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Obama’s Transportation Bill: Taking Us for a Ride

July 16, 2014 By: Scott Spiegel Category: Economy

ObamaTrainNever trust a Democrat’s stated rationale for legislation he’s pushing. There’s always an ulterior motive, if not seven or eight.

Take President Obama, who’s been harping about transportation funding, not because it’s a national priority, but because it serves a host of other goals of his:

1. Obama changing the subject to transportation is meant to distract us from a rash of his scandals and policy failures.

When the border crisis, the IRS scandal, the lawsuit filed against you by the House Speaker, and the 13 unanimous Supreme Court rulings against you in the last two years get you down, just stage a photo op of yourself trying out a Knight Rider simulator. That’s how Obama handles the pressure. After visiting Texas to raise money for Congressional Democrats and stage a photo op drinking beer and playing pool—but not visiting the border—President Obama flew to McLean, Virginia to tour a transportation research facility: about the least critical place for him to be on Earth right now.

2. Dwelling on transportation reflects Obama’s lack of interest in foreign policy and the many international crises unfolding at the moment, and his preference for focusing on massively increasing domestic spending. Obama favors such profligacy, even though he expects the electorate to be too stupid not to notice that he’s been requesting and getting transportation funding for five-and-a-half years and has little to show for it.

What ever happened with that trillion-dollar stimulus package that was supposed to address our infrastructure woes and generate tens of thousands of shovel-ready jobs? Time and again since 2009 we’ve heard from Democrats that, well, we haven’t gotten quite enough funding for transportation, so we’re going to need to raise gas taxes and corporate taxes to rustle up a few more dollars, and then everything will run smoothly and we’ll never ask for extra funds again.

The Department of Transportation (DOT) press release for Obama’s request gushes that it “reflects President Obama’s vision for a four-year surface transportation reauthorization bill that would create millions of jobs and lay the foundation for long-term competitiveness, rebuilding crumbling roads and bridges…” I think we’ve heard that spiel before, and it gets less convincing every time the administration repeats it.

3. Emphasizing transportation gives Obama an excuse to lecture Republicans and dredge up an election-year issue to help Senate Democrats.

In McLean, Obama berated Republicans for not appropriating enough money for federal spending on roads and bridges. Speaking several hours before the House passed an $11 billion stopgap transportation bill that funds highway maintenance through next May, Obama scolded, “Congress shouldn’t pat itself on the back for averting disaster for a few months, kicking the can down the road for a few months, careening from crisis to crisis.”

This is rich coming from Obama, under whom the Senate failed for three consecutive years to pass or propose a federal budget, said recklessness precipitating years of fiscal cliffs, debt ceiling crises, and last-minute continuing resolutions.

And those fiascos concerned the entire federal budget. Obama’s FY15 request for the DOT is a mere $77 billion ($302 billion over four years), compared to the FY14 federal budget request of $3.77 trillion. Apparently we can ignore the entire federal budget for three years, but must obsess over one sliver that Obama wants to focus on right now.

4. If passed, the bill would service a host of far-left causes.

Obama’s transportation bill is motivated, not by a desire to see more cars and trucks on the road facilitating commerce and raising our standard of living, but an obsession with impractical high-speed rail, bike and pedestrian lanes, erosion prevention, global warming reduction, and showing that we can blow as much of our federal budget on transportation as China.

DOT’s press release announces that one of the bill’s benefits is “training women, minorities, and veterans to fill the jobs gap in transit through innovative new workforce development programs.” That’s about a step up in relevance to the department’s mission from NASA’s goal of promoting outreach to Muslims.

5. Most of all, Obama’s bill is designed to keep transportation and other areas of funding grounded within the federal government and prevent them from migrating to the state and local level.

Though the House’s stopgap measure passed by a large margin, some conservative Republicans objected. They favor cutting gas taxes and federal transportation aid and leaving construction projects to states and localities. But Obama opposes decentralization of spending, as it would undercut his claim “You didn’t build that.” Getting Washington out of the transportation arena would give the lie to the notion that private companies and innovators can’t do anything without the largesse of the federal government.

So the next time Obama or Congressional Democrats get on their soapboxes and lecture you about what you really need to be focusing on—transportation funding, student loans, the War on Women—just peek behind their lecterns and see what they’re really hiding.

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Forcing Us to Subsidize Rent-Controlled Apartments Is Downright Mean

May 21, 2014 By: Scott Spiegel Category: Economy

007670-18-rooftop-loungeIndulging in their favorite pastime of picking at the scab of “income inequality,” The New York Times recently published a weepy exposé on the plight of rent-stabilized high-rise tenants in Manhattan who are excluded from the expensive amenities that full-paying fellow residents have access to, such as gyms, yoga studios, and environmentally-friendly bathhouses.

In recent years, upscale New York City co-ops and condominiums such as The Windermere West End, Stonehenge Village, Northside Piers, and Royal York have been installing amenities such as children’s playrooms, bike storage rooms, spas, pools, rooftop decks, gardens, and sky lounges, at a cost of millions of dollars, to try to lure in lucrative new tenants. According to developers, making all of these amenities available to rent-regulated tenants who are paying bargain-basement rates is costly and unfair to full-paying residents.

The city already forces most New York City high-rises to set aside about 20 percent of their units to low-income residents. Opponents of amenity exclusion policies charge that developers are trying to get rent-controlled tenants to vacate the building, so they can rent or sell their units to higher-paying tenants. Building owners, they claim, are trying to make these tenants feel unwelcome so they’ll leave prematurely.

To which I say: “Amen”—especially if those tenants have the nasty, green-eyed entitlement mentality of residents like Jean Green Dorsey.

