Freedom Line Blog

Those of us who objected to the federal bailout of the automotive industry were delighted when Ford recently launched this ad, playing up the fact that it didn’t take taxpayer money:

Apologies for the handheld quality, but there’s a reason for it: Ford has now pulled the ad — including taking down the YouTube version. And at least one of the sources of their newfound timidity seems to be in the White House. Daniel Howes, a columnist in the Detroit News, writes:

Ford pulled the ad after individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008, in early ’09 and again when the ad flap arose. And more.

With President Barack Obama tuning his re-election campaign amid dismal economic conditions and simmering antipathy toward his stimulus spending and associated bailouts, the Ford ad carried the makings of a political liability when Team Obama can least afford yet another one. Can’t have that.

The ad, pulled in response to White House questions (and, presumably, carping from rival GM), threatened to rekindle the negative (if accurate) association just when the president wants credit for their positive results (GM and Chrysler are moving forward, making money and selling vehicles) and to distance himself from any public downside of his decision.

Sources at the White House have been quick to insist that there was no actual pressure on the automaker. But there didn’t have to be. The fact that there was even communication on the issue was a major ethical breach. The idea that the executive branch would gripe at a private company over a perfectly legitimate ad campaign is antithetical to the American tradition of free speech. This is what we would expect from Vladimir Putin on a slow day, not the team surrounding the President of the United States.

Don’t think that the adminstration was simply peeved that a major corporation would have the temerity to criticize the visionary mandarins of the Obama White House. More than anything, they were terrified that it would work.

The Heritage Foundation has a masterful indictment of Senator Harry Reid’s (D-NV) ham-handed attempt to use a FEMA budget bill to score political points.  Last week, Reid deliberately killed a House-passed continuing resolution funding FEMA for $3.5 billion while cutting $200 million in subsidies similar to the Solyndra loan fiasco.  Angry at the cuts, Reid sidelined the House bill and introduced his own with no cuts and more spending.

Yet when the Senate sensibly defeated Reid’s proposal, he chastised the chamber in a bizarre floor speech that tried to pin blame on Republicans for leaving disaster victims out in the cold.

Besides refusing responsibility for holding victims hostage so more green jobs could be subsidized, Reid’s implication was that without billions in taxpayer money, citizens would be left to fend for themselves.

As Heritage shows, Reid’s argument is simply not so.  With just a bit of calling around, the think tank found that disaster victims in Pennsylvania were being assisted by the Wyoming County United Way, the Seven Loaves Soup Kitchen and the Weinberg Regional Food Bank.  Each of these private voluntary groups reported record numbers of donations and applications to assist.

As with any disaster, everyday Americans don’t wait for the government to mobilize.  Instead, they roll up their sleeves, stuff sand bags, serve hot food and help the devastated rebuild their lives and communities.  For statists like Harry Reid, people die without the government.  For those living in the real world, it’s people – not bureaucracies – that make recovery possible.

Fox News reports that ATF’s Fast and Furious botched gun-tracking operation to Mexican drug cartels didn’t stop at encouraging private gun owners to sell to known criminals with assurances of surveillance.  Six months before Border Patrol Agent Brian Terry was murdered with one of these weapons, ATF supervisors in Phoenix directed field agents to sell the guns directly.

The result was the same as when the guns came from private sellers: no surveillance was initiated by ATF to track the guns.  Instead, the buyers for the cartels were allowed to store them in a stash house and ship them south with impunity.

These are the kinds of revelations that get bureaus like ATF shut down.  Could it also be the scandal that sinks Attorney General Eric Holder, the man who oversees ATF’s operations?

Read the whole story here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

In my column last week, I detailed the devastation that the Pentagon will be in for should the bipartisan congressional “supercommittee” not enact major debt reduction by early next year. While paring back the size of the federal government is essential, the Obama Administration was unspeakably reckless in allowing defense cuts that could reach over $1 trillion to be triggered automatically should the committee fail to act.

The staff of the House Armed Services Committee has now released their analysis of the proposed reductions and, according to a report in Politico, the outcomes could be every bit as dire as warned:

The analysis notes that the Navy would need to take two aircraft carrier battle groups out of service and the Air Force would lose a third of its fighters. The Marine Corps would no longer be able to maintain forward-deployed amphibious forces around the world. New weapons systems, such as the Navy and Marine Corps’ versions of the F-35 Joint Strike Fighter, would be canceled. The U.S. nuclear arsenal would be drastically reduced and modernization plans scrapped.

