Monthly Archives: November 2012

Can It Get Any More Feckless?

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Here’s a statement from our State Department’s statement concerning Mohamed Morsi’s power grab (coup?) in Egypt:

The decisions and declarations announced on November 22 raise concerns for many Egyptians and for the international community.  One of the aspirations of the revolution was to ensure that power would not be overly concentrated in the hands of any one person or institution.  The current constitutional vacuum in Egypt can only be resolved by the adoption of a constitution that includes checks and balances, and respects fundamental freedoms, individual rights, and the rule of law consistent with Egypt’s international commitments.  We call for calm and encourage all parties to work together and call for all Egyptians to resolve their differences over these important issues peacefully and through democratic dialogue.

This wishy-washy set of remarks is another example a foreign policy of leading from behind—which is to say following, and being influenced by the events ahead.

The answer to the question, then, seems to be…yes.  We just haven’t seen it yet.

Taxes and Widows and Orphans

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Included in President Barack Obama’s demand to raise tax rates on those Americans he hates so much is a raise in tax rates on dividends, unless the Republicans pay Obama’s price.  Obama’s ransom, after all, is simple: raise the rates on the Evil Rich, or the rates will go up for everyone.  Nice economy you got there….

Here’s what happens to dividends if Obama gets either one of his choices.

Presently, qualified dividends (which are most of the dividends about which you and I care) are taxed at a 15% rate for stockholders who are in a 25% or higher income tax bracket, and at a 5% rate for those investors in a lower bracket.  If Obama gets his way on tax rates generally, those rates will rise to ordinary income rates: those in the 39.6% bracket, for instance, will pay 39.6% on their dividend income (not 15%), those in the 15% bracket (which will reappear if Obama holds out for his ransom and the Republicans refuse to fold) will pay 15% on their dividends (not 5%).  Notice that: if Obama gets his way, the poor will get the highest tax bump.

Think the poor don’t invest?  Where are the savings of the retired, and of the stereotypical widows and orphans?  In safe, stable, income-producing vehicles—mutual funds that invest heavily in dividend-paying  stocks funds (or interest-paying bond funds).  These folks—on fixed incomes—are going to see a significant bump in their tax bill because a significant share of their income is dividend income.

Two top dividend mutual funds currently have a yield, courtesy of their dividend-paying stock holdings, of between 2% and 3%.  That’s not a lot of margin on which a retiree—or a widow or an orphan—can afford to see a tripling of his tax bite.

Of course, these folks could switch entirely to funds that pay interest rather than dividends, but with the Fed artificially suppressing interest rates, where’s the value in that?

Republicans need to find some courage.  The House needs to pass, this session, a budget (again) that includes lower rates across the board and spending cuts in the amount necessary to bring Federal spending to less than Federal revenues, with the difference mandated to paying down the debt.  Let the Democrats, led by our President, defend their refusal to pass this bill in the Senate and sign it into law; let them explain why they prefer the catastrophe of the Obama tax increases and sequestration.

And Republicans need to get serious about taking their message to all Americans.

Others’ Thoughts on Politics

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Thomas Jefferson:

I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.

And

We in America do not have government by the majority. We have government by the majority who participate.

Benjamin Franklin:

This will be the best security for maintaining our liberties. A nation of well-informed men who have been taught to know and prize the rights which God has given them cannot be enslaved. It is in the religion of ignorance that tyranny begins.

And

Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.

George Washington:

While we are contending for our own liberty, we should be very cautious not to violate the rights of conscience in others, ever considering that God alone is the judge of the hearts of men, and to him only in this case they are answerable.

And

To contract new debts is not the way to pay old ones.

Patrick Henry:

When the American spirit was in its youth, the language of America was different: Liberty, sir, was the primary object.

And

The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.

Thomas Paine:

Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness POSITIVELY by uniting our affections, the latter NEGATIVELY by restraining our vices. The one encourages intercourse, the other creates distinctions. The first a patron, the last a punisher.

Francis Lightfoot Lee:

I feel myself deeply interested in the security and happiness of America, compared with which, the interests of Britain, is as a feather in the scale….

Robert Morris:

I assert boldly that commerce ought to be as free as the air, to place it in the most advantageous state to mankind in general.

John Adams:

All men are born free and independent, and have certain natural, essential, and unalienable rights, among which may be reckoned the right of enjoying and defending their lives and liberties; that of acquiring, possessing, and protecting property; in fine, that of seeking and obtaining their safety and happiness.

Also, from a couple of older guys:

Pericles:

Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you

Plato:

One of the penalties of refusing to participate in politics is that you end up being governed by your inferiors.

And

Those who tell the stories rule society.

An Empirical Demonstration

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Investor’s Business Daily provides one.

Renting a 20-foot truck one-way from San Francisco to San Antonio, for example, will cost $1,693. But the U-Haul tab to go in the opposite direction is just $983.

Hmm….

This figure compares, across just a few parameters, the outcome of big government, high taxes, and profligate spending—California—with the outcome of limited government, low taxes, and (more) disciplined spending—Texas.  Texas has many faults, but the routine of government interference with its citizens’ wallets and businesses isn’t among them.

California has become a state that people are increasingly trying to escape, and Texas a state people are increasingly migrating to.

…

A study by the Manhattan Institute found that Californians have been leaving for states with better job prospects, lower taxes and better business climates.

In other words, states that are pursuing the kind of low-tax, limited government, free market policies [President Barack] Obama typically rejects.

The public may have voted to give Obama a second term.  But many people in California are voting with their feet, leaving the state that’s already put in place policies Obama has promised to keep pushing for four more years.

Obamanomics, as California demonstrates—its economy actually shrank sharply in the last four years—are an utter failure.  RTWT.

Sufficient Reason

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Turkey has officially requested NATO to send them uprated PAC-3 model Patriot missile batteries for deployment along their Syrian border, where al-Assad’s butchery has been spilling across.  I had considered refusing to arm the Turks after they called the Israelis terrorists for the heinous crime of defending themselves against Hamas’ overt terrorist attacks during the just (temporarily) concluded conflict.

Then came this.

The militarization of the Syrian-Turkish border is an alarming signal,” [Russian Foreign Ministry] spokesman Alexander Lukashevich said.  “We have different advice for our Turkish colleagues—use their influence with the Syrian opposition to accelerate the start of a political dialogue.

And this:

“…in the military field, what is important is not intentions, but potential.  And when potential increases, the risks grow,” [Russia’s Foreign Minister Sergei Lavrov] said.

If the Russians don’t like a Turkey—which also sits astride the Dardanelles and the Strait of Bospherus—with the wherewithal to defend itself against incursion, then it’s not a bad idea.

NATO should expedite approval and the transfer and deployment of the missile systems.