Free Markets, Free People

Daily Archives: July 31, 2012


Taxes, energy, health care and spending–what we should be talking about

Pete DuPont does a little analysis of what should be major issues in the upcoming  election.  They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:

Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.

But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.

The economic impact shouldn’t be waved off.  When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes.  Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years.  It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended.  Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.

As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.

Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.

This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke.  Its priorities are completely backward, but purposefully so.  To call what they are doing a “policy” is simply absurd.  This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable.  Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy.  On the issue of energy, this administration gets an F-.

Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.

The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.

Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway.  That should tell most Americans what they really think of their opinion.  It is a classic “we know what’s best for you” elitist move.

The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat.  The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care.  Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.

Finally:

Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.

Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”.   And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so. 

Those are the things we ought to be talking about.  Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel?  How is this even news?).

These are where Obama’s skeleton’s are to be found.  He’d prefer to keep this closet door firmly closed.  The media, for the most part, seems content to help in that endeavor.

This election isn’t about anything but his administration’s abysmal record.  Spending time talking anything else is simply a distraction.  Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies.  Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota.  But it sure does distract from examining the previous administration’s record, doesn’t it?

~McQ

Twitter: @McQandO


Economic Statistics for 31 Jul 12

The following statistics were released today on the state of the US economy:

Personal income rose 0.5% in June, but personal spending was unchanged. The PCE price index rose 0.1% for the month, up 1.5% from last year. The Core PCE price index rose 0.2% for the month, and 1.8% over last year.

The State Street Investor Confidence Index improved slightly in July to 94.0, which, at below the 100 level, indicates a demand for safety.

Consumer Confidence for July came in at 65.9 on the index, indicating confidence is still bumping along the bottom.

The Chicago PMI rose 0.8 in July to 53.7, indicating slightly faster growth in the Chicago area than last month. This report is usually seen as an indicator of the national PMI, which will be released tomorrow.

Home prices posted a strong jump in May according to S&P Case-Shiller, which shows a seasonally adjusted 0.9% increase. But, on a year-over-year basis, prices are down -0.7%.

The Employment Cost Index rose a relatively subdued 0.5% in the 2nd Quarter. Year-over-year, the ECI is up a moderate 1.7%.

In weekly retail sales, Redbook shows a very weak 1.1% year-over-year sales increase. ICSC-Goldman Store Sales showed a disappointing -1.7% decline in sales from last week, with a year-over-year sales increase of only 1.8%.

~
Dale Franks
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DEA sting gone wrong violated Texas truck owner’s rights

Need a story to get you all fired up this morning?  Looking for something to make you see red?

The DEA provides it (from the Houston Chronicle via NRO):

The phone rang before sunrise. It woke Craig Patty, owner of a tiny North Texas trucking company, to vexing news about Truck 793 — a big red semi supposedly getting repairs in Houston.

“Your driver was shot in your truck,” said the caller, a business colleague. “Your truck was loaded with marijuana. He was shot eight times while sitting in the cab. Do you know anything about your driver hauling marijuana?”

“What did you say?” Patty recalled asking. “Could you please repeat that?”

The truck, it turned out, had been everywhere but in the repair shop.

Commandeered by one of his drivers, who was secretly working with federal agents, the truck had been hauling marijuana from the border as part of an undercover operation. And without Patty’s knowledge, the Drug Enforcement Administration was paying his driver, Lawrence Chapa, to use the truck to bust traffickers.

The concept of private property?  Completely ignored.  Permission?  We don’t need no stinkin’ permission.  We’re the federal government.  We’re the DEA.

But eight months later, Patty still can’t get recompense from the U.S. government’s decision to use his truck and employee without his permission.

His company, which hauls sand as part of hydraulic fracturing operations for oil and gas companies, was pushed to the brink of failure after the attack because the truck was knocked out of commission, he said.

Patty had only one other truck in operation.

In documents shared with the Houston Chronicle, he is demanding that the DEA pay $133,532 in repairs and lost wages over the bullet-sprayed truck, and $1.3 million more for the damage to himself and his family, who fear retaliation by a drug cartel over the bungled narcotics sting.

Out of control?  That’s a vast understatement.  This is like Fast and Furious Jr.  Who thought this up? Who approved it?  Why didn’t they seek the permission and cooperation of the owner of the business and property?  Where in the world do they get off commandeering private property and endangering the life and livelihood of a citizen without seeking his okay to use his property?

The operation was a fiasco:

At least 17 hours before that early morning phone call, Chapa was shot dead in front of more than a dozen law enforcement officers – all of them taken by surprise by hijackers trying to steal the red Kenworth T600 truck and its load of pot.

In the confusion of the attack in northwest Harris County, compounded by officers in the operation not all knowing each other, a Houston policeman shot and wounded a Harris County sheriff’s deputy.

17 hours before the owner of the truck was notified and that notification didn’t come from either the police or the DEA.  The only thing the DEA didn’t commandeer for this operation was a clown car.  Said Patty:

"I was not part of this," he said. "I had absolutely no knowledge of any of it until after it happened."

For its part, the DEA has not admitted that it was using Chapa as a spy because its official policy is not to comment on whether someone was an informant.

Lisa Johnson, a spokeswoman for the DEA Houston Division, confirmed that Patty’s demand had been received and noted that it would be investigated by the agency. But the Chronicle established Chapa was an informant based on interviews with multiple law-enforcement officials who spoke on the condition they not be named, and later by courtroom comments of prosecutors.

So now the DEA will drag its feet, pretend like it is investigating this, refuse to admit anything, and, as is fairly standard and routine behavior for government agencies violating the rights of the citizens these days, obfuscate, evade and attempt to block every move to shine a light on this operation.

This is outrageous.  And, if the facts presented by the Chronicle are true, whoever put this together and executed it deserves to be put on trial and put in jail.  That’s right, jail.  We want someone held accountable for this travesty for a change.

As for Patty, pay the man, DEA.  You screwed up big time, you were wrong to commandeer his property and put his life in danger.  You had no right to do any of that and you owe him the chance to get his life and that of his family back in order.

~McQ

Twitter: @McQandO

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