What The President Should Have Said Vs. What He Actually Said About Jobs

Earlier last week we did a post that set forth some ideas on what President Obama should include in his jobs speech last Thursday and predicted what he would actually say. Would he be bold and innovative or would it be the same basic, tired political tactics that have been tried and have usually failed to live up to expectations?

Today's post will compare what he should have said and what he actually said. Unfortunately, the bottom line is that from a boldness, innovation, and courage perspective, the President came up well short of the goal line.

1) Infrastructure

As expected, the President did state that he wanted money and funding for infrastructure jobs to fix roads, bridges, dams, schools, etc. that were in need of repair, something we expected and were supportive of. However, the President's proposal came up short in two areas.

First, infrastructure spending and work done via the economic stimulus bill was woefully inefficient. According to various Associated Press investigations, thousands and thousands of government contracts were granted without competitive bidding. Half of the bridges that were repaired under the stimulus program were not in need of repairs. Powerful individual politicians in Congress snatched their share of the stimulus money and directed it to their voters regardless of whether of not the spending was actually fixing a real problem.

Millions of dollars from the stimulus plan were granted to companies that owed millions of dollars in back taxes. No where in the President's jobs speech do we get firm assurances that these atrocities have been recognized and will not happen again. He states that the money will be properly spent but we were promised that in the economic stimulus bill. As we pointed out last week, the only way to insure that this potential pot of money is well spent is to give the decision on what projects are done to the states via a block grant of money, taking Congress out of the decision process altogether.

Second, the President does not show any detail on how to pay for this increment Federal spending. He says he will unveil a plan within a week or so. Thus, his performance on this topic is an incomplete. He gave no indication of specifics like we did when we suggested reducing the Federal payroll back to 2008 levels, terminating unwanted and unneeded military projects such as the Osprey, terminating corporate welfare programs, ending agriculture subsidies, and directing high speed rail line funding to shorter term infrastructure needs.

Grade: Incomplete given the unnamed ways to fund this infrastructure spending that will be forth coming. However, worries about whether this will be another waste of money spent on things that do not need to be fixed, given the economic stimulus program, and the fact that the President has not taken Congress out of the decision making loop, continue to exist.

2) Obama Care

Ourselves, along with the majority of Americans, realize that Obama Care is an unfolding disaster. It will screw up existing health care insurance for tens of millions of Americans that already have coverage, it will significantly add to the deficit, it has created a large amount of tax and business uncertainty into the employment crisis in this country, and will not address the root causes of our escalating health care costs. Nowhere in his speech did he address this problem.

The President did make reference to the fact that we need to somehow reduce Medicare and Medicaid costs going forward in order to protect the long term solvency of both programs. He wisely wants to phase in any changes over time to ease the transition. However, he gave no indication of how he thinks we should do this, he gave no indication he has a plan to do this, and gave indication when this would be done.

Overall grade - D-. Obama Care is one of the biggest drags on the economy and unemployment today and he ignored it. The only reason he did not get an F here is that he may finally be realizing the need to reform Medicare and Medicaid, even if he does not have a plan on how to do that.

3) Tax Holiday For Overseas Profits

We suggested that the President announce that there would be a one time tax holiday for American companies that have stashed billions of dollars of their profits overseas because it is cheaper to leave those earning overseas than to bring them back to the country and get hit with a 35% tax hit. We suggested that this tax holiday be a one time deal that would be followed up immediately with a dedicated overhaul of the tax system.

Our reasoning was that it would be better to have that corporate cash sloshing around in the United States than sitting off in some foreign banks even if it was not taxed. The short term problem is jobs, not taxing overseas profits. However, in order to not train companies to wait for the next tax holiday, this would be a one time deal followed immediately by comprehensive tax reform. The President did not address this opportunity to get dollars flowing back into the country and economy.

Overall grade - F

4) Regulation - we suggested that the President terminate all Federal regulations that do not impact the health and safety of our citizens or the environment and he agreed with us in his speech. He addressed this issue, claiming that his administration had identified over 500  regulatory reforms that will free up billions of dollars over the next few years. 

However, he provided no specifics, such as the big reform we suggested, termination of the unneeded and unnecessary Sarbannes-Oxley legislation. His case would have been stronger if he had provided some concrete examples of what his administration has already done to ease the regulation overload.

