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Category: Economics

What is a Reagan Conservative?

by Jessica Prol
February 1, 2012

Everyone’s grabbing at the Reagan mantle these days.

Under the Wikipedia entry “What would Reagan do?” one can find the following summary:

The phrase on occasion has been used by iconoclastic conservatives to claim the mantle of Reagan as they criticize mainline conservatives, by some liberal commentators as a way of chastising Republicans whom also they believe fall short of Reagan’s ideals and also by non-partisan public policy organizations that seek to emulate aspects of Reagan’s leadership.

But one Reagan historian doesn’t find that surprising at all. Professor and author Paul Kengor notes that Reagan won the presidency in 1980 by defeating an incumbent in a landslide, winning 44 of 50 states, and then got reelected in 1984 by sweeping 49 of 50 states. Few presidents enjoyed such decisive success at the ballot box and, more broadly, in changingAmerica and the world for the better.

Tomorrow, Dr. Paul Kengor will address the question, “What did Ronald Reagan believe?” Or, even more specific: What would Reagan do if he were president right now?

Dr. Kengor will lay out the underlying thinking that formed the basis of Ronald Reagan’s political philosophy and the policies (foreign and domestic) that he pursued. Dr. Kengor will share what he calls his “Reagan Seven;” that is, seven beliefs that undergirded Reagan’s actions as president and as a public figure. These core principles get us closer to the crux of what Ronald Reagan’s conservatism was about, and what his GOP emulators today might take to heart.

To RSVP for tomorrow’s event, click here: What is a Reagan Conservative?

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Demography Is Economic Destiny

by Rob Schwarzwalder
September 28, 2011

“The cost for businesses to buy health coverage for workers rose the most this year since 2005 and may reach $32,175 for a family in 2021, according to a survey of private and public employers.”  So reports Bloomberg News.

This is not news any family wants to read.  The last thing our recession-bound country needs are rising health care costs, particularly when we know these costs will be augmented dramatically should the Obama health care plan go into effect.

Buried within the Bloomberg article is a story that is underreported but finally seeping-out into the mainstream press: “Contributing to the rise in premiums are … fewer young and healthy people in the insurance pool.”  This assertion is being made by the respected insurance association president Karen Ignagni, but it is verified by cold data.  The Federal Bureau of Labor Statistics projects the following:

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Articles of Faith

by Rob Schwarzwalder
June 14, 2011

Barack Obama and his colleagues in the enterprise to manage the American free enterprise system believe that government knows better than the private sector how to create jobs. This is an article of faith with the Left. As the President said in an interview on “The Today Show:”

What we have to do now, what this Jobs Council is all about, is identifying where the jobs of the future are going to be. How do we make sure there’s a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing into those places with the greatest opportunity? We are on the right track. The key is figuring out how do we accelerate it.

No: Government doesn’t have to figure this out — those who create jobs do. Government needs to remove itself substantially from the equation and allow open markets to determine whom to hire, for how much compensation and benefits, and what kinds of goods and services to produce. This is the very essence of the American economic experiment, one that has led to greater benefits for more people than any other system of finance, production, and income in history.

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Deficit Deception: Don’t Bank on Social Security: A Primer in the Manifest Phoniness of the Social Security System

by Rob Schwarzwalder
April 12, 2011

According to the Congressional Budget Office (CBO), the fiscal year 2010 deficit was $1.3 trillion.  If the roughly $700 billion from Social Security had been kept in its own so-called “Trust Fund” and, as a result, subtracted from federal general revenues, the deficit would have been more than $2 trillion.

Instead, as economics writer James Pethokoukis observes, monies supposedly dedicated to Social Security are used as part of a fiduciary “shell game” to “mask the true depth of the budget deficit.”

How can Social Security and the federal government get away with this?

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Portrait of an Abortion Zealot: Glimpse of Obama in the NYT

by Cathy Ruse
April 11, 2011

In the midst of the budget debate last week an important premise was planted:  That President Obama is willing to risk a lot, and lose a lot, in order to keep the federal spigot open and tax dollars flowing to Planned Parenthood.

The New York Times report on the budget negotiations included this gem:

At one crucial moment in the game of chicken over a looming shutdown of the United States government, President Obama and the House speaker, John A. Boehner, faced off in the Oval Office. Mr. Boehner, a Republican heavily outnumbered in the room by Democrats, was demanding a provision to restrict financing to Planned Parenthood and other groups that provide abortions. Mr. Obama would not budge.

