Freedom Line Blog

A sobering column by a Greek politician in today’s Wall Street Journal shows that Stalin-style Communism is making a comeback in a nation teetering on the edge of financial meltdown.  The breakdown in policing has led to countless acts of violence – including murder – that go unpunished:

Many argue that Greece’s disintegration is the unavoidable consequence of the government’s attempt to enforce fiscal austerity. This seems doubtful. This meltdown can be seen as the product of the totalitarian left’s open attempt to exploit the economic crisis and destroy Greece’s existing democratic and economic institutions. What we are witnessing is not a descent into chaos, but a descent into organized lawlessness. Sowing pandemonium and forcing Greece to default will, according to Greek Stalinists’ analysis, bring the revolution nearer.

What makes the situation worrisome is not so much the political strength of this movement. After all, the Communist Party and the Coalition of the Radical Left together claim no more than 13% popular support.

The problem, rather, lies with the political and ideological passivity of the parties that do represent Greece’s broader middle classes. The tolerance these democrats have shown toward their totalitarian counterparts has allowed the latter to play a leading role in shaping Greek public discourse. Do they imagine the favor would be returned if the Coalition of the Radical Left were in charge?

Unless Greece’s political elite realizes the seriousness of what’s happening and acts now to re- establish the rule of democratic law, their efforts to deal with Greece’s economic problems will have been in vain.

Gasoline prices have increased from the $3 range to the $4 range in just one year, we’re approaching all new record prices set in 2008 even though it’s not even summer driving season yet.  But ignore higher gas and food prices, America.  They only matter if you actually drive or eat. Federal Reserve Vice Chair Janet Yellen says it’s all “transitory,” and we need to keep the “stimulative” inflationary monetary spigots open because it “continues to be appropriate.”

Even the European Central Bank is raising interest rates in an attempt to avert inflation.  Of course, there isn’t an Obama reelection campaign to sustain over there.

Quote of the day from The Wall Street Journal’s L. Gordon Crovitz, writing in his weekly “Information Age” column:

In high-tech, by the time the political and legal systems catch up to an issue, the issue is moot.”

Whether anti-trust, so-called “Net Neutrality,” public broadband endeavors, wireless data roaming mandates or anything else, you can always count on bureaucrats to be a day late and a dollar short.  Are you paying attention, FCC?

The Wall Street Journal reports that President Barack Obama’s upcoming speech about how to balance the budget will include tax increases along with cuts to programs like Medicare and Medicaid.

The call for higher taxes on America’s job creators will solidify the decision facing voters next year.  The Democrats want more money, while the Republicans want less government.

If there is a positive aspect about the president showing his true tax-and-spend colors, it’s that ideology – how serious people frame reality and their decisions about it – is now front and center in politics.

Rep. Paul Ryan (R-WI) and the GOP want lower taxes and private sector growth.  President Obama and the Democrats want to spend taxpayer money into an ever-growing share of GDP.

Let the debate begin.

Larry Kudlow has the best summary thus far on the importance of Rep. Paul Ryan’s (R-WI) pro-growth budget proposal:

The key point is not the actual numbers, but the direction of the numbers. Spending is coming down.

Trend lines are important in politics and in finances.  With Ryan’s budget plan, Tea Partiers may have found the details guy they need to make their rhetoric into reality.

Shouldn’t America ensure that its military personnel and their families continue to receive paychecks, regardless of whether budget negotiations result in a deal or a federal shutdown? Barack Obama apparently doesn’t think so.

As bargaining continued yesterday, House Speaker John Boehner (R – Ohio) introduced legislation that would keep the government open one additional week and maintain military funding through the end of 2011 so that members of the armed forces would continue to be paid.  The House quickly passed that bill, including 15 Democratic votes.  Obama, however, grotesquely promised a veto, bizarrely labeling it a “distraction.”

Frankly, this entire debate wouldn’t be necessary if the preceding Congress overwhelmingly controlled by Obama’s own party had simply passed a 2011 budget.  But for the first time since the inception of the Budget Act, they simply abdicated that basic responsibility.  Regardless, our military is stretched thin across the globe, and many families live paycheck-to-paycheck.  This obviously isn’t of paramount concern to a president who clearly seems to welcome a government shutdown.

This is one of the most shameful and pathetic episodes in an already shoddy presidency.

Two bills before the Texas legislature, H.B. 259 and H.B. 3675, propose new and unwarranted taxes on satellite television providers.  This period of high unemployment and economic uncertainty is no time to be raising taxes in the first place.  But here’s the kicker:  those two bills would essentially tax thin air.

