Topic: Capitalism

Somebody went to the trouble of creating an iPhone app that allows you to add and edit posts on a blog running Movable Type. It's called Movable Manager and I'm using it to type this post.

It looks extremely bare-bones basic at first blush, but I could be wrong. Frankly, finding it in the App Store was the only thing that stopped me from dumping Movable Type completely and switching over to Wordpress.

MT has gotten more code-intensive since I started this blog in 2004, while Wordpress has gotten more user-friendly. Since Six Apart sold the MT software rights to a Japanese company a year or so back, tech support for English-speaking users has gone downhill fast. Six Apart couldn't be bothered to create a smart phone app for their software, but perhaps they were focusing their efforts on unloading the rights to MT and its shrinking market share before it became worthless. The new company hasn't indicated any interest in an app for English-speaking smart phone users, so the "opportunity" fell to the free market.

That only one company made the effort (and that the app's been in v1.0 since November 16th with minimal features) speaks volumes. Movable Manager gets one week to convince me that I'm mistaken.

This is too simplistic:

OWS vs Tea Party Venn diagram

Here's one that's much more accurate (click it to zoom in):

OWS vs Tea Party

Capitalism has failed

Here's a case of bitter personal experience vs. naïve theoretical dreaming. These geniuses with the Workers World Party sure are confident, aren't they?


North Korea is a glowing example of success at, uh, something. I suppose. Let's check the NASA nighttime satellite imagery of Eastern Asia, shall we?

North Korea at night

Wait, I've got it. When the sun goes down in North Korea, every hour is Earth Hour. Yeah, that's the ticket.

A simple question for progressives (#20)

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According to the Obama Administration, this is how federal government spending works miracles (emphasis mine):

Keynesian economicsWell, obviously, it's putting people to work. Which is why we're going to have some interesting things in the course of the forum this morning. Later this morning, we're going have a press conference with Secretary Mavis and Secretary Chu to announce something that's never happened in this country -- something that we think is exciting in terms of job growth. I should point out, when you talk about the SNAP program or the [food] stamp program, you have to recognize that it's also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times.


If this is true, shouldn't the federal government immediately hand out a trillion dollars' worth of food stamps, thus generating 1.84 trillion dollars of economic activity? In fact, shouldn't they hand out a billion trillion?

Remember this chart from Monday? I updated it to show the farthest the Standard & Poor's 500 Index dropped below its 365-day simple moving average during the two "close calls" marked by green arrows.

365-day moving average for S&P 500


On Monday the S&P 500 closed at 7.74% below its 365-day SMA. Yesterday it rebounded a bit, but still closed at 1172.53 -- 3.37% below the Red Line of Doom™. As of right now, it's down another 34.64 points.

Since 1995, whenever the index has closed at 4% or more below the 365-day SMA, it has experienced a major drop.

11:30 PM Update: Today's close was 1120.76, which is almost exactly where we were after Monday's slide. How does a nice, fat 7.64% under the SMA grab you? Unless something fundamental has changed since the 2008 crash, I think we're going to see blood on the trading floor.

Thanks again, politicians!

Watch the S&P 500's moving average

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A moving average can tell you a lot.

Don't just look at the Dow Jones Industrial Average. It's the best-known financial statistic, but it doesn't tell the whole story. The Standard & Poor's 500 Index tracks a much larger and much more diverse group of stocks than the DJIA's mere 30 industrial companies. It's regarded as a pretty good bellwether for the entire United States economy.

If you go to Yahoo! Finance and mess around a bit with the chart for the S&P 500 by adding a simple moving average for the last 365 days (the red line), here's what you'll see for the period from 1995 to now:

365-day moving average for S&P 500


The purple arrows that I Photoshopped into the chart mark the points when the S&P 500 dropped significantly below its 365-day SMA. The green arrows mark the points when the closing price only briefly dipped below it. As of today, the closing price is a little bit more than 1% under the Red Line of Doom™. Watch closely this week, because I think this chart's going to get another purple arrow.

Way to go, Washington.

Raising taxes will do nothing good

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Scrooge McDuckPeople respond to taxes.

That shouldn't be a surprise to anyone, but to hear the Left's explanations, the federal government can extract more and more money from their preferred targets without any repercussions. In Progressive Fantasyland, rich fat cat CEOs who run oil companies, banks, and Fox News have a secret stash of unlimited money hidden somewhere in their corporate jets or on the grounds of their posh estates, from which they simply pull more money after Washington takes what it wants. The government spreads the wealth around, the members of the middle class find excellent green jobs with full dental benefits, the poor all move up to the middle class, everyone votes for progressives, conservatives crawl back into the bowels of Hell from whence they came, and unicorns poop skittles to feed the hungry.

In the real world the vast majority of American wealth belongs to the middle class, but facts never get in the way of a juicy class warfare talking point. Here in flyover country where common sense still exists, we know that taxes influence people's behavior. If the government collected no taxes whatsoever, then its revenue would be zero. Likewise, if the government taxed away every last cent people earn, revenue would also drop to zero. Nobody would have any incentive to conduct any economic activity at all, so there would be no wealth to tax. Somewhere in between no taxation and total taxation, there's a point where the government will collect the maximum possible revenue. The conclusion isn't magical, farcical, or deserving of ridicule. It's common sense. It's logical. It reflects reality.

It also means everything to your way of life, so pay attention.

Well-known supply side economist Arthur Laffer sketched out this thought experiment decades ago -- reportedly on a napkin over drinks with conservative political heavy hitters -- and came up with the curve that soon bore his name. Here's a very simplified version of the Laffer Curve:

Laffer Curve

Ed Morrissey serves.

Jazz Shaw returns.

J.E. Dyer smashes.

Jazz Shaw whiffs.

Game, set, and match to the conservatives. Granted, the debate's an easy one to win if you're willing to think, but it's always nice to see a fan of tax hikes get schooled.

Tech "support" from BrotherSoft

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A couple of months back I tried to find an old favorite strategy game of mine called Empire Deluxe (currently distributed by Killer Bee Software), but to my knowledge it had never been available for the Mac. Imagine my surprise when I discovered that BrotherSoft.com offered exactly what I wanted.

My pleasure turned to confusion when I downloaded the file and fired it up. It wasn't Empire Deluxe. It was an entirely different game, albeit from Killer Bee Software. Assuming the error was a simple case of a misdirected link, I submitted a help ticket through BrotherSoft's site asking for clarification.

Hilarity ensued.

The sequel to the original rap is finally out.


Set the markets free, yo.

Food for thought

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Video: Evil Rich People

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These are the dastardly sneaky skunks who Betty Sutton and friends want to punish:


In other words, she wants to punish the people who employ three out of four small business employees. Guess what will inevitably result when those small business owners get hammered by Congress? They'll be forced to cut payrolls.

J-O-B-S, right, Betty? Way to "protect the little guy."

No wonder Lee Fisher's going to lose

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He can't answer straightforward questions:

Would domestic offshore drilling increase the supply of oil? Would building more oil refineries increase the supply of gasoline? Would drilling in ANWR increase the supply of oil?


Weasel. Those weren't difficult questions. Chime in any time, Rob Portman.

Shailagh Murray's snarky piece in Saturday's Washington Post jabs Betty Sutton's challenger for taking advantage of Sutton's signature legislation.

Republican House candidate Tom Ganley sold more than 800 cars last summer through the "Cash for Clunkers" government rebate program. But does Uncle Sam get a thank you?


"Let's talk about Cash for Clunkers," the voluble millionaire, who owns the largest auto dealership group in Ohio, told a group of voters here recently. "It created a 30-day surge in auto sales. After it ended, there was no business. It was like the faucet was shut off."

...

Most economists say the nationwide stimulus effort has generally paid off, although they differ on how much.

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But Sutton is a top target of Republicans, in part because of her support for the program. Her opponent's 31 dealerships sold an estimated $17 million worth of cars through Clunkers rebates, but he now denounces the program as a fiscal folly.

Ganley needs to get in front of this "he's-a-hypocritical-used-car-salesman-fatcat-rich-guy" portrayal quickly, before Sutton hangs it around his neck for good. This isn't the first time we've seen this line of attack, and there are more tasks that require Ganley's attention.

Enough fund-raising and strategizing, Tom. Hit the campaign trail (Lord knows, Betty refuses to). Define yourself, define your socialist opponent, and publicize your plan to get government out of our health care, our lives, and our wallets.

Trade wars as election stunts

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Betty Sutton's been busy:

Rep. Betty Sutton (D-OH) introduced H.R. 4678, the Foreign Manufacturers Legal Accountability Act, to protect consumers from dangerous and defective products manufactured and produced abroad. Every year, countless Americans are injured, sometimes fatally, by dangerous products that have been manufactured abroad and imported into the U.S. Recent examples included toxic drywall, faulty infant cribs, lead paint in children's toys, and defective tires. These products not only hurt American consumers, they hurt American businesses.

...

The Foreign Manufacturers Legal Accountability Act:

  • Requires manufacturers to register an "agent" in a state where the company does business to accept service of process for civil and regulatory claims.
  • Registering an agent will constitute an acceptance of personal jurisdiction of the State and Federal courts of the state in which the agent is located.
  • Covers products regulated by the Consumer Product Safety Commission (CPSC), such as children's toys; the Food and Drug Administration (FDA), including prescription drugs and medical devices; and the Environmental Protection Agency (EPA), like pesticides.

