While there are many arguments for not cutting defense spending, I do not believe Senator Kyl’s is a convincing one. First and foremost, smart cuts (especially in waste, fraud, etc. in the Pentagon) could easily eliminate fifteen percent from defense spending without harming our national interests or the ability of the troops to conduct missions. And while I am in agreement with Senator Tom Coburn (R-OK) and The Heritage Foundation that sequestration’s form of defense cuts are not smart cuts, Kyl’s choice to oppose cuts on the behalf of the economy seems more ideological than economical. After all, Kyl has strongly supported significant spending reductions (including the House-passed Cut, Cap and Balance proposal) in the past, and introduced legislation with Senator John McCain (R-AZ) earlier this year to reduce the deficit by $110 billion through federal worker pay freezes and federal work force reductions. He also made a strong statement on the Senate floor in April 2011 in which he said the following:

And it is the private sector that creates jobs. What we need to do is spend less government money – not only to get ourselves out from under this huge debt burden, but to allow the private economy to have the resources to grow…

An argument against sequestration can be made a variety of philosophically-consistent grounds, and Republicans (including Kyl) have made many of them. But given what he said in 2011 about Medicare spending reductions via eliminating wasteful spending, Kyl should actually support smart defense cuts:

At a Sept. 13 hearing of the deficit-reduction Super Committee, several lawmakers singled out Medicare’s wasteful spending as one way to save a significant sum without gutting popular entitlements. “We can save on Medicare without cutting benefits,” Sen. Jon Kyl, R-Arizona, said, citing a Cato Institute study on fraud and waste.

Senator Kyl has led Senate Republicans against the Democrats and their wishes to cut defense spending, and my disagreement with his stance does not diminish my respect for his generally consistent position on defense spending. However, his comments yesterday leave me with two important questions:

1. Why did Senator Kyl vote for the Budget Control Act – which enacted sequestration – given the CBO’s claims for years that even moderate spending reductions would harm economic growth?
2. How do the economic impacts of defense spending cuts differ from spending reductions or cuts in the rest of the federal government?

I reached out to Senator Kyl’s press secretary this morning via phone and e-mail regarding these questions, but received no response to either message.

It’s been rated “mostly true” by Politifact.

It is the MarketWatch piece on how Obama hasn’t really increased spending all that much.

And I’m damn tired of picking it apart 140 characters at a time, so I put together this sarcastic infographic showing exactly how sloppy this piece really is.

There are two things in this infographic that should be called out more explicitly.

First, much of the debate here centers around who exactly should catch the blame for FY 2009 spending. This is actually a very tricky question and I think compelling cases can be made for both sides of this debate.

My personal position is that it’s really complicated. But one thing is for certain: in hindsight the CBO January 2009 estimate is so obviously wrong that using it should be called out and mocked.

The January 2009 CBO estimate might have been a “best estimate of what Obama inherited”, but only in January 2009 when spending data was *very* hard to predict. January 2009 marked the worst part of the recession and the uncertainty was very high. Only a few months later, Obama’s budget estimated 2009 spending would be $400 billion higher than the CBO estimate.

But now we can look at the data, not the estimates. And we should. The spending data ended up $20 billion lower than the CBO estimate… and that included the stimulus spending (which Nutting says was $140 billion, but I’m still trying to track that number down). If that is the case, the high-end estimate for Bush’s fiscal year is  $3.38 trillion. If we compare that to Obama’s 2013 budget proposal ($3.80 trillion), that’s an increase of 12.5% (3.1% annualized). Which isn’t that high, but it’s also using a baseline that is still filled with a lot of what were supposed to be 1 time expenses (TARP, Cash for Clunkers, the auto bailout, the housing credit, etc).

Second, Nutting uses the CBO baseline in place of Obama’s spending. This is easily verified and I can’t think of a serious economic pundit who would say this is OK. I can think of two reasons for doing this: Either a) Nutting is a monstrously biased ass who (rightly) figured no one in the liberal world would fact check him so he could use whatever the hell number he wanted to use or b) Nutting had no idea that the CBO baseline isn’t a budget proposal. I’m actually leaning toward the second explanation. Nutting uses so many disparate sources it seems clear he doesn’t know his way around federal finance.

Congrats, Mr. Nutting. I don’t think you’re a huge jerk, only that you’re hilariously unqualified for your job.

References:

Bush requested $3.107 trillion, but the final budget of $3.52 trillion was passed by the Democratic Congress and signed by President Obama on March 12, 2009.

For actual spending, I used the monthly Treasury Reports, which have spending and revenue for every month since 1981 in an Excel file. Easy to work with.

For the CBO fiscal year 2009 estimates.

The CBO baseline (which was referenced by Nutting for the $3.58 trillion number) is found here.

President Obama’s actual 2013 budget

And just for kicks, here is the CBO analysis of the President’s Budget which pegs Obama’s 2013 spending at $3.717 trillion.

Thanks to the Hot Air team for letting my cross post this in the Green Room!

For northern Ohio, the price was a surreal $357 per megawatt – because northern Ohio has been heavily reliant on coal plants that will all be shut down by 2015.

These increases can only be passed on to the consumer – or taxpayer.  Again, this is what bidders actually committed to pay for power generating capacity.  As Doug Ross reminds us, this isn’t information from a model; it’s a real-world, market-driven data point.  It’s going to cost that much to generate power without the coal plants.  If you want electric power, you’re going to have to pay the rate that makes it possible to generate power at that cost.

And, of course, almost no one can afford to do that.  Suppose the eight-fold increase in the auction price produced a commensurate eight-fold increase in the unit price of a kilowatt-hour for the consumer.  (It may not, but it will produce a significant increase, probably on the order of 500-700%.)

Imagine the average $120 or so monthly electric bill of Northeasterners exploding to $960 a month.  The 500-700% increase would produce average bills running from $600-720 a month.

Even just doubling the amount of people’s electric bills would entail a huge economic shock.  The eight-fold-increase numbers are hard to get our minds around, but supposing that the increase no more than doubled or tripled the amount of the average electric bill – with the residue being absorbed by taxpayer-debt-funded government programs – it would still have a very disruptive effect on social cohesion.  Only a small percentage of Americans would riot in the streets, but millions of Americans would begin fleeing the areas where they could no longer afford to live.

Those who already live in rural parts of northern Ohio would no doubt turn exclusively to diesel generators, propane heaters, and wood fires.  (Which we can expect would then be outlawed.)  They and their rural confreres in the neighboring states would be joined by more and more refugees from the cities.  Suburbanites would go off-grid to the extent they could, but would remain captive to urban regulation.  Many in the Northeast and Midwest would make the long delayed decision to move elsewhere – south and west – even if that meant losing the investment in their homes.  Still others would begin considering the move for the first time.

What Americans will not do is blithely revert to living in 19th-century conditions in the cities.  More than household electric bills will skyrocket:  the cost of everything in life that relies on electricity – in other words, everything – will skyrocket as well.  Retailers, no matter what they sell, will have to charge much, much more for their products, not only because making them costs the producers more, but because keeping the lights on or the machines operating in the retail facility will cost so much more.

This electricity increase will force thousands of businesses to shut down.  Even many big businesses can’t handle this cost increase.  It will kill more jobs than anything has to date, making the Great Depression look like a roaring recovery.  It will make things we take for granted, like fresh produce, impossible to obtain unless you live right next to a farm (and live outside of the Northeast, where commercial farming will die out entirely) – but it will also distort and suppress all kinds of sophisticated and packaged production, including those related to the most basic necessities.  The price of gasoline may remain comparatively stable, but if there are far fewer retailers to ship products to, many truckers will still go out of business.

Doug Ross cites the North American Electric Reliability Corporation (NERC) predicting that the massive shutdown of coal plants will compromise the reliability of the power grid in the Northeast.  But we must also consider the likelihood that power companies will lose so many customers, and lose so much revenue, that they will go under.  “Saving” them with big bailouts would only make the areas they serve more beholden to their “patrons” in the federal government.

These are mostly first-order effects.  As distortions mushroomed in the Northeast, we can assume that the federal government would not stand idle.  If its priority remained limiting the people’s access to electric power, it would do whatever was necessary to ensure that there would be no benefit from fleeing to the other parts of the country.

The bottom line on this prospective skyrocketing is that it cannot happen without tremendous social disruption.  That doesn’t mean the American people will turn violent or undisciplined – a small minority would, and they are already displaying their character as we speak – but it does mean that we cannot continue life as we know it, with almost everyone in the northeastern part of the country artificially priced out of the convenience of central-grid electric power.

Keep in mind, this is entirely artificial.  This is government policy, made independently of any sort of outside crisis.  Nothing imposes this on us except the Obama administration’s acceleration of hallucinatory ideological extremism.

Ross notes that after NERC published its estimates on the reliability problems of the future power grid, it was promptly investigated by the Federal Energy Regulatory Commission (FERC).

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.

There has been no huge increase in spending under the current president, despite what you hear.

Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget.

Varied versions of this flawed argument have already been shot down by numerous commentators, including twice by Just Facts President Jim Agresti in 2010 and earlier this month, and by Morgen Richmond and me here at Hot Air. However, Nutting takes a different angle on the discussion, and there numerous misleading or inaccurate statements he makes that require correcting. Several major points are addressed below.

First, Nutting writes, “In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion.” This is inaccurate for two reasons: first, as Nutting notes in a separate chart, Obama was responsible for $140 billion in stimulus spending in 2009. Therefore, insinuating that the 2009 deficit was garnered entirely under President Bush’s watch is misleading.

Second, and related, Nutting fails to place blame for a number of other spending items President Obama signed into law on the President, particularly those from the $410 billion H.R. 1105, the Omnibus Appropriations Act, 2009. This Act, signed into law by President Obama on March 11, 2009, included the following:

1. Five billion dollars worth of earmarks added by Members of Congress.
2. A funding increase of $8.5 billion in the Labor-HHS-Education portion of the law, excluding emergency appropriations.
3. A $31 billion increase in nine bills funding various federal agencies over FY 2008, as totaled by the U.S. Conference of Mayor.

All told, as noted by the Canada Free Press, the omnibus increased total spending in the relevant departments by 8% over the prior year. And while $31 billion is not a large amount of money compared to the federal budget in 2009 (it was less than one percent of spending in that year), it was 22% of the $140 billion in deficit spending Nutting credits to Obama. Nutting should still have put the blame for those increases on Obama’s shoulders – as he eventually, and rightly, did with stimulus spending.

Third, Nutting cites the Congressional Budget Office (CBO) to claim FY 2013 spending is supposed to go down by 1.3%. This is extremely misleading. In citing the CBO, Nutting is looking at the its 2012 baseline report on spending. This report looks at how current law will impact spending and the deficit. However, in the same report, CBO’s alternative fiscal scenario (what I like to call the politically realistic scenario, with explanations of the likely course Congress will take regarding specific tax and spending programs) expects certain spending reductions to be delayed by Congress. These include cuts to doctor payments in Medicare and the sequestration cuts scheduled to take place in 2013. These and other examinations of fiscal reality cause the CBO to note “deficits would average 5.4 percent of GDP over the 2013–2022 period, rather than the 1.5 percent reflected in CBO’s baseline projections.” The CBO also expects the difference in deficits between the baseline report and alternative fiscal scenario to be about two percent of GDP, or over $300 billion in 2013.

Finally, while Nutting’s thesis focuses exclusively on the time President Obama has been in office, it should be pointed out that then-Senator Obama voted for at least two big-ticket items opposed by many Republicans and signed by Bush – TARP and the auto bailouts. While not looking at these is consistent with Nutting’s thesis, it also leads the reader to forget that it takes three to tango in Washington…and by having control of the House and the Senate Senator Obama and his Democratic allies were two of those partners in spending in Fiscal Year 2009.

In The Debt Bomb: A Bold Plan To Stop Washington From Bankrupting America, Senator Tom Coburn (R-OK) explains how Washington’s career politicians, staffers, and lobbyists have set the nation up for fiscal failure.  Pulling few punches, Coburn targets sacred cows of each party and explains that rather than being in gridlock (as the media claims is the case), Congress has spent the last several decades (and especially the last 15 years) working to expand influence and re-election capabilities regardless of party.

Opening with a story about how America’s rising debt could cause first a financial, and then a military crisis by 2020, Coburn reminds readers that this country is only as powerful as its finances will allow it to be.  In this fictional-but-likely future, foreign investors decide in 2014 that America is no longer a viable financial investment.  Over a span of days, this new consensus works its way into the value of the dollar, sinking it by 50% and increasing inflation.  Riots become widespread, the National Guard is deployed, and the G-20 meets to tell the U.S. that tax rates will double, retirement ages will leap precipitously, and means-testing will be the order of the day on benefits.  Finally, in 2019 — two years after employment finally drops from 24% — China invades Taiwan and informs the U.S. that if we stop the invasion, the U.S. will lose both financially (as China dumps our debt) and militarily (as both nations perhaps engage in a nuclear exchange).

Unlike other authors, Coburn takes on the debt from a series of critical angles, not just partisan ones.  This is done in a way that breaks through the fog of D.C.-speak and explains in plain terms the corruption all too present in Washington.  The impacts of the debt on the unemployment rate, national security, retirement, social welfare, personal freedom, tax rates, energy reform, and morality each have portions of chapters (in some cases, whole chapters) dedicated to them.  Additionally, Coburn aims to show just how much smaller government could be if we just eliminated fraud/waste/abuse/duplicity from the federal government…as much as one-third, or over $1 trillion per year (nearly $3,900 for every American every year).  If nothing else, the disgust readers should have for their elected politicians is a victory in and of itself, and it should lead to a successive series of efforts by voters to term-limit members of Congress.