H.B. 259 and H.B. 3675 would impose taxes on something satellite television providers don’t even use – the physical public right of way.  Obviously, reasonable people could understand why entities that actually use the public right of way under city streets or along physical power lines must help maintain those rights of way.  Since satellite video doesn’t even traverse any physical right of way, however, H.B. 259 and H.B. 3675 constitute a tax on thin air.  Moreover, Texas already taxes video services, so imposing yet another entirely new tax upon physical rights of way that satellite providers don’t even use makes these two bills even more manifestly unfair.  Additionally, it is estimated that only 10% of right of way taxes actually go to maintenance, with 90% of collected revenues diverted to general city funds.  In other words, these two proposed bills are a transparent money grab.

We at CFIF have therefore sent a letter of to the House State Affairs Committee to assert our opposition on behalf of 17,000 activists and supporters in the state of Texas.  But you can also help by contacting them as well via this link. 

Make it clear to these legislators that now is not the time to raise taxes, especially when what’s being taxed is nothing more than thin air.

In this era of bureaucratic overreach and unsustainable spending and deficits, should government also enter the business of competing against private communications service providers?  Doesn’t it already have its hands full?

We at CFIF think so.  In fact, we testified last month before the North Carolina legislature on behalf of thousands of supporters and activists across that great state in support of H.B. 129, which would restrain government bureaucrats from unfairly competing against private providers of communications services.   And with good reason.  From Taiwan to Australia, from Chicago to Houston, and inside North Carolina itself, the history of public broadband is without exception one of failure.  Every single public broadband project of which we’re aware has failed to so much as break even.  Ultimately, taxpayer bailouts become necessary as government endeavors lose money and require constant upgrades to keep pace with evolving technology.  Moreover, government broadband boondoggles undermine the billions of dollars invested in private network improvement and expansion, and discourage future private investment.  After all, why risk one’s capital to compete against governments that can manipulate the rules and go to taxpayers for bailout?  Inevitably, poorer service and layoffs in the vibrant tech sector result.  Rural communities particularly suffer.

But none of that logic seems to matter to Democratic FCC Commissioner Mignon Clyburn.   In a statement Monday, Clyburn attacked the North Carolina’s sensible legislation and defended the concept of government entering yet another portion of the private sector.   Perhaps that’s not surprising, considering Clyburn’s vote last December to impose so-called “Net Neutrality” in the face of two-to-one public opposition, a unanimous Court of Appeals decision that the FCC didn’t possess such authority and condemnation from bipartisan groups in Congress.

Predictable or not, however, it is critical that Americans at the federal, state and local level vocally oppose the sort of government tech sector overreach that she advocates.

The Wall Street Journal reports that India’s explosive growth in college graduates isn’t translating into employment for millions of newly minted degree holders.  The biggest problem: lack of critical thinking and communication skills.

To compensate, companies are spending large sums of money coaching graduates into employability.  According to one Indian business executive, the problem is the credential mentality infecting education:

“How are you able to change the mind-set that knowledge is more than a stamp?”

Sound familiar?  American higher education too is tempted to treat knowledge-building as a service rather than a task.  When students are treated like customers, the link between effort and reward is broken.  The result is a certification that doesn’t translate into employment.

With half of India’s 1.2 billion population under the age of 25, up to a million new workers a month are estimated to join the labor force over the next decade.  If India continues down the path of graduating young people without critical thinking skills, those workers – and the growing Indian economy – will be in serious trouble.

This week provides a stark contrast between a leader actually willing to risk political capital, versus a man who now seeks four more years of politics-as-usual.

On the one hand, we have House Budget Committee Chairman Paul Ryan (R – Wisconsin).  Tomorrow, Congressman Ryan will unveil a federal budget proposal that reduces spending by $4 trillion over the coming ten years, provides pro-growth tax reform and caps runaway federal spending.  All without reducing Social Security benefits by a single penny for anyone already receiving them or over 55 years of age, along with Medicare reform that will save it from its catastrophic fate if nothing is done.  Congressman Ryan knows full well that by offering budget leadership, Democrats will possess a “political weapon” to use against him, even if it means that “they will have to lie and demagogue” to do so.  But instead of shrinking, he has chosen leadership.