He also did not address the overtly oppressive Federal government interference into individual business operations, specifically the overbearing and likely politically motivated harassment of Boeing and Gibson Guitars. This unnecessary type of government interference diverts companies' resources from business and job expansion.

Overall grade - B-. This could change if he does not follow through with the promises he made.

5) Energy

He made no reference at all to using the energy industry, and using oil and gas company resources, to expand our internal energy capacity and development. Since the country does not have an overall, longer term strategic energy plan and policy, fossil fuels will still be the major component of our energy mix for a long time.

Given that fact, it makes sense to not keep sending our wealth overseas to other energy providers when we could develop our own energy resources, again, using oil company money, not taxpayer money. Ending any Gulf drilling moratoriums, building the  Canadian crude oil pipeline, opening up drilling in the Arctic, etc. would create good, long term, needed jobs in our domestic energy industry.

Coupling that with a major initiative to develop alternative energy sources and an overarching energy strategy would cover both our long term and short term energy needs while creating a ton of jobs. The President missed this opportunity completely.

Overall grade - F

6) Education

We suggested a number of short term and long term changes in the nation's approach to education. First, given that the Federal government has dozens of independent organizations that provide severely fragmented job training services, we proposed that these dozens of job training entities be consolidated into a single, more efficient and more effective Federal job training organization, placed in the Health and Human Services Department.

This single organization would be a one stop shopping for citizens looking for training support and be a conduit between job seekers and those hiring. It would be more efficient than having the dozens of organizations that we currently have.

Long term, we proposed an initiative that would identify the root causes of our failing public schools and put together a comprehensive plan for fixing our education processes so that we stop under educating our kids relative to the rest of the world. A similar plan was laid out under the Reagan administration in 1983 but the American political class ignored those findings. As a result, our kids are not being educated as well as kids in dozens of other countries around the world.

Unfortunately, the President completely missed the needs in this category also. He made two references to education in his speech. First, he wants money to fix up 35,000 schools across the country. Second, he wants money to hire more teachers. However, if the country does not fix our failed public education processes, if we do not adopt curriculums to the current, fast paced world, if we do not improve teacher training and evaluation, etc., all the President's plans will do is have us continue to under educate our kids. Only now we will under educate them with more of the same kind of teachers in nicer buildings.

This is a typical solution from the political class. It is based on their inability to understand root causes of problems Having a nicer school building will not make for a better educated work force. Hiring the same types of teachers will not improve the learning process. We need fundamental changes to education to compete in the world economy.

None of the President's plans address this more serious problem. He just wants to hire some painters and electricians to make things look nice. The basic product, bad education results, will not change and will not positively affect job creation.

Overall grade - F

7) Taxes

We suggested that the President ask for an extension of the tax changes made last fall, i.e. the extension of the Bush tax cuts be extended for two years in order to introduce some more certainty into the tax planning of individuals and companies. From his speech it looks like he wants to extend it for another year. Not bad, but two years would have been better and provided the economy with more certainty.

In addition, the President asked for more tax changes, especially for small business. These include providing tax credits for newly hired employees and forgoing the payroll tax for a year to give businesses more cash. However, while these are positive steps, they are open for abuse (e.g. what would stop a business from firing all of its employees on Friday, hiring them back on Monday and claiming the tax credits ) and will further deplete the dwindling Social Security funding.

Their effectiveness is also worthy of doubting. Many economists have looked at similar tax programs in the past and found that unless there is a clear path to an improving economy and improving sales, a business will not likely take on new employees and assume that risk if there are still all types of uncertainty in the mix (e.g. next year's elections, Obama Care, over regulation, etc.)

The other tax area the President touched on his is unhealthy fixation with taxing the rich. The numbers prove that while taxing the rich more might be a healthy political move for some voters, the financial impact on the economy, government tax levels, and the national debt is extremely small. The President made some embarrassingly incorrect statements regarding taxing the rich in his speech that are worth reviewing:

"Warren Buffet pays a lower tax rate than his secretary." Likely a true statement since Buffet probably draws a smaller salary than his secretary. However, the President never brings up that fact that Buffet does not pay himself millions of dollars every year in salary, getting his money via legally approved other ways that minimize his tax burden. To not mention this fact is deceptive at best, a lie at worst.

"I (Obama) believe that the vast majority of wealthy Americans and CEOs are willing to do just that (pay more in taxes) if it helps grow the economy." A number of problems with this tired, cliched statement. First, the President never cites a source or research that supports this statement. He states it as fact but no data supporting its truth is ever presented.

