Archive for July, 2012
President Obama recently got himself in hot water with his “you didn’t build that” remark, which trivialized the hard work of entrepreneurs.
But he is right—in a perverse way—about government playing a big role in the life of small businesses. Thanks to a maze of regulations, the government is an unwelcome silent partner for every entrepreneur. And we’re not talking small numbers.
- Americans spend 8.8 billion hours every year filling out government forms.
- The economy-wide cost of regulation is now $1.75 trillion.
- For every bureaucrat at a regulatory agency, one study estimated that 100 jobs are destroyed in the economy’s productive sector.
For a long time, the United States had one economy. Now we have two economies that compete for America’s wealth: A private economy and a public economy. The 2012 election will decide which will be subordinate to the other. One economy will lead. The other will follow.
“If you’ve got a business—you didn’t build that. Somebody else made that happen,”declared President Barack Obama at a campaign stop last week in Virginia. Evidently, the president believes that economic growth and job creation are largely the result of actions taken by benevolent government agencies. But while it is certainly the case that good governance is essential, entrepreneurs engaging in voluntary cooperation coordinated through competition in free markets is what actually creates wealth and jobs.
What happened to turn the mood of the country so far from our historic celebration of economic success?
Two important changes in objective conditions have contributed to this change in mood. One is the rise of collusive capitalism. Part of that phenomenon involves crony capitalism, whereby the people on top take care of each other at shareholder expense (search on “golden parachutes”).
But the problem of crony capitalism is trivial compared with the collusion engendered by government. In today’s world, every business’s operations and bottom line are affected by rules set by legislators and bureaucrats. The result has been corruption on a massive scale. Sometimes the corruption is retail, whereby a single corporation creates a competitive advantage through the cooperation of regulators or politicians (search on “earmarks”). Sometimes the corruption is wholesale, creating an industrywide potential for profit that would not exist in the absence of government subsidies or regulations (like ethanol used to fuel cars and low-interest mortgages for people who are unlikely to pay them back). Collusive capitalism has become visible to the public and increasingly defines capitalism in the public mind.
President Obama’s health care law raises taxes by $1 trillion, according to a new report from the Congressional Budget Office.
The individual mandate — which the CBO calls a “penalty tax,” in apparent deference to Chief Justice John Roberts — will produce $55 billion in “penalty payments by uninsured individuals,” the CBO told House Speaker John Boehner, R-Ohio, in a Tuesday letter. Of course, the framers of the law didn’t design the mandate as a tax, and so it produces less revenue than any other provision in the bill.
RIVERSIDE, Calif. — In the Inland Empire, an economically depressed region in Southern California, President Obama’s health care law is expected to extend insurance coverage to more than 300,000 people by 2014. But coverage will not necessarily translate into care: Local health experts doubt there will be enough doctors to meet the area’s needs. There are not enough now.
California has lost billions of dollars in revenue in recent years as businesses and residents flee the state, in part because other states have a more favorable business climate.
According to one estimate, 254 businesses across a variety of industries moved all or some of their jobs out of state last year.
While its politicians dither, startups can take up the mantle of Europe’s economic future.
President Obama claims he’s overseen the creation fewer regulations than his predecessors. But his administration has actually issued far more expensive and economically costly regulations, adding billions of dollars in compliance costs for businesses and job creators. The red tape is documented in a new report by the House Oversight and Government Reform Committee.
Bubble? What bubble!? By pushing bad loans in the name of ‘diversity,’ the president is creating the mortgage crisis all over again
Mortgage simplification is one of the 400 or so regulatory requirements called for in the 2,300-page Dodd–Frank Wall Street Reform and Consumer Protection Act.
In just two years, the CFPB has grown from zero to 900 employees. But in redesigning the mortgage documents, it (evidently) required the assistance of Kleimann Communication Group, Inc., a self-described “small, agile, woman-owned” business, at a cost to taxpayers of nearly $900,000. (No wonder the bureau is seeking a 32 percent budget increase for 2013—to $448 million.)
Trashing Achievements – A must read by Thomas Sowell
The perseverance of Thomas Edison, as he tried scores of materials for the filament of the light bulb he was inventing; the dedication of Abraham Lincoln as he studied law on his own while struggling to make a living — these were things young people were taught to admire, even if they had no intention of becoming inventors or lawyers, much less President of the United States.
Somewhere along the way, all that changed. Today, the very concept of achievement is de-emphasized and sometimes attacked. Following in the footsteps of Barack Obama, Professor Elizabeth Warren of Harvard has made the downgrading of high achievers the centerpiece of her election campaign against Senator Scott Brown.