“Nope. Zero,” the president said to the speaker. Mr. Boehner tried again. “Nope. Zero,” Mr. Obama repeated. “John, this is it.” A long silence followed, said one participant in the meeting. “It was just like an awkward, ‘O.K., well, what do you do now?’ ”

That meeting broke without an agreement. But while Mr. Obama may have held tough on the abortion provision, he and the Senate majority leader, Harry Reid, had already made a broader concession — agreeing to tens of billions of dollars in spending cuts that would have been unthinkable had Republicans not captured control of the House from Democrats in midterm elections last year.

Keep in mind, Mr. Obama wasn’t protecting a right to abortion, but something even more radical:  the right of America’s largest abortion provider to reach into our pockets!

Planned Parenthood has almost one billion dollars in net assets and $737 million in reported revenues, not counting the $363 million from taxpayers.   Isn’t that a special favor for “Big Business”?

And what a business.  From its most recent report we learn that Planned Parenthood clinics aborted 332,278 American children, about the same number of people who populate the city of Cincinnati. (For more important facts on Planned Parenthood, see this wonderful piece by Susan Wills)

The budget negotiations revealed, again, President Obama’s abortion zealotry.  We have the Republicans congressional leaders to thank for that.  As my colleague Tom McClusky asks:  “Who is the hard liner on abortion?”

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On Maryland’s Eastern Shore — Plow Days

by Robert Morrison
April 4, 2011

It’s been a dreary winter here. Visiting our son on Maryland’s Eastern Shore, where he recently graduated from Salisbury University, we’ve traveled through gray and frozen farmlands. Bordered by the Atlantic Ocean and the Chesapeake Bay, the Eastern Shore is flat, interrupted only occasionally by rivers and inlets. But when spring comes, the farms come alive again. This weekend, we visited the Mount Hermon Plow Days. Driving to Salisbury, we passed through emerald fields that reminded my wife and me of the western part of Ireland.

Spring plowing is an ancient ritual in farm country, but what makes this event unusual is that it’s still done with horse- and mule teams. With the notable exception of Amish country, American farms were long ago mechanized. I asked farmer Gaylon Adkins about this. It was Gaylon’s farm that was the location for Plow Days. He joked, saying if diesel fuel goes much higher—it’s at an historic peak—more American farms may have to resort to mules. “A bale of hay is still a lot cheaper than a diesel at $4 a gallon.”

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Book Review: The New Holy Wars: Economic Religion vs. Environmental Religion in Contemporary America

by Eliza Thurston
January 31, 2011

Economists of the twentieth century looked upon the depravity surrounding them and pinpointed the source of this sin: material shortages. By promoting the development of financially profitable natural resources, progressive economists believed this sin could be erased. A century later, however, this economic religion is suffering and as Robert Nelson’s The New Holy Wars: Economic Religion vs. Environmental Religion argues, it may well be on its way out. As environmentalist values continue to permeate public policy, economic arguments are forced to reckon with a whole new ethical framework. Nelson’s new book offers a fascinating interpretation of this dilemma. By examining the fundamental tenets of both economics and environmentalism The New Holy Wars provides a fresh perspective on one of the most debated issues of our time.

The New Holy Wars proposes that at their cores, both environmentalism and Western economic theory are informed by Judeo-Christian beliefs. However, the theological underpinnings of these disciplines have been “remapped” to form secular versions of Christianity. Taking this a step further, Nelson argues that the clash of these two competing secular religions represents the “most important religious controversy” in America today. It is a startling proposition for which Nelson presents a convincing case. By framing the environmental debate in spiritual terms he makes sense of the intensity with which both sides promote their worldviews. At the same time The New Holy Wars digs beyond the rhetoric to unearth those presuppositions which are essential to understanding both sides of the debate.