Second, if these people are so anxious to pay more in taxes, why don't they? The U.S. Treasury Department has had a program for many years that easily allows Americans to pay more than they owe in taxes to pay down the national debt. If these people were willing to pay more, there is nothing stopping them from doing so. The fact that this program gets very little money donated to it every year reinforces the doubt that the President's statement is right.

Third, if they do want to pay more in taxes, why didn't the President challenge them to contribute to the infrastructure program he is proposing? We could name bridges and streets and dams after them as as a side benefit.

Finally, the President implies that if only these people paid more in taxes, the economy would grow significantly. Certainly not a true statement if you examine the numbers. Another Obama statement bordering on deception.

The bottom line is we need a much simplified and much fairer tax code. A tax code where the rich pay their fair share and those Americans that use the income tax process as a money maker, i.e. 45% of Americans pay no Federal income taxes, also pay their fair share. However, beyond general statements about reforming the tax code, the President's provided no details, plans, or timetable on how to do that.

Which is a shame since such a plan would remove a large amount of uncertainty and wasted economic time complying with our complex tax code. This would have freed up money, time, resources, and energies to expand our economy and hire new workers.

Overall grade - D-

8) National Debt - we have reviewed many ways to take trillions and trillions of wasted dollars out of our national debt. Many smart Americans have already done the heavy analysis and work identifying waste and redundancy in our government. The President at least gave lip service to this need and claims to have an aggressive plan ready within the week. We shall see.

Grade - Incomplete

9) Unemployment Benefits

We suggested that the President start finding a way to get out of the unemployment benefit business since every major study conducted in this area, including one done by the new head of his economic advisor team, says that providing long term unemployment benefits contributes to chronic long term unemployment The President stated in his speech that he wants to extend long term unemployment benefits, the exact opposite of what all economic studies say is wise.

Overall grade - F, based on the results of the studies cited above, the fact that as we keep extending benefits, unemployment gets stronger, and the fact that there are jobs out there. Just go to Craigslist, Snag A Job's website or other employment websites and search for all jobs in a zip code.

Jobs are out there, they may not be great jobs, they may not be in someone's field but here has to be a creative way of melding unemployment benefits with the existing vacant job piles around the country so that everyone wins. In the President's speech, status quo wins and that is a failure.

10) Trade treaties.

We suggested that the President press for the passage of trade treaties that have already been negotiated and he did.

Overall grade - A

Overall, across all components, this speech gets no better than a D- minus in boldness, originality, in-depth understanding of our root causes to our problems, and needed specifics on how to move forward. His tax ideas are standard and very tactical, with histories of varying degrees of success. His call for tax reform was hollow. His ignoring of the devastating effects of Obama Care on hiring and uncertainty is unforgivable.

His strategy for paying for this increased spending is vague and yet to be unveiled or to be determined. His removal of unnecessary regulations was tepid at best.  He missed big strategic opportunities to free up uncertainty in the private sector by ignoring the wastefulness of Sarbannes-Oxley, failing to address the opportunities in the domestic energy field, and fixing our short term and long term education process. He missed a big time opportunity to declare a one time tax holiday to get off shore corporate earnings back into our economy and linking that to overall tax reform.

If these are such great ideas, which they are not, why haven't we moved on them previously? Could it be that we have and the results has been a steady dose of 9% unemployment? There was not a creative, ingenious, or bold idea in the lot.

His speech reinforces the belief that the President is like most other politicians, they do not know how to think strategically. All of their thought processes and plans are usually very short term and tactical, rarely addressing the underlying problems. Cash For Clunkers. Cash For Caulkers. One time rebate for first time home buyers. A scattering of small business tax credits but no overall tax reform that encourages business growth. Fix up the schools and make them look pretty without long term education reform. All failed concepts, all short term, doomed tactics.

Besides not being strategic. the plans set out by the President do not remove the major road blocks of uncertainty in the economy and marketplace:

- Short term, gimmicky tax adjustments with unknown future implications and changes.
- A complex and unwieldy tax code.
- High national debt.
- High taxes at every level of government.
- Over regulation.
- Obama Care.

Until the political class fixes these problems, unemployment will still stay high and businesses will continue with their conservative "deer in the headlights" planning. Enough said.