Aside from the troop cuts, there would also be massive layoffs of Pentagon civilian employees and the elimination of many jobs in the defense industry, according to the analysis.

Please read this important press release:

PRESS RELEASE

It has come to our attention that Congressional Medal of Honor recipient Marine Sgt. Dakota Meyer is seeking an extension of the filing period so that he may file to take the upcoming FDNY Firefighter entry test…but is meeting resistance to his request.

Extension of the filing period for this test has, in the past, been a common practice. In fact, it was just extended this past weekend so recruiters could attend a parade and sign up those who didn’t file an application during the allotted two months. Sgt. Meyer was in New York this week for events connected to his act of unbelievable bravery when he first became aware of the test and expressed an interest. Unfortunately, he expressed that interest a few hours- yes, hours- late.

We are calling on the Department of Citywide Administrative Services, the FDNY, Mayor Bloomberg and any and all other interested and proper agencies and officials to do whatever it takes to give the first living Marine since Vietnam to earn the Medal of Honor the opportunity to become one of New York’s Bravest. There is absolutely no excuse not to- none. If the reasons for extending the filing period this past weekend or for past tests have been valid, then there is absolutely no excuse for not granting Sgt. Meyer’s request.

I know there will be a groundswell of support for what we are urging in this Release. All interested members of the media, elected officials, civic and other leaders can contact us and we will coordinate with those closest to Sgt. Meyer. All receiving this message are urged to make phone calls, forward this message and take any other action to make this Marine’s wish come true. A Medal of Honor recipient wants the opportunity to serve the city of New York- let’s make sure he gets that opportunity.

Paul Mannix
President
Merit Matters

Today marks the release of Moneyball, a movie based on a book based on the true story of how the Oakland Athletics baseball team overcame a chintzy payroll to compete with high-dollar teams.  The book revolutionized the way many people think about baseball (and management in general) because of the A’s innovative use of player’s statistical data.

Today also saw top executives from Solyndra stonewalling Congress over how the company went from $535 million in federal subsidies to bankruptcy in less than three years.

Nine years after Moneyball was published – and eight years after Major League Baseball started testing for steroids – the A’s success tapered off in relation to falling production of steroid using players like Jason Giambi, Miguel Tejada, and others.  (National Review’s Neil Minkoff has the details here.)

So, despite the A’s perceived use of a superior technology, it looks more and more like they benefited from their proximity to the steroid capital of baseball: the San Francisco Bay Area (remember the Giants’ Barry Bonds?)

Something similar happened with Solyndra.  When the company’s solar technology was new it looked like the magic bullet for the “green economy,” so much so that investors and the Obama Administration threw caution to the wind, funded a fantasy, and put taxpayers on the hook for half a billion dollars.

The A’s only lost games and perhaps some credibility after their more-than-meets-the-eye initial success.  American taxpayers are losing their collective shirt with bad bets on Keynesian stimulus and market-distorting subsidies.  A’s fans might want to get new management.  Americans should demand it.

Foreign Policy offers a Top 10 list of the “craziest things ever said during a United Nations speech,” to help give context to today’s request for statehood recognition by the Palestinian Authority.

Among the leaders contributing to the list are Russia’s Nikita Khruschev (shoe banging and epithet); Palestine’s Yassir Arafat leading a “Zionism = racism” movement; Venezuela’s Hugo Chavez comparing President George W. Bush to Satan; and Iran’s Mahmoud  Ahmadinejad blaming the South Ossetia war on Israel.

Of the top ten, three include racist criticisms of Israel.  If Palestine gets statehood status and speaking privileges, expect that number to rise.

Bloomberg News reports the latest ultimatum from House Speaker John Boehner (R-OH) to President Barack Obama:

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem” with the aid and preference programs, Boehner, an Ohio Republican, said in a statement yesterday. “If the president submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.”

Apart from Rep. Paul Ryan’s budget resolution and the president’s deficit reduction proposal, there may be no better example of how different is each party’s idea of sound economic policy.

Boehner wants Obama to release three trade treaties negotiated by the Bush Administration so that Americans and their counterparts in Columbia, South Korea and Panama can start enjoying the benefits of free trade.