Perhaps most intriguing is Nelson’s treatment of environmentalism. Nelson argues what few practitioners are willing to admit—the environmentalist worldview is very much a religious one.   With clarity and perception he explores the Protestant (specifically Calvinist) underpinnings of the movement. Pointing back to the writings of John Calvin, Martin Luther, and Jonathan Edwards, The New Holy Wars shows how key components of Calvinism have been transformed under the guise of environmentalism. Nelson illustrates how the movement’s jargon speaks volumes about its philosophical commitments. Steeped in the language of moral urgency, human depravity, individualism, and asceticism that marked much of the early reformed tradition, environmentalism is not unlike its more traditional religious counterparts. But Nelson is careful not to take the association too far. When Jonathan Edwards looked upon the Book of Nature he was awed by God’s glorious and omnipotent hand in creation. In marked contrasted, John Muir responded to the same beauty with transcendentalist adoration that bordered on pantheism. For Muir and the descendents of his preservationist movement, Nature became the ultimate recipient of their worship. And herein lies what Nelson recognizes to be a serious flaw in environmental theology: its failure to offer an adequate substitute for the “loving and redeeming Christian God” who had been lost.

While The New Holy Wars does not offer a solution to the economic-environmental debate, it does provide significant insight into the issue. Nelson’s stimulating case for the role religion plays in the economic and environmental philosophies dominating current public policy is bound to challenge his readers. Those seeking to equip themselves for today’s challenges should pay heed to Robert Nelson’s work.

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Protesting Too Much: The Evangelical Left Doesn’t Get Capitalism – and Doesn’t Want To

by Rob Schwarzwalder
December 16, 2010

Poor Jim Wallis is almost beside himself.

In an article published in The Huffington Post, Wallis’ class warfare rhetoric pours forth without stint or measure, spilling over upon those of us who have the audacity to believe that when a person earns money legally, it should not be unduly confiscated by the government.

Here is a sampling of Wallis’ careful, nuanced, ruminative, above-the-fray language:

  • “higher tax rates on the very rich”
  • “the very wealthiest Americans”
  • “Goldman Sachs traders”
  • “hedge fund gamblers”
  • “a handful of very rich people”
  • “There is socialism in America, but it’s only for the rich.”
  • ” … fighting the people whose greed, recklessness, and utter lack of concern for the common good have led us into this terrible crisis”
  • “casino gamblers on Wall Street”
  • “More tax breaks and benefits for the very wealthiest people in America is not only bad economics and bad policy; it is fundamentally immoral.”

Anyone for the barricades?

These huzzahs of indignation, full of stereotyped Leftist boilerplate, reflect either ignorance of how the economy grows or else a bitter ideological conviction that wealth is wrong and that the wealthy are ontologically evil.

Neither proposition is appealing, or convincing. After two years of massive federal spending and micromanagement of the economy (to the point where a President of the United States actually fired the head of General Motors), job losses have climbed and we are now facing the prospect of actual deflation.

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Watch Our Interview with Jay Richards

by Carrie Russell
December 10, 2010

On December 1, 2010, Jay Richards, author of “Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem” talked about his book and how capitalism is not a problem in dealing with the current state of the economy.

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Watch the Recap from FRC’s Family Policy Lecture

by Carrie Russell
November 18, 2010

Yesterday, FRC had a family policy lecture called, “The Puritan Gift:  Reclaiming the American Dream Amidst Global Financial Crisis.”  We had the opportunity to sit down with William Hopper to discuss “The Puritan Gift.”

To learn more about our upcoming Family Policy Lectures, click here.

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Vote Yes on Slots? Here are some Why Nots

by Robert Morrison
October 13, 2010

The billboard promised me “Better Schools” if I voted for Question A. Who doesn’t want better schools? I’m ready to vote YES on Question A as soon as I get to the voting booth.

But, wait a minute: if Question A is really for better schools, a little homework might be helpful. Ah, so it turns out that Question A will allow the State of Maryland to put slot machines in the Arundel Mills shopping center.

Hmmm. What’s that got to do with better schools? Will the kids be able to play the slots at lunchtime and learn more about probability to improve their math scores? If they really learn about probability, they’ll learn that gambling is a tax for people who didn’t study math. Maybe the teachers will be able to supplement their income with some one-armed banditry after school hours. That might ease the pressure on the state budget. But we’ll have to lay out more money for police.

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Is There a War Between Social and Economic Conservatives?

by Jared Bridges
September 24, 2010

Below is video for panel held today at FRC headquarters with Ross Douthat, Lawrence Reed, and Bob Patterson:

Below is the lowdown, and you can find embed code for the video and an audio download here:

Are social and economic conservatism at odds? According to political journalists Jonathan Martin and Ben Smith, … the battles over morality-based cultural issues such as gay rights, abortion and illegal drugs that did so much to drive the conservative movement and dominated the political conversation for more than 30 years have abated, giving way not just to broad economic anxiety but to a new set of emotionally charged issues. (Politico, August 20, 2010 )

Are they right? To answer that question, Family Research Council is hosting an important symposium on the relationship between economic and social conservatism featuring three of the nation’s leading observers of the political scene.