If that sounds good to you at first glance, Rick Woldenberg urges you to think again:

The purpose of this bill is to make foreign manufacturers of finished goods and parts intended to be used as components in those finished goods register for service of process in this country. In other words, foreign manufacturers must register here so our plaintiff's bar and the government can sue them with ease. The new law prohibits trade with foreign manufacturers unless they are registered, and enlists the aid of the federal government's snarling dog, the U.S. Customs and Border Patrol, to enforce this law.


This means that every factory we use outside the U.S. will have to register for service of process in the U.S. if we want to continue to import our products from them. The law goes even FURTHER, asking that each agency involved to study ways to force manufacturers of components to register here, too. So, for example, if you make a toy in China and your factory buys boxes from a local printer who has NO contractual relationship with you, this law asks the agencies to study the feasibility of getting such box printers to register for service of process in this country. To accomplish that lofty goal, of course, you have to know their identity. Our customers do not know our vendors' names and we aren't telling. It's none of their business. Do you think it's any different for our factories relative to us? Will they ever disclose that information to our Mother Government (to them, a foreign government)? Please - would you disclose your sources to the Chinese government? And who pays the administrative and out-of-pocket costs of this exercise? And what about the consequences of the fear factor and the costs of new litigation on markets?

...

This is an example of how I learned to HATE Congress and Democrats. These rules descend on our business in suffocating waves, adding no value but creating major distractions and feeding fear. On the other hand, perhaps I will be eating crow when Obama's recently announced master plan to reduce the deficit by two-thirds in three years through increased spending, increased entitlements, increased taxes and increased regulation works like a charm. Maybe this law is part of the implementation of that great plan.

That's how progressives like Betty Sutton work to "fix" unemployment. Do you feel encouraged yet? Check out what a well-respected lawyer has to say about the CPSIA, which Betty apparently thinks is too weak and needs strengthening with her new bill. Betty's bill could be the next Smoot-Hawley Tariff. The first one helped trigger the Great Depression. Remember that when you see Betty's TV ads touting her concern for "the little guy" and her tireless work to "create or save jobs." It's a protectionist election year gimmick that will result in serious pain later.

It just occurred to me that some of my readers may be unfamiliar with the concepts in my post on price ceilings. Supply and demand are basic concepts in economics, and although we all intuitively react to them in our daily lives, it's rarely a conscious thing. Public schools rarely teach economics, so I guess I shouldn't be surprised.

If a basic explanation of supply and demand confuses you, watch this video:


Rewind it a bunch of times if it goes by too quickly, and then try this interactive exercise (warning: it loads slowly).

Price ceilings cause shortages

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What would happen to the supply of gold if tomorrow morning the federal government declared it illegal to sell it for more than $500 an ounce? Every last bit would be snapped up by the close of business that day, and gold producers would shut down. Instant shortage. You can apply the same relentless cause-and-effect to other forms of price ceilings (that is, maximum prices set by law).

Rent control laws cause a drastic boost in demand for apartments and a drastic drop in the supply of landlords willing to rent apartments at painfully low rates ... which combine to cause shortages. Ask anybody in New York City how easy it is to find an apartment that you can afford that's also suitable for human habitation.

Remember the gasoline lines of the 1970s? Price ceilings enacted by the Nixon administration were to blame. Demand spiked while supply cratered.

In 2007 the government of Zimbabwe imposed price ceilings on the prices of food, resulting in shortages and utter chaos.

Remember all of those rolling power blackouts in California in 2000? You guessed it. Price ceilings again, this time on retail electricity rates. The wholesale price of electricity was allowed to float freely, but the power companies weren't allowed to charge enough to recoup their expenses. They had to reduce the supply of power to avoid going bankrupt. After all, you can't stay in business by buying widgets for $10 and selling them for $5, could you?

The British health care system sets price ceilings on health care. The result? Artificially high demand, shortages, rationing, crappy care, black markets, and corruption.

Watch and learn.


Given this completely predictable pattern, how likely is it that President Obama's plan to impose price ceilings on health insurance premiums will "promote competition, transparency and better deals for consumers" as he predicts?

When I read Daniel Klein's WSJ piece on the state of basic economic knowledge among American adults, I had to wonder how anyone could be surprised by his findings.

Who is better informed about the policy choices facing the country -- liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.


Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

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Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

...

The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers [out of 8]. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.

The eight propositions polled in the survey were:

  1. Restrictions on housing development make housing less affordable.
  2. Mandatory licensing of professional services increases the prices of those services.
  3. Overall, the standard of living is higher today than it was 30 years ago.
  4. Rent control leads to housing shortages.
  5. A company with the largest market share is a monopoly.
  6. Third-world workers working for American companies overseas are being exploited.
  7. Free trade leads to unemployment.
  8. Minimum wage laws raise unemployment.

Laffer Curve basics

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Since anyone but a progressive like Betty Sutton will readily admit that taxes affect people's behavior, how can a government get the most revenue from income taxes? By setting the right income tax rate, of course. If the government doesn't tax income at all, it obviously gets no revenue. If it taxes every last cent of income, it also gets no revenue (since nobody would have any incentive to work in the first place). Somewhere in between is a "sweet spot."


Remember that we're just trying to figure out how to maximize revenue from income taxes, not whether it should be maximized.

U.S. Census data on automobile sales offer yet more proof that Betty Sutton's biggest "achievement" was nothing but a clunker.

Cash for Clunkers

Just like every other Keynesian stimulus program, Cash for Clunkers relied on the delusional idea that government can create new wealth by destroying old wealth:

It destroys wealth by not letting these cars be used up over their useful life. It destroys wealth by routing scarce resources into activities - in this case, car building - that wouldn't otherwise take place, denying other industries access to those resources. It destroys wealth by taking on liabilities, through borrowing, that have to be paid back later by taxpayers (reducing their purchasing power in the future) or by taxing them immediately (reducing their purchasing power today).

...

These people traded in a car they've been likely to drive less. We can safely assume these cars didn't get as good gas mileage or were older, "clunkers", because they were targeted for these reasons. These cars also may not have been driven at all, or driven rarely. However, they've been used to help people get a vehicle that they're now more likely to drive more frequently!!! More driving means more emissions, even if the emission per unit of travel is less. More driving means more fuel consumption, even if the fuel consumption per unit of travel is less.

Betty Sutton's a labor lawyer and a career politician. All she's ever done is spend money to pander to big union bosses, radical environmentalists, and every other nutty leftist special interest in existence. She knows absolutely nothing about the free market, nothing about creating capital and jobs, and nothing about the real world consequences of her actions. Nobody should be surprised that her hare-brained ideas have wrecked the economy and burdened our children with mountains of debt.

Betty Sutton

Re-electing her and expecting anything different makes as much sense as giving an alcoholic a bottle of whiskey and the keys to your car. This shambling monstrosity is her baby. No wonder she didn't abort it.

Using hay to control oil spills

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Could this be a fast way to limit the spread of the Deepwater Horizon oil spill in the Gulf of Mexico? I'm not seeing any drawbacks here.


Some Coast Guard buoy tender CO with gonads (CYPRESS? OAK? JOSHUA APPLEBY?) needs to load his cutter with hay, get out to the spill, dump it overboard, and film the results. Waiting for direction from CG Headquarters and the rest of the jokers in Washington, DC is no strategy for success. Be bold!

Video: "Reason Saves Cleveland"

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Drew Carey and The Reason Foundation decided to look for ways to save Cleveland from its aggressively stupid political leaders and their refusal to heed the first rule of holes. The result is a video series called "Reason Saves Cleveland":


Keep checking back as new episodes premiere, because I'll add them to this playlist.

3/18 Update: Right on cue, Tim Russo (a standard-bearer for typical Cleveland progressives) posts a spittle-flecked screed that misses the points of the Reason video ... and indelibly beclowns its author. Statist hacks like Russo simply cannot admit (or even comprehend) that punitive taxation and suffocating bureaucracy are responsible for Cleveland's sorry decline.

Time Warner Cable sucks

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Here I sit, trying to watch the premiere of "The Pacific" on HBO, and the signal from Time Warner Cable is hitching, pausing, and pixelated. I signed up for HBO on Thursday just for this. I've been calling customer support all day to demand assistance. The response?

Gee, sorry, our computers are down. Try rebooting your box. Besides, we're working on the "outage" and things should be fine by tomorrow.


Fail. This is what monopolies get you.

11:55 PM Update: This is almost exactly what it looks like. I'll try to record my own video soon.

They been goin' back 'n forth for a century ...


Set the markets free, yo.

Zach Lahn corners Barack Obama

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Bravo to Zach Lahn, for having bigger balls than 99% of the media! I hope this young man's ready for the Joe The Plumber treatment, courtesy of ACORN and SEIU.

President Obama spent the majority of his "answer" restating the question, then talked about "opposing" the exact kind of public option that's in the House bill. ABC transcribed some of it:

"Certainly they can't compete if the taxpayer is standing behind the public option just shoveling more and more money at it," Obama said. "That's certainly not fair. And so I've already said I would not be in favor of a public option of that sort, because that would just mean more expenses out of our pockets and we wouldn't be seeing much improvement in quality."

