Ask yourself, tax code, do you feel lucky? Do ya, punk?

 Rick Perry stabs the tax system in the heart.  But under the plan, is it dead or simply pining for the fjords?

Steve Forbes must feel like he’s stepped into a time machine.

The 1996 & 2000 GOP presidential candidate briefly electrified the denizens of political wonkdom with his conception of a national flat tax to simplify – and eliminate – the current overcomplicated tax code over 15 years ago.  Forbes’ idea of broadening the tax base while reducing the individual tax burden proved a temporary hit – too much of one as most of his 1996 rivals embraced similar policies.  Unfortunately for flat tax advocates, the only candidate who didn’t rush towards the concept was nominee Bob Dole, and since then the tax as languished as more theory than practice despite its success in many former Soviet bloc countries.

That is until now, as Texas Governor Rick Perry has revived the concept, winning Forbes’ praise and liberal scorn.  The headlines have screamed about Perry’s new tax rate of 20%, but in most reports, the lead has been buried:

“The plan starts with giving Americans a choice between a new, flat tax rate of 20 percent or their current income tax rate,” Perry writes. “The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.”

 

The plan also drops the corporate tax rate to 20 percent and will temporarily lower the rate to 5.25 percent to promote companies working overseas to move to the U.S. along with implementing a “territorial tax system,” which will  tax in-country income.

 

The plan will eliminate the death tax and end taxes on Social Security, which would help an estimated 17 million Americans receiving benefits today. It would also cut taxes on qualified dividends and long-term capital gains.

The drop in corporate tax rate would put the U.S. as the lowest in the world (among major competitors; there are a number of nations with no corporate taxes).  And with most foreign economies unable or unwilling to respond in-kind with similar corporate tax rate cuts, the U.S. could be looking at an immediate repatriation of up to $1.4 trillion with the addition of a “territorial tax.”  Does that mean an immediate increase in jobs?  Not exactly, but a similar “repatriation holiday” for overseas corporations in 2004 spurred massive investments in capital and employment.

Lost in the corporate tax discussion has been Perry’s proposal to cap federal spending to 18% of GDP, or what would be roughly $2.54 trillion.  That’s under the projected 2012 revenues of $2.627 trillion and significantly under the Obama adminstration’s desired $3.729 trillion of spending.  Perry is obviously expecting that projected $1.4 trillion to soften the blow as increased income would (hopefully) spur GDP growth, raising Perry’s 18% beyond projected 2012 revenue levels.

The chief compliants from the right, much like with Herman Cain’s “999” plan, are that Perry’s flat tax doesn’t go far enough.  Indeed, both leading economic fixes from the GOP field disembowel the current tax system but keep it wrapped together in some fiscal Eraserhead policy nightmare.  Both Cain and Perry’s proposals have foreign models to work from – Cain’s VATesque vision which has hindered Europe; Perry’s opt-out Hong Kong-like system which has worked well despite the complication of individuals being potentially able to switch back-and-forth from flat tax to the current system year to year.

Ultimately, Perry’s flat tax needs to be seen as the beginning of a new policy discussion, rather than as a destination.  A total overhaul of the tax code, while popular in spirit, likely polls poorly when the roughly 47% of Americans who don’t pay federal taxes figure out they might be forced to actually contribute to the system.  As proposed, few Americans will find themselves benefiting from the policy, but I think critics are thinking too short term and too little on the potential corporate effects of the plan.

We’ve known it for decades; raising taxes in a recession is stupid, stupid, stupid.

But being a liberal means believing history just doesn’t apply to you:

CME Group Inc. is evaluating whether to move some operations to other states from Chicago to reduce its taxes, but it has not decided on an exact timeline, CEO Craig Donohue said Thursday.

“Our tax situation is untenable,” Donohue told Reuters, noting that CME is taxed more heavily than any of its global competitors. The company is talking with at least three states — Texas, Florida and Tennessee — about relocating some of its business to take advantage of lower tax rates there, Donohue said.

Illinois bucked the trend that New York and (to some extent) Calfornia recognized; that not only do you have to cut spending (because government is out of control) but that taxes inhibit revenue.