New York Times columnist Ross Douthat, formerly a senior editor at The Atlantic, has written extensively about religion, family, and public life. Douthat is the co-author, with Reihan Salam, of Grand New Party: How Republicans Can Win the Working Class and Save the American Dream (Doubleday, 2008).

Lawrence Reed is president of the Foundation for Economic Education and formerly led the Mackinac Center for Public Policy. Under his leadership, the Mackinac Center emerged as the largest and one of the most effective and prolific of over 40 state-based free market-oriented think tanks in the country.

Bob Patterson is a adjunct research fellow at the Howard Center for Family, Religion & Society of Rockford, Ill. and editor of The Family in America, which recently published his important article, “Fiscal Conservatism is Not Enough: What Social Conservatives Offer the Party of Lincoln.”

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Reich Redux

by Rob Schwarzwalder
September 9, 2010

Readers of my occasional contributions to this site realize I have written several times about the going economic commentary of former Clinton Labor Secretary Robert Reich.

I do this out of no personal animus: By all accounts, Mr. Reich is a lively, warm, and indisputably intelligent man. However, he is a man whose economic misunderstandings border on the fabulous – fabulous in the literal sense, the sense in which Gulliver’s Travels was fabulous. Absurd, gigantic, the stuff of satire. And just plain wrong.

Last evening, during his weekly “Marketplace Radio” commentary, Mr. Reich commented on the President’s plan to provide tax reduction for businesses. Mr. Reich was intellectually apoplectic, reduced to explaining his understanding of the rudiments of the American economy:

“The reason businesses aren’t investing in new plants and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity.”

Well, I’ll grant him this: capacity is related to productivity. However, capacity exists because capital is inaccessible (see below). And then, Mr. Reich persists:

“Obama’s proposed corporate tax cuts won’t generate more jobs, because they won’t put any more money in worker’s pockets … Obama’s whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy’s biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.”

Two broad observations:

(1) Mr. Reich argues that we should put more money in worker’s pockets so they will spend more and thereby foster greater demand and thus stimulate corporate output, which means new hires and more jobs.

As usual, Mr. Reich is wrong. Most of the “workers” to whom he refers already pay, at best, modest taxes. Although I strongly support tax reductions for virtually everyone who pays them, the fractional amount of money a “tax cut for the working lower-income” (not quite the same ring as “tax cuts for the rich,” but more accurate) would put in their pockets would do little to induce economic growth.

Or perhaps Mr. Reich is thinking of some kind of direct federal payment to workers, of having the Treasury Department fabricate yet more money and dispense an arbitrary but politically potent amount of it to a favored group. Naturally, this would create more federal debt and serve as an at-best temporary infusion of capital into the economy. Sort of like a fiscal heroin injection.

Here’s a better idea: If we lower taxes on corporations and provide incentives (e.g., making the R&D tax credit permanent, as Republicans have long advocated and which the President now suggests) to enhance innovation and improve America’s global competitiveness, companies will begin to hire more employees (i.e., “workers,” in Mr. Reich’s parlance). These people will then start paying taxes, buying things of all types (from new cars to groceries) and thereby stimulate the market through – wonder of wonders – the private sector itself!

(2) Mr. Reich asserts that President Obama wants corporate tax reductions to lower the cost of capital.

This is part right, but misses the larger point. Corporate tax reduction encourages investment, productivity improvements, and frees up capital itself. A business that is not growing cannot access capital. A business that is growing – and private sector growth happens, in large part, when the tax burden is not excessive – creates jobs, eases the “plight” of those in the lower income brackets, and builds a stronger America.

Robert Reich has a marvelously mellifluous voice which is a delight to the ear. His obvious passion for people on the down-side of advantage is compelling. But he is wrong, in fact, philosophy, and policy. That’s what makes him, and his compeers in the American Left, so dangerous.

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Miracle at the New York Times, Trouble for America

by Rob Schwarzwalder
June 18, 2010

We live in a world where the extraordinary has become commonplace.

