Unemployment Payments Create Jobs And Other Nonsense

Unemployment Payments Create Jobs And Other Nonsense

Colonel Donald J. Myers USMC(Ret)

On Monday our president announced that unemployment payments create jobs. His staff at the White House echoed that statement. Former Speaker Nancy Pelosi said the same quite some time ago and on Tuesday she repeated it. Senate Majority Leader Reid also repeated that unemployment payments created jobs. Of course, all of this is to garner support for extending unemployment payments. Think about it. If this were true, unemployment should be at zero since we have been paying it for so long. Again, if this were true, why not double the payments and unemployment could be reduced twice as fast.

The president spoke about the tough economic times as if he had nothing to do with it. He has been in charge for five years and once again he is going to focus on the economy like a laser beam. I think that he better check the sights on that laser gun because it sure is not hitting the target. Perhaps it would help if he had staff members who actually had experience beside government or academia. Theory is great and one should be familiar with it, but theory and the real world have a tendency to differ if everything is not perfect. Our strength as a nation comes from freedom and the ability of our people to adjust to changing situations as they occur. The best leaders are able to anticipate potential changes and plan accordingly. We have seen this in business, the military and rarely government.

The thinking inside the Washington beltway is totally out of touch with the country. We are being led against our will and we do not like it. The regular American knows that we are in trouble financially and spending must be reduced, but our political leaders fail to appreciate this fact. They look at the national debt as merely a glitch that can be handled with more taxes, printing more money, and borrowing more money. In the past, we were always able to solve our difficulties because of our industrial superiority, technology, and typical American attitude of getting the job done. Much of that industrial superiority has gone and our technological advantage is also evaporating. The dramatic increase in food stamps, disability applications, and people just stopping their search for jobs has taken a toll on that get the job done attitude Americans are known for. Policies in Washington can change much of that, but I see no indication where that is being done. In fact the opposite is occurring. Our military is being cut to dangerous levels even as additional requirements are levied. More and more rules and regulations are issued by the government that cause our businesses to be less competitive.

I have lived long enough and done enough reading and studying to appreciate the fact that tough times require tough people. Our history is full of such examples such as George Washington, Thomas Jefferson, Benjamin Franklin, Abraham Lincoln, General U. S. Grant, President Franklin Roosevelt, Dr. Martin Luther King, and President Ronald Reagan just to name few. I remain optimistic about the country, but time is running out. The window of opportunity is slowly closing and we must take advantage of opportunities such as the Canadian pipe line, fracking, reduced spending, and reducing regulations.

Guest Post. Economics: Not Rocket Science

Economics: Not Rocket Science

Colonel Donald J. Myers USMC (Ret)
 

When I listen to high ranking individuals talk about the economy, I wonder where they have been or have been educated during their formative years. I also wonder how they look at their own budgets if they have such little understanding about money and how to best use it. I suspect that the bottom line is that the money that they throw at possible problems is not their money and as a result, there is little accountability or concern.

Our country is unlike any other in that the ability of becoming unbelievably rich remains viable. Contrary to what far too many profess, hard work and innovation pays great dividends in this country. The greatest percentage of the rich in this country became rich because of the work that they did. They created a product or program that a huge number of people wanted and were willing to pay for it.

The richest group of people in this country are the senior citizens. Most of them never made a huge salary, but they always saved and did not spend on objects that they could not afford. They lived on their income and avoided going into debt except to buy a home. Their cars were for transportation and not show. In most cases, the wife cooked and stayed at home to raise the children. The latest senior citizens had the wives working, but much of the other aspects of the middle class remained true. Their parents or older siblings showed the way.

Schools taught the basics of economics and the examples on earlier TV portrayed the example of living within ones means. Some may say that that was not real life, but it worked. I understand that there is a percentage of the senior citizens who truly are needy and require assistance, but that is a small percentage compared to the entire population of seniors. Unfortunately, some aspects of the media attempt to portray senior citizens as a whole who are nearly destitute. That is utterly false.

Our government has grown well beyond what is necessary to effectively operate. There is a proposal now to double the federal tax on gasoline because it has not been raised in 20 years. The congressman proposing this says that it is needed to improve the highways and bridges throughout the country. That increase will bring in an additional $20 billion. When one looks at the amount of taxes that already are collected such as gas taxes, taxes on oil companies, tolls, state and local taxes, it amounts to well over a hundred billion dollars. Where has that money gone?

When we look at various welfare benefits, we learn that it is controlled by numerous federal agencies with absolutely no coordination among them. Trying to reduce this piggy bank is nearly impossible because so many agencies are involved and are unwilling to reduce their expenditures. 

The typical American family understands economics. The head of the household knows that spending more money than one earns will cause significant difficulties in the future. Unexpected expenses such as the air conditioning dying demands that expenses in other areas such as entertainment or dining out be curtailed for a period of time. That is not great, but that also is life. We need to teach our congress and president this basic fact.

*****

Donald J. Myers a retired colonel in the U.S. Marine Corps, is a regular columnist for Hernando Today. He lives in Spring Hill and can be contacted at dmyersusmc@aol.com.

Guest post: Observations on Paul Krugman’s Column: “Medicaid and Freedom”

Observations on Paul Krugman’s Column: “Medicaid and Freedom”

Samuel L. Skogstad

New York Times columnist---or, more accurately, polemicist—Paul Krugman is also a Nobel Laureate in economics, and a distinguished professor at Columbia University. Yet his NYT columns regularly and consistently overflow with flaming, hate-filled rhetoric against “conservatives” and “Republicans.” Exaggeration, vilification, and sweeping unsupported generalizations are his preferred tools of “analysis.” His “Medicaid and Freedom,” reprinted in the Sarasota Herald Tribune on April 9, 2013 is an excellent example of his use of these instruments of bigotry and demagoguery.

In that column he reiterates his usual theme, namely that “the U.S. Right” (which he uses interchangeably with “conservative,” and “republican”) only favors policies “comforting the comfortable, and afflicting the afflicted.” The proof he offers is the expected opposition of many Republicans to the Medicaid expansion in President Obama’s proposed FY 2014 budget. He adds that “Republicans oppose the expansion of programs that help the less fortunate.”

Krugman’s intellectual contortions allow him to conclude that the massive expansion of government control over the production, delivery and pricing of health care and health insurance (he doesn’t distinguish between the two,) (aka Obamacare) will greatly increase individual freedom. If you oppose it you oppose freedom. This is the way charlatans argue. What has become of the modest and respected scholar who toils away in the vineyards of academia, seeking truth through honest, objective and rigorous inquiry?

This observer and many of his fellow economists believe that Obamacare is a nightmare of confusion and complexity, precisely because it seizes control over the production and delivery of health insurance and care. If the problem is that too few people can afford access to the healthcare system, a far less expensive and less inefficient way to attack it would seem to be to let the public sector role in paying for it expand, while relying on the price system and free private markets to deal with its production and delivery. There is much room for legitimate debate on the definition of the problem and possible solutions. But Krugman is not advancing the cause of honest dialogue by merely genuflecting before Obamacare and vilifying people with competing points of view.

Dr. Skogstad is an economics professor and a brother Marine. ~Bob

Where are we going and why are we in this hand basket?

