Columns

Opportunity Knocks

T. J. Brown — Fri, 30 Oct 2009 04:01:00 GMT

It only seems that I am the only Constitutionally-eligible registered Republican in Illinois that has not declared himself a candidate for governor.

After all, Rep. Mark Kirk (R-Ill.) has launched a bid for the U.S. Senate. But the field for governor is crowded, and for the first time in more than a decade Illinois could make a right turn in many of the statewide elections.

The 2010 midterm election comes with Illinois - and the nation - at a crossroads.

It should be the best of times for Democrats here. Not only have the Democrats controlled the statehouse for the past decade, they won all the statewide races in 2006. While Cook County has long been a Democrat stronghold, the collar counties have trended left. The northwest suburban district that conservative stalwart Rep. Phil Crane (R-Ill.) held down for more than 35 years (after succeeding Donald Rumsfeld) has elected Democrat Melissa Bean three straight times. Former House Speaker Denny Hastert was succeeded in his far west suburban district by Democrat Bill Foster. Kirk narrowly won re-election for his 10th District seat, fighting off Democrat Dan Seals.

Not only have the few remaining elected Republicans been running for their political lives, but Illinois Democrats seem not only to be in charge of the state, but the country. Sen. *** Durbin is the Senate Majority Whip. Former House Rep. Rahm Emanuel left his leadership position in the House to become White House Chief of Staff. Of course, the White House is stacked with Illinoisans with President Barack Obama taking office.

So why are so many Republicans rushing to declare candidacy? The field is full of candidates with strong resumes, people like former Attorney General Jim Ryan, the 2002 GOP nominee, and former Illinois Republican Chairman Andy McKenna, a strong contender in the 2004 U.S. Senate race, State Senate Minority Whip Kirk Dillard, State Senator Bill Brady (a candidate in the 2006 GOP Primary for Governor) and DuPage County Board President Bob Schillerstrom. Two other strong Republican primary candidates, Dan Proft and Adam Andrzejewski, are different in that neither have run for elected office. Proft is a political consultant and Andrzejewski a businessman who later founded a PAC.

This many experienced candidates would not launch costly primary runs if the chances for the Governor's Mansion were slim. Proft wouldn't mount a futile run for governor considering his services are in high demand during campaign season.

There's opportunity that Illinois Republicans haven't sensed since 2004, when no fewer than eight GOP candidates ran to replace retiring one-term Sen. Peter Fitzgerald (R-Ill.). At that time, Obama was just one of a handful of Democratic Senate hopefuls, an Illinois State Senator unknown to those outside his district. But in March 2004, Obama began his rapid ascent that landed him the White House this January. First, embarrassing information about the leading Democrat's divorce boosted Obama from second or third in primary polling to a landslide winner. Then, embarrassing information about Republican nominee Jack Ryan's divorce came out in June. Ryan dropped out of the race, and the state Republicans weighed replacing Ryan with numerous candidates, including former Chicago Bears coach Mike Ditka.

Then, Obama gave his famous Keynote Address at the 2004 Democratic Convention in Boston. All of a sudden, very few people wanted to launch a run against an instant celebrity - so few that the Republicans imported Alan Keyes to run for the seat. (Keyes' run was a disaster.)

Why is the thrill back? Ethics. With all the problems the state faces: a nearly-bankrupt treasury, failing city schools, high unemployment, a shrinking industrial base throughout the state, and an unstable real estate market, the race is becoming a contest of who is most ethical.

With the previous governor preparing for trial, and the governor before that in federal prison, Illinois voters might have lost their tolerance for corruption.

It's more than that. Chicagoans will vote Democratic, but they will complain about their 11.25 percent sales tax, about their soaring property taxes, about the city's mismanagement of basic services. They'll complain about the city, county, state and federal governments regulating all types of facets of their lives, from seat belt usage, to an indoor smoking ban, to the administration of individual health care.

But most of all, they hate to see the privilege their government helps itself to.

Want a solution? Shrink the government. A smaller government produces fewer opportunities for government officials to treat taxpayers like a piggy bank.

If only there was a political party that even paid lip-service to that.

Is that the opportunity Republicans are sensing in Illinois? Is that the opportunity Republicans sense nationwide?

BARONE: Four Races Will Test the Strength of Obama's Majority

Michael Barone — Thu, 29 Oct 2009 04:38:00 GMT

Five days from now the voters of New Jersey and Virginia will elect governors. Voters in the 23rd district of New York and the 10th district of California will elect new members of the House of Representatives to replace incumbents, a Republican and a Democrat, who were appointed to positions in the Obama Defense and State departments.

All four of these constituencies voted for Barack Obama 51 weeks ago. Obama won 57 percent of the vote in New Jersey, 53 percent (his national average) in Virginia, 52 percent in New York 23 and 65 percent in California 10.

Yet all of this territory was once Republican. Suburb-dominated New Jersey voted 56 percent for George H.W. Bush in 1988. Southern-accented Virginia hadn't voted for a Democratic presidential candidate since 1964. The last time the territory covered by New York 23 elected a Democratic congressman was in 1870. And the incumbent who is being replaced in California 10 won her seat by beating a Republican in 1996.

In other words, the 2009 contests are a reasonably fair test of the strength and durability of the Democratic majority that Obama and his ticket-mates assembled in 2008, a majority that was only made possible by gains in hitherto Republican territory. It is also a test of the capacity of Republicans to regain turf they have lost.

Yes, the character of the individual candidates and local issues can make a difference. But the basic issues in these four contests are reasonably congruent with the national issues now being debated in Congress and this summer in town halls across the nation.

The result in Virginia is not much in doubt. Republican Bob McDonnell has campaigned on transportation, education and taxes, and holds a wide lead in polls. Democrat Creigh Deeds, though from a rural area, opted not to follow the rural strategy that elected Democrat Mark Warner governor in 2001 and senator in 2008, but instead sought to use cultural issues -- a 20-year graduate school thesis of McDonnell's helpfully unearthed by The Washington Post -- to capture the big majorities Democrats won in the Northern Virginia suburbs of Washington in 2005, 2006 and 2008.

It hasn't worked. No one believes that a McDonnell victory will result in women being expelled from their workplaces and sent back to their ironing boards. Bigger things -- the size and scope of government -- are at stake this year.

In New Jersey, things are murkier. Democratic Gov. Jon Corzine's approval numbers are stuck around 40 percent, but he has used his wealth to pummel Republican Chris Christie with negative ads and hopes that independent Chris Daggett will steal anti-Corzine votes from the Republican. If Corzine wins because he is perceived to be the lesser of three evils, it will hardly be an endorsement of Democratic policies.

The situation in New York 23 is simply bizarre. Local Republican leaders nominated an assemblywoman who has been endorsed by the ACORN-allied Working Families Party and who backs the unions' card check bill. One of the Republicans passed over was nominated by the Conservative Party and has picked up endorsements from Sarah Palin and Tim Pawlenty. He has raised money on the Internet and from the anti-tax Club for Growth. He's now leading in two polls commissioned by his supporters.

All of which highlights, in exaggerated form, the distrust of tea party protesters for Republican insiders and could result in a plurality for the Democrat. As William Galston points out in his New Republic blog, during Obama's presidency voters have been growing more conservative but remain disdainful of Republicans.

The California 10 results will come in last, and just about everyone will be astonished if the Democrat, Lt. Gov. John Garamendi, doesn't win in this San Francisco Bay Area district. But many things are possible in special elections.