Dorsey, president of Stonehenge Village’s tenants association and self-described “activist” who pays just $1,107 a month for a two-bedroom Manhattan apartment with a terrace, is incensed because only market-rate tenants will have access to the building’s new gym. As the Times interjects—no doubt in order to plant the seed of race discrimination in readers’ minds—Dorsey is African American. Author Ronda Kaysen writes, “Her front door is decorated with placards supporting President Obama… Sitting at her dining-room table recently, a sketch of Malcolm X hanging behind her, she said, ‘Nobody makes me a second-class citizen in my own home.’”

It’s come to this: Where once African Americans were denied legal protection against housing rental discrimination, now an aggrieved Malcolm X supporter isn’t satisfied at getting a lifelong Manhattan luxury rental for one-third the asking price, and declares that not having access to a state-of-the-art gym she’s not paying for is the new Jim Crow.

Another rent-stabilized tenant, Michael Reilly, a “personal trainer and actor” who pays just $1,250 a month for a studio apartment he shares with his wife and son in The Windermere—where rent for similar apartments runs several times that amount—whines about being denied access to a brand-new children’s playroom: “‘We were the only [rent-stabilized tenants] with a kid who was age-appropriate and that was just mean.’”

You know what else is mean? Forcing cash-strapped New York taxpayers with their own nightmarish rents to subsidize the cost of your luxury Manhattan apartment so you can raise children on the salary of an actor, and complaining when full-paying customers get a few treats that their exorbitant rents are funding, all while your presence lowers their property values. That strikes me as a bit mean.

(I seem to remember another ungrateful prominent figure who lives in a subsidized House complaining in recent years that the country that had given her and her family lucrative opportunities was “downright mean.”)

In their defense, developers note that, if they offer amenities to rent-stabilized tenants, they face the threat of additional regulation by the New York State Division of Housing and Community Renewal, which they must ask for permission if they want to remove such amenities. Even if the Division allows removal of the amenity, they may require building owners to offer an even greater discount to rent-stabilized tenants.

Naturally, city and state Democratic legislators like Mark Levine, Corey Johnson, and Linda Rosenthal are swooping in and loudly promising to eradicate this segregationist policy of… requiring people to pay for services they use.

Rosenthal recently tugged at her constituents’ heartstrings with this appeal: “‘It’s a subtle form of harassment. It sends a message: You’re not as good as my tenants who pay more.’” No, they aren’t as good as the other tenants who pay more—not for the building’s coffers, or its financial sustainability, or its ability to turn a profit or expand or add more amenities in the future. Does Rosenthal quarrel with that?

The Times sarcastically titled its article, “What’s Next, a Bouncer?” Yes, actually, a bouncer would be appropriate for a nightclub in which 20 percent of the clientele demand access for one-third the cover charge, then cause a scene inside when they’re denied free access to the VIP lounge.

As the comments section of the Times article reveals, even most liberal New Yorkers agree: If off-Broadway stagehands and community activists want to use the luxury gyms and spas in high-rise Manhattan apartments, they can just pay the same damn rent as everyone else who lives there.

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The Good Life Is Not a Constitutional Right

May 07, 2014 By: Scott Spiegel Category: Economy

512XyOsXR8L._SY450_Lately there’s been a lot of chatter from midterm-campaign-theme-starved liberals about the scourge of income inequality.

In an entry in their lugubrious “Poverty in America” series, a National Public Radio reporter recently wailed that 95 percent of the wealth recovered since the 2008 recession has gone to the top 1 percent of income earners, and that the U.S.’s middle class is no longer the wealthiest in the world.

Adding fuel to the fire, French economist Thomas Piketty recently published the English translation of his anti-capitalist exposé Capital in the Twenty-First Century. Proud neo-Marxists and their acolytes briefly sent the book to number 1 on Amazon’s digital bestsellers list. (Clearly the left is no longer miffed at tech giants who exploited the physical labor of field peasants to harvest the Internet.)

Winner of the worthless Nobel Prize in Economics Paul Krugman gave Piketty’s volume a glowing review, calling it a “magnificent, sweeping meditation on inequality.” (Whenever a New York Times reviewer calls a book a “meditation” on something, I assume that’s code for “random fact-free musings scribbled while on drugs.”)

Piketty’s central argument is that unbridled capitalism is bad for society. According to economic data he’s reanalyzed, the concentration of wealth accelerates at a faster rate than the economy grows, such that even if society is doing well, disproportionately more wealth goes to a small percentage of the population. The solution to this non-problem is—you guessed it!—government regulation, including higher taxes on the wealthy.

Liberals are agog over Piketty’s brilliance and are parading his book around as though he’s offered some blindingly new and innovative insight. But anyone who argues, as Piketty does, that unchecked wealth accumulation is bad for capitalism doesn’t understand capitalism.

Wealth generation and accumulation aren’t zero-sum games; they can expand infinitely. The existence of more billionaires doesn’t squeeze the middle and lower classes out of their chance to become billionaires. Before there were hundreds of billionaires, there were only a few billionaires; yet no one claimed that letting these few billionaires get richer would prevent other people from becoming billionaires.

Restricting wealth accumulation for some doesn’t foster wealth accumulation for others; it just allows fewer people to join the ranks of the super-rich.

In fact, NPR itself ran a story just last week on Americans’ surprising mobility in and out of the 1 percent. According to Mark Rank and Thomas Hirschl, author of the book Is it just the One Percent, or is Affluence a Normal Life Course Event?, a whopping one out of five members of the U.S. population makes it into the top two percent at some point in their lives. Eight percent of Americans make it into the top one percent and stay there for at least a year. But seven out of those eight in a hundred don’t last a decade in the top one percent, which means that foolish investment can bump one out of the upper class just as easily as hard work and wise investment can propel one into it.