Two things that make me think “something’s just not right here”, and warrant some investigation:

• Teenagers asking “so, are you going out Friday night?”
• Liberals citing Reagan.

Lately, there’s been a plague of liberals, in print/blogs/on Twitter, stating without fear of contradiction (because, if you’re a Twin Cities liberal, nobody has ever contradicted you) that “today’s conservatives would never nominate Ronald Reagan”.

It’s a claim based on two dubious premises:

As to the abortion issue – that, again,shows how little the left understands the Tea Party.  Abortion is a key conservative issue – but when the economy is in the tank, it’s not the most important issue facing the Chief Executive.  As Reagan allocated political capital among his key priorities – the economy, defeating communism – his metaphorical “abortion” budget was squeezed down to “using the bully pulpit against the practice”…

…which is pretty much where today’s Tea Partiers are with the issue; mortally opposed, but focused on other things at the moment.

The lesson?  As your liberal friends start parrotting these memes, by all means set ’em straight.

(Closed-circuit to liberal commenters: Go ahead.  Point out that “Reagan legalized abortion in California”.  I dare you)

Joe Doakes from Como Park writes:

If I am funding an agency whose mission is to promote home ownership among low-income clients but a substantial percentage of those clients are losing their homes and thereby ending up worse off than before they started – foreclosed, credit ruined and evicted – at what point should I conclude that the agency is a failure and stop throwing money down the rat-hole?

Joe is referring to the plethora of non-profits whose goal is to promote home ownership among low-income buyers – like this, and this and this.

It’s Economics 101;  you can not make something worth other than what people are naturally willing to pay for it without creating unintended, inevitably bad consequences.

Well, it was Economics 101.  In the era of Obama and Dayton, I think it must have been dropped from the curriculum to make time for GLBT economic sensitivity training.

From the lefty playbook; compare apples to distributor caps, then use the results to give ones’ supporters the sense of victimizaiton that, you hope, will keep them chanting on cue.

So with this bit from the City Pages:

Minnesotans who can’t afford their rent outnumber those who can, according to a new study released today, landing us dead last in a ranking of affordable housing markets in the Midwest.

The statement is…well, just wierd.

Over half of Minnesotans can’t afford rent?

Rent…where?

Which half of Minnesotans?

Don’t worry – the point isn’t about thinking:

The National Low Income Housing Coalition released numbers today showing that Minnesotans need to be making, on average, $15.79 an hour in order to afford a decent two-bedroom apartment. Most of us are not.

Well, yeah – most of “us” do, if by “us” you mean Minnesotans, who according to the Census have a median income of $56955 a year.

That’s only part of it, of course:

• For 2-person families, it’s $ 61,457.  That’s about $30 an hour (our two incomes at $15-ish per hour)
• for 3-person families, $74,371 – AKA $37 an hour (or two incomes at $18.50)
• 4-person families’ median incomes in Minnesota are $86,099.
• 5-person families average 83,143 – if you’re following along with the math, that’s like $42/hour, or two incomes at around $21.  But there we’re getting into three-bedroom apartment material.

Maybe by “us” the author, Jessica Lussenhop, means 20-something freelance “writers” who are trying to eke out a living at the City Pages.

The study considers paying up to 30 percent of one’s income on rent to be “affordable,” and the average fair market rent for a two-bedroom apartment is $821 a month. The number crunchers figured you need to make $15.79 an hour to make that work, but the mean wage in the state is only $11.61. That means about 55 percent of us are paying more than we can afford on rent.

If “55 percent of us” are living alone on $11 an hour in a two bedroom apartment, then 55 percent of us are too dumb to be living on their own for long.

You’re you’re working for $11 an  hour, how about moving into a one-bedroom place?  Or getting a roommate ($22 an hour between you; plenty of money for that fabled two-bedroom apartment)?

In the metro area, the average rent skews higher for a two-bedroom–about $924 a month–and vacancy rates are at an all-time low of 3 percent. But the least affordable counties in the state are Winona and Aitkin Counties, and the problem is worst in the greater state.

“Rents tend to be cheaper, but there’s a real shortage of good affordable rental housing,” says Minnesota Housing Partnership researcher Leigh Rosenberg.