Both parties will try to spin the results seven days from now. But one thing seems clear. None of the Democrats seems likely to equal Obama's 2008 percentages in these states or districts. None may even come close. But Republicans may find it difficult to convert the increasing unease with Democratic policies into Republican (or conservative) victories across the board.

Michael Barone is senior political analyst for The Washington Examiner. To find out more about Michael Barone, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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Barack Obama's Domestic Agenda is a National Security Threat

Kim Priestap — Thu, 29 Oct 2009 04:01:00 GMT

What is Barack Obama's stimulus plan really accomplishing? Looking strictly at the numbers, one can't help but conclude that it's accomplishing very little. Unemployment is at 9.8 percent and is only expected to go up further, perhaps as high as 10.5 percent. It is expected to remain at that level for several years. Government tax revenues continue to decrease while government expenditures increase, as hundreds of thousands of Americans each month lose their jobs and become beneficiaries of government handouts, victims of Obama's jobless "recovery." As this cycle continues unabated, it poses a serious problem for our economy. But we are only just witnessing the beginning.

The health care reform bills circulating through Congress are job killers because many of their provisions include billions of dollars of fees and taxes that will hit the American people both directly and indirectly. The Baucus bill in particular is loaded with tax increases not just on individuals but also on insurance companies, device manufacturers, pharmaceutical manufacturers, and clinical laboratories. All of these taxes will be passed on to and will be paid for by the American people through increased medical costs. These de facto tax hikes on the American taxpayer would be a bad idea in a good economy. In a bad economy, they are instant poison. They will add up to large increases in insurance premiums. According to the Wall street Journal, a study by WellPoint shows that premiums could triple under ObamaCare. This rise doesn't even include the increases in health care costs that will occur naturally as technologies improve. Again, that's more money ripped out of the American people's pocket books.

We can expect similar increases in energy costs should the president's Cap and Trade plan become law. The legislation in the House would limit energy producers to a ceiling of CO2 production via the issuance of CO2 credits. If these companies need additional credits to burn more CO2, they will have to purchase them from other energy producers who are producing less CO2. If a company goes over its credit limit, however, the government will slap it with a hefty fine. Experts in the energy industry fully expect this plan to drive up the cost of energy production dramatically, inflating energy prices for already cash strapped consumers. Energy consumers can also expect to spend more money on everyday goods and services as increasing energy costs impact all areas of the economy.

Inevitably, all of this governmental meddling will lead to even more Americans losing jobs. Significantly fewer taxpayers mean less revenue for the Treasury. It also means a lot more money will go out because of millions of long term unemployed Americans will require unemployment benefits, food stamps and other social programs, including subsidies for access to a government run health care system. Money will also be required to pay the salaries of the additional government employees who will staff these two new massive health care and cap and trade bureaucracies.

Something in the budget will have to give and you can be assured it won't be either of the two new programs because once they are up and running, they will be as impossible to reverse as Medicare and Medicaid. So what part of the budget will have to be sacrificed in order to pay for these massive new government expenditures and entitlement programs? The same part that European countries sacrificed as a result of their ballooning social programs: the defense budget.

In 2008, America accounted for 41.5 percent of the world's military spending. Conveniently, America's massive military budget has allowed countries in the European Union to cut back on their defense spending and ramp up their social programs and entitlement spending. Countries with large entitlement programs and smaller military forces are incapable of defending themselves adequately in the face of an attack, yet they continue growing those social programs anyway. Why? Because it has been quietly understood that America would be there to fill the gap should some disaster strike.

However, if President Obama succeeds in taking over the American health care system and implementing his cap and trade scheme, the United States will be forced to do what European countries did in past decades and cut its military defense budget. Of course, the president will deny that he would ever do this, although he vowed as much during the Democratic primaries, but there simply would be no other choice. And in doing so, Obama could accomplish his ultimate goal: undermining America's military might and exceptionalism and putting us in greater parity with weaker European nations.

In a few years many leaders of European nations may find themselves a bit startled at the prospect of once again having to assume the responsibility of defending themselves should America be forced to reduce military spending. Many of these countries have not really provided for their own military defense since World War II. And here lies the irony: when America is forced to slash military spending in order to expand social programs, many of the nations that previously counted on America to be the world's defender may have to cut their country's social programs in order to rebuild their own militaries once again.

Spinning Bad Statistics

Lorie Byrd — Thu, 29 Oct 2009 02:22:00 GMT

Combing through statistics can be time consuming and, at times, confusing. Recently though, I jumped into a chart at the U.S. Department of Labor Bureau of Statistics website and had a hard time coming up for air.

The chart shows the most recent month's unemployment rates organized by state, along with historic highs and lows for each state (plus the District of Columbia) since 1976. The figures tell a story very much at odds with conventional wisdom and reporting done over the past decade regarding the Bush administration, but otherwise closely tracks that of other administrations.

I reviewed the chart and found the following:

The historic low unemployment rates (since 1976) for twenty of the fifty states were recorded during the years of George W. Bush's administration. Seven of those were at the very beginning of his term (in January through March of 2001). Thirteen of them, however, were in Bush's second term when his policies had certainly had plenty of time to take hold and he had solid reason to claim credit.

On the flip side of the economic picture, the chart showed that eleven states (including the District of Columbia) have experienced their record high unemployment rate (since 1976) over the past few months - several months after passage of Barack Obama's so-called stimulus bill. The most recent month's unemployment figures for an additional five states are within one percentage point of the record high since 1976. In other words, sixteen states are now experiencing at or near record high unemployment.

In my home state of North Carolina, the highest unemployment rate since 1976 was experienced in May of this year, at 11.1 percent. The most recent month cited on the chart (September 2009) showed NC with a 10.8 percent unemployment rate, a difference of only 3/10ths of a percent.

California experienced its historic high unemployment mark since 1976 in August of this year with 12.3 percent unemployment. Last month the number had only improved to 12.2 percent. Delaware's worst unemployment since 1976 was seen in June at 8.4 percent. By September, the number had only improved to 8.3 percent. The District of Columbia experienced its historic high of 11.4 in September of this year, as did Florida (with 11.0), Nevada (with 13.3) and Rhode Island (with 13.0).

For eight years of George Bush's administration conventional wisdom, encouraged and reinforced by the reporting done by the mainstream media, was that we were in the midst of one of the worst economies in the history of the world. When the unemployment rates were several points lower than they are today, Nancy Pelosi was asking, "Where are the jobs, Mr. President." Yet the figures from the Department of Labor Bureau of Labor Statistics show some of the states' best employment rates since 1976 were recorded during George Bush's second term, with thirteen states experiencing them in years after Bush's policies were instituted.

A look at the list shows thirty-two states' high unemployment marks occurred during Ronald Reagan's term in office - with almost all of those concentrated in late 1982 through early 1983. In his second term several states experienced record low unemployment. Twenty states experienced their record low unemployment rates since 1976 during Bill Clinton's administration. A look at Reagan's approval ratings during the first half of his first term, compared to later years of his administration, and certainly a look at Bill Clinton's approval ratings during his time in office reflects those numbers.

Unemployment rates are only one little piece of the economic picture, but they are a powerful one when it comes to public perception and approval. During the Bush administration those in the media, as well as Bush's political opponents, were very successful in downplaying the good jobs numbers and shaping public perception.

Recently there have been similar efforts to shape public opinion, but this time in favor of Barack Obama, by minimizing the results of the stimulus plan. Since this is very early in his term and the economic situation could improve significantly over the next few years, Obama may not need such help. But if the economy does not improve soon, not even a fawning media and Democratic Congress will be able to move public opinion enough to stop the steep drop he is seeing in his approval numbers.