For his part, Obama wants to force Republicans into funding another round of unemployment benefits, this time for workers displaced by the yet-to-be-ratified agreements.  That’s right: the president wants to spend money on people who may never be fired.

First of all, it’s fallacious to assume that businesses operating at historically low worker levels will fire employees; especially since increased trade opportunities are more likely to lead to hiring increases.  Moreover, Obama fails to recognize the cost of not enacting the three free trade agreements.  For instance, the U.S. Chamber of Commerce estimates that failure to ratify the agreements will cost 380,000 jobs due to missed business opportunities.

At the heart of this dispute is the focus of each party.  Boehner and the Republicans want to spur economic growth.  Obama and the Democrats want to lock-in the growth of the entitlement state.

Boehner is right to demand action on both free trade and worker aid at the same time.  If Obama cries foul, it’s only because his childish attempt to spend more and get less was called out.

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Lee:  LightSquared Imbroglio – “Fast and Furious” Doesn’t Just Describe One Obama Administration Scandal Anymore
Senik:  Debt Ceiling Defense Cuts Are Ticking Time Bomb for American National Security
Hillyer:  Keller, NYT: Blinkered Obama Love
Ellis:  Corporate Jet Tax Will Kill Manufacturing Jobs

Freedom Minute Video:  Government Stupidity! Where’s the App for That?
Podcast:  Interview with Professor John Yoo: “Confronting Terror”
Jester’s Courtroom:  Unkempt Lawn Grows Lawsuit

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

In an interview with CFIF, John Yoo, law professor at the University of California Berkeley and former Justice Department official, discusses a new book that he co-edited: “Confronting Terror: 9/11 and the Future of American National Security.”  The book is a collection of essays by 22 nationally known legal and policy experts and scholars examining the law and policy of the War on Terror, including President Obama’s response to 9/11 and U.S. policy on interrogation methods. 

Listen to the interview here.

A new coalition of major corporate executives has formed to push for a lower corporate income tax rate. Called RATE (Reducing America’s Taxes Equitably), the group has been rather vague about how much to cut the corporate rate, but the fact that an influential group is organizing at all is good news. As I have argued in person for four years and in print for at least 3 1/2 years, I think there is actually a good case to be made for not just reducing, but completely eliminating, the corporate income tax. Presidential candidate Rick Santorum, to his credit, goes almost as far, calling for cutting the rate in half in general, and completely eliminating it for manufacturers.  Megan McArdle at The Atlantic agrees with me that the whole thing should go.

But back to RATE, which isn’t so bold, but still is a valuable step in the right direction…. It really merits a full column, and will receive one here in the coming weeks. But as RATE notes at its web site, there really is no good political reason not to cut corporate rates, because leaders throughout the political spectrum have agreed it should be cut.  The problem, I think, is that they keep holding it in abeyance, wanting to include the corporate rate cut in some “grand bargain” that includes all sorts of other taxing and spending changes.

This is the wrong way to go about it. Grand bargains are almost always the wrong way to go about things. Better to do things cafeteria style selection by selection. If everybody agrees on something, go with it — especially if it is good policy. Good policies shouldn’t wait on extraneous matters.

Anyway, again, there is far more to be said for RATE. But for now, we should welcome this group to the table and thank it for coming. It’s a coalition that could do some real good.

According to a new Gallup poll, a majority of Americans now blame President Obama for the current state of the U.S. economy.  By a 53% to 47% margin, surveyed adults say that Obama shares a “great deal/moderate amount” of blame, while they also believe that George W. Bush continues to share blame by a 69% to 30% margin.  But notice something interesting.  For all the talk of hyper-partisanship from Republicans, the primary reason Bush’s numbers look worse is that Republican survey respondents split 50% to 50% on whether Bush shares some blame.  Democrats, in contrast, were far less willing to admit that their guy Obama shares blame, disagreeing by a 75% to 25% margin.  Independents by a 60% to 40% margin say that Obama shares some blame.

Here’s another noteworthy fact.  For all of Obama’s talk that he and his wasteful trillions of “stimulus” spending saved our economy from “the next Great Depression,” government economic figures show that we actually began our cyclical recovery before Bush had left office.  That’s a point that must be highlighted to voters as we approach a pivotal 2012 election in which Americans must choose between two governmental philosophies.  But in the meantime, at least most of us now recognize Obama’s role in our continuing economic struggles.

