Freedom Line Blog

According to a new poll from Gallup, Americans rate the “Computer Industry” most positively among 25 business and government entities, with the “Internet Industry” close behind.  That’s no surprise – few innovations in human history have transformed our lives as rapidly and profoundly as the tech sector.

But here’s an irony.  The federal government, which constantly interferes with tech sector innovation via such bureaucratic assaults as so-called “Net Neutrality” and interference with the private proposed merger between AT&T and T-Mobile, is rated least favorably by Americans.  Only 17% of Americans rate the federal government positively, which 63% rate it negatively.  In contrast, the computer industry is rated positively by a 72% to 10% margin, and the Internet industry is rated positively by a 56% to 16% ratio.

Perhaps we’d all be better off if the tech sector began monitoring the federal government, rather than the converse.  It certainly appears that most Americans would agree.

Whatever shred of credibility Fareed Zakaria retained as a conservative pundit from his celebrated book The Future of Freedom has now been officially lost thanks to follow-ups like The Post-American World and today’s essay “Does America Need a Prime Minister?”

In the essay, Zakaria uses the recent S&P downgrade of American sovereign debt to note that “no country with a presidential system has a triple-A rating from all three major ratings agencies.”  He then uses this to support his thesis that the United States would be better served by chucking separation-of-powers and moving to a British-style parliamentary system where the executive and legislative branches are the same.  After all, Britain still has a triune triple-A rating!

How wonderfully anti-American of the Harvard PhD.  Throughout the essay one realizes that Zakaria has wandered so far from the insights of the Founding generation that he now endorses the very system – and possibility for tyranny – that the American Revolution fought to end.  So too did another PhD-turned-constitutional-scold: Woodrow Wilson, the godfather of America’s progressive movement.

Wilson believed that government needed to be professionalized and removed from popular control so that it could act quickly and decisively to cure whatever ailed the populace.  He favored the parliamentary system because it gave enormous power to one man: the Prime Minister.

To appreciate how far Zakaria has wandered from core American principles about the proper way to construct a government, consider this passage from today’s essay:

In the American presidential system, in contrast, you have the presidency and the legislature, both of which claim to speak for the people. As a result, you always have a contest over basic legitimacy. Who is actually speaking for and representing the people?

In America today, we take this struggle to an extreme. We have one party in one house of the legislature claiming to speak for the people because theirs was the most recent electoral victory.  And you have the president who claims a broader mandate as the only person elected by all the people.  These irresolvable claims invite struggle.

There are, of course, advantages to the American system – the checks and balances have been very useful on occasion. But we’re living in a world where you need governments that are able to respond decisively and quickly.  In a fast-moving world, paralysis is dangerous. Other countries are catching up – if not overtaking – America.

Who are these other countries?  Members of the European Union with a currency and debt crisis several times worse than our own?  China with its unsustainable population demographics and monetary policy?  Arab dictatorships that are being toppled by the month?  Latin American oligarchies that nationalize industries to buy off the masses with the wealth of entrepreneurs?

The problem we are experiencing in Washington, D.C. is not America’s constitutional design of checks-and-balances and separation-of-powers.  If anything, the ability of the House GOP to slow down the liberal agenda to tax-and-spend the nation into bankruptcy is due solely to the very “paralysis” intended by our constitutional framework.

If Zakaria wants to end the paralysis in D.C., he should vote for pro-growth fiscal conservatives in 2012 and urge all of his readers to do the same.

In a brilliantly written refutation of the Obama-as-Genius argument, Mortimer Zuckerman explains why even taking all the money from “rich” people and corporations won’t solve the deficit problem:

Even if the government instituted a 100% tax on both corporate profits and personal incomes above $250,000 per year, it would yield enough revenue to run the government for only six months. Why? Because under Mr. Obama’s presidency, government spending has swelled to 24% of GDP from 18%.

Spending is Obama’s original sin as president.  Unless he’s willing to repent of that folly and ratchet back on the flow of money, the American economy will stay mired in a recession.

Senate Republican Leader Mitch McConnell (R-KY) earned his position today by naming three conservative workhorses to represent the Senate GOP in the new “Super Congress” charged with eliminating more than $1 trillion in federal spending.

Senator Pat Toomey (R-PA) is getting the lion’s share of attention because of his former leadership of the conservative Club for Growth, and his opposition to the debt deal that created the committee he’ll serve on.  But McConnell deserves some serious thanks from the Tea Party for also naming Senators Jon Kyl (R-AZ) and Rob Portman (R-OH).