Tomorrow we will review some of the in-depth analyses done by the Associated Press of Obama's speech along with how he would have done much better if he had just used many of the steps from "Love My Country, Loathe My Government," an approach that would have given him a strategic framework for problem solving.



Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available, at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday



Please visit the following sites for freedom:


http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/

Where Did Our Nation's Wealth Go?

I got to wondering the other day about what happened to all of our wealth. It is true that the United States still has the largest economy in the world. Our citizens, on average, are some of the wealthiest in the world. At one time, our wealth allowed us to dominate the world in so may areas include militarily, politically, diplomatically, economically, athletically, and culturally.


I am not sure I can make that statement of dominance today. One reason we may not be able to do that is we are much less wealthy, relative to our past, than we have been. Consider the many ways the government and the political class that operates it have allowed our nation's wealth to leak out of the country over time:


- Probably the biggest drain on our nation's wealth has been the political class' inability to develop and implement a coherent and strategic energy policy for the country. Despite the OPEC oi shocks from the 1970s that rocked the country and the economy, in 2011 we still have no energy policy that protects and retains the nation's wealth.


According to the U.S. Energy Information Administration, in 2010 the United States imported about 4.3 billion barrels of oil and petroleum products from other countries. These imports are needed because the U.S. economy goes through over 7 billion barrels a year. 

The political class has not found a way, or even tried to find a way, to close that gap over the decades, by either diversifying our energy sources away from petroleum or increasing domestic production to close or eliminate that gap of three billion barrels of oil. In fact, the gap has likely gotten larger since the 4.3 billion barrels of imported barrels is about twice what it was in 1980, according to the Federal government.


At $90 a barrel, 4.3 billion barrels a year roughly results in about $386 billion dollars of our wealth leaving our domestic economy annually. These hundreds of billions of dollars end up building the economies of other nations that feed our energy addiction, nations that are not always friendly to our interests or our safety.


- Another major wealth drain is due to the illegal drug market, primarily the Mexican drug cartels. According to a January 26, 2011 research paper developed by the Law and Public Policy group at the Wharton School at the University of  Pennsylvania, the Mexican drug cartels' revenue from the United States is between $35 and $45 billion a year. The majority of the revenue, according to several other sources, comes from marijuana but also includes amphetamines, cocaine and other illegal drugs.

We have seen Mexicans die by the thousands every year due to drug cartel violence. We have seen the police, judges, and government officials in Mexico corrupted by cartel money. And as a result of our politicians' forty year failed war on drugs, we have seen hundreds of billions of dollars diverted from this country into foreign gangs, who much like the oil exporting nations above, do not always have our best interests and safety in mind.

- While we have seen trillions of our wealth leak out over time because the political class has not acted and has not developed coherent strategies and plans for energy and drug addiction, the third major wealth drain has been the political class actually acting but acting poorly when it comes to military matters. We have deployed hundreds of thousands of U.S. troops around the world over the past decades, most often in ill-defined and ill-executed wars or in places where there was no need to deploy them.

We have likely spent over a trillion dollars already in Iraq and Afghanistan with no clear, concise, and defined benefit in return. Between Europe, Japan, and South Korea, we have well over 120,000 U.S. troops deployed overseas or no reason at all, at a cost of probably over $50 billion a year. In return, the economy and the American public gets no tangible benefit, another leak of our wealth pool.

- According to the Cato Institute's government downsizing analysis, the American taxpayer would save over $100 billion a year of the U.S. Department of Education was eliminated. Why should it be eliminated? Consider the following "accomplishments" of the Department:

• A recent Associated Press article indicated that almost 25% of U.S. armed forces recruits could not fulfill basic language and math skills needed to enter the armed forces.
• Another recent Associated Press report showed that upwards of 40% of community college freshmen in this country need to take remedial courses in basic subjects before they can begin their college work even though most of them had high school diplomas.
• A whole host of international student testing initiatives show that U.S. students almost always trail dozens of other countries' kids when it comes to math, language, and science skills.
• And the latest bad news, a June 14, 2011 Associated Press report showed that only 13% of U.S. high school seniors have a solid understanding and knowledge of American history.

All of which raises the important question: couldn't the nation do just as poorly and not spend $100 billion every year to do so badly? Cato has done its investigative analysis and has shown that yes, the country can change and dramatically improve its educational policies and approaches without having a Department of Education, resulting in $100 billion a year in taxpayer savings.

