High Speed Choo-Choo Update - End of the Line?

This is normally Dean's turf, but this article made me so happy, I had to post. From the LA Times Headline:

Bid to appease bullet train critics may violate law
Revisions are in conflict with the ballot measure approved by voters and may go against the Obama administration's plans.

It seems that all the changes being made to this boondoggle are violating the terms of Proposition 1A. Some provisions that can't be met and would violate the law:

• Any initial segment has to use high-speed trains. Instead, the rail authority has agreed to run fewer trains at slower speeds on tracks shared with commuter rail systems.
• Passengers must be able to board in Los Angeles and arrive in San Francisco without changing trains.
  
• The system is supposed to run without taxpayer subsidies. I can't stop laughing at that requirement.

King's County is suing, "two of its residents alleges that the plan to start construction in the Central Valley is also illegal" and the Calwhine blog is reporting that the Howard Jarvis taxpayer association will also be engaging. He reports on an email from Jon Coupal of the association:

“We don’t see how these bonds could ever be issued with such a significant legal cloud hanging over them,” he wrote in an email to me. “In addition to the existing legal challenges, it is likely that multiple parties would jump into any validation action filed by the state seeking to inoculate the financing. Wall Street itself may demand that the issue be revisited by the voters.”

It's hard to describe my jubilation in the firm belief that the taxpayers won't get bilked. H/T Temple of Mut.

Quote of the Week

Comes from Walter Russell Mead:

The question before the country isn’t whether the law will stand. It is headed for failure; the question is whether the Supreme Court will kill it quickly and at a relatively low cost, or will it impose huge costs and inefficiencies across the country as its contradictions and inadequacies are successively revealed.

The whole article is worth reading, it is a scathing critique of the poverty of thinking of modern progressivism.

Tea Party Canada? Updated Links

Canada seems poised to experience significant economic growth. The Conservative government of Stephen Harper has announced reforms to keep government spending down and entitlement spending under control. I would hope this is what a tea party government would look like in America. Part of their plan includes raising the retirement age will rise from 65 to 67 in 2023. The government also announced:

Under the plan, Canada will cut its deficit this year through "moderate" spending cuts, as the economy grows by 2.1 percent, Flaherty announced.

But much deeper cuts, including the laying off of 19,200 government staff, or 4.8 percent of the federal workforce, are planned for the coming years.

Canada's debt to GDP ratio, while good compared to other industrialized countries, at 84%, is too high for the comfort of the government. As a result they are focusing on not allowing the ratio to rise.

The deficit was projected in the budget to fall to Can$21.1 billion (US$21.1 billion) or 1.2 percent of the gross domestic product (GDP) for the fiscal year ending March 31, 2013, down from a revised Can$24.9 billion last fiscal year.

1.2% of GDP? We can only dream. Finally, I like what they are doing to grow the economy.

Looking to the longer term, the minister outlined immigration reforms to attract more foreigners with skills and money to "strengthen Canada's economy," and a streamlining of the review process for major resource projects.
. . .
Since 2006, Canada has signed nine free trade deals and is now negotiating pacts with the European Union and India, as well as trying to grow its trade ties with China.

Free trade and immigration of skilled foreigners, I like this plan. The article also mentions how the U.S. is losing out by cancelling the XL pipeline and how it has strained relations between the two countries.

H/T CDR Salamander.

UPDATE

Fellow SLOB, WC Varones has some more material supporting this tea party thesis, liberated from the comments.

From August 2010:

You know why Canada doesn't have Tea Party protests?

Because they already have type of sensible government policies that Tea Partiers are trying to implement here!

Relative to the U.S., Canada has lower taxes, lower debt per capita, lower debt to GDP, and a sound banking system:

From July 2011:

In today's WSJ, Fred Barnes writes that Canada had a debt crisis in 1993 very similar to our current situation. And Canada's Liberal prime minister saved his country by doing exactly the opposite of what Obama is doing now.

Weekend Music Chill

This weekend's music is from one of my favorite bands from the 80s, even though this song was released in 1993. Most bands with these kind of personal issues don't make such a successful comeback. From the "Wedding Album" here is Duran Duran with Ordinary World.




Another of their 90s singles that I like.



The second song is on a Sonos playlist that includes these two songs.

Your Economics Lesson for the Week

H/T Carpe Diem. From NBC News in the Bay Area.

The catchy Subway sandwich shop jingle involving a variety of foot-long sandwiches available for $5 doesn't apply in San Francisco.
. . .
Apparently, the city's new minimum wage, raised to $10.24 as of Jan. 1, make $5 footlongs an impossible business model.

There was an eruption of comments on Carpe Diem. One complaint was about how it was impossible to live by oneself on minimum wage in San Francisco. No sharing apartments! The new cri de guerre of aspiring Bolsheviks.

Fletcher Leaves Republican Party

Nathan Fletcher, California Assemblyman and San Diego Mayoral candidate announced that he was leaving the Republican party today. VOSD discusses his long history with the GOP.

He had Ronald Reagan in mind when walked door-to-door campaigning for Republicans as a teenager and registered Republican voters outside Home Depots in college. He became a professional Republican operative, even working as the state party's political director. He married a former campaign staffer for President George W. Bush. He counts big-name Republicans — Karl Rove, Pete Wilson, Meg Whitman and Mitt Romney — among his supporters in his bid to become San Diego's next mayor.

Over at sdrostra, the announcement has generated a flurry of comments about Fletcher's choice, but I think that his trouncing in the GOP endorsement process led to this decision. The VOSD article opines that this was a result of Tony Krvaric remaking the San Diego Republican party into a less "establishment" mold. If that's really true, then I applaud the move. I'm tired of paying for largesse to downtown business establishments through my city taxes. I have been critical of Krvaric in the past, but if he is really moving the party in that direction, then great. It remains for the moment, unproved.

Meanwhile, polls show Fletcher in last place, so what did he have to lose? The latest polling showed:

DeMaio 24%
Filner 20%
Dumanis 10%
Fletcher 10%
Undecided 35%

It seems that the betting would be for a November runoff between DeMaio and Filner, since neither looks capable of getting more than 50% in the officially non-partisan June primary.

The Challenge of Tax Reform

Paul Ryan's budget proposals are being excoriated by the left. His push for reform is of course laudable, but we should acknowledge that there are some difficulties with the approach he has taken. First the good stuff.

Mr. Ryan wants to avoid a tax increase and reform the tax code because he realizes that the budget will never balance over the long term without economic growth faster than today's 2% a year.
. . .
He has also issued a second budget estimate based on evidence from the 1960s, 1980s and 2000s that tax reform and spending restraint will increase GDP by about 0.5 to one percentage point a year. This means the Ryan budget reduces the debt to GDP ratio to 50% in 10 years from 74.2% this year (and heading higher) and thus steers the U.S. away from the Greek fiscal rocks.
. . .
But what really matters on spending over the long term is entitlement reform, and on that score Mr. Ryan goes further than any Republican Congress or President since 1995. He understands that without converting Medicare into a market-based program with more choices for seniors, and without devolving Medicaid to the states and repealing ObamaCare, tax increases will soon become the political default option.

