Tidbits Quotations on February 15, 2010
To Accompany the February 15, 2010 edition of Tidbits
Bob Jensen at Trinity University



How Can We Help Haiti --- http://www.insidehighered.com/views/2010/01/15/fitzsimmons

Emergency Fund for Students From Haiti --- http://www.iie.org//Content/NavigationMenu/Programs7/Haiti-EAS/Haiti-EAS.htm

"Jared Diamond Explains Haiti’s Enduring Poverty," Open Culture, January 21, 2010 ---
Available on MP3

Video of Detroit in Ruins --- http://www.youtube.com/watch?v=1hhJ_49leBw

The Disgraceful Personal Spending of House Speaker, CNN --- http://www.youtube.com/watch_popup?v=A6_xgKWzhRw
Bob Jensen's fraud updates --- http://www.trinity.edu/rjensen/fraudUpdates.htm

Huffington Post State of the Union Address Drinking Game --- http://www.huffingtonpost.com/2010/01/26/state-of-the-union-drinki_n_436932.html

And for More Laughs at the Party
Video:  Jon Stewart Mocks Olbermann (hilarious) ---
Olbermann reduced to name calling.

Some of Jon Stewart's more famous "comedy" clips --- http://www.associatedcontent.com/topic/26395/jon_stewart.html?cat=9
Not linked are his latest clips portraying a negative image of President Obama (which surprise me greatly) ---
"Tougher Jon Stewart Obama Jokes May Signal Collapse of Remaining Vestiges of Obama Support" ---

Saturday Night Live's Scott Brown Dance Party ---

Hey, Ben (Nelson): can you hear us now?
Nebraska billboards after Scott Brown's victory in Mass.

Excuse me. I was just distracted by the new 66-page federal indictment of Larry Seabrook, a New York City councilman who, along with multitudinous other charges, is accused of altering a receipt from a deli so he could get a $177 reimbursement for a bagel and diet soda.
Gail Collins, The Biggest Losers, The New York Times, February 10. 2010 --- http://www.nytimes.com/2010/02/11/opinion/11collins.html?hpw
But his attorney says that no crime was committed. This is just acceptable behavior of elected officials.

574 Shields Against Validity Challenges in Plato's Cave ---

"Climategate's Phil Jones Confesses to Climate Fraud," by Marc Sheppard, American Thinker, February 14, 2010 ---

"The Public-Union Ascendancy Government union members now outnumber private for the first time," The Wall Street Journal, February 3. 2010 ---

Video:  Air Pelosi Scandal
The Disgraceful Personal Spending of House Speaker, CNN --- http://www.youtube.com/watch_popup?v=A6_xgKWzhRw

"House Speaker’s Military Travel Cost the United States Air Force $2,100,744.59 over a Two-Year Period, Including $101,429 for In-Flight Expenses," Judicial Watch, January 28, 2010 ---

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has obtained documents from the Air Force detailing House Speaker Nancy Pelosi’s use of United States Air Force aircraft for Congressional Delegations (CODELs). According to the documents, obtained by Judicial Watch through the Freedom of Information Act (FOIA), the Speaker’s military travel cost the United States Air Force $2,100,744.59 over a two-year period — $101,429.14 of which was for in-flight expenses, including food and alcohol. The following are highlights from the recent release of about 2,000 documents:

“Speaker Pelosi has a history of wasting taxpayer funds with her boorish demands for military travel. And these documents suggest the Speaker’s congressional delegations are more about partying than anything else,” said Judicial Watch President Tom Fitton.

Judicial Watch previously obtained internal DOD email correspondence detailing attempts by DOD staff to accommodate Pelosi’s numerous requests for military escorts and military aircraft as well as the speaker’s last minute cancellations and changes.


"Judicial Watch Announces List of Washington's "Ten Most Wanted Corrupt Politicians" for 2009," Judicial Watch ---

Rep. Nancy Pelosi (D-CA): At the heart of the corruption problem in Washington is a sense of entitlement. Politicians believe laws and rules (even the U.S. Constitution) apply to the rest of us but not to them. Case in point: House Speaker Nancy Pelosi and her excessive and boorish demands for military travel. Judicial Watch obtained documents from the Pentagon in 2008 that suggest Pelosi has been treating the Air Force like her own personal airline. These documents, obtained through the Freedom of Information Act, include internal Pentagon email correspondence detailing attempts by Pentagon staff to accommodate Pelosi's numerous requests for military escorts and military aircraft as well as the speaker's 11th hour cancellations and changes. House Speaker Nancy Pelosi also came under fire in April 2009, when she claimed she was never briefed about the CIA's use of the waterboarding technique during terrorism investigations. The CIA produced a report documenting a briefing with Pelosi on September 4, 2002, that suggests otherwise. Judicial Watch also obtained documents, including a CIA Inspector General report, which further confirmed that Congress was fully briefed on the enhanced interrogation techniques. Aside from her own personal transgressions, Nancy Pelosi has ignored serious incidents of corruption within her own party, including many of the individuals on this list. (See Rangel, Murtha, Jesse Jackson, Jr., etc.)


The motto of Judicial Watch is "Because no one is above the law". To this end, Judicial Watch uses the open records or freedom of information laws and other tools to investigate and uncover misconduct by government officials and litigation to hold to account politicians and public officials who engage in corrupt activities.
Judicial Watch --- http://www.judicialwatch.org/

Air Pelosi Scandal

In March 2009, Judicial Watch received documents from the Department of Defense detailing Nancy Pelosi's abuse of a system which provided military aircraft for the transportation of the Speaker of the House. The documents, which were acquired through the Freedom of Information Act (FOIA), detail the attempts by DOD staff to accommodate Pelosi's numerous requests for military escorts and military aircraft as well as the speaker's last minute cancellations and changes.

Press Releases


The Sad State of Government and Government Accountability ---

Elizabeth Warren warns of looming crisis in the commercial real estate market ---

"CIT TARP Wipeout is Official," The Street, February 9, 2010 --- http://www.thestreet.com/story/10677453/1/cit-tarp-wipeout-is-official.html

The U.S. Treasury has officially lost its entire $2.33 billion TARP investment in CIT Group(CIT Quote), according to a company filing with the Securities and Exchange Commission after Monday's closing bell.

The Treasury made the investment in CIT in December 2008, but CIT then ran into trouble after the Federal Deposit Insurance Corp. refused to guarantee its debt, as the FDIC did for larger lenders, including General Electric(GE Quote) and large banks like Citigroup(C Quote), Bank of America(BAC Quote) and Wells Fargo(WFC Quote).

CIT ended up filing for bankruptcy protection on Nov. 1 but was able to reorganize and return to a public listing on Dec. 10. Contrary to what many assumed, the bankruptcy filing did not extinguish all hope for a taxpayer recovery. The Treasury and other preferred shareholders received complex securities called contingent value rights (CVRs) which could have been worth something if CIT Group's stock had reached the mid-50s ahead of Monday's session, according to the estimate of another investor who held CVRs.

CIT Group is the largest loss on record under the TARP, though AIG (AIG Quote) General Motors, GMAC, Fannie Mae(FNM Quote), Freddie Mac(FRE Quote), Chrysler and Citigroup each owe the Treasury at least $10 billion each, according to ProPublica.

Continued in article

Bob Jensen's threads on the bailout mess are at

Jensen Comment
I think the commentators arguing against global warming by pointing to the wintry weather this season are long an politics and short on science. There is legitimate debate in the academy about global warming and the melting of glaciers that's apparently been going on for up to a century, but looking at the snow fall depth in Philadelphia is hardly justification for any attack on global warming.

I'm more inclined to attack the problem of changing climate no matter what the unknown clauses. For example, perhaps we should be spending trillions o learning how to better live with the change instead of wasting money trying to stop the changing climates. For example, money might be better spent trying to bring water to drought-stricken areas than in trying to bring the glaciers back to where they were in 1910.

"Climate bill: All cost, no benefit," Milwaukee Journal Sentinel, January 30, 2010 --- http://www.jsonline.com/news/opinion/83069547.html

It's common practice in politics to market legislation in a way that hides its true intent. The so-called Clean Energy Jobs Act, praised by a Journal Sentinel editorial on Jan. 17 is one of the most misnamed bills of all time.

In 2007, Gov. Jim Doyle appointed his Global Warming Task Force. He gave the task force the duty of recommending policies to fight global warming in Wisconsin - without considering cost. The report was published in July 2008 and contained more than 50 recommendations for cutting greenhouse gas emissions. The report was the blueprint for Assembly Bill 649 and its companion Senate Bill 450, the so-called Clean Energy Jobs Act.

