Monthly Archives: June 2013

Social Engineering with Taxes

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Dr Alan Blinder, Princeton University Professor of Economics and Public Affairs, is at it again.

First, some side issues which he raises:

Since the economy as a whole created 5.41 million net new jobs over the past three years, you might expect that about 4.51 million of them were in the private sector and about 900,000 were in the public sector.  In fact, the private sector created 6.56 million net new jobs over the past three years while about 1.14 million net government jobs were eliminated via layoffs and spending cutbacks.

Never before in postwar history has government employment declined during a recovery. Compared with historic norms, we’re down over two million government jobs.

Never mind that the private sector’s performance is about 2/3 of what President Barack Obama promised with his 2009 stimulus and less than that compared to other recoveries, held back by his interfering policies.

Separately, the reduction in government employment is a good start.  Government remains far too big, and it’s not a jobs welfare program: further cuts in Federal employment are warranted.

Then,

Real GDP growth has averaged a paltry 2% per annum over the past three years.  But growth of GDP excluding government purchases—the things governments buy, including hiring workers—has averaged 3%.

But this just confirms how much government interference is inhibiting recovery.

Next, he offers a partial solution:

So Congress could make a good start on faster job creation simply by ending what it’s doing—destroying government jobs.

There’s that employment security welfare claptrap made explicit.  Government actually has a few very specific tasks, named by the Constitution, and no other thing to do at all.  It doesn’t need to employ lots of workers, outside of soldiers, sailors, marines, and airmen, in order to do those few tasks.

Now, he comes to his tax policy as social engineering tool:

Virtually since the Great Recession began, many economists have suggested offering businesses a tax credit for creating new jobs.  While details matter, the basic idea is straightforward: Offer tax breaks to firms that boost their payrolls.

For example, companies might be offered a tax credit equal to 10% of the increase in their wage bills over the previous year.  No increase, no reward.

You might imagine that Republicans would embrace an idea like that.  After all, it’s a business tax cut….

Here’s that foolishness of using taxes to drive our economy to a government goal.  No.  The ways to help our businesses and spur hiring include reducing—or even eliminating—taxes on businesses, canceling the additive costs and outright taxes Obamacare imposes on businesses for hiring, and stopping paying the unemployed for not working.

And no, the “tax credit” isn’t at tax cut at all.  It’s an increase in spending.

Blinder also had this idea:

Suppose Congress enacted a partial tax holiday that allowed companies to repatriate profits held abroad at some bargain-basement tax rate like 10%.  The catch: the maximum amount each company could bring home at that low tax rate would equal the increase in its wage payments as measured by Social Security records.

Again, no.  Eliding the social engineering claptrap of the suggestion, temporary tax moves have no effect.  We’d be better off moving to a territorial tax scheme at the new reduced overall business tax rate.  Or eliminating the business tax altogether.

Blinder concludes with this:

My general point is that the fiscal cupboard is not bare.  There are things we could be doing to boost employment right now.  That we are not doing anything constitutes malign neglect of the nation’s worst economic problem.

Indeed.  Let’s reduce/eliminate business taxes, get Obamacare off the backs of businesses, and restore unemployment payments to the status quo Harding right now.

Leak Hypocrisy

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Recall the zeal with which President Barack Obama’s DoJ is attacking leakers, to the point of a broad-band raid on AP reporters’ and editors’ (with its collateral raid on Congressmen) telephone records and an accusation of a specific reporter having criminal culpability in order to get a search warrant to obtain his personal emails (with its collateral raid on the reporter’s parents’ email).

A (draft) Defense Inspector General report on ex-Secretary of Defense Leon Panetta’s leaks had some interesting things to say.

The first instance [of a leak] was a July 15, 2011, interview of the Pentagon’s top intelligence official, Michael Vickers, by the [Osama bin Laden raid] film’s director, Kathryn Bigelow, and screenwriter Mark Boal.  In that session Vickers gave them the name of a special operations planner whose identity was supposed to be protected from public release.

And

The second instance was a June 24, 2011, awards ceremony at CIA headquarters in which Panetta identified the ground commander of the SEALs raid, with Boal in attendance.  The report did not say whether Panetta knew Boal was present.

Of course Panetta knew, though.  Such gatherings at such a level in the government hierarchy are highly prestigious, if nothing else; additionally, the permissions/invites to attend are tightly controlled.  And what was a Hollywood screenwriter doing in a classified gathering, as this one had to be, with classified information like SEAL team identities being bandied about?

