Short takes…

Same ol’, same ol’. This is the heading from Drudge this morning.

Jobless claims surge...
REPORT: Foreclosure crisis hits older blacks, Hispanics hardest...
Factory activity contracts...
Home sales drop 5.4%, fewest since October...
Grocery bills on rise as corn prices near record highs...

The jobless claims continue around the 400.000 mark, “seasonally adjusted” says the Labor Department. There were 34,000 new claims last week.  All the while, Obama plays golf.

Manufacturing output continues to drop. The economy is just coasting waiting for the Fall elections.  If Obama is ousted, the economy will take off like a rocket on the expectation of a turn-around in government constraints, regulations and Executive Orders.

All the while, those suckered into the liberal scheme of buying a home without the wherewithal to actually meet the payments, continue to be forced into foreclosure and bankruptcy.

In addition to all this, the summer drought has destroyed over 30% of the crops across the county hitting the corn crop heavily. This will hit the ethanol market, the grocery market and the export market.  The eco-freaks blame global warming while ignoring the strong increase in solar sunspot activity this last year.

While all this goes on, the GOP establishment in Washington does…not much at all lest they offend the democrats. It’s getting to the point of asking whom is harming us more? The democrats or the establishment ‘Pubs who won’t do anything to oppose the democrats except talk.  Talk is cheap. Talk is worthless.  Action has value. Action is a commodity missing in the GOP establishment.

Our Town

James Taylor sang a song for the movie, Cars, titled “Our Town.”  It is one of my favorites.

The storyline is a small town that was once thriving but is no longer.  The town was located on the fabled US Route 66. Then the Interstate arrived and by-passed the town. Since then it has been slowly dying.

That scenario exists today.  Just substitute any small town in America for the one in the movie. Instead of the arrival of the interstate, substitute the liberal economic policies of Obama and the democrat leaders in Congress. 

You can see the results yourself. Just drive down any highway and look at the empty, abandoned buildings, the empty gas stations, small businesses, former construction lots…all empty, overgrown with weeds and covered with For Sale and realtor signs.

These are the lyrics of Our Town.  Substitute a word , here and there, and it becomes your town.

Long ago, but not so very long ago
The world was different, oh yes it was
You settled down and you built a town and made it live
And you watched it grow
It was your town

Time goes by, time brings changes, you change, too
Nothing comes that you can’t handle, so on you go
Never see it coming, the world caves in on you
On your town
Nothing you can do.

Main street isn’t main street anymore
Lights don’t shine as brightly as they shone before
Tell the truth, lights don’t shine at all
In our town

Sun comes up each morning
Just like it’s always done
Get up, go to work, start the day,
Open up for business that’s never gonna come
As the world rolls by a million miles away

Main street isn’t main street anymore
No one seems to need us like they did before
It’s hard to find a reason left to stay
But it’s our town
Love it anyway
Come what may, it’s our town.

[Thanks to gjcoram@yahoo.com for lyrics]

A sickness in the land

I’m a conservative Christian. Unlike some, I don’t spout scripture at the drop of a hat. The reason is that I have a fault…I can’t remember text. My memory is visual based.  When I was in High School, I got a C in Literature instead of an A because I could not memorize a scene from Shakespeare’s Merchant of Venice.  I just couldn’t do it.

Consider my surprise when I had this piece of scripture floating in my head this morning. More so, since it must have been decades since I read it.

Jeremiah chapter 8 v. 22: “Is there no balm in Gilead? Is there no physician there? Why then is there no healing for the wounds of my [God’s] people?”

Imagine my reaction when I scanned my morning news websites and came across this item.  It seems that Kansas has passed an income tax cut promoted by Sam Brownback, the Governor. The tax rate was cut from 6.45% to 4.9%. The wailing and gnashing of teeth can be heard from Colorado to Nebraska to Oklahoma to Missouri.

Kansas tax cuts arouse opposition instead of applause

Monday, June 18, 2012 – Red Pill, Blue Pill by Al Maurer

DENVER, June 18, 2012 — There’s an interesting fight going on in Kansas between Governor Sam Brownback, who believes that tax cuts stimulate growth and seemingly everyone else in Kansas who lives off tax revenues.

It hasn’t been pretty so far.

Kansas Governor Sam Brownback lobbied for and finally got a tax plan through the Kansas legislature which will reduce income taxes by $847 million in 2014, and eliminate income taxes for 191,000 Kansas businesses. It creates a 3 percent income tax for the first $15,000 of a single filer’s income, and the first $30,000 for a married couple. Income above that would be taxed at 4.9 percent – instead of the existing rate of 6.45 percent.