WILL: DOSE OF REALISM IN A DRUG WAR

George F. Will — Wed, 28 Oct 2009 04:01:00 GMT

     WASHINGTON -- During his immersion in his new job, Gil Kerlikowske
attended a focus group of 7-year-old girls and was mystified by their talk
about "farm parties." Then he realized they meant "pharm parties" --
sampling pharmaceuticals from their parents' medicine cabinets. What he
learned -- besides that young humans have less native sense than young
dachshunds have -- is that his job has wrinkles unanticipated when he
became director of the Office of National Drug Control Policy.
     "People," he says, "want a different conversation" about drug
policies. With his first report to the president early next year, he could
increase the quotient of realism.
     Law enforcement has a "can do culture" but it also instructs its
practitioners about what cannot be done, at least by law enforcement alone.
Kerlikowske, who was top cop in Buffalo and then Seattle, knows that
officers sweeping drug users from cities' streets feel as though they are
"regurgitating perps through the system."
      He dryly notes that "not many people think the drug war is a
success." Furthermore, the recession's toll on state budgets has
concentrated minds on the costs of drug offense incarcerations -- costs
that in some states are larger than expenditures on secondary education.
Fortunately, the first drug courts were established two decades ago and
today there are 2,300 nationwide, pointing drug policy away from punishment
and toward treatment.
     Kerlikowske is familiar with Portugal's experience since 2001 with
decriminalization of all drugs, including heroin and cocaine. Nature made
Kerlikowske laconic and experience has made him prudent, so he steers clear
of the "L" word, legalization, even regarding marijuana.
     Asked if he thinks that is a "gateway" drug leading to worse
substances, he answers obliquely: "You don't find many heroin users who
didn't start with marijuana." And he warns that more intense cultivation of
marijuana is yielding a product with notably high THC content -- the potent
ingredient.
     In 1998, the United Nations, with its penchant for empty
grandstanding, committed its members to "eliminating or significantly
reducing" opium, cocaine and marijuana production by 2008, en route to a
"drug-free world." Nowadays the U.N. is pleased that the drug trade has
"stabilized."
     The Economist magazine says this means that more than 200 million
people -- almost 5 percent of the world's adult population -- take illegal
drugs, the same proportion as a decade ago. The annual U.S. bill for
attempting to diminish the supply of drugs is $40 billion. Of the 1.5
million Americans arrested each year on drug offenses, half a million are
incarcerated. "Tougher drug laws are the main reason why one in five black
American men spend some time behind bars," The Economist said.
     "There is no correlation between the harshness of drug laws and the
incidence of drug-taking: citizens living under tough regimes (notably
America but also Britain) take more drugs, not fewer." Do cultural
differences explain this? Evidently not: "Even in fairly similar countries
tough rules make little difference to the number of addicts: harsh Sweden
and more liberal Norway have precisely the same addiction rates."
     The good news is the progress America has made against tobacco, which
is more addictive than most illegal drugs. And then there is alcohol.
     In "Waking Giant: America in the Age of Jackson," historian David S.
Reynolds writes that in 1820, Americans spent on liquor a sum larger than
the federal government's budget. By the mid-1820s, annual per capita
consumption of absolute alcohol reached seven gallons, more than three
times today's rate. "Most employers," Reynolds reports, "assumed that their
workers needed strong drink for stimulation: a typical workday included two
bells, one rung at 11 a.m. and the other at 4 p.m., that summoned employees
for alcoholic drinks."
     The elderly Walt Whitman said, "It is very hard for the present
generation anyhow to understand the drinkingness of those years. ... it is
quite incommunicable." In 1842, a Springfield, Ill., teetotaler named
Lincoln said that liquor was "like the Egyptian angel of death,
commissioned to slay, if not the first, the fairest born in every family."
Which helps explain why the nation sobered up (somewhat; these things are
relative). One reason crack cocaine use has declined is that a generation
of inner-city young people saw what it did to their parents and older
siblings.
     Kerlikowske can hope that social learning, although slow and
intermittent, is on his side. But perhaps he knows the axiom that
experience is a great teacher, but submits steep bills.

     George Will's e-mail address is georgewill(at)washpost.com.

     (c) 2009, Washington Post Writers Group

STOSSEL: Self-Governance Works

John Stossel — Wed, 28 Oct 2009 04:01:00 GMT

Much of what government does is based on the premise that people can't do things for themselves. So government must do it for them. More often than not, the result is a ham-handed, bumbling, one-size-fits-all approach that leaves the intended beneficiaries worse off. Of course, this resulting failure is never blamed on the political approach -- on the contrary, failure is taken to mean the government solution was not extravagant enough.

We who have confidence in what free people can achieve have long believed that government should not venture beyond its narrow sphere of providing physical security. It should not attempt to cure every social ill. So it's good to learn that serious scholars have demonstrated that our intuitions are right. Free people, given the chance, solve what many "experts" think are problems that require state intervention.

For that reason, Elinor Ostrom's winning of the Nobel Memorial Prize in Economic Sciences ought to kindle a new interest in freedom. (See my earlier column here: http://tinyurl.com/yj883po.)

Ostrom made her mark through field studies that show people solving one of the more vexing problems: efficient management of a common-pool resource (CPR), such as a pasture or fishery. With an unowned "commons," each individual has an incentive to get the most out of it without putting anything back.

If I take fish from a common fishing area, I benefit completely from those fish. But if I make an investment to increase the future number of fish, others benefit, too. So why should I risk making the investment? I'll wait for others to do it. But everyone else faces the same free-rider incentive. So we end up with a depleted resource and what Garrett Harden called "the tragedy of the commons" (http://tinyurl.com/37nhdm).

Except, says Ostrom, we often don't. There is also an "opportunity of the commons." While most politicians conclude that, depending on the resource, efficient management requires either privatization or government ownership, Ostrom finds examples of a third way: "self-organizing forms of collective action," as she put it in an interview a few years ago (http://tinyurl.com/yhw3u5x). Her message is to be wary of government promises.

"Field studies in all parts of the world have found that local groups of resource users, sometimes by themselves and sometimes with the assistance of external actors, have created a wide diversity of institutional arrangements for cooperating with common-pool resources."

She has studied, for example, self-governing irrigation systems in Nepal and found successes never anticipated in the textbooks. "Irrigation systems built and governed by the farmers themselves are on average in better repair, deliver more water, and have higher agricultural productivity than those provided and managed by a government agency. ... (F)armers craft their own rules, which frequently offset the perverse incentives they face in their particular physical and cultural settings. These rules may be almost invisible to outsiders. ..."

In "Governing the Commons," she writes about self-governed commons in Switzerland, Japan, the Philippines and elsewhere that date back hundreds of years. For example, in the alpine village of Tobel, Switzerland, herdsmen "tend village cattle on communally owned alpine meadows" under rules of an association created in 1483. The rules govern who has access to the grazing lands and how many cows a herdsman can place there, preventing overgrazing. The cattle owners themselves run the association and handle the monitoring. Sanctions are imposed for violation of the rules, but compliance is high.

Don't mistake the association for government. Rather, it is a private co-op designed for a narrow purpose. "All of the Swiss institutions used to govern commonly owned alpine meadows have one obvious similarity -- the appropriators themselves make all the major decisions about the use of the CPR."

She found something similar in Japanese villages, where residents use private property for some agricultural purposes and self-managed common forests for others.