Yet liberals don’t see the good life as an aspiration. They see it as the default, and if some don’t have it—well, that’s a problem the government needs to fix. The good life doesn’t need to be painstakingly created, shaped, and built via imagination, planning, and hard work. It just comes into existence, is owed everyone as a birthright, and is absent only if it’s been stolen by greedy oligarchs.

Meanwhile, conservatives don’t view society as owing anyone anything; they favor “negative rights,” in which the government merely protects us from fraud and theft. Liberals capitalize on general public recognition of this genuine, small role for government regulation by endlessly complaining that the government isn’t meeting that minimal responsibility. But their efforts result in legislation like the 14,000-page Dodd-Frank Bill, which not only uses vague language to allow future regulators to impose all kinds of restrictions on business, but doesn’t even address the problem it was supposedly designed to solve.

So why is growing inequality even an issue? What difference does it make if a CEO earns 100 times his average employee’s salary of $75,000 vs. 50 times their salary of $50,000? As Margaret Thatcher once asked, would the left rather have everyone be poorer so that the gap between rich and poor can be smaller?

The default throughout human history hasn’t been the good life; it’s been an epic, bloody struggle for survival, in which successive generations have tried, with some success, to pass on a better way of life for their children. Miraculously, this has happened in recent times, especially in the West, as a result of capitalism, and is happening in developing nations as they adopt the Western model.

Capitalists didn’t take away the good life from the masses, because the good life didn’t exist until capitalism. But the more of capitalism that liberals chip away at, the less of the good life there will be for everyone.

Previously published in modified form at Red Alert Politics

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Democrats’ War on Competent Women

April 09, 2014 By: Scott Spiegel Category: Economy

war-on-womenOn Tuesday the nation’s grievance-mongers celebrated Equal Pay Day, the day up through which women supposedly must work to catch up with men’s earnings from the prior year.

Based on the actual research, however, women would need to work only up until about brunch on New Year’s Day.

Liberals have been bleating for decades about some apocryphal pay gap, whereby full-time working women receive just 77 cents for every dollar men earn for the same work.

To help rectify this situation, President Obama signed the Lilly Ledbetter Fair Pay Act, which made it easier to file a lawsuit alleging salary discrimination, as his first act in office.

In a desperate attempt to mobilize Democrats’ largest voting bloc before the 2014 midterm elections, Obama recently renewed his push to remedy the injustice of pay inequality by promising to go around Congress if it doesn’t act.  On Tuesday he signed executive orders banning federal contractors from prohibiting workers from discussing their pay, and requesting pay statistics by gender from contractors.

Meanwhile, investigative journalists have documented that the Obama White House has paid its female staffers less than men for years.  So according to liberal logic, Obama is either discriminating against women applying for prestigious positions or stiffing them in their paychecks.

As journalist Christina Hoff Summers and others have documented, women’s work habits and life circumstances differ from men’s in many ways that affect their earnings.

Women tend to major in subjects that lead to lower-paying jobs and to pick lower-paying careers.  Women are more likely, for example, to become schoolteachers or nurses, whereas men are more likely to become college professors or doctors.  Men are more likely to choose careers that involve difficult manual labor or dangerous work conditions, which yield extra compensation relative to safe desk jobs.

Women are more likely to interrupt their careers, often when they’re just taking off, to give birth and stay home to rear children.  Many return to their jobs after sacrificing months or years’ worth of experience, networking, and resume-building opportunities.

Women are more likely to choose to work part-time, or to work fewer overtime hours, which compounds the experience gap and compromises their utility to employers.

Controlling for all of the above factors, the gender gap dwindles to 6.6 cents on the dollar.  And in our litigious, politically correct era, the fact that there’s still any gender difference suggests that researchers simply haven’t pinned down the situational factors that explain away those final few cents—e.g., women’s less aggressive salary negotiating style, or control variables that classify a woman who majors in sociology and a man who majors in economics both as “social science” majors.

As even the U.S. Department of Labor admitted in a comprehensive study of the pay gap in 2009, “[T]he raw wage gap should not be used as the basis to justify corrective action.  Indeed, there may be nothing to correct.  The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.”  Is Obama unaware of his own Labor Department’s research on the pay gap?

Conservatives have been pointing out all of the above facts for years—but all to no avail.  Brain-dead feminist Joan Walsh recently scolded Republicans for telling women to stop lying about the pay gap.  Liberal reporter Dana Milbank sneered that Republicans can “kiss votes from women goodbye.”  Birth control connoisseur and California State Senate candidate Sandra Fluke helpfully outlined all of the steps we can take to reduce the pay gap.  (I don’t know about you, but when Sandra Fluke has something to say, I do absolutely nothing differently than if she hadn’t spoken.)

For liberals who don’t buy the economic data showing no discriminatory pay gap, tell me: If employers could get away with hiring women with the same skills and experience as men for a 23% discount, why wouldn’t they be snapping up women and giving them their male employees’ jobs?  (They might even have to keep binders full of women!)  The left regularly accuses heads of companies of selling unsafe products or gouging customers just to squeeze out a few more pennies per transaction.  Are we to believe that these capitalist overlords haven’t noticed that they’re paying a 30% markup for male employees?

If it’s illegal to pay women less than men with the same qualifications for the same work, why don’t we see more gender discrimination lawsuits?  Where are the thousands of women proving in courts of law that their bosses give them less money than equally qualified men doing the same work?  Most heads of Human Resource Departments, which keep employee resumes, work requirements, and salary information, are women.  Are female human resource managers jealously conspiring to cover up widespread gender discrimination?