I agree that reforming entitlements, including social security, not just medicare and medicaid are necessary elements of reform. The Rebublican party needs more Congressman like Ryan.

Ryan proposes a simplified two tier tax system with rates of 10% and 25% and a corporate rate of 25%. He proposes to pay for this with unspecified cuts to tax loopholes. The following chart from the CBO illustrates the relative size of the loopholes, aka tax expenditures, on the budget in GDP percent.

The problem is that every one of these deduction/credits are very popular. What do Republicans propose to remove to make up for the lowered rates? According to Ruth Marcus at the Washington Post, there are about $12 trillion over ten years in such "tax expenditures" and Ryan needs $4.6 trillion over the same period to keep revenue static. However, I'm not sure revenue needs to be static, since Ryan's goal is to reduce the federal government's size to under 20% as it has historically been. Even so, which deduction is the tea party supporter willing to forego?

• Taxing health care benefits makes sense to me, but can you imagine the uproar after Obamacare is repealed or struck down and now we want make health insurance even more expensive?
  
• Do we really want to discourage saving for retirement by taking 401(k) and IRA savings?
• Mortgage interest is very powerful in propping up the prices of homes.
• What about long term capital gains? Don't we want to encourage investing?
• How about state taxes? Doesn't seem fair to pay taxes on money that was taken away by taxes.
• Charitable giving? How are we going to show that we need less government if charities don't step up.
  

These are tough calls. My belief is that we are going to have to go for a package deal that persuades people that they are better off without the deductions in return for lower rates and growth.

Obama: Counter-Revolutionary

The founders of our nation bequeathed us a Republic, if we could keep it, to paraphrase Benjamin Franklin. The duty of the government of the Republic was to protect the rights of its citizens. To quote the Declaration:

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,

The founders didn't promise us ever increasing wealth, freedom from want or poverty; only the opportunity to take control of our own lives to pursue those ends we thought best.

But Obama, like other progressives before him, actively seeks to subvert the meaning of the revolution by pressing government into service to supply our every need. Such a government becomes our master, not the servant it was meant to be. In this way, Obama is a counter-revolutionary. He seeks to return the U.S. to the condition of Europe in which the greatness of the state and what it accomplishes, not the greatness of the people, is the measure by which the nation is judged. This is part of the underlying meaning of his so called health insurance reform, and why I so strenuously oppose every bit of that legislation.

In fact, the nation has always delivered first rate insurance and health care, but certainly not equally to all people. But that is not the promise of our nation. We will all be better off we let free people figure out how to best buy their health insurance amid freedom of choice among providers and plans. We will be better off if providers, doctors and hospitals are free to innovate not only with the technology of health care but with innovative business models for delivery. Look at the abundance of food delivered at low cost in a relatively free market. Health care will be as plentiful and filled with variety when we introduce free market reform.

Ultimately, this President, who promised to fundamentally transform America, is not the revolutionary, but a counter-revolutionary, reversing the promise of our founding, a limited government that protects the rights of its citizens.

Obamacare - Taxing Issue

Hot Air is reporting, actually re-reporting from Philip Klein, that even the liberal justices were skeptical of the idea a tax not called a penalty could be called a tax. Congress explicitly withdrew language from Obamacare that called the penalties enforcing the individual mandate a tax.

On the first day of oral arguments in the case challenging President Obama’s national health care law, justices seemed skeptical that the individual mandate should be considered a tax — one of the main consitutional defenses being offered for the law.

To be clear, today’s 90 minutes of oral arguments did not concern the underlying merits of the case, but whether an 1876 law called the Anti-Injunction Act bars the Court from ruling on the suit at this time. Under the Anti-Injunction Act, people cannot challenge a tax in court until after they have paid it, something that would effectively punt the issue until at least 2015. However, there is some overlap between this question and the idea of whether the mandate is a tax, and justices on both sides of the ideological fence expressed skepticism that the mandate should be treated as a tax.

Even though the smart money seems to be on the Justices upholding the law, I remain optimistic that the vast overreach of stretching the commerce clause will come to its limit. Frankly, if the individual mandate is not overturned, I don't see how the federal government can have any constitutional limits to its reach.

David Axelrod Sent Me this Stupid Email

David Axelrod sent me this email touting the purported benefits of Obamacare. The hashtag #IlikeObamacare has been an epic fail on Twitter as well, but I wanted to highlight how weak the case is for this pork laden, lobbyist written epic fail of a legislative effort.

B. --

I like Obamacare.

I'm proud of it -- and you should be, too.

Here's why: Because it works.

So if you're with me, say it: "I like Obamacare."

Obamacare means never having to worry about getting sick and running up against a lifetime cap on insurance coverage. It gives parents the comfort of knowing their kids can stay on their insurance until they're 26, and that a "pre-existing condition" like an ear infection will never compromise their child's coverage.

It's about ending the practice of letting insurance companies charge women 50 percent more -- just because they're women.

And Obamacare can save seniors hundreds of dollars a year on prescription drugs -- and gives them access to preventive care that is saving their lives.

President Obama never lost sight of the fact that this reform is about people. People like his own mother, who spent the last years of her life fighting cancer -- and fighting with insurance companies, too.

That shouldn't happen. And because of Obamacare, it can't.

So next time you hear someone railing against Obamacare, remember what they're actually saying they want to take away.

And, today, stand with me in saying, "Hell yeah, I'm for Obamacare":

http://my.barackobama.com/I-Like-Obamacare

Thanks,

David

P.S. -- Side note: Can you imagine if the opposition called Social Security "Roosevelt Security"? Or if Medicare was "LBJ-Care"? Seriously, have these guys ever heard of the long view?

The "long view?" That's exactly why we call it Obamacare, because we intend to fight until it is repealed and the label indicates the temporary nature of the bill. Let's take down some other aspects of his arguments.

It works? Rising premiums, people losing their coverage, cost curve bending upwards, adding to the deficit and trampling freedom of conscience. No I don't like Obamacare, but I like the snarky use of the #IlikeObamacare hashtag at Twitchy.

Lifetime cap on insurance coverage? In a truly free market, the public would have the right to make choices about the type of coverage needed. In fact, if we didn't tie health insurance to employment, and freed the marketplace, all sorts of innovative products might spring up.

Pre-existing conditions? This is the item that most resonates with Americans. But it is a red herring. The reason that pre-existing conditions are a problem is that health insurance is not portable. It ties people to their jobs and limits labor mobility. However, as part of a real health insurance reform package, the right to buy portability would overcome this problem. People could get started on their health insurance at birth, funded by their parents, and keep the insurance their whole lives. Wrecking the entire health care system over this one issue is a cover for stealth imposition of a socialist agenda by controlling this portion of the economy.

Charging women more? Free markets and transparency are the answer. Preventive care for seniors? How was this prevented under the previous system? Since Medicare was an existing program, why wouldn't changes to medicare have sufficed to fix any such problem? Again why wreck the entire nation's health insurance market, when a single reform to a single program would have sufficed.