Solutions imposed by external authority were not necessary -- and usually self-defeating: "Academics, aid donors, international nongovernmental organizations, central governments, and local citizens need to learn and relearn that no government can develop the full array of knowledge, institutions and social capital needed to govern development efficiently and sustainably. ..."

How about that? Freedom works.

John Stossel will soon host "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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Dem's Cap and Trade Bill Is a 3.6 Trillion Dollar Gas Tax Too

Jim Hoft — Tue, 27 Oct 2009 13:28:00 GMT

Democrats know their cap and trade energy legislation will cripple the US economy. Barack Obama admitted this on the campaign trail in 2008 saying the program "would cause energy prices to skyrocket." Obama also promised an audience of supporters that cap and trade would bankrupt the coal industry. White House Budget Director Peter Orszag told George Stephanopoulos in a March 2009 interview that Obama's proposed cap and trade energy legislation would increase energy costs for everyone. Democratic Congressman John Dingell (D-MI) summed up cap and trade at a Congressional hearing on April 24th saying, "It's a Great Big Tax."

Cap and trade policies will likely cost Americans $700 to $1,400 dollars per family per year. The Department of Energy estimated GDP losses would be between $444 billion and $1.308 trillion over the 21-year period. Cap and trade also could cost the US 4 million jobs.

But that's not all. Cap and trade would also mean a massive new national gas tax on American families and American business. Cap and trade legislation will drive up the prices of gasoline, diesel and jet fuel. Higher fuel costs will feel like a new gas tax that will hit consumers at every income level, in every state, in every field of transportation and manufacturing.

Senators Kit Bond (R-MO) and Kay Bailey Hutchison (R-TX) released a report this week on the massive new national gas tax on American families, farmers, workers and truckers as a result of the Waxman-Markey cap and trad legislation.

Combining the increased price per gallon of gasoline, diesel and jet fuel expected from climate legislation such as the Waxman-Markey bill multiplied by the amount of fuel this country is expected to use over the life of that bill has revealed the truly massive new gas tax that climate legislation will impose on the American people.

The Waxman-Markey climate legislation will impose a $3.6 trillion total gas tax that includes:

- $2.0 trillion gasoline tax on American drivers, workers and businesses
- $1.3 trillion diesel fuel tax on American truckers, farmers, workers and businesses
- $330 billion jet fuel tax on American air passengers

These figures include provisions in the legislation intended to reduce the impact of this massive new gas tax. While present, their impact is extremely modest - only 1% of the gas tax is mitigated, leaving consumers with a $3.6 trillion gas tax bill.

The Bond-Hutchison report is conservative in its numbers. Americans will likely pay much more than the 3.6 trillion dollars if Congress pushes for a 20 percent reduction in gas emissions rather than the 17 percent emissions reduction goal in the House bill.

While Senators Kerry and Boxer omitted key details necessary to determine precisely their gas tax, they do suggest even greater emissions reductions of 20% in 2020 instead of the House's 17%. This will drive up the cost of the program, energy prices and energy taxes. Additionally, there is no indication that they will expand help to mitigate fuel cost increases. Thus, the Kerry-Boxer gas tax will be even larger than the $3.6 trillion Waxman-Markey gas tax detailed in this report.

The situation will not improve with time. A study (pdf) from the George C. Marshall Institute found that the average American household could expect an estimated tax increase of $1,100 in 2008 rising to $1,437 by 2015, to $1,979 in 2030, and to $2,979 in 2050. And gas prices could rise as much as 2.58 dollars per gallon.

The studies reviewed showed electricity prices jumping 5-15% by 2015, natural gas prices up 12-50% by 2015, and gasoline prices up 9-145% by 2015. As an illustration, gasoline would suffer a 16 cent price increase per gallon at the low end of the estimates to a $2.58 penalty at the high end (using the January 2009 reported retail price of $1.78 per gallon).

Cap and trade legislation was supposedly designed to fight man-made global warming. We now know that earth's temperature peaked in 1998 and has been falling ever since. In 2008 temperatures touched 1980 levels. Today in America just 57 percent believe there is solid evidence the world is getting warmer, down 20 points in just three years. But, Barack Obama and the democrats are determined to ram their junk science tax on America anyway regardless of the facts. As a result, Americans can look forward to more government control over energy, manufacturing and transportation and a 3.6 trillion dollar tax. How's that for hope and change?

Democrat Decay

Melissa Clouthier — Tue, 27 Oct 2009 13:20:00 GMT

Urban decay might as well be called Democrat decay. Democrats rule every major city in America and the more power the Democrats have in the city, the more likely the city will be a complete mess.

Enter Detroit, Michigan.

Detroit might be the second worst example of unchecked Democrat policies in the United States today and that's saying something. The first would be New Orleans. Close behind would be Philadelphia and Chicago. Remember New York City before Rudy Giuliani? No? That's because the city was too dangerous to visit before the Republican mayor cleaned house.

Economic chaos precedes sociological anarchy and that's where Detroit finds itself. For years, Michigan rolled along fat on car manufacturers tax gouging. Communities sprung up like neat little lines of boxes all around the cities. There were indulgent public school programs (my own high school had a beautiful, full-service planetarium thanks to the local Oldsmobile plant).

Taxes continued to increase as more public services were offered. Then, a confluence of events turned Michigan on its head and the state has yet to find its footing. Union demands outstripped the companies' ability to increase production adequately to continue increased profits. The car companies grew top-heavy with layers of innovation-killing management. Good ideas would get stifled in layers of play-it-safe-bean-counting management. The states and cities weren't and continue to be undiversified economically. The equivalent of a seaside fishing town, Michigan got swept along whatever the economic weather. And when sales dropped, tax revenue dropped. And when income fell far enough, jobs were lost but not until after years on furloughs (being paid to do nothing) and lay-offs which drained profits from struggling companies.

And what did Detroit and the state of Michigan do? Raise taxes, of course! Loathe to cut companies or their employees slack, the government continued to hike taxes on those working to help those without a job. In Detroit these days, that's nearly 25% of the working population. Can you fathom that number? One in four people languishing while Democrats fiddle.

So what destruction does Democrat policy produce? This post from The Urbanophile from August shows, literally shows, that it ain't pretty:

In most cities, municipal government can’t stop drug dealing and violence, but it can keep people with creative ideas out. Not in Detroit. In Detroit, if you want to do something, you just go do it. Maybe someone will eventually get around to shutting you down, or maybe not. It’s a sort of anarchy in a good way as well as a bad one. Perhaps that overstates the case. You can’t do anything, but it is certainly easier to make things happen there than in most places because of the hand of government weighs less heavily.
What’s more, the fact that government is so weak has provoked some amazing reactions from the people who live there. In Chicago, every day there is some protest at City Hall by a group from some area of the city demanding something. Not in Detroit. The people in Detroit know that they are on their own and if they want something done they have to do it themselves. Nobody from the city is coming to help them. And they’ve found some very creative ways to deal with the challenges the result. Consider this from the Dowie piece:

About 80 percent of the residents of Detroit buy their food at the one thousand convenience stores, party stores, liquor stores, and gas stations in the city. There is such a dire shortage of protein in the city that Glemie Dean Beasley, a seventy-year-old retired truck driver, is able to augment his Social Security by selling raccoon carcasses (twelve dollars a piece, serves a family of four) from animals he has treed and shot at undisclosed hunting grounds around the city. Pelts are ten dollars each. Pheasants are also abundant in the city and are occasionally harvested for dinner.