To cheering audiences, Professor Warren says, “there is nobody in this country who got rich on his own. Nobody. You build a factory out there, good for you, but I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers that the rest of us paid to educate.”
Do the people who cheer this kind of talk bother to stop and think through what she is saying? Or is heady rhetoric enough for them?
People who run businesses are benefitting from things paid for by others? Since when are people in business, or high-income earners in general, exempt from paying taxes like everybody else?
At a time when a small fraction of high-income taxpayers pay the vast majority of all the taxes collected, it is sheer chutzpah to depict high-income earners as somehow being subsidized by “the rest of us,” whether in paying for the building of roads or the educating of the young…………..
Erskine Bowles, the co-chair of President Obama’s fiscal responsibility commission, says that the federal government should aim at cutting spending back to 21 percent of GDP–which is 1 point more than the highest level federal tax revenues have reached in any year since World War II.
At the National Press Club on Tuesday, CNSNews.com asked Bowles at what level of Gross Domestic Product he would balance the federal budget, given that federal spending has exceeded 24 percent of GDP over the last four years and that since World War II federal tax revenues have reached 20 percent of GDP only once–and have never been as high as 24 percent of GDP.
A report from the Congressional Budget Office (CBO) finds that the already record-high numbers of Americans collecting government disability checks will continue to rise, further harming the program’s finances and making it harder for low-income Americans to find work.
The 8,753,935 workers who took federal disability insurance payments in July exceeded the population of 39 of the 50 states. Only 11 states—California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia, North Carolina and New Jersey—had more people in them than the number of workers on the federal disability insurance rolls in July.
The unemployment benefits system was built on a combination of wishful thinking, generosity, and skimpy funding during good times. Today, it’s likely impeding job growth
The Farm Bill is reapproved every five years; in the 2007 bill, the biggest lobbyistsincluded the agriculture biotech giant Monsanto, which spent $8.8 million. Other large corporate lobbyists included American Farm Bureau, Kraft Foods, PepsiCo Inc., American Beverage Association, Tyson Foods, Coca-Cola Co, Wal-Mart Stores, and the GMA (Grocery Manufacturer Association).
Big Agriculture lobbies Congress knowing hundreds of millions of dollars are on the line for their corporations.
By the end of the third quarter of fiscal 2012, the new debt accumulated in this fiscal year by the federal government had already exceeded $1 trillion, making this fiscal year the fifth straight in which the federal government has increased its debt by more than a trillion dollars, according to official debt numbers published by the U.S. Treasury.
The real unemployment rate is around 15 percent and we’re only setting ourselves up to make it worse
Fewer Americans are working today than in 2000, despite the fact that our labor force has grown by 11.4 million.
Pennsylvania coal companies announce layoffs, blame Obama – He kept his promise to bankrupt the coal companies
“[T]he escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry,” said PBS Coals Inc. President and CEO D. Lynn Shanks in a statement on Friday, as noted by the Pittsburgh Post-Gazette. The company also cited weaker-than-normal demand for coal.
First an Obama campaign website called out Romney donor Frank Vandersloot. Next the IRS moved to audit him—and so did the Labor Department.
A federal immigration enforcement operation dubbed “Clipped Wings” has produced 30 leads and four administrative arrests of “possible” illegal aliens, individuals who the Transportation Security Administration (TSA) allowed to attend U.S. flight schools, an Immigration Customs Enforcement (ICE) official told lawmakers this week.
Ice-T Defends Gun Rights: “The Last Form Of Defense Against Tyranny” – VIDEO AFTER THE JUMP. I agree with him 100%
Ice-T: Well, I’ll give up my gun when everybody does. Doesn’t that make sense? If there were guns here, would you want to be the only person without one?
Krishnan Guru-Murthy, anchor, Channel 4 News: So do you carry guns routinely at home?
Ice-T: Yeah, it’s legal in the United States. It’s part of our Constitution. You know, the right to bear arms is because that’s the last form of defense against tyranny. Not to hunt. It’s to protect yourself from the police.
About one in 10 employers plans to end workers’ health insurance as the new healthcare law takes effect, according to a new study.
The finding could bolster opponents of the law, who argue that its changes to the healthcare system will force workers out of insurance plans they like. Supporters of the law say most people will keep their current coverage.
Promoting entrepreneurship instead of perpetuating crony capitalism.
Kate Adams, a member of Heritage’s Young Leaders Program, and Heritage’s Rachael Slobodien compiled a list of the 12 members of the Green Graveyard—companies that received taxpayer money for green initiatives yet have filed for bankruptcy.