Finally, with regards to the insurance companies, they are no different from any other business. Bad business practices are corrected by competition, sometimes by lawsuit for breach of contract and sometime by regulation. Obamacare did not solve this problem, in fact, it will probably make it worse, because of the nightmare thicket of regulations that will make it harder to understand actual standards of coverage. Contract law is a much more straightforward way to enforce standards of coverage. Further, because many people have little choice in who their insurance provider is, because it is tied to their job, competition on service, which drives auto insurance, isn't present in the health insurance market.

Obamacare is still not popular, and no amount of cheerleading will change the fact that it was a bad bill. I hope the Supreme Court will overturn it. The individual mandate is an unacceptable extension of the Commerce Clause. Further, the individual mandate is both legally and practically non-severable from the bill. We'll see what happens. I thought the court would go the other on Kelo vs New London, which ranks with Dred Scott and Plessy v Ferguson for horrible decisions, so what do I know?

Stand Up for Religious Freedom Rally San Diego - Link Update

I went to the Stand Up for Religious Freedom Rally today in downtown San Diego. I was struck by how impassioned both the speakers and participants were. The President's policies are uniting people of faith against him. The speakers all spoke of the importance of freedom and conscience to the proper functioning of government. They spoke of the continued assault on religious liberty. They spoke of the laughable accounting shell game of the administration: "Religious associations don't have to pay for birth control, only their insurers will be required to provide that." My personal estimate was that about 700 people turned up. We got honks of support throughout the rally.

I expect Temple of Mut to give a more complete update which I will link when available. UPDATE: Link here for full coverage of event. Best quote is from San Diego Bishop Cirilo Flores:

“Religious freedom is not a gift from politicians: It is a gift from God,” said Bishop Flores. “Today’s debate is not about the access to contraceptives…it is about the federal government forcing the Church to act against its teachings”.

Two pictures.

Weekend Music Chill

I had a great time at today's "Stand Up for Religious Freedom" event at the county building in San Diego. My favorite line was about Obama uniting Christian denominations. To show a little solidarity with Temple of Mut and especially with the thoughts expressed in her blog Flight into Egypt, here I have some music today that is very different from what I normally post.

Obamacare Quote of the Week

Dean, at Beers with Demo, takes down Nancy Pelosi idiocy about how Obamacare is constitutional because it enables the pursuit of happiness, which is of course in the Declaration, not the Constituion. Read it all here, but the money quote follows:

It's done. Some 236 years later, we've completed the journey started by our founding fathers. Not merely content with inherent or God-given rights, we've progressed to a point in our post-constitutional republic where a back room deal-brokered, kick back-laden, lobbyist-written piece of legislation that nearly two years from full enactment is going to cost twice as much as advertised as when it was voted into law, will now be the guarantor of life, liberty and the pursuit of happiness.

False Choices or Growth?

John H. Cochrane, The Grumpy Economist, proposes a set of economic policies that I think the tea party should support. He dispenses with the false choices of austerity vs stimulus that has plagued the debate over economic policy. Stimulus has clearly failed and failed the world over. Austerity isn't fairing much better. Why not, Cochrane asks, just choose policies that allow growth?

“Growth Now.” Forget about “stimulating.” Spend only on what is really needed. We could easily stop subsidies for agriculture, electric cars or building roads and bridges to nowhere right now, without fearing a recession. Most "spending" is in fact transfer payments, which even Keynesian economics recognizes are not very stimulative, not the mythical (and curiously carbon-intensive) roads and bridges, and most of that goes to people who are relatively well off.

Rather than raise tax rates further on “wealth” and the “rich,” driving the underground, abroad, or away from business formation, fix the tax code, as every commission has recommended. Lower marginal rates but eliminate the maze of deductions. In Europe, eliminate the fears of wealth confiscation, euro breakup and currency devaluation that are driving saving and investment out of the south.

Most of all, remove the profusion of regulation and (increasingly) direct government management of the economy.

Exactly. I would add to end the uncertainty in this country about how regulation, especially in the area of health insurance will impact business in the future. Lower marginal rates while eliminating deductions will increase the tax haul from the rich, but more importantly will grow the economy as the distorting effects of the tax code are removed.

A tea party growth plan would have these elements:

• Eliminate loopholes, deductions and credits for a low flat tax rate below 19%.
• Tax all sources of income at the same low rate.
• Eliminate subsidies to all industries, no matter how "green." This includes all the hidden subsidies in the tax code.
  
• Tax profits in accordance with the same accounting principles that corporations use to report their earnings. This will eliminate stupid arguments over things like depletion allowances and simplify the tax code.
• Repeal Obamacare. Start over on health insurance reform using principles of economic freedom.
• Halt the application of new regulations and require a review of all existing regulation for economic cost benefit analysis.
• Repeal Dodd-Frank. End too big to fail by simply increasing capital requirements for the largest financial institutions in proportion to their market share.

That should get us started.

Good Order and Discipline and Tea

Sgt. Gary Stein (pictured) created the Facebook page "Armed Forces Tea Party" in 2010. As you might expect, he eventually made comments critical of the President on Facebook. He is now facing discharge from the Marine Corps (pronounced "core" for the pronunciation challenged) for Conduct Prejudicial to Good Order and Discipline. He argues that he has merely been exercising his free speech rights. However, those rights are not absolute. A member of the Armed Forces may not participate in partisan political activity nor appear in uniform while endorsing a political candidate for office. These are sensible rules that keep the Armed Forces from unduly influencing or being drawn into partisan politics. The subordination of the Armed Forces to the civilian control of the President and the Congress have served our nation well.

At issue is whether Gary Stein's comments critical of the President and his statements that he wouldn't follow Obama's orders, later amended to not following unlawful orders, cross that line. At first blush, the Facebook page doesn't appear to violate the rules as I understand them. However, it may have changed after Stein came under investigation. The Marine Corps seems to have taken a different view.

The Marine Corps issued a statement saying that Stein’s commanding officer ordered a preliminary inquiry on March 8 after receiving allegations that the sergeant “posted political statements about the president of the United States on his Facebook web page titled ‘Armed Forces Tea Party.’ After reviewing the findings of the preliminary inquiry, the Commander decided to address the allegations through administrative action.”
. . .
Stein attracted national media attention when he started his Armed Forces Tea Party page, which has nearly 18,000 followers. Then a complaint was lodged against him with the Marine Corps this month after Stein made a comment online using his personal Facebook account. Stein said he can’t remember exactly what he posted — the comment has been deleted — but he paraphrased it as “I say screw Obama. I will not follow orders given by him to me.”

I think the key issue that will sink Gary Stein is that he has identified himself as a member of the armed forces and publicly criticized the President. More subtly, his comments seem to indicate that the President is contemplating issuing unlawful orders. I think that would cause me concern if I were the Commanding General.

A more cautious approach by members of the Armed Forces would be to comment primarily on law and policy rather than criticize individuals. For example, in the above mentioned case, Sgt. Stein could have said that in keeping with his oath of office, he intended to not arrest civilians or perform some other act that was unlawful.

I wish Sgt. Stein well, but I think he is going to be discharged and that he won't be reinstated on any sort of appeal.

