Saturday, July 28, 2012

Glenbarry Glen Ross

A perplexing fact - Polls continue to indicate that President Obama's "likability" remains relatively high even as his policies come under fire. Many see him as basically a good guy who's just in way over his head. I suspect this has something to do with people wanting to see the country's first black president succeed. Obama's overall approval rating is probably inflated by this sentiment.
Believing, as I do, that people should be judged by the content of their character rather than by the color of their skin, I have no such constraint. I think Obama is a nasty SOB who repeatedly mocks and belittles those he opposes or disagrees with. The media depiction of Obama as a post-partisan, post-racial healer is a sham. The president is post-courtesy, post-decency, post-respect.
A few of the better known instances of his incivility are presented here by Matthew Continetti. (Continetti provides just a sampling. A comprehensive listing would fill a book).

On April 6, 2008, he told a rather cartoonish audience at a San Francisco fundraiser that “it’s not surprising” he wasn’t winning the votes of working-class whites in the Democratic Party, because years of betrayal by the political class had made them “get bitter, they cling to their guns or religion or antipathy toward people who aren’t like them or anti-immigrant sentiment or … uh, anti-trade sentiment as a way to explain their frustrations.”

...while campaigning for Massachusetts’ attorney general Martha Coakley to replace the late Edward M. Kennedy in the U.S. Senate, Obama seemed obsessed with Republican state senator (and eventual victor) Scott Brown’s pickup truck, poking fun at it repeatedly during a last-minute campaign rally. A month later, at the health-care summit, Obama could not hide his contempt as John McCain explained why his constituents and a national majority opposed the president’s proposal for a health-care overhaul. When McCain finished, Obama dismissed him by sniping that "The election's over" as though the four-term senator had no legitimate grounds for opposition.

Obama also urged Hispanic voters to "punish our enemies" on a Spanish radio station. Post-racial indeed.

He mocked Mitt Romney's use of the word "marvelous" when Romney used it to describe Paul Ryan's proposed budget. With his trademark smirk and an irritating "heh heh", Obama let his crowd know only a dweeb like Romney would use an uncool word like "marvelous". (Fox News investigated and found at least two instances of Obama using it).

And of course, there's Obama's remarks in Roanoke, Virginia on July 13 - containing the now infamous phrase "you didn't build that". Since Democrats are claiming that the phrase has been taken out of context, here's the piece in its entirety.

There are a lot of wealthy, successful Americans who agree with me—because they want to give something back. They know they didn’t—look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something—there are a whole bunch of hardworking people out there. (Applause.)

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

(Incidentally, the internet was created by a collaboration of industry, academia and yes, government. Credit for the growth of the internet into the colossus as it exists today goes solely to the usual suspects - the energy, imagination and hard work of the private sector. Gordon Crovitz (WSJ) tells the story here and here).

Continetti states that although most of the attention has been concentrated on Obama's second paragraph,
...the truly revealing and disturbing idea is in the first paragraph, in which the president of the United States of America, the richest nation in the world, says he is “always struck” by “people who think” that individual smarts and hard work are responsible for success. The fools! Don’t they know achievement is a function of lavish government contracts to education and construction unions? Can’t they comprehend that innovation results from taxpayer-financed loan guarantees to companies owned by Democratic Party donors?

It's a remarkable spectacle - the president showering scorn on those he was elected to serve.

One of my favorite movies is Glengarry Glen Ross, the film version of David Mamet's play about the (probably fictional) cutthroat world of shady real estate dealing in Brooklyn, New York. One of the best scenes in the movie has the character Blake, played by Alec Baldwin, sent by his bosses to motivate the company's salesmen. He does so with a barrage of profanity laced insults. (The entire film is profanity laced). At one point Blake directs his invective at a salesman named Moss (Ed Harris).

I made $970,000 last year. How much you make? You see, pal, that's who I am. And you're nothing. Nice guy? I don't give a s---. Good father? F--- you -- go home and play with your kids!!

Baldwin goes on like this for more than five minutes. It's his only scene in the movie.