- Abound Solar (Loveland, Colorado), manufacturer of thin film photovoltaic modules.
- Beacon Power (Tyngsborough, Massachusetts), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.
- Ener1 (Indianapolis, Indiana), built compact lithium-ion-powered battery solutions for hybrid and electric cars.
- Energy Conversion Devices (Rochester Hills, Michigan/Auburn Hills, Michigan), manufacturer of flexible thin film photovoltaic (PV) technology and a producer of batteries and other renewable energy-related products.
- Evergreen Solar, Inc. (Marlborough, Massachusetts), manufactured and installed solar panels.
- Mountain Plaza, Inc. (Dandridge, Tennessee), designed and implemented “truck-stop electrification” technology.
- Olsen’s Crop Service and Olsens Mills Acquisition Co. (Berlin, Wisconsin), a private company producing ethanol.
- Range Fuels (Soperton, Georgia), tried to develop a technology that converted biomass into ethanol without the use of enzymes.
- Raser Technologies (Provo, Utah), geothermal power plants and technology licensing.
- Solyndra (Fremont, California), manufacturer of cylindrical panels of thin-film solar cells.
- Spectrawatt (Hopewell, New York), solar cell manufacturer.
- Thompson River Power LLC (Wayzata, Minnesota), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.
Interior already has performed National Environmental Policy Act assessments, will work with regional planners to link projects with transmission lines that carry electricity to electrical substations and has included financial incentives in the competitive leasing process, though the department did not provide specifics about those incentives.
By 2030, the areas identified in the solar road map will supply 23,700 megawatts of power, enough to run more than 7 million homes, Mike Pool, acting director with the Bureau of Land Management, said Tuesday.
Together, the weaker economy and 2001-2003 tax cuts explain 40 percent of the debt shift. Here’s how Pew allocates the rest. Its estimates parallel the CBO’s and the CRFB’s, which either cover slightly different time periods or use slightly different budget categories.
Iraq and Afghanistan wars: 10 percent
Increases in discretionary domestic spending: 10 percent
Other increases in defense spending: 5 percent
Obama stimulus: 6 percent
2010 tax cuts: 3 percent
Medicare drug benefit: 2 percent
Other tax cuts and means of financing: 12 percent
Higher interest costs on larger federal debt: 11 percent
So, most theories (often partisan) of the $11.7 trillion shift turn out to be wrong, exaggerated or misleading. There were lots of causes; no single cause dominates.
One other thing: Even projecting surpluses from 2002 to 2011, the CBO cautioned then that large deficits would ultimately return.
Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent
Top one percent: 28 percent
The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.
Legislators, Union Bosses Seek Funding for Digging Holes and Filling Them Back In – WHO IS STEALING OUR MONEY?
Emails show an investor’s ties to White House officials Valerie Jarrett and Jim Messina. With Romney taking fire, the RNC shoots back with allegations that the White House allowed donors to feed at the green energy trough.
According to a search of FEC contributor data, employees of the Internal Revenue Service have a strong preference in this year’s election. Donors who list their employer as “Internal Revenue Service” or “IRS” have donated $26,538 to President Obama’s campaign, and just $2,340 to Mitt Romney’s campaign.
“The real question for President Obama is this: if Bain Capital is so bad, why have you taken nearly $120,000 in donations from them? President Obama’s actions are the heightof hypocrisy.”
Section 1401 of the Affordable Care Act is, on the surface, just as exciting as it sounds. It outlines in excruciating detail the eligibility requirements for an American to receive a tax subsidy to assist in purchasing health insurance.
That’s at first glance, at least. Two experts who recently scoured Section 1401 think they found something huge: a missing word that could undercut the Affordable Care Act’s promise of affordable health insurance.
Left-wing president favors the collective over individual initiative
Testifying before Congress today, Ben Bernanke explained that inflation won’t spiral out of control even if the economy recovers because the Federal Reserve can put the brakes on at any time:
No it will not. We know how to reverse what we did, we know how to take the money out of the system, we know how to raise interest rates. So it will be a similar pattern to what we have seen in previous episodes where the Fed cut rates, provided support for the recovery and when the economy reached a point of take off, where it could support itself on its own, the Fed pulled back, took away the punch bowl. And we can do that and we will do that when the time comes.
But in response to a different question, Bernanke said the Federal Reserve can’t shift to a higher inflation target without inflation spiraling out of control:
I recognize that some people would advocate that we set an inflation target at, say, 4 percent and maintain that for a number of years. I don’t think first that we could do that without losing control of the inflation process. Secondly, I’m very skeptical that it would increase confidence among businesses and households that increase economic activity. I think it would create a lot of problems in financial markets as well. And so I don’t think that’s a strategy that has a lot of support on the Federal Open Market Committee.