This might sound awful, and indeed it is. But it is also an inspiration and a testament to the human spirit and defiant self-reliance of the American people. I grew up in a poor rural area where, while hunting is primarily recreational, there are still many people supplementing their family diet with wild game. Many a freezer is full of deer meat, for example. And of course, rural residents have long gardened, freezing and canning the results to help get them through the winter. So this doesn’t sound quite so strange to me as it might to you. The fate of the urban poor and the rural poor are more similar than is often credited. And contrary to stereotypes the urban poor often display amazing grit and ingenuity, and perform amazing feats to sustain themselves, their families and communities.

Think about this for a moment. Here is a writer triumphing the human spirit in the face of dissolution of the urban social fabric. The scenes described could be a bombed out, war-torn city but they describe a city, a city controlled by Democrats.

Should the Democrats get their way nationally policy-wise, the whole fate of America will be a slow devolution into anarchic utopian, agrarian ideals. So, the benefit will be local farming coupled with lawlessness. Homes will be worth nothing, stripped even, but cheap! The downside? Only rich people will be afford to live in them, because the poor will be renting or homeless. The upside? Less energy usage!

The Democrats push forth policies that work against human nature. They reward bad behavior which begets more bad behavior. They triumph irresponsibility and malign achievement. They indulge cronyism which allows corruption to flourish. Lawlessness ensues. Anarchy results. Decay is inevitable.

Conservatism isn't just about conserving values, it's about conserving and preserving what has gone before--economic, spiritual, architectural, etc. A conservative values law and justice. Only in a free society can the economy grow. (Note that grocery stores can't service these areas in Detroit--it's not safe to be open there.) In New York, when rational law and order returned, the economy could be unleashed. Punitive taxation had to be removed. Success needed to be rewarded.

The Democrats in Washington are going down the exact opposite road. They are taking America down the failed road that ends in a city like Detroit. Their agenda must be stopped. The legacy of Democrat policies is abject failure. America as we know it now, will be a long distant memory.

It only took a generation to destroy Detroit. America could easily fall that quickly

Obama's war on the U.S. Chamber

Michael Lewis — Tue, 27 Oct 2009 13:18:00 GMT

While many are criticizing Obama for his lack of ability to bring the promised "change" to Washington, he has in fact brought change to Washington, inasmuch as Chicago-style, knee-capping politics never made it to the White House before 2008.

Chicago politicians are famous for the vicious, vindictive, arm-twisting, back-stabbing politics that have long marked Illinois as a poster child for corruption, influence peddling and radicalism. Contrary to Obama's pledge to refuse money from special interests, a claim former Senator Mike Gravel (D., Ala.), the Obama administration has thus far used everything from the stimulus bill to Kenneth Feinberg's unconstitutional voiding of private pay contracts to repay its biggest campaign donors and silence its critics.

Take the Chrysler restructuring for instance. Cerberus Capital, which rescued Chrysler from the brink a few years ago, acting as the life preserver for both Chrysler and its employees, combined with parent company Diamler, held some $2.5 billion in secure loans to Chrysler. The unions, whose outlandish benefits has in no small part contributed to the downfall of Detroit and the companies who gave life to the city, held no debt to Chrysler. In a normal bankruptcy procedure, those holding secure debt are paid off first. Because the UAW had spent tens of millions of dollars to get Obama elected, the UAW made no sacrifice and got paid off first. In fact, UAW president Ron Gettelfinger testified before Congress, recently said that the "working men and women" of the UAW had already sacrificed enough-through the creation of Job Bank, which paid laid-off UAW members their full salary to sit on their fannies. Cerberus held an 80% stake in Chrysler prior to the government-financed bailout, with the rest held by bondholders, covering everyone from individual investors to municipal pension plans. Obama personally took those evil bondholders to task for balking over a payout of pennies on the dollar, saying "everyone must bear a loss," and furthermore, called them "selfish". The UAW, who actually laid off employees while spending millions on Obama's election campaign, walked away with a 55% stake in Chrysler, while Cerberus and Diamler forfeited their ownership in the company in exchange for...nothing. Wait-Diamler did get to pump $600 million into the UAW pension fund to satisfy liberal interests. The taxpayers were real winners, shelling out $4 billion in TARP funds and $3.2 billion in bankruptcy financing, which was probably taken from future retirees out of Social Security.

The unions spent over $100 million to elect a president, and thus have first rate access to White House officials. While Obama has thus far been able to bring forth Big Labor's golden egg, the Employee Free Choice Act, aka card-check legislation, the White House has been on a months-long witch-hunt against opponents of legislation that would hurt the economy, as Sen. Arlen Specter (D., Penn.) has said. Just last week, White House advisor Valerie Jarrett called the U.S. Chamber of Commerce, which opposes EFCA, cap-and-trade (which Rep. John Dingell of Detroit has called a "big, massive tax"), and government-run health care, "old-school," and suggested that member companies find better security. Or? What? Al Cap- I mean, Barack Obama is going to break out a baseball bat? Unfortunately for the White House, their temper tantrum has resulted in a boost for the Chamber-money has begun flowing in and members have asked the Chamber to step up their activity.

As if threatening the engine of America-business-wasn't enough, Obama has dispatched White House Communications Director Anita Dunn, who apparently admires Mao for his ability to "do big things and get the job done," to launch a full-scale war on Fox News, which actually has the gumption to fact-check the statements made by administration officials. This practice, according to Dunn, is now known as "opinion," as opposed to sucking up to the president and thereby practicing real journalism and calling opponents of administration initiatives racist, like venerable journalist Keith Olbermann. Nixon tried to pick a fight with the Washington Post and suffered badly-Obama picks a fight with FNC and Glenn Beck and their ratings continue to soar.

Memo to Obama-criticizing the organizations of political opponents and news organizations only make them more popular. Add this to your "Lessons to Learn list." You can put it right under "learn to use Google-helpful in vetting people for czar appointments."

Does the Government Think You’re Stupid? Or a Child?

Rick Moran — Tue, 27 Oct 2009 04:01:00 GMT

I am often vexed lately when reading what our government is doing. On the one hand, I find it hard to fault the intentions of those who wish to make our lives "easier." On the other hand, I want to throttle them for insulting my intelligence by proposing to do something for me that any reasonably aware 10 year old should be able to do for himself.

If the modern welfare state teaches us anything, it is that we must be cocooned and protected as if we were a newborn babe, or prevented from harming ourselves because we're too stupid to know any better. It's not enough that government warn us that the stove is hot. They must put on oven mitts for us and then place a 10 foot high sign in front of our face telling us not to touch anything.

I get this feeling of being patted on the head and told I'm a good boy when reading about the brand new Consumer Finance Protection Agency (CFPA) - another in a long line of alphabet soup government watchdog agencies who are ostensibly set up to protect us from rapacious corporations who would do us harm. And, as you might have guessed, the CFPA has also been constituted to protect us from our own stupidity.

In this case, it will be financial products from which we will be spared the consequences of any irresponsible, ill-informed decisions we might make. The stated reason is to prevent another financial meltdown like the one that occurred a year ago. But as Katherine Mangu-Ward writing in Reason Magazine asks, does that include payday loan outfits too?

In contrast to the complex instruments that helped bring about the financial crisis, payday loans are astonishingly low tech: Applicants bring in a stack of paper showing that they have a job and a bank account, write a paper check in a physical store for the amount they will owe when the loan comes due, and walk away with a handful of cash. These localized, low-key transactions are hardly the stuff of innovative high finance, but that hasn't stopped Congress and the president from purposefully conflating ordinary, everyday financial practices they deem unsavory with those that caused a global financial meltdown.