Economic Freedom 2012 Campaign

I listened a bit to Mitt Romney and Rick Santorum speak after the Illinois primary results came in. I was glad to see that Romney's speaking has noticeably improved over the course of the campaign. He really hit the right notes when he talked about freedom. Here is what I have been waiting to hear from him:

The American economy is fueled by freedom. Economic freedom is the only force that has consistently succeeded in lifting people out of poverty. It is the only principle that has ever created sustained prosperity.

But, over the last three years, this administration has been engaged in an assault on our freedom.
. . .
Under President Obama, bureaucrats prevent drilling rigs from going to work in the Gulf. They keep coal from being mined. They impede the reliable supply of natural gas. They even tell farmers what their 15-year-old sons and daughters can and can't do on the family farm.

The administration's assault on freedom has kept this so-called recovery from meeting their projections, let alone our expectations.

And now, the President is trying to erase his record with rhetoric. Just the other day, he said, "We are inventors. We are builders. We are makers of things. We are Thomas Edison. We are the Wright Brothers. We are Bill Gates. We are Steve Jobs."

That's true. But the problem is: he's still Barack Obama. And under this President, those pioneers would have faced an uphill battle to innovate, invent, and create.
. . .
I see an America where we know the prospects for our children will be better than our own; where the pursuit of success unites us, not divides us; when a government finally understands that it's better for more to pay less in taxes than for a few to pay more; where the values we pass on to our children are greater than the debts we leave them; where poverty is defeated by opportunity, not enabled a government check.

I see an America that is humble but never humbled, that leads but is never led.

This should be the natural rhetoric of the Republican party, and indeed the tea party. But it has disappeared from the campaign for a while. Americans understand that Romney is correct in assessing the state of freedom in America.

Santorum, for his part gave a good speech on the topic of freedom as well. He claimed to have been speaking of this core issue well before Romney, and indeed, he may be right. He also landed some good punches on Romney and global warming. But I have two complaints. First, he spent far too much time emphasizing his humble roots and his identification with hard working ordinary Americans. It sounded like pandering after a while. Further, I don't care how much you identify, I want to know that you have policies that will lead to those ordinary Americans being better off. Which brings me to my second complaint. After talking about freedom and ordinary Americans, Santorum trotted out his support for manufacturing as a jobs plan. It was inherently self-contradictory of course. If you believe in economic freedom, you don't believe that government picking winners and losers in the economy advances that cause. Santorum doesn't seem to understand that.

Assembling for Religious Freedom

I have blogged extensively on the administration's assault on religious freedom with respect to contraception mandate. It's time to get out and protest. The SCTRC and like minded groups will be part of nationwide protests this Friday, titled "Stand Up for Religious Freedom." Here in San Diego we will be protesting on Friday – March 23, 2012, from Noon – 1 pm at the San Diego County Administrative Building on 1600 Pacific Highway. See you there.



H/T Temple of Mut.

Working to Wreck California this November

Governor Jerry Brown has reached a "compromise" with the Californian Federation of Teachers (CFT) on competing tax increase measures for November's ballot. The teachers' union wasn't happy that the Governor wasn't proposing to drive enough millionaires out of the state. To make sure there weren't competing measures on the ballot, the gov reached out to the teachers, like one family of thugs to another, dividing up the spoils. From the Sacramento Bee:

The Democratic governor and CFT announced last week that they had reached an agreement to work together to try to qualify a measure that combines parts of their rival tax proposals. CFT had been working with the Courage Campaign to qualify a special tax increase on millionaires.

The "Courage Campaign?" How much courage does it take to propose a tax on a small minority of the population. Of course, this is all supposed to be "temporary", until the crisis passes.

The measure is similar in structure to the constitutional amendment initially proposed by Brown, which relied on a temporary half-percent hike in the sales tax and temporary income tax increases for Californians earning more than $250,000. The new version features a quarter-percent hike in the sales tax and steeper increases for higher earners. The sales tax increase would last four years and the income tax increases would last seven years.

What hogwash, we know that these tax increases will be permanent and rising until the state goes broke from failing to offer meaningful pension reform. Nothing is so permanent as a temporary tax increase. It took 108 years to repeal the long distance telephone tax originally intended to fund the Spanish-American war. Most shockingly, that tax was also billed as a "tax on the rich."

Delta vs Boeing and the Larger Impact of Export Subsidies

Delta Airlines and Boeing are in the news in a fight over the role of the U.S. Export-Import Bank, which despite its name, only seems to fund export activity. A quick summary of the current issue from the WSJ:

The bank—overseen by a White House appointee and funded by customer fees and interest payments—has doubled its financial support in the past four years to $41 billion annually. But without congressional action, the bank may soon hit its limit.
. . .
Boeing, the bank's top beneficiary, which is leading the corporate charge in support of the administration's efforts to renew and expand lending. The bank has helped finance billions of dollars in sales of Boeing aircraft to foreign customers.

One of those customers is Air India, which until 2008, competed directly with Delta on the New York to Mumbai route. But Delta stopped flying the route, which it had switched to Atlanta, saying it couldn't compete with Air India's fares.

In summary, the good faith and credit of the United States provides loans to foreign customers of U.S. products. What could go wrong?

We could start with the crony capitalism angle, but that's too obvious. We will assume that our readers recognize how the politics of the bank's decisions could cause donations to flow to particular candidates for office. Let's talk about the basic economic unfairness of allowing foreigners subsidies to purchase U.S. made products. Glad to know that you're on the hook for a loan to Air India? But wait, say the defenders of the bank, it never loses money. So what? There is real risk that it will.

Second, given that economics is about the study of comparative, not absolute advantage, this means that corporations' sales abroad are subsidized through lower interest payments by their customers. To the extent that this shift productive capacity towards those customers, it has an impact, albeit small on domestic customers, who pay a higher price for goods intended for domestic consumption.

Back to the crony capitalism issue, once again Obama shows himself to be in thrall to the big corporations he routinely pillories. Boeing couldn't swing the loan to Air India itself? Well no, because Boeing would have to pay the market risk for the loan in the form of higher interest rates. Less money for Boeing to pay its somewhat unionized work force.

U.S. companies that buy planes and other goods don't have access to assistance from the U.S. Export-Import Bank, but they often turn to similar institutions in other countries. Delta acknowledges that it benefits from export financing when it purchases airplanes from Canada's Bombardier Inc. or Brazil's Embraer S.A.

What stupidity. The net effect is just to shift risk of borrowing to various national governments and make it more desirable for airlines to buy from foreign competitors, even if there would be higher costs associated with such transactions.

Pictured at top is a Boeing 737-800.

Michelle Obama Sent Me This Creepy Letter

Got this email from Michele Obama, since I have signed up for barackobama.com emails.

B. --

I see this happen a lot:

Someone in a crowd yells at my husband, "We love you, Barack."

That's when he interrupts himself, smiles really big, and says, "I love you back." And he does.

That's why Barack's dinners with supporters mean so much to him -- because they give him a chance to show it and to say thanks.