Watching Obama speak in Roanoke made me think of Baldwin in GGR. All that's missing is the profanity, but that's an issue of propriety. A presidential candidate (much less a president) is not going to use the F-word. However, a perceptive listener can fill in the blanks. Link to the video, notice the contempt in his voice, in his demeanor, and imagine him saying

...look, if you’ve been successful, I don't give a s---.
I’m always struck by people who think, well, it must be because I was just so smart. Well, f--- you. There are a lot of smart people out there.

Moss could have been referring to Obama when he responded to Blake's rant with,

Bunch of f---in' nonsense...treat people like that.

Yes it is.

Obama speech

Baldwin scene (His tirade is fun to watch).

Thursday, July 26, 2012

Why We Are Where We Are

In a few concise paragraphs in today's WSJ, Karl Rove explains the cause of the financial meltdown which led to the 2008 recession and, ironically, the disastrous Obama presidency.

"Though publicly traded companies, Fannie (Mae) and Freddie (Mac) are government-sponsored enterprises – GSE's – chartered by Congress. Because the US government implicitly backed them, they could borrow money more cheaply than competitors such as mortgage companies and banks. And borrow they did. It took from Fannie’s founding in 1938 until 1999 for the companies to acquire or guarantee $2,000,000,000,000 in mortgage backed securities. By 2005, they had snapped up another $2,000,000,000,000 in mortgages, many of them subprime.

The Bush administration supported S.P. 190 to provide more oversight to America's two largest financial institutions similar to that of the nation’s banks, savings and loans, and credit unions. A new regulator could examine their books, limit their mortgage portfolios, and set capital requirements.

After the banking committee passed a bill with 11 Republicans in support and nine Democrats opposed, Senate Democrats warned committee chairman Richard Shelby (R, Ala) that all of them – including an Illinois freshman named Barack Obama – would filibuster the bill if a were brought to the floor.

Democrats opposed regulation in part because the GSE's were an important source of funds for community groups allied with the Democratic Party, and they were run by Democratic power brokers like former Clinton office of management and budget director Franklin Raines and Walter Mondale's 1984 campaign Chairman, James Johnson. And so the Bush reform died.

For the next three years, the GSE's increased their purchases of mortgages and mortgage-backed securities by $1,200,000,000,000 to a total of $5,000,000,000,000, of which about $1,800,000,000,000 was in subprime, “liar loans” or other nonprime mortgages, according to Columbia business school’s Charles Calomiris.

At the end, Fannie and Freddie were drastically overextended, with loan-to-capital, or leverage, ratio of 70 to 1 or higher. In the summer of 2008, when housing prices declined, the value of their mortgage portfolios collapsed and the government put them into conservatorship. When the GSE's collapsed, they took down Lehman Brothers and then nearly America's entire financial sector. Democratic opposition to sensible regulation made this possible."

Rove concludes with,

"When Mr. Obama warns on the campaign trail against "the same failed ideas that got us into this mess," reporters might gently remind him of his role in helping create the mess by opposing regulation of Fannie and Freddie, then showing little inclination to fix the problem, and now seeming blind to how he's creating another financial debacle."

Sorry Karl. Reporters chiding Obama aint gonna happen.

Note - I wrote out the gargantuan numbers so as not to soften their impact. In his column, Rove uses the word trillion.

If you can't abide hearing the truth from the astute Mr. Rove, perhaps you'll be convinced by Democrats like Maxine "If it aint broke don't fix it" Waters and Barney "I want throw the dice a little bit more" Frank making Rove's case. (You Tube video linked below). Interestingly, one of the Dems shilling for the GSEs is Artur Davis who has since seen the error of his ways and has jumped to the Republicans.

Monday, July 23, 2012

You First

"This coming debt crisis is the most predictable crisis we’ve ever had in this country."
Paul Ryan

"If you don't change the direction you are headed, you will end up where you are going."
Chinese proverb.

Obama campaign slogan.

Saturday, July 21, 2012

A Tale Of Two Styles

Here is Charles Krauthammer countering President Obama's claim that private enterprise owes its success to modern, liberal government.

