Hogwash and a Bellyfull of Pork

The Obama stimulus plan has so much pork that I'm surprised PETA has not launched aggressive ads to decry it.

The supply-side of the plan is anemic. Taxes are not being cut for those who paid taxes. A cut in payroll taxes by 2-3% combined with a reduction in corporate taxes from 35% to 25% and a two-year suspension of capital gains taxes would truly be stimulus and quickly revive the struggling economy. However, it would upset the left wing of Obama's political base so it won't happen. 

Democrats want government to do the spending for strictly political reasons -- they get to dole out money to their liberal constituencies and political base. They buy votes with our money. That's why they would rather keep our tax money in Washington than give it back to us. 

Even the Keynesian side of the plan is feeble. Most "shovel ready" infrastructure spending is at least 18 months away. Other spending is just typical of political pandering to the Democrats' interest groups. It would have been far more honest to include the spending in a Democratic budget than to disguise it as "stimulus". What a fraud! Hogwash.

Want Gitmo?

President Obama's decision to close the Guantanamo Bay detention center within 12 months is not a surprise. It was an often-repeated campaign pronouncement. Senator McCain also favored the closing of the detention center, as did President Bush in recent months.

Closing Guantanamo is by itself not a detractor to our national security. What will be decisive is what will happen and where will we send the 270 enemy combatants - terrorists - that are presently held in Guantanamo. There is already clear evidence of the high recidivism rate among released Guantanamo detainees. We have recaptured 61 of these terrorists in various stages of their return to killing innocents. How many are out there that we have not recaptured is a logical question. 

Left wingers would like us to treat these dangerous elements as if they have been charged with a misdemeanor of sorts, not too different from being a litter-bug or making an illegal U-turn. Make no mistake about it, these are terrorists and they aim to inflict lethal damage upon us if given the opportunity.

So, where do we send them 12 months from now? If tried in the U.S. and not convicted we can choose to deport them. However, if their home country doesn't welcome back their beloved citizens then they get to stay right here in the land of the free and the home of the brave.

Stay here? Where? Here are some ideas to kick around. We can send them to Hyde Park in Chicago, then they can just be "pals from the neighborhood". A few can even stay at Weatherman terrorist Bill Ayers comfy abode and spend quality time competing with Billy in the "I Hate America Most" sweepstakes. 

Some can be routed to Beverly Hills so that leftist Hollywood types can "feel the sorrow of their awful gitmo experience". 

We can send a couple to MSNBC so that Keith Olbermann can have them on his  nightly propaganda hour whoopin' it up with some Bush-bashing and so that Chris Matthews can feel more tingles up his leg or wherever tingles most suit him these days. 

If any still need a place to call home, there is always the upper west side of Manhattan -- they really hate Bush there for detaining these victims. I'm sure they would be welcomed with open arms. We can always see if France, Germany, or Spain will take them. After all, they all applaud the Obama overtures to have America return to moral leadership. They will accept a few of these adorable creatures, don't you think?

The sad irony is that these 270 hardened killers of innocents are being far better treated than the thousands of political prisoners held for a far longer period of time next door in Cuba. Yet the left hates Bush and worships Castro. It make perfect sense to me.

The Cost of Stimulation

$825 Billion. That is the latest price tag placed on President Obama's stimulus package. Let's write the cost out to enhance our grasp of this cost: $825,000,000,000. As with any other price tag, we should strive to understand what we Americans get in return for $825,000,000,000.

First, we should deduct from this cost the portion of the stimulus plan that is made up of tax cuts. This is not a true cost to Americans - in fact, it is the opposite for our wallets. It is only a reduction of the Federal Government's revenue. At an estimated $300 Billion in tax cuts, the real cost of the stimulus initiative would be more akin to $525 Billion. 

But here we encounter a problem because issuing a refund check to someone who does not pay income taxes is a hand-out, not a tax cut. As maintained in previous posts, the swiftest, fairest, and most effective way to provide a tax cut is to immediately reduce payroll taxes. Disappointingly, this does not appear to be part of the plan's design.