This is a perfect example of Uncle Sam believing we are all toddlers and need the protection of mummy and daddy from doing something that requires an iota of thought. Payday loans are the least complicated, most upfront financial transaction you can imagine with the possible exception of putting a dollar into a vending machine for some Fritos. The consumer must choose to get into trouble all by themselves - no unscrupulous businessman is necessary in that equation.

Not paying off your debt has consequences whether you're borrowing $200 from the local Cash Store for an emergency or $200,000 from Countrywide Financial for a house. The problem with agencies like CFPA is that they don't differentiate between the two. To government, both are part of the same problem; consumers who are "taken" by greedy businessmen.

I hate to break it to our Mother Hen regulators, but anyone who would sign their name to a loan that they have not examined as far risks are concerned, or take on terms they may not be able to meet, or do not understand these risks and terms and fail to ask for clarification, they deserve exactly what that kind of irresponsible individual behavior merits; foreclosure or bankruptcy. If the individual selling the mortgage is misleading the applicant, or lying to them, there are laws already on the books to deal with crooks like that. The victim also has legal redress in such cases to recover any losses.

This is not good enough, says government. Hence, we are saddled with the CFPA and its aggressive enforcement of its standards that will grade financial products based on how easy it is for a consumer to understand them. A financial services employee who sells the consumer a product that the government thinks the buyer doesn't understand properly could lead to hefty fines and even jail time for the employee.

To make matters worse, the CFPA chief would have enormous powers to mete out punishment to transgressors; sort of like a Super-Daddy on steroids:

Though two oversight panels would advise the new director, he or she would not have to follow their recommendations and instead would have a far-reaching mandate to address unfair, deceptive and abusive practices.

The director "has unfettered power to regulate, investigate, prosecute, try and sentence," said William Isaac a former Federal Deposit Insurance Corp. chairman, who is now the chairman of LECG Global Financial Services.

If you get the wrong sort heading up the CFPA, the potential for far reaching corruption would be possible. A political partisan in that position could reward their friends and punish enemies, while making a cruel joke of their consumer protection mandate.

And that mandate would be extensive. It is estimated that 80% of bank depositors would fall into the CFPA's tender embrace, although most "community banks" would be exempt from the bulk of the regulations. Complaints against these smaller banks would still be investigated but the agency would not have the statutory authority to directly examine their product lines and business practices.

All in all, there is little doubt that the real target of the CFPA is risk taking; the act of faith made by entrepreneurs and venture capitalists who have a dream about building something tangible from nothing. Or the investor who wishes a better return on their money and is willing to gamble to get it. It is this kind of innovation that fuels the economy that will be stifled under this new agency.

The CFPA will no doubt receive the plaudits of those who look upon consumers as sheep, and businesses as evil shearers. But I can't help but look at this agency and ask; what has happened to personal responsibility? Is it desirable to remove almost all risk from investing?

The answers to both of those questions lie in a government who mistakes itself for a knight protector of children and other weak folk who they believe are at sea when it comes to making their own self interested decisions about their financial lives.

Democrats fiddle while the economy burns

Cassy Fiano — Mon, 26 Oct 2009 13:11:00 GMT

If the unemployment rate is at a dismal 9.8%, we’ve lost an average of 16,000 jobs a day, and only one state saw an increase in jobs over the last nine months (North Dakota, with an increase of less than 2,000 jobs), would you consider that there could be such a thing as a “jobless recovery”?

As ridiculous as it may seem, it’s exactly what Democrats seem content to settle for. They’re so preoccupied with health care and cap-and-trade that they’ve seemingly forgotten that we have an ailing economy and an outrageous pile of debt. While Obama is promising that he’ll work until everyone who is unemployed will be able to get a job thanks to his economic policies, his actions speak otherwise -- and so do the words of his economic advisor, Christina Romer. Last week, she told Congress that unemployment was likely to stay exactly where it was, but that she still expected an economic growth in the third quarter.

And with that, we have a “jobless recovery”. Unemployment may remain at 9.8%, but hey, chin up -- we’re still going to have some form of economic growth! You may not be able to afford to feed your family, but Obama’s economic advisor says it’ll all be OK, so take solace in that.

The reality of the situation is that, without a decrease in unemployment, the economy can’t really improve that much. And it’s looking increasingly bleak. Harry Reid, the Senate majority leader, has to answer to a 13.3% unemployment rate in his home state of Nevada. While North Dakota has seen an increase in jobs, they are the only state to do so and it was a mere 1,800. (North Dakota lawmakers also cut taxes, which may have something to do with it.)

As for jobs created through the stimulus package, they came at a heavy price. Lorie Byrd notes that there was a cost of a whopping $71,500 per job -- and that’s just based on funds distributed so far. The average American salary is less than $40,000 a year, so anyone who got a job through the stimulus package and is getting paid an average salary is finding that their stimulus job cost them money.

But again, we’re still being promised economic growth in the third quarter. But without some relief in the job market, what will happen in the fourth quarter? What will happen in 2010? If Americans can’t work, if they can’t make and spend money, then the economy can’t survive. It especially can’t survive if Democrats keep spending the way they have been. In the fiscal year of 2009, the government ran a $1.4 trillion deficit, more than triple 2008’s deficit.

Meanwhile, Democrats are focusing on disaster legislation that will only serve to hurt the economy more. The health insurance industry, for example, will be destroyed in Obama’s government run health care reform gets passed. However demonized insurance companies may be, the reality is that health insurance companies are struggling to make it right now. The average profit margin for a health insurance company is currently 2.2%. And insurance companies won’t be able to compete with the government, which will have limitless borrowing potential. Insurance companies will find themselves edged out of business, and before you know it, socialized health care will have taken over -- not quickly or noticeably, but a little at a time. The government will force a struggling industry to shut down. And all this will serve to do is to make costs skyrocket and force rationed health care onto us.

The other nightmare Democrats are trying to cram down our throats is cap-and-trade. It’s being passed in the name of global warming and saving energy, but as with most Democratic initiatives, that’s misleading. Cap-and-trade, if passed, would be the largest tax increase in American history. It will affect every facet of our lives, from our cost of living to our global economic competitiveness. It will raise operating costs on businesses as well, and it won’t do a dang thing about the so-called global warming. But Democrats still want to push cap-and-trade through, despite the economic disaster that will follow.

With the economy already in such shambles, why would Democrats want to pass such harmful legislation?

It’s simple: because they want to, because they ignore the evidence of what will happen, because it’s the fantasy legislation they’ve been deprived for the last twenty years, and because it’s a massive power grab for them. They don’t know how bad it will be, and they don’t care. Life will still be comfortable for them, provided they don’t get voted out of office, and most of them feel like their position as a senator or a representative is one they’re entitled to for life. Reality is not very well understood in Washington, D.C., and reality is harsh.

Raising taxes, for example, is a horrible idea during a recession. Small business owners will be the ones affected the worst by cap-and-trade. Mega-corporations can move their operations overseas without a problem, but mom-and-pop stores can’t. So the only options they have are to raise costs for their customers or to fire employees. If conditions don’t improve, then they’re forced to close their doors. None of those options are good for the economy; a fired employee can’t spend their paycheck and stimulate the economy, and neither can a failed business owner. But Democrats don’t understand, and they don’t care. They see nothing but their dreams coming true, and are happily ignoring the evidence of what will surely follow. It’s the modern-day equivalent of Rome, except Rome is our economy and the Democrats are Nero.

While they’re fiddling with health care and cap-and-trade, our economy is burning.

Seven Months and 2.7 Million Lost Jobs Later...