Where are we going and why are we in this hand basket?

Samuel L. Skogstad, Ph.D.

Professor Emeritus of Economics

Georgia State University

(In an exchange in which he corrected--for the worse--one of the debt charts on the economy going around, Sam sent me the piece below, in response to my asking the old joke question, which I have used as the title. He kindly agreed I could share it with readers. He is both an economist and a brother Marine. His explanations are clear and always worth reading. ~Bob)

Good question (i.e. where are we going and how did we get here?). It seems to me that one of the very important causes of our having gotten here is the political reality that presidents and legislators in both houses keep their eyes pretty clearly on the next election, and not very far beyond. Keynesian economic thought, taught us that the mere fact of an increase in government spending, paid for with borrowed money, isn't necessarily harmful. And I think virtually all economists believe that this can be true if it is done for short periods and doesn't raise our debt servicing burden very much. But to the extent anyone outside the academy learned about Keynes' ideas, they got the totally false impression that government debt isn't harmful---period. So the voting public tolerated borrowing for any kind of government goodies at all, believing their school teachers, pundits, preachers, etc. when they said "oh all that stuff about public debt being bad for the economy is just far-right slogan-mongering."

I think most of our elected representatives behaved as if they believed this, too. But by carrying this belief way too far, and funding the most routine consumption type stuff with borrowed money, the national debt got to be palpable. People who can think in balance sheet terms began to believe, and to act on the belief, that Uncle Sam would run out of credit and then turn and come after them and their assets to feed the government's great appetite. Then as that was talked about more and more in the news, and our national credit rating took a lump or two from the rating agencies, more and more household heads began to have the same fear---i.e. that Uncle S. would be coming after them to feed the beast.

Gradually the inescapable conclusion that Uncle's debt isn't his at all---there ain't no uncle except you and me---was so broadly felt that it made entrepreneurs retreat to the sidelines along with households who had managed to form up a little wealth.

Given enough time, every sector and income segment will realize that we have to slam on the brakes. But my worry is that we are so close to the precipice that Greece, Spain, Portugal, Italy etc. are tottering on, that the disaster might strike before the population of voters who understand this have become half or more of the voting population. And Obama will be returned to the White House by our large and vocal body of econilliterati.

My prognostication? If Obama is re-elected, we will be in a downward economic spiral like that in Greece that cannot be stopped, before his second term is over. ALL assets will deteriorate in value as will real incomes. Politicians won't have the fortitude or the political force to take either of the possible remedies---(1) cut way back on spending; (2) confiscate private income and wealth or some combination of the two. So instead they will turn on the printing presses, thereby enacting a harshly punitive and very regressive, concealed income tax that takes the form of hyper-inflation of prices and wages. Think Germany in the 1920s. On the other hand, there is some possibility that Romney would use the levers and bludgeons of power to direct a modest retrenchment and move us back bit by bit from the unmanageable debt precipice. But it isn't guaranteed by any means.

Please excuse my pessimism. I hope I will wake tomorrow having dreamed up a more hopeful, yet plausible, path that can be taken.

Cheers, Sam

Guest Post: Economics

Teaching Economics

Samuel L Skogstad

It is with some trepidation that I dare to enter the sublime ambiance he creates to a technical economic theory level. From the sublime to the ridiculous, perhaps. Anyway, here it is. I have long thought that those of who ostensibly have spent a career ‘teaching’ economics haven't done a very good job. If we had, could the words ‘capital, capitalism and profit’ be so broadly perceived as descriptions of avarice and lack of social conscience?...... Most of your readers have had enough economic study to remember that the goods and services we consume are produced by way of cooperation of the three (sometimes called 4) factors of production—Land, Labor and Capital (sometimes ‘entrepreneurship’). And this is true everywhere and at all times, in communist China, communist Soviet Union, Fascist Italy, democratic USA and left-liberal Scandinavia. So if something (or something additional) is produced, these factors of production in almost every case have all played a role, and in every single case one or more of them has played a role…… And where does ‘capital’ come from?  Broadly, there is only one way to form ‘capital.’ That is, some of what is produced has to be held out of consumption—i.e. has to NOT be used all up in the same period (year, let's say). And that act of NOT CONSUMING is what economists call SAVING…… So that is where capital comes from—saving something out of current income. Well, then where does ‘current income’ come from? It comes from wages and salaries earned by Labor, ‘Rental’ Income earned by the owners of land, and the excess of business revenue over the payments for inputs if any. This excess is named ‘profit.’ And if a productive business is to grow, it has to have profit to pay for more land, labor and capital.……‘Capitalism,’ then is the economic sub-system of a political system that allows people to keep a portion of their earned income, and to divide that between consumption and savings……. How is it that we economists can have failed so dismally that we have a very large proportion of our population (including, possibly, our president) has absolutely no grasp of these simple relations, and instead accepts uncritically, the notion that ‘Profit’ and ‘Capital’ are symbols that mean that labor has somehow been cheated out of their goods and services, which have, unfairly, been given to others???  I wish I knew the answer, but even if I did, I don't have the combination of skill, time and space to present it here.”

Guest Post

Oil and Economics

By Paul Rendine

We’ve been focusing on the political turmoil in the Middle East and North Africa almost to the exclusion of what that situation has done and will do to the U. S. and European economies.   After it was widely reported in just the past 10 days that there was now credible evidence that the al Qaeda/worldwide Jihadist and Muslim network – using their own computer and nefarious cyber skills – may have begun and made worse at almost every turn the financial crisis of just over two years ago that came very close to bringing the economies of the West almost to their knees.

While it may be too soon to postulate that now, there is a growing perception that this same type of network may also be behind much of the unrest across the Mediterranean, North Africa, and the Middle East crescent, with unrest now focusing in Libya, a major supplier of oil to Europe.  The goals of that “unrest” appear to be lulling the west into a false sense of security with the belief that those factions that come out on top will be more “moderate” relative to the way that they relate to them, while pushing the price of oil up in another attempt at negatively impacting the west’s economies, who are slowly recovering from the financial crises of the recent past and are now still quite fragile.  While I’m not one to see a conspiracy theory behind every tree, I am one who does believe that, “Where there’s smoke, there’s fire.”

For too long, we have significantly underestimated the educational, intellectual, and organizational skills of the extremist Muslim network, preferring instead to view those extremists in the ways that the world’s (and our own) media want us to; i. e., poor, uneducated, uninformed, easily manipulated by their own “leaders,” who almost always only move in easily fomented mobs.   It would do us all well to understand who our enemy’s leaders are.  Most have advanced degrees in engineering, the computer sciences, economics, the sciences and mathematics, medicine, etc.  In particular, there seems to be a cultural knack for dealing with, manipulating, managing, and using computers and cyber-systems to their advantage.

In particular, nowadays, if you have a hardware, software, or other computer question, the toll free customer service number you are given to call will almost always go to a “tech” in India, Pakistan, and now the Philippines.  Surprisingly, at least to me, I’ve read in some of the latest cutting-edge computer periodicals that most of the really bad computer “viruses” actually originated in Pakistan, with more now coming from the Philippines.   As corroboration, we already know how ahead-of-the-curve the Japanese have been in the development of “good” consumer electronics.  We Americans no longer have – or had – the big lead we thought we had in computers, digital technology, etc.