If we add in additional waste that we have documented, waste that exists in Medicare, Medicaid, and Social Security, we easily can see where over $200 billion a year leaks out of the productive area of the economy into the unproductive and often criminal areas of the economy.

So let's review:

- We allow about $386 billion a year to leak out to foreign oil exporters because the political class has not deployed an effective energy strategy.
- We allow about $40 billion a year to leak out to criminal drug gangs in Mexico because the political class has not deployed an effective drug addiction policy.
- We allow about $50 billion a year to leak out of the productive area of our economy because we continue to unnecessarily deploy U.S. troops around the world.
- We allow over $200 billion a year to leak out of the productive area of the economy due to an ill performing Department of Education and waste and fraud in our Federal social services programs.

If we add up these various wealth leaks out of the U.S. economy, we end up with a grand total of leaks worth about $679 billion a year. This figure does not include the more than trillion of dollars we have allowed to leak down the military drain that is Afghanistan and Iraq. It does not include the tax breaks we give U.S. companies to close domestic factories and move production to other countries. It does not include the tens of billions of dollars that illegal immigrants send back home to their countries, dollars that are not retained and spent in this country.

Thus, the $679 billion is probably a conservative estimate of how much our government and the politicians that run it allow these leaks to deplete our world and our economy every year. $679 billion is equivalent to an annual tax break for every American household of about $5,900, at a minimum. I believe that we would be much wealthier as a country if every household had at least another $5,900 a year in disposable income to spend as they see fit.

And the good news is that we would be just as safe as a nation, more economically independent, and probably raising smarter kids in the process. The steps to accomplish this wealth retention are laid out in "Love My Country, Loathe My Government," steps that address energy independence, education reform, military consolidation, and the changing of our political processes so that these processes eventually would produce elected officials that know how to fix a leak.

Until we take these steps, our wealth and our economy will die a little bit more each day, death by a thousand cuts. The problem with a thousand cuts is that eventually the leaks stop, not because they have been fixed, but because there is nothing left to leak out.




Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:

http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com

Ever Wonder Why Government has No Plan? Politicians Is Just Another Way of Spelling "Lo, It Is Panic!"

One overarching problem I have always had with the political class is that there seldom, if ever, seems to be a plan behind their madness. They seem to careen from crisis to crisis, wasting time and our freedom, but never solving anything. All of their efforts seem quite shallow, never understanding the root causes of a problem and never understanding the potential, unintended consequences of their actions, consequences that are usually bad.

In looking at the word "politicians" recently it came to me that one reason they may never plan ahead and execute a good plan is that if you rearrange the letters in "politicians" you end up with the distressing phrase, "Lo, it is panic!" No wonder they never get anything right, they are always working in a panic mode. Consider:

- At the end of the Bush administration, it appeared that the financial system of the world was going to crash. Important, supposedly smart people, in both the Republican administration and the Democratic controlled Congress had no idea the financial system was about to implode and obviously had no plan to deal with such an implosion. Recall Bush officials, Reid, and Pelosi warning us that unless the $700 billion TARP bank bailout was passed within days, the world economy would collapse. Obvious panic.

Shouldn't the political class and the government agencies it runs have had some kind of contingency plan ready for just such an event? They did not and they ended up throwing together a costly rescue and bailout package that was hastily deployed, inefficiently handled, and as we have pointed out in this blog many times, was totally unnecessary. Lo, it is panic.

- As most know, Egypt has been undergoing riots and protests over the past week or so with Egyptian citizens marching in the street demanding political changes and more individual freedom. A White House statement concerning the situation was issued last Saturday where President Obama "reiterated our focus on opposing violence and calling for restraint, supporting universal rights, and supporting concrete steps that advance political reform within Egypt."

This comes off as a very weak, very generic response. These words would have had a lot more force and meaning if they had been part of a diplomatic plan all along to promote freedom and democracy around the world. To issue these words after a friendly dictator is about to fall sound hollow and forced. It is apparent that the protests caught the administration by surprise and that the Obama administration really has no plan to deal with what could become a very inspiring or a very dangerous situation, not only in Egypt but also in Jordan, Yemen, and other Mideast dictatorial nations. Lo, it is panic!

- Going back to last spring, it is pretty obvious that the political class had no plan in place on how to deal with oil disasters such as the BP oil rig that exploded. The Interior Department, EPA, and other government agencies showed very little coordination among themselves, the offending companies, and local officials, trying and testing different solutions after the explosion happened. One would have hoped that a plan and contingencies would have been thought through beforehand, not making up solutions as they went along and as more and more oil gushed into the Gulf. Lo, it is panic.