So, truly, until we know how much of the $300 Billion are thinly-veiled handouts, we do not know the real cost of the stimulus plan. Therefore, we have no other figure to work with than the aforementioned $825 Billion.

Back to the question at hand -- what do we get in return for $825 Billion? Let's take Barack Obama at his word in stipulate that it is all about jobs. To be fair, Mr Obama did stress the importance of jobs during his campaign. Look no further than Joe Biden's mid-October claim that the number one problem facing the middle-class happens to be a three letter-word: J-O-B-S. Imagine the press reaction had Sarah Palin said that.

The President insists that his plan will create or save 3.5 million jobs. This jobs goal is a bit opaque because I cannot fathom a way to quantify how many jobs are saved. How do you prove that the money that was spent prevented a job loss?

Let's move on. The Obama administration thinks its a good idea to exchange $825 Billion for 3.5 million jobs. Okay then, my calculator renders a cost per job of approximately $235,000. Seems a tad high, correct? 

Far better just to give each of the 3.5 million job loss victims $35,000 each. Then the stimulus plan can be called an Unemployment Assistance Plan and cost $122 Billion. Our children and grandchildren may appreciate that we did not burden them with the extra $703 Billion.

Just an idea.

Tim Geithner Does a Mean Rumba

A different type of government, President Obama? One that is transparent? Let's see: 

Sen. John Kyl (R-Arizona): "You made the same mistakes on your 2001 and 2002 taxes as you did on your 2003 and 2004 taxes, which you corrected -- at any time before being asked to be Treasury secretary did you think to go back and pay your back taxes from '01 and '02?" Hey, Mr. Treasury Secretary hopeful, did you only decide to pay back taxes when you calculated it would be politically expedient?

"Isn't it a fact that you immediately or very quickly realized that the same mistake you made in 2003 and '04 was probably made in '01 and 02 but the statute of limitations had run out and you didn't have to pay taxes for the other years?" We are all under the impression that you are not an idiot and therefore knew exactly what you were doing.

Tim "I want to run the IRS" Geithner: "It was a mistake, the IRS told me I had fulfilled my obligation, I should have caught it." Dude, gimme a break, of course I tried to put one over the IRS -- you know it and so does anyone watching me squirm now. But I was told that if I keep saying "mistake, mistake, sorry, sorry" that you guys would cut me some slack. I need a bail-out here.

Kyl: "Would you answer my question rather than dancing around it, please? The question is whether it occurred to you before you were nominated or approached to be nominated that, in point of fact, you didn't have to go beyond [your '03 and '04 taxes] because of the statute of limitations?" Stop jacking with me, you mealy-mouth tax dodger and fess up.

Geithner: "I did not believe I had the obligation to go back. I did not think about that until I was going through the vetting process....I had no occasion to think about it and I might not have thought about it had I not gone through the vetting process." There...I said it. I paid because I want this job. By the way, with the Democratic majority I'm gonna get this job no matter what because I'm the only one that can save the economy. And, yes, I'm trying to make eye contact and speak up but I just can't.

President Obama (Inauguration Speech): "What is required of us now is a new era of responsibility – a recognition, on the part of every American, that we have duties to ourselves, our nation..." 

This is Change? Good Grief!

P.S. Didn't Barack Obama nominate Bill Richardson for Secretary of Commerce? That didn't work out very well either. Something about an investigation into Pay for Play and ethics.

Obama's Inauguration Day

President Obama's Inaugural Address was a good one. Not great, but it will do. The images themselves carried the day. He could have just stood there and read the ingredients from a packet of Uncle Ben's Ready Rice (Cajun Style) and the crowd would have cheered wildly. 

My favorite part of the speech was the evoking of George Washington's troops during the Revolutionary War and linking that into his conclusion -- very good. Worse part was not knowing that he was the 43rd American, not the 44th, to take the oath. Grover Cleveland was the 22nd and 24th President. 43 men have sworn the Presidential Oath. 

I read the speech before I heard it. It looked better on paper. 

I wonder how many tingles went up Chris Matthew's leg, thigh, back, or neck during the speech. Matthews is a multi-tingle guy, you know. 