Energy Dept. ‘Unable to Locate’ $500,000 in Equipment Bought With Stimulus Money – WHO IS STEALING OUR MONEY?
An audit conducted by the Energy Department’s Office of Inspector General was “unable to locate” $500,000 worth of equipment purchased with stimulus money by a recipient of funds distributed through the deparment’s “Advanced Batteries and Hybrid Components Program,” according to an audit report published by the OIG.
The DOE said it would not be “appropriate” to release the name of stimulus-money recipient where the $500,000 worth of equipment could not be located.
House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two “most stimulative” t things you can do for the economy.
During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.
“I haven’t talked to any who are of that mind,” said Hoyer. “If you talk to economists, they will tell you there are two things that are the most stimulative that you can do — one’s unemployment insurance, the other’s food stamps, okay?”
This burst of ideological candor is already resonating like nothing else Mr. Obama’s said in years. The Internet is awash with images of the President telling the Wright Brothers, Thomas Edison, Henry Ford, Steve Jobs and other innovators they didn’t build that. Kevin Costner’s famous line in “Field of Dreams,” as adapted for Mr. Obama: “If you build it, we’ll still say you didn’t really build it.”
Beneath the satire is the serious point that Mr. Obama’s homily is the soul of his campaign message. The President who says he wants to be transformational may be succeeding—and subordinating to government the individual enterprise and risk-taking that underlies prosperity. The question is whether this is the America that most Americans want to build.
Over the weekend, President Obama sent a message to all American entrepreneurs and potential entrepreneurs. The message was, “Nothing special about you!”
At a campaign event Friday evening in Roanoke, Va., Obama laid out his contempt for business men and women who somehow thought they earned their wealth. ‘If you’ve got a business — you didn’t build that,” he proclaimed to the crowd. “Somebody else made that happen.”
I was President Obama’s college classmate at Columbia University, Class of ’83. Almost every one of my classmates were openly socialist or Marxist, with many of these leftist radicals calling for an end to capitalism and “bringing down the system” by destroying the U.S. economy with entitlements, debt, and crisis.
That’s why I have predicted in thousands of media interviews from the first days of Obama’s presidency that Obama is a radical, with a deep-seated hatred of business owners, a desire to demonize us and destroy America’s faith in capitalism, and a plan to bring down the system by overwhelming our economy with debt and crisis — just as we all learned and discussed at Columbia in our college days.
Well, it’s no longer a theory. Obama has decided to come clean with his plans for a second term. In a matter of 48 hours he gave us two hints so big you couldn’t miss his intentions.
But why should this even be a public project? Why should it be subject to public vote? What of the 47% who didn’t support it? Why should they have anything to do with it? If the project were commercially viable – and the greens were kept at bay – it would be built by the private sector. Only politically is it viable – which means it entails lots of payoffs, bribes and graft for the politically-connected in the state. Construction is supposed to begin later this year, in the Central Valley, near Merced, with 300 miles of track to be laid from there, over 10 years, to the northern outskirts of Los Angeles. Thereafter a northern link is to be built to San Francisco, but it wouldn’t be finished until 2028. Why would it take a whole decade to lay that initial track? I count 300 miles over 3650 days, which is less than 500 feet per day. Really? No one but Obama-friendly political cronies can do this project faster, cheaper, and better? Today it remains about $55 billion short of the total funds needed – and that’s before cost overruns. It’ll likely end up a half-finished scheme.
Golden State cities hoping to avoid bankruptcy should look east for ideas.
Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”
Researchers have released the findings of an intense study into the aftermath of last year’s Fukushima nuclear disaster and warn that the United States isn’t exactly spared just yet. In fact, scientists now fear that incredibly contaminated ocean waters could be reaching the West Coast of the US in a matter of only five years, and the toxicity of those waves could eventually be worse than what was seen in Japan.
What do companies get when they act responsibly? Government-subsidized competition.
President Obama has accused Mitt Romney of raking in profits from investing in companies that ship American jobs overseas, but according to his most recent financial disclosure, he and First Lady Michelle Obama have hundreds of thousands of dollars in a mutual fund that has large holdings in corporations that outsource jobs.
“(Romney) invested in companies that have been called ‘pioneers’ of outsourcing,” Obama said at a Saturday campaign event in Glen Allen, Va. “I don’t want a pioneer in outsourcing. I want some insourcing.”
But Obama’s own portfolio shows a willingness to invest in American corporations that have shifted employment overseas.