Their “data“

The goal of the study, of course, is to create the impression that the average Minnesotan can’t afford to live in Minneosota – presumably without government subsidies.

As Reagan once said, “It’s not that liberals lie.  It’s just that they say so many things that are not so”.

Now, if you’ve read this blog for a while, you know two things:

1. I, among very few partisan bloggers in the Twin Cities, make a concerted effort to try not only to remain civil, but to create some sort of a productive, or at least neutral, relationship with leftybloggers – or at least the ones that are worth the effort.  And there are a few.  Rare, but few.
2. It’s really not easy.  It gets frustrating, dealing with so much bad logic for so long.

Which brings us to this bit by Eric “Big E” Pusey, covering Senator Howe (R – Red Wing) and his effort to restructure the renters rebate.

The piece – and if you guessed it’d be entitled “Why Does Senator John Howe Hate Renters?”, you’re right, but you needn’t get cocky, since one out of four posts on every Minnesota leftyblog starts with some variation on “Why Does Someone Hate Something?” – starts: –

On the Senate floor today, Sen. John Howe (R-Red Wing) tried to explain how canceling the renter’s credit is a good idea. The Senate was debating the Republican’s $1 billion cutback’s bill. This is basically a tax increase on all renters.

“That’s a $170 tax increase on every renter in Minnesota,” Sen. Scott Dibble (DFL Mpls) said.

Well, no.  It’s a cutback on a rebate that renters get.

In Minnesota (if you don’t live here), renters are entitled – via a niggling, sliding, income-based formula – to a refund of a piece of the property taxes paid by their landlord on the property they’re renting.  On the one hand, if you’re poor – and up until about 18 years or so ago, I certainly was – it is an annual tradition in Minnesota; waiting for the rebate check.  When I was a single guy making $12K a year and paying out $300 amonth in rent in 1989, it was a nice little $400 bump.

Of course, that money comes from somewhere – the state’s gross property tax receipts, in this case.

And with that pool dropping, as property values decline and foreclosures continue mounting, it’s high time the state re-jiggered the formula.

Pusey doesn’t see it that way, naturally.  He quotes Howe’s speech to the Senate:

It’s [the renter’s credit] actually encouraging people to stay in that renter mode, and not achieve what we want people to move forward. If we want to be “progressive”, we need to help people to achieve their dreams and their goals. And we shouldn’t hold them back. I view a renter’s credit as something that holds people back. It doesn’t encourage the type of behavior that we want. It doesn’t encourage the type of dreams and hopes that people can achieve to having their home ownership. And it runs counterproductive to other things that we do.

First of all, he keeps using the word “progressive.” To quote Inigo Montoya from the movie “Princess Bride”: “You keep using that word. I do not think it means what you think it means.”

(Entirely possible, but that doesn’t mean Pusey gets it right…)

Secondly, isn’t it the Republican mantra on taxes that people should keep more of their own money or something? So why is it a good idea to take away this tax break for renters? Oh … I get it … they’re not millionaires …

Pusey doesn’t get it.

People should keep their own money – poor, rich, and everyone in between, myself included.

But don’t  mistake the renters rebate for “people keeping their own money’; it’s a rental housing subsidy that gives tax revenues back to certain “targeted” constituencies – renters making less than $30K or so a year.  While landlords (and regular homeowners, who have nobody to pass the costs down to, even more so) get clobbered with property taxes (especially if you’re stuck living in a DFL-plagued city like Saint Paul), renters get a piece of that money directed back to them.

Wouldn’t it be better to just lower taxes, and let the rental market pass the savings down to the renter?

Indeed, the market for rental prices is affected by a dizzying number of variables, most of them tied, directly or indirectly, to big government.  “Affordable Housing” – houses and apartments that might not make it into Architectural Digest, but are inexpensive – is zoned out of existence by utopian City Councils from New York City to Saint Paul, to be replaced by tax-funded Public Housing and/or “affordable housing”, built and subsidized by taxpayers but not remotely “affordable” except maybe in the out-of-pocket cost to the government client “renter”.   The taxes to make more “affordable housing” combine to make housing, ironically, less affordable and, in bad times, contributing to a vicious cycle that forces out home owners (by foreclosure or tax fatigue), lowering property values, and thus tax revenues, thus requiring more tax increases…

At its worst, the “Renters Rebate” insulates the poor from the profligacy of city government; if they didn’t get part of the price of their over-taxed rental property rebated to them, perhaps they would take a closer look at the stupidity of their city and county governments, the same way the profligacy of the 2009-2010 DFL legislature and the 2009-2010 Congress made so many Americans do the same before the last election.