Now, looking at the economics of the Mediterranean, North Africa, and Middle Eastern crescent states – while adding those issues to the politics at work – we see the following:

1.   The price of oil on the world markets has now risen to well above $100 per barrel, with the price of a gallon of gasoline in the U. S. rising to well above $3.42 per gallon in many locales to almost $4.00 per gallon in Southern California, for example.

2.   Any number of forecasters is now suggesting that $140 per barrel for oil in the short term, with $4.30 to $4.50 per gallon for gasoline, may be what to expect over the near term.

3.   In Libya, Barclays Capital estimates that as much as 1 million barrels per day of production has been shut down so far. In January, Libya produced almost 1.7 million barrels per day of oil and natural gas liquids, with most of those production losses being felt mostly in Europe.

4.   Most economists today are suggesting that the U. S. economy can probably absorb the price of oil over $100 (but not by that much) and still keep expanding.  The problem arises when the price of a gallon of gasoline – now expected to rise to about $3.75 later this spring – begins to raise prices for everything from food, production costs, etc., while clearly affecting those who work in lower-paid jobs.

5.   Rising oil prices have pushed jet fuel to just over $3 a gallon. Fuel accounts for roughly one-third of the budget for U.S. airlines, up from less than one-fifth a decade ago. Most analysts suggest that, if jet fuel rises above $3.20 a gallon, the whole industry will be challenged to stay profitable.

6.   Sustained oil prices above $100 a barrel will threaten European economies, many of which are net importers of oil and gas, and haven’t fully recovered from the financial crisis and face heavy debt loads. Spain and Italy, for example, where gas at the pump already goes for well above $8 a gallon, face years of a slow, grinding recovery. Another spike in the price of oil and gasoline would deal their economies a significant setback.

7.   Pricier oil and gasoline will also push up inflation in Europe, where it already exceeds official targets, and in countries with surging food prices, like China, Brazil and India. Those countries would then have to raise interest rates to cool inflation.  In turn, this would also slow growth in Latin America and Asia.  Can you spell WORLD recession?

On the bright side, an ensuing domestic and worldwide devastating recession, made worse by rampant inflation, gas lines, odd/even days, high food prices, $7.00 a gallon for gasoline, etc. might actually refocus our real attention away from the continuing Charlie Sheen saga and more toward: opening up our own well known and substantial oil and natural gas reserves; REALLY cutting REAL U. S. government spending NOW; having the “greens,” tree huggers, and Sierra Clubbers, etc. wake up to allow the U. S. to exploit our energy reserves for the good of all of us, not just their selfish and narrow-minded desires; and all of us might even start to work together as AMERICANS, not labor, management, liberal, conservative, black, white, young, old, man, woman, and even politicians, etc. etc. etc. etc.

If we can’t, we might all just as well call Rosetta Stone and learn how to speak Mandarin Chinese.  By then, the mainland Chinese will have probably bought us anyway, and for cents on the dollar, too.

Political Digest October 10, 2009

I post articles because I think they are of interest. Doing so doesn’t mean that I necessarily agree with every—or any—opinion in the posted article.

Is my blog OK?
I had a report from a reader that my blog was coming up with text over-laying the first few articles. Doesn’t happen when I log on, so it may be him. Please let me know if you can't read it okay. Thanks. tartanmarine@gmail.com.

Barack Obama Wins Nobel Peace Prize
http://voices.washingtonpost.com/44/2009/10/09/reaction_obama_wins_nobel_peac.html
Excerpt: A surprising unanimity of opinion is emerging online that the award has been given to Obama prematurely -- and that this both poses a potential danger to his presidency and will serve as a challenge to the credibility of the Nobel-awarding committee in Oslo.At Time magazine, Nancy Gibbs argues, "The last thing Barack Obama needed at this moment in his presidency and our politics is a prize for a promise." Tweets ABC News's Jake Tapper, referring to a controversy earlier in Obama's presidency: "apparently the standards are more exacting for an ASU honorary degree these days." (An Arizona State University spokesperson in April explained a decision to invite the president to give the commencement address without also giving him an honorary degree by saying, "His body of work is yet to come. That's why we're not recognizing him with a degree at the beginning of his presidency." And Tyrants rejoice: “I believe Obama is working hard for peace," said Muhammad Habash, a Syrian member of parliament and director of the Islamic Studies Center in Damascus. "We in Syria believe that Obama's initiative have been suitable, and that Syria is now witnessing important steps to correct the relationship with the United States. I believe everyone here will be very happy for Obama." (Obama joins such Nobel Laureates as Yasser Arafat and Le Duc Tho, who helped bring the peace of the grave to millions. Barack Hussein Obama, Mmmm, Mmmm, Mmmm as the little children are taught to chant.)

How to Win the Nobel Peace Prize in 12 Days
http://www.foxnews.com/opinion/2009/10/09/tommy-seno-obama-nobel-prize-win/
Excerpt: Barack Obama won the Nobel Peace Prize this morning. Over the last decade the only requirement to win the prize was that the nominee had to be critical of George W. Bush (see Al Gore, Mohamed El Baradei and Jimmy Carter). President Obama has broken new ground here. Nominations for potential winners of the 2009 Nobel Peace Prize ended on February 1. The president took office only 12 days earlier on January 20. Let’s take a look at the president’s first 12 days in the White House according to his public schedule to see what he did to deserve a Nobel Peace Prize:

Nobel runners-up to Obama
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Nobel-runners-up-to-Obama-63847952.html
At least Obama beat out these egotistical connivers! Two runners-up: Zimbabwean Prime Minister Morgan Tsvangirai has been arrested and beaten for his peaceful political resistance to the brutal dictatorship of Robert Mugabe. But his persistence has brought about small steps toward a free and open Zimbabwean society. The pro-democracy, AIDS and environmental advocacy of Chinese dissident Hu Jia has earned him a three-and-a-half year sentence in Red China's gulag.

Nobel Panel Hopes Peace Prize Boosts Obama Self-Esteem
http://www.scrappleface.com/?p=4239
Satire. I think. Excerpt: An unnamed member of the Nobel committee this morning explained the shocking decision to give the Nobel Peace Prize to U.S. President Barack Obama, who had served only 11 days as president when nominated, by noting that the gold medal would go a long way toward boosting Mr. Obama’s self-esteem. “We used to give the award to persons who had actual accomplishments,” the anonymous source said. “But that’s so reactionary, and almost nostalgic. By giving the peace prize to Obama, we’re recognizing his potential, and applauding his intentions in a way that we hope will result in future actions.”

Next: Help Obama win the Heisman Trophy!
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Next-help-Obama-win-the-Heisman-63851657.html
Excerpt: I just went to http://promo.espn.go.com/espn/contests/theheismanvote/2009/
and, in the "Type your nominee here!" field, entered "Barack Obama." The winner of this Nissan-sponsored promotion will actually receive one official vote for the Heisman award as sort of the people's choice. You can actually go back and vote once each day between now and the Heisman award in December. (yeah, but how do we get the Pope to fast track BO for sainthood?)