The governor directed the task force to accept "the substantial scientific consensus that exists that climate change is occurring and human activity . . . is a major contributor to such change." Much of that consensus is based on the findings of the United Nations' International Panel on Climate Change. A number of the prominent member scientists are now embroiled in "Climategate," a scandal involving e-mails showing the scientists were involved in unethical research techniques.

If the science is settled, why fudge the data? Why didn't the climate alarmists' high-tech computer models predict the recent cooling trend? If they can't even predict 10 years ahead, should we believe their predictions for the next several decades?

The task force was told by the governor not to consider cost-benefit analysis when developing the recommendations. Not surprisingly, AB 649/SB 450 is all cost, no benefit.

AB 649/SB 450 will mandate more expensive electricity in the form of windmills, solar panels, biofuels and storage batteries. Cost estimates show the mandates will cost at least $1,000 per year for the average family. This doesn't even include possible federal cap and trade legislation.

Higher energy costs will lower profit margins for manufacturers, who will either pass the costs onto customers or cut jobs. One study estimates Wisconsin could suffer a net loss of 31,000 jobs if some of the task force recommendations become law.

The bill has other oppressive mandates and regulations, including adopting California vehicle emissions standards. Do we want California bureaucrats to set emission standards in Wisconsin? And who will be in charge of administering AB 649/SB 450? The deer-counting-challenged Department of Natural Resources.

Finally, how will the climate benefit if this bill is passed? It won't. Even if Wisconsin reduced greenhouse gas emissions to zero, there would be no measurable effect on background levels of greenhouse gases and, therefore, no effect on temperatures.

Conservation and a cleaner environment make sense, but AB 649/SB 450 is not the answer. Wisconsin does need a sensible energy policy. We should start by increasing our use of nuclear energy. Mandating utility rate increases and oppressive government regulations will only raise the cost of living and cost our state jobs.

Jensen Comment
I think the commentators arguing against global warming by pointing to the wintry weather this season are long an politics and short on science. There is legitimate debate in the academy about global warming and the melting of glaciers that's apparently been going on for up to a century, but looking at the snow fall depth in Philadelphia is hardly justification for any attack on global warming.

I'm more inclined to attack the problem of changing climate no matter what the unknown clauses. For example, perhaps we should be spending trillions o learning how to better live with the change instead of wasting money trying to stop the changing climates. For example, money might be better spent trying to bring water to drought-stricken areas than in trying to bring the glaciers back to where they were in 1910.

"Climategate's Phil Jones Confesses to Climate Fraud," by Marc Sheppard, American Thinker, February 14, 2010 ---

"CRU Chief Admits Warming May Not Be Unprecedented," by Ed Morressey, HotAir, February 14, 2010 --- Click Here 

In a rather stunning series of admissions, the suspended chief of the East Anglia CRU now admits that the warming seen in the late 20th century may not be unprecedented after all, that the planet has stopped warming for the last 15 years despite the predictions of AGW advocates, and that his own record-keeping has been poor. Phil Jones, who stepped down at least temporarily from his position at the CRU when its e-mails exposed a series of embarrassing attempts by climate scientists to undermine careers of skeptics and to hide contradictory data, now says that the entire basis of the “hockey stick” graph could have been invalid:

The academic at the centre of the ‘Climategate’ affair, whose raw data is crucial to the theory of climate change, has admitted that he has trouble ‘keeping track’ of the information.

Colleagues say that the reason Professor Phil Jones has refused Freedom of Information requests is that he may have actually lost the relevant papers.  … The data is crucial to the famous ‘hockey stick graph’ used by climate change advocates to support the theory.

But that’s just the start:

Professor Jones also conceded the possibility that the world was warmer in medieval times than now – suggesting global warming may not be a man-made phenomenon.

And he said that for the past 15 years there has been no ‘statistically significant’ warming. …

And he said that the debate over whether the world could have been even warmer than now during the medieval period, when there is evidence of high temperatures in northern countries, was far from settled.

Sceptics believe there is strong evidence that the world was warmer between about 800 and 1300 AD than now because of evidence of high temperatures in northern countries.

But climate change advocates have dismissed this as false or only applying to the northern part of the world.

Professor Jones departed from this consensus when he said: ‘There is much debate over whether the Medieval Warm Period was global in extent or not. The MWP is most clearly expressed in parts of North America, the North Atlantic and Europe and parts of Asia.

‘For it to be global in extent, the MWP would need to be seen clearly in more records from the tropical regions and the Southern hemisphere. There are very few palaeoclimatic records for these latter two regions.

‘Of course, if the MWP was shown to be global in extent and as warm or warmer than today, then obviously the late 20th Century warmth would not be unprecedented. On the other hand, if the MWP was global, but was less warm than today, then the current warmth would be unprecedented.’

The “hockey stick” graph has already been shown to be mainly a creation of graph-scaling bias, but this gets to the heart of the entire argument.  During the MWP, farmers grew crops on Greenland for a couple of centuries.  Until now, AGW advocates insisted that the warming only took place in the northern hemisphere.  If that warming was indeed global, then it dwarfs anything seen in the 20th century, as these two charts from Climate Audit, via  Sonic Frog, demonstrate:

Continued in article

"Climategate's Phil Jones Confesses to Climate Fraud," by Marc Sheppard, American Thinker, February 14, 2010 ---

"Climate bill: All cost, no benefit," Milwaukee Journal Sentinel, January 30, 2010 --- http://www.jsonline.com/news/opinion/83069547.html

It's common practice in politics to market legislation in a way that hides its true intent. The so-called Clean Energy Jobs Act, praised by a Journal Sentinel editorial on Jan. 17 is one of the most misnamed bills of all time.

In 2007, Gov. Jim Doyle appointed his Global Warming Task Force. He gave the task force the duty of recommending policies to fight global warming in Wisconsin - without considering cost. The report was published in July 2008 and contained more than 50 recommendations for cutting greenhouse gas emissions. The report was the blueprint for Assembly Bill 649 and its companion Senate Bill 450, the so-called Clean Energy Jobs Act.

The governor directed the task force to accept "the substantial scientific consensus that exists that climate change is occurring and human activity . . . is a major contributor to such change." Much of that consensus is based on the findings of the United Nations' International Panel on Climate Change. A number of the prominent member scientists are now embroiled in "Climategate," a scandal involving e-mails showing the scientists were involved in unethical research techniques.

If the science is settled, why fudge the data? Why didn't the climate alarmists' high-tech computer models predict the recent cooling trend? If they can't even predict 10 years ahead, should we believe their predictions for the next several decades?

The task force was told by the governor not to consider cost-benefit analysis when developing the recommendations. Not surprisingly, AB 649/SB 450 is all cost, no benefit.

AB 649/SB 450 will mandate more expensive electricity in the form of windmills, solar panels, biofuels and storage batteries. Cost estimates show the mandates will cost at least $1,000 per year for the average family. This doesn't even include possible federal cap and trade legislation.

Higher energy costs will lower profit margins for manufacturers, who will either pass the costs onto customers or cut jobs. One study estimates Wisconsin could suffer a net loss of 31,000 jobs if some of the task force recommendations become law.

The bill has other oppressive mandates and regulations, including adopting California vehicle emissions standards. Do we want California bureaucrats to set emission standards in Wisconsin? And who will be in charge of administering AB 649/SB 450? The deer-counting-challenged Department of Natural Resources.

Finally, how will the climate benefit if this bill is passed? It won't. Even if Wisconsin reduced greenhouse gas emissions to zero, there would be no measurable effect on background levels of greenhouse gases and, therefore, no effect on temperatures.

Conservation and a cleaner environment make sense, but AB 649/SB 450 is not the answer. Wisconsin does need a sensible energy policy. We should start by increasing our use of nuclear energy. Mandating utility rate increases and oppressive government regulations will only raise the cost of living and cost our state jobs.


"Taliban make children plant IEDs to thwart Army snipers," by Christopher Leake, Daily Mail, February 7, 2010 ---

Boys as young as 12 are being used by the Taliban to plant bombs designed to kill and maim British troops in Afghanistan. Army commanders say insurgents are forcing children to lay improvised explosive devices (IEDs) because they know they will not be shot by British snipers. Senior military sources say the children’s parents and families are likely to have been threatened by the Taliban to allow their sons to carry out the dangerous task.

Details of the new tactic were revealed last night in Sangin, Helmand Province, where soldiers of the 3 Rifles Battle Group have been fighting the Taliban for the past four months. Troops say they have seen insurgents sending out boys to lay IEDs, sometimes only 150 yards from British positions. A senior Army source said: ‘The Taliban know that if they get caught in the sights of our snipers, they don’t last long, so they have resorted to hiding behind compound walls and directing children to plant bombs for them. ‘Lots of home-made IEDs detonate before they have even been laid, but the Taliban don’t seem to care whether a child gets killed or maimed. Some boys are as young as 12.’