...

"I think there are ways that we can address those competitive issues," he said. "And you're absolutely right, if they're not entirely addressed, then that raises a set of legitimate problems. But the only point I wanted to make was the notion that somehow just by having a public option you have the entire private marketplace destroyed is just not borne out by the facts."

Read the whole thing; ABC interviewed Zach afterward, and he kept the pressure on the president for regurgitating nothing but vague talking points. Ten bucks says Rush Limbaugh, Sean Hannity, and Glenn Beck are all over this within a week. Oh ... notice that Obama didn't accept Zach's challenge, either (wuss).

More coverage:
Politico

UK writer: US health care beats ours

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Stephen Glover admits that the truth hurts:

In treating almost every cancer, America apparently does better than Britain, sometimes appreciably so. According to a study in Lancet Oncology last year, 91.9 per cent of American men with prostate cancer were still alive after five years, compared with only 51.1per cent in Britain.

The same publication suggests that 90.1 per cent of women in the U.S. diagnosed with breast cancer between 2000 and 2002 survived for at least five years, as against 77.8 per cent in Britain.

So it goes on. Overall the outcome for cancer patients is better in America than in this country. So, too, it is for victims of heart attacks, though the difference is less marked.

If you are suspicious of comparative statistics, consult any American who has encountered the NHS. Often they cannot believe what has happened to them - the squalor, and looming threat of MRSA; the long waiting lists, and especially the official target that patients in 'accident and emergency' should be expected to wait for no more than four - four! - hours; the sense exuded by some medical staff that they are doing you a favour by taking down your personal details.

Most Americans, let's face it, are used to much higher standards of healthcare than we enjoy, even after the doubling of the NHS budget under New Labour. Of course, the U.S. is a somewhat richer country, but I doubt its superior health service can be mainly attributed to this advantage.

In other news: jumping into water leads to wetness, rocks fall downward, and there's no way to pick up a turd by the "clean end."

The tragedy of the commons

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Do people treat rental cars better than their own cars? Is the office fridge cleaner than your home fridge? Does a public park have less litter than your back yard? Is a government housing project maintained as well as a privately owned apartment building?

The answer in each case is obviously "no", but have you ever wondered why?

If this unethical tactic for pushing an immoral policy doesn't justify a full-throated attack, what does? Via Drudge:

On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care -- a move that has ignited an ethical firestorm!

Highlights on the agenda:

ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.

The network plans a primetime special -- 'Prescription for America' -- originating from the East Room, exclude opposing voices on the debate.

Hey, Ohio Republican Party bigwigs! What in the world are you waiting for? Blast this! Get aggressive. This is a no-brainer in at least two ways. 1) Americans don't want socialized medicine. 2) Americans hate biased media outlets that claim to be unbiased.

Couple that with cratering support for Obama's policies and you guys have a perfect opportunity to contrast the statist path of the Democrats with the traditional GOP values of rugged individualism, independence, and capitalism. Yes, Obama's popular. So what? Attack his policies and his plans, not him.

Stop worrying about being treated badly by the media. You lost that war in the 1960s. They'll never like you. Use it to your advantage. Say things that they can't afford to ignore, things that they'll have to cover. Call ABC "a wholly owned subsidiary of ACORN and the Democratic Party." Draw comparisons to Joseph Goebbels' "Big Lie" strategy. Remind people of what Pravda used to publish. The media and the statists on the Left have just exposed their weakest point of vulnerability to you. Hit it with a sledgehemmer!

Learn from Sun Tzu:

You may advance and be absolutely irresistible, if you make for the enemy's weak points; you may retire and be safe from pursuit if your movements are more rapid than those of the enemy.

...

Military tactics are like unto water; for water in its natural course runs away from high places and hastens downwards.

So in war, the way is to avoid what is strong and to strike at what is weak.

Get off your asses and attack!

Can you name one industry that runs more efficiently after it's been taken over by the government?

Uplifting "Hope & Change" shirts and sweats like these ...

Cheap hope and change shirt

Women's hope and change shirt

Dark hope and change hoodie

... can be bought here.

Capitalism and greed

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Milton Friedman responds to Phil Donohue's well-meaning ignorance:

Are you listening, Barack?

Boehner, Cantor: vote "no" on stimulus

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Earlier today a rumor surfaced on Politico.com about House Republican leadership encouraging the Republican members of the House to vote against Barack Obama's monster wasteful pork stimulus bill. I have confirmation from a DC source that this is no mere rumor. Rep. John Boehner and Rep. Eric Cantor urged their caucus to oppose the stimulus-a-palooza when it comes to the floor tomorrow.

Cantor led a working group that came up with a "House Republican Economic Recovery Plan", which they released on Friday in one-page summary form. I received an e-mailed copy of a two-page version of the plan.

An Obama victory will cause a depression

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An unknown wit once said: "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury." When it comes to voting ourselves goodies from the treasury, we Americans stand near the point of no return.

Support Class Envy!I've addressed this lopsided situation before in a post on war funding, but this is a much more general discussion.

The federal government levies taxes on some of us, and it sends handouts to some of us. Some Americans pay more in taxes than they receive in handouts. I'll call them "givers." Others receive more in handouts than they pay in taxes. I'll call them "takers."

The Tax Foundation studied taxes and handouts from 1994-2004 (see the FAQ), and came to some startling conclusions. Below you'll see a diagram of their 2004 breakdown of dollars received in handouts per dollar taken in taxes. Pay special attention to the blue bars (the total handouts per dollar of taxes). Look at the bottom 3/5ths of our population. Those groups get more in handouts than they pay in taxes; they're the takers. The top 2/5ths are paying more in taxes than they get in handouts; they're the givers.

Spending per dollar of taxes

Since the American form of government (thankfully a representative republic, not a democracy) responds fairly quickly to the will of American voters, we have the ability to force our elected representatives to give us tax dollars as handouts. If our representatives refuse our demands for goodies, a majority of us can replace them with more pliable politicians.

So what happens when the takers outnumber the givers at the polls on Election Day? We hit the "tax tipping point." Since everyone gets one vote (unless ACORN is involved) regardless of their tax-to-handout ratio, the takers force the government to soak the givers. Eventually, the givers get tired of being punished for their success. The result is predictable:

Calculating how far society's top earners can be pushed before they stop (or cut back on) producing is difficult. But the incentives are easy to see. Voters who benefit from government programs will push for higher tax rates on higher earners -- at least until those who power the economy and create jobs and wealth stop working, stop investing, or move out of the country.


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The sequence is always the same. High-tax, big-spending policies force the economy to lose momentum. Then growth in government spending outstrips revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and unemployment follow. The central bank tries to solve the problem by printing money. International competitiveness is lost and the currency depreciates. The system stagnates. And then a frightened electorate returns conservatives to power.

Barack Obama claims he'll give a "tax cut" to 95% of Americans (for the sake of argument, let's ignore the impossibility of doing that while also paying for his massive expansion in government spending). His magic "tax cut" for those who pay no income taxes is really a tax credit. That's a handout to the takers, funded by higher taxes on the givers. The chart above will get more lopsided, with the blue bars on the right shrinking and the blue bars on the left growing.


Redistribute Wealth!America cannot keep confiscating more and more money from the givers and sending it to the takers. There's no such thing as a free lunch. If you're one of the givers creating jobs and capital, you'll only tolerate punishment for so long before you take rational steps to reduce your vulnerability. You'll start shifting your capital away from productive uses and into tax shelters dictated by loopholes in the law. You'll cut costs by hiring fewer employees or getting rid of current employees. You might even decide to escape the punishment of the takers by closing down your business or moving it overseas to a country with friendlier tax policies.

Now multiply this scenario to include all of America's private sector, and you'll start to understand the inevitable result of a tax-and-spend policy like Barack Obama's. He believes he can tax and spend his way to prosperity, but he can't (or won't) see that he'll push our economy over the tax tipping point and into either a severe recession or an actual depression. Our current economic downturn is already worsening as Obama's victory grows more probable, and one hundred top economists recently warned of the impending disaster of Obamanomics.

Barack Obama is more than Jimmy Carter on steroids. He's about to repeat Herbert Hoover's tragically foolish response to an economic downturn. If Obama wins this election, he will drive us into a Second Great Depression.

An early American experiment with socialism

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You've no doubt heard the well-known story of the first Thanksgiving in Plymouth, Massachusetts. But did you know that what you've heard is drastically inaccurate?

According to the writings of William Bradford, the colony's first governor, the hardships and near-starvation of the entire population occurred because the colonists turned their backs on capitalism. They believed the old lie that an economy based on the concept of "from each according to his abilities, to each according to his needs" can actually work. They instituted a socialist system, and found out that socialism causes disaster:

The harvest of 1623 was different. Suddenly, "instead of famine now God gave them plenty," Bradford wrote, "and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God." Thereafter, he wrote, "any general want or famine hath not been amongst them since to this day." In fact, in 1624, so much food was produced that the colonists were able to begin exporting corn.

What happened?

After the poor harvest of 1622, writes Bradford, "they began to think how they might raise as much corn as they could, and obtain a better crop." They began to question their form of economic organization.

This had required that "all profits & benefits that are got by trade, working, fishing, or any other means" were to be placed in the common stock of the colony, and that, "all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock." A person was to put into the common stock all he could, and take out only what he needed.