If you’re a free-market person, a small business owner or a Kansas taxpayer you should be thrilled. The plan, passed by both houses of the Kansas legislature, should have generated a flood of positive reporting.

It did not. Lowering tax rates always results in job creation and increased net tax revenue but you’d never know it by listening to the reporting.

It all sounds good, doesn’t it?  But not if you listened and read the commentaries from across the state. Here is a sample of the opposition.

The headline in small-town Gardner, Kansas is all about the process, not the substance: “House passes tax plan using rare parliamentary procedure.” Were they talking about the Obamacare bill? The “rare procedure” turns out to be cutting off debate to force a vote.

Emphasized at every turn is the prediction that the tax cut will result in a $270 million deficit by 2014 or  a $2.5 billion deficit in 2018. Not much is said about where those numbers come from.

The Kansas National Education Association said in a press release that the impact on education will be the equivalent of shuttering the Pentagon. I’m not sure I can even begin to understand what was meant by that phrase. What do schools have to do with defense? As I understand it, the bill restructures how taxes are calculated. What does that have to do with the number of tax dollars schools receive?

Perhaps one of the most innovative criticisms of the plan came from The Kansas City Examiner back in January, where writer Whitney Bell opined that the proposed tax plan is unbiblical, immoral and unjust because it hurts the poor. — Washington Times.

Just how a lower tax rate would injure poor taxpayers, Bell doesn’t explain.  Perhaps she’s wailing about less money for free goodies that she believes are necessary to sustain dependency-addicted welfarites?

This continuing clamor for more for the dependency class, the greed of public service unions who demand more while delivering less, is an illness that must be cured. One way or another. The opposition deliberately ignores history that tax cuts allow for economic growth which in turn provides more tax income that would have been realized if the tax cut had not occurred. We only need to look at past cases from Kennedy to Reagan to Clinton (although he was forced to cut taxes by the Gingrich led Congress) to Bush. In this last case, just consider how devastating 9/11 would have been if those tax cuts hadn’t cushioned the blow.

Instead we hear the same worthless complaints from those whose hands dip into the public till.

The Brownback administration hired economist Arthur Laffer to help them design the proposal in January. In an article on the topic then, writer Scott Rothschild led with the phrase, “Gov. Sam Brownback’s proposal to increase taxes on poor Kansans…”

Hardly unbiased reporting.

One could accuse Rothschild of missing the point but he was obviously trying to make his own editorial point. Laffer is referred to as “consultant” rather than “economist” and we are given his salary for the project. The clear implication is that his advice shouldn’t be trusted because he was paid to give it. Really? I’m an IT consultant by day and I certainly wouldn’t be giving my advice if I weren’t being paid for it. What nonsense. — Washington Times.

Kansas has been losing jobs for the last five years. I would predict that this tax cut, if it doesn’t reverse that trend, will at least halt it.  Tax cuts encourages businesses. If the cuts do not allow businesses to expand, at least they will help them survive until the morass in Washington is remedied and we eliminate the waste and fraud there.

The pathological addiction to taxes…and the concomitant spending is the real sickness in the land. The lust for freebies, for public money is a sickness that could be mortal unless we take steps to remedy it now.

Business Ethics, or…

John Stossel has an interesting column this morning, Keeping Business Honest. The theme of his column is that “business” desire for profits is a good thing.

Instinctively, we look for people’s motives. We need to know whom we can trust and whom we can’t. We’re especially skeptical of business because we know business wants our money.

It took me too long to understand that business’s desire for profit is a good thing. To get our money, businesses — if they can’t look to the government for favors — need to give us what we want. Then they must make continuous improvements and do it better than the competition does.That competition is enough to protect consumers. But that’s not intuitive. It’s intuitive to assume that competition isn’t really consumer protection and that experts at the FDA, FTC, DEA, FCC, CPSC, OSHA and so on must protect us. These experts consult “responsible” businessmen for advice on creating rules to make sure businesses meets minimum “standards.” — Washington Examiner.

The down side is that regulations, created by local, state and federal agencies, intended to “level the playing field” stifle innovation. Under the camouflage of consumer protectionism, licensing and other business restrictions have a tendency to make innovation, business startups and competition difficult. The result is protectionism. the question is, what is being protected.  Stossel provides some examples.

Las Vegas regulators require anyone who wants to start a limousine business to prove his new business is needed and, worse, will not “adversely affect other carriers.” But every new business intends to beat its competitors. That’s the point. Competition is good for us. Las Vegas’ anticompetitive licensing rules mean limo customers pay more.