After beating video, Daley gets more help from Obama
http://www.chicagotribune.com/news/columnists/chi-kass-08-oct08,0,1636195.column
Excerpt: The Obama administration may not be much for governing and tough decision-making, but when it comes to symbolism and aiding the mayor of Chicago, it is quite adept. Last week it was Daley's failed push for the 2016 Olympics. This week it's the murders. "This is not a show-and-tell," Daley said, when a reporter wondered whether Wednesday's public relations effort was more dog-and-pony-show than real policy. (John Kass is a Chicago treasure, worth more for the taxpayers than two Olympics.)

A peek at a federal employee’s spam e-mail from Team Obama
http://michellemalkin.com/2009/10/08/a-peek-at-a-federal-employees-spam-e-mail/
Excerpt: Over the past couple of weeks, we have received several emails (a couple below, two received within a minute of each other) from the Commerce Secretary, Gary Locke, announcing ANOTHER new White House web site. This web site is where employees can make suggestions for how government can save money……ooooh, and win a trip to see Obama!! What a joke after all we have seen since Obama was elected! Too bad the general public cannot submit suggestions.

Poll May Point to Democrats' Worries Beyond Old Dominion
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/08/AR2009100803288.html?wpisrc=newsletter
Excerpt: The latest Washington Post poll of the Virginia gubernatorial race represents more than bad news for Democratic nominee R. Creigh Deeds. The findings paint a portrait of the electorate that, if replicated elsewhere, stands as a warning sign for President Obama and Democrats who will be running in next year's midterm elections. The poll shows a lack of enthusiasm among many of the voters who propelled Obama and his party to victory last November, raising troubling questions for the Democrats: Were many of Obama's 2008 energetic supporters one-time participants in the political process who care little about other races? Is Obama's current agenda turning off some voters who backed him last year but now might be looking elsewhere? (Barack Hussein Obama, Mmmm, Mmmm, Mmmm as the little children are taught to chant.)

House ethics committee announces expanded investigation into Rep. Rangel
http://thehill.com/homenews/house/62281-house-ethics-committee-will-announce-an-expanded-investigation-into-rep-rangel
Excerpt: The House ethics committee voted unanimously Thursday to expand the investigation into Rep. Charles Rangel’s (D-N.Y.) alleged financial irregularities. The panel broadened the jurisdiction of its probe to include amendments he made in August to his financial disclosure records showing at least $600,000 in previously unreported assets, according to an ethics committee statement.

Transfer Machine
http://townhall.com/columnists/JohnStossel/2009/10/07/transfer_machine
Excerpt: "The government who robs Peter to pay Paul can always depend on the support of Paul," George Bernard Shaw once said. For a socialist, Shaw demonstrated good sense with that quotation. Unfortunately, America has become a laboratory in which his hypothesis is being tested. The theory of government I was taught says that government provides benefits, primarily security, to the entire population. In return we pay taxes. But lately the government has been a distributor of special privileges, taking money from some and giving it to others. America is now about evenly split between those who pay income taxes and those who consume them. The Urban-Brookings Tax Policy Center recently disclosed that close to half of all households will pay no income tax this year. Some will pay less than zero ­ that is, they'll get money from those of us who do pay taxes.

Soldier 'Loved Life and Lived It to the Fullest'
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/08/AR2009100802313.html?wpisrc=newsletter
Excerpt: Like so many of his peers, Nekl Allen felt compelled to serve his country after the Sept. 11, 2001, terrorist attacks. And joining an ever-increasing number of his fellow soldiers, Allen was buried Thursday morning at Arlington National Cemetery. Staff Sgt. Nekl B. Allen, 29, of Rochester, N.Y., was killed Sept. 12 in Wardak province, Afghanistan, along with Spec. Daniel L. Cox, 23, of Parsons, Kan. Enemy forces attacked their vehicle with a makeshift bomb and small-arms fire, the Defense Department said.

No Compromise on Afghanistan
http://www.humanevents.com/article.php?id=33855
Excerpt: Right now, as commander-in-chief, President Obama must lead on Afghanistan, or we risk losing what he has described as the "central front" in our battle against al Qaeda. This past March, the President laid out his mission for the war: “to disrupt, dismantle, and defeat al Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future.” And he inserted his top commander to pull it off, General Stanley McChrystal. At this moment, the situation in this fragile region is deteriorating. The insurgency is growing more effective and momentum is not on our side. Deaths of American soldiers are on the rise, and our troops lack the resources to turn the tide. General McChrystal, has recently reported that unless the President provides the full resources of a counter-insurgency strategy and does so quickly, we risk "mission failure" within 12 months. This is a view supported by General David Petraeus, now head of US Central Command.

Young Hamlet's Agony
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=508519
Excerpt: The genius of democracy is the rotation of power that forces the opposition to be serious — particularly about things like war, about which until Jan. 20 of this year Democrats were decidedly unserious. When the Iraq War (which a majority of Senate Democrats voted for) ran into trouble and casualties began to mount, Democrats followed the shifting winds of public opinion and turned decidedly anti-war. But needing political cover because of their post-Vietnam reputation for weakness on national defense, they adopted Afghanistan as their pet war. "I was part of the 2004 Kerry campaign, which elevated the idea of Afghanistan as 'the right war' to conventional Democratic wisdom," Democratic consultant Bob Shrum wrote after President Obama was elected. "This was accurate as criticism of the Bush administration, but it was also reflexive and perhaps by now even misleading as policy." Which is a clever way to say that championing victory in Afghanistan was a contrived and disingenuous policy in which Democrats never seriously believed, a convenient two-by-four with which to bash George Bush over Iraq — while still appearing warlike enough to fend off the soft-on-defense stereotype. Brilliantly crafted and perfectly cynical, the "Iraq War bad, Afghan War good" posture worked. Democrats first won Congress, then the White House. But now, unfortunately, they must govern. No more games. No more pretense. So what does their commander in chief do now with the war he once declared had to be won but had been almost criminally under-resourced by Bush? Perhaps provide the resources to win it? You would think so. And that's exactly what Obama's handpicked commander requested on Aug. 30 — a surge of 30,000 to 40,000 troops to stabilize a downward spiral and save Afghanistan the way a similar surge saved Iraq. That was more than five weeks ago. Still no response. Obama agonizes publicly as the world watches. Why? Because, explains National Security Adviser James Jones, you don't commit troops before you decide on a strategy. No strategy? On March 27, flanked by his secretaries of defense and state, the president said this: "Today I'm announcing a comprehensive new strategy for Afghanistan and Pakistan." He then outlined a civilian-military counterinsurgency campaign to defeat the Taliban in Afghanistan. And to emphasize his seriousness, the president made clear that he had not arrived casually at this decision. The new strategy, he declared, "marks the conclusion of a careful policy review." (You can fool some of the people all the time, and 54% on election day!)