- A recent article by New York Post reporter Charles Gasparino was summarized in the January 28, 2011 issue of The Week magazine. The article reviewed how 50 to 100 U.S. cities and towns may actually default on their municipal bonds in 2011, a symptom of cities that have badly managed their finances over the past decades. Default on municipal bonds was unheard of until recently.

Not mentioned in this article is the fact that over forty state governments still have serious budget shortfalls which may endanger their bonds and bond ratings. Despite this impending financial disaster, all levels of the political class, Federal, state, and municipal, apparently have no plans in place to deal with this dire situation. Wait until the first city defaults. Lo, it is panic!

- In his recent state of the union message, President Obama called for additional spending to be made available for education in this country. However, just three months before his speech, the Associated Press reported that President Obama had then stated that more money alone cannot fix our failing public schools. The obvious question is what has changed in that short time frame? What plan has the President put together that will make those additional funds, if they are ever allocated, a worthwhile investment when just three months ago he said additional money was not the only answer. Where is the plan? Lo, it is panic.

- Many times in this blog we have discussed the ever growing and ever more menacing drug cartel problem and violence just over our southern border in Mexico. Several months ago a U.S. citizen was killed by gang members as he jet skied with his wife in U.S. territory on a lake that abutted Mexico. In the past week, a Texas missionary was killed as she and her husband tried to drive away from drug cartel gunmen at an illegal roadblock. Last year the Associated Press reported that gunfire regularly comes across the border into El Paso when drug cartels have shoot outs in Mexico. Mayors, judges, and police officials are regularly killed by drug cartels in Mexico.

And the latest indication that the political class has no plan for dealing with this growing and serious problem, the Associated Press reported on January 27, 2011 that video surveillance cameras on the border captured on tape how the cartels are getting their contraband across the border into the U.S. The tape showed cartel members driving up to the border fence, backing up their trucks on which they had installed a catapult and then catapulting their illegal drugs over the fence to waiting comrades on the other side. If there is a plan for dealing with this issue, we certainly have not been told and neither have the cartels. When catapults are defeating the billion fence the political class built on the border, there is no plan or forethought. Lo, it is panic.

- The biggest set of unintended consequences have come from Obama Care. While the legislation was over 2,000 pages long, the unintended consequences may end up being much larger:

• In an August, 2010 Fortune magazine article, an interview of AT&T Chairman Randal Stephenson revealed that AT&T may drop its corporate health insurance coverage for current and retired employees since it was less expensive to pay the Obama Care fine than it was to continue the program. Other companies, e.g. Verizon, John Deere, and Caterpillar, have made the same assertions (Fortune magazine, May, 2010).
• The Wall Street Journal reported on September 3, 2010 that MacDonalds may drop their health care plan for their hourly employees due to legal ramifications from Obama Care.
• The New York Times reported on November 21, 2010 that Obama Care was spurring health care companies to merge together. This would likely result in less competition and higher health care prices, the exact opposite that the legislation was intended to do.
• The New York Times reported on November 9, 2010 that the new health care rules implemented as a result of Obama Care had been waived many, many times just months after it was implemented. Thus, Obama Care could not even anticipate these waiver issues just months after approval. Pitiful.
• Reason magazine quoted Congressional Budget Office reports that even with Obama Care, 21 million Americans will still be uninsured by 2016.

Great plan, or absence of a plan. A piece of legislation that was supposed to increase coverage and reduce health care costs is likely to decrease coverage and increase costs. Lo, it is panic.

- The political class was very proud of  itself when it passed the financial industry regulation reform plan last year. However, it is difficult to believe that you actually have a valid reform plan when two of the biggest consumer financial pieces of the industry, car loans and home mortgages, were excluded from the legislation. This is like saying you had a great dinner but only ate the rolls; the soup, salad and main dish were not included in the meal. Plus the fact that the main culprits in the housing crisis, Fannie Mae and Freddie Mac avoided additional regulation but still cost the taxpayer billions of dollars in subsides every month means that there really was not a plan. Lo, it is panic.