Those in the crowd that booed President Bush and Laura Bush and President Bush 41 are the low class elements that should be prevented from attending events such as these. They are cut from the same unsavory and odious cloth as those who would yell "pig" when they saw a police officer years ago and today live in a home that has an alarm system directly linked to the nearest police station.

If you did not hear President's Bush's speech upon arrival in Midland, you should. It was the vintage Bush that once upon a time was better at connecting with an audience. Then he allowed the trappings of the White House and his handlers to alter his approach to people. 

How about Jimmy Carter's snub of Bill Clinton? He greeted George and Barbara Bush, walked right past Clinton and reached back to hurry-up Rosalyn. Apparently Carter is still sore that Clinton called him on the table for his free-lancing and errant "diplomacy" during the Clinton years. Carter is just a sour guy that knows that his presidency was an unmitigated disaster and no one really respects him.

All in all, a good day for America. We transition control from one man to another, from one party to another. Democracy in action.

Best Lines of Inaugural Addresses

Theodore Roosevelt; March 4, 1905.  Remarking on the need to leave an unwasted and enlarged heritage to our children. "To do so we must show, not merely in great crisis, but in the everyday affairs of life, the qualities of practical intelligence, of courage, of hardihood, and endurance, and above all the power of devotion to a lofty ideal, which made great the men who founded this Republic in the days of Washington, which made great the men who preserved this Republic in the days of Abraham Lincoln."

Thomas Jefferson; March 4, 1801. "But every difference in opinion is not a difference in principle. We have called by different names brethren of the same principle. We are all Republicans, we are all Federalists."

"... what more is necessary to make us a happy and a prosperous people? Still, one more, fellow citizens - a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned."

Ronald W. Reagan; January 20, 1981. Pictured above left. "Now, so there will be no misunderstanding, it is not my intention to do away with government. It is, rather, to make it work - work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it."

"As for the enemies of freedom, those who are potential adversaries, they will be reminded that peace is the highest aspiration of the American people. We will negotiate for it, sacrifice for it, we will not surrender for it - now or ever."

Abraham Lincoln; March 4, 1861. The Civil War approaches. "We are not enemies but friends. We must not be enemies. Though passion may have strained, it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature."

Franklin D. Roosevelt; March 4, 1933. "So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself ..."

John F. Kennedy; January 20, 1961. "Let every nation know ... that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and success of liberty." 

"Ask not what your country can do for you, ask what you can do for your country."

The best line of them all: 

Abraham Lincoln; Second Inaugural Address; March 4, 1865. The end of the Civil War in sight, President Lincoln delivers a brief speech aimed at healing a young, divided nation. "With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations."  Lincoln was assassinated the following month.

A Hero, A Farewell, and Three Rats

Chesley Sullenberger III, the pilot of US Airways Flight 1549 is a true hero. He alerted the crew and passengers to prepare for a hard landing and then crash-landed the plane on the Hudson River. All passengers and crew survived. He was the last person to leave the plane. 154 other passengers and crew owe their life to this man. Imagine the deep pain and sorrow that would have otherwise been felt in countless homes if it had not been for the brave "Sully" Sullenberger.

President Bush gave a short farewell address to the nation last night. He was gracious, pensive, and relaxed. Main point - evoking the theme of his second Inaugural Address by asserting that the only practical way to achieve peace at home is to spread freedom abroad. He was generous in his compliments toward President-elect Obama and emphasized that we must not become complacent in defense from terrorist attacks.

Rats # 1 and 2 are Chris Matthews and the mentally unbalanced Keith Olbermann. Their petty, cynical, and just plain mean-spirited  attack of George Bush after his farewell address was disgraceful. These two master-carpers are so partisan that I'm sure that they would have withheld their praise of Chesley Sullenberger if they had received word that he had voted Republican.  

