The Nobel Idiots

From January 20, 1977 to January 19, 1981 James Earl Carter - our 39th President - managed to allow the Soviet Union to run rampant in Latin and Central America; much of Africa; Afghanistan and remain dominant in Eastern Europe and Southeast Asia while simultaneously allowing thugs in Iran to take - and keep - 52 American hostages for 444 days.

His great response? Boycotting the 1980 Summer Olympic games and barring Iranian oil from flowing into the U.S.

By the time he left office 40% of America's military personnel was living on foodstamps while our position as a world leader was diluted into a world joke.

Carter left office as one of our least-popular and weakest presidents.

For his accomplishments, he managed to win the Nobel Peace Prize in 2002.

Seven years later, Barack Obama has won the Nobel Peace Prize after only 37 weeks on the job. His great accomplishment towards world peace has been a speech to the Muslim world, a willingess to engage Iran in nuclear talks and the decision to remove missle protection defenses from Europe.

Meanwhile, Ronald Reagan has still not won the Nobel Peace Prize.

All he did - by the admission of his enemies in the Soviet Union - was end the Cold War and save millions from the ravages of nuclear war without firing a shot. During his eight years he accomplished more to save the planet from tyranny without war than every president in our nation's history. The record on this is clear. Go read about it for yourself.

Tell me please - how can two liberals - one who endangered the world with his weakness, and another who has done nothing to make the world a more peaceful place in his 200 plus days in office, win this award when a real savior of our earthly lives does not share in this honor?

I suppose the next award will be the Nobel Memorial Economics prize to Karl Marx.

A Summary of how Government Serves Us

The following was sent by a former student who understands the case for limited government. Enjoy...

The U.S. Postal Service was established in 1775 - they've had 234 years to get it right; it is broke, and even though heavily subsidized, it is not able to compete with private sector FedEx and UPS services.

Social Security was established in 1935 - they've had 74 years to get it right; it is broke.

Fannie Mae was established in 1938 - they've had 71years to get it right; it is broke.


Freddie Mac was established in 1970 - they've had 39 years to get it right; it is broke. Together Fannie and Freddie have now led the entire world into the worst economic collapse in 80 years.

The War on Poverty was started in 1964 - they've had 45 years to get it right; $1 trillion of our hard earned money is confiscated each year and transferred to "the poor"; it hasn't worked.

Medicare and Medicaid were established in 1965 - they've had 44 years to get it right;
they are both broke; and now our government dares to mention them as models for all US health care.

AMTRAK was established in 1970 - they've had 39 years to get it right; last year they bailed it out as it continues to run at a loss!

This year, a trillion dollars was committed in the massive political payoff called the Stimulus Bill of 2009; it shows NO sign of working; it's been used to increase the size of governments across America , and raise government salaries while the rest of us suffer from economic hardships. It has yet to create a single new private sector job.

Our national debt projections (approaching $10 trillion) have increased 400% in the last six months.

Cash for Clunkers" was established in 2009 and went broke in 2009 - - after 80% of the cars purchased turned out to be produced by foreign companies, and dealers nationwide are buried under bureaucratic paperwork demanded by a government that is not yet paying them what was promised.

So with a perfect 100% failure rate and a record that proves that each and every "service" shoved down our throats by an over-reaching government turns into disaster, how could any informed American trust our government to run or even set policies for America's health care system - - 17% of our economy?

Maybe each of us has a personal responsibility to let others in on this brilliant record before 2010, and then help remove from office those who are voting to destroy capitalism and destroy our grandchildren's future.

"I predict future happiness for Americans if they can prevent the government from wasting the labours of the people under the pretence of taking care of them." Thomas Jefferson

There is no "Health Care Crisis"

Lost in the debate on what government should do about health care in America is the question no one seems to want to ask. That is, "Why fix a crisis when there is no crisis?"

According to the Obama Administration somewhere in the neighborhood of 50 million people do not have health insurance in America. So what? That is only about 15% of the entire population.

Why do we need to have the federal government - the same government that invades countries that do not invade us first; fail to deliver mail better than our phones or FedEx; provides lousy housing for the poor; lousy education for children; lousy roads, bridges, food inspection services and more - in charge of the biggest industry in America? Who are these functional morons who actually believe that government can do a better job at health care then they can at anything else? The American-Indians on reservations have been getting government care for decades. You would not want to go to one of the clinics these Americans are compelled to use.

I wonder how many of the 50 million people who do not have insurance could afford it but choose to spend their money on other things?

How many of the 50 million could afford some insurance if they altered their lifestyles and allocated their funds in a more rational manner?

How many of the 50 million could have some insurance if they would improve their stock of human capital by learning a trade or getting an education that would make them valuable enough to an employer to gain a job and employer-provided health care?

In a nation with rampant obesity, sexually-transmitted diseases, dangerous drivers, high crime and a "you owe me something" mentality, providing health care through the nose of the taxpayer is going to be very, very expensive. Nations like Canada, Sweden, Norway and other quasi-Socialistic places that have low populations and people who do not look as bad, or act as bad as we do, already have tax burdens that are hard for the average worker to manage.