"Infrastructure is not a liberal idea, nor is it particularly new. The Via Appia was built 2,300 years ago. The Romans built aqueducts too. And sewers. Since forever, infrastructure has been consensually understood to be a core function of government.

"The argument between Left and Right is about what you do beyond infrastructure. It’s about transfer payments and redistributionist taxation; about geometrically expanding entitlements; about tax breaks and subsidies to induce actions pleasing to central planners. It’s about free contraceptives for privileged students and welfare without work — the latest Obama entitlement-by-decree that would fatally undermine the great bipartisan welfare reform of 1996. It’s about endless government handouts that, ironically, are crowding out necessary spending on, yes, infrastructure."

And here is Mark Steyn saying essentially the same thing.

"Halfway through the first millennium b.c., the nomadic Yuezhi of Central Asia had well-traveled trading routes for getting nephrite jade from the Tarim Basin to their customers at the Chinese court over 2,500 miles away. On the other hand, the Yuezhi did not have a federal contraceptive mandate or a Bloombergian enforcement regime for carbonated beverages at concession stands at the rest area two days out of Khotan, so that probably explains why they’re not in the G-7 today."

(Krauthammer's column is refenenced in my previous post.)

Friday, July 20, 2012

A Conservative Manifesto

That would be an appropriate title for Charles Krauthammer's latest column (NRO) in which he rebuts President Obama's latest socialist rant ("You didn't build that").

Or as one commentator on the NRO website put it - "Oh, if Mitt Romney could learn to lip synch the great Dr. K...."

Romney could do worse, much worse, than naming Krauthammer as his running mate. Or, better yet, Mitt could transfer all of his delegates to the great man.

I'd like to make one other point not specifically addressed in this wonderful article.

Democrats have been trying frantically to limit the damage done by Obama’s remarks by claiming that when he said, “You didn’t build that”, he was referring to bridges and roads, not businesses created by entrepreneurs. Even if you believe this incredible assertion, Obama was still wrong. They did build it. The government is able to fund its infrastructure projects along with a mind-reeling number of less worthy endeavors only by utilizing its awful power of taxation and confiscating a significant portion of the profits of the producer class.
You see, Obama and his liberal friends have it exactly backwards. It is the private sector’s energy, enterprise, risk-taking, hard work, and genius (CK's list) that produces the wealth that allows government to indulge in its obscene excesses. If it was the other way around, the industrial (aka – capitalist) revolution would never have occurred. Not in 19th century America with its meager infrastructure and no Leviathan state in sight.
The people who "didn't build that" are the nearly half the country's inhabitants that pays zero income taxes, many of whom actually get tax rebates. Obama doesn't dare criticize them, much less ask them to contribute "their fair share". This is what government "creates" - a multitude that gets to reap the benefits of the producer class just as we all do, but free of charge.
Countering the banal truism that all individuals are influenced by society is the equal truism that society is shaped largely by the contributions of a small contingent of unique individuals.

Wednesday, July 18, 2012

Better With Age

Dennis Prager is a conservative journalist whose writings usually deal with matters of morality. His latest column is in the form of a letter to young voters explaining why people become more conservative as they grow older. It is not because, as the left contends, aging begets selfishness. On the contrary, age is correlated with increased generosity. And increased wisdom.
Anyone interested why innumerable onetime liberals (including myself) now call themselves conservative could gain some insight from Prager's article.

Tuesday, July 17, 2012

700,000 Jobs vs. Obama's One

President Obama has proposed letting the Bush tax cuts expire next year for individuals and small businesses earning more than $250,000. The non-partisan accounting firm, Ernst and Young  has done an assessment of of the expected effects of enacting the president's proposal.

The Ernst and Young study looked at the impact of seeing the top marginal tax rates rise—but also studied the effects of a range of other proposals included in the president's budget and broader tax plans:

This report examines four sets of provisions that would increase the top tax rates:

· The increase in the top two tax rates from 33 to 36 percent and from 35 to 39.6 percent.

· The reinstatement of the limitation on itemized deductions for high-income taxpayers (the "Pease" provision).