A laptop computer in a coffee shop in Tulsa can link to a climber on Mt. Everest.  We walk into a typical suburban supermarket and are faced with an overwhelming variety of every imaginable foodstuff, from 300 types of ice cream to 15 varieties of mozzarella cheese.  Intricate surgery can be performed remotely through electronic “arms.”  Finely-crafted telescopes can take us into the far reaches of a previously unexplored universe.

These things are amazing.  But this morning I am deeply gratified that I have lived to see the day when the front page printed-edition of The New York Times carries a headline that more generally would befit Rush Limbaugh’s website than the cover of the Gray Lady: “Strong Steps or Oversteps? BP Is Latest Example of Tactic by Obama.”

Do wonders never cease?

The Times cites the President’s successful effort to get BP to commit to a $20 billion compensation fund as a “display of raw armtwisting” through which Mr. Obama “has reinvigorated a debate about the renewed reach of government power, or, alternatively, the power of government overreach.”  The article concludes with this: “(Mr. Obama should) avoid painting with such a broad brush that foreign and domestic investors come to view the United States as a too risky place to do business, a country where big mistakes can lead to vilification and, perhaps, bankruptcy.”

This is only the latest episode in which the President has used the pretext of a crisis to seize power.  No one excuses whatever legal or ethical lapses BP committed in the Gulf.  Eleven men are dead, and countless gallons of crude oil continue to spew into the water around the Gulf Coast.

Yet what would Mr. Obama have done if BP had declined setting up such a massive fund and, instead, stuck to the $75 million mandated by law?  Outlawed the firm’s presence on our shores?  Filed a massive, punitive, bankrupting lawsuit?

Mr. Obama used American concerns with our medical insurance system to ram-through an unconstitutional mandate that all citizens possess health insurance, and included in his legislation provisions that provide federal subsidies to abortion providers.  Additionally, the impenetrable measure is almost incalculably expensive.

He used a recession to ram through a “stimulus” package that places the federal government in the role of doling out hundreds of billions of dollars to private industry, thereby becoming a principal source of industrial growth.  This growth will collapse, however, once the paper on which it is running crumbles in the fiscal wind.  Then what?

He leveraged a crisis in the auto industry to make two of the three largest American auto companies fiefs of the federal government, to the point of forcing one of their boards to fire its CEO.

He eliminated private-source education loans, making college students dependent on Uncle Sam for their post-secondary education.

He is seeking to push homosexuals into the military, diminish religious liberty, skewer the public understanding of abortion (by saying we must reduce the “need” for abortion – his Administration’s term of art – he insinuates that such need sometimes exists), consolidate the private financial system into a federally-run bureaucracy, and make homosexuality culturally normative.

His Treasury Department is pumping out money at an obviously unsustainable rate, placing us on the path to hyper-inflation and, thus, federal seizure of private assets to avert complete default.

Just wait until America faces a serious military emergency – say, another 9-11 style attack.  How will this President use it to advance his vision of an America where “solidarity” trumps liberty?

When America’s liberal paper of record wonders about Mr. Obama’s overreach, it’s clear something is registering with even the elites: This is a different kind of presidency, a giant step down the road to serfdom described in the 1940s by Friederich Hayek.

In 1781, Thomas Jefferson – as much a prophet as a future President – wrote in his Notes on Virginia, “Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.”  From entitlements to stimulus packages to assorted federal power-grabs, we are at grave risk of becoming a subservient people, intellectually anesthetized by the superficial veneer of government-induced prosperity and security at the cost of our liberty, prosperity, self-reliance and, most essentially, virtue.

The Bible warns us not to place our trust in princes (Psalm 146:3), and for a reason: Our confidence must be in God and, as citizens, in the pathway for public life laid out in the Constitution.

Is it?  And if it is, shall we oppose the collapse of the America we have known and love?  The answer seems clear, if only we will act on it.

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Obama Health Care Ignores Private Sector Realities

by Rob Schwarzwalder
March 26, 2010

According to Reuters, White House Secretary Robert Gibbs is unconcerned with the reports today by two leading American manufacturers that the newly enacted Democratic health system legislation will hit them hard financially.

John Deere and Caterpillar report a combined anticipated earnings loss of $250 million given the new tax provisions of President Obama’s just-imposed regime of federal health care management.  This will affect their ability to hire, promote and provide benefits.  It will affect the cost of the goods they sell and their ability to compete in domestic and international markets.  It will hurt their ability to work with subcontractors and pay for retirement benefits.