In Nashville, Tenn., regulators ruled it illegal for a limo to charge less than $45 a ride. One entrepreneur had won customers by charging half that, but the new regulations mean the established car service businesses no longer have to worry about him.

Perhaps Nashville’s and Vegas’ regulators really believe “this is an area where the free market doesn’t work,” as the manager of the Nevada Transportation Services Authority put it. But it’s fishy that charging big fees for licenses just happens to be a very effective shakedown operation. Vegas cab and limousine businesses give “substantial” donations to Vegas-area political candidates, according to the Las Vegas Sun. — Washington Examiner.

Stossel makes an interesting point in that last paragraph.  It has parallels locally.

Up until a month or so ago, my home town had a tax on businesses. It was a one time tax on new businesses who constructed a building for their business or expanded their existing place of business.  Supposedly the tax was to pay for increased use…at that location…of city resources such as street maintenance, water, sewer and power usage.  Basically, infrastructure costs. The tax was not levied if a business moved into an existing structure and did not alter the building beyond the usual interior make-over. No, it was targeted towards new or growing businesses.

The tax created a reluctance of new businesses to come to our city.  From the statement of a former councilman, who was not re-elected to the council after saying, “We don’t need more burger-flipping jobs here.” 

I was present when that statement was made. Shortly thereafter the council repealed the tax.

Was the purpose of the tax to discourage businesses, business startups without the capitalization of a large company, from doing business here? “We want good jobs!” was one reasoning. I would submit that to one without a job, ANY job is a good one, burger-flipping or not. Perhaps the exposure of one purpose of the tax was sufficient to overcome the reluctance of other members on the council who had previously supported the business tax.

That local tax was repealed just before our local city elections. Since then we’ve already seen fruit of the repeal.  Our local Micky-Ds has renovated their building.  Did it add new jobs? Probably not.  Would the tax have applied to the renovation if it had still existed? I don’t know.  But we have other evidence that the lack of the tax is bringing new jobs to town.  Next week we’ll have a ground-breaking on a new Steak ‘n Shake.  The tax would have applied to them because they are building a new presence on an empty lot.

Yep, a new business and a half-dozen or more new jobs. Minimum wage? Probably, but to someone without a job, minimum wage is attractive.  Remember the original purpose of minimum wage: a starting wage to gain experience to allow the worker to build skills useful for acquiring a better job.  It may be those skills are simply coming to work on-time, every-time, and putting in a full-shift.  You’d be amazed how many job-seekers lack those basic skills.

So let’s ask ourselves, what is the purpose of these regulations, these taxes? Are they for consumer protection? Are they to preserve city resources? Or, are they to protect favored cronies or simply to make doing business more difficult?

The economic recovery of our country…post Obama, will be difficult enough without our adding to those difficulties through the imposition of anti-business taxes and regulations. Remember, juvenile unemployment is above 50% in some areas. We need to be pro-business, especially to startups. That is where jobs are created. And burger-flipping frequently is an eye-opener to our young folks just starting or approaching adult life. They need jobs and experience, too.

Gulag America

Gulag America.  Senator Schumer (D-NY) must have been re-reading his communist history. After WW II, eastern Europe was losing population to the west. Rather than live in the Communist paradise, Eastern Europeans fled to escape the oppression. The communists retaliated. Churchill named the creation of that retaliation the Iron Curtain. A few years later they added the Berlin Wall.  If anyone was captured (rather than killed outright) trying to leave, they were sent off to the Gulags where no one was able to escape. That is what Senator Schumer and Senator Bob Casey want to create—Gulag America where no one can escape. Paying taxes, that is.

Schumer has introduced a bill, called the Ex-Patriot Act by some, that would punish anyone who gives up US citizenship to save their asset from Schumer’s taxman.  Schumer doesn’t mind people leaving. In fact in bill prohibits them from returning.  No, he just wants them to leave their money behind…at least 30% behind.

Why is Schumer doing this? Because Eduardo Saverin, the co-founder of Facebook, renounced his U.S. citizenship last year and moved to Singapore. If he make a few billion off the Facebook IPO, Saverin would pay taxes in Singapore, where there is no capital gains tax.

The nerve of Saverin! Leaving the country just to preserve a few billions of dollars. It’s immaterial that Saverin pays taxes in Singapore. No, Schumer wants this non-citizen, who doesn’t live in the US, to pay US taxes.