Research shows that the pay gap is narrowest at the start of women’s careers and widens as they get older.  So it’s unlikely that employers simply have an unfounded bias against women at all stages of their careers.  In fact, U.S. Census data reveal that the pay gap is reversed when comparing single men and women in their twenties.

If women want the same pay as men, then they should enter high-paying, high-prestige, high-responsibility careers that require lots of overtime and no interruptions in work history for having babies or part-time schedules to care for children.

As Megan McArdle points out, the real pay gap is the one that results from the differences between women and men, and the divergent life choices they make.  The left doesn’t want women to receive the same pay as men for equal work; they want women to receive the same pay as men for unequal work.

And these whining obfuscators whose appeals to social justice belie their assumption that women can’t compete on their own terms are the ones who call themselves feminists.

Previously published in modified form at Red Alert Politics

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Time to Furlough Essential Federal Employees

October 09, 2013 By: Scott Spiegel Category: Economy

government-shutdown-make-it-hurt-politifakeThe federal government shouldn’t be shutting down non-essential functions, it should be privatizing them and shutting down essential functions.

The one thing you can say about all the things Obama has chosen to shut down during the current budget battle is that they made someone happy.  Whether it’s the National Zoo, national parks, private parks, historic and cultural monuments, children’s cancer research, campgrounds, or fishing outlets, Obama wants to make well and sure you don’t benefit from any of them while he waits for Republicans to buckle over Obamacare.

As the stories emerged about Obama’s goons stringing wire through barricades to ruin 80-year-old vets’ chances to see the World War II Monument and blocking the view from the road to Mount Rushmore, I went from guffawing at the ineffectuality of the shutdown to seething over his maliciousness in targeting the most innocent bystanders via a series of heavy-handed shutdown spectacles that cost more to carry out than to just leave the damn sites open.

While parks, monuments, and campgrounds bring people pleasure, you can’t say the same about the agencies Obama left open, which nominally provide key services but regularly inflict torment on hapless citizens not bothering anyone.  When was the last time you heard someone gush over how the Department of Education or the IRS made his life better?

Consider the putative roles of these federal behemoths and the tortures they rain down on us:

Department of the Interior, budget $20 billion.  This harmless agency that’s been around since before the Civil War is there to manage and conserve federal land, right?  Wrong.  Lately its main duties seem to be preventing off-shore drilling, banning oil exploration in Alaska, and keeping retailers and developers from expanding.

Internal Revenue Service, budget $13 billion.  No one likes the IRS, but don’t we need them to enforce the federal tax code?  Except that they’re best known these days for stalking Tea Party groups, intimidating political opponents, and forcing people to buy health insurance.

Department of Justice, budget $27 billion.  Tasked to enforce federal law for cases of national importance, they’re best known in the Obama era for criminalizing whistleblowers, enabling voter intimidation, and shipping guns to Mexican drug cartels.

Department of Commerce, budget $9 billion.  Charged with promoting an infrastructure that supports commerce, but better known since FDR for punishing farmers for not growing crops, banning guns in school zones, and forcing people to buy health insurance.

Federal Reserve.  Designed for setting monetary policy and interest rates on U.S. bonds; best known for inflating the currency, devaluing the dollar, and buying good economic news for the administration by printing money and causing the stock market to rally.

Social Security Administration, budget $736 billion.  Intended for assisting with workers’ retirement and disability benefits; known for confiscating wealth that could be more profitably invested elsewhere, discouraging workers from properly preparing for retirement, and going bankrupt.

Department of Health and Human Services, budget $78 billion.  Intended: Ensuring the health and safety of the citizenry.  Actual: Holding up crucial drug approvals, making a trusting populace obese with the carb-heavy Food Pyramid, and forcing people to buy health insurance.

Department of Housing and Urban Development, budget $48 billion.  Intended: Developing policies on housing and metropolitan living.  Actual: Spreading rat-infested projects through minority neighborhoods, banning truthful descriptions in real estate ads as “offensive,” and promoting subprime housing loans to poor Americans.

Department of Energy, budget $31 billion.  Intended: Setting the nation’s energy policy.  Actual: Preventing nuclear power plants from operating, subsidizing flimflam solar panel companies, and pushing global warming hysteria.

Federal Emergency Management Agency, budget $11 billion.  Intended: Providing disaster relief to victims of catastrophic events.  Actual: Confiscating guns, misdirecting funds, and dillydallying over bureaucratic regulations while hurricane refugees suffer.

Department of Education, budget $71 billion.  Intended: Overseeing and strengthening the public school system.  Actual: Mobilizing teachers’ unions to vote for Democratic candidates, indoctrinating students in liberal ideology, and dumbing down America.

Department of Homeland Security, budget $61 billion.  Intended: Protecting the nation from terrorist threats.  Actual: Strip-searching babies and monks at airports, exposing the populace to scatter radiation, and stockpiling ammunition.

So just how much does it cost to run the National Zoo?  $25 million to operate two facilities, about a quarter of which comes from private donations.  That’s an annual budget of 0.3 percent of the EPA, the cheapest of the behemoths listed above.

I’ve changed my mind—turn the Panda Cam back on, and turn off the spigot to these wholly unnecessary, actively harmful, misery-spreading “essential” federal agencies.

Previously published in modified form at Red Alert Politics

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Dems Fail to Terrify Americans with Threat of Panda-Cam Deprivation

October 02, 2013 By: Scott Spiegel Category: Economy

originalNow that the federal government has partially shut down, the big question isn’t how we’ll ever manage, but: Did anything actually shut down?