I can say from experience you won't want to miss out on the next dinner. I hope you'll consider donating $3 -- or whatever you can to support the campaign -- and be automatically entered today:

[redacted]

Thank you,

Michelle

It's hard to get my mind to come to grips with all that's wrong with this. The shamelessness with which it was sent is a nice starter. Bragging not about your husband's accomplishments, but about how many groupies he has? And Obama's response is not the humble "thank you" of a man who might be uncomfortable with such adulation, because his native humility reminds him that he is not perfect. Rather, he responds as the immature rock star who wants more and more.

Next the image of Obama as loving father figure to the masses of adoring fans smacks of a personality cult worthy of Kim Jong Il. He is not our father figure, he is a fellow citizen of the Republic. He is the President, to be sure, but that position is limited and temporary.

What do you think? I am too harsh?

Weekend Music Chill

Some of the most instantly recognized music in our culture comes from TV shows. But we seldom think of it as pop music. Occasionally a tune may cross over to radio success, I think that the theme song from Cheers did so. I didn't especially like it, so here are my two votes for best TV theme songs. I look forward to hearing what yours are.

Obama's Birth Certificate - Layers of Deception?

If you watch the following video, which has many cousins on YouTube, you will see a clear argument that there are issues with Obama's supposed release of his long form birth certificate.



There have been a number of attempts to explain this effect. Nathan Goulding at NRO postulates that it was scanned with OCR software turned on. I have read others say that this could be an artifact of other software that was used to shrink the file size. I really don't know what the truth is, and neither do you, unless you have seen the actual piece of paper yourself. Here is what one commenter, Rob, posted on the controversy, which accurately sums up the issue.

I think we’re all missing the point, here: We still haven’t seen an original copy of Obama’s birth certificate. We’ve seen a layered version of it. So, the evidence of layers cannot prove that it was purposely doctored – why does that matter? What’s important is that we have not seen an actual, authentic copy which can only be acceptable in an un-layered image format like a .JPG.

A layered file like a PDF, PSD, etc.. CAN never and SHOULD never be accepted as an authentic copy of an important piece of paper by virtue of the fact it is mechanically altered the minute it is saved. Only an un-layered, scanned .JPG image can suffice as proof of the original birth certificate.

In short, we have no more proof of Obama’s original birth certificate than we did prior to the morning of the 27th. We should demand an single-scanned, un-layered image.

WE HAVE NO PROOF. That is what is disturbing about this President. He has carefully hidden facts about his past with media complicity. We have no records of his college grades, we can't read his college papers, and we don't know much about his 1981 trip abroad to Indonesia and Pakistan. The secrecy has a purpose; it might be as benign as preventing embarrassment or as malignant as the Manchurian Candidate. We don't know because of the secrecy. That the press is willing to be complicit is also a key point. It is also the point of this video in which Joe Pollak takes down CNN, and they hardly have the wits to understand their complicity:

Dumanis and Fletcher Unveil Education Plans

But who cares? Watching KUSI tonight, there was some story about Bonnie Dumanis and Nathan Fletcher offering up education plans. I don't care. As the news pointed out, this is not a province of the mayor and their will be enough for the mayor to handle without adding education reform to his or her plate. With the city facing tough issues like pension funding, the potential implementation of a new defined benefits plans and ongoing budget woes, Fletcher and Dumanis are focused on the wrong issues. For the same reasons that I am not a Rick Santorum supporter, he isn't focused on the debt and the economy, I can't support Fletcher or Dumanis.

Meanwhile, Carl DeMaio remains the front runner, if the local polling is to be believed.

It's About Repealing Obamacare

I feel certain that the Republican nominee can beat Obama on the issue of PPACA alone. The steady drip of bad news about the bill is poisoning residual public support for it. The bill was never popular and support for it is slightly lower now, than when passed, at 35%. More importantly the issue that has captured popular outrage, but is central to making the plan work, is as unpopular as ever:

On the key issue before the Supreme Court, however, public opinion is clear. Nearly 6 in 10 in say they oppose the law’s requirement that Americans carry health insurance, except in cases of financial hardship, or pay a fine to the government.

Regardless of polls, there is plenty to hate about the law, which Dean has covered extensively. But more bad news continues to torture us. From the Congressional Budget Office:

The ACA’s provisions related to insurance coverage are now projected to have a net cost of $1,252 billion over the 2012-2022 period; that amount represents a gross cost to the federal government of $1,762 billion, offset in part by $510 billion in receipts and other budgetary effects (primarily revenues from penalties and other sources).

Here is what the the CBO said originally (which was based on some lies like the doc fix not getting fixed and the CLASS Act saving money).

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting both pieces of legislation H.R. 3590 and the reconciliation proposalwould produce a net reduction in federal deficits of $143 billion over the 2010-2019 period as result of changes in direct spending and revenues.

From deficit reduction to deficit builder, all because this was built on a tissue of lies. Calling Obama account for those lies should be a center piece of the campaign.

Another reason to bring this issue front and center is that it causes Democratic Senators and Congressmen to distance themselves from Obama. That can't help him win re-election. From Forbes:

· Bi-partisan opposition to ObamaCare is brewing. When the House of Representatives votes next week on repealing ObamaCare’s unaccountable, unelected IPAB board, at least some Democrats are likely to support repeal. The IPAB repeal bill, sponsored by Rep. Phil Roe (R-TN), received bi-partisan support as it made its way through House committees, showing that Democrats are equally worried about the power of the board to usurp the job of the people’s elected representatives.

Because Obamacare so damages Obama's chances for re-election, I worry that what I consider a likely Supreme Court ruling that it is unconstitutional, will actually improve Obama's chances. If the Supremes also rule that the mandate is non-severable and the whole law is tossed, Obama's chances would be hugely boosted. See Daniel Heninger's article on Obama's plan to make real issues disappear.

Santorum's Big Night - UPDATE 1

As of this writing, Santorum has won both the Alabama and Mississippi primaries. By tomorrow morning sometime, we will have some new delegate totals. I will be surprised if Santorum cuts into Romney's delegate by more than 5 delegates. He might even up a net loser for the day. If I get a chance I will update results in the morning.

The reason for this is that Romney has been sweeping the overseas contests like Guam and the Virgin Islands. No reason to believe that he won't seize most of the 29 delegates up for grabs from Hawaii and American Samoa tonight. Given the proportional result from Mississippi and Alabama, where Santorum's win might only net him +12 or so.

UPDATE 1

Realclearpolitics delegate count shows Romney +5 from the March 13 event.
New York Times delegate count shows Romney +6.

Interestingly Santorum's win in Mississippi doesn't seem to have netted much in the way of delegates as the NYT count shows him losin by one delegates there and RCP only showing him +1.

The Price of Gasoline and Obama

The President appears to be taking a beating in the polls over the high price of gasoline. Normally, I wouldn't have much to say on the subject, because there is little the President can do regarding the price of a commodity good like gasoline, which responds largely to supply and demand. However, in this case the President's chief achievement, and that of his party has been to increase the supply of dollars chasing goods in the economy. He has done so by fueling a huge expansion in the debt, which the compliant Fed has monetized by keeping interests rates artificially low and by buying up Treasuries. Rather than recognizing that the government's spending is out of control, he counted on a compliant federal reserve to delay the effects of his folly.