Look – the formula’s being re-jiggered.  People will still get rebate checks.  They’ll get smaller.

Perhaps it’s time those renters took a moment to ask where the money comes from, and why.

I wonder if Eric Pusey would care to help do that?

(And isn’t it hilarious that the Democrats call the Bush Tax cuts – which cut taxes across the board, from billionaires to minimum wage owners, a “subsidy” and “spending”, while the portion or the renter’s rent that goes into property taxes is not?)

I almost feel sorry for Barack Obama. He’s traveling the world over, looking for some love, and coming up empty.

America handed him an epic rejection of virtually everything he has “accomplished”  just two years in. Knowing fully well what was coming, he skipped the country on a trade mission, a multi-bazillion-dollar entourage in tow, hoping to bring home a trade agreement…or…something.

President Obama’s hopes of emerging from his Asia trip with the twin victories of a free trade agreement with South Korea and a unified approach to spurring economic growth around the world ran into resistance on all fronts on Thursday, putting Mr. Obama at odds with his key allies and largest trading partners.

Does the whole world hate Obama?

After five largely harmonious meetings in the past two years to deal with the most severe downturn since the Depression, major disputes broke out between Washington and China, Britain, Germany and Brazil.

OK, maybe not the whole world, just a majority of the largest economies of the world, so technically there are countries out there, theoretically, that don’t think America’s fiscal and monetary policies are being crafted by an administration consisting of a band of arrogant bookworms that have never owned, created or run anything resembling an enterprise.

In two years, the Obama administration has effectively rendered America to the economic equivalence of adolescence, world leaders now treating Obama and his staff like underclassmen.

As if a global scolding wasn’t embarrassing enough for the soon-to-be one-term President, his Treasury Secretary, steeped in academentia, was fending off attacks from back home.

The disputes were not limited to America’s foreign partners. Treasury Secretary Timothy F. Geithner got into a trans-Pacific argument with one of his former mentors, Alan Greenspan, the former chairman of the Federal Reserve, after Mr. Greenspan wrote that the United States was “pursuing a policy of currency weakening.” Mr. Geithner shot back on CNBC that while he had “enormous respect” for Mr. Greenspan, “that’s not an accurate description of either the Fed’s policies or our policies.” He added, “We will never seek to weaken our currency as a tool to gain competitive advantage or grow the economy.”

Well, if you say so.

…well, at least not again…because the Fed’s current plan to buy $600 Billion of government securities is precisely, explicitly that.

Does Geithner actually believe we are all that stupid or that he’s so much smarter?

Much of the rest of the world seemed to share Mr. Greenspan’s assessment. Moreover, Mr. Obama seemed to be losing the broader debate over austerity. The president has insisted that at a moment of weak private demand, the best way to spur economic growth is to have the government prime the pump with cheap credit and government stimulus programs. He quickly found himself in an argument with Prime Minister David Cameron of Britain and Chancellor Angela Merkel of Germany.

Wait, who? Great Britain? Isn’t Great Britain…like, our Huckleberry? How retarded does the President and his staff have to be to screw up that relationship?

America isn’t subscribing to this administration’s ineptitude and neither is the rest of the world.

Playing a fools game, hoping to win, telling those sweet lies and losing again.

…fire the Fed.

Yesterday we learned the American economy added more jobs than expected. While it was not enough to budge the 9.6% unemployment figure, it was a surprise to everyone…including the Federal Reserve who had just announced a $600 billion dollar initiative to create economic “stimulus” via buying back government debt. This essentially pushes more cash into the economy by printing more dollars, the theory being cheaper money will jump start lending and hiring.

But!

Interest rates are already at historic lows, banks aren’t lending, real estate continues to fall in value, companies aren’t significantly increasing hiring and consumers remain skittish.

And!