This "from each according to his ability, to each according to his need" was an early form of socialism, and it is why the Pilgrims were starving. Bradford writes that "young men that are most able and fit for labor and service" complained about being forced to "spend their time and strength to work for other men's wives and children." Also, "the strong, or man of parts, had no more in division of victuals and clothes, than he that was weak." So the young and strong refused to work and the total amount of food produced was never adequate.

To rectify this situation, in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of famines.

For more on the lessons the pilgrims learned, see this piece by Rick Williams, Jr.

Can we stop bashing oil speculators now?

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Facts are funny things:

In one of the broadest and most authoritative studies to date, the Commodity Futures Trading Commission has offered hard statistical data that financial trading hasn't been driving price moves. The CFTC conducted an unprecedented Wall Street data sweep and scrutinized millions of transactions worth billions of dollars between January and June of this year.

Lo and behold, the CFTC found that index traders and swap dealers actually reduced their stake in crude oil futures as prices spiked. The number of contracts held by these investors betting that prices would increase -- the net long position -- fell by 11%, and more were shorting oil than going long over the six-month period. In other words, index traders and swap dealers were driving the future price of oil down.

Supply and demand, folks. Geez, we need competent economics education in this country.

True Stimulus

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Is it just me, or are the Congress and the President doing the usual two-step "we must be seen to be doing something about a recession because it is an election year" dance when it comes to "stimulus?" Think about it. As proposed, what would the stimulus really accomplish? We give individuals $600.00 ($1,200.00 to families or couples) to spend as they wish. It will cost approximately $150 Billion dollars. WHY?!?!? From what I have read, people are usually going to do one of two things with their checks, either pay off their credit cards (no new jobs) or go to Wal-Mart and spend it (most of the money going to China). If we are determined to put ourselves in debt that much more (and I personally don't think we should) why don't we address it differently?

If you want to truly stimulate the economy, do something that will help people long-term. This country is beginning to have major infrastructure problems. Why not propose it as a comprehensive Infrastructure Refurbishment Bill instead. Think of how many construction workers and American businesses would be hired with this amount of money? American Steel used to rebuild bridges. American families reaping the benefits of new jobs. All of the money would go into stimulus, and it would stay in the USA.

If you want relief for all Americans, then release 15% of the Strategic Petroleum Reserve over the course of a year to stabilize (reduce the price) of the oil markets. 15% is equal to 104 million barrels of oil (the current reserve level is at 697.5 million barrels). This would result in lower gasoline costs, lower heating oil costs, lower jet-fuel costs, etc. It would probably knock the price of oil back down into the $50-$60 range, which would translate to a savings of approximately $0.50 per gallon of gasoline for each consumer. Considering each family on average uses 15 gallons of gas a week (conservatively), this translates to a savings of nearly $400.00 per year per family, and jump starts the transportation industries (airlines, shipping, etc) by boosting their profits and allowing them to afford to create new jobs. It's not like we're draining the reserve, it will still be at a higher level than it was in 2001 (when it held 545 million barrels).

Huckaboom crests, begins receding

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Looks like the swoon is fading.

Huckaboom begins receding

Remember, the InTrade prediction market differs from opinion polls in a key way. The users are putting their own money at risk.

Joseph at Plunderbund sure does have a problem with a charter school making a profit and (*gasp*) paying its teachers less than teachers at public schools.

The education of our state’s children in the hands of a for-profit corporation- obligated NOT to the best interests of OUR CHILDREN but the best interests of THEIR STOCKHOLDERS!


This means the company’s primary goal is to make money- not to educate our kids. And they do this by spending less money on students and by paying their teachers…

Socialists like Joseph can be so stubbornly ignorant. If the facts don't fit their preferred narrative ("Powerful teachers' unions and huge education expenditures make for better educated kids!"), they throw temper tantrums about mean corporate interests and their dirty-greedy-money-grubbing-child-hating-wingnut-fascist shareholders.

Allow me to outline the profit motive for Joseph in simple terms, because he obviously hasn't got a clue about this. To serve its shareholders the school must maximize profits. It does this by maximizing revenue and minimizing expenses. Here's how that works.

Revenue


  • To maximize revenue (tuition) the school must keep its customers happy.

  • Its customers are happy when the quality of their children's education exceeds that available in the public schools.

  • If the school charges more for an education than the parents think it's worth, they'll pull their kids out.

  • Therefore the school has an incentive to provide a better education than the public schools offer, and at a reasonable price.

Expenses


  • To minimize expenses, the school will try to reduce overhead and operate efficiently.

  • Among other methods, the school will pay its teachers lower starting salaries than they'd get in a public school.

  • Since teachers are free to seek employment elsewhere, the school must find other ways to make its teaching positions attractive.

  • Apparently the school has found a way to attract teachers with more than just base salary. Perhaps it's less red tape, a safer and more disciplined classroom environment, merit pay, or some combination of the above.

  • If the school cuts salaries too far, the teachers will leave.

  • Therefore the school has an incentive to treat its teachers well.

Boy, this free market stuff is tricky. Competition sure isn't neat and orderly, like the typical centrally-planned economy.

Dell, Inc. pays attention to blogs

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At 9:20 AM this morning, Dave at NixGuy.com posted a blurb about Dell's XPS competing with the Apple iMac. At 10:51 AM, I left a comment criticizing Dell and explaining why I now own a Lenovo. At 5:05 PM, someone named RichardatDELL left the following comment:

Hi Dave, thanks for the feed back and glad to hear you are impressed.


Ruddle Pirate [sic], The XPS One as part of the XPS line has a specialized support team that is highly trained on XPS systems and based in North America. I just bought a new XPS and needing to just check a couple things. The hold times were nil and the agents great.

We dropped the ball in the past, but we heard you, our customers, and are onb the way back. Sorry we lost you as a customer.

Hopefully we will regain your confidence with time.

<Vader voice>

Impressive. Most impressive.

</Vader voice>

5 facts that prove the US economy stinks

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OK, I admit it: I wasn't being serious. Here are the top 5 myths about the U.S. economy:

Myth Number 5. The "need" for universal health insurance, or at least near-universal insurance for children.


Myth Number 4. America is de-industrializing, and manufacturing is dying.

Myth Number 3. We are in a recession (not heading for one, actually IN one).

Myth Number 2. Most people are just scraping by.

Myth Number 1. Income inequality is growing, the rich are getting richer, and they aren't paying their fair share of taxes.

Be of good cheer!

I hit the argument for Tax Cuts pretty hard when I wrote about it here. However, I did not mention one of the classic problems with the Supply Side Economic model when I addressed it. When the government fails to take in enough revenue to cover expenses, it creates a deficit. This is economics 101. When this occurs long enough over time, it causes inflationary conditions to develop, and it devalues the currency against the world market. Let's start this part of the discussion with the cost of oil.

Is it just me, or is it odd that the price of oil has spiked from $28.00 a barrel in 2001 to $88.49 in 2007? How about the fact that the 50 year trend in oil pricing prior to 2001 saw the median for oil at less than $24.00 per barrel with the exception of times when conflicts around the Middle East were occurring, yet it is projected to potentially go as high as $110.00 a barrel within the next year? You can find an analysis of the past 100 years worth of oil sales and figures here. The most common justifications that has been given for the increase in oil price are that a)more countries are consuming it (i.e. China and India), b) the market is just catching up for 30 years worth of inflation, and that the cost of oil is really low considering what was paid for it in 1980 and c) the weak US dollar is driving oil prices up, which means that the commodity in the world market is right where it is supposed to be.

Sorry, not buying it.

Can you honestly tell me that the chairmen of two oil companies, who just happen to be occupying the #1 and #2 political positions in this country, had absolutely no control whatsoever over the 300% increase in crude oil pricing over a 6 year period? Oil prices (and the corollary, gasoline prices) affect just about every aspect of the economy. The cost of gas is figured into everything from freight bills to school district budgets. Oil prices directly affect electricity and heating costs. Anyone paid any attention to the cost of milk recently? At the local grocery store, it will cost you approximately $3.50 for a gallon of milk. Contrast that with $1.40 in 2003. Why the rise? Increased costs for everything from cow feed to trucking to send the milk to market.

My point is that there are already inflationary storm clouds starting to form on the horizon. Do we really want to return to the economic model of the late 1970s, with 16% interest for a home mortgage and double-digit inflation? So how could the Bush administration prevent this from occurring? Simple. The National Strategic Oil Reserve currently holds 690 Million barrels of oil out of a possible 720 Million. In other words, it is currently holding over 95% of its capacity, which also happens to be the most it has ever held in history. OPEC affects the price of oil by setting price controls and then turning the tap on or off as appropriate to get oil to the level they want. Let's take a page out of their book. If the President was to release 15% of the existing reserve (100 Million barrels) in a controlled manner over the next year to two years, it would probably have a huge dampening effect on the market, bringing the cost of oil back down to around $50 a barrel (if not lower). The argument could be made that this is a garden hose next to the OPEC fire hose. It doesn't matter. The economic principles that drive the oil commodity market are keeping it artificially inflated. All it takes is puncturing the balloon for the prices to reset to where they should be. Will this administration even consider it? Probably not, because it is not in their political interests.