Both Kyl and Portman own reputations as serious policy wonks who know how to get substantial conservative victories in government negotiations.  (Kyl is an expert on foreign affairs, defense, and tax issues, while Portman served as President George W. Bush’s OMB Director and Free Trade Representative.)

For his part, Toomey is no slouch when it comes to putting skins on the wall.  (Under Toomey, Club for Growth helped illuminate the economic records of several Republican candidates, helping to identify which were in line with less government.)

All told, the Tea Party should be very pleased that Leader McConnell has named a terrific trio to grow the federal government down in a smart and lasting way.

In this week’s “Freedom Minute,” CFIF’s Renee Giachino explains why President Obama’s “balanced approach” of tax increases and spending cuts for fixing the nation’s fiscal woes is far from balanced in terms of its effects on the American people and U.S. economy.

Here was my take on things, this morning, at The American Spectator.

Short version: I think the debt deal DOES, in effect, protect pretty well against tax hikes, but it does not protect enough against defense cuts of an unwisely large size.  But the ultimate fate of defense, and indeed of all of this, will depend on the 2012 elections — and in the meantime, the change in direction of government spending will probably be noticeably helpful. Conservatives have every right to grumble about this result. But wise conservatives will certainly not reject it out of hand. In short, it’s a close call that probably will attract slightly more conservative votes than it will repel.

For the past two and a half years, it’s been the exclusive provenance of the right to point out that President Obama often seems overmatched by his job. But after this weekend’s latest round of debt ceiling negotiations — where a newly irascible President Obama was nowhere to be seen amidst the congressional horse-trading — it’s becoming clear that Democrats on the hill are starting to think the same thing. The ugly details are fleshed out by Craig Crawford, writing in the Huffington Post:

While the GOP obviously would savor a solution to the debt-ceiling crisis that gives Obama no credit, why are Democratic leaders so willing to cut him out?

The answer might be found in growing concerns among veteran Capitol Hill Democrats that their president is a lousy negotiator.

Although they see him as a talented public communicator, his short time as a senator and painfully slow learning curve as president leads congressional Democrats to think it best to take over and provide cover for him once the deal is done.

“A talented public communicator” who can’t negotiate? The Democrats are essentially saying that the president is really good at talking about his job, just weak when it comes to actually doing it. This, my friends, is what the wag who coined the phrase “damning with faint praise” had in mind.

In this week’s Freedom Minute, CFIF’s Renee Giachino debunks President Obama’s claim that 80 percent of the American people agree with his plan to raise taxes as part of a debt ceiling deal.

Michael Barone is one of those rare Washington pundits who thinks facts are more important than feelings. That means that when he makes sweeping claims, he’ll always have the data to back them up. And he’ll do so in the dispassionate fashion of a doctor reading an X-ray. That’s part of what makes his new column on the debt ceiling so chilling. In it, he writes:

The bedrock issue is whether we should have a larger and more expensive federal government. Over many years, federal spending has averaged about 20 percent of gross domestic product.

The Obama Democrats have raised that to 24 or 25 percent. And the president’s budget projects that that percentage will stay the same or increase far into the future.

In the process, the national debt as a percentage of gross domestic product has increased from a manageable 40 percent in 2008 to 62 percent this year and an estimated 72 percent in 2012. And it’s headed to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart have identified as the danger point, when governments face fiscal collapse.

Barone’s words are a bracing reminder of the stakes in this fight. Virtually all Democrats — and even many Republicans — would have us believe that this is a moment defined by pure political philosophy; that it’s simply a question of whether you balance the books through tax increases, spending cuts, or some combination thereof. But it’s more than just principles that hang in the balance. It’s the fate of a nation.

In an interview with CFIF, John Ransom, finance editor for Townhall.com, discusses the debt ceiling debate, how tax increases will negatively impact jobs, and the latest “tax” imposed by teachers’ unions to help re-elect President Obama.

Listen to the interview here.

In a letter sent yesterday to every member of the House Judiciary Committee, the Center for Individual Freedom (“CFIF”) joined with other free market organizations collectively representing millions of American taxpayers to urge support of the Wireless Tax Fairness Act (H.R. 1002 / S.543).

The Wireless Tax Fairness Act would put a five-year freeze on attempts by state and local governments to raise taxes on wireless services.  The legislation is being marked up today by the House Judiciary Committee.

The letter, which was organized by Americans for Tax Reform’s Digital Liberty project, reads in part:

Across the country, state and local governments are putting a substantial burden on consumers by raising discriminatory taxes on wireless services to fund special interest projects and cover up overspending addictions.  Today, the average consumer pays upwards of 16 percent in taxes on their wireless bill every month.  In some localities, wireless taxes have skyrocketed to well over 25 percent.