Read more:

"Another Obama Tax Hike:  The Senate health-care bill would raise effective marginal tax rates on lower and middle-income singles and families up to 41%," by Douglas Holtz-Eakin and Alex Brill, The Wall Street Journal, February 3, 2010 ---

The stunning victory of Scott Brown in Massachusetts may prove to be a game-changer for the President's health-care "reform" agenda. This is good news for the ability of lower-income families lacking insurance to climb up the ladder of American prosperity. His associated rhetoric notwithstanding, the President's policies in the stimulus bill and health-care debate increase current barriers to the American dream. These legislative efforts (we use the Senate health-care bill for illustration) raise to shocking levels the effective marginal tax rates (EMTR) on lower and middle-income singles and families--with the government taking up to 41% of each additional dollar.

The mechanics are simple. The effective marginal tax rate is the answer to the question: "If I earn $1 more, how much less than $1 do I get to save or spend?" If you can keep that full dollar for your disposal, the effective marginal tax rate is zero. If earning another dollar does not raise your disposable income by even a penny, the effective marginal tax rate is 100 percent.

Obviously, neither extreme is realistic. But exactly where federal policies come down in between has dramatic implications for the ability of families to rise from the ranks of the poor, or to ascend toward the upper end of the middle class. This mobility is the heart of the American dream that has made the United States a beacon of economic light for centuries. Equal opportunity to achieve that dream – not equal paychecks or equal government handouts – is the real-world litmus test for fairness in government policy.

Consider, then, the figure below constructed for a two-earner family with two school-age children, one of whom is in college. The solid line shows the EMTR based on income tax law prior to the health-care bill (it excludes the impact of the payroll taxes). The dashed line displays the damaging increases in the EMTR assuming the health insurance premium subsidies contained in the Senate health-care bill and insurance cost estimates provided by the Kaiser Family Foundation. As a family's income rises above 133% of poverty, Medicaid eligibility will be eliminated but a family that does not receive health insurance from their employer will receive a subsidy to purchase health insurance in the "exchange." In turn, however, as their efforts yield higher income, subsidies are clawed back or effectively taxed away. The current law policies show that there are already some lower income families facing EMTRs above those in the middle class. But the barrier to success imposed by health-care reform is even more striking. According to the Congressional Budget Office, about 20 million people would receive a subsidy to purchase insurance through an exchange and thus face a higher EMTR.

How can a family be expected to get ahead when taking an extra shift, finding a way for a second parent to work, or investing in night school courses to qualify for a raise means handing the government as much as 41% of the additional income earned? Parents already juggle the tough trade-off between working more to build their family's future and spending time at home with their children. The bigger the EMTR, the tougher that tradeoff becomes.

How could this happen? In part, it may reveal ignorance about the long-term impacts class warfare-based programs. For decades, both parties have employed refundable tax credits (i.e., disguised spending programs) as a way of providing benefits to low-income families while appearing to favor low taxes and small government. The class-conscious left has insisted that these benefits be "targeted" – i.e., that they disproportionately help those lower-income families that pay no taxes and be phased-out for the tax-paying middle class. The result fit their agenda of wealth redistribution. The right, eager to achieve any tax cuts they could muster, accepted the income limitations as the price of getting any tax relief. With progressives' hell-bent effort to soak the rich, the outlook for the poor and middle class quietly and steadily deteriorated to the condition we find it today.

Every "phase-out" of a tax credit or subsidy program is an EMTR in disguise. The cumulative impact is a cruel twist on "targeting," as families are anchored near the bottom of the income distribution by layers of fiscal cement. Ignorance is a dangerous animal in the hands of tax policymakers.

A second possibility is subtle paternalism toward the poor. Unlike the rich who are presumed to know what they want (which progressives are dead set on thwarting), it may be that poorer Americans are presumed to need guidance on how to live their lives (or a "nudge" in the parlance of the faddish behavioralists in the Obama Administration). They need to be told that it is a good idea to work, take care of your children, go to college and have health insurance, hence a tax credit for every virtue.

In the end it does not matter how we got here. Taxes interfere with the basic rewards for work, thrift, and saving. Excessive EMTRs damage these incentives, discourage the taxed, and threaten to rob America of a vitality that is its signature.

This year marks a crucial time in the future of tax policy. The tax laws enacted in 2001 and 2003 will sunset, along with the recent tax credits included in the so-called stimulus bill. As Congress thinks about the future, we hope it puts full weight on the importance of a tax code that supports the ability of the poor and middle-class to achieve their dreams.

The Massachusetts special election sends the strong message that voters want Washington to scale back its interference in their lives. Re-thinking the policies that get in the way of their pursuit of success is a good place to start.

"The Jimmy Carter Jobs Credit Congress's latest stimulus idea is a bust from the past," by Jimmy Carter, The Wall Street Journal, February 10, 2010 --- http://online.wsj.com/article/SB10001424052748704820904575055394016616742.html?mod=djemEditorialPage_t

. . .

This latest Senate Democratic bill will cost $85 billion and is shaping up to be largely a rehash of last year's stimulus: extended unemployment insurance, Medicaid cash for the states, and some public works spending. The one new twist is a proposal for a one-year $5,000 tax credit for small businesses for each new worker hired. President Obama calls the credit "the best way to cut taxes" to help small businesses.

But we've also seen this economic movie before—in 1977 under Jimmy Carter. During the two years it was in effect, a jobs credit worth about $7,000 in today's dollars became a $20 billion free lunch as businesses claimed the handout for one of every three new employees.

In the short term, the Jimmy Carter jobs credit appeared to reduce unemployment. The jobless rate dropped by 1.2 percentage points (to 5.8% in 1979 from 7% in 1977). But that effect was short-lived, and when the subsidies ended two years later the layoffs resumed and the unemployment rate rose again and by 1980 was back to 7.2%.

Citing this not-so-happy experience, Wisconsin Democrat Ron Kind says the tax credit is evidence that Congress doesn't "do anything new around here except the history we repeat." The left-leaning Tax Policy Center recently looked at a proposal for a $5,000 payroll tax credit, which is similar in concept to the Senate jobs credit, and concluded that "The problem with subsidies such as this is that they are exceedingly sloppy. A lot of money goes to those firms that would have hired anyway."

They're right: The Labor Department reports that in December 2009 there were 2.5 million job openings. Will the government pay $5,000 for every one of these new jobs that would have existed anyway? In the dynamic American economy, thousands of workers are hired, fired or quit each day.

The President is trying to lure Republicans to support this policy as a "business tax cut." But they should know that it violates sound tax principles. Pro-growth tax cuts, as adopted so successfully by JFK in the 1960s and Ronald Reagan in the 1980s, are broad-based and lower tax rates for as many people as possible. This reduces the distortions of the tax system, while permanently adding to the rewards for investment and risk-taking.

That's the opposite of Mr. Obama's tax strategy, which is to dole out special tax credits and loopholes for favored behavior or industries—hybrid cars, buying a new house, wind power—and then paying for these by raising tax rates on anyone making more than $200,000 starting next year. The result will be higher tax rates paid on a shrinking tax base, with a misallocation of capital toward projects chosen by politics rather than by prices or potential return on investment.

A 2009 study by the World Bank and Harvard University examined growth and entrepreneurship in 85 countries and found that lower tax rates on firms are powerful spurs to job growth and business start-ups. Perhaps Mr. Obama and Senate Majority Leader Harry Reid need a tax policy refresher from Dick Gephardt, Bill Bradley and other Democratic champions of tax reform from the 1980s.

Republicans and Democrats looking for a better way should call for a permanent reduction in the top personal and corporate tax rate to 25% to attract capital to the U.S. Making the current 15% tax rate on capital gains permanent, rather than raising it next year as Mr. Obama wants to do, would also help.

Recent surveys by the National Federation of Independent Business, the small business association, suggest that small employers don't want tax credits. They want a future in which Congress and federal agencies stop imposing new tax and regulatory burdens. Given the damage done by the current Congress, doing no more harm would do far more to increase hiring than a reprise of Carternomics.

Continued in article


"Huge Deficits May Alter U.S. Politics and Global Power," by David E. Sanger, The New York Times, February 1, 2010 ---

David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)

Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1
Please note that this is NBC’s liberal Newsweek Magazine and not Fox News or The Wall Street Journal.

. . .

In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

. . .

Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

Continued in article --- http://www.newsweek.com/id/224694/page/1


Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University and the author of The Ascent of Money. In late 2009 he puts forth an unbooked discounted present value liability of $104 trillion for Social Security plus Medicare. In late 2008, the former Chief Accountant of the United States Government, placed this estimate at$43 trillion. We can hardly attribute the $104-$43=$61 trillion difference to President Obama's first year in office. We must accordingly attribute the $61 trillion to margin of error and most economists would probably put a present value of unbooked (off-balance-sheet) present value of Social Security and Medicare debt to be somewhere between $43 trillion and $107 trillion To this we must add other unbooked present value of entitlement debt estimates which range from $13 trillion to $40 trillion. If Obamacare passes it will add untold trillions to trillions more because our legislators are not looking at entitlements beyond 2019.


"A Double-A U.S.A.? A primer on the national debt," The Wall Street Journal, February 5, 2010 ---

Fear of defaults by European countries sent stocks reeling yesterday, but that could never happen in the U.S. Or could it? Moody's Investors Service caused a market stir this week by saying that on Washington's present spending and debt track, maybe it could.

Specifically, the credit rating outfit issued a statement following the release of President Obama's fiscal 2011 budget: "Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the Aaa government bond rating."

So there it is: The threat of a double-A U.S.A. This warning could use some perspective.

As a reality-check to politicians, the Moody's blast is useful as far as it goes. But it doesn't go very far. In particular it shouldn't be cause for rending garments or selling Treasurys, much less laying in canned goods. The U.S. isn't in imminent danger of losing its Aaa rating, and it won't do so even in the medium or long term if our political class responds in the right way.

The ratio of U.S. federal public debt to GDP soared in World War II but then fell steadily until the defense buildup and recession of the early 1980s. (We use the debt-held-by-the-public figure because that is the amount the U.S. government has borrowed from others. The total debt is larger, but that includes Social Security IOUs that are promises that politicians have made to taxpayers and can repudiate. You can't repudiate public debt except at great cost, as Greece is discovering.)

The debt ratio stabilized for a time, as the nearby chart shows, then reached a postwar record of 49.3% in 1993 after the recession of the early 1990s. But it quickly fell in the 1990s as the economy grew rapidly and the post-1994 Republican Congress restrained spending for a time and struck a balanced budget deal with Bill Clinton.

It's worth noting that when Democrats took over Congress in 2007, the debt ratio was 36.2%, but within a year it had climbed to 40.2% and was heading north. Now the public debt ratio is climbing even faster amid slow economic growth and a spending binge, reaching an expected 63.6% this year, 68.6% next year and above 70% later this decade even by White House reckoning.

These White House estimates are surely understated if current U.S. policies continue. The Obama budget assumes its tax increases won't affect investor behavior or reduce growth. Passing ObamaCare would send the debt ratio even higher, probably past 100% within a few years as spending soared and the illusionary cost savings failed to appear.

But debt that goes up can come down. The key policy variables for future debt are spending restraint and, especially, economic growth. The burden of debt climbs most rapidly amid recessions as tax revenues decline, but it can also decline rapidly when the economy expands by 3% or more a year and Congress controls itself. The latter didn't happen under the Tom DeLay GOP and it won't happen as long as Nancy Pelosi is House Speaker, but it did happen for some time after the election of the GOP Congress in 1994.

Which brings us to the necessity of economic growth. This is where we part company with Moody's, which in handing out country credit ratings cares most about balanced budgets. How countries do the balancing counts for less. If tax increases do the job, that's fine with the green eye shades.

The wrong lesson to take from this fretting over the national debt is that the only answer is a tax increase. That's clearly part of the White House strategy, which explains its emerging theme that debt is a "national security" problem. Having lifted spending to a peacetime record of 25% of GDP, Democrats now want to point to the national debt and claim they must raise taxes—for the national good!

Neither the public nor Republicans in Congress should fall for this. The $2 trillion in tax hikes that Mr. Obama proposed this week, which will start hitting in 2011, are the larger threat to national solvency and prosperity because they will strike an economy still emerging from a deep recession. A weaker or shorter expansion will mean less tax revenue, and thus higher deficits and more debt over time.

The real debt problem is that, in a mere two years, Democrats have taken more than 4% of annual U.S. national output from the private economy and handed it to the government. Politicians do not typically make wiser investment choices than people investing their own money to make a profit. This is a misallocation of resources that is sure to reduce growth and private income over time. This is the real root of America's emerging debt problem, and what has to be reversed.

"The Job-Subsidy Plan," by Judge Richard Posner, The Becker-Posner Blog, January 31, 2010 ---

The President is asking Congress to enact a one-year $33 billion job-subsidy plan. An employer would receive a $5,000 tax credit in 2010 credit for increasing his labor force by one person and an additional subsidy for giving an employee a wage increase greater than the inflation rate. The total subsidy would be limited to $500,000 per employer, in the hope that the principal recipients would be small businesses. I do not know why the ceiling should be expected to have that effect. Even big businesses like $500,000 windfalls. If a big business happens to be increasing its hiring or its wages, why wouldn’t it claim the subsidy?


That point to one side, and disregarding also the abundant possibilities of gaming the program, stressed by Becker, the proposal is unlikely to be effective because it violates the economic principles that ought to guide stimulus programs.


The theory of stimulus is Keynes’s, is (in my opinion) sound, and is as follows. If, because a high rate of unemployment creates pessimism about the economic situation, people increase their savings at the same time that business is reducing its investing—and that is our situation today—the government can by financing projects through borrowing put the inert savings to work (inert because businesses aren’t borrowing people’s savings). The projects require workers, so unemployment falls, and with it pessimism and the cash hoarding, by consumers and businesses alike, that pessimism induces.


With Keynes’s theory understood, it becomes possible to list the principles of effective stimulus:


  1. The stimulus must be large in order to make a substantial dent in unemployment. The $787 billion stimulus enacted last February may have been too small; a $33 billion jobs subsidy is a drop in the bucket.


  1. The stimulus must be implemented before recovery from a depression or recession is well under way—otherwise the government’s borrowing to finance the stimulus will slow the recovery by pushing up interest rates. (That is, at some point in the recovery, business will resume investing and so will be competing with the government for capital.) If enactment of the job subsidy is delayed in Congress, or if procedures for preventing the gaming of the program are cumbersome, the subsidy expenditures may come too late to do any good.


  1. The stimulus must be targeted on industries, and areas of the country, in which unemployment is high. Like the $787 billion stimulus, the job-subsidy plan flunks this test as well.


  1. Most important, a stimulus is designed to stimulate demand, not supply. The economic problem for which a stimulus program is a solution is insufficient demand relative to the economy’s labor and other resources. Because of overindebtedness and continued weaknesses in the financial system, consumers and businesses are reluctant to spend. Businesses are reluctant to hire (that is one aspect of their reluctance to spend), so unemployment is high and wages are stagnant, which further depresses demand. The idea behind the stimulus is for government demand to take the place of the missing private demand. Government “buys” new roads, in lieu of consumers’ buying SUVs, and contractors meet the government’s demand by hiring unemployed construction workers. The job-subsidy plan is not demand-focused, and so is unlikely to contribute to the economic recovery. Suppose a firm in a depressed economy sells 100 earth-moving machines a year, and employs 200 workers. If the government tells the firm it can save $5,000 on its taxes by increasing its work force to 201, the firm’s total costs will increase (by the wages and benefits of the additional worker less $5,000), but its revenues will not increase because adding a worker does not increase the demand for its product.


There is an enormous amount of idle productive capacity in the U.S. economy at present. There is thus a case, as liberal economists such as Paul Krugman keep urging, for further stimulus spending. The problem is that such spending is irresponsible unless coupled with a credible commitment to repay, after the economy recovers, the money borrowed to finance the spending. Not only is there no such commitment; at present the only realistic prospect is of staggering deficits stretching indefinitely into the future. As a result there is at present no stomach for additional stimulus spending. The government is reduced to impotent gestures, of which the job-subsidy plan is one.


"Obama's Budget Freeze and America's Economic Decline," by Umhair Hague, Harvard Business Review Blog, January 27, 2010 ---

A budget freeze in the middle of a (curiously depression-like) recession? That's about as smart an idea, economically speaking, as gulping down a bucketful of magma just because you're thirsty. It's even worse than Hoovernomics, because we have, today, the benefit of hindsight.

And though it's probably just PR shadowboxing, a "spending freeze" is actually perfect illustration of the big problem with Obama's economic policy. So far, it has accelerated — instead of decelerated — three transfers of wealth:

A transfer of wealth from Main Street to Wall Street. As Robert Reich has noted, the freeze disproportionately hurts Main Street. Wall Street got bailed out — and a spending freeze, now, is just another way of saying Main Street has to pay for it. In my last post, I referred to it as a War on the American Dream.