On Monday night the House and Senate missed their deadline for passing a budget resolution due to disagreement over Obamacare funding, which  naturally drove the media into a frenzy.  But consider all of the things that will not shut down during the so-called shutdown:

  • All branches of the military, including our troops in Afghanistan
  • The Department of Homeland Security
  • All federal law enforcement offices and officials, right down to traffic cops
  • Emergency services, including 911
  • Federal prisons
  • Maintenance of the power grid
  • Disaster assistance
  • Social Security checks
  • Unemployment checks
  • Medicare payments (at least the ones Democrats haven’t siphoned off to pay for Obamacare)
  • Medicaid payments
  • Food stamps
  • Federal school lunch programs
  • Most veterans’ services
  • Mail service, which will continue six days a week
  • The Supreme Court and other federal courts
  • Border control
  • Processing of immigration applications
  • The National Weather Service
  • Air traffic control
  • NASA/the International Space Station
  • Amtrak, Metrorail, and Metrobus
  • Travel safety services, including the Transportation Security Administration
  • Food inspectors
  • Hazardous waste handlers
  • Most passport requests, which are funded by fees and not taxes

Also, of course, the full salaries of President Obama ($400,000) and all House and Senate members ($174,000 to $230,700 each).

Also the offices of the 76% of the 3.3 million federal employees who have been deemed “essential” for the nation to continue to function, even though most of their positions and offices didn’t exist 50 years ago and we somehow got along fine.  The other 24% of employees will be furloughed and most likely receive back pay for the time they were off the job, as they always have in the past.  The Office of Management and Budget (which will not shut down) will make the determination of who stays on the job (with pay) and who gets furloughed (likely with pay).  Those lucky enough to stay on the job and pick up some of their missing coworkers’ slack may be eligible for overtime.

Highly critical government offices that will not shut down and the essential services they provide include: the Bureau of Labor Statistics (fudging the unemployment numbers), the Internal Revenue Service (monitoring Tea Party groups), the Federal Reserve (deflating the currency), the Consumer Financial Protection Bureau (harassing banks), and the U.S. Patent Office, which will bravely continue to crank out patents during the apocalypse.

Just 15% of Justice Department employees will be furloughed.  (Attorney General Eric Holder needs a lot of help suing North Carolina for being racist.)  And don’t worry—99% of all Head Start programs will remain open.

Also… Obamacare!  The state health care exchanges went live October 1, and with three months till coverage starts, Democrats will move heaven and earth to make sure funding flows their way.

Here are the things that will shut down:

National parks, the Smithsonian museums, and the National Zoo.

That’s about it.  As CNN mournfully noted in its recent headline, “‘Panda cam’ to go dark in shutdown.”

In other words, a few D.C. tourists with bad timing will have to entertain themselves paddle boating in Baltimore’s Inner Harbor and shopping at Pentagon City.  (Note: the Kennedy Center for the Performing Arts is still open!)

Oh—and federal loans to buy houses will be temporarily unavailable, which should help stave off the next financial crisis; and the federal government won’t be able to issue gun permits, which we shouldn’t have to petition it to do anyway.  Also, E-Verify will naturally be out of commission.

Why have House Republicans been so daring in pushing us to the brink of a shutdown?  Perhaps it’s because they’re confident that Obamacare is so detested that public opinion will break their way and turn against Democrats who refuse to revoke their self-awarded exemption from the bill.

But perhaps it’s because of what a non-issue the supposedly catastrophic sequester earlier this year turned out to be.

The government has shut down 17 times since 1977, not counting your occasional sequester or Snowpocalypse, and somehow we’ve survived.  If your average American is generally skeptical of government, doesn’t understand most of its functions, and suspects it’s too big, why would he quake in terror at the prospect of its taking a breather for a few days?

As Mark Levin noted, there’s a government shutdown every Friday with no untoward consequences—it’s called “the weekend.”

Previously published in modified form at Red Alert Politics

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No Ceiling on Obama’s Debt Recklessness

September 25, 2013 By: Scott Spiegel Category: Economy

untitledContrary to popular belief, the debt ceiling wasn’t instituted to rein in Congressional spending, it resulted from a power grab by a Democratic President to circumvent Congressional authority.

Based on his recent debt recklessness, Obama is happily restoring that ignominious tradition.

In 1917, President Wilson decided he didn’t feel like waiting for Congress to appropriate funds to enter World War I, so he schemed to go around them.  He insisted that as Commander in Chief he couldn’t pause for Congress to authorize military spending, that his Treasury Department needed the power to print large numbers of bonds whenever it wanted to drum up cash.

Congress eventually agreed to Wilson’s demands, but on the grounds that he be constrained such that he could not unilaterally incur more debt without Congress’s approval.  (As NPR wryly notes, “Sort of like putting a leash on a toddler.”)

The debt ceiling concept not only survived the war but expanded under FDR from a mechanism intended to pay for armed conflict to a catchall wink-wink approval to Congress to keep spending as much as it wanted as long as it didn’t exceed the limit.

Then Congress started raising the debt ceiling.  A lot.

In NPR’s words, “The toddler grew into a giant, and Congress just ordered longer leashes every couple of years.”

The history of the U.S. debt ceiling reveals that: (1) both parties have raised the ceiling by enormous amounts over the last century; (2) Democratic Presidents have increasingly taken advantage of debt ceiling increases for non-war discretionary spending; and (3) President Obama is in a league of his own in debt ceiling abuse.

In FDR’s third term in office, during World War II, the debt ceiling quintupled from $49 billion to $260 billion.  Over six years of peace and two of war under Truman, the debt ceiling rose to only $275 billion.  Under Eisenhower it inched to $293 billion.