Sen. Charles Schumer, D-N.Y., accompanied by Sen. Bob Casey, D-Pa., gestures during a news conference on Capitol Hill in Washington on Thursday after unveiling legislation inspired by Facebook co-founder Eduardo Saverin's scheme to renounce his U.S. citizenship in order to dodge taxes on profits he will collect when Facebook goes public. The bill will harshly tax people like Saverin should they depart America to save on business taxes.

Democratic Sens. Charles Schumer (N.Y.) and Bob Casey Jr. (Pa.) announced legislation on Thursday designed to punish people who renounce their citizenship in order to dodge taxes.

Their bill, the Ex-Patriot Act, is a direct response to Eduardo Saverin, the co-founder of Facebook, who renounced his U.S. citizenship last year. The news became public last week.

“Eduardo Saverin wants to de-friend the United States of America just to avoid paying taxes. We aren’t going to let him get away with it,” Schumer said at a press conference Thursday where he announced the new legislation.

The citizenship move will save Saverin, who was born in Brazil and now lives in Singapore, an estimated $67 million to $100 million in taxes. That amount could increase if Facebook’s stock price rises.

Schumer called Saverin’s actions “outrageous.”

“Saverin has turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire,” Schumer said.

Casey called Saverin’s plan an “insult to the American people” that “cries out for some basic justice.”

Under the bill, anyone who renounces their citizenship and has a net worth of $2 million or an average income tax liability of $148,000 over the last five years will be presumed to be trying to dodge taxes. The person can appeal that designation to the Internal Revenue Service.

But if the IRS determines a person gave up their passport for primarily tax reasons, all of the person’s U.S. assets will be taxed at 30 percent, double the usual rate of 15 percent.

The person will also be barred from ever entering the United States again.

Instead of punishing Saverin and others like him who are leaving the US for better tax waters, perhaps Senators Schumer and Casey should be asking themselves WHY people are leaving this People’s Paradise?  Perhaps if they would try to resolve that question people wouldn’t have a need to leave.

How about that Chuckie, old boy?

Nah, you’ll never do that, will you Chuckie. You’d rather be a Socialist elite.  After all, it’s the State’s responsibility to control the economy. It worked so well for the Soviets.

Inflation strikes!

When Mrs. Crucis and I had been married only a few years, the Viet Nam War ended.  Nixon had been elected and was making good on his promise to end the war.  The peace talks finally bore fruit.  But another fruit, one created by LBJ and the democrats had ripened too.  Inflation and debt.

Most citizens now don’t remember those days. The days of high, over 10%, inflation, interest rates over 20%, and wage and price freeze.  It happened at the end of WW1, again after WW2, and in 1976, with Jimmah Cahtah in the White House, instead of using the wisdom of past presidents to keep their hands off the economy, Jimmah had to meddle.  Home mortgage interest rates skyrocketed to nearly 25%.

The turmoil continued until Reagan was elected.  Within two years, interest rates fell like a rock off a cliff, employment was up and the recovery was well underway.

I scanned the news websites this morning and what do I see.  Jimmah Cahtah redux.  For those of you who don’t know, the Consumer Price Index measures inflation.

The cost of living in the U.S. rose in February by the most in 10 months, reflecting a jump in gasoline that failed to spread to other goods and services.
The consumer-price index climbed 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News, after increasing 0.2 percent the prior month, the Labor Department reported today in Washington. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.
The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services.


The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services.

The government, for decades, has manipulated reports of inflation by dropping data for the most volatile items affected by inflation, fuel and food.

The “core” items mentioned in the article are those that do not include food and fuel.  When you add food and fuel, the CPI doubles, more than double if you delve into the figures.

One reason why the price of oil has spiked is inflation.  The Dollar is still the currency of oil.  When the fed pumps out more dollars, it takes more dollars to buy the same amount of oil, i.e, the price goes up.  Some analysts have declared if the fed hadn’t run off more dollars in their so-called “Quantitative Easing,” the price of oil would be in the $80 range instead of the current price over $100 a barrel.  In short 20% of the increase of oil can be attributed to inflation.

