Economy & Budget

Unfair Rules

This country is about equal opportunity, not equal outcome. How many times have we heard that? It's the American way to give everybody the same fair chance at success. What a wonderful theory.

So let's talk about all the equal opportunity here in the U-S of A, shared by rich and poor alike: 

Them That Got v. Those That Don't

Let's talk about our economic system. More and more it is ruled by a Tyranny of the Quarterly Report. Profits über alles. No longer is business governed by anything more than the amoral push to constantly increase earnings and reduce expenses. That has become the only way top executives can keep their jobs and their obscene compensation.

And how do they do that? Let's see: They can "improve productivity," which often means cutting jobs. They can reduce expenses, which often means cutting jobs and product quality. They can move their operations to a Third World country where they can pay near slave wages, and leave their workers and communities in the dust, as well as the consumer, who is less likely to be protected from dangerous goods. 

A Strong Economy, A Weak Stomach

“This is far and away the strongest global economy I’ve seen in my business lifetime,” Treasury Secretary Hank Paulson recently said to Fortune magazine.

People investing in the stock market would seem to agree. It broke another record yesterday, and barring unforeseen circumstances, will break the 14,000 barrier by the end of the summer.

While America hums along, the rest of the world is going like gangbusters. Most of the big growth is happening overseas, in places like China, India, Chile and even in some African countries. But we are growing too, as is Europe. A rare time when the world is growing together.

Just Asking: Top 10 Things I (Occasionally) Think About

10. The AP reports that half of the faculty of the University of Alabama will be denied Crimson Tide football tickets for the coming year. Wouldn’t it be better if a college administration really put the brakes on faculty excess by, say, denying tenure to left-wing professors who don’t really teach?

9. Speaking of left-wing professors, what will occur sooner, John Edwards going to the Hair Cuttery or the president of Duke taking ANY action against the “Duke 88” who signed hateful letters against the Duke Lacrosse players? The left wing is firmly in control of American college campuses.

8. Why so little mention that the federal deficit is projected to fall substantially again in 2007 without a tax increase? Could it be that the national media is interested in the deficit only as an excuse to raise taxes?

Deficit Politics

A small story, getting smaller all the time, is the deficit. It stands now slightly north of $200 billion, or about 1.2 percent of the gross national product. The historic rate is about 2.4 percent. In wartime, the historic percentage is much higher (for example, during the Second World War, the percentage was in the upper 30s). Take away spending for the war, and we probably would have a small surplus. Imagine what spending programs the Democrats would propose if we actually did have a surplus!

The war drives the left crazy because they want to spend the money on bigger government. When the Democrats say they want to bring the troops home, they mean that they want to bring the troops home so they can spend more of the taxpayers’ money on universal healthcare, midnight basketball, windmills and stuff like that.

Just Asking: Top 10 Things I Occasionally Think About

10.    How can liberal Democrats be so outraged about President Bush commuting Scooter Libby’s jail sentence (but not his fine or conviction), yet be so sanguine about President Bill Clinton doing basically the same thing (lying to a grand jury)  and escaping any sanction at all? Indeed, he is now the toast of the town and slated to become our next co-president. Shouldn’t a president be held to a higher standard than anyone else?

9.    If the economy is so bad, why are lines so long to buy a new telephone costing upwards of $700? Is this a great country or what?

8.    Did the concern about “too much money in politics” evaporate when Democratic candidates began out-raising Republicans in this year’s presidential campaign? 

How's That for Gratitude?

“Congress weighs end to tax break for hedge funds,” says the headline from today’s New York Times. Apparently Democrats are planning a huge tax increase on hedge-fund operators.

A story from Bloomberg News service last August said this: “Democrats are collecting more than two-thirds of the campaign donations from employees of the biggest hedge funds and buyout firms, as the party taps into one of Wall Street's fastest-growing sources of wealth.”

So, how’s that for gratitude?

It shouldn’t come as any surprise that the Democrats were going to find ways to raise taxes on most Americans. They don’t have to say anything. That’s what they do.

But these smart hedge-fund operators really deserve what they are getting from the Democratic majority that they largely delivered. 

Tax Cuts to Those Who Don't Need It

I was half-listening to the Democratic Forum broadcast live on MSNBC this morning when I heard Sen. Barack Obama (D-Ill.) say something that made me shake my head in disbelief. When discussing differences between himself and President Bush, Obama noted that the president provided “tax cuts to those who don’t need it.” Really?

I wonder if Sen. Obama is up to the task of being president of the United States based on this one particular statement. The last time I checked, the American economy has been fueled, rather than stifled, due to the tax cuts enacted by Congress and signed into law by the president earlier in his term. Did reducing the marginal rates and slicing capital gains rates stimulate the economy — an economy battered by 9/11 and fighting a war on terrorism? Let’s see, where to start? 

Congress Agrees to Keep Earmarking

Totally misreading the public mood, as always, Democrats and Republicans in the House have reached a deal to include earmarks on the 10 remaining appropriations bills that will pass after the Homeland Security bill goes through without earmarks.

The public wants earmarking stopped! It understands that rather than providing jobs, it is a device lawmakers use to stimulate campaign contributions from the grateful corporate or nonprofit recipients of this largesse. Congress should restore presidential authority to impound money and the line-item veto to fight earmarks. Those who earmark will face tougher scrutiny from the voters than they have ever faced now that the public is alive to earmarking, which consumes $64 billion every year, a healthy slice of total discretionary federal spending.

Test of Wills in the House as Pelosi’s Popularity Plummets

Look for the House to work late into the night on Friday or possibly Saturday as the new majority will encounter its first real test of wills with the minority over earmarks on three Appropriations bills to be considered on the House floor this week.

Earmarks are growing as a symbol of business as usual in the House, and Appropriations Chairman David Obey’s (D-Wis.) unwillingness to give ground to the Republicans will likely spark a huge fight. My sources tell me that the GOP has over 200 amendments prepared to force Obey to relent and open up the earmark process to public scrutiny.  Obey will likely go to the Rules Committee to force a closure of debate on the spending measures, sparking a bigger rebellion amongst the minority.

This test of wills is inevitable. The good news for staff and lobbyists is they are doing it this week, not the week before the July 4 recess. Hopefully this clash will work itself out before it becomes necessary to screw up the vacations of a lot of people in town.