Under JFK the ceiling ratcheted up to $309 billion; under LBJ it hiked to $365 billion.  During the Vietnam War under Nixon, it spiked to $495 billion, but after war’s end it came back down to $400 billion.  Carter’s failed economic policies reversed that trend and sent the ceiling up to a shocking $935 billion.

While Reagan was building our arsenal of nuclear weapons and winning the Cold War, the debt ceiling doubled to $2.8 trillion.  Under George H. W. Bush, who fought the first Iraq War, it rose to $4.1 trillion.  During eight years of peace under Clinton, it chugged up to $8.2 trillion.

While George W. Bush was fighting two wars, the debt ceiling rose to $11.3 trillion, but a good chunk of that boost came in response to the financial crisis of the fall of 2008: nearly a third of the debt ceiling increase under Bush occurred in his last four months in office, under political pressure from Democrats.

And then there’s Obama.

When Obama assumed office, the debt ceiling was $11.3 trillion.  As of May 2012, it was $16.7 trillion.

It’s probably going to get raised again in a few weeks.  And Obama wants to raise it much, much higher before he’s done with us.

Look at a graph of debt ceiling increases over the past 30 years, and you’ll see a steady accumulation of baby steps across Reagan, Bush, Clinton, Bush…  Then—wham! the effort meter on your Stairmaster shoots up to Matterhorn level, and you’re confronted with a massive, vertical wall of debt.

Obama loves to point out that Reagan raised the debt ceiling 18 times.  But Reagan’s increases were much smaller, even in combination, than Obama’s.  Reagan increased the debt ceiling an average of $233 billion a year.  Bush Sr. increased it $336 billion, Clinton $226 billion, and Bush Jr. $671 billion.

Obama?  A cool $1.4 trillion per year.

If Obama continues at his current rate, the debt ceiling will be $25 trillion when he leaves office.  That’s 10 times its level at the height of the Cold War, and 30 times its level during the peak of the Carter recession.

Under Wilson in 1917, Congress authorized the issuance of $11.5 billion in bonds, which would be $193 billion in today’s inflation-adjusted dollars.  Obama’s debt ceiling?  86 times as large as that inflation-adjusted amount.

As The Atlantic noted, “The U.S. isn’t fighting a world war, but the nation’s government is borrowing like it is.”

Even the originator of the debt ceiling would be appalled at Obama’s debt ceiling recklessness.

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Detroit Happens

July 24, 2013 By: Scott Spiegel Category: Economy

130718130808-detroit-protests-bankruptcy-620xaAh, Detroit!  The most liberal metropolis in the country, a city that hasn’t elected a Republican city council member since Nixon’s first term, a city that hasn’t elected a Republican mayor since Eisenhower was president.

Naturally, Republicans are responsible for Detroit’s woes.

Last week Detroit filed for bankruptcy, the largest municipal bankruptcy filing in U.S. history.  The city is $18 billion in debt and owes $3.5 billion to city employees in unfunded pension and health care obligations.

Kevyn Orr, Detroit’s emergency city manager, proposed cutting pension benefits and interest to bondholders as part of his Chapter 9 filing.  Last Friday a circuit judge ruled that Detroit’s bankruptcy filing was unconstitutional, because it violated municipal employee contracts with predefined pension payments.

Commentators have been tossing around a variety of explanations for Detroit’s problems, including: residential and business flight to the suburbs, a lost manufacturing base, auto plants closing, mismanagement and corruption in city government, racial segregation, and the national housing crisis and recession.

I’ve noticed a curious thread running through most commentators’ explanations: namely, the suggestion that no one is at fault for what happened in Detroit; or that everyone is at fault; or that many factors contributed to Detroit’s decline and we can’t say which had the most influence; or that it doesn’t really matter who’s at fault because all we can do now is move forward.

New York Times columnist Paul Krugman expressed the following passive account: “Detroit does seem to have had especially bad governance, but for the most part the city was just an innocent victim of market forces.”  You know, like those Republican-led cities and states that suffered through the same recession as Detroit and somehow managed to emerge prosperous.

But something is clearly at fault for the budget shortfall of the city’s pension system, which continues to offer guaranteed retirement income and health care benefits to recipients, no matter how long they live, no matter how expensive their medical care.  Where does that exist in the private sector these days?

Why do municipal employees—some of whom perform dangerous jobs, but many of whom sit at library checkout desks or hospital reception counters all day—think they deserve such privilege?

The resistance to cutting pensions is probably driven in part by what decision-making psychologist Daniel Kahneman calls loss aversion—or, alternatively, the endowment effect.  Namely, losses seem more unjust to most people than gains seem just, so instead of cutting benefits and lowering taxes to spur wealth creation, society resists touching entitlements to prevent anyone from ever losing anything, even if this hamstrings entrepreneurs.  Another way of looking at this is to say that people who already have benefits feel that they are “endowed” with them and have more of a right to them than if they had never possessed them.

The American Prospect’s Harold Meyerson makes this case in ethical terms: “[T]oday’s bankruptcy filing is likely to reduce [city] services still further, while likely reducing the monthly pension checks of its retirees, though they and their unions have a strong moral claim to most favored creditor status.”  According to Meyerson, the businessmen and investors who created the jobs that allowed taxes to be collected and city services to be provided—well, their moral claim on much of anything is moot.  But the people cashing in on those services—now, they’re the ones whose rights we have to protect, whose claim to pensions and free health care are enshrined in the Michigan State Constitution.

But for an even more direct answer to the question of why city employees feel so entitled, see the comments of 65-year-old Michael Wells, plaintiff in a city union-sponsored lawsuit against Detroit’s bankruptcy: “He said he viewed the pension as part of the overall pay he was promised…  ‘Had I not had a pension, perhaps I would have gotten several dollars an hour more and that would be O.K.  I would have taken that money and invested it in some kind of mutual fund or stock.’”