Let's talk about the free-falling dollar against world economies. In February 2001, then Treasury Secretary O'Neill made the statement that "We are not pursuing, as often said, a policy of a strong dollar. In my opinion, a strong dollar is the result of a strong economy." Federal Reserve Chairman Bernanke, when asked about it recently, made it clear that it is the role of the Department of the Treasury, and not the Fed, to control international currency valuation policy. Since 2001, this administration has given lip-service to supporting a "strong dollar," but always with the caveat that market conditions would set the price. In other words, where the dollar falls is where the dollar falls. This is the first time in history that the US has not used the Department of Treasury to ensure a strong dollar.

So where has it fallen? Let's look at the Euro for a price comparison. In February 2002, $0.87 bought €1.00. If you wanted to buy a new BMW from the factory in Bavaria that cost €50,000.00 it would set you back $43,500.00. In today's world, the Euro just closed at an all time high against the dollar, where it costs $1.43 to buy €1.00. That same BMW at today's conversion...$71,500.00. Pick a different currency? The Canadian Loonie reached parity with the US Dollar for the first time in over 30 years this month. In February 2002 $0.66 bought $1.00 of our northern Strange Brew cousin's money (Cool, eh'). What does this mean for America? In the short term, it means that the US gets to act like a kid in the candy store. Our goods cost less in other countries, which means we sell more. Other countries goods cost more, which means we buy less. Our trade deficit lowers and American manufacturing makes a comeback. Everybody sings Kumbaya.

Not so fast.

Remember oil? We buy it from other countries. A lot of it. We also happen to buy a lot of other products we use in our day to day lives from foreign countries. Most of our fruit and produce this time of year comes from South and Central America. Electronics from Japan, China and South Korea. You get the picture, there is a reason it is called the "Global Economy." In the long term, a devalued US dollar can cause long-term double digit inflation. There is no such thing as a free lunch. It is a lot like one of the scams you see advertised on TV. A company offers to give you a large lump sum as long as you sign away your monthly pension to them. They'll give you $100,000.00 right now, as long as you give them your retirement check of a paltry $800.00 a month. Of course, this means that at the end of 10 years, they'll continue to collect your pension for the rest of your life, a long time after you've spent the $100,000.00. If the math is confusing you, in 10 years at $800.00 a month, you would have earned $96,000.00 not including any compounding interest. For a short term gain, in the end you get royally screwed. In other words, the Bush administration has utilized a sledgehammer to attempt to dictate fine economic policy. And just like hitting a stained glass window with a sledgehammer, it's hard to put the pieces back once you're done.

As my co-blogger PuddlePirate wrote yesterday, he and I got into something of a spat over the presidency of George W. Bush. My position is that, in the past 7 years with him as president, he has done more damage to this great nation of ours than just about any other person in history.

Needless to say, my good friend the PuddlePirate turned beet red with rage and demanded to know how I could possibly justify a statement like that. It all went down hill from there.

He has put together a very nice argument for tax cuts and why supply-side economics are just what the country ordered. You can find that here. The problem with this, in my opinion, is that it is disingenuous and misses the point of my argument. Let me start by making a very broad disclaimer - I am not, nor do I pretend to be, an economist. Having said that, I trust the words of the economists who should be setting policy.

The justification for the 1.35 Trillion (yes, that is Trillion with a T) tax cut package that Bush passed through congress in the first part of his presidency was that the country was projecting 10 Trillion dollars in budget surpluses over the next decade. The goal was to spur the economy, create new jobs, and replace the tax revenues through growth. In this package, it accomplished some very good things, most namely eliminating the "marriage penalty" (i.e. two people with income would be better off not getting married due to higher taxes). It also increased the tax credit to lower income people with children (not that I am against this, but it smacks a little bit of a "buy your vote" kind of deal). The bottom line is that of the 1.35 Trillion dollars in tax cuts, according to the IRS's own statistics, approximately 70% is going to the top 0.5% of society (those individuals making over $1,000,000.00 in reportable income). The last time I checked, the last year the country had a budget surplus was 2001. It also just about completely failed in its stated purposes (create jobs), since approximately 5,000,000 jobs were lost between when it was passed in 2001 and 2004.

The argument has been made that the idea behind the tax cuts bears out, since tax revenues are up. This is, again, disingenuous. The reason tax revenues are up is that the top 0.1% (those making over $1.6M per year) account for over 10% of the nation's income and 19% of the taxes. Contrast this with 1979 when the top 0.1% accounted for 3% of the nation's income and 7% of the taxes. When income in this group goes up, tax revenues go up a lot faster than if income rose evenly across all tax brackets. This is borne out by the fact that, while income tax revenues are up significantly, Social Security and Medicare tax receipts have remained flat (indicating that the average wage earner's salary has not been rising, nor have there been additions to the average wage earner's numbers). In other words, the rich have gotten richer while the average person has stagnated. Where did this money come from? A large chunk came from Capital Gains taxes. Where did the capital gains taxes come from? Unfortunately, a very large chunk came from investments in foreign markets, where the returns have been up significantly due to the falling dollar (I don't even want to get started on that presidential economic fiasco). Think about that for a second, our tax revenues are up because the top 1% of the population has been investing their money in other countries. How do I know this? To quote an example, Warren Buffet, the "Oracle of Omaha," has made no secret of the fact that Berkshire Hathaway has been exploring the foreign markets as a primary source of growth for their investors.

My view on this is that, in a time of war when the country is running huge deficits (with most of the debt being bought by the Chinese, by the way) it is not the right time to continue giving the top 0.5% of people a tax cut that is costing the country more than the entire cost of the Iraq war. I have some folks who agree with me, too. Namely, some of the top economists in the nation who signed a letter in 2003 titled Opposing the Bush Tax Cuts. Like I said, I'm not an economist, but when 10 Nobel Laureates in Economics are calling the president to the carpet, I tend to take notice. If that particular piece of prose is a little dated, there is also the Briefing Paper from the Economic Policy Institute updated in March of 2006 titled THE BOOM THAT WASN'T - The economy has little to show for $860 billion in tax cuts. The long-term health and well-being of the country has been seriously compromised by this gift to the rich.

A couple of final notes. My friend quotes from his research that "Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41." My only issue with this is how do we come up with these numbers, since it is not explained? Are we talking about Social Security and Medicare for retirement? Income credits for the poor, or building highways that lower income people drive to work on? All of the above?

Let me put it another way. If a single person makes $30,000 a year, of that amount they will pay $3,159.00 in Federal Taxes and $2,295.00 in FICA (Social Security and Medicare). Not taking into account State or Local tax burdens, this means that already they have paid out 18.2% of their income in taxes. This is the standard deduction, because most people in this income range cannot itemize deductions (which require the ability to itemize more than the standard deduction of $5,150.00). This leaves them with roughly $2,050.00 per month to pay their bills and feed themselves (assuming no state taxes). Am I advocating lowering their tax burden further? No, I am not. But I am also not going to hold them to the same standard as someone who makes in a day what they make in a month. A serious reexamination of the tax code and all the tax benefits are necessary, including the sacred cows of "home mortgage interest deduction" and "State Income Tax deduction." Why should a millionare who owns a $750,000 house get to deduct $60,000.00 in mortgage interest because they chose to buy a bigger home? Most financial advisers will tell you it is better to buy a home with a mortgage rather than spend your money on it for the tax savings that you will realize (as long as the size of the mortgage allows you to itemize deductions), with the argument being "you can invest your money then into a mutual fund and receive a return of 8-12%, while the government subsidizes your home."

On the flip side, let's take a look at another example. A single lawyer who makes $250,000.00 a year and owns a $750,000.00 home will pay approximately $6,885.00 in FICA and $30,000 in Federal taxes after taking itemized deductions for his home, unreimbursed business expenses, charitable contributions, a home office deduction and the like. This equals out to approximately 14.8% of their income. It also means that they have only $17,760 per month to pay their bills and feed themselves (again, assuming no state taxes). You will notice that I state they will pay $30,000, not $66,303.00. The $66,303.00 is what they would pay if they took the standard deduction. I am making the argument that they would be able to shelter approximately $125,000.00 via deductions. Does this sound excessive? It isn't when you consider that as a small example your car can be deducted if used for business, and that the miles are deducted at $0.485 per mile not considered commuting. There's a reason CPAs get paid big money for working on people's taxes (which is also a deductible expense). Oh, and if they did take the standard deduction (foolish lawyer!) that would leave them with only $14,700.00 per month to live on. Someone needs to let them know where they have to go to get the food stamps.

Here is the bottom line, and the most important part of the debate in my mind. My daughter is 4 years old. All these deficits will come due to be paid when she reaches the work force. Her mother is currently serving in Iraq. The cost of that war, the crumbling infrastructure of this country and crippling debt that will occur in the future could be averted for the most part if we were to reset the tax rates for the top 1% back to what they were paying in 2000 before Bush took office. If we don't do something, we'll be leaving it to our children to shoulder the responsibility for our inaction. I'm sorry, telling people that the best way to support the troops is to go to the mall and buy a pair of jeans is not my idea of good policy. Ask them to sacrifice a little instead by paying what they were paying only a couple of years ago. That would be supporting the troops, because it would mean that the country they are fighting to defend will still be around when they grow old.

OK PuddlePirate, ready for Round 2?