In a nation of 307 million people with all of our problems, reforming health care to save 15% of us is simply idiotic.

In a week or so, the posting on this site will provide some economically sensible solutions to problems in our health care market.

Stay tuned...

Cash for Clunkers = Horrible Economic Policy

In my 20 - plus years as an economist I have witnessed many taxpayer-financed programs that have have little or no merit - economically, morally or Constitutionally.

However, I think I may now be witnessing a program that confirms my deep belief that Americans are almost completely economically ignorant.

Recently the Obama Administration announced plans to steal $1 billion (plus interest) from future taxpayers to help current Americans buy a new car. The "Cash for Clunkers" program, as of today, has used up all $1 billion and now the socialists running our country are preparing to add upwards of $2 billion to this "successful" stimulus to our moribund automobile sector.

This program is steeped in economic stupidity for a variety of reasons. Here's why:

1. If you are a car buyer who thinks of this program as $4,500 of your money at work you are wrong. This is not a tax credit where the government tells you to deduct $4,500 from your 2009 tax bill (assuming your tax bill is at least $4,500). This is government telling you that it will take almost $4,500 from your fellow taxpayers and give it to you. If you take it, over 99% of this figure will constitute theft on your part. Legalized theft, but theft nonetheless.

To calculate how much of the $4,500 is "your money" all you have to do is look at what you typically pay in federal income taxes each year. The federal government collects about $2.5 trillion in taxes annually. You need to figure what percentage of $2.5 trillion you paid. Then, take that percentage out of $1 billion (the cost of the program so far). THAT is how much of the $4,500 that is your money, rather than your neighbors money. When you do the math you will probably see that out of $4,500, your "tax credit" is probably 7 or 8 cents and the rest is government plundering on your behalf.

2. If you think the program will stimulate the automobile sector, think again. Yes, over 220,000 new cars have been purchased so far. But that means 220,000 cars that were still running have also been taken off the market. In this program you have to trade in a car that is operable then the dealer destroys the engine and it leaves the supply part of the market for cars. 220,000 new cars driven away, 220,000 used cars, with value to someone (the poor, teenagers, parents looking for a car for a kid, etc.) leave. That is called a zero-sum event. With used cars now becoming more scarce - especially if the program continues - we will see a tighter supply for these cars and higher prices for poorer Americans who could have used an $800 car to get around in for a couple of years.

The 22,000 new ones also are a false stimulus. Many of these would have been bought anyway but the lucky people who were already in the market simply get to save money at our expense.

Of those who would not have bought a new one, now the government has encouraged them to buy. This looks like a good thing for our auto industry but what happens when this false stimulus ends? Do you think the car industry is going to add more workers for a temporary program? What happens to the people who went into debt - during a recession caused by too much debt - to buy a new car? The law of opportunity cost means they took money away from some other purpose to buy this car. That means less money for other sectors of the economy and debt incurred at a time when less debt would be a better idea.

3. The planet will not cool off as a result of this program, but more people will die from it. The Obama Administration launched this program in part to get pollution-belching cars off the road and help lower the temperature of Earth. Give me a break. Let's say I trade in my truck - that gets a polar bear harming 13 miles per gallon - for a new truck that gets 19 miles per gallon. Better yet, I trade it in for a car that gets 29 miles per gallon. So, I get an improvement of 16 miles per gallon by driving my new tin can. Will I drive more now that I get better mileage? Will I be less safe on the roads? Yes and yes.

It is a rational reaction to enjoy the better mileage by going to the beach, taking more frequent trips to the grocer and other trips - long and short - that I would not take in my current gas-guzzling truck.

One brief stop on Google will also help you uncover the hard data on the number of people who get killed by driving smaller cars.

These accidents have to be paid for by insurance, health care professionals and by consumers who have to spend more to fix small cars than bigger, safer ones. This is a real cost that few in government are talking about.

Finally, and perhaps most sadly, is the cost of raising our kids to think of government as Santa or the tooth fairy. For every adult who buys a new car under this program they are unwittingly sending a message to their kids that there is "free money" out there for the taking and that we should just go get it.

That, my friends, simply adds to the ranks of future voters who line up to steal other people's money on election day.

Enjoy your new car.