In this week’s Freedom Minute, CFIF’s Renee Giachino comments on the U.S. Department of Labor’s new smart phone app, designed to help outdoor workers prevent heat illness by informing them of… well… the temperature outside.  The Labor Department is not yet able to calculate its costs to taxpayers.  “Yes, that’s your government at work,” says Giachino. “They can tell you what temperature it is outside, but not how much it cost them to tell you. Maybe there should be an app for that.”

It was less than a month ago that the Federal Reserve wrapped up its annual economic symposium in Jackson Hole, Wyoming with all signs pointing to the prospect that the nation’s central bank was going to cool it on the “quantitative easing” (dumping new currency into the markets) for a while. Though the insanity has (at least temporarily) abated, the central bank is still making mischief.

As Politico reports:

The nation’s central bankers dusted off a 1960s-era plan in hopes of rousing the sluggish economy Wednesday, taking the unusual step of shifting $400 billion into longer-term bonds in hopes of slashing interest rates further.

The Federal Reserve’s Open Market Committee voted 7-3 to embark on what’s informally called “Operation Twist,” a move first used during the heyday of Chubby Checker and named for his song of the same name.

The policy is mostly inert, as it won’t actually result in a monetary injection ala quantitative easing. The early consensus is that it won’t have much effect one way or the other. But the possible rationale, if true, is revolting:

Exerting political pressure on Bernanke may have rallied the Fed to act, since the committee likely found “this political meddling repugnant,” wrote JPMorgan Chase economist Michael Feroli in a client note.

Let’s be clear about this: the Fed already operates independent of “political meddling.” Various members of Congress and candidates for president may have been carping about Bernanke’s leadership (a point on which they’re certainly justified), but their influence was limited to the range of their voices. Nothing they said could actually effect policy.

If something so immaterial to the Fed’s work could drive monetary decisions, then this may be the most petulant institution in the federal government. At a time when the economy teeters on the brink of another devastating downturn, making market decisions in response to slights real and imagined shows a staggering lack of seriousness. If this is Mr. Bernanke’s swipe at Governor Perry, he should note that he’s only strengthening the governor’s argument.

The Canadian Press reports that its government will hire consultants from Deloitte Inc. to devise ways to reduce annual spending by $4 billion by next March.  Cost of the contract: $19.8 million.

Here’s the Conservative government’s response to those badgering it for spending $90,000 a day to reduce spending:

A spokeswoman for Clement defended the contract, saying Ottawa needs the best advice available for reducing costs.

“Engaging private sector advisers who have been successful with cost-saving operational reviews will better enable ministers and deputy heads not only to compile their individual cost-savings proposals but also to provide practical advice on what to look for and how to execute their plans,” press secretary Heather Hume said in an email.

“As always, our government is committed to maintaining an open, fair and transparent procurement process while obtaining the best possible value for Canadians.”

If President Barack Obama and Congress are so willing to set aside the normal constitutional processes for writing budgets and tax policies (as evidenced by the creation of the congressional ‘supercommittee’ charged with finding $1.5 trillion in savings by Thanksgiving), why not go all the way and let experts in the private sector scrub the books and find the savings?

Hat tip to Rep. Darrell Issa (R-CA) and his staff at the House Committee on Government Oversight for sharing this “Myth v. Fact” explanation via email of the USPS’s alleged overpayment into the federal retirement system.

Myth: The Postal Service has overpaid by $50-$75 billion into the Civil Service Retirement System and Congress owes this money back.

Fact: There is no Postal Service overpayment.

The United States Postal Service was created in 1971 from the old Post Office Department in order to provide better mail delivery and let it act more like a business. In 1974, the Postal Service agreed to a formula to share the retiree costs of individuals who worked for both the Post Office Department and the Postal Service, calling it “proper, as a matter of principle.” Now, with revenues declining, the Postal Service argues that that formula is unfair. The Postal Service argues that if a formula it considers to be fair had been used instead, then it would be owed $50-$75 billion by the US Treasury.  This is an attempt to rewrite history. The original formula was instituted as part of a broader set of decisions concerning the creation of USPS.  For instance, those decisions included not charging any fee to USPS in return for the postal monopoly it was granted.  Another reason why it makes little sense to speak of an overpayment due to USPS is that the Postal Service had a clear requirement from 1971 until 2006 to raise postage rates to cover all costs, including its cost of retirement funding.  If a different formula had been used all these years that had resulted in lower annual payments by USPS for its federal employee retirement costs, those savings would have been used to lower the cost of postage rates.