Enough, you get the idea. I dare you to explain one plan that the government has put into place, and managed by the political class, that has been timely, effective and reasonably priced. There is no plan for energy independence. There is no plan to fix our failing public schools. There is no plan for securing our borders and replacing our failed war on drugs. There is no plan to get government spending under control. There is no plan to make Social Security solvent. There is no plan to win the so-called war on terror. There is  no plan to deal with citizen uprisings around the world. There is no plan to contain the nuclear ambitions of North Korea and Iran. There is no plan. Lo, it is panic.

How do we get out of this panic mode? Several steps from "Love My Country, Loathe My Government" would be a good start:

1. Step 1 - reduce the Federal budget by 10% a year for five years so that politicians work on far fewer but far more important issues. One sub-step within this step is a complete, ground up review of government functions and the development of contingency plans for every possible issue in all government functions, contingency plans that are tested and adjusted before the crisis hits, not after.
2. Step 34 - remove politicians from Congressional committee seats when those committees fail to plan ahead and avoid crisis in government areas they are responsible for.
3. Step 39 - implement term limits for all politicians so that we get a fresh set of minds and ideas into the political system every few years. Those politicians that have been in office for 20, 30 or more years are now officially part of the problem and panic. They need to be removed so that one term replacements can come to power and see if the can plan any better. A good plan should not be contingent on who is running the show, it should transcend who is in charge. Otherwise, you end up with the same, short term, sup-optimal panic induced operations we currently suffer through.

We pay too much in taxes to be ruled by panic stricken and panic directed politicians. No matter how you spell it, we are not in a good space as a result of their panic and sole focus on their next election.



Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.


Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment

2010: Politically, It Was Much Worse Than You Thought

As we come to the end of the year, it is usually a good time to look back and see what the year brought us and hopefully, be thankful for our health, wealth, and good times. However, from an American political class perspective, the events of 2010 were not healthy, wealthy and good for most of America. The exact opposite was true, events of the year were much worse than we think they were, based on some recent news reports:

- In the lead up to the passage of the legislation that would extend the Bush tax cuts for every American for two years, the Democrats were hollering that the legislation was not a good idea to extend the tax cuts for those Americans making over $250,000 a year. It would add about $70 billion a year to the national debt and this horrified them. Never mind that while in control of Congress the past four fiscal years, they managed to add over $4 TRILLION to the national debt.

The Republicans have spent most of the year decrying how out of control Federal government spending was, using that fact as a rallying cry to have a great midterm election. Wow, both parties seemed so interested in taming the budget deficit. However, according to an article in the December 17, 2010 isse of The Week magazine, once the two parties got together to work out a compromise on the tax cuts, the resulting compromise legislation ended up increasing the national debt by $900 billion in just two years. Thus, although all Americans will continue to be taxed at their same level, each U.S. household has now been burdened by an additional future national debt burden of almost $8,000.

How come every time the political class does anything, current and future Americans get hit with more onerous debt burdens? What makes this latest travesty so frustrating is the hypocrisy of both parties who claimed to worry about curbing government spending but ended up making a bad situation even worse.

- According to an article in the December 20, 2010 issue of Business Week magazine, the United States added 937,000 jobs in 2010. This was not nearly enough to begin bringing down the almost 10% unemployment rate. Conversely, a single company in Taiwan, Foxconn, by itself created 300,000 jobs in 2010. Let's see: one foreign company creates 300,000 all by itself, our political class creates only three times that much for the entire country. Proves once again that no matter how much government money is wasted in "economic stimulus programs," it cannot compare in either volume or cost effectiveness in the job creation capability of the private sector. Pathetic. When we will they ever learn?

- One reason that entities like Foxconn can create so many jobs and the United States political class cannot, despite spending hundreds of billions of dollars, was vividly illustrated in the December 27, 2010 issue of The Week magazine. According to the article, the last economic stimulus program spent money on a new heating system for an Indiana Methodist church, bought new windows for a Wyoming Catholic church, and food for a Pennsylvania Christian organization's homeless program. Combine them with other such wasteful stimulus programs as researching insect colonies on an island off the coast of Africa and you can see why much of the stimulus spending had absolutely no chance and no leverage of creating jobs.

A real company in the real world spends money efficiently. In the political realm, money is spend inefficiently to get incumbents re-elected by fixing their places of worship or counting bugs.

- Staying with the bad financial management theme of government, prepare to be horrified by the assertions from various sources in a December 17, 2010 article, also in The Week magazine. According to a a quote from the Financial Times, a recent document dump by the Federal Reserve Board, as required under the recently passed financial markets regulation bill, revealed that the Fed had not dumped about $800 billion into the market to rescue the banks and other financial institutions from the Great Recession, as originally and widely thought.