How not to fund a war

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SisyphusMy good friend and co-blogger Too Short and I got into an argument yesterday over whether President George W. Bush's administration will go down as one of the worst in American history. Among other things, Too Short objected strenuously to the income tax cuts that President Bush shoved through Congress a few years back. Evaluating the alternative takes some mental heavy lifting, so get ready to push uphill against the big-government mindset.


To my buddy's way of thinking, income tax cuts for "the rich" are a Bad Thing™ in a time of war, and we Americans should follow our grandparents' example during World War II and "sacrifice for the war effort" ... translated as "pay more taxes." Now I don't recall Too Short advocating a revival of programs like rationing and price controls and the WPA, which all went together with the 1930s-1940s package. Then again I might have just missed it when he said it. He wouldn't be the first to substitute wishful thinking for free market realities.

Squeezing blood from a stoneI argued that income tax cuts in wartime are not inherently a Bad Thing™. When taxes in general are excessively high, economic activity tails off as people lose their incentive to work, save, and invest. Next, government revenues shrink because the total amount of money available for taxation has shriveled. The big government advocate instinctively responds by raising taxes, which deepens the downward spiral (the Laffer Curve illustrates the general concept nicely).


If you're a government official trying to fund a wartime military machine, having no tax revenue is truly a Bad Thing™. A logical government in that situation lowers tax rates to stimulate the economy and raise tax revenues. Now it can buy guns and butter and F-22 Raptors. Pretty straightforward stuff so far, right?

My compadre Too Short retorted that I wasn't figuring in federal payroll taxes, which tend to hammer the poor. It was a point well taken since so far I was only talking about income tax cuts. I couldn't puncture his counterclaim because I didn't have the necessary data at my fingertips, so I asked for a temporary ceasefire.

I went looking for ammunition, and to my surprise I found that I was far more right than I realized.

The Tax Foundation pored over the dry, dusty tax and spending data collected by all levels of American government between 1991-2004, and they found that for every $1.00 of taxes that the poorest Americans forked over, they got $8.21 back.

There's more:

While the U.S. tax system is progressive, the distribution of government spending makes the overall fiscal system more progressive than is apparent from tax distributions alone. Using a microdata model we estimate the distribution of federal, state and local taxes and spending between 1991 and 2004. We find households in the lowest quintile of income received roughly $8.21 in federal, state and local government spending for every dollar of taxes paid in 2004, while households in the middle quintile received $1.30, and households in the top quintile received $0.41. Overall, tax payments exceeded government spending received for the top two quintiles of income, resulting in a net fiscal transfer of between $1.031 trillion and $1.527 trillion between quintiles. Both taxes and spending appear to have large distributional effects on households, and these effects have grown since 1991. The results suggest tax distributions alone are an inadequate measure of progressivity, and policymakers should examine both tax and spending distributions when judging the overall fairness of policy toward income groups.

Did you catch that? Yes, payroll taxes hit poorer people harder than they hit rich people. But when you account for all federal, state and local taxes and government spending on entitlements, my pal Too Short's idea of "increasing our sacrifices" via higher taxes on "the rich" just doesn't cut it. The folks at the lower end of the income scale more than make up for their payroll tax losses, and the folks higher up the line get royally hosed.

Remember that those dastardly "rich people" that our leftist friends love to hate are the very ones who risk their capital to create businesses, conduct research on new technology, and hire the rest of us. Without "the rich" we don't produce the best bullets and boots and cell phones. Without "the rich" our economy loses its advantage over the rest of the world.

Look at how we punish success:

Tax burdens and entitlement windfalls

Let that sink in for a moment. Does that seem like a wise idea in peacetime? How much less so in the middle of fighting a war!

Now look at it another way. Focus on the blue bars below:

Entitlements minus taxes

Don't repeat my initial mistake by looking at tax rates alone. You'll miss the big picture. Always, always, always figure in government spending when you're trying to figure out how to pay for a war. Our steeply progressive tax-and-spend system takes money from America's most productive people and showers it on the least productive. While you can make a good argument for keeping some parts of the social safety net, we're way beyond the point of absurdity now.

Here's a slightly more detailed summary of the report:

While many studies answer the question of who pays taxes in America, the question of who gets the most government spending is often overlooked. Just as some Americans bear a larger portion of the nation's tax burden than others, some Americans also receive a larger share of the nation's government spending.

This report summarizes the key findings of a comprehensive 2007 Tax Foundation study of federal, state and local taxes and government spending. The results show that when we consider the distribution of government spending as well as taxes, it provides a dramatically altered view of how U.S. fiscal policy affects Americans at different income levels than is apparent from the distribution of tax burdens alone.

Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.

These findings suggest tax distributions alone do not tell Americans how much the nation's fiscal system is helping or hurting low-income households. To answer that, we must look beyond tax burdens to government spending as well. Lawmakers who ignore the distribution of government spending risk making policy judgments based on an incorrect set of facts about the United States fiscal system.

In my buddy Too Short's defense, he joined me in criticizing runaway federal spending that makes drunken sailors look frugal. Reasonable folks are tired of creeping socialism, and we expect to see some real spending cuts before 2009's over. And I'm not talking about the Washington version of "cuts."

So what's the bottom line? Income tax cuts are still a good idea, and so are cuts in entitlement spending. If we do both, the economy will surge forward and government revenue will increase along with it. That translates into much more money available for the military. Seventy-year-old notions of "sacrifice" will punish the most productive Americans and further erode our military readiness.

Sorry, old buddy. You lose this round.

More info:
Tax Foundation report and accompanying Frequently Asked Questions

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Update: TooShort's response

Looks like Fred's stock is slipping on the InTrade prediction market, where traders put real money on predictions of future events. Rudy Giuliani and Mitt Romney have been eating into Fred's support since late September.

Click on any image below for InTrade's estimation of a nominee's chances to win the GOP nomination:

Fred Thompson as GOP nominee
Rudy Giuliani as GOP nominee
Mitt Romney as GOP nominee

And just for the sheer schadenfreude of it, here's Don Quixote:

John McCain as GOP nominee

"Freedom For Today" debt reduction scam

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A company called Freedom For Today just called me a few minutes ago and offered me software that will supposedly reduce my credit card debt and boost my credit rating. As annoying as such telemarketing calls are to begin with, this one really got under my skin.

The recorded message sounds almost like it might be coming from your bank's collections department, calling with a "final notice" that you need to act upon. Unless you overcome your alarm and surprise at hearing the phrases "credit card" and "final notice" in the same sentence, you won't realize it's not your bank on the other end of the line.

Worse still, the recording does not identify the source of the call. You have to press 1 to get a human on the line, and it takes some aggressive questioning to get the company's name. But wait. There's more.

My phone number's been on the National Do Not Call Registry since July 1st, 2005. By calling me, this telemarketer violated the Federal Trade Commission's updated Telemarketing Sales Rule. After verifying that my phone number is on the list, I filed a complaint with the FTC against Freedom For Today.

When Freedom For Today calls you, please do what I did and help keep scams like this under control. I'm a big supporter of free markets, and to ensure that our capitalist system runs smoothly the feds do need to stamp out scams like these. It's one of the few things that the federal government should do more of.

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12:05 PM 9/11/07 Update: Unbelievable. They just called again. Time to file another complaint.

What Deindustrialization?

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Conventional wisdom holds that America's manufacturers have been declining for ages, yet the facts don't support this assumption. Tom Blumer wonders why:

The powerful "manufacturing is in decline" meme won't go away soon, but it should.

It apparently isn't enough that the Institute for Supply Management's Manufacturing Index has read "expansion" in 48 of the past 50 months. It has become an article of faith among reporters and opportunistic politicians that American manufacturing has been, and continues to be, in a long-term decline.

The fact is that government reports also show the exact opposite. Why apparently no one, including the sector's supporters, has done, or at least published, the simple math involved to debunk the myth of "deindustrialization" is indeed a mystery.

Pay close attention to Tom's description of manufacturing's share of the economy. It's a smaller chunk of a much larger pie. Refer to the concepts of tax cuts or baseline budgeting for more illustrations.

Since cities like Dubuque, Houston, Seattle and Charleston support robust manufacturing sectors, I'm forced to ask: what's Cleveland's excuse?

Socialist water

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Why must your water be provided by government? Good question.

TigerHawk is tired of hearing his fellow Americans complain about the price of gas at the pump:

People are evidently outraged over "high" gasoline prices -- otherwise television personalities like O'Reilly and out-of-office politicians wouldn't be beating the tom-toms about them. Who has not seen the tedious local news programs with stories about people pawning their heirlooms to buy gasoline? But isn't this all so much idiocy? My assertion is this: however "high" gasoline prices may be by historical standards, gasoline remains a fantastic value. If it weren't, then people would take obvious and simple steps to curtail their gasoline consumption. They don't, because even at $3 per gallon they would rather burn gas than bear some other burden. Gas is so cheap that most Americans won't do anything to conserve it.

Excellent analysis. You should definitely take two minutes and read the whole thing while you sip your $4/gallon Coca-Cola.

Back to the Moon

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NASA finally has a plan to get back to the Moon ... with cobbled-together Space Shuttle parts. The first time we went, it took 8 years and cost $135 billion (in 2005 dollars). According to CNN, this time around we'll get there in 13 years, and it'll cost $104 billion (in 2005 dollars).