A transfer of wealth from young to old. America's debt wasn't racked up just last year, but over several decades. Its burden will fall disproportionately on tomorrow's citizens. (That's what my Generation M Manifesto was really about.)

A transfer of wealth from human people to corporate "people." America's debt, in a very real sense, is a consequence of corporations evading their responsibilities as citizens, and failing to provide services that matter. If we had a working healthcare industry, for example, healthcare might not have to be so heavily subsidized. Instead, pharma players have booked huge profits for decades, while America's racked up debt to essentially pay for it. (Connect the dots: one of the biggest components of the deficit is healthcare costs; healthcare costs so much, in part, because drugs are sold at significantly higher prices to Americans than abroad; higher drug prices yield nice margins for pharma players.) Today, it's real people who carry corporate people on their shoulders — not vice versa.

Let me put it as simply as I can: These are fatal vectors.

Economies that transfer wealth in these directions cannot survive — let alone prosper. Their resource bases, productive bases, knowledge bases, skills bases all implode. And the very fabric of trust that binds all of the above frays and disintegrates.

The problem we face isn't the problem we think we face. America's looming debt crisis is the consequence, not the cause. What are the root causes of America's addiction to debt?

The root cause is what I've been calling dumb growth: short-term, consumption-driven, polluting, economically meaningless growth. Think Hummers, Big Macs, and McMansions. America doesn't make products and services of earth-shaking, awesome value — it consumes stuff. So much stuff that we failed to adequately build yesterday's industries — which is why they needed bailing out. And today, we're bailing them out, instead of building tomorrow's industries. Worse, the stuff we so ravenously hyperconsume is traded on an uneven playing field. We're eating the future.

The way to close the gap between what we spend and what we earn isn't to stop investing in tomorrow — a spending freeze. That's a recipe for economic implosion.

The answer is a smarter kind of growth. Here are its four pillars. Smart growth reverses the fatal vectors above. When economies set the stage for smart growth, wealth isn't just transferred — unfairly and self-destructively. It is created anew. That's the key to an authentic, shared prosperity — not just the illusion of one.

Fire away in the comments with thoughts, questions, etc.

Budget Freeze" is an Oxymoron
"Deficit to Hit All-Time High" Obama's $3.8 Trillion Budget Forecasts a $1.6 Trillion Shortfall for 2010 Before It Drops," by Jonathan Weisman, The Wall Street Journal, February 1, 2010 ---

President Barack Obama will propose on Monday a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700 billion, or 4% of the gross domestic product, by 2013, according to congressional aides.

The deficit for the current fiscal year, which ends on Sept. 30, would eclipse last year's $1.4 trillion deficit, in part due to new spending on a proposed jobs package. The president also wants $25 billion for cash-strapped state governments, mainly to offset their funding of the Medicaid health program for the poor.

To get the deficit down by the middle of the decade, Mr. Obama will be relying on some cuts that have previously been proposed without success, on cooperation from a wary Congress and on a yet-to-be set up debt commission to suggest politically difficult choices.

At the same time, Mr. Obama is under pressure to address the country's continued high unemployment rate. And he will propose increases in spending for priorities such as education and domestic scientific research. All of this raises questions about how much progress the president is likely to make in trying to fulfill his pledge to halve by 2013 the $1.3 trillion deficit he inherited.

The budget embodies Mr. Obama's larger predicament of needing to contain the deficit without harming the economy, which remains fragile. The deficit has become a major political issue, as antigovernment activists swing independents against what they describe as Mr. Obama's big-government policies and Republicans try to regain the mantle of fiscal responsibility after the Bush years saw surpluses swing to deficits.

Republicans have said they aren't likely to cooperate with Mr. Obama on his deficit-reduction approach, opposing tax increases even as they attack Democrats for proposing cuts to Medicare. Meanwhile, senior Democrats in Congress have shown themselves reluctant to cut spending with unemployment hovering at 10%.

Under the Obama budget, this year's $1.6 trillion deficit would fall to $1.3 trillion in the fiscal year that begins Oct. 1. It would drop to $700 billion in 2013 and 2014, the budget projects, on the assumption that the economy recovers, tax receipts start rising again with incomes, and stimulus spending drops off.

The deficit would drop to the equivalent of 5% of GDP in 2013 through expected economic improvement alone. Policy changes proposed by the president, such as a proposed freeze in nonsecurity domestic spending, would shave an additional percentage point.

Mr. Obama plans to rely on a new debt commission to come up with recommendations on how to meet his promise to bring the figure down to the equivalent of 3% of GDP by 2015, according to budget analysts briefed on the proposal.

The deficit is forecast to stabilize at $800 billion between fiscal years 2015 and 2018 before beginning to rise again, according to the White House projections. The projected rise is due to the retirement of the baby boomers, which is expected to result in increased spending on Medicare and Social Security.

With unemployment still at 10%, the president is finding it difficult to meet his promise to halve the $1.3 trillion deficit he inherited by January 2013. Job creation has become his top priority, and he is showing no sign of skimping on tax cuts and spending measures in the short term.

A bipartisan 18-member debt commission would forward any deficit-reduction proposals they come up with to Congress after this year's midterm elections. Issues it would face would include how to cut the deficit further in the short term and how to rein in long-term growth of entitlement programs, such as Medicare, Medicaid and Social Security. Commission members would have to come up with between $180 billion and $190 billion in cuts to meet the president's target.

Congressional leaders have promised the president that they would submit the panel's recommendations to an up-or-down vote in the lame-duck session of Congress, after the elections but before the newly elected House and Senate take office.

White House officials say they are ready to make some tough choices to get the deficit under control. White House communications director Dan Pfeiffer wrote on the White House Web site this weekend that the president's budget would propose to terminate or cut back more than 120 programs, saving about $20 billion in the fiscal year beginning in October.

The proposals include consolidating 38 education programs into 11, cutting the National Park Service's Save America's Treasures and Preserve America grant program, and eliminating the Advanced Earned Income Tax Credit, which allows low-wage workers to get tax-credit checks in advance but which is rife with abuse, White House officials say. The Brownfields Economic Development Initiative, which converts decayed former industrial sites to new uses, would be cut, and payments ended to states to restore abandoned mines, many of which have been long cleaned up.

But some of those efforts, such as the abandoned mines and Advanced Earned Income Tax Credit cuts, were proposed last year in Mr. Obama's first budget. They were ignored by Congress. Other planned cuts are presidential perennials, attempted without success by Presidents Bill Clinton and George W. Bush before Mr. Obama, such as eliminating whaling partnerships and implementing deep cuts to the Army Corps of Engineers.

The president is also expected to call for halting the National Aeronautics and Space Administration's plan to return astronauts to the moon, a tough sell in vote-rich Florida.

"There's no question there's a range of domestic discretionary that can be scaled back," said one Democratic budget analyst. "Politically, they will never get through."

Meantime, the president will ask for large increases in spending on education and civilian scientific research, according to analysts briefed on budget plans.

Mainly, the president plans to rely on the budget commission and budget rules in an effort to try to force Congress's hand, budget analysts say. The budget assumes the enactment of pay-as-you-go rules that would force any tax cut or spending increase to be offset by tax hikes or spending cuts.

Isabel Sawhill, a budget expert at the Brookings Institution, criticized the president's goal— a deficit of 3% of GDP long after the recession has ended—saying it amounted to "defining deficits down."

"The pay-go rules will make it more difficult for Congress to dig the hole deeper but won't affect currently projected red ink; and the commission will likely be a paper tiger," she wrote on Friday. "In short, these proposals will still leave us with unsustainable deficits as far as the eye can see. It is depressing to discover that we can no longer even aspire to balance the budget once the recession is over."

"Geithner's AIG Bailout," by Greg Kaughmann, The Nation, January 29, 2010 ---

Bob Jensen's threads on the Bankster Bailout --- http://www.trinity.edu/rjensen/2008Bailout.htm#BailoutStupidity

Today test scores are up, charter schools proliferate and schools have improved to the point that Louisiana is a leading contender for Race to the Top education grants that the Obama Administration has set aside for model school systems. As tragic as Katrina was, its destruction also replaced a failed system of public education and created a political opening for reform.
"Sorry for What? Team Obama apologizes for being right," The Wall Street Journal, February 5, 2010 ---

"Tony Blair's Iraq Statesmanship:  The former PM reminds the world why Saddam had to go, and the lesson for Iran," The Wall Street Journal, January 31, 2010 ---

Instead, Mr. Blair offered a ringing defense of the decision to invade Iraq, and a very different set of lessons for the present. "This isn't about a lie, or a conspiracy, or a deceit, or a deception. It is a decision," Mr. Blair told a packed room that included relatives of soldiers killed in Iraq. "And the decision I had to take was, given [Saddam's] history, given his use of chemical weapons, given the over one million people whose deaths he had caused, given 10 years of breaking U.N. resolutions, could we take the risk of this man reconstituting his weapons program?"