In fact, Business Week notes the business consultancy of Towers Watson estimates a loss of $14 billion in corporate profits due to the Obama health regime-change (“Obama Tax’s $14 Billion Charge Starts at Caterpillar,” March 25, 2010).

But, hey – to Robert Gibbs, all of this is worth one modest shrugging of his shoulders.  Here’s what he said on Air Force One when asked about the hit Deere and Cat will have to take due to his boss’s new medical system overhaul:

So basically, they get a subsidy and what amounts to two deductions.  They get the subsidy that’s not counted as income, then they get to write off the spending. This bill, our bill, simply closes the loophole.

Similarly, Commerce Secretary Gary Locke responded, “The rules…and a lot of the regulations on how this will affect large businesses haven’t even been published yet.  So for them to come out, I think, is premature and irresponsible.”

I see: The Obama people are just closing tax “loopholes,” but it’s irresponsible for companies to estimate what the de facto taxes will cost them.  How silly – a company ponders the affects of a tax hike and it’s irresponsible for letting its investors know its cost estimates.  Guess I missed that lucid economic principle somewhere along the way.

Ask the families of people who are about to lose their jobs because President Obama and his congressional allies couldn’t care less about the private sector.  Many of the President’s senior aides and appointees (including Mr. Gibbs) have never held jobs in the open market.  They have never actually created a job, met a payroll, worried about opening a new store or burned the midnight oil experimenting with a new product.

In showing contempt for individual and corporate taxpayers, Robert Gibbs and Gary Locke reveal the true heart of the current Administration: Elitist, dismissive, arrogant and fundamentally ignorant of the American system of entrepreneurship, enterprise and market-based competition.

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Physician, Heal Thyself!

by Robert Morrison
March 4, 2010

President Obama was surrounded by doctors and nurses in white coats for the second time this week. Yesterday, he was on national television, pumping for his health care plan. But before that video performance, he was at the National Naval Medical Center in Bethesda. He went there for his first physical as President.

I sure have to hand it to him: He’s practicing what he’s preaching. Bethesda is government health care. I should know: my life was saved there by a top-notch Navy doctor in 1985. I had been stricken with viral meningitis, an often fatal illness.

My heart went out to the President when the report on his physical exam came back. He is having a hard time quitting smoking. This is a hard addiction to shake. I quit in 1977. Cold turkey. Haven’t had a cigarette since. Or a cigar. Or a pipe. (I found through many attempts to quit that going to a cigar or pipe just whetted the appetite and sent me right back to cigarettes.)

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Does “FTC” Mean “Clueless” ??

by Chris Gacek
December 17, 2009

With all the big health care news going on this week one could not be blamed for missing the news that the U.S. Federal Trade Commission has filed suit against Intel, the computer chip maker, for anti-competitive practices.   This news left me scratching my head.  Of course, it is possible that Intel is crushing its competitors with horrible business practices, but, as the Wall Street Journal notes, it isn’t so obvious.  Chip prices decrease now at staggering rates, and it is not clear that Intel is selling their chips below cost, the lodestar of anti-competitive behavior.

More to the point is this: has anyone at the FTC noticed that we are in a crushing recession and that Intel is one of the very few bright spots in the American economy?  I guess not.   To an outsider Intel appears to be engaged in fierce competition while fighting off regulators using antiquated anti-trust tools.

The Europeans have recently fined Intel a massive amount, but this strikes me as being part of a emerging trade pattern in which EU authorities use their trade laws to cripple America’s leading tech companies.  Of course, the U.S. government appears oblivious to this strategm.   Microsoft has been the most visible punching bag for the Euros.

Bottom line: perhaps, our government would do better laying off our job creating industries and firms until the unemployment rate — the “U-6″ rate which is the broadest — goes from 17% to half that amount.  How’s that for a deal?

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The Fatuous Job Summit

by Rob Schwarzwalder
December 4, 2009

The fact that President Obama will hold a “jobs summit” to figure out how jobs are created is perhaps the saddest commentary of all on the farce that is about to begin. It seems like good timing as our unemployment rate is over 10 percent, and well into the double-digits in some parts of the country.

Yet having a job creation debate at the White House is disheartening. Shouldn’t an American President have some sense of how our market-based, competitive economy works?