The second way reason for well deserved scorn has been his policies of preventing new exploration on federal land, in the Gulf of Mexico and by preventing the Keystone XL pipeline from bringing new supplies of oil to our refineries. Although these actions would have only a small effect on the price of gasoline, they deprive Americans of the jobs that come with these activities. His opposition is based not on science, because the science says that we cannot quickly and economically replace the convenience and power of carbon based fuels; but on a religious belief that man's activities are causing a catastrophic warming of the globe. These are subjects on which I have blogged in length and time does not permit me to link all of them.

Chart of the Decade?

Professor Mark J. Perry has a chart on his blog, Carpe Diem that explains all you need to know about "high gasoline prices." When measured against gold, the price of oil is below its historical average. This can only mean that the value of the dollar is falling, which is reflected in the increasing price of oil.


To be fair, most of the world's currencies are falling against the price of gold, or oil at this time. However, it doesn't change the fact that oil and gold, as materials that contain intrinsic worth, don't deviate in their value whereas fiat money, such as the dollar only loses value over time.

Update on Carbonite and Rush Limbaugh

Last week I went on the Carbonite web site to tell them that I was not going to be renewing my subscription to their service because of their actions with respect to the Rush Limbaugh show. As you might expect, I received this corporate weasel word response.

Response Via Email (Riley B. - [redacted], ME) 03/04/2012 06:46 PM
Hello and thank you for contacting Carbonite Customer Support.

We do not endorse political views or opinions of the companies, magazines, newspapers, TV stations or radio stations that we advertise on. We simply choose a range of programs designed to reach a broad range of people so they might hear about Carbonite.

Please let us know if you need additional assistance.

Sincerely,
Riley
Carbonite Customer Support

It hardly addresses the issue at hand and doesn't seem consistent with the original announcement put out by their CEO:

Over the past two days we have received a tremendous amount of feedback on Rush Limbaugh’s recent comments. I too am offended and very concerned about his comments. Limbaugh’s remarks have us rethinking our future use of talk radio.

We use more than 40 talk show hosts to help get the Carbonite message out to the public. The nature of talk radio is that from time to time listeners are offended by a host and ask that we pull our advertising. This goes for conservatives like Limbaugh and progressives like Stephanie Miller and Ed Shultz. We even get customers who demand that we pull the plug on NPR. As an advertiser, we do not have control over a show’s editorial content or what they say on air. Carbonite does not endorse the opinions of the shows or their hosts.

However, the outcry over Limbaugh is the worst we’ve ever seen. I have scheduled a face-to-face meeting next week with Limbaugh during which I will impress upon him that his comments were offensive to many of our customers and employees alike.

Please know your voice has been heard and that we are taking this matter very seriously.

Sincerely,
David Friend

Interesting that his customer service folks didn't get his memo.

Quote of the Week - Carl DeMaio's Real Opponents

Over at sdrostra.com, an interview with Carl DeMaio is posted. The money question comes third:

• Which of your opponents do you fear the most? Why?

I don’t see this as a race of me against these three other candidates. My campaign is the same campaign I have waged since becoming a taxpayer watchdog years ago: to clean up the mess at city hall.

My real opponents are the government employee unions and powerful downtown interests that benefit from the cozy system at City Hall at the taxpayers’ expense. They know I will end their taxpayer-funded gravy train, and that’s why they are doing everything they can to defeat our grassroots campaign.

Bolding added by B-Daddy.

I couldn't agree more with Carl DeMaio about who is true opponents are. The author of the rostra article, Tony Manolatos, showed superb judgement in headlining the article the way he did. This also speaks to my long time complaint here in San Diego, that our political choices have been between government that favors big business or government that favors big labor. We need government that favors the taxpayers and average citizens, whether or not that favors particular businesses. An even playing field will ultimately make our city a better place to live.

Breaking news update: DeMaio won the endorsement of the GOP this morning with 71% of the vote. There may be hope for the party. Love Richard Rider's tweet on the subject.

Unemployment Report - Some Good News

This month's jobs news from the administration is that unemployment remained steady at 8.3%. Of course this isn't being trumpeted as good news the way last month's numbers were. However, the news is actually good for the first time in a long time. I have stopped believing the official unemployment numbers and concentrated instead on labor force participation. The participation rate is easier to calculate, harder to manipulate and is a better picture of economic health. No matter how you slice it, the people who are working have to produce the goods and services for those who are not. Even if those who aren't working are living off of their savings or government checks, the equation doesn't change. (Calivancouver might help me with the nuances of imports in this equation, but the theory is correct in the aggregate.)

US Labor Force Participation Rate Chart by YCharts

We had a slight uptick in participation rate last month, but as you can see the overall trend is quite grim. It will take many months of improvement before we can say that the economy is really healthier from a jobs perspective. What saved GDP growth in 2009 and 2010 was the increase in productivity. Even as workers lost jobs, businesses made huge leaps in productivity per worker, probably by shedding the least productive workers. (That is not an indictment of those laid off, they may have been the least productive because they were stuck in a factory that lacked modern tooling or had energy inefficient equipment.) Now, the productivity gains have tapered off, and total employment is not increasing. Hard to see how the economy can return to normal growth of 2.5% under those conditions.

Weekend Music Chill

I am getting to like this band more and more, from Akron, Ohio, here are the Black Keys:

That's Why They Aren't Calling It a Default - UPDATE: It's Official

I earlier had said that the Greeks were essentially defaulting by giving their creditors a "haircut." However, there has been a great reluctance on the part of anyone except Moody's and S&P to call it a default. I thought it was just political correctness and a mistaken belief that it would spook the markets if the politicians uttered the d word out loud. Turns out there's an insurers vs banksters sub-plot in this whole deal. From the Telegraph:

Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger.

Athens officials last night estimated more than 85pc of private creditors had accepted the €206bn (£173bn) bond swap shortly after a deadline expired yesterday evening. That is enough for the deal to go through, but leaves the possibility the government might have to use its controversial Collective Action Clauses (CACs).

Ratings agencies have warned they will declare a default if Greece activates the CACs, which allow the government to impose the deal on the remaining bondholders. The CACs will be used if the take-up falls below the desired 95pc but above the required 66pc.

The International Swaps and Derivatives Association (ISDA) is poised to convene again to decide if the deal amounts to a “credit event” that would trigger billions of euros of insurance.

If the event isn't called a default or "credit event" then the insurers are out billions of euros, but if its just a "haircut" then the insurance isn't triggered. This seems like a bad system, as a huge incentive is built in to game the system. Or should I say, yet one more incentive is built in to game the system.

Ambrose Evans-Pritchard calls out the whole enterprise for what it is, legal skull-duggery. He points out that the European Bank has exempted itself from losses on the Greek debt, in effect shifting debt on to other bond holders. (Governments interfering in bankruptcy's favoring certain groups, I could swear that sounds familiar.) Here is an extended quote (I don't normally like to do that, but he is very clear and its important.)

The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."

At the start of the crisis EU leaders declared it unthinkable that any eurozone state should require debt relief, let alone default. Each pledge was breached, and the haircut imposed on banks, insurers, and pension funds ratcheted up to 75pc.