It was much worse. The Fed had actually dumped more than four times that amount or $3.3 TRILLION. These TRILLIONs were lent to domestic and foreign banks (I cannot understand why the U.S. taxpayer would bailout a foreign bank!), hedge funds, and even Harley Davidson. All of these TRILLIONs were disbursed without congressional oversight or approval.

According to the article, the Fed took massive risks with current and future Americans' wealth and financial health by taking on not good loans with solid collateral but "toxic assets." The article goes on to pint out that the Chairman of the Fed, Ben Bernanke, pushed to bailout AIG, the most toxic of all the bailed out companies even though his staff concluded that any AIG bailout was unnecessary.

The article quotes the CEO of JP Morgan, Jamie Dimon, when he told his shareholders "that the bank hadn't actually needed the Fed's help - but the program (loans from the Fed) did save us money." This verifies the assertion made many times in this blog that many of the financial institutions did not really need the Fed's help to survive. They could have made the hard business choices needed to get themselves out of the problems they created (issued more stock, sold off assets, cut salaries and expenses, etc.) but were more than happy to have an out of control and foolish Fed give them a lending hand, courtesy of the American taxpayer.

Thus, the American taxpayer was actually not on the hook for the original $800 billion dollars of bailout (almost $7,000 per U.S. household.) It was much worse with each household responsible for closer to $30,000 per household ($3.3 TRILLION) due to the Fed and Bernanke being out of control and accountable to no government oversight or institution.

- Another article in the December 17. 2010 issue of The Week magazine reported that American students finished 17th in reading test scores, 23rd in science test scores, and 31st math test scores in an international survey conducted by the Organization for Economic Cooperation and Development. These scores were ranked relative to the 60 countries included in the survey. A recent Associated Press article revealed that almost 25% of those wishing to enlist in the U.S. Armed Forces cannot complete basic reading and math tests.

Thus, as we are closing the second year of the Obama Presidency, we see that we are seemingly further and further away from properly educating our kids to compete in the world. Combine these results and findings with a recent quote by Robert Reich in Salon.com (as reported in the December 27, 2010 issue of The Week magazine) where he stated unemployment rate of those Americans without a college education is more than 20 percent (double the national average) and you can see what an education hole the political class has dug for the country.

This continuing public education failure by our political class, regardless of who controls Congress and who controls the White House, is drastically undermining the future economic strength of the country along with the ability of our armed forces to defend us. Shameful.

- Not only has the failure of public education in this country not been addressed in 2010:

• We still do not have a national, comprehensive, and rational energy policy.
• We still do not have a national, comprehensive, and rationale immigration policy.
• We still do not have a rational, comprehensive, and rationale health care reform policy with Obama Care coming apart at its financial underpinnings and in courts throughout the country.
• We still do not have a national, comprehensive, and rationale drug addiction policy. The current policy, the lost "War On Drugs" has not worked for the past forty years, has wasted untold billions of dollars, has not materially reduced drug usage, and has allowed a near lawless, violent narco state to evolve just south of our borders.

- Although we do not have many policies listed above, as we look back to 2010, we still have the following in this country, courtesy of the political class:

• We still have the prison at Guantanamo despite Obama campaign promises to close it.
• We still have the Patriot Act, one of the most freedom inhibiting laws of all time.
• We still have an ineffective SEC who has not prosecuted anyone of consequence despite the largest financial meltdown of our generation. Was everyone involved in the financial markets during the meltdown completely honest and law abiding?
• We still have an ineffective Congress and political class which continues to work on useless legislation such as the recently passed law to regulate the sound of television commercials.
• We still have a perverted election process that allows incumbent politicians to almost ensure their perpetual re-election via controlling earmark allocations, gerrymandering Congressional districts, accepting money from money well endowed organizations (PAcs, corporations, unions, etc.), and moving money around the country to benefit of the political parties but to the detriment of local voters.

I would say have a happy 2011, that it cannot be any worse than 2010. However, every time I say something like that, the political class proves me wrong and makes things worse. Instead, let's hope and work towards replacing those in office with a better and smarter class of people with higher standards of integrity and performance, both in 2011 and beyond. We cannot afford a lot more years like 2010.


Our recent book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.


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http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.org