More pointedly, the “summit” will produce no noticeable change in the policies of an Administration woefully and aggressively against the essential principles of the greatest jobs engine every designed or implemented, a free enterprise system based on property rights and capital formation.

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How to Create Jobs

by Rob Schwarzwalder
November 13, 2009

According to ABC News, President Obama is now “calling for a summit meeting of experts to find ways to jump-start job creation. And a jump-start is needed.”

This comes on the heels of a new report that the federal deficit “hit a record for October as the new budget year began where the old one ended: with the government awash in red ink,” as the Department of the Treasury warned that “the deficit for October totaled $176.4 billion, even higher than the $150 billion imbalance that economists expected.” Note: this is the deficit for a single month – not a calendar year.

Mr. President, here are some ideas distilled from leading economist dating from Adam Smith through the current day: If you want to create jobs,

(a) Quit spending the country into economic oblivion, farming out our debt to foreign creditors who will someday soon call in their loans and damage our nation’s economy. If you stop overspending, you will also ameliorate the growing fear of many investors that we are on the verge of monetizing the debt, simply printing worthless bills that will hyper-inflate our currency. Fiscal discipline, if dramatic and real, will energize the markets.

(b) Cut taxes – on individuals and families, on major firms and S-corporations. Cut the dividend tax. Cut the income tax. Cut capital gains taxes. Cut, and cut some more.

(c) Reduce and simplify a vast federal regulatory apparatus that confuses and cripples business growth.

(d) End the government-mandated “health care reform” madness, which will further impose on our companies and employees growing fiscal, legal and regulatory burdens. Target those things in our system that don’t work and offer market-based incentives and tax reforms that will enable insurance providers to better serve the underserved.

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More on Health Care & the Constitution

by Rob Schwarzwalder
November 13, 2009

Sen. Daniel Akaka is probably the quietest person in the U.S. Senate. He is known as a kindly man who votes faithfully but is not a vocal or activist member of the “upper body.” But this week, when asked if there is a constitutional basis for the Democratic health care bill, he candidly said, “I’m not aware of that, let me put it that way.”

Good way to put it, Senator, because your lack of awareness indicates that at least you know your Constitution well enough to recognize that it contains no basis for this latest exercise in federal elbow-throwing.

Sen. Akaka’s colleague Sen. Jack Reed (D-RI) could learn from him. Sen. Reed was asked by a reporter “where in the Constitution does Congress get its authority to mandate that individuals purchase health insurance?”

Reed responded, “I would have to check the specific sections, so I’ll have to get back to you on the specific section. But it is not unusual that the Congress has required individuals to do things, like sign up for the draft and do many other things too, which I don’t think are explicitly contained (in the Constitution).”

Sen. Reed is an undoubted patriot, a former Marine who served honorably in Vietnam. So it is disappointing that someone of his political stature would equate the draft with an individual federal mandate of citizens for non-military purposes. To what “many other things” is Reed referring?

In the 1918 Arver v. United States case, the Supreme Court ruled that the draft is constitutional because it is essence an implementation of the Constitution’s provision for the federal government to create a standing army (Article I, Section 8). Men (and women) are needed to defend the nation, and during times of national crisis conscription might be needed.

The Democratic health plan (H.R. 3962), passed last weekend in the House, goes well beyond any authority conferred on the federal government, through our written Constitution, by “We, the People.” In fact, the congressional Joint Committee on Taxation (JCT) wrote to the House Ways and Means Committee that “failure to comply with the terms of the law that the Democrats passed last weekend could put people in jail. The JCT told the committee that anyone who decides not to maintain “acceptable health insurance coverage” or, absent that, pay the individual health insurance mandate tax of about 2.5 percent of income, would be liable to large fines or prison sentences” (The Washington Times, “Tax Penalties and Prison,” by Donald Lambro, November 12, 2009).

The JCT went on to write that “H.R. 3962 provides that an individual (or a husband and wife in the case of a joint return) who does not, at anytime during the taxable year, maintain acceptable health insurance coverage for himself or herself and each of his or her qualifying children is subject to an additional tax.”

This mandate is unconstitutional in its own right and also poses a serious threat to the fundamental liberty of ordinary Americans: When the federal government requires specific economic activity (in this case, the purchase or acceptance of a health insurance plan) and threatens to impose “fines or prison sentences” for non-compliance, our essential freedom as citizens is eroded and our path into coerced political subjection all the more obvious – and dangerous.

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