That's a point worth remembering over all the Monday-morning recriminations about "dodgy dossiers" and missing WMD. We have never for a moment believed that the British or U.S. governments deliberately misled their publics over what they thought they knew about Saddam's weapons. Every Western country, including those opposed to the war, believed Saddam had WMD.

But the important point was never so much about what Saddam did or did not possess so much as it was about what he intended. And as Mr. Blair pointed out Friday, "What we now know is that he [Saddam] retained the intent and the intellectual know-how to restart a nuclear and a chemical weapons program when the inspectors were out and the sanctions changed, which they were going to do. . . .

"Today we would be facing a situation where Iraq was competing with Iran, competing both on nuclear weapons capability and competing more importantly perhaps than anything else . . . in respect of support of terrorist groups. . . . If I am asked whether I believe we are safer, more secure, that Iraq is better, that our own security is better, with Saddam and his two sons out of office and out of power, I believe indeed we are."

Mr. Blair was no less clear-eyed about the threat posed today by Iran and its nuclear program, against which he counseled that the international community had to take a "very hard, tough line." Iranian interference was a large reason why the Iraq war "very nearly" failed. Iran remains a sponsor of terrorism and a cause of instability from Afghanistan to Lebanon. The lesson from the Iraq war isn't to avoid action for fear of unanticipated consequences, which are inevitable in any war. It is to take action to prevent the most foreseeable of disasters, namely the combination, in a single regime, of fanaticism, links to terrorism and nuclear weapons.

"The decision I took—and frankly would take again—was, if there was any possibility that he [Saddam] could develop weapons of mass destruction, we would stop him," Mr. Blair told the commission. Listening to him, we are reminded why he ranks with Margaret Thatcher as a pre-eminent statesman of postwar British politics, an achievement unlikely to be matched by the Lilliputians who seek to embarrass him.


"Obama Administration Steers Lucrative No-Bid Contract for Afghan Work to Dem Donor," Free Republic, January 25, 2010 ---

Despite President Obama's long history of criticizing the Bush administration for "sweetheart deals" with favored contractors, the Obama administration this month awarded a $25 million federal contract for work in Afghanistan to a company owned by a Democratic campaign contributor without entertaining competitive bids, Fox News has learned. The contract, awarded on Jan. 4 to Checchi & Company Consulting, Inc., a Washington-based firm owned by economist and Democratic donor Vincent V. Checchi, will pay the firm $24,673,427 to provide "rule of law stabilization services" in war-torn Afghanistan.

"Big government's business cronies," by John Stossel, WorldNetDaily, February 3, 2010 ---

Many window-making companies struggle because of the recession's effect on home building. But one little window company, Serious Materials, is "booming," says Fortune. "On a roll," according to Inc. magazine, which put Serious' CEO on its cover, with a story titled: "How to Build a Great Company."

The Minnesota Freedom Foundation tells me that this same little window company also gets serious attention from the most visible people in America.

Vice President Joe Biden appeared at the opening of one of its plants. CEO Kevin Surace thanked him for his "unwavering support." "Without you and the recovery ("stimulus") act, this would not have been possible," Surace said.

Biden returned the compliment: "You are not just churning out windows; you are making some of the most energy-efficient windows in the world. I would argue the most energy-efficient windows in the world."

Gee, other window-makers say their windows are just as energy efficient, but the vice president didn't visit them.

Biden laid it on pretty thick for Serious Materials: "This is a story of how a new economy predicated on innovation and efficiency is not only helping us today but inspiring a better tomorrow."

Serious doesn't just have the vice president in his corner. It's got President Obama himself.

Milton Friedman's classic "Capitalism and Freedom" explains how individual liberty can only thrive when accompanied by economic liberty

Company board member Paul Holland had the rare of honor of introducing Obama at a "green energy" event. Obama then said: "Serious Materials just reopened ... a manufacturing plant outside of Pittsburgh. These workers will now have a new mission: producing some of the most energy-efficient windows in the world."

How many companies get endorsed by the president of the United States?

When the CEO said that opening his factory wouldn't have been possible without the Obama administration, he may have known something we didn't. Last month, Obama announced a new set of tax credits for so-called green companies. One window company was on the list: Serious Materials. This must be one very special company.

But wait, it gets even more interesting.

On my Fox Business Network show on "crony capitalism," I displayed a picture of administration officials and so-called "energy leaders" taken at the U.S. Department of Energy. Standing front and center was Cathy Zoi, who oversees $16.8 billion in stimulus funds, much of it for weatherization programs that benefit Serious.

The interesting twist is that Zoi happens to be the wife of Robin Roy, who happens to be vice president of "policy" at Serious Windows.

Of all the window companies in America, maybe it's a coincidence that the one that gets presidential and vice presidential attention and a special tax credit is one whose company executives give thousands of dollars to the Obama campaign and where the policy officer spends nights at home with the Energy Department's weatherization boss.

Or maybe not.

There may be nothing illegal about this. Zoi did disclose her marriage and said she would recuse herself from any matter that had a predictable effect on her financial interests.

But it sure looks funny to me, and it's odd that the liberal media have so much interest in this one company. Rachel Maddow of MSNBC, usually not a big promoter of corporate growth, gushed about how Serious Materials is an example of how the "stimulus" is working.

When we asked the company about all this, a spokeswoman said, "We don't comment on the personal lives of our employees." Later she called to say that my story is "full of lies."

But she wouldn't say what those lies are.

On its website, Serious Materials says it did not get a taxpayer subsidy. But that's just playing with terms. What it got was a tax credit, an opportunity that its competitors did not get: to keep money it would have paid in taxes. Let's not be misled. Government is as manipulative with selective tax credits as it is with cash subsidies. It would be more efficient to cut taxes across the board. Why should there be favoritism?

Because politicians like it. Big, complicated government gives them opportunities to do favors for their friends.

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/fraudUpdates.htm


"How do you spell brazen," by Neill Amhart, Canada Free Press, January 30, 2010 ---

In listening to the State of The Union Address, and other recent pondering of President Obama, I am constantly amazed at his ability to say things that he knows can be fact checked. Let me give you a few examples.

Lobbyists. President Obama promised during his campaign that lobbyists “won’t find a job in my White House.”

Then, once he was in, and hired a lobbyist a day for several weeks, he explained that there had to be exceptions.

In the State of the Union Address, he nuanced it further.

“That’s why we’ve excluded lobbyists from policymaking jobs, or seats on federal boards and commissions.”

Now, I grant that he may have many lobbyists in non policy making positions, but here are a few that definitely DO make policy.

Eric Holder, Attorney General, lobbied for Global Crossing, a telecommunications firm.

Tom Vilsack, secretary of agriculture, lobbyist for the National Education Association.

William Lynn, deputy defense secretary, was registered to lobby as recently as last year for defense contractor Raytheon where he was a top executive.

Trying not to lose readers with mind numbing detail, here is a list of names, and you can google them if you want, but the one thing that they all have in common, is that they are all in policy making positions.

William Corr, David Hayes, Mark Patterson, Ron Klain, Mona Sutphen, Melody Barnes, Cecilia Munoz, Patrick Gaspard, Michael Strautmanis, and there’s more. This isn’t counting the ones that didn’t take the job, or the ones who couldn’t pass muster. Tom Daschle comes to mind.

Hiring the very type of people that he swore not hire, and do it from the very first day of his presidency, is the epitome of brazen.

Did he think that no one would notice?

Stimulus Bill. In regard to the Stimulus Bill, the President said, ”Economists on the left and the right say this bill has helped save jobs and avert disaster.”

Then, two paragraphs later, he says ”That is why jobs must be our number-one focus in 2010, and that’s why I’m calling for a new jobs bill tonight.”

Most of the time, he waits at least 24 hours before contradicting himself. In this case, the contradictory statement out of his mouth while the echo’s of the first statement could still be heard bouncing around the chamber.

Is that brazen, or what?

My question is, which time was he telling the truth?

And, in my opinion, the President, through words and deeds, has demonstrated that he believes that prosperity comes from the government.

Maybe in some other dimension of time and space, this would be true, but in this universe, prosperity comes from the private sector.

