Free Markets, Free People

Daily Archives: November 13, 2009


It’s Bush’s Fault Obama Is Traveling So Much

Dana Milbank does a pre-emptive strike on possible criticism of Obama’s globe trotting during a time of domestic economic woe.  He notes that the “normally querulous opposition” hasn’t said a word about the fact that he’s spent 12% of his presidency outside the country and has more trips planned before the end of the year – a record unsurpassed by any president.

Why no criticism per Milbank? Heh … why do you think?

Normally, Obama’s wanderlust would be a liability, because Americans care more about the economy than foreign affairs. But the normal rules don’t seem to apply this year, largely because Obama’s predecessor left the nation’s world standing in a shambles. While Republicans may be tempted to criticize Obama for being “intercontinental,” as Bush would have put it, “the ability to change the way America is viewed is powerful,” a senior Obama adviser said Thursday, “and they are afraid of looking petty.”

Polling by the Pew Research Center at the end of Bush’s presidency found that 70 percent of Americans thought the country had become less respected in the world (only 5 percent said “more respected”), and most of them thought the decline in standing was a major problem.

“Repairing our image overseas was an important consideration for the public,” said Andrew Kohut, the poll’s director. Americans have given Obama credit for a “dramatic improvement” in the nation’s standing, he said.

Here’s an alternative thought for Milbank to consider. The reason the “normally querulous opposition” isn’t saying much, and, in fact, is complaining he isn’t gone enough (fall of the Berlin wall) is when he’s gone he isn’t here mucking things up. Or more succinctly, it’s to their advantage to have him gone.

On a separate subject, my theory as to why he’s going so much has to do with his realization that he is in over his head and as his poll numbers and popularity sink here, he seeks a narcissistic boost elsewhere. One of the main reasons, as some have theorized, he didn’t go to Berlin is there wasn’t enough about him in the program. Of course that didn’t stop him from inserting a totally irrelevant fact that when the wall fell those there at the time wouldn’t have imagined the US would have a president of “African descent” in office in his two minutes speech. What that had to do with anything is beyond me but it is another indicator of how self-absorbed the man is. On his Asian swing, as with his other visits to foreign countries, he will indeed be the center of attention. And, of course, issuing apologies as for the US as is his want, he can’t help but be more popular than a predecessor who didn’t do that sort of thing.

Whether the new “standing” we supposedly enjoy means anything at all really isn’t explored in the Milbank column. Apparently if that new standing is based on contempt (and the popularity of a US leader who panders too it) rather than respect, that’s fine – just so the numbers are “better” than they were previously. Because that means all kinds of important things to America – like more jobs, a better economy, a resolution on Afghanistan and much, much more.

~McQ


Tax Facts

Some tax facts from the Tax Foundation [pdf]to ponder while you work toward paying off the government’s first claim on your paycheck today.

Fact 1: Not everyone is doing that.

Today, 46 million tax filers have no income tax liability after taking advantage of all of the credits and deductions in the tax code—one-third of all tax filers. Obama’s tax polices, such as the “Making Work Pay” tax credit, will increase the number of non-payers to more than 63 million.

Or 63 million won’t , as Scott Hodge of the Tax Foundation says, have any “skin in the game”. Why should they care about tax policy or how tax money is spent?

Fact 2: Not all tax cuts/credits are good.

[T]he most politically popular tax cuts actually give the government more control over the economy rather than less. Even the credits enacted with the best of intentions—such as the $1,000 child credit, hybrid vehicle credit, or adoption credit—are bad tax policy because they attempt to induce people to make choices politicians think are right while rewarding select industries at the expense of others.

Or said another way, we again have government picking winners and losers, which few people would accept as something it should be doing. Politicians use their first claim on what you earn to reward you by not taking it if you do what they want. Is that your idea of the function of government?

Fact 3: High corporate taxes punish workers.

As the new study explains, there is a growing body of evidence that a large share of corporate taxes is really borne by workers—most of whom are not wealthy. Using statistical methods, the new study found that for every $1 rise in state and local corporate tax collections, real wages in that area fell by $2.50 five years later. The reverse is also true: wages rose by $2.50 for every $1 reduction in state and local corporate income taxes.

If wages are depressed in your particular state or locality, check out the corporate tax rate – as we’ve pointed out for years, corporations don’t pay taxes, they pass them on.

Fact 4: US corporate taxes are high.

Average OECD top corporate tax rate: 26.29 percent. Average U.S. top rate: 39.1 percent.

And of course after spending time demonizing corporations as rich and greedy, the present administration and Congress want to raise these taxes even higher. Then they’ll have another job summit and wonder why unemployment continues to get worse and wages are stagnant.

Fact 5: The rich actually pay more than their “fair share”.