A month in Helmand: the soldiers' stories
http://www.timesonline.co.uk/tol/news/world/Afghanistan/article6852533.ece?token=null&offset=0&page=1
Excerpt: Beneath the lip of his helmet the colonel’s face had the grey luminosity and glowing eyes of sudden grief. “I’ve just lost one of my best soldiers.” His words, so quiet that they were nearly a whisper, could almost have been a question. The identities of two dead soldiers had come over the radio just minutes earlier. Serjeant Paul McAleese, one of the battalion’s most renowned soldiers, had been so recently alive that his death warranted more than a degree of incredulity. “Shit day,” the colonel added. “Two KIA [Killed In Action]. Why is it always the ones with wives and children?” I had seen that look before in the faces of field commanders in Afghanistan. They talk about their mission and their operations with an air of enthusiasm that is either real or projected, becoming a little more cautious as they explain the “small steps of progress”. Then, bang, one more of their soldiers is dead – “ragdolled” as the men call it. The patter stops, the mask drops fleetingly, and raw grief stares back into your face.

MOP + UON Spells Trouble For Iran
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=508560
But only if someone has the guts to use them.

Islamic Death Bounties in the U.S.A.
http://frontpagemag.com/2009/10/09/islamic-death-bounties-in-the-u-s-a-by-jamie-glazov/
Excerpt: Gaubatz: Many readers, specifically liberals, will say it isn’t true that Islamic leaders advocate hatred and violence, but in reality if the readers would conduct just basic research of the materials provided to worshippers (to include children) in their local mosques, their conclusions would change. I have been to over 200 U.S. mosques and within the walls of a mosque are materials advocating the same violent ideology Iran’s Ahmadinejad and Al Qaeda’s Osama bin Laden promote. Numerous materials provided to the worshippers by the Imams call for the destruction of Israel, America, honor killings (such as a father killing his daughter or son if they leave or cause harm to Islam), killing homosexuals, and to even kill priests or nuns because the spread of Christianity is harmful to the Dawaa (spreading/teaching of Islam).

Muslim in Washington, DC: "I'm not scared to die! I will kill you! I will blow people up and the Metro!"
http://www.jihadwatch.org/2009/10/muslim-in-washington-dc-im-not-scared-to-die-i-will-kill-you-i-will-blow-people-up-and-the-metro.html
Guess he didn’t get the “Islam is a Religion of Peace” memo.

UK: Girl missing for ten years was victim of honor killing
http://www.jihadwatch.org/2009/10/uk-girl-missing-for-ten-years-was-victim-of-honor-killing.html
Excerpt: No one, of course, dares to confront the root of the problem by pointing out such inconvenient truths as the fact that a manual of Islamic law certified by Al-Azhar as a reliable guide to Sunni orthodoxy says that "retaliation is obligatory against anyone who kills a human being purely intentionally and without right." However, "not subject to retaliation" is "a father or mother (or their fathers or mothers) for killing their offspring, or offspring's offspring." ('Umdat al-Salik o1.1-2). …A mother broke a ten-year silence to claim her teenage daughter was murdered in an 'honour killing', a court heard yesterday. Tulay Goren, 15, was allegedly killed by her father and buried in his garden after he learnt she was in a sexual relationship with a man twice her age. Mehmet Goren, 49, with the help of at least one of his brothers, then allegedly dug up her remains in Woodford Green, East London, and disposed of them a week later. Her body has never been found…. But after losing her virginity Tulay was seen as a 'valueless commodity', the court heard….

France: Muslim soccer team refuses to play match against gay team
http://www.jihadwatch.org/2009/10/france-muslim-soccer-team-refuses-to-play-match-against-gay-team.html
Tolerant Islam.

Obama Declares War on Free Speech
http://www.humanevents.com/article.php?id=33869
Excerpt: The Obama Administration has now actually co-sponsored an anti-free speech resolution at the United Nations. Approved by the U.N. Human Rights Council last Friday, the resolution, cosponsored by the U.S. and Egypt, calls on states to condemn and criminalize “any advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence.” What could be wrong with that? Plenty. First of all, there’s that little matter of the First Amendment, which preserves Americans’ right to free speech and freedom of the press, which are obviously mutually inclusive. Any law that infringed on speech at all -- far less in such vague and sweeping terms -- would be unconstitutional. “Incitement” and “hatred” are in the eye of the beholder -- or more precisely, in the eye of those who make such determinations. The powerful can decide to silence the powerless by classifying their views as “hate speech.” The Founding Fathers knew that the freedom of speech was an essential safeguard against tyranny: the ability to dissent, freely and publicly and without fear of imprisonment or other reprisal, is a cornerstone of any genuine republic. If some ideas cannot be heard and are proscribed from above, the ones in control are tyrants, however benevolent they may be.

The Man with the Broken Arm and the NHS
http://www.rangelmd.com/index.php/2009/10/08/the-man-with-the-broken-arm-and-the-nhs/
Check out his picture to see what National Health Care means for you. Excerpt: This is likely what happened to Mr. Eeles. A few weeks after the accident, an orthopedic surgeon told Mr. Eeles that he would need to have surgery soon in order for the bones to heal correctly. That was 10 months ago. The fracture occurred on December 3rd 2008 and Mr. Eeles claims that the surgery has been scheduled and canceled four times since then (the British National Health Service claims only two were canceled). The arm has since improperly healed in a non-functional state.Thus Eeles the plummer has become the latest poster boy for the evils of socialized medical care. Inefficiency and long wait times for non-emergent tests and procedures are so common and endemic to socialized medical systems (Canada and the UK) that they are intensively studied and recorded. Such a phenomenon is unheard of to most Americans who only need to wait 2 week on average to get a knee replacement.

A New Entitlement That Cuts the Deficit!
http://www.ncpa.org/sub/dpd/index.php?Article_ID=18535&utm_source=newsletter&utm_medium=email&utm_campaign=DPD
Excerpt: Senate Finance Chairman Max Baucus (D-Mont.) kept a lid on the cost by making this program non-universal: Enrollment is limited to those who aren't offered employer-sponsored insurance and earn under 400 percent of the poverty level, or about $88,000 for a family of four. CBO expects some 23 million people to sign up by 2019. But this firewall is unlikely to last even that long, says the Journal. Liberals are demanding heftier subsidies, and once people see the deal their neighbors are getting on "free" health care, they too will want in. Even CBO seems to find this unrealistic, noting "These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation." Then there are the many budget gimmicks, says the Journal: Baucus spends $10.9 billion to eliminate the scheduled Medicare cuts to physician payments --but only for next year. In 2011, he assumes they'll be reduced by 25 percent, with even deeper cuts later. Congress has overridden this "sustainable growth rate" every year since 2003 and will continue to do so because deeper cuts in Medicare's price controls will cause many doctors to quit the program. Fixing this alone would add $245 billion to the bill's costs, according to an earlier CBO estimate.