The most important reforms Coburn addresses are those related to duplication/oversight, military spending, taxes, and entitlements.  With an envious lack of ego, Coburn looks at the problem from the perspective of an outsider involved in the process rather than as an elitist insider who knows all the answers.  Does the senator have answers?  Yes.  Does he think his are the only ones?  Absolutely not.  While his own oversight reports and Back in Black solutions are regularly mentioned both in chapters and in an addendum, Coburn praises Senator Joe Lieberman (I-CT), Senator Dick Durbin (D-IL), and Representative Paul Ryan (R-WI), among others, for truly working to find a way to defuse our debt bomb.

The inside baseball Coburn exposes should embarrass both members and their constituents.  Earmarks, personal discussions, and careerism are all brought to the fore, but nothing is more “inside baseball” than the debate that took place leading up to the debt ceiling compromise last August.  The utter dysfunction of Congress is laid bare in Coburn’s descriptions of what happened.  Meeting after meeting and discussion after discussion led to a deal that not only didn’t cut spending, but actually grew spending by $2 trillion over ten years…and still left our nation’s credit rating downgraded.

In the final pages of the book, Coburn writes the about “the left’s counterfeit compassion.”  Accurately, Coburn notes:

[W]e hear a lot of talk about caring for the poor but very little evidence that the policies they espouse are working. In fact, the evidence shows government is harming the poor more than helping. Imagine, for instance, if a conservative proposed a Medicaid reform that would result in 40 percent of doctors not seeing Medicaid patients, and 65 percent of specialists denying care to Medicaid patients. And then imagine if this same reform would cause Medicare patients to be rejected at a rate higher than that of private insurance. Finally, imagine if this reform idea would cause the bankruptcy of Medicare and the likely denial of benefits in five years.

These are all actual policy realities and are a direct result of the left’s “compassion” for the poor.  As Coburn has often pointed out in other mediums, it is better to dictate spending and other reforms internally rather than have drastic changes dictated by external forces, as is the case with Greece.

Like any book, this effort has its flaws.  Impressively, only one sentence stands out as factually imprecise — Coburn says on Page 211 that the payroll tax holiday now in its second year “is cannibalizing” Social Security.  However, the holiday law is written so that the impact on the life of Social Security is canceled out with deficit transfer payments from the Treasury, so the size of the Social Security Trust Fund is left unaffected.

(Note: In a series of e-mail exchanges, The Debt Bomb co-author and Coburn Press Secretary John Hart disagreed with my assessment of the tax holiday’s effect on the Social Security Trust Fund, though he did not dispute that general fund transfers are taking place.  Hart pointed out that a number of economists, columnists, and others from across the political spectrum believe that the payroll tax holiday will change how Social Security’s funding is both considered and applied in the future.  While this is certainly a defensible contention, this is technically separate from how the funding for the payroll tax holiday law was applied in 2011 and will be applied in 2012.)

Additionally, while he rightly goes after inflation as theft and the Wall Street crisis as both a government policy failure and a failure of morality, Coburn spends too little time on the Federal Reserve’s impact on our debt and no time on the Troubled Asset Relief Program (TARP), for which Coburn himself voted.  (Note: In a phone conversation, Hart explained that Dr. Coburn did not want the book to be about him and his voting record, but instead about the debt problem the nation faces.  Hart noted that Coburn is open to answering questions about his vote for TARP, something I noticed personally last year when the senator not only answered my question about his vote for TARP, but also said in a follow-up discussion that if he “couldn’t defend” that vote, he didn’t belong on Capitol Hill.)

Two other notable critiques: several chapters get lost in the myriad of examples of fake partisanship, fraud, and dishonesty in Congress.  While these examples are important, and should disgust Americans, they also divert the reader’s attention from the larger point of the chapters.

The other concern with this book is its language regarding how Coburn balances separating the person from the politician.  On the one hand, he is blunt in denouncing corruption, careerism, and those who sustain the fiscal status quo; calls many politicians “double-minded”; and in fact targets a number of politicians and special interest leaders in both parties by name (such as ATR’s Grover Norquist, FreedomWorks’ Dick Armey, and Senate Majority Leader Harry Reid [D-NV]).  However, Coburn also says, “Everyone in Washington wants to do the right thing.”  Coburn is a master of holding to principle while still working with members of all political stripes in a gentlemanly manner — though he is also not one to mince words, especially in this book — but it was difficult to discern how Coburn could hold any respect for those members of Congress who are being “double-minded” and are working purposely for re-election instead of for the benefit of the nation.

All in all, The Debt Bomb is an invaluable addition to the public debate.  Doctor and Senator Tom Coburn is one of the few members of Congress who both knows the severity of the debt problem the nation faces and is willing to risk his reputation to fix it.  Be it via highlighting fraudulent spending in Medicare, Defense Department corruption, or how Congress would rather add more costly programs for election reasons than make existing programs more efficient, nobody is safe in this book.  This includes the voting electorate, which is often ignored in media portrayals of Beltway Bubble battles.

While Coburn largely praises voters for seeing through the Beltway Bubble in recent years when it comes to the Tea Party, earmarking, and entitlement reform, he also lays responsibility on our shoulders in the form of holding elected officials responsible for their actions, and for enacting term limits through the ballot box.  After all, careerism — which Coburn says is the core reason for Washington’s unconstitutional expansions of power and influence — can be truly defeated only by an educated electorate.  Above all else, that is the goal of this book: to end careerism, bring the federal government back to within the limits of the Constitution, and slash spending.  Unlike other politicians, Coburn’s intent is not to hold onto power, but instead to see America avoid the fate of Rome, Napoleonic France, the USSR, and other great powers that collapsed not due to a lack of military might, but instead because of a failure of fiscal responsibility.

The temptation is strong to just let this one go.  But it’s actually a perfect example of where Romney is, um, challenged, and why my enthusiasm for him remains tepid.  The short version of my point is that the president has no business restructuring auto companies and trying to guide them through “recovery.”  He is not empowered by any part of the US Constitution to do this, and it’s a terrible, horrible, no-good, very bad idea in any case.

If I want the services of someone who’s good at reorganizing auto companies, I’ll invest money in a private business.  That’s not what we elect a president for.  The president of the United States, our highest elected public official, needs to keep his paws off the management of private companies.  When he doesn’t, the window is flung open to cronyism, graft, bad business decisions, and distorted, uneconomic incentives.

The US auto industry keeps snuffling up to the public trough – has been doing so for 30 years now – because it is required by the government to operate under unprofitable conditions.  It is tended by the federal government as an interest of politically connected constituencies.  It has been artificially constrained and incentivized for so many years now that to say it has “recovered” is a wholly political statement, bearing no useful relation to the Big Three’s actual profit-loss or earnings picture, stock price, or any other measure of business health.

In fact, Chrysler’s much-touted “payback” of its taxpayer bailout turned out to involve a shell game in which the US Department of Energy is lending Fiat $3.5 billion so that Fiat can pay off its US Treasury loan and pump Chrysler with cash by exercising an option to buy Chrysler stock.  The Washington Times describes the transaction as follows:

So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.

That’s government management in a nutshell.  Romney can’t manage the auto industry better – not from the Oval Office.  No one can.  If he wants to run auto companies, he needs to see if Ford, GM, or Chrysler is hiring.  If he wants to guide them through bankruptcy, he can become a federal regulator or get himself appointed as a bankruptcy judge – and in either case, follow the law on the matter as written by Congress, rather than getting creative and exercising powers the Constitution doesn’t give him.

When Romney speaks of the US auto industry recovering, he is speaking in the language of big, dirigiste government, accepting at face value the short-term effect of a bailout process that has served mainly to perpetuate unprofitable but politically entrenched conditions.  It guarantees that more subsidies will be needed down the road.  The taxpayer had to be billed for getting the Chevy Volt built and maintaining the political sway of the UAW, because those are special-interest mandates that no one would pay for voluntarily.  The bailout under Obama has simply been a pretext for expanding the unprofitable conditions that make the US auto industry unable to truly “recover,” in the sense of not continuing to need bailouts.

A president who doesn’t see this is hard to get excited about.  There is no point in claiming that Romney does see it, when he never speaks as if he does.  About the auto industry bailout, what he ought to say is that it was improperly handled by Obama through executive actions that must not serve as precedents; that it hasn’t turned out to be a good deal for the taxpayer; and that due-process bankruptcy without presidential intervention would have been the right way to proceed and should have been defaulted to.

Romney’s utterances on this topic indicate that he is a big-government politician.  Not only is he not offended by the bailout, he’s not offended by the Obama administration’s dirigiste approach to restructuring GM and Chrysler.  He’s taking credit for it.

In the sense that he would not engage in Chicago-style cronyism, I think Romney would be better than Obama.  (There are a number of other ways in which Romney comes out on the long end of the personal- and professional-integrity comparison.)  But in terms of improper autonomy in the executive, and structural opportunities for cronyism, he would probably either set or confirm some very undesirable precedents while in office.  He needs an active, curmudgeonly Congress to thwart him, early and often.

The president is not the nation’s CEO-in-chief.  Regarding domestic policy, he should talk principle, not business-reorganization specifics.  I’d like to hear more from him on foreign and security policy; on domestic policy, it is far more important to be courageous about the principles of limited government than to be knowledgeable about reorganizing businesses.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

Greece’s continued access to bailout funds from the IMF, EU, and European Central Bank, could be in danger, if the austerity measures currently in place in Greece do not continue. As of right now (7:55 CST on May 6th), the Nikkei is down over 2% on the news of the election results. Needless to say, if the Eurozone starts to feel rumbles due to Greek instability, how long before any of that instability spreads to the U.S.?

As I’m sure many of you are aware, the current economic situation in the United States, is far from peachy. It probably wouldn’t take a lot to knock the U.S. back into recession. If I’m at the White House, I would probably start taking some Tums right about now. President Bush still tends to get more blame for our economic condition than president Obama, but if we enter a new recession, how long do you think those numbers will remain that way?

At least the White House can always look at the bright side, if a recession hits, gas prices will drop… probably.

P.S.-Instead of austerity measures, couldn’t the EU demand in return for bailout funds, that all copies of My Big Fat Greek Wedding be burned and that Maria Menounos be betrothed to me? Just an idea.

Now some might ask why my first post at The Greenroom concerns a non-political topic such as a (seemingly) overpaid baseball player finally getting his first home run and not something more deserving of your attention. First, because Allahpundit does it too and what’s good for the goose is good for the gander. Second, as a Cardinals fan, I have a morbid curiosity of how our ex-superstar performs for his new team. Finally, and more importantly, it touches upon something that is not only prevalent in the private sector, but in the government too. That is, throwing money at a problem and hoping to see improvement.

You see, the Angels hoped to walk right into the World Series by going on a free-agent shopping spree and many “experts” thought they’d be successful. Yet, as of the morning of May 6th, 2012 they stand at 11-17, good for last in the A.L. West. When it comes to government spending, you hear “experts” tell us that lots of government spending is the answer for whatever the current crisis is at the moment. Whether that be getting out of a recession or improving education, you hear we just need to invest (i.e. spend) in x and we’ll be better off. Despite these assurances, we keep spending and we get results like this.

So a word of warning to all of you out there, whenever a politician says we have to make vital investments in so and so, cast a skeptical eye.

But what does all this look like in terms of numbers?  What’s the how much and where and whom of the Golden State collapse?  Perhaps the most interesting and telling thing is that it really is as bad as it looks.  And the reasons are pretty much what you’d expect.  Here’s the California story, in numbers.

According to a March 2012 report, 855,000 is how many private-sector jobs California has lost since the recession started four years ago. (H/t: California Political News & Views.)  The state today enjoys an unemployment rate of 11%, compared with the official national average of 8.3%

Texas, by contrast, has added 139,800 jobs, posting the biggest absolute gain among the 50 states.  (California’s is the biggest absolute loss.)  Texas’ unemployment rate is 7.1%.  Number 3 on the job-growth list? The District of Columbia, with 21,000 added private-sector jobs.  Government is big business.

But we were talking about California.  How does California rank in terms of the average state and local tax burden? According to the Tax Foundation, in 2009, California had the 6th heaviest tax burden in the nation, at 10.6%.   (New Jersey was #1, followed by New York at #2.)  That’s the in-state tax burden, of course.  Federal taxes are on top of that.

Of course, business climate comprises more than the average individual tax burden.  The Tax Foundation looks at five forms of taxation – corporate tax, individual income tax, sales tax, property tax, and unemployment insurance tax – to index the business climates of the 50 states.  By this combined measure, the Tax Foundation ranks California 48th in business climate.  (New York is 49th, and New Jersey 50th.)

State regulatory environment? George Mason University’s Mercatus Center ranks the Golden State 48th in the nation.  New Jersey and New York are numbers 49 and 50, respectively.

How about other business costs?  California had the 5th highest state premium ranking for worker compensation insurance costs in 2010 (although the state’s position improved slightly in 2011 due to other states raising their state premiums).

California ranks 7th highest in electric utility costs, with Hawaii being the highest, followed by Connecticut and Alaska.

According to the Small Business & Entrepreneurship Council, California has the third-highest per-gallon gasoline tax (Connecticut and New York are #1 and #2) and by far the highest tax on diesel, at 52.5 cents per gallon. (Some numbers below also come from the SB&EC report.)

California perennially has the second-highest gasoline prices at the pump (Hawaii is #1), although the state has regularly been ranked 3rd or 4th in oil production in recent years.  (In the past week the statewide average was $4.15 for a gallon of regular, down from $4.36 a month ago.)  In spite of having the third largest oil and gas reserves of any state in the nation, California is ranked dead last among all US jurisdictions for global oil investment.  The fact that California hasn’t issued a new offshore drilling permit for over 30 years is undoubtedly a factor, as is the fact that the Monterey Shale Oil Field, which holds 64% of all the recoverable shale oil in the United States, is hamstrung by lawsuits, a typical condition in the state for both drilling and refining operations.