Rat #3 is some law firm named The Sanders Firm. I literally stumbled upon this outfit when searching for the spelling of the name of the US Airways pilot. Upon typing "us airways" into the search engine the first site to appear is Injured on Flight 1549? The site is a link to this group of parasites trolling for passengers from the plane crash that are ready to sue. These rats would surely sue Sullenberger if they thought it would bring a profit. Repulsive! 

Economic Freedom: The Road to Prosperity

The 2009 Index of Economic Freedom has just been released. The Wall Street Journal and The Heritage Foundation have collaborated for 15 years to measure economic freedom. The level of economic freedom is measured by a scoring system that includes the following components: Business Freedom; Trade Freedom; Fiscal Freedom; Government Size; Monetary Freedom; Investment Freedom; Financial Freedom; Property Rights; Freedom from Corruption; Labor Freedom.

Once again, those countries that scored highest on the Economic Freedom index enjoyed per capita income that was many times greater than those countries that repress these freedoms.

Here are the Top Ten countries:

1. Hong Kong
2. Singapore
3. Australia
4. Ireland
5. New Zealand
6. United States (down from #5 due to increase in taxes and govt spending)
7. Canada
8. Denmark
9. Switzerland
10. United Kingdom

The Worst Ten? (#1 is the worst, then count back):

1. North Korea
2. Zimbabwe
3. Cuba
4. Burma
5. Eritrea
6. Venezuela
7. Democratic Republic of Congo
8. Comoros
9. Libya
10. Sao Tome and Principe

Hmmm ... Singapore at 2nd best and Cuba 3rd worst out of 179 that were ranked. See "Cuba and Singapore: 1959 - 2009". There is no mystery here.

If you want prosperity, better to embrace free market -- yes, CAPITALIST ideals and practices. If living in misery and poverty is your pleasure, you can also make that choice and move to one of the countries that abhors capitalism. But beware, you may not have too many other choices once you unpack your bags -- they do have a way of smothering you. 

W Gets His Groove Back

Who was that guy at the White House press conference yesterday? He looked strikingly similar to George Bush. His gesticulations were certainly Bush-like. It was not Frank Caliendo -- Frank is chubby.

The man at this press conference passionately defended the successes of his administration's defense of America and, contritely, acknowledged mistakes over the past eight years. The George Bush that rummaged through the White House since 2004 was a total klutz when he tried to explain his actions, stumbling over words and sentences and too many times appearing listless. Moreover, he was loathe to admit to errors and, therefore, he could never get beyond them.

On January 12th, President Bush called the press out for having a lapse in memory over the days after September 11th. To paraphrase, President Bush reminded them of the many congressional hearings and media criticism for the failure to "connect the dots". Then, anti-terrorist laws and procedures having been established, the Bush Administration was incessantly vilified for having connected the dots. 

President Bush went on to remark that the same countries that assail the Guantanamo Bay detention center also refused to accept any of the misunderstood Guantanamo prisoners into their country. In short, he made it clear that if the choice was defending America or winning a popularity contest, the latter option simply never existed.

I wish this President Bush would have emerged years ago. It would have made for a very different national debate.

It Makes Perfect Sense to Me

Problem: Low interest rates for the better part of this decade led to stratospheric debt levels for speculative purposes that led to the housing bubble and its nefarious after-shocks. 

Solution: The Fed lowers short-term rates to an all-time low and is maneuvering to lower long-term rates, such as mortgage rates.

Problem: Coupled with low rates, banks and other financial institutions recklessly abandoned time-proven credit underwriting standards, leading to mounds of toxic debt (the "T" in TARP was originally meant to be "toxic" before it was euphemisized (new word) to "troubled".)

Solution: Lend. But prudently, of course. 

Problem: We are in the mess we are in because government spent without regard, without means, and without brains. We must all understand that deficit spending was solely President Bush's fault. 

Solution: Fashion economic stimulus plans that elevate spending to multiples of what was cited as being the problem in the first place. Even drunken sailors are horrified.

Problem: Corporations and individuals did not behave responsibly. This cannot be repeated.

Solution: A bail-out bonanza. You should soon receive your monogrammed tin cup in the mail.

Problem: Oil prices are at criminally high levels. Anyone associated with the oil business must be captured and publicly quartered.