Duane Lester — Mon, 26 Oct 2009 13:06:00 GMT

It was during a January 10th radio address that President Barack Obama laid out the number one goal of his economic stimulus plan: Create 3 million new jobs in the next 24 months, with only 600,000 being government jobs.

So how's it working out?

Seven months after the passage of the Stimulus, a bill so important it had to be passed as quickly as possible, a massive 30,000 jobs have been created. The Heritage Foundation give us some perspective on those numbers, calculating the cost per job at $533,000. However, ABC's Jake Tapper reports that out of the money allotted by the federal government, $16 billion, only "$2.2 billion has actually gone to these contractors to create jobs," putting the cost per job at $72, 408.

Tapper's calculation was outright rejected by the White House. In fact, they put the number of jobs the stimulus has created at a million or more. Recovery Act spokeswoman Elizabeth Oxhorn explains this by stating “contract money doesn’t just go toward labor/wages for workers – it also funds things like purchase of equipment and supplies which also creates jobs.”

Sounds like trickle down stimulus to me.

Where are these jobs then? Jim Hoft points to Recovery.gov and shows Connecticut has created 20 and only spent a million dollars to do it. New Hampshire racked up 22 jobs and only spent $430,000 to do it. However, the federal government reports the stimulus has saved 250,000 education jobs. So, there is that.

Let's get serious. The only thing this administration has stimulated recently is Fox News' ratings. While Connecticut may have created 20 jobs, it lost close to 36,000. New Hampshire lost 12,000. In the time since the Stimulus Bill was passed, only one state has created jobs: North Dakota. The rest have lost 2.7 million collectively.

White House economic adviser Jared Bernstein calls this "quite positive" and says so far the result "exceeds our projections."

In fact, according to the left, the good times are just getting started. Supporters of the stimulus will tell you critics are jumping the gun because the money has yet to get rolling. However, that contradicts the testimony of Christina Romer, the Chair of the White House's Council of Economic Advisor's. Romer told Congress:

Christina Romer, the head of President Obama's Council of Economic Advisers, said Thursday that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year.

She told a congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 percent, through the end of 2010.

For the math junkies out there, Romer's numbers show jobs costing the taxpayer anywhere from $323,000 at the low end to $130,000 at the high end. Anyone out there get a new $130,000 jobs courtesy of the Stimulus Plan?

Close to three million jobs lost, but the government has created over a million? The Stimulus is just getting started but is getting ready to fizzle out? This is enough to make a person's head spin.

Regardless of what the White House or its sycophants in the media tell you, the Stimulus is not having a positive effect on employment. The people who are estimating the number of jobs saved or created are the same people who told us unemployment wouldn't exceed 8 percent if the Stimulus Bill passed. Today it is creeping up on 10 percent. These are the same people who, according to Vice President Joe Biden, underestimated the severity of the economic downturn.

Are we supposed to believe that while they "misread the severity" of the recession, the results of the Stimulus are still exceeding their expectations? Doesn't that make them complete incompetents? If things are going great, then doesn't it follow that they were initially spending far, far more money than they needed to spend? Or did they have it right from the get-go and Biden was just being Biden?

Or is it possible that the Stimulus is a failure and the administration is spinning everything so fast they could trip over each other's stories?

The numbers speak for themselves.

It's been seven months.

The budget deficit has quadrupled.

Over 2.7 million jobs have been lost.

The unemployment has risen from 7.6 percent in January to 9.8 percent today and we are told it isn't going to get better anytime soon.

And not a single cent of taxes have been cut. Except in North Dakota...the only state to grow jobs.

T.J. Brown Column

T. J. Brown — Sun, 25 Oct 2009 02:29:00 GMT

In business, the most difficult things to value are people.

As an employee, I have struggled at figuring out just how much my work is worth. On the one hand, I don't want to price myself out of getting that job or raise. On the other hand, I am not the only person who doesn't like being underpaid.

Employers have the same problem. Overpaid employees are a drain on resources but underpaying employees leads to constant turnover. Every company wants to have the best people possible in each department. The best people possible cost money.

Simply put, the issue of compensating employees is a tricky and inexact science. Businesses that do it well succeed. Businesses that don't, struggle. At least that's the way it used to be.

Then the Federal government got into the business of rescuing failing institutions. True conservatives will agree that TARP and the other assorted government bailouts were among former President George W. Bush's biggest failings. Once the money was paid out, taxpayers do have an interest in how the bailed out companies spend. Bonuses to AIG, Citi and General Motors executives were particularly galling considering the amount of equity the government held in these companies.

This week, Obama Administration "Executive Pay Czar" Kenneth Feinberg announced some tough compensation rules governing the way financial companies that received government aid pay their top executives. The new guidelines cut some executives' pay by as much as 90 percent.

I can't sympathize with people like Ken Lewis of Bank of America, whose earnings in 2008 were in the hundreds of millions. But I can dislike the government's activism in the private market.

Executive pay is an issue that liberals have loved to throw around since the beginning of time. It's an issue driven by jealousy, greed and little else. So what if the CEO of XYZ company makes $20 million per year in salary and a part-time janitor at the same company makes $10 an hour? The janitor can aspire for a better-paying job either with the same company or a different one.

It all reminds me of an ethics class when I was getting my MBA. The professor (a libertarian for good measure) polled the class on whether executive pay should be regulated. The number of students who thought it should be surprised him. Normally, few MBA students would be for such regulation. Why? "Aren't you here because you someday want to be a CEO?" he asked.

Maybe not. After all, any senior management position comes with a ton of responsibility to the board of directors, customers and employees; long hours; civil and criminal liability; and now regulated pay.

Pay czar Feinberg enjoys a stellar reputation as an attorney and mediator. However, is he any better suited than a company's board of directors and ultimately its shareholders to decide salaries? Sen. Chuck Schumer (D-N.Y.) thinks so, and that's why he's proposing legislation that will put all 55,000 publicly traded corporations under Feinberg's jurisdiction.

Now Thursday, the Fed came out with a proposal that will limit the types of bonuses and incentives that encourage "excessive risk." Some pay-for-performance plans encouraged short-term profits at the expense of the long-term, Fed Chairman Ben Bernanke said.

What is excessive risk? Some of the best long-term payoffs come with taking extraordinary risks. Some of the best short-term payoffs come from making safe short-term investments.

Whatever Bernanke's definition of "excessive risk," it should not be the Fed's call on how private companies pay their help. If companies are rewarding bad risks, they'll pay for it, as will those who chose to do business with these companies. That includes good employees. That includes business partners. That includes the customers.

The truth is that stakeholders appreciate the value risk brings. Employees that make calculated risks that bring results should be rewarded.

This all brings us back to the issue of excessive executive compensation. Obama said earlier this week that he's not about punishing success, but expanding Feinberg's powers sends the opposite message. The top talent will seek careers in industries unregulated by the government, or worse, overseas. Those asked to replace the current crop of corporate chiefs might be even less qualified, less motivated and less competent than their predecessors.

Even worse for Obama, limiting executive compensation might create another problem for him. He would like to raise taxes on the "wealthy" so he can pay for an expensive health care plan. Limiting the annual income of the ultra-rich will severely curtail the treasury's take.