A federal solution to curbing wireless taxation has become imperative.  The mandatory freeze on wireless taxes under H.R. 1002/S. 543 is a pro-consumer, pro-business, anti-tax, and bipartisan solution to this growing problem.”

Read the full letter 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.

The incomparable Veronique de Rugy (Reason columnist and economist at the Mercatus Center) was recently a guest on Bloomberg TV, where she was tasked with rebutting the faulty economics behind the gigantic economic stimulus program that’s still holding back the American economy. As the video below shows, it was child’s play for this intellectually rigorous defender of free markets:

C.J. Ciaramella of The Daily Caller reports: 

The Securities and Exchange Commission gave up its leasing authority yesterday and could face a Justice Department probe in light of a $550 million leasing scandal.

At a House Transportation and Infrastructure subcommittee meeting yesterday, SEC Chairman Mary Schapiro ceded the agency’s leasing authority and admitted it had made a “terrible mistake” when it put taxpayers on the hook for a half-billion dollar lease for office space it didn’t need.

And this is the same government that now wants to increase taxes as part of a “deal” to raise the debt ceiling?

Previously, I interviewed California Republican Assemblyman Chris Norby about the costs associated with taxpayer-funded redevelopment agencies (RDAs).  Along with liberal use – and threats – of eminent domain powers, RDAs siphon away local tax money from schools, roads and other public services to service the debt incurred to privilege certain businesses.

Writing for City Journal, Steve Greenhut of the Pacific Research Institute laments the dependency on RDA funding by local officials like the mayor of Glendora, CA.

When I spoke to Tessitor, I finally got to the heart of his redevelopment defense. The city relies on RDA funding for 15 percent of its budget, he said, and assuring the city’s financial future is “all I care about.” Individual cities have indeed become dependent on redevelopment money, but that doesn’t mean that the current system works. Nor does it change the reality of how these abusive agencies operate. I sympathize with the mayor’s budget worries, but if Glendora is an example of redevelopment done right—as he argues—then the situation is even worse than I thought.

For the all the protests to the contrary, it’s hard to shake the feeling that RDAs are crony capitalism by another name.

Last week I wrote about California’s prison dilemma: mandatory sentencing laws combined with too few prisons.  So far, the choice has been presented as between less time for criminals or more taxes for the law-abiding.  An update by the Debra Saunders doesn’t paint a prettier picture:

Even law-and-order types understand that the system must be streamlined. Nina Salarno Ashford of Crime Victims United told me, “I understand budget constraints.” For example, parole violators should go to jail – not prison. But Salarno looks at overcrowded jails, which already have had to release inmates, and fears the consequences.

How do you pay for it?

“It is probably going to take taxes,” she answered.

No lie. There is not much point in keeping taxes low – only to have some lowlife boost your wallet.

On the other hand, there’s not much point in paying higher taxes if the state slashes the number of inmates by 40,000.

Now that the United States Supreme Court has demanded California reduce its overcrowded prison population by over 40,000, there may not be enough time to raise taxes and build adequate prison space even if Californians wanted to.

If ever there was a need for statesmanship from California’s executive and legislative leaders, this is it.  Otherwise, when tens of thousands of felons are freed, there will literally be rioting in the streets.

This morning, the Labor Department announced that first-time unemployment claims rose again, from 414,000 last week to 424,000 this week.

As demonstrated by this Labor Department graph, weekly unemployment claims average approximately 300,000 during periods of economic normalcy.  One year ago, the number stood at 463,000 when the Obama Administration proclaimed the arrival of the “Recovery Summer,” yet it never dipped below 400,000 for the remainder of 2010.  We finally dipped into the high 300,000 range in February of this year – still an elevated level – but the number climbed back to 478,000 last month.

This is the Obama “stimulus,” over two years and $1 trillion of government spending later.

As the Senate debates proposed tax rules that would unfairly and discriminatorily target domestic oil and gas producers, the Center for Individual Freedom on behalf of its 300,000 supporters and activists across the United States today formally urged all Senators to vote “NO” on S. 940.   Addressing that counterproductive proposed legislation, Grant Aldonas (former Under Secretary of Commerce for International Trade) and Pamela Olson (former Assistant Treasury Secretary for Tax Policy) warned of its likely destructive consequences in a Washington Examiner opinion piece today.   Here is one particularly relevant excerpt from their commentary:

Rather than offering serious ideas about how to tackle entitlements, cut wasteful spending or reform the tax code, proponents of raising the oil companies’ taxes have seized on the notion that American energy producers benefit from billions of dollars in alleged tax subsidies.