There is already more than a trillion dollars of liquidity in the system, on the sidelines – not being lent or spent – and yet the Fed ostensibly believes that what the economy needs now is more liquidity. The federal government has found many and several ineffective ways to mortgage our future in a futile attempt to create jobs and this is the one that we might regret the most dearly.

The Keynesians finally got their wish. The Federal Reserve plans to inject $600 billion of the most caustic debt imaginable into the economy. This is the Agent Orange of monetary policies that has the potential to wreak financial havoc.

In the hope of generating inflation, the central bank is going to enable deficit spending by buying treasury bonds. You read that correctly: the primary goal is to erode the value of the dollar, and we get to watch our currency and wealth literally dissolve before our eyes.

Only a desperate government would consider debasing its own currency. The resulting inflation will be an insidious tax on every American who will suffer as wages lag behind increasing prices. It is doubtful that countries like China will react favorably to the precipitous drop in the value of the debt owed to them.

One has to wonder, had the Fed waited one more day until the employment numbers came out, if they would have paused their relentless attempts to “thwart deflation” and “create jobs” by further rendering the dollar worthless.

Once again, repeat after me: “The government can’t create jobs.”

That’s not to say they can’t hire citizens to park their flabby arses behind desks and vote for Democrats, but the government can’t create jobs in a pure sense – jobs that actually create net-net wealth and prosperity and in turn revenue for the government.

Consumers aren’t buying and employers aren’t hiring because conditions are uncertain. (yes, I bolded, italicized and underlined “uncertain”)

Conditions in turn are uncertain in no small part due to the fact that those that have the cash, banks, employers and consumers don’t know what the government’s next bumbling intervention will be as it relates most substantially to taxes and health care.

So they wait.

No amount of Fed Quantitative Queasing will change that. In fact most consumers and employers could give a rip what the Fed is doing.

Based on election results this week, one might conclude they would just as soon the government get the hell out of the business of manipulating the system.

So why does the Fed insist on more of the same?

1) Because they can’t not. It’s the nature of government the last few decades. They must justify their existence.

2) Furthermore, they must justify past actions; if flooding the economic landscape with liquidity didn’t work before, that must mean we just didn’t do enough.

3) It’s the only lever they have, given the bent of the current administration, who until this past Tuesday were opposed to any economic prescription other than increasing spending.

4) Irrational fears of deflation; the theory is that once prices fall, the consumer becomes even more fickle: Why buy now when the price will be lower tomorrow? So prices go lower still. The problem with this theory is that history shows otherwise and…consumers just aren’t savvy enough to wait until tomorrow.

Despite the misinformation propagated by these big-spending liberals, deflation has existed during extraordinary periods of economic growth and did not adversely affect consumers or wage earners. In fact, deflation is not only a common occurrence in a free economy, but it is also indicative of a vibrant and healthy economic expansion where the innovations and efficiency that competition engenders lower the costs of production. These lower costs translate into lower product prices benefiting the consumer.

Consumers were not harmed by the significant deflation of personal computers prices over the last two decades, and despite these falling prices, there has been explosive growth and profits. No credible economist could argue that consumers, manufacturers, or the economy would have been better-served if the government intervened and forced computer prices higher. Yet Keynesians propose that our economic woes can be ended by forcing the price of all products higher.

Employers and consumers will not budge until the economy naturally, and in this case excruciatingly slowly, takes up the slack created by the collapse of the real estate bubble, which of course was created by another flavor of government meddling.

The employment numbers show this is starting to happen and that the chances of a double dip are diminishing. The numbers behind the numbers show that average hours worked by those that are employed are increasing as well, further demonstrating capitalism’s ability to overcome even the worst liberal economic molestations.

There is no amount of Federal intervention that can or will change the fact that it is the small business owner, the employer, the risk taker; the capitalist, that can take up the slack. It is the newly-minted GOP’s job to make sure this can continue unabated while at the same time recalibrate America’s fundamental expectations of the Fed’s ability to effectively manage the trajectory of the overall economy.

For if the Fed continues to dabble in economic alchemy, it only increases the likelihood of inviting the as yet unrealized but certainly dire consequences of a nuclear currency war in an ever more global economy.

I’m not going to say that the most frustrating arguments are the ones where your opponent reduces your case to its most absurd extreme.