Earmark spending. In the campaign, the President said that he would outlaw the practice of earmark spending. That was his word. Outlaw. I’m not making this up.

Then, when the stimulus bill came to him for his signature, it was full of earmark requests. He signed it, rationalizing that some earmarks are good.

Does that make him an outlaw?

In the State of the Union Address, he called on the House and Senate to control their earmark requests, but no mention of outlawing them.

How can he say some many different things about the same subject, and not expect to be caught?

Oh, I forgot for a moment. He is brazen.

Supreme Court. The President, using a verbal baseball bat, lambasted the Supreme Court for its recent ruling on campaign finance, uttered, “I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”

I don’t want to debate the wisdom the ruling here, knowing that there are plenty of good arguments on both sides. But I do want to address the last two words of that sentence. Foreign entities.

Regardless of your opinion of allowing corporations to donate to campaigns, there is, and always has been, a law that prohibits foreign interests contributing to them, directly or indirectly.

The President was a professor at WHAT university?

He graduated from WHERE?

He passed the bar exam HOW?

Was it a snow day on the day that his teacher was going to cover that?

To be fair, I don’t think that the President is ignorant of this law. I just think he is brazen enough to believe that he can say anything, and the people who like him will believe him, and the people who don’t like him won’t be taken seriously when they speak out.

Has any other President bashed the Supreme Court like this in a State of the Union Address? I haven’t heard or read all of them, but, I’ve skimmed the text of all of them that happened in my lifetime, and I can’t find any evidence of it.

Final note on campaign finance.

This is from a man who promised to accept, and abide by the rules of, public financing, so as to keep the playing field level. Then a few weeks later, upon discovering that he could raise more money, with less accountability, using the internet, he did an abrupt about face, describing the public finance system as “broken”. This allowed him to outspend McCain by a very large margin. A cynic might say that he bought the election.

What’s the word to describe this type of behavior? Lemme think. Starts with B, and rhymes with raven.

The last eight years. I’m going to get down on my knees and pray, “Lord, in order to help the struggling people of America, please arrange for them to get a dime every time the President uses the phrases, ”....the last eight years…”, “we inherited….”, “we walked into a mess…...”, or any other phrase that puts the blames for the problems of the country on the last administration, or tries to excuse his failure by pointing out what a hard job he walked into.

I’m going to run for President one day, but only if I can follow an administration that did everything perfect from the point of view of both democrats and republicans, so that I don’t inherit any problems.

If this were an email or facebook post, I would end the previous remark with an LOL.

Here is a quote from George Bush’s State of The Union Address from January, 2008.

“And Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow State housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.”

And if he had been successful in persuading the democrat controlled Congress to go along with him, we might have averted the crisis, or at least blunted it.

Bush didn’t cause the economic collapse. That was in motion long he was sworn in. Mortgage companies were passing around bad paper for decades. Many of the mortgages that went bad were written in the 90’s. Many others were written under policies that began in the 90’s.

I remember reading of a family that obtained a $720,000 mortgage, based on a combined income of under $15,000 dollars, that they earned by picking strawberries. You can find their story here.

In 2004, House Republicans tried to bring more regulation to mortgage lending, but the Dems fought against it tooth and nail. Said Barney Frank: “But I have seen nothing in here that suggest that the safety and soundness (of Fannie Mae and Freddie Mac) are at issue. I think it serves us badly to raise safety and soundness as kind of a general shibboleth when it does not seem to me to be an issue.”

There is a video that can be found here, showing some house deliberations, that pretty well destroys that argument the President uses. It shows republicans trying to put the brakes on Fannie Mae and Freddie, and how they are ridiculed by democrats for even suggesting such thing.

I dare anyone to invest 7 minutes of their life to look at this video, and then put the blame for the mortgage crisis anywhere but in the laps of Nancy Pelosi, Barney Frank, Lacy Clay, Maxine Waters, Gregory Meeks, Franklin Raines, Arthur Davis, and the Community Reinvestment Act.

In another matter concerning the last eight years, how many close calls have we had in the way of terrorist attacks in the past year, compared to Bush administration after 9/11?

I’ve lost count.

Now, I don’t believe for one second that the President isn’t aware of this. He’s not a stupid man.

I just believe that he is brazen enough to say things like that, regardless of whether they have any foundation in truth.

So, in answer to the question I started this essay with, here is how I spell “brazen”.

I spell it O. B. A. M. A.

That’s the way I see it.

Neill Arnhart.


Yeah Right! Scott Brown's Nae Vote is Really Going to Help Pass Obamacare
Obama Administration is in Denial

We are getting into real mental health issues here. Robert Gibbs is on Fox News Sunday, "explaining" what the Brown win in MA means. Gibbs stated forcefully that last week Brown was elected not because of anger at Obama's policies, but because voters were angry at George Bush and because Obama hasn't moved forcefully and quickly enough in implementing Obamacare.
"Gibbs: Brown win in MA means that the voters really want Obama's policies," Free Republic, January 24, 2010 ---

The Washington Post  retracts support for Obama's treatment of Christmas Bomber as a criminal case, by Scott Johnson, Powerline, January 24, 2010  ---

The Washington Post supported the Obama administration's treatment of Christmas day bomber Umar Abdulmuttalab as a criminal rather than as an enemy combatant. In an editorial published yesterday, It has nevertheless retracted its support. The Post writes that it "originally supported the administration's decision in the Abdulmutallab case, assuming that it had been made after due consideration. But the decision to try Mr. Abdulmutallab turns out to have resulted not from a deliberative process but as a knee-jerk default to a crime-and-punishment model."

The Obama administration's treatment of Abdulmutallab as a criminal accorded the constitutional rights of an American citizen is absurd and indefensible. Yet the administration persists in it.

It is highly unusual to see a prominent newspaper editorial board publicly change its mind. The stated ground for the Post's original editorial position is lame. It criticizes the decision on procedural grounds. Is the Post incapable of judging its substance?

A defective decision making process is more likely to have resulted in a defective decision, but who cares what process the Obama administration used to come to the wrong decision? The administration is full of world-class liberal chin pullers who would come to the same decision if they had taken more time to think about it. They are simply on the wrong track.

Yesterday's Post editorial also concludes on a lame note. The Post can't quite bring itself to the conclusion that the Obama administration's treatment of Abdulmutallab as a criminal is in fact a mistake. Maybe, maybe not. It professes to have an open mind on that question.

It notes, on the one hand: "The administration claims Mr. Abdulmutallab provided valuable information -- and probably exhausted his knowledge of al-Qaeda operations -- before he clammed up. This was immediately after he was read his Miranda rights and provided with a court-appointed lawyer."

That sounds bad. Abdulmutallab was singing like a bird until the FBI read him a Miranda warning. Reasonable people would conclude that he stopped singing because of the warning.

But here the Post injects a note of epistemological uncertainty befitting a college philosophy class. The Post asserts, on the other hand: "The truth is, we may never know whether the administration made the right call or whether it squandered a valuable opportunity." The truth is, we may never know this only if we are prohibited from employing the most basic common sense to assess the situation.

More importantly, however, the administration's decision to treat Abdulmutallab as a criminal is mistaken on its face. It cannot be defended on the merits in principle and the administration has not chosen to do so. It is an obvious mistake that can be rectified -- the administration can dismiss the criminal proceedings and remit Abdulmutallab to the custody of the armed forces as an enemy combatant -- but it would be helpful to have reasonable administration allies like the Post editorial board say that it should do so forthrightly.

If the administration now chose to treat Abdulmutallab as an enemy combatant, he might well remain "clammed up." At that point we would have a good case in which to debate the folly of the administration's abandonment of the CIA's enhanced interrogation program.

"A Glacier Meltdown:  The Himalayas and climate science," The Wall Street Journal, January 23, 2010 ---

Last November, U.N. climate chief Rajendra Pachauri delivered a blistering rebuke to India's environment minister for casting doubt on the notion that global warming was causing the rapid melting of Himalayan glaciers.

"We have a very clear idea of what is happening," the chairman of the U.N. Intergovernmental Panel on Climate Change (IPCC) told the Guardian newspaper. "I don't know why the minister is supporting this unsubstantiated research. It is an extremely arrogant statement."

Then again, when it comes to unsubstantiated research it's hard to beat the IPCC, whose 2007 report insisted that the glaciers—which feed the rivers that in turn feed much of South Asia—were very likely to nearly disappear by the year 2035. "The receding and thinning of Himalayan glaciers," it wrote in its supposedly definitive report, "can be attributed primarily to the [sic] global warming due to increase in anthropogenic emission of greenhouse gases."