Share of federal income tax paid by top 1 percent: 40.4 percent. Share paid by bottom 95 percent: 39.4 percent.

In fact, the rich pay more than 95% of the taxpayers out there – and the plan is to tap them for even more. Because, of course, they’re rich, and that automatically makes them “greedy”. Not in the plan is how the government will make up the revenue it plans on collecting with this new tax when the rich do what is necessary to protect what is theirs from the increased government looting.

Fact 6: Tax increases cost nearly twice the revenue raised.

“With every dollar of revenue, the proposed tax hikes cost the economy an extra 86 cents.”

Called “deadweight loss” high taxes distort the economy by artificially affecting decisions, such as:

…how much people choose to work by decreasing the financial reward to labor. High tax rates also may discourage savings, affect investment choices, and change the way households spend their money. For these reasons, economists recommend low tax rates and broad tax bases.

But that’s not at all what we now have – 63 million projected to be paying no taxes at all, corporate taxes higher than the OECD average and going higher and 1% of the population paying more in taxes than 95%?

If you can’t see what’s wrong with this picture and where it portends to leave us as we try to “recover” from the recession, then you’re being willfully blind. And, if some of this isn’t addressed and changed in the upcoming jobs summit, nothing is going to change to improve the employment situation. We have a tax structure that is anti-growth, anti-business and anti-liberty. The unfortunate thing is the present administration and Congress are working on legislation right now which will actually increase the tax burden exponentially and have projected trillion dollar budget deficits for the next 10 years.

How, given the above and the inevitable result of their unconscionable planned government spending spree (and taxes to support it) are we going to “grow” our way out of this?

~McQ


Is The Locomotive Of “Chavismo” Losing Steam In Venezuela?

Gallup’s latest poll says it is:

President Hugo Chavez’s popularity among Venezuelans has waned in recent years. Less than half of Venezuelans (47%) in August 2009 said they approved of Chavez’ job performance — down from 61% in late 2006 when he was elected to a second six-year term.

That’s not a good sign for a dictator “president for life”. And what’s even worse is his inability to do much about what is causing that decline but attempt to distract attention by stirring up an existential threat (Colombia).

The reasons for this decline in popularity aren’t hard to figure out. Again, Gallup:

This year, 30% of Venezuelans said economic conditions in their city or area are improving, down from 47% in 2008 and 63% in 2007. Electricity and water shortages have become frequent, and violent crime is rampant in much of the country. This year, 23% of Venezuelans said they feel safe walking alone in their areas at night, the second-lowest figure among the 67 countries in which Gallup asked the question.

Politicians, whether socialist or capitalist, are held responsible for their country’s ability to provide the basics in life – especially when in the past those basics were cheap and plentiful. And, politicians are also held responsible for providing basic security. In all areas the socialist “Bolivarian revolution” is failing. And, because of actions by Chavez over the years to nationalize many industries, Venezuelans who supported Chavez are now beginning to see his government as more of a threat to them:

Conversely, concern about the heavy hand Chavez has demonstrated in the recent wave of nationalizations may be growing. The proportion of Venezuelans who said people in the country can feel very confident their private property will be respected by the government has dropped to 40% this year, from 52% in 2007. And 44% of Venezuelans currently agree that life is very hard for those who oppose the government, up from 36% in 2008.

As Megan McArdle points out, Chavez was able to paper over much of this when the price of oil was high and revenue plentiful, but at the present price and faced with the fact that because he diverted money from the state run oil company PDVSA to fund social programs, his golden goose is on life support. And Chavez has been forced to impose some unpopular restrictions:

President Hugo Chávez has been facing a public outcry in recent weeks over power failures that, after six nationwide blackouts in the last two years, are cutting electricity for hours each day in rural areas and in industrial cities like Valencia and Ciudad Guayana. Now, water rationing has been introduced here in the capital.

The deterioration of services is perplexing to many here, especially because the country had grown used to cheap, plentiful electricity and water in recent decades. But even as the oil boom was enriching his government and Mr. Chávez asserted greater control over utilities and other industries in this decade, public services seemed only to decay, adding to residents’ frustrations.

With oil revenues declining and the economy slowing, the shortages may have no quick fixes in sight. The government announced some emergency measures this week, including limits on imports of air-conditioning systems, rate increases for consumers of large amounts of power and the building of new gas-fired power plants, which would not be completed until the middle of the next decade.

Combine that with growing food shortages and rampant inflation and the picture is not pretty for our boy Hugo.  And while his popularity remains slightly north of the critical 50% mark, his job approval rating of 46% portends a fall for that as well.  Chavez, like all socialists,  is finding out the hard way that they call them the laws of economics for a reason.  You just wonder if we’ll learn something from his inevitable decline.

~McQ