In spite of the state’s natural bounty, California produces only 37% of its statewide oil consumption.  The rest comes from other states and countries, at added expense.

In terms of the employer burden of health-insurance mandates, California is 9th among the 50 states and the District of Columbia.  (Rhode Island, Maryland, and Minnesota have the highest burdens.)

Meanwhile, California ranks 4th highest in state and local government spending per capita.  The District of Columbia is the highest, followed by Alaska, Wyoming, and New York.

Ah, yes, state spending.  California has by far the largest debt of any US state, at around $612 billion with state and local debt and pension liabilities included.  In terms of raw numbers, New York posts a pathetic second place with only $305 billion.  The size of California’s population allows the Golden State to slip to only 7th place in terms of per capita state and local debt.  The District of Columbia walks off with another prize in this category, having on the books 85% more debt per capita than the 50-state average.

The California debt spiral is due in part to the steep decline in state tax revenues.  The 22% year-on-year decline observed in February 2012 doesn’t tell the whole story either; California had already posted dramatic revenue losses in business and property taxes between 2007 and 2010.  Business-tax revenues dropped 18% in that period, and property-tax revenues fell 30% due to the real estate market crash.

Let’s talk population trends.  Many readers are familiar with the arresting Golden State statistics cited by a Wall Street Journal article in March:

From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

The net gain in tax filers includes the author:  I was added as a tax-paying filer to the California income tax rolls in 2004.  Apparently there are another 149,999 of us, and I’m thinking we need a T-shirt.  (And yes, alert readers, I understand that this was a net gain, reflecting both additions to and subtractions from the tax rolls over time.  Just having some fun with these sad little numbers.)

California also has the distinction of having 12% of the US population and 33% of the nation’s welfare recipients.  Governor Jerry’s Brown’s 2012-13 budget proposal includes $100 billion for health and human services, which, on an annualized basis, is more than all the state and local spending in 27 of the 50 states.

In California, meanwhile, the tax code is steeply progressive.  Prior to the recession, the state got 45% of its income tax revenues from the top 1% of filers.  As the Wall Street Journal pointed out last year, the incomes of filers in that top 1% — which in California starts at $490,000 – are more volatile than the incomes of other filers.  California, New York, Connecticut, and Illinois are some of the states most dependent for revenue on the top 1%, and they have opened up the biggest state deficits during the recession.

How many businesses are leaving California?  In 2011, 254 businesses left California, or an average of 5 per week.  202 left in 2010, 51 in 2009.  Even “green” businesses are leaving California.  The business environment is that overregulated, and costs are that high.  A business saves, on average, between 20% and 40% on costs by moving out of California.  (Even the lower figure is astounding for a move within the same nation.)

But according to a 2011 report, 2500 employers ceased operations in California between 2007 and 2011.  The great majority of them simply went out of business.  (I can certainly vouch for the observability of that trend in my area of Southern California.  Besides small businesses closing – I can’t seem to keep a dry cleaner for longer than 6 months – we’ve had a number of big chain businesses pull out, leaving gigantic empty stores and parking lots.  The last time I stocked up on household supplies at the local Wal-Mart, there were no greeters at the doors.  An ominous portent.)  How did California’s real GDP growth rank in 2011?  34th in the United States.

As of January 2012, which state had the highest average mortgage debt per household?  California, with $313,000.   California has had the second highest foreclosure rate of any state throughout the recession (Nevada has the highest).  In terms of the state’s percentage of underwater mortgages, California ranks only 6th (Nevada, again, is #1).  But that’s a little deceiving, since the value of the underwater mortgages in California is over $544 billion. That sum represents nearly 30% of total mortgage debt in California, which is $1.94 trillion – or 22% of all mortgage debt in the United States.

Well, but which state had the highest tuition hike for its state university system in 2011?  That would be California, with a tuition jump of 21%.  (This hike mitigated somewhat the advantage of in-state tuition for those here illegally, which California offers along with 11 other states.)

Oh, and California has far and away the most endangered animal species, with 111.  No other state comes close.  Hawaii has California beat on endangered plant species, however, with 273 to the Golden State’s 178.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

If, as the old saw goes, personnel is policy…then it is clear that the Obama machine (campaign and labor) has decided that its primary Hispanic outreach target is Central Florida.  Accordingly, they have dispatched their best general to the field.

On Monday, José Delgado (Washington D.C. correspondent for El Nuevo Día) published a piece which featured the Democrat Hispanic outreach key players in Central Florida (Google-translated version here).  I was familiar with some of the names cited (such as Franceschini, who has been active for years, and Acevedo, who is the public face of the Hispanic campaign in the I-4 corridor)…but one name, in particular, was not at all known to me (my translation):

“This is where the battle royal will be fought”, said labor leader José La Luz, whom the AFL-CIO has assigned to work on voter mobilization in Central Florida.

Since the name didn’t ring a bell, I started digging.  It turns out that La Luz is not only a labor legend, but a “proud socialist” with a track record and radical pedigree going all the way back to the ’70s.  Had he shifted to academia, as did many of the radicals of that time period, he’d undoubtedly be one of those “silver ponytails” that Andrew Breitbart alluded to at CPAC.  Instead, he stayed in the field and became a master organizer.

La Luz got his start as a member of the now-defunct Puerto Rican Socialist Party (which had extensive ties to the Castro regime, according to Congressional testimony), and was active in that party’s Connecticut branch.  By 1976, he rose to become a part of the PSP’s Central Committee, and attended the National Hard Times Conference (under the auspices of Prairie Fire and the Weather Underground).  Shortly thereafter, La Luz left the PSP and joined the Democratic Socialist Organizing Committee, where he became Chairman of its Hispanic Commission, prior to the merger that led to the formation of the Democratic Socialists of America.  After spending most of the ’90s in Chicago, La Luz officially retured to Puerto Rico as Executive Director of the local AFSCME branch, and successfully oversaw the multi-union organization of 150,000 government workers, and their (successful) campaign for collective bargaining rights.

Fast forward to 2007, and we begin to see how La Luz’ unique experience and skill sets come into play over the course of the past and current election cycles.  Shortly after that particular speech, La Luz (who was, at the time, director of the AFSCME Leadership Academy) became chairman of Latinos For Obama.  As such, La Luz worked in Colorado and New Mexico, driving registration, educating, and mobilizing voters until Election Day.  A month and half before the 2008 general election, he had this to say to People’s World Weekly:

“We are showing how the companies and outfits that exploit Latino workers are the people behind McCain,” said Laluz. Between now and Nov. 4, Laluz said the Obama campaign is registering voters in New Mexico and Colorado and developing lists of tens of thousands of Latino supporters for Obama. “Those lists will constitute the people we bring out on Election Day,” he said.

By now we know that the strategy clearly worked, given that Obama gained 67% of the Latino vote in 2008.  This strategy focused specifically on racial and economic grievances.

La Luz has remained active in the DSA, serving as vice-chair as recently as 2009, and adressing the DSA conventionin 2011 (watch the whole thing if you can spare the time, but if not, then definitely go to 24:11).  In particular, the calls for a tax increase pledge, and the Occupy Spring Offensive bring special insight into what we can expect to see in Central Florida.

If you read through the Nuevo Día piece, you’ll see that La Luz is savvy enough to recognize that the immigration argument might not play as well in Central Florida, but the other elements of the strategy would.

Given the importance of the Hispanic vote along the I-4 corridor, and its national repercussions (let there be no doubt that FL-9 is now the Mother Of All Bellwethers), there was always an expectation that the Institutional Left would go all out.  We also know that the muscle is never far from the smiling face, and the iron is fist never far from the velvet glove.

It is clear that Central Florida’s hispanic battleground (the most important in the nation) is a must-win for the regime, and it has sent its best general to the field.

Stuff just got real.

A Spanish-language version of this post is available at El Tercer Riel (The Third Rail).

One of the more intriguing posts deals with onions and oil. Oh, and corn. Perry quotes a 2008 Fortune magazine article:

“Before the government starts scrutinizing the role that speculators may have played in driving up fuel and food prices, investigators may want to take a look at price swings in a commodity not in today’s news: onions.

The bulbous root is the only commodity for which futures trading is banned. Back in 1958, onion growers convinced themselves that futures traders were responsible for falling onion prices, so they lobbied an up-and-coming Michigan Congressman named Gerald Ford to push through a law banning all futures trading in onions. The law still stands.

And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics’ belief that futures trading diminishes extreme price swings.”

The proof is in the charts. The first chart compares the volatility in the onion market, in which futures trading was banned, with that of the oil market.

Compare the mean and standard deviation differences in the two markets. Remember blue – no futures trading. Red – futures trading.

So, you say, comparing onions and oil is like, well, comparing onions and oil! OK, how about onions an corn. Again the same difference applies. No futures trading for onions but there is with corn.

Result? The same:

The point, of course, is those futures contracts help moderate a market. Or as Perry says:

The fact that the volatility of onion prices is so much greater than the volatility of corn prices lends further statistical support to the notion that markets with futures trading like corn have lower price volatility than markets without futures contracts like onions.

Bingo. So, the President’s war on “oil speculators” is an obvious distraction. But here’s the other side of that – if successful, you may end up seeing oil act like onions. Is that something most of us would prefer? Given these facts, it seems the height of folly to attempt to regulate or ban futures trading in oil, doesn’t it?

A few more charts to finish the point. First, futures trading in natural gas:

If oil speculation (or, as implied, greed) is the cause of rising oil prices, why aren’t natural gas prices rising as well in futures trades (not as “greedy”)?

In fact, it is because of “speculators” that we’ve seen the price of natural gas go down. So futures markets do what? They react to market signals on supply and demand. What this tells us is we most likely have an over abundance of natural gas.

So what does the market do? It adjusts the price to the reality of the supply v demand – in this case, the price goes down. And it also does things like this:

When natural gas price were up and oil prices down, more drilling rigs were allocated by those markets to natural gas. As oil prices have risen dramatically recently, while natural gas prices have fallen, there’s been just as dramatic a shift in the allocation of drilling rigs from natural gas to oil.

The success in the natural gas sector has driven supply up while demand has yet to increase proportionately. Meanwhile, we’d had an abundant supply of oil, which has now become very tight (geopolitics, folks – governments at work and war) driving up the price of crude. The market is reacting.

And as it reacts, guess what?

Crude futures are down as they obviously see future supply growing as the market adjusts and reacts. All driven by “speculators” who are, right now, in the middle of moderating the market.

So, as President Obama continues with his “blame the speculators” nonsense, you have a choice.

Onions or corn?

Markets or bureaucrats?

PS – if you’d like to read some academic pieces on why “speculators” are a key to a market economy, read this.

~McQ

Twitter: @McQandO

Don’t misunderstand – the GSA and other federal agencies should be held accountable for this and other unethical abuses of the public’s money. As The Heritage Foundation’s Morning Bell outlined on April 19, and again on April 23, this is only one of many publicly egregious wastes of taxpayer money in the bureaucracies in D.C. But when it comes down to it, $820,000 is not even a drop in the bucket of fraud/waste/abuse/duplicity. Here are some of the other, more easily ignored abuses:

First off is simple abuse that is acceptable for the well-connected politician but disgraceful and/or illegal for anyone else – small change, but ultimately emblematic of the systemic corruption in the federal government. Case in point is how former Representative Anthony Weiner (D-NY) gets a pension and other benefits for the rest of his life, despite resigning in disgrace. President Obama, following in the footsteps of his predecessors, is almost certainly using taxpayer dollars for campaign trips – illegal, but obviously acceptable under both parties. Senator David Vitter (R-LA) was busted for solicitation, but never spent time in jail. He will get a pension and other monetary benefits, same as Weiner.

Antithetical to many conservatives is looking hard at unproductive defense spending. However, the Defense Department is rife with abuse. For example, last October a report by Senator Bernie Sanders (I-VT) outlined how major defense contractors who paid civil fines or settled for amounts of $1 million or greater still received over $500 billion in contracts in the last 10 years. Another report, this one from The Commission Wartime Contracting, estimated that between $31 billion and $60 billion had been lost to poor oversight and/or fraud in Iraq and Afghanistan during our time in those nations.

Outside of fraud, simple inefficiencies abound in the Defense Department. This Forbes piece notes that approximately $100 billion had been spent on weapons programs that were either never used or eventually canceled – all after significant investments. In an informal conversation with a friend who is a military auditor, I was told that a number of contractors take a contract and take a percentage off the top. They then subcontract to another company, which takes a percentage off the top. This subcontractor then subcontracts to another company, and takes a percentage off the top. Finally, several levels down, the contract actually gets fulfilled.

Duplication of federal programs is something that has come to light in the last 15 months. A pair of Government Accountability Office (GAO) reports in 2011 and 2012 found, according to Senator Tom Coburn (R-OK), “hundreds of billions” of dollars in duplication in the federal government. ABC News reported that the GAO found many programs were not tested for actually accomplishing their stated goals, and the same applied to a number of tax loopholes, credits, etc. (Several aspects of the 2012 report can be found at the first link, including examples of duplication and the report’s Executive Summary.) Here are some of the juicier parts of ABC’s article:

• GAO found the Department of Defense could save up to $460 million every year by undertaking a “broader restructuring” of its military health care system.
• The military came in for special scrutiny: over $10 billion on defense-wide business systems every year; $49 billion in military and veterans health services; and at least $76 billion since 2005 in urgent processing systems for the military.
• Fifty-eight billion dollars at the Department of Transportation [was spent] for over 100 separate surface transportation programs.
• [A]lmost $1 trillion in government-wide tax expenditures listed by the Treasury Department, some of which the GAO found “may be ineffective at achieving their social or economic purposes.”
• [T]he government has neglected to investigate numerous programs, making the expenditure of some funds not only redundant but wasteful. For instance, only five of 47 job training and employment programs surveyed by the GAO had been studied to evaluate whether outcomes were the result of the program itself or another cause altogether.
• “Little is known about the effectiveness of most programs,” the watchdog observed.
• That point also applies to domestic food assistance, where “little is known about the effectiveness of [11 of the 18 programs] because they have not been well studied,” the GAO said. In fiscal year 2008, for example, the government spent $62.5 billion on those 18 programs.