On the other hand, we have the President of the United States.  The purported leader of the Free World.  The most powerful man on Earth.  The man who formed a blue-ribbon deficit commission, then proceeded to ignore it.  Instead of making sure that a Congress dominated by his own party could even manage to pass a 2011 budget, instead of offering decisive world statesmanship amid worldwide crises and instead of providing leadership in averting a national debt catastrophe, Obama instead focused on unveiling his 2012 reelection campaign this week.  Instead of offering a plan, the AWOL Obama will apparently just sit back and attack Paul Ryan’s.

So there you have it.  One man seeks to cut spending by $4 trillion, and the other man seeks to spend $1 billion getting himself reelected.

CNBC’s Fast Money quotes an investment strategist who says that when Federal Reserve Chairman Ben Bernanke gives his first press conference on April 27, his remarks “could induce a 10 to 15 percent correction” in the market.  Here, “correction” means “drop.”

The reason the market might drop one-tenth of its value in a matter of hours is due to some analysts’ fear that Bernanke will not continue printing money (i.e. quantitative easing) to inflate the value of assets.  When values return to more realistic levels, investors are likely to stop banking on government-distorted policies to bail them out.

The purpose of the Fed is to tinker with the money supply and interest rates to stabilize the economy.  So far, the only stability it’s guaranteeing is as fake as a free lunch.

CFIF Senior Fellow Troy Senik takes President Barack Obama to task in a column for The Daily Caller today, arguing that the commander-in-chief has the power to bring down gas prices, but won’t.  Instead, Obama would rather enrich a semi-socialist state like Brazil while America’s economy sputters.

In fact, gas prices are up 67 percent since President Obama took office a little more than two years ago. Lest you think this analysis one-sided, during the same period in President Bush’s tenure gas prices increased by only seven percent.

Yet that doesn’t seem to bother President Obama much. Earlier this month, he said that we can’t drill our way out of our energy problems. That is like suggesting you can’t medicate yourself out of an illness.

Read the entire article here.

Gallup released a fascinating survey this week, under the heading “U.S. Steady as the Most Popular Destination for Potential Migrants.”

In fact, it’s not even close.  Using aggregated data compiled from 148 nations during the years 2007 through 2010, survey subjects were asked, “Ideally, if you had the opportunity, would you like to move permanently to another country, or would you prefer to continue living in this country?  To which country would you like to move?”  The United States was the runaway leader, with more than three times as many respondents as the next closest countries (Canada and the United Kingdom).  The U.S. led with 24%, Canada and the U.K. were far behind at 7% each, with France at 6% and Spain at 4%.  In fact, America was named as the top potential destination by as many people as the U.K., France, Spain, Germany and Italy combined.  So much for that supposedly superior European model.

President Obama may not believe in American exceptionalism, but apparently the rest of the world that he strangely seeks to follow rather than lead still does.

In just a few hundred words a Wall Street Journal editorial writer summarizes how out-of-touch supposed ‘experts’ can be when it comes to how policies affect everyday Americans.  The object lesson comes courtesy of New York Fed President William Dudley’s failed attempt to convince citizens in Queens that the economy is doing much better than they think.

The former Goldman Sachs chief economist gave a speech explaining the economy’s progress and the Fed’s successes, but come question time the main thing the crowd wanted to know was why they’re paying so much more for food and gas. Keep in mind the Fed doesn’t think food and gas prices matter to its policy calculations because they aren’t part of “core” inflation.

So Mr. Dudley tried to explain that other prices are falling. “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful,” he said. “You have to look at the prices of all things.”

Reuters reports that this “prompted guffaws and widespread murmuring from the audience,” with someone quipping, “I can’t eat an iPad.” Another attendee asked, “When was the last time, sir, that you went grocery shopping?”

Mr. Dudley has been one of the leading proponents of negative real interest rates and quantitative easing, so this common-man razzing is a case of rough justice. If Mr. Dudley were wise, he’d take it to heart and understand that Americans aren’t buying the Fed’s line that rising commodity prices are no big deal. Unlike banks and hedge funds, they can’t borrow at near-zero interest rates, and most of them don’t have big stock portfolios. Wall Street and Congress may love the Fed’s free-money policy, but Mr. Dudley and Chairman Ben Bernanke ought to worry about losing the confidence of the middle class.

Ronald Reagan destroyed confidence in Jimmy Carter with one simple question: “Are you better off now than you were four years ago?”  Any Republican presidential hopeful that can channel the frustration in Queens into a similarly concise indictment of President Barack Obama will be well positioned to oust yet another bumbling Democratic incumbent.