Last month the European Central Bank exercised its droit du seigneur, exempting itself from loses on Greek bonds. The instant effect was to concentrate more loss on other bondholders. "This has set a major precedent," said Marchel Alexandrivich from Jefferies Fixed Income. "It does not matter how often the EU authorities repeat that Greece is a 'one-off' case, nobody in the markets believes them."

Anybody for some Portuguese bonds? So given this history and this administration's abysmal record on the rule of law, what's going to happen when Illinois or California head towards default of their bonds? I believe the class already knows the answer. But for added emphasis, we have the previous story of the U.S. Treasury guaranteeing interest on California state bonds. Just as perverse incentives are at play in the EU shenanigans, so too, will this cause the Fed to buy up state bonds should that day come. Of course, by concentrating all of the financial risk of every government entity onto the U.S. Treasury, the meltdown will be all the more spectacular.

UPDATE

The WSJ is reporting that the "special committee of the International Swaps and Derivatives Association, which rules on such matters for the credit-default" has indeed ruled that the Greek action is a default which triggers the insurance provisions discussed above.

Payouts on a net $3.2 billion of insurance-like contracts designed to protect against losses on Greek sovereign debt have been triggered, after the country forced certain private creditors into its debt restructuring who didn't want to accept the terms of the deal, a committee of dealers and investors decided Friday.

Now that the EU Central Bank has insulated itself, and we have a real life actual sovereign default, what will happen to other sovereign debt interest rates in the euro-zone? Here is what we have so far:

Math Strikes San Diego Unified

The San Diego Unified School District (SDUSD) has sent out layoff warnings to over 1600 teachers and other employees for the next school year. The math behind the problem is simple. Part of the reason for the layoffs has to do with promises made in the past with the bill coming due now. From the City Beat:

Roughly $39 million of San Diego Unified’s $122-million deficit is the result of a deal the district struck in 2010 with the San Diego Education Association (SDEA), the union that represents teachers. The teachers agreed to cut one week off the school calendar for two years (reducing pay by 2.7 percent each year); in exchange, the district agreed to raise pay a little more than 4 percent for the upcoming school year (2012-13) and another 3 percent in 2013-14 and add that week back to the calendar.

Why the SDUSD assumed that they would have the money for these pay raises in the future is unknown to me. Much of the district's funding comes from the California state government. The state's finances are not improving. Given our high rates of taxation of all kinds, I am sure that California will lag any national recovery.

The unions are resisting any concessions, of course, and seem willing to put their heads in the sand and let the layoffs roll on. Meanwhile Scott Barnett of the SDUSD considers the nuclear option, if only to get the unions to bargain in their own best interests:

“In theory,” he says, “we could not do the layoffs, which is what the union wants, but then still come to an agreement with the unions on concessions—on salary cuts and so forth—if they don’t want a trustee to take over. In some ways, I’m wondering if the unions will ever seriously negotiate if they don’t believe we are going to go under. So, it’s truly an Armageddon solution.”

If he decides to vote that way, Barnett would need to convince at least two of his four colleagues on the Board of Education to do the same—a tall order because if the unions don’t buckle, it could amount to political suicide for the board.

The district is asking for these specific concessions to avoid layoffs:

The San Diego school board has been pushing for concessions since last summer. In January, Superintendent Bill Kowba put the request in writing, calling on the teachers union and the district’s five other bargaining units to:

• Save jobs by forgoing a series of pay raises set to begin in July.

• Extend furlough days for a third year, which amounts to eliminating five school days, cutting teacher pay 2.7 percent annually.

• Pay more for health insurance for any provider except Kaiser, which would continue to be offered to all employees and their dependents free of charge.

I notice that every labor dispute includes the issue of health care costs, with employers trying to get employees to pay a greater share. This is not a sign that Obamacare is bending the cost curve downward. In reality, by mandating coverages that not everyone wants, the administration is increasing labor strife and employment costs for the whole nation.

Proof that this is about the numbers and not ideology comes from a member of the board who is also a teacher.

Trustee and math teacher Kevin Beiser [pictured] made an emotional plea to unions and district officials, urging them to find a way to save jobs.

"I am a teacher and I am going to be voting to lay off my friends," Beiser said, his voice cracking at the dais."I implore the leaders of every single group or organization in this district to come together."

The schools in the state are over burdened with all sorts of requirements and too high a staff to teacher ratio. This results in costs per student that are much higher than well run Catholic schools in Chicago by way of comparison. Further, principles are not given the freedom to manage the budget for their own schools. A quasi-market economy could be achieved if principles were given power over their own budgets, could hire and fire teachers and parents could move their kids to any school in the district they wanted to. These ideas need not destroy public schools and might save them. But like any improvement, the unions will oppose them to the death. Given the dire straits of school financing, they may get their way.

Romney's Big Night - Again - And One More Thing

Regardless of whether or not Mitt Romney wins Ohio tonight, he will increase his delegate lead. He started the day with a 173 to 76. When the delegates are totaled after Super Tuesday, I believe his lead will increase his lead by 140 delegates or more, given the proportional representation in many of the states. (A little coaching from Karl Rove on that one.) He is running a national campaign that the other candidates cannot match.

Of interest is that Sarah Palin voted for Newt Gingrich. Wonder what some former fan girls think of that? (Do I mean you Sarah?) Is Sarah Palin secretly rooting for Romney?

In other news, Dennis Kucinich, lefty extraordinaire, lost in Ohio due to redistricting to another Democrat Rep, Marcy Kaptur. I have seen Kucinich on TV a number of times and almost always disagree with his inanity but can never bring myself to personally dislike him.

And One More Thing

The media portrays the race as Romney vs Santorum, but Gingrich is closer to Santorum than Santorum is to Romney in the count. From the RealClearPolitics delegate count site:

Romney - 404
Santorum - 161
Gingrich - 105
Paul - 61

Romney remains at 55% of the delegates available so far.

Sorry You Took Offense - But We're Tired of Paying for Your Bad Behavior

On Twitter, I got sucked into a debate on the intersection of government mandates and religion which got started because I objected to the hypocrisy of advertisers dropping Rush Limbaugh while continue to sponsor left wing hate speech of Ed Schultz, et al. Somehow the requirement to force insurers to cover contraception, even if their customers, like Catholic institutions, objected, got equated to the use of "In God We Trust" on U.S. coinage which might offend some atheists. (I won't discuss my moral objections to FDR being on the dime.) This is why twitter isn't such a good platform for discussions of this nature.

First, the federal government is granted a monopoly on certain activities. Coining money is one of them. National defense is another. Defending the border would be a third, but don't get me started. The manner in which the government carries out its constitutionally mandated duties is bound to offend someone. Failure to use the traditional phrase, "In God We Trust" would offend far more people than its inclusion. I argue that the health care regulation by the federal government is not required constitutionally, is not wise and certainly did not have to be crafted in a manner more reminiscent of commissars used to producing five year plans.