Of course, no critique of the federal government’s spending habits is complete without highlighting simple stupidity. In fiscal year 2011, improper payments totaled $115 billion in, over three percent of the federal budget. According to a press release from Rep. Todd Platts (R-PA): “An improper payment could be an incorrect payment, an over- or under- payment, and could include a payment to an ineligible recipient, a payment for an ineligible service, a duplicate payment or a payment for a service not received.” Medicare and Medicaid represented over half of these improper payments; in Fiscal Year 2010 alone Medicare cost the taxpayers $48 billion in improper payments.

To be fair, $115 billion is less than what was spent on improper payments in fiscal year 2010… but the $115 billion did not account for many agencies that simply fail to report improper payments. According to Platts: “Although not all agencies are required to report improper payment estimates, some agencies that are required to report do not do so.  The most significant agency failing to report is the U.S. Department of Defense (DOD), although both the Government Accountability Office (GAO) and the DOD – Office of Inspector General has found that the DOD is at a high risk for improper payments.

The simple fact of the matter is that while Congress and much of the media focuses on the President’s unnecessary and wasteful $52 million gas manipulation task force, or the GSA’s junket, hundreds of billions of dollars are slipping through the system. Perhaps Congress should focus on stopping these abuses of the taxpayer dollars, instead of intentionally misdirecting the attention of the American people to what amounts to literally cents on the dollar of the “fraud, waste, abuse and stupidity” (to quote Senator Coburn) so prevalent in our ever-growing, ever-expensive federal government.

Dustin Siggins is an associate producer with The Laura Ingraham Show and co-author with William Beach of The Heritage Foundation on a forthcoming book about the national debt. The opinions expressed are his own.

President Obama must believe he can’t close the deal with Latinos, because during his Friday interview on Univision he resorted to lying about Mitt Romney’s stance on racial profiling. Obama implied that Romney’s approval of the Arizona illegal immigrant was an indication that he approved of racial profiling. What he was actually doing was trying to deflect attention away from how bad his administration has been for the Hispanic community.

Host Enrique Acevedo asked Obama if he would make immigration reform a priority during the first year of a second term:

Rick Santorum’s withdrawal was supposed to have signaled the beginning of the general election, and the end of this cycle’s silly season.  However, there is still an open spot on the Republican ticket, still news cycle to be filled with speculation, and still deadlines to be met…come rain, hail, sleet, or snow.

Until now, I had seen no need to address this fantasy indulged by the D.C.-and-New York-bassed kommentariat, which seems intent on pushing the Governor of Puerto Rico, Luis Fortuño, for the Vice Presidential nod.  Despite this insistence, I don’t think Fortuño so much as cracks the short list.  Such pieces as these, most recently from The Hill, are not just purely speculative media mind-dealing, they also serve to expose the ignorance of those who are supposed to deliver fact-based analysis.

There is no doubt, given Fortuño’s track record, that Gov. Mitt Romney is right to call him “a solid conservative and a firm leader.” However, I don’t think that neccesarily builds Fortuño’s case for running mate.

The end of any seriousness in The Hill’s piece begins with the notion that Fortuño’s presence would help the party’s Hispanic outreach efforts.  As I’ve noted previously, the coveted “Hispanic vote” is not a monoblock that can be reached with a single message.  Those who think so are usually the ones that have been clamoring for Marco Rubio’s addition to the ticket, as well (despite his continual rejections of the VP nod).  In theory, Fortuño’s impact would likely limit itself to the I-4 corridor, which would be redundant given John Quiñones’ run in FL-9 (and, to a lesser extent, Col. E.J. Otero’s run in Tampa).  In the Northeast, Hispanic voters are used to (and used to voting against) Hispanic candidates.  In the West, there is no factual basis with which to assume that a Hispanic conservative would necessarily bring substantial votes, especially now that Gov. Susana Martínez has tapped out from VP consideration (other than maybe Rubio, I can’t see it).

Fortuño’s executive and Congressional experience best qualifies him to lead Puerto Rico through its particular self-inflicted fiscal challenges, but isn’t a good fit for the Vice Presidency at this crucial historical juncture.  Romney’s running mate is going to have to be able to hit the lame-duck session on the run, and this lame-duck is big enough to choke a horse.  There will be ObamaCare SCOTUS fallout, regardless of the ruling.  In addition, there is a transition whichc hands off the winding-down of two wars…and oh, by the way, Taxmageddon is looming.  This particular transition requires a mastery of the tax and budgeting process that I’m not sure whether Fortuño has attained as Resident Commissioner in Washington, and Tourism Secretary and Governor of Puerto Rico.

Any other election cycle, and Fortuño is definitely on the short list.  But not this one.  Given the magnitude of the mess that is going to need cleaning up, and the need for a clean vetting, I think Romney will play it safe and go with three budget nerds on his short list.  Of these, I expect Jindal to show, Ryan to place, and Portman to win.

A Spanish-language version of this post is available at El Tercer Riel (The Third Rail).

As of Sunday, April first, the United States will have the highest corporate tax rate in the world. This new record is not something that would make most Americans proud.

We take the title as Japan cuts its tax rate by five percent. America’s business tax rate now tops out at 35 percent. Add state taxes and American job creators face a median rate of 39.2 percent.

The United States was in the middle of the pack when we last changed our rates in 1993. Since 2000, however, 30 of the world’s leading developed countries — looking to boost their economies — have cut their rates.

Germany dropped its top rate by 22 points.

Canada cut its by 13 points.

Ours stayed the same.

Today the worldwide average is 25 percent.

Even Russia, at 20 percent, and China, at 25 percent, have lower rates than America does. The difference in tax rates means American companies are trying to compete with one hand tied behind their backs.

…High taxes also leave less money for businesses to expand, innovate and create jobs. The prospect of saving millions of dollars in taxes has caused some U.S. businesses to move overseas, taking their jobs with them.

In contrast, researchers at the Heritage Foundation have calculated that if Washington were to cut our corporate rate to 25 percent, the benefits to Americans would be dramatic. After-tax income for a typical family would rise by almost $2,500. The U.S. economy would create 581,000 jobs a year over the next decade.

It’s like the old slogan you’ve probably seen pinned to a cubicle at work somewhere, “The beatings will continue until morale improves.” Barack Obama has been cranking out the regulations, driving oil prices higher, demonizing successful people, cheering on the Occupy freeloaders, expanding government wildly, promising more tax increases in his second term, and spending so much money that people have genuinely started to fear an economic collapse caused by the government being unable to even pay the interest on its debt in the near future. Meanwhile, Obama seems to be puzzled as to why the economy is continuing to limp along and businesses aren’t hiring. The biggest problem this country has is sitting in the Oval Office a golf cart somewhere and voting him out of office in November would do more to help the economy and create jobs than any policy the government could implement.

John Hawkins is a professional writer who runs Right Wing News and Linkiest. He’s also the co-owner of the The Looking Spoon. You can hear more from John Hawkins on Facebook, Twitter, Pinterest, G+, You Tube, & at Pajamas Media.

…Theft of Tide detergent has become so rampant that some cities are setting up special task forces to stop it and retailers like CVS are taking special security precautions to lock down the liquid.

…Tide has become a form of currency on the streets. The retail price is steadily high — roughly $10 to $20 a bottle — and it’s a staple in households across socioeconomic classes.

Tide can go for $5 to $10 a bottle on the black market, authorities say, and some thieves even resell it to stores.

“There’s no serial numbers and it’s impossible to track,” said Detective Larry Patterson of the Somerset, Ky., Police Department, where authorities have seen a huge spike in Tide theft. “It’s the item to steal.”

To paraphrase Mark Steyn, when laundry detergent becomes a de facto currency, you’re pretty much done for.

You feeling stimulated yet?

Hat tip: BadBlue.

…Listen LIVE: 9-11pm EST…

Share

**UPDATED MONDAY MORNING**
THE BALDWIN/McCULLOUGH PODCAST:
Baldwin/McCullough *LIVE* – Hr 1/Hr 2

Where can you find the radio station nearest you to hear Baldwin/McCullough? Simple enough… Click here! Where can you go to see it on television? Check your local listings, or on-screen guide:

And tonight, watch right here:

ON THE BALDWIN/McCULLOUGH MegaCast:
1. Gloria Allred today called for an arrest of the Icon of Talk Radio–Rush Limbaugh. On message boards, chat rooms, facebook and twitter, the call for Limbaugh to be fired, boycotted, etc, still rings out. All the while President Obama is sending the man he most trusts to be on shows that make far worse objects of women. And get this–Obama’s guy this week did a hit job on Romney and Santorum for not denouncing Rush stronger. Keith Olbermann explained it this week–summarized, “If you’re a liberal man, saying insulting things to conservative women… is NOT misogyny.” BTW… How misogynistic is the new ABC television network’s show “Good Christian Bitches?” Agree? From your perspective: 888.340.3373.

2. The Oministration making all sorts of friends this week: Defense Secretary telling Congress that International “Permission” trumps U.S. Congressional “permission.” Additionally, the February deficit was $229,000,000,000. (That’s how much money Obama spent ABOVE what he HAD!) Thoughts: 888.340.3373. But he did have enough time, energy and money to make a pitch to Hollywood.

Brought to you tonight in part by:
Are you looking to make a major difference in the success you can experience in business, promotion, marriage, or life? Then you owe it to yourself to discover the secrets of Dani Johnson and her transformational seminar First Steps to Success. These events sell out quickly, and many come away getting promoted, starting businesses, or earning a 6 or 7 figure income for the first time in their lives. Dani Johnson… committed to your TOTAL SUCCESS check out First Steps now!

Baldwin/McCullough Resources:

KMC’s BRAND NEW BOOK is now available:

The Kind of Man Every Man Should Be .
MuscleHead Revolution: Overturning Liberalism with Commonsense Thinking .
The Death and Life of Gabriel Phillips
The Unusual Suspect: My Calling to the new Hardcore Movement of Faith .

Obama rejected a cross-border permit for the Keystone pipeline in January.

He said the decision was not based on the merits of the project, but instead in response to a 60-day permit decision deadline that Republicans demanded in a December payroll tax cut bill. Obama said the deadline would short-circuit review.

Of course the State Department had previously favorably reviewed the pipeline and recommended its approval (08/29/11)

David L. Goldwyn, who until earlier this year had served as Secretary of State Hillary Clinton’s Special Envoy and Coordinator for International Energy Affairs, said in an interview aired over the weekend that Clinton would likely approve plans for a contentious pipeline to deliver oil from Canada’s tar sands to the Texas Gulf Coast.

“I think that balancing jobs, energy security — a country which has increased production potentially the size of Libya — I think the case for a pipeline is overwhelming, and she will approve it,” Goldwyn said, speaking to Platts Energy Week, an energy-themed television program.

On Friday, the State Department issued its final Environmental Impact Statement, concluding that the proposed 1,700-mile pipeline would have “no significant impact” on the environment and recommending that the project move forward, despite warnings from environmental groups that, among other things, the project would help accelerate the warming of the planet.

So, in reality, other than petulance, politics and an agenda, Obama had no real reason to not approve the pipeline. The review had been completed. In fact it seems clear, given his disapproval, that the process was irrelevant to him in reality and the Republicans were just the latest excuse not to approve the deal.

Republican Senator Sen. John Hoeven (R-N.D.) introduced an amendment to the transportation bill concerning the pipeline:

The amendment, unlike previous GOP efforts to simply create a deadline for an administration permit decision, would have bypassed the administration and approved construction, although the legislation would still require Obama’s signature.

Of course Obama didn’t want to be seen vetoing something which polls have repeatedly said the vast majority of the nation is for. So he actively lobbied against the passage of the amendment.

Obama lobbied wavering Senate Democrats before yesterday’s vote. He urged them to reject an amendment to legislation funding transportation projects that would have overturned his administration’s decision to deny a permit for the pipeline until an alternative route was proposed to bypass an environmentally sensitive area in Nebraska.

But, as reported previously, many pipelines already criss-cross the Oglala aquifer in Nebraska with no problem. Additionally, the governor of Nebraska made it clear that it wasn’t necessary to reject the pipeline – there were some pretty easy workarounds.

So here, in the midst of rising gas prices and high unemployment, a politician is presented with a positive way to impact both and declines it based purely on ideology vs. what’s best for the nation.

Unfortunately he has allies in the Senate – enough to defeat the amendment that would have either allowed the pipeline to be built or forced Obama to veto it.

The vote was 56-42 with 11 Democrats defecting. Most of those, as you might imagine, are from states in which oil production is important.

And, as usual, opponents were scraping the bottom of the barrel for reasons not to vote for the amendment:

Sen. Ron Wyden (D-Ore.) and other Democrats opposed to the project argued oil would end up going to Asia, and that the pipeline could even raise costs in the U.S.

As well as the usual nonsense:

“Once again Republicans are trying to play politics with a pipeline project whose route has yet to be proposed, and despite the claims that this would somehow solve the pain families are feeling at the pump today, according to the company it would take years before it transported a drop of oil,” [White House spokesman Clark] Stevens said in a statement.

But history gives lie to Stevens claim. Remember when President Bush lifted the moratorium on oil and gas exploration on the East and West Outer Continental Shelf in 2008. Not a single well had been drilled when it was announced and the price of oil took a significant drop:

The politics at issue here are those which are detrimental to the nation.

And those would be the ideologically driven politics being played by the White House, and none other.

~McQ

Twitter: @McQandO

The recession and the early, brittle years of the economic recovery absolutely shredded state budgets. With growth now returning to healthier levels, this should be a time for relief legislators. Unfortunately, as USA Today reports, they might have to face another sobering reality: The system most states rely on to generate sales tax revenue could become obsolete.