According to a Wall Street Journal survey of economists, unemployment for the November 2012 election will remain elevated at 7.7%.  That would make it the highest for a presidential election since the Carter/Ford nailbiter in 1976, when it was 7.8%.

Ominously, the report adds, “Economists in the survey slightly raised the likelihood of recession over the next 12 months to 14%, largely due to rising oil prices.”  The article endeavors to highlight the caveat that, “analysts point out that it is often the overall trend – rather than the level of joblessness – that determines an incumbent’s fate.”  The 7.8% rate of November 1976 (in which the incumbent Ford lost), however, had declined from 9.0% in May of 1975, 8.3% one year earlier and 7.9% at the beginning of 1976.

Liberal pundits appear eager to claim that no Republican wants to take on the supposedly strong Obama, but this survey and storm clouds in the form of higher gas prices, overall inflation and worldwide chaos may suggest otherwise.

Last month, we noted with alarm that the Congressional Budget Office forecast a record $1.5 trillion federal budget deficit for fiscal 2011.

It’s apparently even worse than that.  Today, the Obama Administration unveils its proposed budget, projecting that this year’s deficit will actually reach $1.6 trillion.  So after telling Americans during his 2008 campaign that he was going to go through the budget “line-by-line” and reduce the deficit, Obama has given us deficits of $1.4 trillion, $1.3 trillion and now a record $1.6 trillion.  And what to show for it?  Unemployment remains at or above 9% for a post-World War II record 21st consecutive month, despite Obama’s promises that it would top out at 8% in October 2009 and decline to between 6% and 7% today.

As for those who continue their mindless “Blame Bush” rationalization crusade, they must explain how three years into the Age of Obama, the deficit is increasing, not decreasing, from $1.3 trillion to $1.6 trillion (an almost 25% increase).

The herald of the Tea Party movement is once again telling truth to pundits:

In its monthly report this morning, the Labor Department announced that unemployment has now remained at or above 9% for a post-World War II record 21st consecutive month.  Additionally, it reported just 36,000 new jobs, well short of the expected 140,000 number.

On the eve of the 100th anniversary of Ronald Reagan’s birth, these numbers contrast the results of a big government agenda versus a free market agenda.  In the 23 months since Obama’s massive $1 trillion “stimulus” passage, unemployment has increased from 8.2% to 9%.  One would expect better results in exchange for deficits of $1.4 trillion in 2009, $1.3 trillion in 2010 and an expected record $1.5 trillion this year.  Keep in mind that Obama projected that if we followed his big government agenda, unemployment would be down between 6% – 7% by now.  In contrast, the 23 months following the effective date of Reagan’s tax cuts in January 1983 saw unemployment plummet from 10.4% to 7.2%.

The facts speak for themselves.  Inexplicably, Obama nevertheless called for even more federal “stimulus” in his State of the Union address.  As we celebrate the Gipper’s 100th birthday, we should remember the timeless lesson taught by his freedom agenda’s success.

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.

Newt versus The Wall Street Journal editorial board – the unofficial 2012 Republican campaign is off to a very lively start.

On January 22, the Journal ran a commentary entitled “Amber Waves of Ethanol” in which it criticized federal ethanol subsidies.  It noted that, “Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed,” which does nothing to improve the environment or our reliance on foreign oil, but wastes billions in taxpayer dollars and drives food price inflation.  Likely 2012 candidate Newt Gingrich responded in Iowa last Tuesday, repeatedly referring to himself “as an historian” and accusing the Journal as part of a sinister cabal, saying, “Obviously big urban newspapers want to kill it because it’s working, and you wonder, ‘What are their values?'”

This morning, the Journal responds in its lead commentary entitled “Professor Cornpone.” This dispute, it says, symbolizes the larger fight “between the House Republicans now trying to rationalize the federal fisc and the kind of corporate welfare that President Obama advanced in his State of the Union”:

Given that Mr. Gingrich aspires to be President, his ethanol lobbying raises larger questions about his convictions and judgment.  The Georgian has been campaigning in the Tea Party age as a fierce critic of spending and government, but his record on that score is, well, mixed…  Now Republicans have another chance to reform government, and a limited window of opportunity in which to do it…  So along comes Mr. Gingrich to offer his support for Mr. Obama’s brand of green-energy welfare, undermining House Republicans in the process.”

Regardless of one’s views toward Mr. Gingrich as a potential candidate, the fact that the race is already lively with substantive policy debate is a healthy sign.