States with connected senators get exemptions on the cost of the health care bill!
http://online.wsj.com/article/SB10001424052748703746604574461434007876034.html
Unbelievable! Excerpt: How good is Sen. Max Baucus's health reform bill? So good that Democrats have made sure some of the most costly provisions don't apply to their own states. The Senate Finance Committee is gearing up for a final vote next week, and Chairman Baucus now appears to have the Democratic votes to pass his bill. Getting this far has of course meant cutting deals, and those deals, it turns out, are illuminating. Reid (Nevada) and Charles Schumer (New York) are among those inserting goodies for their states. A central feature of the Baucus bill is the vast expansion of state Medicaid programs. This is necessary, we are told, to cover more of the nation's uninsured. The provision has angered governors, since the federal government will cover only part of the expansion and stick fiscally strapped states with an additional $37 billion in costs. The "states, with our financial challenges right now, are not in a position to accept additional Medicaid responsibilities," griped Democratic Ohio Gov. Ted Strickland. Poor Mr. Strickland. If only he lived in . . . Nevada! Senate Majority Leader Harry Reid, who is worried about losing his seat next year, worked out a deal by which the federal government will pay all of his home state's additional Medicaid expenses for the next five years. Under the majority leader's very special formula, only three other states—Oregon, Rhode Island and Michigan—qualify for this perk, on the grounds, as Mr. Reid put it recently on the Senate floor, that they "are suffering more than most."

Climate Change This Week: Antarctic Ice Report
According to World Climate Report, "The ice melt across during the Antarctic summer (October-January) of 2008-2009 was the lowest ever recorded in the satellite history." Marco Tedesco and Andrew Monaghan, in the journal Geophysical Research Letters, report, "A 30-year minimum Antarctic snowmelt record occurred during austral summer 2008-2009 according to space borne microwave observations for 1980-2009. Strong positive phases of both the El-Niño Southern Oscillation (ENSO) and the Southern Hemisphere Annular Mode (SAM) were recorded during the months leading up to and including the 2008-2009 melt season." The Patriot Post (www.patriotpost.us/subscribe/)

You might be a redneck if….
http://neurotalk.psychcentral.com/showthread.php?p=573033
Different take.

Economic Facts of Life

Essay: Twenty Economic Facts of Life
Robert A. Hall, MEd, CAE
August 29 2009

The world economy is such a complex system that no single person—or group of people—can understand the hundreds of billions of variables and interactions that comprise the entire system. Thus it is understandable that economists—like experts in other disciplines—argue endlessly about what the results of various trends, policies and developments will be. These arguments are colored by each economist’s worldview and life experience, as they are for the rest of us.

But there are some basic economic principles that have proven consistent, and that are fairly easy to understand. You may argue the physics of a complex system like the universe, but still have to agree that H20 turns from liquid to solid at 0°C at sea level on a fairly consistent basis, even if your worldview says it should freeze at 5°C. As Senator Patrick Moynihan reportedly quipped to a colleague, "You are entitled to your own opinion, but you are not entitled to your own facts."

But facts can be slippery things, starting with the old bromide, “Figures don’t lie, but liars figure.” In many of our current political debates, too many people seem to prefer their own facts, and to ignore the evidence of long experience, because the evidence doesn’t fit their worldview.

Here, then, are what I consider to be Twenty Economic Facts of Life, which guide my thinking in policy matters.

1. People do more of what they are rewarded for doing, and avoid what they are punished for doing.

If that seems obvious, politicians and voters forget it all the time. Both JFK and Reagan lowered Capital Gains Taxes and discovered that government revenue went up, as more people invested money, rather than put it into other areas. Likewise, CGT increases have resulted in reduced government revenue. When I pointed this out to a liberal newspaper columnist in Madison, WI, his response was that it was a Republican, Pro-Business fact, and he wasn’t interested in those kinds of facts. He felt entitled to his own facts. But promising to “soak the rich” in the name of fairness is often counter-productive for government revenue, however popular it is with economically-ignorant voters.

Maryland is a recent example. They decided to drastically increase taxes on people with million dollar incomes, only to find that the following year they had about half as many folks reporting million dollar incomes. Some of that decline was doubtless due to the recession, but a lot of it was due to millionaires relocating their legal domiciles, and often their businesses to states like Florida with no income taxes. Zero-income tax Texas is still doing fairly well in this recession while high tax California is crashing, and liberals can’t figure out why.

When you punish people for investing in job-creating businesses, they will create fewer jobs, and you will collect fewer tax dollars, not more. It really is that simple.

Politicians also do what they are rewarded for, and their reward is votes. The next election is at most two or six years away. Voters love government spending and hate government taxes. So politicians get re-elected by voting for spending and against taxes. This results in an almost-permanent government fiscal crisis and ever-higher deficits. During my five terms in the Massachusetts senate, I observed one senator who never voted for a tax bill, but voted for every spending bill or spending increase to the state budget—with one exception. She always voted against legislators and judges pay raises, which, regardless of the merits, had minuscule fiscal impact on total spending. But it had a large PR impact, as with the help of a lazy press that never dug too deeply into the details of the budget, she trumped her fight for fiscal responsibility—these pay-raise votes—to her constituents. And she was re-elected year after year, becoming the dean of the senate. She wasn’t the only one following this "spend, but don’t tax" strategy.

2. There aren’t enough “rich” to pay for everything we want.

The IRS reported that in 2006, only 5% of the taxpayers made $153,500 or above, but that 5% paid 60% of the total taxes. (This was under the Bush tax cuts, which Democrats say favored “the rich.”) The 50% of the taxpayers with the lowest incomes paid a total of 3% of the taxes. “We’ll spend and just raise taxes on the rich, they can afford it,” is fraudulent as a Ponzi scheme, because you soon run out of “the rich.” There aren’t enough of them, and the poor don’t pay taxes, so when government spending goes up, most of it is going to come out of people in the middle, because that’s where most of the money is.

The politicians will try to delay that reality through borrowing, hide it in fees, or disguise it in inflation. But when the government spends a lot more money, it’s going to come out of the hides of middle income earners one way or another.

3. Politicians will sacrifice the country’s long term economic interests for their short term political welfare.

President Hoover signed the Smoot-Hawley anti-trade tariff bill against the advice of a thousand economists. Many economists believe that was the key to a collapse of world trade, which turned what might have been a severe recession into the great depression. But, contrary to the myth that he did nothing, Hoover was under great pressure to do something, even if wrong, and he did what was politically popular, not what made economic sense. When it didn’t work, he was defeated anyway.

Once Republicans got control of Congress in the 1990s, they started spending money in the kind of amounts they had criticized Democrats for, because spending gets you votes. Politicians using their own money to buy votes is illegal, but using our grandchildren’s money to buy votes, by passing earmarks, pork barrel spending and entitlement programs, is not only legal, but practiced by both parties. Someone pockets every one of those dollars, and is thus inclined kindly toward the politician who provided it. The party out of power always criticizes this, as Obama did the Bush deficits (ignoring that they were approved in 07 and 08 by Democrat-controlled Congresses). But once in office, Obama’s first-year deficit was greater than all eight years of the Bush deficits combined, as hungry supportive constituencies had to be rewarded in the name of economic stimulus, to keep them voting Democrat in the future.

Elections are short term, while deficits are a long term problem. Thus we usually have deficits.

4. Free trade increases economic prosperity.

Free trade is popular with everyone, until it impacts their own income. Then workers and businessmen alike howl about “sending American jobs overseas.” (Liberals always wanted to help the downtrodden in other countries—but that didn’t mean the downtrodden should have jobs, only handouts. Like the poor in our cities.) The historic record is clear. Free trade increases prosperity among all the trading partners. After Bill Clinton and the Republican Congress passed NAFTA, the number of jobs in both countries went up—Ross Perot notwithstanding—just as the European Market has increased prosperity in Europe.