The paper writes that last year, state sales taxes claimed the smallest fraction of overall consumer spending since 1967. Americans paid an average tax of 4.27 percent on purchases, down from 4.63 percent five years before. While overall consumer spending rose 4.7 percent in 2011, collections grew by a mere 1.2 percent.

To put it mildly, this is no good. States are desperate for money. And in parts of the country that lack an income tax, such as Texas and Florida, sales taxes are crucial for funding a basic level of government services.

This article from The Atlantic touches yet again on a currently pending bill, the Marketplace Fairness Act, which we’ve written about here before. But it does highlight a larger question of state economies vs. the national economy as a whole. If those numbers from the USA Today report are accurate – and I see no reason to doubt them yet – then this trend represents a pretty big hit to the coffers of the individual states just as some of them are starting to climb out of the hole.

This is one aspect which I hadn’t considered earlier regarding the Marketplace Fairness Act. Apparently, given the SCOTUS ruling in question, there are already some states which are collecting taxes from online retailers (in states where they have a physical, brick and mortar presence) but others which can not. That type of imbalance, if it gets to a significant level, could begin spurring population creep between states.

I’m still on the fence about this legislation. Let’s collect some other opinions and data on it here.

Most American pundits address the problem in terms of the Greeks (and undoubtedly some other Europeans) demanding “goodies” from the “government.”  And they are not wrong about that, but the refrain is an incomplete depiction of what’s at work with the public-debt implosion of the West.  The more fundamental problem is the vilification and punishment of work and individual initiative.

This is not just a matter of the Europeans imposing rules that look like rank sloth to Americans, such as the EU’s 35-hour work week, and the Greek designation of hairdressing as a hazardous occupation, meriting early retirement (at the age of 50).

It is a matter, more basically, of suspicion and hostility about “labor,” as if labor is an imposition on the human being, rather than our greatest opportunity, and requires constant amelioration and adjustment by the state.

This is a thoroughly Marxist view of labor.  Marx’s original definition of the well-known term “excess value” related not to the profit the capitalist made on the workman’s labor, but to the excess productive work the capitalist extracted from him, over and above the amount necessary for the worker’s self-sustainment.  Marx accepted that sustaining human life was more than mere brute survival, but his theory was that capitalism had distorted the connection of work with sustaining the individual in an appropriate level of consumption and comfort.  Capitalism forced the worker to work harder than he would have to, if his work objective were sustaining his own life rather than meeting the goals of the capitalist boss.

Marx’s view was essentially negative: work could be appropriately scoped and properly rewarded only within certain limits.   A work regime developed outside those limits was distorted, oppressive, and in need of correction.

Marx had no perspective on the tireless engine of the most powerful Western economies in the Enlightenment and modern eras:  the entrepreneur.  In Marx’s formulation, the entrepreneur did not exist in any form significant to broad social dynamics.  Marx’s theory involved capital and labor, but ignored the entrepreneur and entrepreneurship.

This was a fatal error, because the entrepreneur is the entity that combines labor and capital.  He overcomes – naturally, and without artificial intervention – the systemic clash of interests posited by Marx.  The entrepreneur defines labor for himself, and he finds it good to do so.  He sees his work as a tremendous opportunity, and most definitely not as an imposition of something defined against his interests from without.  The existence of the entrepreneur is what makes it invalid to define labor narrowly, and in terms of conflict between socioeconomic roles.

In dismissing the entrepreneur, Marx left out the most important birthing mechanism of a dynamic economy.  And so does Europe, with its laws designed to relieve its citizens of the “unjust” burdens of labor.  The a priori assumption of the European political class is that labor is, in fact, an imposition – unless it is being regulated and adjusted by a compassionate state.

The problem here is not really that people tend to take advantage of that state posture and imagine themselves entitled to a utopian existence.  The problem is that the initiative to work for a self-defined reward is the most powerful factor in human economic life – and the EU has been laboring diligently to shut it down.

The European political perspective doesn’t just encourage a languishing entitlement mentality; it actively discourages the only thing that could enlarge the pie and work off the absurd and dysfunctional debt regime of the European Union.  It is not, for instance, because millions of young Europeans are lazy and stupid that their unemployment levels are so high.  It is because their governments regulate the people’s lives so heavily, and impose such costs, that very few people of any age are free to define work for themselves, and get on with it.

Some of them do, of course, running what are effectively small businesses in an underground economy (especially in the south).  But in much of Europe, the regulatory and tax environment is hostile to starting small businesses legally.  If you make it effectively illegal to start with little – not enough for full regulatory compliance – and act as an entrepreneur, you shut down entrepreneurship in the official, above-board economy.  Less entrepreneurship – less opportunity, less growth, less empowerment of the young and poor, less creative destruction and renewal.

It is quite true that not all of Europe is so steeped in self-imposed sclerosis.  But that’s really the point:  it only takes as much as there is today to produce the seemingly unsalvageable debt and unemployment situation in the “PIGS” – Portugal, Italy, Greece, and Spain – and to unsettle the rest of Europe and world markets.

America is headed down the same path. We haven’t reached the point of mandating a 35-hour work week yet, or retiring hairdressers on their public pensions at 50, but we are all but there in the spirit of our labor laws.  If you heap suspicion on work that isn’t directly controlled or defined by government or a union; if you punish the rewards of independent, profitable, uniquely hard work; if you discourage the unguided, creative development of work – you get less work.

We can only tax what we produce.  The epic economic error of the modern West lies in its determination to discourage production, whether by ruling out industry entirely with environmental ukases, by denigrating productive work in the culture, or by actively discouraging productive work with regulatory obstacles and punishments.

This model is unsustainable, and if we want to fix the problem, we have to let people work.  We have to let them define work and rewards for themselves.  If we insist on an intrusive supervision of other people’s work and production arrangements – if we insist, on an ever-growing list of points, that they be regulated or prevented, “for their own good,” by the state – then we have indeed consigned ourselves to a future like Athens’.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

Initial jobless claims unexpectedly jumped by 24,000 last week to 399,000 as more workers lost their jobs, the Labor Department said Thursday. At the same time, the economy continues to lose workers.

In the 30 months since the recession officially ended, nearly 1 million people have dropped out of the labor force — they aren’t working, and they aren’t looking — according to data from Labor’s Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000.

This is virtually unprecedented in past economic recoveries, at least since the BLS has kept detailed records. In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.

…According to the BLS, the “labor force participation rate” — the ratio of the number of people either working or looking for work compared with the entire working-age population — is now 64%, down from 65.7% when the recession ended in June 2009. That’s the lowest level since women began entering the workforce in far greater numbers several decades ago.

If you adjust for this drop, the unemployment rate would be close to 11%, instead of the official 8.5%.

At this rate, the completely politicized Bureau of Labor Statistics should just remove several million more workers from the labor force, so they can get the unemployment rate down to, say, 4.8%. Like it was during those nightmarish Bush years.

 
Related: Obama Labor Politburo Now Publishing Patently Bogus Unemployment Propaganda.

Vivian: So you don’t actually have a billion dollars, huh?

Edward:  No, I get some of it from banks, investors…

Vivian: And you don’t make anything and you don’t build anything.

Edward: No. No.

Vivian: So what do you do with the companies once you buy them?

Edward: I sell them.

Vivian: … You sell them.

Edward: Well, l… don’t sell the whole company; I break it up into pieces… and then I sell that off; it’s worth more than the whole.

Vivian: So it’s sort of like, um, stealing cars and selling ‘em for the parts, right?

Edward: [ Exhales ] Yeah, sort of. But legal.

Edward Lewis could have added:  “… and I love being able to FIRE PEOPLE!!”  Or so the soundbite-driven understanding of all this would have it.

You’d think Romney’s opponents would know that much of the base they’re trying to appeal to hates demagoguery against business.  When a business isn’t profitable, there are good reasons why it’s better to repackage and repurpose its assets for more profitable use.  Unprofitable businesses aren’t made profitable by political bailouts; they are made dependent and unsustainable.  Businesses like Bain Capital ensure that resources are being put to the most profitable, job-creating uses, given the environment of regulation and taxes that businesses have to operate in.  There’s nothing wrong with the existence of such companies; indeed, they are a positive factor in a dynamic business climate.

But then, Romney is tin-eared himself on some significant things.  He did, in fact, say that he likes to be able to fire people if they’re not performing.  That is a stupid, politically insensitive way to word a valid requirement of a healthy economy.  People sometimes have to be fired, but it’s suspicious for someone to “like” being able to do it.  There is nothing more gratifying than an employee who does well, and in particular one who improves over time, while there is nothing that makes the average boss feel as terrible as having to fire one who simply can’t seem to measure up.

Why couldn’t Romney have said instead that businesses need to be able to fire non-performing employees, even though it’s never any fun to do that?  Apparently because that’s not the way he sees it.  His phrase about liking to be able to fire people is the one that came naturally to him.  It doesn’t mean he’s a cold-hearted jerk who loves to give people bad news, but it is a personality problem for him in political leadership.  ‘80s-era pop psychologists would have said that he is very “objective-oriented”: he resonates to the idea of the goal and the achievement, and gives short shrift to the people.

Republicans do want a better climate for business, but the more abstract, data-focused perspective of a Bain Capital graduate is not necessarily what they are looking for.  I don’t actually want a president who imagines he can boost the bottom line of US companies.  I want one who understands that government policies affect people, largely through the constraints they put on business.  And I want him to respect the rights and dignity of individual people, neither trying to bribe them with goodies nor trying to herd them into programs that he sees as financially smart.  I’m not looking for a president with an opinion on whether a whole bunch of things he isn’t in charge of can be profitable.

Bringing up Bain as an issue has also turned up the fact that Bain profited from a deal in the early 1990s involving a steel company that received a $44 million federal bailout for its pension plan.  While it is demagoguery to equate this with Bain itself receiving a federal bailout, it is still a problem for Romney.  Companies like Bain have been operating in the environment of government incentives, regulations, and bailouts for quite a while now, and Romney’s record is one of being comfortable with that.  (He endorsed the TARP bailout in 2008.)

More and more of the people are not comfortable with it.  It is well and good that Romney wants the government to get off business’s back, but it’s not OK to remove only some constraints while leaving others, and continuing to bail the whole mess out.

Sadly, Romney’s opponents have wasted a superb opportunity to talk about what they think is the proper relationship between business and government.  They have simply jumped on the demagoguery bandwagon, which frankly is cheap and annoying.  If I were crafting talking points, I would address the “liking to fire people” comment graciously – something along the lines of “I’m sure this is what Governor Romney meant to say” – and focus more on Romney’s comfort with the extent to which government regulates business, profits from regulating business, and bails business out so it can keep regulating and profiting.

One last thought.  In contrast to the bloviation-fest precipitated by the Bain Eruption, consider the cool dispatch and intelligence with which the candidates knocked down the idiotic social-issue questions posed by Stephanopoulos and Sawyer in the debate on Saturday night.  The candidates were ready to talk about those issues – irrelevant as they were – with principled specifics.

On the matter of business and government, however, it’s been all big-government complacency on one side, and all mindless demagoguery on the other.  Not a hint of a principled argument about the free market and the appropriate role of government, from the perspective of either a man-and-the-state theory, or a regulation-vs.-the-market theory.

Nothing has made clear like the last 40 months that there is no longer an American consensus on these matters.  The Obama camp knows exactly where it stands.  But the GOP candidates aren’t internally motivated and prepared to make specific cases about it, as they are about social issues.  Yet that’s what the voters are waiting to hear.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

Perhaps the next edition can provide kids with a full accounting of the Occupy-related illnesses, vandalism, rapes, deaths, and other criminal violations — and a related pop quiz on John Nolte’s Occupy arrest rap sheet.

The kids deserve the whole truth. The teachers unions’ Alinsky brigade won’t give it to them.

However, while Scholastic continues its love affair with OWS, it also has a hypocrisy problem (yes, go figure).  Seems Scholastic senior editor, Natalie Smith, who wrote this OWS puff piece dated well after this gem of a photo, conveniently forgot that her company is a $1.9 Billion publicly-traded company on the NASDAQ exchange.  Smith writes:

The Occupy protesters argue that large companies like those on Wall Street are making too much money while millions of Americans are struggling just to put food on the table. The protesters say they want average Americans to have more job opportunities and share in companies’ prosperity. They want their voices to be heard.  (emphasis mine)

What Smith fails to report is that Scholastic is in quite good shape financially:

In fiscal 2011 operating income was $100.7 million on revenue of $1,906.1 million, primarily reflecting lower sales of educational technology relative to a year ago, when the Company benefited significantly from the federal stimulus program, as well as increased strategic spending on digital initiatives in the children’s book business. Free cash flow was $120.5 million, which exceeded net income, compared to $171.6 million a year ago, which reflected that year’s strong educational technology sales. The Company also returned $176.4 million to shareholders in the form of share buybacks and dividends in fiscal 2011.

Last year we celebrated the 90th Anniversary of the founding of Scholastic. From the launch of a single classroom magazine in 1920, Scholastic has grown to become the world’s largest publisher and distributor of children’s books and a leader in educational technology and children’s media.

Ah, yes, the sweetness of a capitalistic economic system, vision, ingenuity, and success.  Scholastic has been able to grow due to the very capitalistic system OWS condemns.  It’s mind-boggling, to say the least, how Scholastic can support a movement that validates and teaches children class warfare, lawlessness, and lewd behavior.  But then again…

A report from the Center for Responsive Politics (CRP) reveals that 47% of Congress members are millionaires, some of them many times over. When you contrast that finding with the percentage of U.S. households with net assets of at least $1 million—a mere 4%—the handwriting on the wall is clear. Extend the number of seats in Congress to roughly 115 million, one for each household recorded in the 2010 census, and we become a nation of mostly very wealthy people. How’s that for wealth redistribution?