Solution: Prices under $40/barrel are a sign of the coming Great Deflation. We should all be afraid. The fact that you are now saving $50/month on gas purchases is an ominous omen.

Problem: Housing prices shot through the roof. 

Solution: We must prevent housing prices from falling.

Problem: American consumers do not save and they spend too much. Consumers spend their own money. Government also spends consumers' money.

Solution: Lament the depressed level of Christmas season spending; criticize the consumer for saving in times like this; proceed to send them a freshly-minted government check so that they will go out and spend. Spend even if it means you have to put it on a credit card and are worried that your employment status is precarious. Just spend! 

If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. Milton Friedman said that. 

Talk Big and Wave a Twig

Harry Reid proved to be even more of a wimp than I thought. Three days ago in "Watchtower Beams", the prediction was that Roland Burris would be seated as Senator if he insisted on asserting that Governor Blago's appointment is lawful. Mind you, Mr Reid obtained the support from Sen. Durbin from Illinois and 55 other Senate Democrats to "reject any appointment" by Hot Rod Blago. Even Mr Obama threw his support toward the appointment block.

Then, Mr Burris showed up in Washington, whispered "boo" to the pusillanimous Senate Majority Leader, and now Roland Burris will soon be the toast of D.C. The November 18th post, "Good for the Goose, Horrible for the Gander" also predicted another crack-job by the valiant Mr Reid in connection with Senator Lieberman.

Mr Reid folded but that is not a surprise. It isn't every day that we witness a Senate Majority Leader getting his teeth kicked in by a disgraced, corrupt, impeachment-bound Governor. It merits repeating that Mr Reid gutlessly said that the Iraq war "was lost". He is who he is.

BookWatch: The Ascent of Money

If you like books concerning financial history, then definitely read The Ascent of Money by Niall Ferguson. The evolutionary path of money as a medium of exchange to the complexity of today's financial system is well outlined. Mr Ferguson mixes in the right level of overview and detail as he covers the origins of banking to debt instruments to equity markets to hedge funds. Most compelling is how he introduces assorted personalities (no shortage of rascals) that shaped our financial world. Plenty of tidbits here and plenty of well-explained basics and beyond.

A Tax Cut in the Offing?

Word that Mr Obama is including a $310 Billion tax cut for individuals and businesses as part of a massive economic stimulus package should illicit only one response from congress: "Go ahead, I'm listening". Read November 26th post: "Cut, Baby, Cut". 

If the idea is to get money into consumer's wallets right away, then cutting the payroll tax would be the most direct and quickest way to provide relief to millions of taxpayers. Sending a check to those who did not pay income taxes in the first place is a giveaway, not a refund. A "permanent" cut in the income tax would be the best way to achieve sustainable consumer confidence that they will have less of their money taken away.

Naturally, there will be elements of the stimulus plan that will be designed to please the liberals. However, a significant tax cut is worth some degree of compromise if that's what it takes. But we have to watch the details and read the fine print.

Watchtower Beams - Sunday Talk Shows

Interesting how the Democrats yelped bitterly at President Bush's purported "extra-constitutional" executive policies and now, caught in the Governor Blagojevich imbroglio, they are threatening an unconstitutional blockage of Governor Blago's appointment of Roland Burris to the U.S. Senate. This one will be fascinating. My prediction is that Mr Burris will be pressured to withdraw his name by the Dems. If Burris insists on the appointment, he will prevail.

The talk shows naturally devoted time to the Gaza crisis. What will happen -- who will be disappointed -- when Mr Obama must actually make decisions? He likes to throw hints from the grandstands, like voting present. Let's see how he does when faced with decisions that will certainly attract criticism, no matter what he decides. No doubt that Mr Obama is rooting for President Bush to make a bold decision on American policy on this and other "hot issues" prior to January 20th. President Bush was constantly lacerated by backseat drivers like candidate Obama. 