The IG report said the ground commander’s name was supposed to be protected from public release, under federal law.

Panetta then gave up the Pakistani doctor’s identity in a January ’12 60 Minutes interview:

[Afridi] was an individual, in fact that helped provide intelligence, that was very helpful in regards to this operation….

As a result of this report, Pakistan’s version of the 9/11 Commission concluded that the doctor was acting as an American agent.

Many of the SEAL team members have since been killed, and the Pakistani doctor is now in a Pakistani jail.

Where’s the administration’s hue and cry over these leaks?  Or is it that when the SecDef does it, it’s not illegal?

A Bit of Climate

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What’s up with this?  Is it getting warmer?  Well, yes, maybe, depending on the time scale and the baseline of comparison.  It’s warmer today than during the last Ice Age.  It’s warmer today than during the Little Ice Age of some 3-4 hundred years ago and that ended around 1 hundred years ago.  It’s hard to say, though, how today’s temperature compares with the Medieval Warm Period of some 1,000 years ago, since data sets like NASA’s have been falsified to plus up the claimed warming of today.  We aren’t warmer than we were a decade and a half ago.

The claims of warming and of disastrous continued warming get their force in large part from climate models—more than 70 of them—all of which have been predicting warming rates ranging from worrisome to disastrous.  There’s nothing like actual observation, empirical data, to see what’s up, though.  Anthony Watts, of Watts Up With That, has reprinted a graph from Dr Roy Spencer [“doctor” from his PhD in Meteorology, and currently Principal Research Scientist at the University of Alabama] that compares the year-by-year predictions of those models with satellite and balloon observational data.  The graph has been adjusted by Spencer to produce an artificial agreement between the models and reality in 1979, and then lets the predictions and the empirical data flow from there.

The squares and circles represent the satellite and balloon, respectively, actual observations; the various lines the predictions of the models; and the heavy black line the simple average of the models.  For the climate-worriers’ concerns of the dangerous effects of a 1.5ºC increase in temperature, the overstatement of the models compared to reality of nearly 1ºC lends incredulity to their claims.

Hmm….

Progressive Government Run Amok

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In no particular order, we’ve had in just the last few months the following:

1.  The State Department leaving Benghazi consulate personnel to die, with too little security and no effort to help real-time; a President who absented himself from the situation in favor of a political campaign; and subsequent lies and cover-ups by both about events surrounding that.

2.  The Department of Justice targeting our free press and individual members of it in order to suppress reporting of the secret doings of our government.

3.  The Internal Revenue Service targeting American conservatives.  The low-level IRS staffers now are testifying before the House that they weren’t just ordered to target those who disagreed with the present administration, they were given the specific subjects and questions to be used and to forward specific cases to their bosses for further “treatment.”

And there’s this little IRS gem:

On May 23, Michigan Senator Carl Levin (D, MI) dropped the bombshell that his subcommittee has been in constant contact with the overseers of the IRS political-targeting scandal since it started, and even discussed the applications of “certain” specific groups.

4.  The secret metadata collection program, consisting of the gathering up of the phone calling records of millions of Americans who use Verizon (and presumably of the other American phone companies, also; we don’t know yet because the whole thing is…secret).

5.  The reading of all of our emails, text messages, video down/uploads, and so on via the Internet through another secret program, this one called PRISM.

6.  The government justifying the spying on Americans by claiming it to be a

critical tool in protecting the nation from terror threats.

And

The information “allows counterterrorism personnel to discover whether known or suspected terrorists have been in contact with other persons who may be engaged in terrorist activities, particularly people located inside the United States,” a senior Obama administration official said Thursday.

This in light of the fact that DHS has already labelled (deliberately and overtly, early on) American military veterans and those who oppose the Obama administration as extremists and threats.  Thus, it’s important to note that the information, as broadly swept up as it is, also allows a Progressive government to surveill known or suspected persons who disagree with the government’s policies and to hinder their activities.

National Wealth

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John Hinderaker, of Power Line, suggests that

we have an utterly inept government, which, on top of its incompetence, places little value on economic growth.

President Barack Obama is on record as believing

I do think at a certain point you’ve made enough money.

Whether Hinderaker is right about the ineptness is a separate question.  What is clear, though, from Obama’s policies and his continued proselytizing of them in the face of their utter failure from a free market perspective is this: when Obama made that remark (the 2010 mid-term election campaign season), he was talking about our country as a whole, not just a few of his evil Fat Cat Wall Streeters.