Sheila Krumholz, executive director of CRP, writes that “the vast majority of members of Congress are quite comfortable, financially.” That’s putting it mildly. Of the current 250 members who are millionaires, nine of them have over $100 million. One of them, Rep. Darrell Issa (R-CA), is within hailing distance of half a billion dollars, with an average net worth of over $448 million.

Issa, who is the richest, is followed by Rep. Michael McCaul (R-TX) with $380 million, Sen. John Kerry (D-MA) with $232 million, Sen. Mark Warner (D-VA) with $193 million, and Sen. Herb Kohl (D-WI) with $174 million.

Since there are 531 Congress members in total, that means that 281 members have an average net worth of less than a million dollars. But is anyone in Congress poor? If the records obtained by CRP are accurate and truthful, the answer is a resounding yes. Rep. Alcee Hastings (D-FL) is in debt to the tune of $4.7 million. Rep. Steve Fincher (R-TN) is also reportedly in the red $3.3 million, followed by Rep. Ruben Hinojosa (D-TX), who owes $2.5 million.

But back to the good news: Despite the global economic meltdown and moribund recovery, the estimated median net worth of a current U.S. senator (senators tend to be richer than House members) is up about 11 percent, from $2.38 million in 2009, to $2.63 million in 2010 (the most recent year for which financial data were available).

A complete list of Congress members and where they fall on the wealth continuum is here. You might also enjoy tabbing over to a listing of the most popular investments among members of Congress. I’ll give you a sneak preview: The number one favorite investment vehicle is a company that paid no federal tax in 2010.

Do you think this is what the founding fathers envisioned when they established Congress?

Related Articles

• First Lady spent $10 million in taxpayer money on vacations last year
• Obama’s Agriculture Secretary: Food Stamps create jobs (Video)
• Jay Carney claims unemployment checks create jobs
• ObamaCare, the great job killer
• In midst of recession, new study finds members of Congress getting richer
• Members of Congress own stock in scanner companies: Conflict of interests?
• Clintons looking to buy $11 million Westchester County mansion
• The First Lady’s $80,000-a-day vacation

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

In the process, European leaders will begin to change the fundamental structure of the union, creating a form of centralized oversight of national budgets, with sanctions for the profligate, to reassure investors that this kind of sovereign-debt crisis is finally being managed and should not happen again.

The immediate focus of worry is on Italy and Spain, which have been buffeted by market speculation even as they move to fix their economies. That process took an important step on Sunday, as Italy’s cabinet agreed to a package of austerity measures to put the country in line for aid that would improve its financial stability.

The new euro package, as European and American officials describe it, is being negotiated along four main lines. It combines new promises of fiscal discipline that will be embedded in amendments to European treaties; a leveraging of the current bailout fund, the European Financial Stability Facility, to perhaps two or even three times its current balance; a tranche of money from the International Monetary Fund to augment the bailout fund; and quiet political cover for the European Central Bank to keep buying Italian and Spanish bonds aggressively in the interim, to ensure that those two countries — the third- and fourth-largest economies in the euro zone — are not driven into default by ruinous interest rates on their debt.

Emphasis mine. In other words these disparate countries linked only by a common currency are now going to give up their national sovereignty (i.e. their budgets) to ensure its stability? Really?

Well someone believes that’s going to do the trick because after the outline was announced, Italian bond yields “collapsed”. From a high of 7.4% before Thanksgiving, they’re now down to around 6.15%. While that’s a huge move, it still spells a country in trouble. Now, of course, they’re going to give up having the final say on their budgets?

I wonder how that’s going to play in Greece.

The problem, of course, is the usual one:

So Mr. Sarkozy and other European leaders are working on a less elegant and more phased way to create a pool of bailout money that is large enough to convince the markets there is little chance of a default on Italian and Spanish bonds, which should drive down rates to sustainable levels, European and American officials say.

Mrs. Merkel says it is time to get the euro’s fundamentals right. She is insisting on treaty changes to promote more fiscal discipline, including a limit on budget deficits, with outside supervision and surveillance of national budgets before they become dangerous, and clear sanctions for countries that fail to adhere to the firmer rules. Berlin wants the new standards backed up by the European Court of Justice or perhaps the European Commission, with the power to reject budgets that break the rules and return them for revision.

She would like the treaty changes to be accepted by all 27 members of the European Union, but failing that, she said she would accept treaty changes within the euro zone, with other countries who want to join in the future, like Poland, free to commit to the tougher rules now. Many countries, and not only Britain, are opposed to institutionalizing a two- or even three-tier European Union, fearing that their interests will be sacrificed and their voices diminished.

Mr. Sarkozy, as the political inheritor of Gaullism, disagrees about the reach and nature of European supervision of national budgets and about the role of European institutions in overseeing the fiscal affairs of sovereign states. The French are more jealous of their sovereignty and more skeptical of European courts, not wishing to give them — let alone the bureaucratic European Commission — more sway over national budgets and policies.

“Europe must be refounded and rethought,” Mr. Sarkozy said last week. “But the reform of Europe is not a march toward supranationality.”

But in reality, “supranationality”, while possibly the needed solution, is very unlikely to come about. And then there is enforcement of sanctions by some entity outside of a national one. National politicians would only have a preliminary say in national budgets.

We’ve seen how the Greeks react to their own government attempting to enforce austerity measures. Imagine an outside body like the European Commission forcing the Greek government to revise its budget. Its also very clear the French want no part of it either. The emphasized sentence is how it has always been, i.e. distrust and fear about being sacrificed and diminished. That’s no way to hold a “union” together and it speaks volumes about the less than latent nationalism still in existence in all those disparate countries (and cultures). It all comes down to trust and it appears they really don’t trust each other.

So while the tentative deal may seem to be workable there have to be serious doubts about whether, even if finally agreed too, it can work. It just doesn’t factor in the national paranoia among most members about being subsumed by a “supranational” entity. Their identity, which most have guarded jealously, has always been a problem and, given the financial mess in the south, likely to intensify vs. lessening.

Is there a solution to save the Euro? Perhaps. But is giving up national sovereignty on budgets and allowing a “supranational” entity to overrule them and enforce sanctions going to actually come to pass? And if it does, will those who agree in a time of crisis actually do what they promise now if the crisis lessens?

I’m betting “no”.

Unemployment has dipped slightly, to 9.1%, but that’s hardly a stat Obama wants to boast about on the campaign trail. The most recent Bureau of Labor Statistics jobs report shows 80,000 new private sector jobs for the month of October, but that too is woefully short of the quarter million-plus jobs the economy will need to add each month to eventually reach pre-recession unemployment levels.

So where does that leave the president, and what are his chances for reelection? That, needless to say, is anybody’s guess, and enough commentators have handicapped the election to make another opinion superfluous. Instead, I will simply lay out some facts that will be—or can be—make-or-break issues for the president:

• Independents’ low opinion of the American Jobs Act. The president and his Democratic colleagues have been touting  the results of a Gallup poll conducted in September that shows strong support for his jobs plan—and especially its provisions for taxing “the rich.” According to the poll, 66% favor raising taxes on families earning at least $250,000 versus 32% who do not. What the Democrats conveniently overlook is a second poll released around the same time by Public Opinion Strategies showing that independent voters reject the plan by a 20-percent margin. Only 33% support the bill while 53% oppose it. The independent vote was instrumental in helping Obama win election in 2008. He will need it again in 2012 if is to have a chance of renewing his lease on 1600 Pennsylvania Avenue.
• The power of the self-fulfilling prophecies. People like to back a winner. In my own case, that simple truth explains why I am an avid Pittsburgh Steelers fan but haven’t followed, much less rooted for, the Pirates in decades. So with elections. Even though a trip to the polls takes relatively little time, many voters will stay home if they believe the man they plan to cast their ballot for is toast. And that is the current scuttlebutt surrounding Obama. Intrade, the prediction website, currently gives Obama a 49.9% chance of winning the 2012 election, but assigns Mitt Romney a much healthier 69% chance. Put in more conventional terms, no president ever won reelection with an approval rating of 47% or lower one year out from the election. Obama’s Real Clear Politics aggregate approval rating is currently at 45.4%.

Related Articles

• By January 2013, Obama will have added as much debt as all 43 prior presidents
• Poll: More than half of voters do not believe Obama deserves a second term
• Jon Stewart cracks wise on ‘GOP dream’ of taking back America
• Poll: Independents reject Obama’s “jobs bill” 53% to 33%; likability under 50%
• Economy needs 254K jobs a month for 5 yrs to reach pre-recession unemployment
• Obama to Dems: “Buck up”; Dems to Obama: “Buck off”

That being said, I am beginning to have nagging doubts, none of which are related to the allegations of sexual misconduct leveled against him last Sunday. Rather, the more television exposure Cain receives—and as GOP frontrunner in many polls, he is on the small screen often—the more skeptical I become about his readiness for primetime. Increasingly, his answers to questions seem poorly thought out and disjointed, making his position on key policy issues unclear.

Take, for example, his position on abortion, which he was asked to clarify on FOX News Channel’s Special Report with Bret Baier last night. Here is the exchange between the candidate and panelist A. B. Stoddard of The Hill (cue 11:52 in the video, which is here):

CAIN: I believe that abortion should be illegal. I’ve always thought that way. I believe that life begins at conception—life begins at conception—and I do not believe in abortion. The point I was trying to make is that legally I don’t think abortion should be allowed, but the point I was trying to make, if a situation exists where they may consider some other alternative, then how will the law prevent that? That was the only point I was trying to make.

STODDARD: You [previously] said that it was best left to the woman and her family. What are you describing? A situation that they would—

CAIN: An extreme situation, a very extreme situation—

STODDARD: Involving abortion?

CAIN: And I can’t describe all of the— First of all, these extreme situations, we can never say never relative to these extreme situations. I go back to—

STODDARD: Do you have any exceptions for rape and incest?

CAIN: No, I do not.

Got that? Putting aside the troubling notion that a rape victim would be forced to carry to term the child of the man who violated her, the response conjures up disquieting visions of dirty knives and dark alleys. Was this really the best Cain or his handlers could do in a friendly environment?

Earlier in the same session, Cain was asked by Charles Krauthammer to enlarge upon his signature 9-9-9 plan. Cain’s defense of criticisms that his 9% federal sales tax would duplicate state sales taxes was on point. He correctly noted that the cost of goods and services already reflects multiple systems of taxation, federal and otherwise.

Where Cain ran astray, however, was when Krauthammer asked him whether the nation under his plan would experience a deflation (video cue 11:39).

CAIN: We’re saying that the price of goods are gonna go down.

KRAUTHAMMER: That’s deflation.

CAIN: Yes, the price of goods are gonna go down.

If Cain genuinely believes that his economic plan will precipitate a cataclysmic change in the economy of the type he claims to anticipate, then he needs to explain the long-term implications to the American people. In particular, he needs to elaborate on how the deflation he envisions will be different from the one some economists claim fueled the current recession.

Early in the debates, Cain largely ducked questions on foreign policy, claiming he would surround himself with savvy advisers to provide needed council. If he is to remain a serious contender, he needs those advisers now, and not just to tell him the name of the president of Uzbekistan.

Related Articles

• MSNBC: GOP views Herman Cain as ‘black man who knows his place’
• MSNBC catches Rick Perry using ‘coded’ racist language—again
• Left: Blacks are not brainwashed—except for Herman Cain
• Herman Cain is the left’s and Obama’s worst nightmare
• 2012 campaign slogan: A vote for someone other than Obama is a vote for racism

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

His most recent politically calculated gambit is to win back the youth vote by issuing an executive order that mandates “student loan relief.” That the proposal happens to cater to one of the anti-Wall Street protesters’ demands is purely coincidental.

In actuality, the plan is nothing new. The order merely fast-tracks an income-based student loan repayment program passed by Congress last year.

Here is how Obama introduced the plan to an audience of students at the University of Colorado this week:

When a big chunk of every paycheck goes toward student loans instead of being spent on other things, that’s not just tough for middle class families; it’s painful for the economy and it’s harmful to our recovery.

Sounds good. So how does the plan work? Basically, it envisions two fundamental changes to federally backed student loans. Neither of the changes will apply to private student loans that are not government-guaranteed.

The first change falls under the heading “Special Direct Consolidation Loans” and mainly affects loan holders who have already left school. To qualify, the borrower needs to have two types of student loan—one issued by the Department of Education under the direct loan program, the second by a bank or other private lender under the Federal Family Education Loan (FEEL) program. Borrowers who meet these conditions can consolidate their loans and in so doing shave a quarter of a percentage point off their rate of interest.

What do the savings translate to? Suppose hypothetically, that a qualifying borrower has $25,000 in student loan debt to be paid back over 120 months at an interest rate of 6.8%. Currently, that individual’s monthly payment is $287.70. Once the quarter percent is subtracted from the rate, which becomes 6.55%, the monthly payment shrinks to $284.50. The savings works out to $3.20 a month. Multiplied times the 6 million students estimated to qualify for loan consolidation and extrapolated over a year, those will savings return just over $23 million to the economy annually—not quite enough to rescue the recovery or register as even a dimple in the nation’s towering debt.

The second change covered by the executive order is nicknamed in true Obamaesque doublespeak “Pay as You Earn.” This change is also a retread more or less of an extant program called Income Based Repayment (IBR). Pay as You Earn will apply to an estimated 1.6 million students who are currently in college.

The differences between IBR and Pay as You Earn are matters of degree. IBR caps student loan payments at 15% of discretionary income and forgives outstanding debt after 25 years. Pay as You Earn decreases the cap to 10% and forgives the loan after 20 years.

The problem with IBR is not the numbers but its low visibility among students applying for loans. According to Mark Kantrowitz, of the student financial aid website Finaid.com, a scant 1.25% of current borrowers take advantage of IBR because few people have ever heard of it. Before the government incurs more debt by replacing IBR with Pay as You Earn, the Education Department might try publicizing the extant program.