People circulating e-mails urging boycotts of “foreign” goods should recall how prosperous we were when international trade collapsed in the 1930s. But both businessmen and workers howl if they are the ones paying the price, so “saving American jobs” by barring trade will continue to be popular with politicians. Barack Obama is only the latest politician to pander to this ignorance.

5. Cause and effect in large economic systems are often impossible for most people to discern or understand.

When people who complain about high taxes and deficit spending still vote for their member of Congress because of the new bike path he brought to the district, making no connection at all, it’s little wonder they can’t understand economics. The jobs lost to NAFTA were concentrated in some industries and the workers and businessmen who lost out were very vocal. People demanded their public officials do something about the loss of jobs. Because the larger number of jobs gained were spread around the economy, people holding them usually had no idea they owed their jobs to free trade—and were doubtless clamoring against NAFTA in support of those who lost jobs!

Coupled with the voters’ notorious short term memories, this gives politicians endless chances to manipulate the ignorant. As Lincoln might have said, “You can fool all of the people some of the time, and some of the people all of the time, and them’s pretty good odds.”

6. Waste is in the eye of the beholder.

Give me a couple of CPAs, a calculator and a laptop and I believe that in a month or so I could balance the Federal Budget. After which, a howling, outraged mob would rip me into cat food. All our politicians say they want to bring down the cost of healthcare. One of the huge healthcare costs is malpractice insurance and the defensive medicine that results from the threats of lawsuits. So are these billions in savings on the table in “healthcare reform?” They are not. A majority of legislators, particularly among Democrats, are lawyers. Lawyers get the benefit of these lawsuits and don’t see it as waste at all. It’s not a topic for discussion.

This is why the rest of us may fume at the extravagance of the “Murtha Airport,” but Congressman Murtha gets re-elected by his constituents, who don’t realize that to get their pork airport, Rep. Murtha has to go along with the other Congresscritters taking pork home to their districts, at the expense of his constituents.

7. Government never runs efficiently.

Business, which is organized with the sole goal of making a profit, has a hard time running efficiently. Non-profit organizations, where there are a lot of goals other than profit, have a bigger challenge. And in government, the bureaucrats are rewarded for following the rules, regardless of how much sense they make. Plus, they are subject to political influence in the decision making process, and the rules are set up to reward favored political constituencies, not efficiency. The results they strive to achieve are continued employment for both the bureaucrats and the politicians, not the efficient conduct of whatever the program’s mission is.

Name a government agency or program that you’d hold up to the corporation where your IRA is invested as a model. The Post Office? The DMV? The Pentagon? Medicare, Medicaid, the VA or the Indian Health Service? The Highway Department? Social Security? The Congress, state legislature or city council? (Okay, I’m cheating a bit—we wouldn’t really want them to be more efficient.)

A classic case was reported by John Steele Gordon in his essay, “Why government can’t run a Business.” According to Gordon, “In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged. When the plant was finally finished, however -- three years after World War I had ended -- it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.”

8. When government makes you poorer, it’s a tax.

If the government spends money, but doesn’t raise taxes, and instead prints more dollars, it causes inflation. (See Jimmy Carter.) If it gets really bad, it causes hyper-inflation, as in Zimbabwe, where it can cost billions of Zimbabwe dollars for a loaf of bread. Inflation makes your dollars worth less, so you are poorer. Government caused inflation is a hidden tax on your income and your retirement savings.

If the government passes legislation that makes things cost more, such as the proposed “cap and trade” energy bill to fight global warming, it makes you poorer. It might be necessary, or for a good cause. But if they make heating your home or buying gasoline 10% more expensive, there’s no difference between that and putting a new 10% tax on energy. In either case you are worse off—they just don’t call it a tax.

9. The free market makes better decisions than central planners.

One would think, logically, that one person in charge—a czar for the economy, to use the currently popular term—could look at the big picture and make better decisions. And that is what the statists always believe. But the opposite is true.

Every day in our economy, billions of economic decisions are made by millions of people. When you decide to buy whole wheat bread rather than white, the czar would have to be able to predict that, in advance, for you and 300 million other people, and order all the steps in production to increase whole wheat—for people like you, but not those who prefer white this week.

Each step of the way requires specialized knowledge and experience. The guy who knows how to make a tractor doesn’t know how to grow wheat. The farmer doesn’t know how to get it to the bakery; the baker doesn’t know what sells in a particular neighborhood like the grocer does. There are hundreds of steps and decisions for every product. The czar would have to be God—which is why people always, always have higher standards of living in free economies than in planned economies. (Government bureaucrats and politicians only think they are God.)

10. Business people make economic decisions, politicians make political decisions.

Much was made of the “fact” that banks discriminated against blacks, “proved” by their giving home mortgages to whites at higher rates than to blacks. So the government stepped in, and created the Community Reinvestment Act to force banks to give loans to poor black people, thus earning votes for those politicians. This was followed by Fannie Mae and Freddie Mac, huge loan schemes guaranteed (though they claimed not) by the taxpayers to be sure poorer folks could own homes. Thus started the housing bubble which was the first domino in the current recession. Attempts by the president and some legislators to more tightly regulate Fannie and Freddie were beaten back by supporters, ever eager to cry “racism” to get more dollars for their voting constituencies.

But the brilliant economist Dr. Thomas Sowell points out the banks were in business to make a profit. If loans to poor blacks in the inner city were profitable, they—or someone else—would have been making them already. And Asians were getting mortgages at higher rates than whites—were Asians running the banks and discriminating against whites? No. Asians had better repayment rates than whites, and whites better than blacks, thus making loans to them safer and more profitable. Sowell, for those who don’t know, grew up in a poor black family in NC.

11. There is no political freedom without economic freedom and property rights.

If you cannot own a home and a business and be free to run it as you wish, other freedoms are meaningless. If the government controls your shelter and your livelihood (from the root word “life”), it can tell you what to say, do and think. You are a slave as surely as any slave on a plantation in the old south, because the Master controls where you can live, how you can live, and what you eat and own. The right to own property is the most basis right, in terms of economic prosperity.

12. Government grows at the expense of individual economic and political freedom.

Most of us recognize that government is necessary to provide for the common defense, protect us from criminals, and provide infrastructure we cannot provide individually, like roads and harbors. We are neither anarchists on one end of the political spectrum, believing there should be no government, nor total statists on the other end (communists, Nazis, fascists, socialists) who believe the individual should always be subservient to the ruler’s idea of the “common good”—that is, to the state. The statist tendency is always to build the power of government at the expense of the individual’s freedom, as people keep telling politicians they should do something to solve perceived problems—and the politicians respond. But government owns most of the means of coercion—the military and police—and it has the power to take part or all of your income, to take your house, to tell you where to work. It was to thwart this tendency that the founders established the separation of powers—now much eroded—preserving to the states and the people any power not expressly granted to the federal government.

13. Power equals money.

You have a full wallet, but the guy in the alley has a gun. Suddenly he has a full wallet. The more power government, large corporations, large unions or criminal gangs have, the more money they will extract from the rest of us.