That last sentence is key: Because he was relying on government to fund his retirement, Wells did no financial planning.  Why should he feel the need to?  And hundreds of thousands of other Detroiters no doubt put similar faith in government, and now find themselves in the same predicament.  Their thinking must be, Government not only gives us jobs and salaries, it takes responsibility for our financial well-being right on up through retirement.  How can it possibly withdraw its services now?

Also see Times columnist Steven Rattner’s rationale for why “We Have to Step In and Save Detroit”: “[T]he 700,000 remaining residents of the Motor City are no more responsible for Detroit’s problems than were the victims of Hurricane Sandy for theirs, and eventually Congress decided to help them.”  Right.  Retiring, being the victim of a historically destructive weather event that occurs once a century—they’re equally unpredictable, and people shouldn’t be expected to build up savings any more than they should be expected to build bunkers and hurricane shelters in Manhattan.

The Pittsburgh Post-Gazette, wary of that city’s potential slide into Detroithood, mused, “There has been finger-pointing about who is to blame.  The answer is everyone.”  No.  The answer is Democratic politicians, moderate Republican politicians who enable them, and voters who elect them all on the platform of making government a nanny-state protector of able-bodied human beings to the absurd extent of doing their retirement planning for them.  That’s who’s to blame.

Previously published in modified form at Red Alert Politics

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David Stockman: Supplying Both Sides with Bad Economics

April 03, 2013 By: Scott Spiegel Category: Economy

David Stockman.The Great DeformationIn a controversial New York Times piece that’s been receiving attention from both the left and the right, former Reagan budget director David A. Stockman recently argued that the federal government’s activist role in manipulating our economy for the past eight decades is responsible for our current dire financial straits.

Stockman dissects the history of abuses carried out by the Federal Reserve and notes, correctly, that the Keynesian policy of endless money printing to stimulate demand and promote liquidity leads to long-term, permanent inflation and an erosion of our currency’s value.  He takes to task George W. Bush for recklessly expanding Medicare, Obama for his poorly targeted stimulus bill, and both for their role in the 2008 bank bailout.  He notes that even so-called fiscal hawks like House Budget Committee Chairman Paul Ryan vastly underestimate the severity of our debt crisis and soft-pedal the steps needed to resolve it.

But Stockman gets a lot wrong, too, and the bulk of his error seems to stem from a renegade streak that reflects his desire to prove himself more sagacious than both left and right.  To wit: any analyst who finds equal economic fault in both parties—labeling the problem “bipartisan,” as Stockman does—misunderstands the situation.  Yes, the right deserves blame: Nixon decoupled paper money from gold; Reagan built up massive federal deficits; George W. Bush increased government spending more than any president before him.  But Stockman justifies holding both parties equally accountable by inappropriately coupling spending cuts with raising taxes as solutions to mitigate deficits.  Stockman falls into the trap—as do most liberals—of equating federal expenditures with tax cuts.  In the liberal worldview, both entities are equivalent, because each involves spending in different forms—one on government programs that largely help the poor and middle class, the other on tax breaks that largely favor the wealthy.

But lowering marginal tax rates on high-income earners doesn’t involve spending; it involves not taking money that isn’t the government’s in the first place.  Revealing either his confusion or his deliberate blurring of the issue, Stockman writes, “Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills [emphasis added].”  Cut massive wasteful federal spending, gouge the rich—it’s all the same to Stockman.

Similarly, he bemoans Bush’s “giant expansion of Medicare and a tax-cutting spree for the wealthy…  In effect, the G.O.P embraced Keynesianism—for the wealthy.”  In other words, Stockman thinks letting the wealthy keep their money in the hope they’ll invest and create more wealth is the functional equivalent of burying money and paying people to dig it up.

At times Stockman rails against the size of the entitlement state, but he’s inconsistent in denouncing it.  At one point he complains that Ryan’s “proposal for draconian 30 percent cuts over a decade on the $7 trillion safety net—Medicaid, food stamps and the earned-income tax credit—is another front in the G.O.P.’s war against the 99 percent.”  Is Stockman Reagan’s former budget director or a closet Occupy Wall Streeter?

Stockman betrays further obtuseness when he complains that our two stubborn political parties, caught in “stasis,” won’t resolve our fiscal crisis in one fell swoop, but rather “in carefully choreographed crises over debt ceilings, continuing resolutions and temporary budget patches.”  In other words, the country’s having to white-knuckle it through endless, panic-filled stopgap measures is equally the fault of Democrats who refused to pass a budget for four years and Republicans who desperately tried to get one signed into law during that period.  Neither party is more to blame than the other.

Showing further solidarity with the left, Stockman writes that not only should we end deposit insurance and inexpensive Fed loans for Wall Street, but banks should be “banned from trading, underwriting and money management in all its forms.”  So banks should have to shoulder all the risks inherent in their profession—a sensible idea—but government should arbitrarily restrict the scope and nature of their profit-generating activities?  Isn’t that just the inverse of the problem we have now?

But what really undercuts Stockman’s case is the solutions he presents to resolve our crisis.  While he suggests some sensible ideas involving smaller government, including reining in the Fed and replacing the welfare state with a modest means-tested safety net, he inadvertently reveals an odd, megalomaniacal desire for control.  Under his plan, for example, Stockman would demand “the abolition of incumbency”; he would order “sweeping constitutional surgery” that would require “providing 100 percent public financing for candidates; strictly limiting the duration of campaigns (say, to eight weeks)… [and] overturning Citizens United…”  Stockman is willing to throw out free speech—including our ability to spend money to advocate for political candidates and messages—in the process of saving the country.  Why don’t we just let Stockman pick our leaders right now and be done with it?