Related Articles

• Obama to stimulate economy through executive power grab
• Obama needs to prompt audience at campaign event to ‘go ahead and clap’
• Obama: Nobody succeeds without government’s help
• Liberal news flash: GOP opposes Obama plan to cut taxes
• Obama’s economic “fairness doctrine”
• Internal WH memo: Few entrants in Obama commencement speech contest

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

That would include the man who is arguably Wall Street’s biggest detractor and an OWS sympathizer—Barack Obama. A study by the nonpartisan Sunlight Foundation’s Influence Project finds that Obama has received more in campaign donations from the financial sector than any other politician in the last two decades.

So far, the president has received $16 million in Wall Street contributions. The amount, which accounts for 20% of Obama’s total campaign funding, is $2.7 million more than George W. Bush received.

The Daily Caller quotes former White House Press Secretary Ari Fleischer as commenting:

It’s almost as if President Obama won’t cross across a Wall Street picket line except to get inside with [his] hand out, so he can raise money. That sort of support causes him to look hypocritical.

Fleischer adds that if Obama and other Democrats, including New York Sen. Charles Schumer, are so offended by Wall Street’s actions, they should put their mouths where their money is. Schumer has received roughly $8.7 million from the financial sector since 1989.

But the disconnect between what Obama says and does becomes more pronounced when you examine his specific list of donors. One of them is Bank of America, which donated $421,242 to Obama’s 2008 presidential campaign. The president returned their kindness last week when he pounced all over B of A for its newly announced $5 monthly fee on debit card users.

Related Articles

• OWS: The 99 Percent solution
• Occupy Wall Streeters stink—literally
• Obama: OWS ‘expresses frustrations American people feel’
• 700 Wall Street protesters arrested after blocking Brooklyn Bridge traffic
• Obama has run up the debt to the tune of $3 million per minute
• Obama’s autocratic dream (Video)
• Shared sacrifice: Cutting ObamaCare could save $2 trillion
• By January 2013, Obama will have added as much debt as all 43 prior presidents
• Solution to the debt crisis: Tap the nation’s “additional income” reserve

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

First, the collapse of the Eurozone, which does look likely to happen, is the death of a Big Idea.  It represents more than the collapse of a common currency.  It’s the death of an idea of human life, regulated and directed and comprehensively administered by the state.  The collapse represents a triumph of reality over hallucination.  You can’t, in fact, build a sustainable model for having the state organize most of the investing for the people, and use its resulting power to tell the people what they are allowed to think and say, how much electricity they can use, and what medical services they will be allowed to have recourse to.

It is impossible to maintain a sound currency – much less a sound fiscal policy – when that’s your going-in proposition.  And it’s good news that we are reaching the breaking point.  The collapse of the Eurozone means Europeans cannot keep doing what they have been doing.  They will have to do something else.

There are millions of people in Europe who will all still be there the day after the official collapse, however that ends up being marked.  The collapse represents a gigantic opportunity for them, if they will take it.  Each nation already has a mechanism for choosing new representatives, people with different ideas, to govern it.  I am not convinced that there is no one left in Europe who has the discipline and character to chart a new course, instead of collapsing in the gutter, whimpering.  There is a colossal infrastructure in Europe, and what it needs is not solicitude and life support but a release of the clamps in which it is immobilized by the 20th-century “European idea.”

America is not that far behind Europe.  We have deceived ourselves that we don’t intend to end up overregulated and overspent like Europe, but the Obama presidency has demonstrated with disastrous clarity just how vulnerable we already were – had already made ourselves, long before January 2009 – to Sudden Overregulation and Sudden Overspending.  If we are to recover, politically and economically – not to mention spiritually – this cannot stand.  We, too, like the Europeans, have to do something else.

At the heart of the European idea is ratcheting up the “civilization premium”:  the extra that it costs us to earn our bread and lodging in a complex society, as opposed to foraging for nuts and berries while we wait to be eaten by the local wildlife.

In many ways, civilization and complexity make things more efficient for us.  But paying for civilization pulls against that effect in a perpetual dynamic.  And the very purpose of the Euro-nanny-state is to add a growing premium to every unit of work effort or purchasing power, in order to pay for civilizational goals.

It has been a long time since anyone in Europe, or in the rest of the modern, post-industrial world, has worked almost entirely to pay for his own needs. The most productive are working at least 4 out of 12 months to pay the civilization premium levied directly by the state through taxes. We then work some months after that to pay the premium imposed indirectly by regulation.

Obviously, we have to pay for police and fire services.  We want to; those services create a stable environment for family life, property, and business.  But paying government regulators to withhold water from us, terminate oil-and-gas drilling, and maintain a system of litigation in which we can be made to pay rent to others for exhaling, doesn’t do that.  It doesn’t enhance our well-being or economic prospects; it merely makes the necessities of life cost more.  It makes us work harder to pay for the same things.  Very often, that’s not worth it to us, and one of the costs of civilization becomes a systematic discouragement of our efforts at the margin.

Today, America and Europe are drifting on a sea of resources idled artificially by government policy.  To begin with, we have a combined population that is less well-educated than its ancestors.  That is a huge idled resource.  The same population operates increasingly on a mental attitude of entitlement and resentment, and that idles it further.  Both of these conditions were created by the implementation of the European idea in the public schools.  Our people – the ones walking around right now – would be much more productive without these handicaps.

To me, this is the most important idled resource, but it cannot be unleashed without removing the clamps of regulation and taxation.  Regulation has taken the place of taxation as the worst imposition on our daily economic life.  It is a silent, mostly invisible killer.  I would like to see the American capital gains tax rolled back, but it’s not our capital gains tax that is destroying our economy, it’s regulation.

Don’t forget the words idled resources.  I’m not talking here solely about capital available for investment, although I’m talking about that too.  I’m talking about how much more you could accomplish, and how much more you could save and buy (with cash), if the government didn’t keep driving up your basic costs (and, indeed, the cost of everything else) with regulation, while diverting 30-60% of what you’re worth to your employer in the form of taxes, mandated benefits, and “social investment.”

I’m talking about the natural resources we could be making use of if the state weren’t literally putting them off-limits to us.  I’m talking about what each of us could do to escape the industrial-job straitjacket if the cost of starting a small business weren’t so prohibitive.  Above all, I’m talking about the new lease on life the younger generations could have if their heads weren’t being filled with hate-thoughts about normal human life 24/7.

Imagine how the economies of the Western industrial nations would surge to life if people were allowed to profit from deciding to work however long it took to do profitable things.  A simple proposition, but fewer and fewer of us can do that today.  The idea of profit in any form is demonized; major segments of profitable work are effectively prohibited, either outright or through regulation; “jobs” are defined in terms of what benefits must accrue to them, rather than in terms of what needs doing; and when there is a profit, it gets hunted down and confiscated in one way or another.  If the capital gains tax doesn’t get you, the regulation will.

Government, as Reagan said, is the problem.  There is nothing we can’t do if we will allow the people to put our idled resources back to work.  Those idled resources represent trillions of dollars in wealth and revenues.  And those trillions would pay down an awful lot of debt.  But they can’t be extracted from a controlled, limited, managed citizenry; they can only be produced by people who are free to labor and profit on the basis of their own motivations.

The impending collapse of the Eurozone is proof of the first truth.  It represents the biggest opportunity Europe has had in a century to acknowledge the second, and act accordingly.

Europe, get rid of your failing welfare state, your unsustainable national health systems, your religious belief in regulation, and your “multiculti” hate-management schemes.  Unleash your people.  Get the demons of self-hatred and institutionalized discouragement off your back.  This is the chance of a lifetime.  Go ahead.  Show us the way.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

John Podhoretz, who is either a masochist or a man endowed with infinite patience, takes the time to chronicle a number of the recycled phrases in a New York Post article that would be funny if it weren’t so sad. (An example is the line “This isn’t class warfare, this is math,” which, JPod notes, Obama said verbatim on September 8.)

The basic premise of the president’s speech is that every taxpayer should pay his fair share. I doubt there is a sentient being among us who wouldn’t agree with that notion. Some would even extend it to 51.6 million American tax filers, or 36%, who pay absolutely nothing into the system but still enjoy the same rights, privileges, and services as those of us who do.

But that segment of the population is not the one the president has in mind when he speaks of income equality. He means millionaires and billionaires (which—credit due—is a slight improvement over his previous definition of rich people, which meant couples jointly earning $250,000 or more). In making his case—that we should raise the top marginal rate to a point where the richest Americans end up contributing $1.5 trillion in new tax revenues—he argues that “middle-class families shouldn’t pay higher taxes than millionaires and billionaires.” He’s right: They shouldn’t. And with rare exception they don’t.

According to the Tax Policy Center, a Washington think tank, households making more than $1 million this year will pay an average of 29.1% of their income in federal taxes. By way of contrast, those making between $50,000 and $75,000 will pay 15% of their income in federal taxes, and those making between $40,000 and $50,000 will pay an average 12.5%.

On the night that Obama unveiled his jobs bill, he made the argument that “nothing in this proposed bill hasn’t been tried before or agreed to before by some or all members of the Republican Party.” Although in of itself that’s not a ringing endorsement for enacting a piece of legislation, his claim could be extended to his proposal to increase the highest marginal tax rate on income. It’s been done before, many times. In 1944 the top tier was raised all the way up to 94%. However, every time the highest marginal tax rate has been adjusted upward, the other four marginal rates have been adjusted as well. To do otherwise would be unfair. That seems a truism to everyone except the man who professes to champion fairness.

Related Articles

• American Jobs Act will create 1.9 million new jobs (at $235K apiece)
• Putting country ahead of vacation
• Obama and the meaning of shared sacrifice
• A modest proposal for stimulating the economy: Create more taxpayers
• Solution to the debt crisis: Tap the nation’s “additional income” reserve
• Obama’s economic “fairness doctrine”

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

1.  Iran’s nuclear reactor at Bushehr has finally been connected to the power grid.  A “pre-launch” ceremony has been scheduled for 12 September.  The important thing about this is that it means Russia has decided not to hold the Bushehr start-up in reserve any longer, as a bargaining chip with the various players in the Iranian nuclear drama.  (Note: Bushehr is not an important resource for the nuclear weapons program, but its fate is a signal of how seriously Iran takes the UN supervision and inspection regime.)   It’s been the Russians, dragging their feet for years, who have kept postponing the operationalization of the reactor.  They have now chosen to make the break.  Why?

2.  Turkey is rattling the naval saber around the Aegean Sea – and is planning to sign a strategic cooperation agreement with Egypt this month.  The agreement will reportedly include military cooperation.  Recep Tayyip Erdogan, who did an interestingly-timed turn in Somalia last month, plans to visit Egypt – and, reportedly, Gaza – in mid-September.  It’s no accident that Russia and Iran will be celebrating at Bushehr at the same time Erdogan is exercising Islamic leadership in post-Mubarak Egypt.  Russia is using Iran (as opposed to throwing in with her) to signal the Turks that Ankara doesn’t have a free hand and will meet resistance and counter-power in the region.

3.  Russia is motivated to do this by the same things that have reportedly put the Greek military on alert.  Turkey’s naval saber-rattling is both general and particular, and the particular focus is the plans of Cyprus to begin offshore gas exploration in the next several weeks.  Turkey has announced on multiple occasions that this exploration will be prevented.  Cypriots and Greeks are gravely concerned; it is being reported in Cyprus that Russia will send submarines to patrol Cypriot waters and defend the offshore commercial activities there.  (Not as unlikely as it was two years ago, and certainly not impossible.)

The more general purpose of the saber-rattling is regional power projection.  This week, the Turks used the pretext of the UN’s “Palmer report” on the 2010 flotilla incident – which acknowledged that Israel had not violated international law – to announce their new program of naval presence in the region.  Eerily (and pointedly) named the Barbaros Action Plan, the naval program will entail the following:

The Barbaros Action Plan, which aims to display the Turkish Navy’s presence in neighboring seas, now plans for Turkish maritime components to be in constant navigation not only in the Black Sea, the Aegean Sea and the Mediterranean but also in the Adriatic Sea, the Red Sea as well as the Indian Ocean.

In other words, Turkey plans to conduct naval security patrols of the waters of the former Ottoman Empire.  We’re way beyond pre-Pax Americana here; we’re in pre-Pax Britannica territory.

4.  Not unnaturally, Greece has just concluded a security cooperation agreement with Israel.  Those in the Eastern Mediterranean expect the offshore plans of Cyprus to become a flashpoint, and Israel is a cooperative partner in the Cyprus endeavor, having agreed with Cyprus in 2010 on a maritime boundary and a mutual recognition of seabed claims (and being an offshore gas driller herself).  Israel, Greece, and Cyprus have a common interest in both freedom of economic action off Cyprus and reining Turkey in across the board.

The Red Sea patrols in the Barbaros Plan are another new and special concern, one that can ultimately put in question the neutrality and quiescence of a key region of the NATO perimeter.  From the Red Sea, the Turkish navy – by far the biggest and best one in Israel’s immediate neighborhood – can flank Israel.