Dollar Inflation the Primary Cause of Rising Oil Prices

I’m under strict instructions, and have been from the beginning, to not talk about the dollar.” -White House Deputy Press Secretary Dana Perino, March 17, 2008 – Link

There is a direct relationship between Dollar value and oil prices. All crude oil purchases worldwide have been conducted exclusively in U.S. Dollars for over thirty-five years. [1] When Dollar value falls via inflation (i.e. the creation of money by the Federal Reserve and other banking mechanisms), oil prices rise. [2] [3] [4]Petrodollar Inflation; it occurred during the 1970′s oil ‘price shock’, and it is occurring right now. [1] This phenomenon could be called
Oil is a critical economic and strategic resource – because every country needs oil to develop and prosper, they also need U.S. Dollars. This has raised the demand, and value, of the Dollar worldwide for several decades. [1]
However, the U.S. Dollar is continuously devalued (inflated) by Federal Reserve and U.S. government monetary policies. [5] Due to recent ‘super-inflation’ of the Dollar, oil producing nations are losing money – or rather, wealth – by selling oil in Dollars. To prevent losses, oil producing nations will sell some or all of their oil in other currencies (Euros, for example). This further devalues the Dollar, since oil buying countries no longer need them to purchase oil.

So when you hear Bernake talk about more “Quantitative Easing,” know, too, your gas at the pump will be going up as well. 

To paraphrase, Obama’s Pastor and mentor, Rev. Jeremiah Wright, “Obama’s chickennnsss!…have come home!…to roost!”

Observations on a drive through Middle America

I posted last week about my wife and I taking off on a mini-vacation over the long Thanksgiving weekend.  I was a good escapade and we both needed to get away for awhile.  The Tahoe performed well and to expectations.  The winds were 15-20mph and gusts up to 25-30mph.  The Tahoe, being a bit boxy, was bounced around at highway speeds.  On the trip down, we had headwinds and our gas mileage reflected those winds.  On our way back, the wind had shifted from the south to the north and we battled headwinds all the way home.

We watched the countryside and the towns that we passed through. It was evident that all were battling headwinds, economic and political headwinds.

It is not unusual to see boarded up buildings along the roadside.  Abandoned gas stations have sprinkled the countryside since the first gas price spike in the 1970s.  At that time, about every corner in town had a gas station, or a mom ‘n pop “gas and grub.”  There are few, now, who survive. Today’s versions sport brand names like Quiktrip, 7-11, or Casey’s.

But today, more than just gas stations stand empty. Along the highways, in the towns, numerous modern office and light industrial buildings now stand vacant. These empty place still sport signs advertising auto repair, tires, used cars, and more often, layers of signs of a succession of failed businesses.

Missouri was and continues to be hard hit but there is a few signs of life.  In Butler, south of Kansas City on US-71, a new Walmart is about to replace an older and much smaller building.  The newer, larger facility will bring a few more jobs in an area already depressed. Further south, in Neosho and Pineville near the Arkansas border, the economy still survives as do the residents…damaged, yes, but surviving. 

On entering Arkansas, the countryside appeared the same until we reached the larger cities of Rogers, Bentonville and Fayetteville.  The depression is visible and obvious.  Instead of a vacant building here, an abandoned business there, you have entire business and light industry parks empty with lease signs sprouting like mushrooms in the economic darkness.

These are not old office and industrial parks. No, these vacant sites are new and modern.  Some in the final stages of completion needing only a bit of landscaping to be finished.  They have been halted and now stand amid growing weeds and wind-blown debris.

There are no visible lines of unemployed men as depicted in fading photos from the 1930s.  In this time of government welfare, they stay at home, or out in bars, and small-town cafes and diners. In many forms the unemployed today have a better life than those of eighty years ago but the feeling of helplessness and despair is still present.

Missouri and Arkansas, in past decades, were bastions of the democrat party.  No longer.  Now trucks and family cars sport decals and stickers say, “One and Done.” Other stickers are much less polite but just as vehement in displaying their displeasure with Washington and the establishment of both parties.

At one small gas station along the Missouri-Arkansas border, I noticed cars and pickups with Obama-Biden stickers crudely scraped off and new ones supporting various democrat opponents like Ron Paul, Rick Perry and others as replacements by the former democrat owners. The negativism against Washington, democrats and liberals run high and continues to climb higher.

Along with these anti-establishment sentiments is a strong suspicion that, seeing the proverbial writing on the wall, the democrats and liberals will attempt to thwart the election next year. A common sense of uneasiness is present if you watch and listen to those around us.  A story about the Black Friday sales after Thanksgiving with the sales of guns being among the highest in recent years is apocryphal. 

Whether for hunting or personal protection, the sales of firearms grows as does the growth of concealed weapons licenses across the country. The growing distrust of the government in Washington is widespread and not, as the state media would claim, only by the far-right.  The country as a whole is shifting leaving those in government isolated and apparently uninterested of the views of the electorate.

We are approaching one of those periods that the Chinese have called, “interesting times.” No one can predict what will come but come it will.  All we can do is prepare as best we can and work together to see that the election is unimpeded and fairly executed.