It turns out that this widely publicized prediction was taken from a 2005 report from the World Wildlife Fund, which based it on a comment by Indian glacier expert Syed Hasnain from 1999. Mr. Hasnian now says he was "misquoted." Even more interesting is that the IPCC was warned in 2006 by leading glaciologist Georg Kaser that the 2035 forecast was baseless. "This number is not just a little bit wrong, but far out of any order of magnitude," Mr. Kaser told the Agence France-Presse. "It is so wrong that it is not even worth discussing."

On Wednesday, the IPCC got around to acknowledging that the claim was "poorly substantiated," though Mr. Pachauri also suggested it amounted to little more than a scientific typo. Yet the error is of a piece with other glib, and now debunked, global warming alarms.

Among them: that 1998 was the warmest year on record in the United States (it was 1934); that sea levels could soon rise by up to 20 feet and put Florida underwater (an 18-inch rise by the year 2100 is the more authoritative estimate); that polar bears are critically endangered by global warming (most polar bear populations appear to be stable or increasing); that—well, we could go on without even mentioning the climategate emails.

For the record, most Himalayan glaciers do seem to be retreating, and they have been "since the earliest recordings began around the middle of the nineteenth century," according to a report from India's ministry of environment and forests. The reasons are complex and still poorly understood, and we're glad to see responsible scientists acknowledge as much. If more of them could help the IPCC get its facts straight, we might put more stock in its reports.

"MIT economist finds temporary jobs may actually reduce workers' income and employment prospects," by Christine Daniloff, PhysOrg, January 20, 2010 --- http://www.physorg.com/news183385347.html

While the U.S. economy struggles, one form of employment is on the rise: Temporary jobs. In December, the country lost 85,000 jobs overall, but added 47,000 temp positions, according to the Bureau of Labor Statistics. Increasingly America relies on these contingent employees -- or “disposable workers,” as Business Week put it in a recent cover story.

For many workers, these are stop-gap measures, but social scientists have long floated another idea: That temp positions help low-skill workers to acquire experience and eventually join the permanent workforce in better long-term jobs. Now, a new working paper co-authored by MIT economist David Autor throws cold water on that notion. Not only do many temp employees struggle to find long-term or “direct-hire” work, the study says, but holding a temp job generally lowers a worker’s employment and income prospects over time.

“Temp jobs have some initial positive impact,” says Autor. “But not only do they end quickly, they tend to displace what a person would have done instead, either taking a direct-hire job or engaging in the kind of search that could lead to a direct-hire job.”

Autor and his co-author, Susan Houseman of the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., came to this conclusion after examining a welfare-to-work program in Detroit called Work First. The program offers some job-seeking training and attempts to put people in either temporary or long-term positions. Using Work First data for over 37,000 cases from 1999 to 2003, combined with state employment information, Autor and Houseman examined how workers fared in the two years before and after they participated in Work First.

Their findings showed that workers placed into direct-hire jobs increased their earnings by about $2,000 per year, compared to their earnings before trying the Work First program. By contrast, workers initially placed into temp jobs saw their earnings lowered by about $1,000 per year, compared to their previous average .

The study, “Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from ‘Work First,’” (PDF) which will be published in the American Economic Journal: Applied Economics, has clear policy implications. “Work First as a model is not a bad idea, but I think these programs should be more focused on getting people into direct-hire positions,” says Autor. “In terms of what state agencies should be spending their money on, it should not be temporary-help placements, at least for this part of the population.”

Workplace experiment

The study’s surprising results have already gained notice among labor researchers, who have often assumed a solid correlation between temp employment and better job prospects. “I would have expected them to find a positive result, but they didn’t,” says Mary Corcoran, a professor of political science, public policy, social work, and women's studies at the University of Michigan, who is conducting her own study of temporary employment in Michigan. Corcoran thinks the Autor-Houseman paper is “one of the best pieces out there on the effects of using temp agencies, because it’s more like an experiment than other studies.”

Indeed, the study uses a key feature of Work First to create what economists call a “quasi-experiment” — research that uses a random element found in data to duplicate the structure of a laboratory trial. In general, it is hard to separate the employment status of people from their skills and motivation; temp workers might have temp jobs because they are less predisposed to have long-term jobs. But in Detroit, Work First arbitrarily rotated job-seekers through different job-placement contractors which themselves had varying tendencies in terms of placing workers in temp positions or long-term jobs. Because each group of job-hunters assigned to each job placement contractor was essentially identical, Autor and Houseman could rule out differences in workers as the primary explanation of differences in workers trajectories; in this case, even some workers who were highly motivated to find full-time work started out in temp jobs.

To be sure, a valid question is how broadly these findings apply, given Michigan’s acute economic struggles. However, as Autor notes, the study’s data starts when the state economy was growing in the late 1990s, then continues through the slump of the early 2000s and the subsequent rebound; it ends before the current recession began.

Moreover, Autor and Houseman believe there is no regional bias in the study because the overall figures for people finding both temporary and long-term jobs through Work First in Detroit closely match the equivalent data for other regions, including North Carolina and Missouri. The researchers also say temp workers fared no differently in the production-line jobs associated with Michigan than in the kinds of clerical jobs found everywhere.

“I don’t think it’s anything specific about Detroit, or the type of work in which temps are placed,” says Autor. “In terms of the external validity of the conclusions, my main concern is how this relates to a more skilled population. There we don’t have a clear answer yet.” It is possible that temp jobs for people with college degrees do lead to greater opportunities and earnings — something the researchers would study if the right data set presents itself, Autor says. Given the way America’s temporary workforce keeps growing, there may be plenty of those numbers for Autor to scrutinize in the future.

Continued in article


"One quarter of US grain crops fed to cars - not people, new figures showNew analysis of 2009 US Department of Agriculture figures suggests biofuel revolution is impacting on world food supplies," The Guardian, January 22, 2010 ---

One-quarter of all the maize and other grain crops grown in the US now ends up as biofuel in cars rather than being used to feed people, according to new analysis which suggests that the biofuel revolution launched by former President George Bush in 2007 is impacting on world food supplies. The 2009 figures from the US Department of Agriculture shows ethanol production rising to record levels driven by farm subsidies and laws which require vehicles to use increasing amounts of biofuels.

Go Canada Even If You've So Boring

"Good and Boring," by Paul Krugman, The New York Times, January 31, 2010 ---

On the other hand, Canada’s experience does seem to support the views of people like Elizabeth Warren, the head of the Congressional panel overseeing the bank bailout, who place much of the blame for the crisis on failure to protect consumers from deceptive lending. Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending.

Above all, Canada’s experience seems to support those who say that the way to keep banking safe is to keep it boring — that is, to limit the extent to which banks can take on risk. The United States used to have a boring banking system, but Reagan-era deregulation made things dangerously interesting. Canada, by contrast, has maintained a happy tedium.

More specifically, Canada has been much stricter about limiting banks’ leverage, the extent to which they can rely on borrowed funds. It has also limited the process of securitization, in which banks package and resell claims on their loans outstanding — a process that was supposed to help banks reduce their risk by spreading it, but has turned out in practice to be a way for banks to make ever-bigger wagers with other people’s money.

There’s no question that in recent years these restrictions meant fewer opportunities for bankers to come up with clever ideas than would have been available if Canada had emulated America’s deregulatory zeal. But that, it turns out, was all to the good.

So what are the chances that the United States will learn from Canada’s success?

Actually, the financial reform bill that the House of Representatives passed in December would significantly Canadianize the U.S. system. It would create an independent Consumer Financial Protection Agency, it would establish limits on leverage, and it would limit securitization by requiring that lenders hold on to some of their loans.

But prospects for a comparable bill getting the 60 votes now needed to push anything through the Senate are doubtful. Republicans are clearly dead set against any significant financial reform — not a single Republican voted for the House bill — and some Democrats are ambivalent, too.

So there’s a good chance that we’ll do nothing, or nothing much, to prevent future banking crises. But it won’t be because we don’t know what to do: we’ve got a clear example of how to keep banking safe sitting right next door.

"Will $1 Billion Bonding Bill Stimulate Minnesota Employment?" by Larry J. Paulson, Ph.D., February 3, 2010 ---

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Return to the Tidbits Archives ---


Shielding Against Validity Challenges in Plato's Cave ---

Shielding Against Validity Challenges in Plato's Cave  --- http://www.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen

Table of Contents


What went wrong in accounting/accountics research?  ---

The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---

Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm

Bob Jensen's threads --- http://www.trinity.edu/rjensen/threads.htm

Bob Jensen's Home Page --- http://www.trinity.edu/rjensen/