14. Corruption, crime, violence and instability make people poor.

One has to look no further than our large cities to see this at work. Would you open a factory to employ people where you would be hit for bribes by the local government? If you had to hire people based on politics, rather than skills? If you couldn’t get insurance because arson was rampant in the area? If crime made employees fearful of coming to work? Welcome to the American metropolis, run by Democrat bosses.

Many of the poorest third world countries are rich in resources, and have willing workers, but investors won’t start businesses there for the same reasons they prefer not to invest in corrupt, crime-ridden inner cities. Plus, there is always the fear that the third-world government thugs will seize your property. So the people languish in poverty, while the oligarchs get rich off them—and our foreign aid.

The classic example is Zimbabwe, which under the evil rule of a minority white government, led by Ian Smith, exported food to many other countries. But minority rule was “unjust,” so the world, the US included, helped to bring down Smith’s government and install black majority rule in the person of Robert Mugabe, a Marxist-Maoist. Mugabe appropriated white-owned farms and gave them to his black supporters, but was unable to appropriate the experience, knowledge and work ethic of the white farmers. Famine ensued, tens of thousands died, black life expectance fell from 64 to about 36, hyperinflation and terror stalked the land. The people are desperately poor because of corruption, crime, violence and instability, as investors do what is in their self-interest. And liberals called it “justice” because the statists had won.

15. The lower the cost of a “good,” the more of it will be consumed.

Last year when gasoline went to well over $4 a gallon, usage fell dramatically, burning the oil speculators and bringing down the cost. My step-daughter was driving home with the AC off to save pennies on a tank of gas, which she was paying for, then cranking up the AC in the house, which I was paying for—the AC at home was a free good to her.

No matter how many times this truth is proved, politicians still don’t get it. Are expenditures for medical care too high with the average American paying 13 cents on the dollar out of pocket for care? Let’s make it “free” and see if total costs go down.

People in supermarkets try free samples of foods they’d never give a second glance to, if they weren’t free. “Cash for Clunkers” was predicted to cost $1B in three months, but it burned through $3B in one month. It was “free money.” But even folks who hated the idea of the program figured if they were going to have to pay higher taxes to cover it, they might as well reap the benefits. (This is known as the “Tragedy of the Commons.”)

16. Government does not create wealth.

Wealth is created when investors start businesses, hire labor and produce goods or services. When government “stimulates” the economy by putting money in, it has to take money out of the economy elsewhere, through higher taxes (dollars spent on taxes don’t get spent in other parts of the economy) or through borrowing (money lent to the government is not invested in the private sector).

And whenever government gives a dollar (or a dollar’s worth of some good, like medical care) to someone who didn’t earn that dollar, it must take that dollar from someone who did earn it through labor or investing (perhaps in a retirement fund.) The person who earned the dollar doesn’t get the benefit of it—the other person does.

If I steal your wallet, and spend the money in it, is that better for the economy than if you had spent it yourself? Or is it just better for me and the favored people I spend it with?

17. Everyone tries to improve his or her own economic situation.

Whenever my wife and I are house hunting—all too often due to my career—we always think that there are houses just out of our price range that would be perfect. I’m sure if we could afford a million dollar house (we aren’t close), we’d be dreaming of a $1.3M cottage. And so it goes. People work to improve the lives of their families and themselves—and appetites are unlimited. Economic systems that ignore people’s commitment to self interest are doomed. The free market system harnesses people’s efforts to improve their lives, to make everyone more prosperous. Other systems discourage economic activity and innovation.

18. Money isn’t the only cost of something.

Time is a cost. My wife and I love yard sales and flea markets, and delight in finding bargains. But is the money we save worth the time investment? Probably not—especially when many of the treasures we find were unknown desires until we saw them. It’s really a hobby, rather than a sound economic strategy. If you did your grocery shopping at ten stores instead of one or two, you could take advantage of the sales and specials at each, and save a great deal on your grocery bill. So why don’t you? Because time is a cost as well, often a more painful one. Just learning where the sale items are takes a lot of time. (See Dr. Thomas Sowell’s writings on the cost of knowledge.)

19. Bankruptcies and failure are vital to the economy.

It’s not just success that makes our economy work. If a company can’t fail, its owners and employees have no incentive to be efficient, to provide the most desirable goods and services at the best price. In short, it becomes like government, which can’t fail because it can always get more money—from you. This is why so much of the current economic bailout is so troubling to conservative, free-market economists.

20. There can never be equal outcomes and trying to achieve them is harmful.

It doesn’t matter how many government programs you pass, or how much you talk about fairness or social justice, I’m never going to have the life style of Michael Jordan or Donovan McNabb. Oh, I can say it’s racism that gives them a better, richer lifestyle than me, but the truth is they had slightly better athletic talents, a marketable skill I didn’t have, and thus got ahead. No government program can give me justice and equality, by making my lifestyle—and everyone else’s—equal to theirs. Nor is it desirable to bring everyone to the same level. If the outcome was the same for the kids who partied and did drugs as it was for Bill Gates, what is the incentive for hard work and creation?

In 1965, I was an 18-year-old private on mess duty in the Marines. I asked a fellow “messman” how come his coffee was so bad. “I make it double strength,” he said. “If I make it regular strength, they drink three pots during chow. Double strength they only drink one, so I do less work and get paid they same.” There, my friends, is socialism. When there are no incentives—except, perhaps, fear—for doing better, no one does better.

I have seen the future—and it doesn’t work.

*****

A Marine Vietnam Veteran, Robert A. Hall holds a BS in Government from the University of Massachusetts and an MEd in history from Fitchburg State College. After graduating from college, he served five terms in the Massachusetts Senate. He is not an economist. For a better understanding of economics than he can possibly give, he recommends Basic Economics and Economic Facts and Fallacies, both by Thomas Sowell, PhD.

Books for Congress

My fantasy of having great wealth is to start a foundation that would give a book a week to every member of Congress, every state legislator, every government policymaker, every opinion columnist and every candidate. "Economic Facts and Fallacies" by Dr. Thomas Sowell would be the second book we’d give out. First would be Sowell’s “Basic Economics.” Yes, it might not do any good. I recently cited to a newspaper columnist Sowell’s history of what happens to government revenues when you increase the Capital Gains Tax (hint: the opposite of what’s expected). The columnist told me those were “right wing facts” and he wasn’t interested in any facts that supported business. Really. Too many people want to discard any facts that don’t support their cherished illusions, preferring comfortable lies, which is why politicians of both parties get elected promising to do things that sound good, but hurt the majority of people they claim to be helping.

Reading Thomas Sowell would at least make it harder for them to do it with a straight face. And if every voter read Sowell, it would be much harder for politicians to pander to their uninformed prejudice. I think the books above should be required reading to hold public office, or to get a college degree.

Update: After posting this, I read Sowell's "The Quest for Cosmic Justice," published in 1999. There is no better discussion of the conservative world view, and how the outcome evidence demonstrates that liberal policies have greatly harmed, perhaps irreparably, both the larger society and the people they were intended to benefit, minorities and the "poor." They made the liberals feel wonderful, though, which Sowell (and I) believe was their main purpose. "Quest" is now number one on my "must read" list.