· The taxation of dividends as ordinary income and at a top income tax rate of 39.6 percent and increase in the top tax rate applied to capital gains to 20 percent.

· The increase in the 2.9 percent Medicare tax to 3.8 percent for high-income taxpayers and the application of the new 3.8 percent tax on investment income including flow-through business income, interest, dividends and capital gains.

Here is what the accounting firm concluded would happen:

· Output in the long run would fall by 1.3 percent, or $200 billion, in today's economy.

· Employment in the long-run would fall by 0.5 percent, or roughly 710,000 fewer jobs, in today's economy.

· Capital stock and investment in the long run would fall by 1.4 percent and 2.4 percent, respectively.

· Real after-tax wages would fall by 1.8 percent, reflecting a decline in workers' living standards relative to what would have occurred otherwise.

A small price to pay for allowing Obama to say he's forcing the "rich" to pay their "fair share". For him, campaign rhetoric trumps effective policy every time.

Saturday, July 14, 2012

Re : Wealth and Income

As a followup to my previous comment about President Obama's confusion of wealth and income, here is an excerpt from a recent Thomas Sowell (NRO) column.

Anyone who wants to study the tricks of propaganda has a rich source of examples in the statements of President Barack Obama. On Monday, July 9, for example, he said that Republicans “believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.”

Let us begin with the word “spend.” Is the government “spending” money on people whenever it does not tax them as much as it can? Such convoluted reasoning would never pass muster if the mainstream media were not so determined to see no evil, hear no evil, and speak no evil when it comes to Barack Obama.

Ironically, actual spending by the Obama administration for the benefit of its political allies, such as the teachers’ unions, is called not spending but “investment.” You can say anything if you have your own private language.

But let’s go back to the notion of “spending” money on “the wealthiest Americans.” The people he is talking about are not the wealthiest Americans. Income is not wealth — and the whole tax controversy is about income taxes. Wealth is what you have accumulated, and wealth is not taxed, except when you die and the government collects an inheritance tax from your heirs.

People over 65 years of age have far more wealth — but lower incomes — than people in their thirties and forties. If Obama wants to talk about raising income taxes, let him talk about it, but claiming that he wants to tax “the wealthiest Americans” is a lie and an emotional distraction for propaganda purposes.

Sowell goes on to rebut the rest of Obama's statement - his fictitious claim about Republicans and "top down prosperity". It's amazing so much nonsense can be crammed into one sentence.

As an aside - The president would do well to read Sowell's economics primer, Basic Economics, which is about as readable a book as one with that title could be. Unlike Sowell's other books which are rich with footnotes and references, there are none here. Also missing are complex mathematical formulations. There is only one table in the book, that illustrating the concept of Comparative Advantage in trade. Sowell clearly wrote Basic Economics for the lay public. He could have titled it The Economy For Dummies, as he had readers like Obama, (and me) in mind.
To define economics, Sowell uses one proposed by the British economist, Lionel Robbins - "Economics is the study of the use of scarce resources which have alternative uses". (A personal preference - I would substitute the words "limited" for "scarce" and "multiple" for "alternative"). Sowell repeats this definition literally dozens of times throughout the book as he points out the complex ramifications of almost every economic policy decision. The Law of Unintended Consequences, unfamiliar to the left, is a powerful force in the world.
Though meant as a teaching book, Basic Economics is not devoid of an ideological slant. This is a very good thing. A reader can see why playwright, screenwriter, and director David Mamet (a recent convert to conservatism) has called Sowell our greatest living philosopher.
Read up, Mr. President.

As a further aside - Mamet's conversion was not some mild equivocation of his former position. He has turned hard against the left. This is clearly demonstrated in his book The Secret Knowledge, an elaboration of his Village Voice essay, Why I Am No Longer a Brain-Dead Liberal.