Liberals, in the press and in congress, are insisting on quick passage of an economic stimulus package that may approach $750 Billion or more. They are also demanding that it has transparency (an overused word that makes certain people feel oddly comfortable I guess). Well, transparency (full, clear, and open disclosure) and quick do not actually go hand-in-hand. That's like being asked to provide a "brief, detailed, comprehensive summary". 

Senator Harry Reid continues to insist that his comments that "the Iraq war is lost" and "there is no sign that the surge is working" were somehow justified at the time his beautifully warped mind conceived these peculiar notions. He will block Burris, he says? 

Cuba and Singapore: 1959-2009

2009 is here and much is being made of the 50th year of Castro's communist revolution in Cuba. Brother Raul notwithstanding, Fidel Castro is still in power. On the other side of the planet, in Singapore, another man also came into power in 1959. His name is Lee Kuan Yew and he became Prime Minister of Singapore in June 1959 and held that position officially until 1990. He was then Senior Minister until 2004 when he became Minister Mentor and his son, Lee Hsien Loong, became Prime Minister. The point is that since 1959, Lee Kuan Yew has been the person who calls the shots in Singapore. He is the authority.

So both Fidel Castro and Lee Kuan Yew have held power for half a century. Who has done a better job for his country? We will grade them on economic progress. On human rights there no sense in comparing Castro with Lee. Yes, Singapore did ban chewing gum and did engage in caning of those who painted graffiti and they have been heavy handed with drug users and the press. Those limitations of freedom are child's play compared to the thousands of political dissidents that have been killed or imprisoned by Castro. Think of Castro as a mass murderer and Lee as strict school principal. Outsiders have no problem moving into Singapore. Cubans risk their lives in shark-infested waters on rickety rafts to flee Castro's hell-hole.  

Back to economic progress. In 1958 (the last pre-Castro and Pre-Lee years), Cuba had a population of 6.6 Million. Singapore had 1.5 Million. Cuba had a per capita Gross Domestic Product (GDP) of $3,170. Singapore's was $2,294. Cuba's per capita GDP was among the highest in Latin America and was higher than any nation in East Asia except for Japan's.

So where do these two countries stand in 2008? Cuba's population has risen to 11.5 Million, so it almost doubled. Singapore's population tripled to 4.6 Million. Singapore's per capita GDP is $48,900 -- among the highest in the world. Castro's beloved revolution has caused Cuba's per capita GDP to reach about $1,700! I write "about" because Cuba is not known for truthful reporting of economic data. It claims to have a per capita GDP of $4,500 but as of 2001 it was at $1,700. Things have only deteriorated this decade on the island so crediting Cuba with $1,700 is probably generous.

The juxtaposition of these two countries over the same 50 year period is mind-bending. It means that in 1958, Singapore's GDP was $3.4 Billion to sustain 1.5 Million people. Cuba's was $20.9 Billion for a population of 6.6 Million. At $225 Billion, Singapore's GDP has risen 66 times in 50 years with a population that has tripled. During the same time, Castro's Cuba can only show a GDP that has shrunk to $19.5 Billion although it's population has doubled.

Again, toss aside Castro's criminality, failed social engineering and overrated health care -- he has been worse than an abject economic failure. Why? Because he followed a failed communist central planning, central control, economic policy that was really only geared to keeping him in power and in control. For Singapore, Lee Kuan Yew's economic policy was free market, free trade, and growth oriented. 

President Nixon once remarked that Lee Kuan Yew was the most intelligent person he ever met. YouTube has several Lee interviews that show the magnitude of his understanding of the global economy and world trends. YouTube has Castro footage that fully display his ability to excoriate the United States. Unfortunately, Cubans cannot substitute excoriation for food. Trash talk is not a nutriment.

Today, Singapore's skyline features well-lit, elegant, modern buildings. By contrast, Havana looks worse than the South Bronx of the 1980s. A huge ghetto. This is very different from how the two cities looked and compared in 1958. Lee Kuan Yew's dream was one of a prosperous and free Singapore -- an "East Asia rising" success story. Fidel Castro envisioned a Cuba that would learn to hate capitalism and the United States -- a Caribbean circle within Dante's Inferno. Both succeeded.

Happy New Year!