Anyone who sees so little difference between the ideological foundations and policy contributions to our economy of our two major political parties—and who botches so many of the specifics in his exegesis of our current woes—either doesn’t have a grasp of the situation or is trying to mislead us.  And Stockman’s restrictive, authoritarian solutions suggest that—as with Democrats and their congenital desire to manipulate other people’s wealth—he really just wants to tell us working-class schlubs what to do.

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Democrats Want Job Creation—But Not Under Republican Governors

March 13, 2013 By: Scott Spiegel Category: Economy

Indiana_IFT_Protest2The progressive Wisconsin-based Cap Times recently released a graph featuring Bureau of Labor Statistics numbers showing Wisconsin well below neighbors Minnesota, Michigan, Iowa, and Illinois in job creation over the past two years.  Liberals have been tittering over the graph, because in 2010, Wisconsin gubernatorial candidate Scott Walker campaigned on the promise of creating 250,000 new jobs in his first term, yet the state has witnessed a net decline of 16,000 jobs since he took office in January 2011.

In defense of Walker, comparing Wisconsin unfavorably to Michigan and Illinois—two of the states with the highest unemployment rates in the country—is hilarious.  In December 2012, Wisconsin’s unemployment rate was 6.6%, compared to Illinois’s at 8.7% and Michigan’s at 8.9%.  (Iowa, with its Republican governor and House, is admittedly doing very well at 4.9%).

Remember that Walker promised to create 250,000 jobs by the end of his first term, which lasts until January 2015.  I think it’s a bit premature for liberals to gloat over the presumed economic fallout from the slight limitations he enacted on lavish taxpayer-funded union benefits via his Wisconsin Budget Repair Bill.  As anyone who grimaced while first-term President Reagan rode out the second half of a double-dip recession can attest, reform takes time to kick in.  There’s so much variability in the numbers of jobs Wisconsin’s neighbors have created over the past 24 months—from Minnesota’s 72,200 down to Iowa’s 18,600—that it’s way too early to tell whether Walker’s policies have worked.  And Reagan didn’t have to waste the first year of his presidency fighting a pointless recall election staged by powerful public sector unions.  (The Wisconsin recall election also set taxpayers back to the tune of 16 to 18 million job-killing dollars.)

Also remember that the change in Wisconsin’s net jobs includes not only private-sector jobs but government jobs.  Since Walker explicitly campaigned on a platform of cutting government spending, it’s safe to assume that several thousand of those “lost” jobs came from laying off pencil-pushing bureaucrats to save the state money.

In addition, Walker promised to create jobs via business expansion.  Yet Democrats have been doing everything in their power since he was elected to stymie his job-creation legislation.  Most regrettable is their effort to stop his mining bill that would open territory in the Lake Superior region for a gigantic $1.5 billion iron ore mine and create thousands of jobs in the mining, trucking, and housing industries.  Despite the bill’s recent passage after a year of Democratic stall tactics, the mine’s opening could be delayed for years due to environmentalist legal challenges.

But since Democrats want to draw comparisons, let’s take a broader view.  Crunching the numbers reveals that unemployment rates declined more across the country in red states—as defined by 2012 Electoral College votes—than blue states from January 2011 to December 2012: 20% on average in red states and 14% in blue states.

Unemployment increased in only two states over the past two years: New Jersey and New Hampshire—both blue.  Unemployment decreased by piddly single-digit percentages in New York, Illinois, Maryland, Connecticut, Maine, and Pennsylvania—all blue states. Similarly, decreases were 17% or less in blue states Michigan, Washington, Hawaii, Vermont, Rhode Island, Colorado, and D.C.

In contrast, unemployment plummeted for red states Utah (32%), Idaho (32%), Missouri (30%), Louisiana (29%), Texas (27%), Alabama (24%), Montana (24%), Oklahoma (23%), Kentucky (22%), West Virginia (22%), Wyoming (22%), Kansas (21%), South Carolina (20%), and Tennessee (20%).

Florida was a blue state in 2012—barely—but has a Republican governor, Senate, and House, and their unemployment dropped a whopping 33% from January 2011.  Swing state Ohio similarly tipped blue in 2012, but also has a Republican governor, Senate, and House, and their unemployment plunged 29%.

Red states also had lower average point-in-time unemployment rates in December 2012 than blue states—7.5% vs. 6.6%.  The following red states all boasted unemployment rates below 6.0%: North Dakota (3.2%), Nebraska (3.7%), South Dakota (4.4%), Wyoming (4.9%), Oklahoma (5.1%), Utah (5.2%), Kansas (5.4%), Louisiana (5.5%), and Montana (5.7%).  Seven of the ten states with the lowest unemployment rates in the nation are red.  The states with the four lowest unemployment rates are all red.

Meanwhile, these poor blue states all had miserable unemployment rates above 8.0% in December 2012: Rhode Island (10.2%), Nevada (10.2%), California (9.8%), New Jersey (9.6%), Michigan (8.9%), Illinois (8.7%), Connecticut (8.6%), D.C. (8.5%), Oregon (8.4%), and New York (8.2%).  Seven of the ten states with the highest unemployment rates in the nation are blue.  The states with the four highest unemployment rates are all blue.

So here’s some advice for Democrats who whine when Republican governors fail to fully implement their economic growth promises quickly enough: Stop saddling them with costly, time-consuming recall elections, and stop opposing every job-creation measure they propose.  They can create a lot more jobs that way—if that’s truly what you want.

Previously published in modified form at Red Alert Politics


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