WILL: ANOTHER ENTITLEMENT FOR SENIORS

George F. Will — Thu, 22 Oct 2009 04:01:00 GMT

    WASHINGTON -- Three years before Rep. Wilbur Mills, the Arkansas
Democrat who then chaired the Ways and Means Committee, had his fling with
a stripper named Fanne Foxe, aka "The Argentine Firecracker" (Mills joined
her on stage at Boston's exquisitely named Pilgrim Theater, which
specialized in what Time magazine primly called "ecdysiast exhibitions";
this was after he had a fracas with Ms. Foxe that provoked her to jump into
Washington's Tidal Basin across from the memorial to Thomas Jefferson, who
really believed that democracies could behave rationally), he decided seek
the Democrats' 1972 presidential nomination. So in an almost admirably
straightforward attempt to buy the votes of the elderly, he successfully
championed an automatic COLA -- cost of living adjustment -- for Social
Security.
    His campaign fizzled but his achievement endures, and his place in
liberalism's pantheon is secure. His COLA, which began in 1975, is the
entitlement that proves that the entitlement system, like the universe,
will expand until, perhaps like the universe, it collapses in on itself.
    Barack Obama has now established Mills' Social Security COLA as the
capstone to the architecture of the entitlement culture that is modern
liberalism's crowning achievement: It is an entitlement to which you are
entitled even when you are not entitled to it. Obama says 57 million
Americans -- every Social Security beneficiary and some other recipients of
federal entitlements -- are entitled to $250 apiece to assuage the
disappointment of having not been injured by inflation. Because the cost of
living declined 4 percent last year, the 57 million are not entitled to the
actual COLA, but they evidently are going to be declared entitled to
monetary consolation for the misfortune of not experiencing misfortune.
    This is the second continent-wide shower of $250 checks. The first
came from the $787 stimulus package enacted in February. There will not be
another such shower, until the next one.
    In January, retirees received a 5.8 percent COLA, the largest since
1982, primarily because of a surge in energy prices, which since then have
declined. Furthermore, after lifetimes of accumulation, Americans over 60
have the highest net worth of any age cohort. So why the special solicitude
for them during an economic downturn that has afflicted almost everyone?
    Obama says "we must act on behalf of those hardest hit by this
recession." But are they the hardest hit? How does he know? By what
measure? Is it possible that, say, the millions who have lost jobs have
been hit harder than retirees?
    Andrew Biggs of the American Enterprise Institute notes that a "lost"
COLA can mean a significant (BEG ITAL)increase(END ITAL) in the value of
retirees' entitlements. Because falling prices increase the purchasing
power of stable benefits, and because many Medicare premium increases are
limited in years in which no COLA is paid, the typical retiree's purchasing
power will be almost $725 higher next year.
    More than 40 percent of the voters in 2008 were at least 50 years old.
Perhaps Obama can do better than Mills did at purchasing the affections of
the elderly. He needs to because they are especially unenthralled about his
plans for their health care.
    But about one thing, they should relax. A president who cannot resist
dispensing a semi-COLA after the cost of living declines will not really
fund a substantial portion of the new health care entitlement by cutting
more than $400 billion from Medicare. And speaking of the unbelievable:
    Maine Sen. Olympia Snowe is being beatified as the incarnation of
bipartisanship because, of the 217 Republican senators and members of
Congress, only she cast a vote for a Democratic health care addition to the
nation's Ponzi entitlement structure. Yet in 2005 she opposed a Republican
plan for shaving just $10 billion from government health care entitlements
over 10 years. If, as seems probable, she would have opposed the health
care bill she just voted for if Republicans had proposed it, does that
devalue her version of bipartisanship?
    Perhaps the 57 million $250 handouts should be seen as a down payment
on a stealthy Stimulus III, which Democrats do not have the audacity to
advocate candidly. In any case, Obama, whose inaugural address was a
summons to "responsibility," does not even feign an intention to pay for
them with offsetting economies. The money will be borrowed, much of it from
abroad, much of that portion from China. Fortunately, foreigners have
unlimited appetites for lending to America. Don't they?

    George Will's e-mail address is georgewill(at)washpost.com.

    (c) 2009, Washington Post Writers Group
    (See attached file: will1020.txt)

First do no harm

Lorie Byrd — Thu, 22 Oct 2009 04:01:00 GMT

When it comes to the economy, those in government would be wise to follow a tenet of physicians -- first do no harm.

During the 1996 presidential campaign I asked a friend why he planned to vote for Bill Clinton. He said he liked what Clinton had done for the economy. I reminded him that when Clinton took office the economy had already been in recovery for over half a year. I asked him what Clinton had done regarding the economy that he liked so much. He thought about it a bit and then said, "Well, he didn't really do anything. He just didn't mess things up."

I did not agree with him about the specifics, but what he said did make a lot of sense and helped me to understand why the President was so popular at the time. It didn't matter whether or not the state of the economy was the result of anything Bill Clinton had done, or if it was in spite of things he had done, the perception was that Clinton deserved credit for the strength of the economy. When things are going well, people are not likely to want to change course. After all, he hadn't done anything to terribly "mess things up."

That is how conservatives often think of the economy - it works better the less those in government try to "manage" it. There are fewer opportunities to mess things up that way.

When Barack Obama took office the economy was suffering. He moved quickly to pass a $787 billion supposed "stimulus" bill. The stated intention was to jump start the economy with lots of spending on public projects to prevent the unemployment rate from reaching 9 percent. Many of those projects were more about congressional pork than employment though, and many of the jobs "created" are temporary.

As columnist Cassy Fiano noted, "since the stimulus package's passing, we've lost an average of 16,000 jobs a day, and the unemployment rate has shot up to 9.8%, a 26-year-high. The budget deficit has quadrupled, and our public debt is currently around $11 trillion."

We are also seeing the breakdown costs for the jobs "created" through the stimulus plan. Recent government figures show a cost of $71,500 per job just based on the funds distributed so far. Other calculations show the cost per job even higher. Even when basing the success of the stimulus plan on the administration's own expectations, it comes up far short. It is hard to imagine any measure by which it could be considered anything but a miserable failure.

Since his election, we have seen month after month of job losses and some are discussing the possibility of a second "stimulus" plan. Just because the first plan has (so far anyway) made the unemployment situation much worse, don't assume politicians would be reluctant to make matters even worse yet. There are too many examples of politicians doing just that in the past.

It is not unusual for politicians to enact failed policies, then when it becomes evident they are failing, instead of changing course, to throw more money into the same failed policy. Remember the War on Poverty? How about the failed approach to education for so many years? Instead of coming up with new and innovative solutions to falling test scores and other problems in schools, the preferred policy for many years was to throw more money at the same policies that failed in the first place.

President Obama and Congress would do well to consider what the current stimulus plan has done thus far and opt to do no further harm to the economy. If I thought this administration and congress could come up with a plan that contained actual stimulus, especially in the form of tax cuts, that would be one thing. So far though, I have seen nothing to lead me to believe they are capable of such, and as long as they continue to maintain that what we are seeing now is success beyond Joe Biden's wildest dreams, I am afraid of what much more of this "success" would look like.

As noted earlier, when Bill Clinton took office the economy was well into a recovery. In spite of that fact, what was sold to voters as the "worst economy in 50 years" during the campaign, became the "Clinton recovery" virtually overnight. Clinton declared it the case and those in the media put their stamp of approval on the claim and convinced the country that it was so.

The Obama administration appears intent on trying to spin the stimulus plan as a success. So far they are having trouble convincing even the Obama-friendly media, much less the public at large. When people are out of work, or fearing they may soon be, they tend to pay much closer attention to the cause and effect of the state of the economy than they do when things are coming up roses. If they are paying close attention now, they are probably not going to be thrilled to hear talk of Stimulus, the Sequel. Conservative or not, people are realizing sometimes things don't turn out so well when the government "messes" with the economy.