When's the last time a government program met its deadline and its budget forecast, hmmm?

More from Time Magazine:

The plan makes good, hard engineering sense, but as always with NASA, the problem is less in the engineering than in the politics. For one thing, the agency says it will take no more than $104 billion over 13 years to pull the project off, necessitating no increase in NASA funding. That sounds like way too free a lunch. The next manned NASA program that comes in on time and under budget will be the first. The space station -- easily NASA's biggest fiscal and political disaster -- will cost more than 12 times its original projections.

Just as important, there's a whiff of dithering around that 13-year time frame. It was in 1961 that President Kennedy challenged the U.S. to go to the moon; eight years later we were leaving footprints there -- and that was before we'd even put a man in orbit. It shouldn't take so long to go back. A contemporary program with a 13-year deadline is precisely the kind of undertaking that can be frittered into nothing if future administrations lose the interest or the revenue to keep pursuing it.

This is progress?

I'd love to see the private sector get there faster and cheaper, wouldn't you? Let NASA stick to pure research.

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UPDATE: I forgot another private sector player. Oops.

Is China the threat we assume it to be?

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Australian optimist Arthur Chrenkoff looks northward toward China and reads the tea leaves to see if future conflict with America is really a foregone conclusion. Chrenkoff gathers disparate threads from the news that demonstrate China's ambition to control East and Central Asia (military buildups, diplomatic overtures, business deals), but then throws in an interesting wild card I hadn't thought much about recently: the rise of Christianity in Chinese culture, especially among that society's elites.

Fascinating stuff.

But I wonder ... whatever happened to China's secretive Assassin's Mace program? It sure has dropped from sight in the news, but that doesn't mean a doggone thing. Anybody have any news about it?

One other wild card comes to mind: capitalism (see Dinocrat's related post). If free market economics continue to make inroads into Chinese society, can China long remain a communist nation? If it does become some sort of democracy or republic, then it would be much less likely to clash militarily with America. After all, democracies don't attack each other.

Definitely something to ponder.

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UPDATE: More China blogging from Why are all the good names gone ...

From Reuters, we have "U.S. Warns Iran Over Missiles, Punishes Chinese Firms." Since the release of Seymour Hersh's article on Monday, MSM sources have turned an increasingly sharp eye toward anything involving Iranian friction with the U.S.

Oddly, no official announcement of the sanctions was made, leading me to wonder if this is because the United States has no desire to highlight disagreements with China over Iran. Considering U.S. efforts to highlight Iran's intransigence, I would have otherwise expected this to receive more play from the administration:

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The most indepth coverage was provided in the Times. I found the end of the article to be the most informative. China is a high-growth country with ever-expanding energy needs. Considering the fact that U.S. interest in the Middle East stems largely from a desire to meet its own energy needs, our position on the "moral high ground" regarding the spread of WMD is based primarily on the same sort of realistic calculations China has made in seeking to secure its own national interests:

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The article suggests that Chinese nonproliferation efforts are taken more as an economic step (to avoid U.S. sanctions) than out of genuine concern for the spread of WMD and delivery system technology:

...

Talk of China and its expanding role in regions such as the Middle East reminds me of the recently waged debate within the EU regarding an end to the current arms embargo levied on China.

I've discussed the idea of political realism outweighing the notion of "shared values" here and here. Steps by some members of the EU (most specifically France) to court China as a strategic balancing point to U.S. influence serve as a reminder that national interests often take precedence over shared values.

Interesting Iranian/French angle. It can be maddening, trying to keep everyone's hidden agendas straight in one's mind.

Want to get really complex? Throw into the mix Colin Powell's recent statements revising America's stance on the "One China" policy, which appear to leave Taiwan twisting in the wind (presumably in exchange for an as-yet-unmentioned something from China). I wonder what Condi Rice will have to say about this (if anything)?

UPDATE 2: Finally! The shipping lane map I've been hoping for! Great find by Little Red Blog, along with more good analysis on the EU-China arms connection.

UPDATE 3: This post has merged at high speed into today's Beltway Traffic Jam.

"In Good Company" trailer

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Based on a blurb I heard on the Hugh Hewitt show, I decided to try out the whole blogging-as-more-than-a-hobby thing. Specifically, bloggers who mention a certain movie get goodies, and I checked it out. I sent an e-mail to the publicist and got this reply:

There�s been overwhelming response from bloggers responding to the offer for free tickets to an advance screening of IN GOOD COMPANY. So Universal Pictures and Grace Hill Media wants to respond to that enthusiasm by upping the ante: any blogger who signs up for the free tickets and then posts this offer and a link to the IN GOOD COMPANY trailer on their site will be automatically entered in a contest to win their very own private screening of IN GOOD COMPANY in their town. The winner can either fill the screening with their friends and family, or see the film alone with that special someone � it�s entirely up to them. One lucky blogger here in the US will win. Sign up at info@gracehillmedia.com and send us your link. And of course, all the non-winners will still be eligible to attend an advance screening in their area.

Want to know what my biggest surprise was? Based on the trailer, this looks like an interesting movie that I might actually go see, even if I were paying for the ticket. I'll let you know if it lives up to its billing.

Best tsunami defense: prosperity

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OpinionJournal weighs in on the finger-pointing after the tsunami in Asia:

It is preposterous to blame the inexorable forces of nature on the development of industry and infrastructures of modern society. The more sensible response to natural disasters is to improve forecasting, put in place efficient communications and evacuation procedures and, should the worst arrive, conduct relief efforts and rebuild what nature has destroyed. Those cautionary measures, as is now clear, cost money. The national income necessary to afford them is made possible only by economic growth of the sort too many of environmentalists retard with their policy extremism.

Rich countries suffer fewer fatalities from natural disasters because their prosperity has allowed them to create better protective measures. Consider the 41,000 death toll in last December's earthquake in Iran compared with the 63 who died when a slightly stronger earthquake hit San Francisco in 1989.

The principal victims of the tidal waves in Sri Lanka and elsewhere Sunday were the poor people living in coastal shanty towns. The wealthier countries around the Pacific Rim have an established early-warning system against tsunamis, while none currently exists in South Asia. Developing countries that have resisted the Kyoto climate-change protocols have done so from fear that it will suppress their economic growth. These countries deserve an answer from the proponents of those standards. How are they supposed to pay for such protection amid measures that are suppressing global economic growth?

Makes sense to me.

The economics of pizza

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Rick Brady at Stones Cry Out looks at the inner workings of the pizza industry, based on how he experienced it in San Diego during a rise from lowly delivery guy to General Manager. He writes in response to news of a proposal to create a United Pizza Workers union.

Because I have been both a driver and a manager, I can say that the UPW proposal, if successful, will likely force many store closures. According to the article, the UPW is targeting the large chain stores like Papa John's, Pizza Hut, Domino's, and others. With costs increased for these large chains, mom and pop shops, free from having to negotiate with the UPW, would take market share. With smaller market share, hours for workers at the chain stores would be cut back and stores could be closed.

Is there a better way? Possibly.

Based on my interviews of prospective crew members, I've learned that: 1) pay within the fast food industry is fairly normalized and static; and 2) most applicants seeking full-time pizza work, including managers, have spent years in the fast food service industry.

Based on my experience as a manager of fast food workers, I've learned that: 1) every store has one or two truly excellent employees; 2) every franchise has one or two truly exceptional managers; 3) every so often a franchisee gets lucky and pairs a star GM who builds and maintains an entire crew of excellent employees; and 4) the stores that have the best managers and crews are the most profitable stores and also take market share.

...

An employee isn't excellent just because he is efficient. An excellent employee has mastered every aspect of her job, including customer service. I don't know how many times I told my best employees, "If I only had 20 more of you..." My stores would have been so stinking profitable if I could have built an "all-star" team comprised of the best crew members from around the region.

How then can a franchisee build all-star crews in each store?

Simple.

No, I'm not going to give away his idea. Read the whole thing. It's surprisingly fascinating stuff.

I wonder if the coffee industry bears much resemblance to the pizza industry. I'll have to ask my friend Patty, who runs a coffeeshop nearby.

Hat tip: Hugh Hewitt

So is it a crisis or not?

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Paul Krugman, target of frequent fiskings, takes fire for his latest complaints about Social Security privatization from JustOneMinute:

Oh, it was privatizers on the right that invented the Social Security crisis? Then when Bill CLinton insisted in his State of the Union that we "Save Social Security first", what was that about? And why did Al Gore keep going on (and on,and on) about his "lockbox"?

We all know the answer - Back in the era of budget surpluses Social Security was in a crisis discovered by Bill Clinton so that no one could cut taxes until Social Security was "saved". Well, Republicans (with some Democratic votes) cut taxes without saving Social Security, but the public perception of crisis lingers.

Bill Clinton started this fire, but it was George Bush who brought the hotdogs and marshmallows. My Metaphor-Mixer is pointing towards "Reap what you sow".

That's going to leave a mark.

The evolution of news

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Bill Bennett has a piece up on RealClear Politics mulling over the ongoing mutations in the news delivery business.