Issa’s postal reform bill is up for consideration in a congressional subcommittee today.  You can get more information on his version of postal reform at this website.

The ATF’s “Project Gunrunner” and “Operation Fast and Furious” scandals continue show a cover-up by high-ranking officials in Eric Holder’s Department of Justice.  The most recent revelation was the emergence of tapes secretly recorded by an Arizona gun dealer who grew suspicious of ATF’s ability to intercept guns deliberately sold to Mexican drug cartels.

Howard made the tapes in March 2011 after a meeting he and his attorneys held with federal officials. In that meeting, Assistant U.S. Attorney Emory Hurley continued to insist the guns Lone Wolf sold were stopped and seized before reaching Mexico.

But ATF officials are quoted in a Washington Post article and the Spanish language daily La Opinion saying just the opposite — blaming Lone Wolf for “selling guns to the cartels” with no mention that Howard was operating under the federal government’s direction, encouragement and approval.

In related news, the Mexican government is seething because ATF brass and supervisors at Justice chose not to inform relevant officials of the gun-walking program.  After learning of the operation from news reports following Border Agent Brian Terry’s murder, the Mexican Attorney General said, “In no way would we have allowed [the selling of guns to drug cartels], because it is an attack on the safety of Mexicans.”

And an affront to American integrity as well.

Warren Buffett has enjoyed a fair bit of celebrity over the last few weeks, acting as the iconic symbol of President Obama’s proposal for tax hikes by ubiquitously making it known that he hasn’t been debited enough by the feds. Buffett’s rhetorical trope of choice is to invoke the fact that he pays lower taxes than his secretary. That’s because most of Buffett’s income comes in the form of capital gains from his investment empire, which are taxed at 15 percent, not earned income like his assistant’s paycheck, which is likely taxed at a federal rate of either 25 percent or 28 percent, depending on whether her annual salary is above $83,600.

This sounds unjust at first blush — until you consider the fact that the capital gains tax is essentially double-dipping. That is, the money you have to invest is what’s left over after your earned income is taxed. In other words, the investment money on which Buffett is paying the cap gains tax was already skimmed by Washington when he earned it in the first place. If his assistant was investing, she’d be paying the same rate as Buffett. As pointed out by S.A. Miller in the New York Post:

Buffett actually was taxed twice on his investment income.

First, Buffett had to make the money he invested. Those earnings were taxed as corporate income, at about a 35-percent rate.

Then, Uncle Sam took another cut when Buffett invested the money and earned a profit. That’s when Buffett paid the 15 percent capital-gains tax rate.

All told, after combining corporate taxes and capital gains taxes, Buffett forked over about 45 percent of his earnings.

We’ll put Buffett in the same category as Albert Einstein and Noam Chomsky: experts in their field who should have never been given automatic credibility when it comes to politics.

Two federal government reports released within the past week again refute the toxic, persistent myth that poverty is the root cause of crime.

Last week, the Census Bureau announced that the nation’s poverty level jumped from 14.3% in 2009 to 15.1% for 2010, the highest rate since we emerged from the Jimmy Carter hangover in 1983.  The overall number of poor Americans rose to 46.2 million, the highest total since poverty estimates began 52 years ago.  Those numbers justify Newt Gingrich’s observation that Barack Obama is the “Food Stamp President.”

Now this week, the Federal Bureau of Investigation (FBI) announced that crime rates continued to plummet last year.  Violent crime rates declined for the fourth consecutive year, while property crimes declined for the eighth consecutive year, even as the nation’s economic malaise deepened.  Moreover, the lower crime rates occurred amid local budget reductions that have affected police departments.

These statistics confirm the timeless reality that criminality is not some sort of involuntary act to which helpless souls are driven by economic adversity.  Rather, criminality is a voluntary choice on the part of the culpable criminal.  The latest data won’t stop the political left from repeating their discredited dogma, but the facts as usual refute them.