5.  The Eastern Med isn’t the only area where the old Pax Americana behaviors are behind us.  It cannot be emphasized enough that we have already entered a period in which the US is likely to have to struggle diplomatically for what we have been able to assume in the past.  A parade of West Europeans has been making up to Moscow this year, for example:

• ·         Britain and Russia agreed to significantly increased military cooperation in July, after decades of frosty relations.
• ·         In August, Britain lowered another barrier to cooperation with Russia, deciding – again, after years of pursuing the opposite policy – to allow Gazprom to enter the British energy market.  Gazprom, effectively an arm of Russian foreign policy, is meaner than a junkyard dog with its weaker investment targets, but the Brits are now willing to take on that problem.
• ·         France concluded the agreement this year to sell Russia Mistral-class, helicopter-carrying amphibious assault ships.  The burgeoning cooperation between France and Russia goes much further, however, including gas deals and negotiations on the privatization of Russian defense manufacturing by French defense giant Thales.
• ·         Germany contracted in June to build the Russian army a new combat training center (a move that evokes, for European and American observers, the secret training agreement in the 1920s and 1930s between Soviet Russia and Germany, which allowed the Germans to circumvent Treaty of Versailles restrictions).
• ·         Ireland’s president made the first visit of an Irish head of state to Russia in 2010.  In 2011, the Russian navy has sent a destroyer to visit Ireland, and the Irish navy has visited St. Petersburg.
• ·         In an event redolent of a golden pre-1914 twilight, Queen Margrethe II of Denmark sailed to St. Petersburg this week on her royal yacht, with a Danish navy escort, for a state visit to Russia.  The Queen visited Russia once before, in 1975; this time, she has a delegation of 100 businessmen in tow, and a lot of business to do.

6.  Central Europeans aren’t taking this trend lying down.  In May 2011, the Central European consortium called the Visegrad Group, which traces its modern history to the mid-1930s, decided to form its own military “battlegroup” under the command of Poland.  (The Visegrad Group consists of Poland, Hungary, Czech Republic, and Slovakia.)  The land-warfare oriented Visegrad battlegroup will operate independently of NATO.

As Richard Cashman of the Henry Jackson Society implies, this development isn’t just indicative of a break-up of NATO-era security assumptions.  It’s in part a reversion to the power/security vision of a century ago, exemplified by the writings of British geopolitical thinker Halford Mackinder and his collaboration with Polish leader Josef Pilsudski in the interwar years.

7.  The essential feature of that older vision was the absence of a superpower on the model of the United States.  The US model matters, because Mackinder’s famous concept – modified and repopularized after WWII by Nicholas Spykman – envisioned the dominant power of the “World Island,” or Eurasia, being the dominant power of the globe.

The missing piece in Mackinder’s theory was the importance of naval power for a (relatively) easily-defended economic titan.  The US, her alliances, and her Navy accomplished after WWII what Mackinder did not envision:  the maritime encirclement of the World Island.  Even the British Empire had not achieved a true precedent for it.  The Soviet Union perceived the American encirclement feat with crystalline clarity, but throughout most of the Cold War, the US, NATO, and Japan persisted in thinking of themselves in Mackinder’s terms:  as a weaker hinterland of the “Heartland” (or Pivot Area – Central/Eastern Europe and the expanses of Russia and Central Asia), trying desperately to defend themselves.

Mackinder's map (from Wikimedia Commons)

(Note for aficionados of these ideas:  essentially, it was a successful US offensive posture with the strategy suggested by Spykman’s analysis that turned the World Island-Rimland construct on its head.   “Containment” was the shorthand defensive formulation of the Spykman-based strategy, but using containment as a basis for rollback was what succeeded in the end. Through alliances, and economic and naval power, the Rimland achieved dominance over the World Island, rather than being consigned to a permanent condition of strategic inferiority.)

No single theory is comprehensively explanatory, but identifying the present situation as a gradual collapse of the maritime encirclement of the World Island goes a long way.  With the absoluteness of US naval power receding, the dynamics predicted by the Mackinder vision are reemerging from long-term storage.

8.  In the West, the emerging drama off Turkey may turn into the first real post-Pax Americana showdown.  In the East, a showdown is all but underway.  As the fear of Chinese ambitions grows among Beijing’s neighbors, the naval powers of the region are beginning to assert a counter-influence.  Late last week, the news came out that an Indian warship, conducting a port visit in Vietnam in July, was confronted by the Chinese navy in international waters and subjected to peremptory demands.

(In an interesting sign of the times, INS Airavat was not in the Indian task group that met with unexpected failure in its attempt to hold a planned exercise with the Russian fleet in April.  Airavat was on a separate deployment.  These multiple naval deployments by the Indian navy to East Asia would have been unimaginable even three years ago.)

Japan, meanwhile, has just gained a new prime minister, whom observers expect to counter Chinese maritime claims – e.g., in the Senkaku Islands at the south of the Japanese archipelago – more “assertively.”

The potential maritime disorder affects arrangements on the continent, as indicated by Russia’s new charm offensive with the Koreas.  US ally Seoul agreed with Moscow in July to significantly increase military cooperation, including hosting Russian troops for training in South Korea.  A month later, the Russians were in North Korea, China’s client, conferring on stepped-up military cooperation and a program of joint exercises.  At virtually the same time, the Russians welcomed Kim Jong-Il for a rare visit.

9.  China gives Russia plenty to worry about in general, having established military exercise series in the last year with Pakistan, Afghanistan, and Turkey, deployed thousands of Chinese troops to the Gilgit-Baltistan region of Northern Pakistan, and continued construction of the Karakoram Highway into Pakistan, which would allow rapid military as well as commercial movement across the heart of Central Asia.

 But Asia isn’t the only part of Russia’s near abroad in Chinese sights.  In July 2011, China dispatched airborne troops for her first-ever military exercise with Belarus.  And in August, China and Ukraine agreed to expand military cooperation. Romania, which inaugurated a series of military exercises with China in 2009, agreed in July 2011 to boost naval cooperation with China.

10.  Every hour brings a new update.  Today – Tuesday, 6 September – China and New Zealand agreed to expand their military relations.

11.  One last gem crops up today.  In her continuing barrage of bizarre announcements, Iran has offered the new analysis that her territory is actually “14 percent larger than previously thought.”  What that means, only the days ahead will make clear.  It sounds like bad news for Iran’s neighbors.

Bottom line

The pressure of encirclement is being released on the World Island – a reasonable starting point for discussing what is going on.  The scramble for dominance of it is underway.

And the time for lament is past.  Too many things are changing; we cannot recapture the post-WWII, post-Cold War Pax Americana along its old outlines.  But neither will the world leave us alone, or retain its generally beneficial features – such as peaceful tradeways and uncoerced agreement to borders – without the use of American power.  No other aspirant to international leadership even has those things as objectives.  With the exception of the British Empire, no other aspirant ever has.  The old Pax Americana is gone; our task now is to get to work on the new one.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

*Find The Kevin McCullough Show in 26,000,000 Broadcast, Cable, and Satellite, television households on FamilyNet Television 7-9am EST, and 9-10pm PST. Also available via more than 100 radio affiliates nationwide. Coverage in the top 600 markets in the nation. Find your local option here.
Share

PROGRAMMING NOTE: We are LIVE Today on TV & RADIO. So Join us, set the DVR, and come have some fun. The Chat Room will be open, and we will welcome those of you who are new to the show. 877.572.THINK. (877.572.8446) See you at 7am EST!

Watch/Listen: CLICK HERE

ON THE KEVIN McCULLOUGH SHOW:

1. THE HEADLINE ITEMS:
Updates on the damage from the earthquake. And some of the lessons we can learn. Plus should a teacher in Florida be forced to apologize for posting controversial things on his facebook… just to get his job back? And finally should the Congressional Black Caucus be blaming the Tea Party for the higher unemployment in the black community? That’s who they are blaming it on… KMC will debunk this theory in exacting detail! Your calls at 877.572 8446.

2. THE PRACTICAL DILEMMA:
How bad is cutting? You’re in line, you know for a fact you have every right to be there, and someone takes a place in front of you. They don’t apologize, they act as though no one notices. What do you do? In the Bronx it’s now cost this woman her life. Your calls at 877.572 8446.

3. The God Thought:
“By FAITH we see things that are invisible to others, and by faith we believe in advance those things that right now make no sense but one day will make perfect sense!“
Join the daily conversation, join the “The Early Morning God Thought” group on facebook!

Get the SmartPhone App and
NEVER miss a minute of any show

The theme of this particular address, recorded at a country store in Illinois, was “what Washington politicians can learn from the folks.” (“The folks” is Obama’s homey way of referring to you, the taxpayer.)

Now, I’m out here for one reason: I think Washington, DC can learn something from the folks in Atkinson and Peosta and Cannon Falls. I think our country would be a whole lot better off if our elected leaders showed the same kind of discipline and integrity and responsibility that most Americans demonstrate in their lives every day.

The president exhibited his own discipline and self-restraint the following evening by taking the missus out to a restaurant where starters average $16 and entrees run around $37. Sides, which are extra, cost $8. Add in dessert, coffee, and booze, and dinner had to set Obama back at least $200 after tax and tip were factored in.

I know, I know: It’s the president’s money (one assumes), and he has a right to indulge himself. The problem, however, is not whether he is justified in spending $50,000 (!) on a vacation but how it looks at a time when the economy is flat-lining. You can’t tell the “folks,” as he did in his Saturday—whoops, Wednesday—address that “we’re going through a tough time right now” when you’re dining on twin Menemsha lobsters at $48 a pop.

The president’s words ring doubly hollow when he lectures members of Congress for putting “country ahead of party.” Even giving him the benefit of the doubt and assuming he does not mean Republicans, who is he to dispense that advice after repeatedly accusing the GOP of having driven “the country into a ditch”?

Related Articles

• Obama and the meaning of shared sacrifice
• Clintons looking to buy $11 million Westchester County mansion

Unfortunately for the president, that bit of wisdom extended onto side #2 of the fortune cookie he extracted it from, which read, “but actions matter more.”

A good leader leads not only by words but by example. Yesterday, the Dow Jones Industrial Average lost another 420 points. So what did the president do to bolster the confidence of panicked voters? He led by example. With 14 million Americans out of work, he embarked on a “10-day retreat at a 28-acre Martha’s Vineyard compound called Blue Heron Farm, which costs an estimated $50,000 per week to rent.” He went, in the words of usually sympathetic Washington Post columnist Colbert King “to dwell in splendid seclusion among the rich and famous.”

King goes on to ask:

What is he thinking? It’s not as if the Obama family is living in deprivation in Washington.

Without leaving the White House grounds, they have access to five full-time chefs, a tennis court, a bowling alley, a swimming pool, a jogging trail, a putting green and a movie theater that shows first-run films on demand. That’s hardly roughing it.

But words matter. So here are some more of the president’s words:

We will not rest until we are succeeding in generating the jobs that this economy needs. (November 2, 2009)

I will not rest until businesses are investing again, and businesses are hiring again. (November 23, 2009)

We will not rest until we build an economy that’s ready for America’s future. (January 28, 2010)

I’m not gonna rest and my administration is not gonna rest in our efforts to help people who are looking to find a job. (March 5 2010)

My administration will not rest until every American who is able and ready and willing to work can find a job. (July 8, 2010)

One more quote:

And on the seventh day God ended his work which he had made; and he rested on the seventh day from all his work which he had made. (King James Bible)

Welcome to Day 7.

Related Articles

• Jay Carney’s shifting views on presidential vacations and photo ops
• Jay Carney claims unemployment checks create jobs
• Will president read message from man who jumped White House fence? (Video)

Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

One of the challenges in terms of rebuilding our economy is – businesses have gotten so efficient, that, uh, when was the last time somebody went to a bank teller? Instead of using an ATM. Or, used a travel agent instead of going online. A lot of jobs out that that used to require people now have become automated.

Apparently you have to be an economic illiterate to be a Democrat.

Since the dawn of recorded history, scientific and industrial advances have raised the average standard of living, not lowered it.

• In 1712, the invention of the steam engine touched off the Industrial Revolution, providing an inexpensive mechanical power source to replace manual and animal labor.

• In 1733, the invention of the flying shuttle allowed a weaver to produce a wider band of cloth. This facilitated faster production of textiles for fabric, clothing and other uses.

• In 1769, James Watt added a crank and flywheel to other steam engine improvements, providing efficient rotary motion for a wide variety of industrial uses.

• In the early nineteenth century, the invention of the power loom — a steam-powered, mechanical cloth-making machine — allowed women to replace men in many textile manufacturing facilities.

• In 1830, the invention of the sewing machine facilitated the “ready-made clothing” industry.

All of these advances created brand new industries and began to free mankind from routine, manual labor. The sewing machine, for example, required hundreds of parts. These parts, made of many different materials, had to be manufactured and machined, often by dozens of suppliers. New companies arose to source these parts, new industries — like repair services — were created, and massive economic value was achieved through the creation of end products.

Such is also the case — multiplied by orders of magnitude — with ATMs and the Internet.

It’s truly a shame and an outrage that we have leaders in Washington who no more understand general economic principles than they do quantum physics.

Fortunately, the American people know what’s going on: a new low of only 26% approve of Obama’s handling of the economy.

 
Related: “The Progressive and the Pencil“.

 
Image hat tips: The Corliss Engine.

No s***. He really said that.

Well, obviously, it’s putting people to work. Which is why we’re going to have some interesting things in the course of the forum this morning. Later this morning, we’re going have a press conference with Secretary Mavis and Secretary Chu to announce something that’s never happened in this country — something that we think is exciting in terms of job growth…

…I should point out, when you talk about the SNAP program or the food stamp program, you have to recognize that it’s also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.

Bask in the sheer genius of Tom Vilsack, peons: the government taking money from you hard-working Americans — and giving it to others, without regard for their ability to work — stimulates the economy!

Why didn’t we think of this before?

In fact, let’s put everyone in America on food-stamps! That’ll be the ultimate Stimulus!

Ultimate, I say!

As an aside, my fellow Tea Party terrorists, Vilsack’s wife is running against Rep. Steve King of Iowa, a true fiscal conservative.

Do we need another economic illiterate in Congress? I think not. Therefore I urge you to give $5, $10, whatever you can spare to Steve King’s campaign.

We need exactly zero Vilsacks in office in 2012.

 
Related Fun: So the Democrats Finally Want Fiscal Responsibility? Great. Let’s End Their Disastrous “War on Poverty”