People now get their news and opinion on the Internet and relay it to talk radio. They then think about it, research it further, and discuss it on the Internet, in email, and in the national conversations that take place on shows like mine all the time -- shows that cannot simply be marginalized as "right wing radio," because they are not "right wing." Some are, in part, national dialogues. Yes there is right wing radio, and yes there is left wing radio but there is radio of another sort too, and too few elites have the first clue about what it is or what is happening there.

Empowered, the people are changing talk radio. Speaking as a host of a three-hour talk show, it is evident that the public, which is checking assertions of fact as they are being made, is not sitting back and merely absorbing pontification. On talk radio, the lecture is fading, and it is being replaced by the interactive national seminar, where callers inform the host and audience as much as the host is informing listeners.

I'll be listening to Rush Limbaugh with Bennett's idea in mind. Rush is more of a pontificator than a conversationalist, so I'm wondering if he's a big enough "institution" that he needn't worry about keeping closer tabs on what his listeners are interested in. CBS News is a big institution, and a handful of bloggers toppled its credibility. Will left-wing bloggers (or even we right-wingers) be Rush's undoing?

Lots of food for thought here.

Just say the magic word

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Over the past few weeks, I've been getting spammed by a fancy restaurant in Miami. Mind you, this isn't my Yahoo inbox I'm talking about. I expect to be spammed there. This fine establishment somehow found out my private e-mail address, the one my friends and family use. I never, ever enter it on a form online, so up 'til now it's been almost completely spam-free.

I knew better than to click the handy "unsubscribe" link at the bottom of the message. Doing so alerts the spammer to the presence of a human being at the other end of the spam pipeline, making one's e-mail address much more valuable. Clicking "unsubscribe" guarantees that your address will be sold to every spammer known to man, and the tidal wave of penis enlargement and home mortgage refinancing will hit your inbox quicker than you can say "yes, I'll help you hide your ill-gotten Nigerian gains."

Being a semi-cagey netizen, I instead looked up the restaurant in the phone book to verify that the place actually existed. No sense in calling a phone number on the spam message if the whole thing's a complete scam, right? I found that the restaurant actually existed, and I verified things by finding several reviews written by local newspapers.

I called to complain, and the runaround began. Every time Chez Fancypants spammed me, I called to politely complain. Every time, they told me that the person in charge of e-mail marketing was unavailable, had left for the day, hadn't arrived yet, was busy, or had perished in a tragic blimp accident.

Today, Chez Fancypants excreted spam number nineteen into my nice clean inbox, so I decided to up the ante. Again I called the oh-so-smarmy maitre d', and discovered that the Spammer-in-Chief was off on a pilgrimage to Yemen. I asked to be removed from the spamvertising hotlist, and again I heard the blasé brush-off beneath the pleasant response.

Ah, the power of the word "blogger."

When I casually mentioned that I'm a blogger who's well aware of how tenuous a good business reputation can be, and when I reminded the maitre d' of what happened to Dan Rather, his tone immediately changed from oily condescension to palpable fear. These days, the spectre of Mike Wallace at the door pales in comparison to "John Hinderaker just sent you an e-mail."

Said my new best friend, "I'll get on the phone to our Marketing Director and I'll send a fax to the e-mail marketing company we use, and tell them to remove your address from the list. What is it, sir, so I can send you confirmation of my success?"

I guess there's a red phone to Yemen in the kitchen after all.

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UPDATE: Just imagine the damage that Wizbang's Jay Tea could do.

The Ant and The Grasshopper

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Just got this in the ol' e-mail inbox. It's a well-circulated retelling of an old fable, but it's still funny.

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Classic version:

The ant works hard in the withering heat all summer long, building His house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The grasshopper has no food or shelter so he dies out in the cold.

Moral: Be responsible for yourself!

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Modern version:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away.

Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while he and other unfortunate grasshoppers are cold and starving. CBS, NBC, ABC, and CNN (FOX was noticeable by their absence) show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food.

America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when they sing a duet version of "It's Not Easy Being Green." Jesse Jackson stages a demonstration in front of the ant's house where the above media film the group singing "We shall overcome." Jesse then has the group kneel down to pray for the grasshopper's sake.

Senator Tom Daschle and Congresswoman Nancy Pelosi exclaim in an interview with ABC's Peter Jennings (a Canadian) that ants have gotten rich off the backs of grasshoppers, and both call for an immediate tax hike on ants to make them pay their "fair share."

Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act," which Congress passes with a veto-proof majority and makes it retroactive to the beginning of the summer. The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government.

Senator Hillary Clinton gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that ex-President Bill Clinton appointed from a list of socialist-leaning, wealth-redistributing attorneys. The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it.

The ant disappears in the snow. The grasshopper is found dead in a drug-related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

Moral: Vote Republican

Cleveland's good news hat trick

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Greater Cleveland may be a political and fiscal and economic basketcase, but we needn't lose hope in the area's core city. Three tidbits of good news have cropped up in the past week.

  1. The VP debate may have generated anywhere from $4.1 million to $45 million of P.R. for Cleveland and Northeast Ohio.
  2. The Cuyahoga River is slowly coming back to life. It's at least 20 years away from a clean bill of health, but local efforts are underway to remove the Cuyahoga from an international list of the most-polluted sites on the Great Lakes and to finish the cleanup. Clean water's critical to any city, and I'm glad that the locals are taking the lead on this project instead of the feds. Of course, I never want to see the end of Burning River Pale Ale.
  3. Cleveland will remain a hub for Continental Airlines through, thanks to Democrat Mayor Jane Campbell. This is especially encouraging, since according to WTAM most airlines have lately refused to commit past three to five years in other cities, and Continental also committed to $141 million in capital improvements at Cleveland International ... including another lengthened runway to compliment the most recent stretch job. Hats off to you, Jane. Nice work.

Now let's lower local taxes and ease stupid regulations (read: elect Republicans), get some development going downtown (instead of parking lots), exploit our waterfront with something more attractive than Whiskey Island, and clean out the dive bars and rundown warehouses in The Flats.

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UPDATE: Oh, and put a stop to this nonsense too.

We are Google. You will be assimilated.

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Google's planning a foray into online bookselling, albeit not directly. Amazon.com and Barnes & Noble must be anxious.

Hat tip: User Driven

Self-interest makes the world go 'round

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Leave it to Sandor at The Zoo to distill the contrast between socialism and capitalism to one pithy post, using SpaceShipOne as a perfect example.

Want to apply pressure to CBS?

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Zoom out & check the forest

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Lileks looks up from the trees and gets a broad view of the news media forest:

I think the number of people who regard the evening news as straight truth delivered by disinterested observers, can be numbered in the high dozens. Blogs haven�t toppled old media. The foundations of Old Media were rotten already. The new media came along at the right time. Put it this way: you�ve see films of old buildings detonated by precision demolitionists. First you see the puffs of smoke � then the building just hangs there for a second, even though every column that held it up has been severed. We�ve been living in that second for years, waiting for the next frame. Well, here it is. Roll tape. Down she goes. And when the dust settles we will be right back where we were 100 years ago, with dozens of fiercely competitive media outlets throwing elbows to earn your pennies.

Maybe it's time for me to find a less-crowded niche.

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UPDATE: More from The Belmont Club. I'm always impressed by Wretchard's thinking, and by his ability to communicate it so clearly.

UK to tax drivers into oblivion

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George Turner over at the Anti-Idiotarian Rottweiler presents (and efficiently guts) a UK government plan to reduce highway congestion by charging drivers a tax of £1.30. Per mile. This is a must-read.

Quick, get that on tape!

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In her remarks at a Democrat fundraiser in San Francisco on Monday, Hillary Clinton revealed her agenda:

"Many of you are well enough off that ... the tax cuts may have helped you," Sen. Clinton said. "We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good."

She goofed and told the truth. Hillary, meet Mr. Woodshed.

Wal-Mart eats Vermont

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The friendly fruitloops at the National Trust for Historic Preservation have just published their annual list of America's 11 Most Endangered Historic Places ... and the entire state of Vermont is on it. Why? Because Wal-Mart might establish stores there. Oh, the horror.

Vermont's probably delighted.

Estonia goes wi-fi

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An Estonian entrepreneur has managed to cover 2/3 of Estonia with wireless web access. "E-stonia", indeed.

We Americans like to eat fish. Lots and lots of fish. 16 pounds each per year, on average. But saltwater fish are getting harder to come by, thanks to a combination of government meddling, overfishing, and high transportation costs. So why hasn't someone figured out how to profitably raise fish inland?

The Harbor Branch Oceanographic Institute is figuring out how to do just that. It's great to see another example of rising demand driving innovation on the supply side. Leave it to the market to come up with an answer to a shortage (are you listening, George W. Bush?).

This little tidbit caught my eye:

The aquaculture industry has seen a 300 percent increase in the last two decades and has become the fastest-growing segment of U.S. agriculture production.

I wonder if there's an aquaculture mutual fund.

I'm not too thrilled that the U.S. Department of Agriculture is involved in the project, but I suppose it's inevitable that the bureaucrats would horn in at some point. I just hope we don't go overboard and follow New Zealand's example by putting a moratorium on new aquaculture farms until bureaucrats untangle their own regulatory mess (don't hold yer breath, Kiwis).

President Bush called yesterday for "universal, affordable access" to high-speed Internet connections by 2007. When a politician calls for universal anything, you ought to hang onto your wallet.

Let the market figure it out, George. Stick with what works: tax cuts and deregulation.

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