[The] single most damaging thing the proposal does is mortgage our energy future to the state-owned energy giants that now dominate global energy markets. The U.S. economy runs on oil, but we produce only 40 percent of what we consume, meaning our economy and standard of living depend heavily on our access to foreign oil and gas resources.

Reid’s plan works just fine if you are comfortable having America’s energy future decided in Beijing, Moscow, or Tehran. Not so much if you think we should be deciding our own destiny.

Any proposal that would enhance the competitiveness of foreign government-owned oil giants at the U.S. companies’ expense and lead to greater volatility in oil markets and rising prices for U.S. consumers qualifies as a damaging unintended consequence.”  (Emphasis added.)

To read this excellent commentary in full, please click here.

CFIF also urges you to contact your Senators (contact information for your Senators available here) and urge them to vote “NO” on S. 940.

City Journal has a piece by Pacific Research Institute’s Steve Greenhut praising the California Assembly’s GOP leadership for proposing a series of small fixes that would result in dramatic savings for the state budget:

But much more encouraging is that the Republican plan suggests how simple reforms can save serious dollars. Take the provision of medical care for prison inmates. According to the Assembly GOP’s budget white paper, “The cost of providing health care to state prisoners has been the fastest growing part of the corrections budget. After the [federal] receiver took control of the system in 2006, medical costs skyrocketed. They reached $2.5 billion a year, including mental health care. The cost of health care for each inmate per year in California is approximately $11,600, while prison healthcare costs $5,757 in New York; $4,720 in Florida; $4,418 in Pennsylvania; and $2,920 in Texas. While costs have increased dramatically, it has not improved the quality of care enough to take the system out of federal court receivership.” Under the Republican plan, the state would contract out the correctional health-care system, saving $400 million. But that would mean taking on the powerful California Correctional Peace Officers Association, the prison-guard union that just won an absurdly generous contract from the governor.

Other budget cuts in the Republican blueprint include $3.7 billion from programs related to early childhood, mental health, the poor, and the elderly, as well as $1.1 billion from the state payroll. The plan also includes $2.8 billion in other savings from a bill that has already passed the Assembly but hasn’t become law. It doesn’t go far enough toward addressing the size and scope of California’s government, since the state faces even bigger fiscal problems down the road. But Republicans have made their point: California can fix at least its short-term budget problem if Democrats truly want to.

The Assembly GOP’s white paper on their budget proposal balances the state’s remaining $15 billion budget deficit without raising taxes.  Greenhut points out that although the proposal doesn’t fix the structural issues plaguing California’s chronically dysfunctional governing process, it does show that there are at least a few Republicans able to offer a serious solution to the state’s most troubling problem.

Rep. Paul Ryan (R-WI) owes a lot to the late Jack Kemp, Ryan’s former boss at Empower America.  In a published remembrance of Kemp, Ryan said that while Ronald Reagan motivated him to get into politics, Kemp inspired him.

Indeed, Ryan’s “Roadmap to America’s Future” and “Path to Prosperity” budget resolution are models of Kemp’s supply-side thinking about incentivizing economic growth through government policies.  It was thought that, at most, Ryan might entertain becoming the 2012 GOP presidential nominee’s running mate if the right candidate asked.  Much like Senator Marco Rubio (R-FL), Ryan is a methodical politician of substance who is purposefully navigating his career trajectory.  Unlike others, Ryan and Rubio seemed committed to establishing a real record before running for higher offices.

But reality may be pushing up Ryan’s time frame.  With the surprise announcement that Senator Herb Kohl (D-WI) will not seek reelection next year, Ryan has an opportunity not unlike Jack Kemp faced as a rising New York congressman in the late 1970’s.  Then, Kemp decided not to challenge liberal Republican incumbent Jacob Javits in the 1980 GOP primary.  Had he done so and won, Kemp would have significantly increased his national profile by holding a statewide office at the beginning of the Reagan era.

Of course, to run Kemp would have had to split time between promoting his Senate candidacy and his landmark Kemp-Roth tax cuts – the soon-to-be centerpiece of Reagan’s economic recovery plan.  Like Kemp, Ryan has a game-changing economic program to fight for this next cycle, but unlike his former mentor, I think the odds are very good that Ryan will decide to run for the Senate.  If Democrats are going to make Ryan’s “Path to Prosperity” a major campaign theme next year, why not see if Wisconsin voters are ready to promote their state’s best presidential contender to statewide status?