Second, there is a constitutional test when the government intrudes on the rights contained in the Bill of Rights, called "compelling state interest." The rights enumerated in the first ten amendments to the Constitution are not unfettered. However, when the government intrudes on them, it must demonstrate that a compelling state interest in somehow restricting the right. In the most famous example, the compelling state interest of public safety restricts one's right to yell fire in a crowded movie theater. When one considers contraception, no such compelling state interest exists. Birth control is not terribly expensive in the first place and is a normal and expected expense. Including normal and expected expenses in insurance is a bad practice in the first place. Some of those arguments are repeated here:

1. Insurance that covers known and expected expenses end up causing those services to be delivered at higher cost because of administrative expense and lack of price competition. This is true of contraception.
2. Even though the goal of the bill was to reduce the cost of health care, mandating coverage of routine services drives up the cost.
   
3. The purported goal of providing access to contraception is a smoke screen. Birth control isn't outlawed in the U.S. Poor women who can't afford it, aren't in employer sponsored health plans.
   
4. It's unfair. The elderly, gay and infertile pay higher premiums. "Let's mandate that every time a government official says that the government is going to "help" some category of voter, he or she has to say who they are going to hurt in the same sentence. Because it has to be someone."

As the above list shows, there is no compelling state interest in forcing individuals and institutions to violate their consciences by forcing them to pay for such coverage.

So, sorry, there is no moral equivalence between the mandate and "In God We Trust." Further, we will find that as government intrudes more and more in our personal economic choices, it will intrude more and more on our personal ethical and moral choices. Sandra Fluke's personal behavior, however ridiculous, was of no interest to me until she asked me to subsidize her dementia through my insurance premiums. Further, I'll bet big bucks that she is in favor of single payer, that is government paid, health care and would be in favor of the taxpayers subsidizing her "need" for birth control. Sorry, since I get stuck with the tab, I have the right to ask her not to have sexual relations outside of marriage. I didn't bring it up, she did.

I think this goes to the crux of why the benighted slobs of flyover country are in an uproar. We are tired of paying for the stupidity of other's bad behavior. Alcoholics get paid for life with SSDI. Government employees spike their pensions in the last year of employ. Illegal immigrants use the emergency rooms of our hospitals after dehydrating in the desert. In some cities, addicts are offered free needles. You might argue that there is some cost savings in that list, but we doubt it, because it only encourages the others. Meanwhile the people who work hard and pay their taxes are expected to shoulder the burden of people of whose behavior we disapprove. Given the chance to blow off some steam about the matter, a little bad language might slip out. So we're f***ing sorry if some leftys took offense, but we've been offended for a lot longer.

Failure of the Stimulus

Economist John Taylor sums up why the stimulus had little effect on the economy. (H/T The Grumpy Economist, John H. Cochrane.)

In the case of the 2009 stimulus package, there was also an attempt to increase significantly government purchases of goods and services. But the evidence is that this attempt largely failed. A special satellite account produced by the Bureau of Economic Analysis shows that federal infrastructure investment—at the peak quarter—increased by only .05 percent of GDP as a result of the stimulus and federal government consumption by only .14 percent.

While state and local governments received substantial grants under the 2009 stimulus, a statistical analysis by John Cogan and me shows that they did not use these grants to increase their purchases of goods and services as many had predicted. Instead they reduced net borrowing and increased transfer payments. Even with balanced budget laws, state and local governments can borrow for infrastructure, and they borrowed less on a net basis during the stimulus period, while they put additional funds into financial assets.

So there you have it, all we have to show for the stimulus is a huge increase in federal debt, which the states chose to spend reducing borrowing and using the money to pay for welfare, unemployment or other transfers. The federal government's own bureaucracy is the main reason it can't spend. Even if you give money to one agency to spend, two others, one of them being the EPA will prevent the spending. By the way, people who received one time tax rebates also didn't spend the money, but reduced debt or increased savings. All the stimulus did was to shift money around in the economy, but certainly it did not change aggregate demand as is claimed by the administration.

Birth Control Stupidity

Rush Limbaugh has apologized for name-calling against the female law school student who said she was having so much sex during her college years that she was going broke paying for birth control. (No link love for either.) That she would admit this in Congressional testimony, while under oath, without any apparent embarrassment, says more about our country than anything Rush said subsequently.

Its been quite the brouhaha over the matter, with the Democrats yelling stupid talking points like: it prevents abortions and reproductive rights; and too many Republican uttering the nonsense that the government is paying for birth control. Lost in the shuffle is why the heck can't insurance companies offer a mix of coverage that their customers might actually want. My local grocery store recently added arugula to its vegetable line up; but under the Democrats argument, if Michele Obama urged the Secretary of HHS that this was a great idea, every supermarket would have carry the vegetable. And under the mandate theory of interstate commerce, nothing prevents Washington DC from dictating every single economic choice Americans make.

This is why I turn off the TV every time I hear bloviation on this subject; everyone is missing the point. It's the freedom, stupid.

Someone Finally Admitted It - Greeks Default

I have been saying for some time that the Greek debt situation is just a slow motion default, but no one wants to call it by its true name. KT alerted me to this gem about Moody's and S&P's view of the matter:

Moody’s dropped Greece’s rating to C from Ca, saying in a statement that investors who participate in the nation’s debt exchange will get about 70 percent less than the face value of their holdings. The deal constitutes “a distressed exchange, and hence a default,” the New York-based rating company said.

The downgrade follows Standard & Poor’s decision on Monday to lower Greece to «selective default» after the announcement of the plan for investors to trade their bonds for new securities. The swap will reduce Greece’s 200 billion euros of privately-held debt by about half if all investors participate.

Haircut my a**. Investors are unlikely to get even the 70% promised.

My Support for Romney

Among tea party supporters, much has been made of Mitt Romney's various faults. The latest is a 2009 Op-Ed piece for USA today regarding health care. The offending language? Mr. Romney, in describing what was good about his Massachusetts plan:

First, we established incentives for those who were uninsured to buy insurance. Using tax penalties, as we did, or tax credits, as others have proposed, encourages “free riders” to take responsibility for themselves rather than pass their medical costs on to others. This doesn’t cost the government a single dollar.

For the record, I deeply disagree with that approach. Those who don't get health insurance should be allowed to make a rational choice for their situation, but held accountable when they end up in an emergency room. But I digress.

The real issue is who is the best candidate to defeat Barack Obama and as a result repeal the damage he has done through Obamacare. That end requires two results, the first of which is Obama's defeat. One might argue that Romney won't repeal Obamacare if he is elected, but we know this for certain; if Obama is re-elected the PPACA won't be repealed.

Neither Santorum, Gingrich nor Paul appear to be as electable as Romney to me. They all have serious deficits, but are to be admired for their perseverance and presenting their alternatives to the President's policies. I have said before that there are other candidates that I wished had run, but they did not. At a time when the country is in crisis and needed its best to step forward, regardless of their personal calculus, they chose to remain on the sidelines.

Mitt Romney is by all accounts a decent and honorable man. Please see Word Warrior of So Cal's article, we could certainly do worse. Running for President is grueling and difficult and not for the faint of heart. I am supporting Mitt Romney because he is the best remaining serious candidate. Faint praise perhaps, but I consider the President's policies so dreadful, that Romney is a shining exemplar of constitutional rectitude by comparison.