Sunday, July 1, 2012

Pro Choice

The U.S. Supreme Court is starting to look like Britain’s National Health Service — you wait two years to get in, and then they tell you there’s nothing wrong. And you can’t get a second opinion.
- Mark Steyn

Let me get this straight. Say, with the ACA in place, you choose not to purchase a $15000, $20,000, $30,000 health insurance policy (that’s about what these things will cost with all the mandated accoutrements, bloated bureaucracy, political favoritism, et al). You will then be assessed a penal…er, tax, amounting to $700, $800, $900 or so. Under the new law you cannot be denied insurance. So, if you get sick, do the math, and calculate that you’re better off now buying a policy, you can. Only a moron is not going to opt to pay the tax, especially since the Supreme Court has decriminalized the act of non-compliance.

Misguided SCOTUS decision or no, this law will collapse.

My vision of an ideal health insurance system goes something like this. I make a list of items I'd like covered, then go online and compare 6 or 8 or 10 (or more) different plans offered by insurance companies nationwide. (I'm allowed to purchase policies across state lines). If I want a plan to simply protect me from catastrophic expense (true insurance) – due to cancer, heart disease, a crippling injury – I can select such a plan. Or I can choose a more comprehensive plan, with low deductibles and pay the higher cost commensurate with such a plan. Importantly, I get to choose - If I decide I don’t want to subsidize rich lawyers’ contraceptive bills, I’m free to decline the honor.

If I have limited means I may qualify for a government subsidy. I just enter my annual income, total assets and dependent information into a calculator tool on the website and the amount of my subsidy is displayed. That information can help me decide which plan to choose. If I have a pre-existing condition, I cannot be denied coverage. The higher costs that insurance companies incur by the mandate to cover these high risk patients are covered by a pool of money funded by a percentage of their profits. I do not get special treatment if I am old. There is no Medicare. That massive, immoral transfer of wealth to the idle, affluent aged from the working, less affluent young is ended. The only factors determining my qualification for government assistance are income and wealth. This frees up an enormous source of money and directs it where it is needed most.

(Note - There is a marked difference between income and wealth, something the president either doesn't understand or purposely ignores. He will talk disparagingly about "miilionaires" and "billionaires" and then propose punishing "those earning over $250,000".)

Eliminated will be what has been called the original sin of American health care - the current tax advantage afforded workers obtaining their insurance through their employers. This World War 2 era policy was concocted to get around FDR's wage and price controls, giving employees "free" health insurance (Yay!) in lieu of higher income. Government's first major intrusion into health care is arguably its worst, introducing and perpetuating the concept of patient unaccountability. Like an all you can eat buffet, patients are encouraged to consume at will. And health care providers are only happy to keep the dishes coming. Soaring costs are the inevitable result. Especially hurt are individuals purchasing insurance on their own. Another consequence - lost revenue from this untaxed gift, which has grown exponentially over the decades. Either we tax health insurance benefits as regular income - good luck with that - or we extend the tax benefit to all individuals, regardless of employment status.

There is no mandate to purchase insurance. Anyone foolish enough not to see the value of low cost health insurance deserves to reap the consequences of his (in)action. And don’t bother with the increased emergency room utilization argument. Overuse of emergency rooms by the uninsured is an insignificant fraction of total health care spending. In any event, universal, mandated health insurance doesn’t reduce ER use. Such was the case in Massachusetts where the overburdened system has led to greater ER utilization.

A free-market based system puts the consumer in charge of health care decisions and, as with almost any other free-market based commodity, (think computers), substantially reduces costs. To push the cost curve down even further, some sort of tort reform is required. This would include capping pain and suffering and punitive damages and throwing out frivolous lawsuits and punishing the litigants who bring them.

So how do we get to my idealized scenario? Well, Holman Jenkins in today’s WSJ suggests one pathway without repeal of the ACA.

…Republicans already are lip-committed to a national health-insurance charter that allows insurers to design their own policies and market them across state lines. Republicans are also lip-committed to a tax reform to equalize the tax treatment of health care whether purchased by individuals or by employers on behalf of individuals.

Now just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.

What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most of their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.

Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.

With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today.  

A prediction - Consistent with the mainstream media's continued fawning idolization of its new hero, John Roberts will grace (disgrace?) the covers of Time and Newsweek this week.