Mandating Unemployment - July 13 Wall St. Journal

Here's some economic logic to ponder. The unemployment rate in June for American teenagers was 24%, for black teens it was 38%, and even White House economists are predicting more job losses. So how about raising the cost of that teenage labor?
Sorry to say, but that's precisely what will happen on July 24, when the minimum wage will increase to $7.25 an hour from $6.55. The national wage floor will have increased 41% since the three-step hike was approved by the Democratic Congress in May 2007. Then the economy was humming, with an overall jobless rate of 4.5% and many entry-level jobs paying more than the minimum. That's a hard case to make now, with a 9.5% national jobless rate and thousands of employers facing razor-thin profit margins.
There's been a long and spirited debate among economists about who gets hurt and who benefits when the minimum wage rises. But in a 2006 National Bureau of Economic Research paper, economists David Neumark of the University of California, Irvine, and William Wascher of the Federal Reserve Bank reviewed the voluminous literature over the past 30 years and came to two almost universally acknowledged conclusions.
First, "a sizable majority of the studies give a relatively consistent (though not always statistically significant) indication of negative employment effects." Second, "studies that focus on the least-skilled groups [i.e., teens, and welfare moms] provide relatively overwhelming evidence of stronger disemployment effects."
Proponents argue that millions of workers will benefit from the bigger paychecks. But about two of every three full-time minimum-wage workers get a pay raise anyway within a year on the job. Meanwhile, those who lose their jobs or who never get a job in the first place get a minimum wage of $0.
Mr. Neumark calculates that the 70-cent per-hour minimum wage hike this month would kill "about 300,000 jobs for those between the ages of 16-24." Single working mothers would also be among those most hurt.
Keep in mind the Earned Income Tax Credit already exists to help low-wage workers and has been greatly expanded in recent years. The EITC also spreads the cost of the wage supplement to all Americans, not merely to employers, so it doesn't raise the cost of hiring low-wage workers.
For example, consider a single mom with two kids who earns the current $6.55 minimum at a full-time, year-round job. In 2009 she receives a $5,028 EITC cash payment from Uncle Sam -- or about an extra $2.50 per hour worked. Other federal income supplements, such as the refundable child tax credit, add another $1,900 or so. Thus at a wage of $6.55 an hour, her actual pay becomes $10.02 an hour -- more than a 50% increase from the current minimum. (See nearby table.)
But that single mom can't collect those checks if she doesn't have a job, and the tragedy of a higher minimum wage is that it will prevent thousands of working moms striving to pull their families out of poverty from being hired in the first place.
If Congress were wise and compassionate, it would at least suspend the wage hike for one or two years until the job market recovers. We know this Congress won't do that, but someone has to speak up for the poorest, least skilled Americans.

Government health care quiz...

When was the last time you encountered a government agency that consistently provided a better good or service than the private sector? I am compiling a list so please think long and hard, send along your response on this blog and have a nice day.

July 4th is no day to celebrate

From the July 4, 2009 Orlando Sentinel

In 1794, Congress appropriated $15,000 for relief of French refugees who fled from insurrection in San Domingo to Baltimore and Philadelphia. James Madison, the principal author of the U.S. Constitution, stood on the floor of the House to object."I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents," he said.A few decades later, while serving in the same capacity as a member of the House of Representatives, David Crockett, upon listening to pleas from his fellow congressmen to give tax dollars to the widow of a deceased naval officer, said, "We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress, we have no right so as to appropriate a dollar of the public money."Madison and Crockett would not recognize the United States of America as we approach our nation's 233rd birthday. In fact, these gentlemen, along with the others who created our great nation, might suggest that the July Fourth festivities be canceled and replaced with a national day of mourning for what we have lost the past several years.When our republic was founded, the framers of our Constitution formed a rule book that established our government as the protector of our life, liberty and private property. Article 1, Section 8 of the Constitution states that along with national defense, Congress can allocate our earnings to provide for the general welfare of the citizenry.Thomas Jefferson, James Madison and others argued that "general welfare" was confined to only those functions that secure our rights. These three natural rights were to be the only rights we would enjoy. Everything else — a car, access to education, decent health care, concert tickets — would be part of our interests, things we would have to obtain by serving our fellow man effectively enough so as to earn the income necessary to enjoy them. Where our earning capabilities were stunted by disabilities, illness or bad luck, charity from secular and religious sources was to fill the gaps.During the Constitutional Convention in 1787, Alexander Hamilton argued that the general welfare clause should not be confined to the specific spending clauses in our Constitution. Hamilton argued that the government should be able to spend money on anything so long as the argument could be made that it was for the general welfare of the nation. Not one of the Founding Fathers agreed with Hamilton during the convention.The Supreme Court agreed with Hamilton in 1935. Fearing that the Roosevelt administration would pack the Supreme Court with justices sensitive to his big-government agenda, the court specifically mentioned Hamilton as the Founding Father who best understood what the role of government should be in our lives. Consequently, since the 1930s, the cost of government has risen from about $20 per person annually to more than $10,000.Today, our quasi-socialistic nation has moved so far from the intent of the Founding Fathers that it is laughable to hear politicians swear an oath that even mentions the Constitution.Consider the past few years alone. Trillions of tax dollars have been allocated to pre-emptive wars, domestic spying on innocent citizens and bank, automotive and insurance bailouts. We have seen huge increases in social-welfare spending for the elderly, people facing foreclosure and farmers who were supposed to know that sometimes it rains and sometimes it does not.We are witnessing the nationalization of General Motors, the banking sector and the health-care industry, all while higher taxes are imposed on America's most productive citizens to pay for the well-being of the less productive. Moreover, we now have the highest corporate income-tax burden in the developed world, while India, much of Eastern Europe and China moves in the opposite direction.If you believe in liberty and small government, July Fourth is no day to celebrate. We cannot, in good conscience, celebrate our independence when we have become so dependent on the government.It is a day to think about how much longer a nation can survive when the citizenry forms a longer and longer line at the trough of public tax dollars.