You:  I think it’d be fun to go to Burger King.

Opponent:  Why do you hate McDonald’s?

You get used to arguments like this if you have junior high kids, psychotic neighbors…

…and if you’re a conservative blogger.

Penigma, writing at Penigma, kinda goes there in a piece that eventually gets around to its real point, his thesis that government regulation had NOTHING to do with the meltdown of the financial system.

I said eventually.  He leads off by accusing me of sophistry, which is fine but incomplete (I got to sophistry after freshmanstry.  But then I proceeded to juniorstry and seniorstry), and more or less irrelevant – because unlike so much that goes on at SITD, it’s not about me.  It’s about my longtime blog associate Johnny Roosh:

JR apparently holds some sort of position in financial services, and has described himself as being a “financial planner.” We’ve asked a few times what licensure he holds (Series 7 would be pretty standard) – but he hasn’t answered.

Nor should he.  It’s nobody’s business.  I’ll vouch for Roosh’s credentials as a financial planner – he’s got golf clubs, even!

Now, Penigma does skirt close to a serious point, here.  I’ve bagged on anonymous bloggers.  But the problem is the ones that use their anonymity to take cheap, defamatory personal shots at other people while shielding themselves from consequences.  There are a few of them in the Twin Cities leftyblogging community; fearless about going after other people, but queasy about their blogging affecting their day jobs.  My answer has always been that nobody should write anything for which they’re not ready for the real consequences under their real name.  Roosh (and First Ringer, another SITD writer who stays under the radar for vocational reasons) meet that standard.  Otherwise I’d have never invited them to join SITD.

And as it happens, Roosh’s “anonymous” (but, I assure you, extant) credentials have no bearing on the issue in Penigma’s piece.

But since we’re on the subject, Penigma claims second-hand expertise on the subject at hand:

I can’t claim to be a great expert on financial services – I work in investment banking, dealing with large cash movement and the reasons for the appetite (or lack) of banks for deposits and the desires of brokers to make ‘spread revenue’ with the cash they have on hand. But, I DO work with some people who are VERY experienced in financial services, people reasonably well-known on Wall Street.

Now, Roosh’s license as a financial planner doesn’t necessarily make him an expert on macroeconomics in and of itself; being literate about economics does.

But claiming to know all sorts of well-known people on Wall Street – Republicans, no less! – is another thing altogether.  So it’d be useful for Penigma to provide the names of these Wall Street sources, so that people can gauge their, and his, credibility.

Because so much of what they (via Penigma, natch) say beggars reason so completely.

I’m not sure he is properly licensed, and frequently he makes comments which belie the suspicion that he is not, for he, like our former pest troll KR, claims that it was governmental regulation which caused the recent econimic meltdown/catastrophe.

This takes us back to my first paragraph; Penigma has reduced Roosh’s argument (and mine, and King Banaian’s, and that of virtually every conservative with an interest in the issue) to an absurdly simple, and utterly misleading thesis, which Penigma helpfully reprises:

Yet, when you want to hate the government, you look for any excuse.

Never chalk up to “hate” what can be better explained by “reason”.

I don’t know a whole lot of people, outside of blog comments, who say that government regulation, alone and by itself, caused the meltdown.

But it’s a simple fact that behind each of the factors that Penigma cites that Penigma’s powerful but anonymous Wall Street friends cite for the meltdown, the hand of the Fed lurks.

2. People were overly incented to do deals – so they did bad deals when the good deals ran out.
Some of these kinds of deals were:
a. Many companies sold their bad debts off to other companies packaged up into deals with many parts, claiming they were good investments (i.e. derivatives)

Right.

And what incented companies to go for these deals?

The fact that government, via a series of initiatives during the Clinton and Bush administraitons – promised to underwrite the deals.

b. Other companies effectively sold their debt exposure (insurance against loss) telling the buyer they were good ideas to hold the risk (Credit Default Swaps).

And what was the initial impetus for these sales?

The government mandate, driven by Clinton/Bush-era legislation, for Fannie and Freddie to underwrite all this debt.

c. Still more companies bet long with what was supposed to be ‘low risk’ money – namely money market funds. When their bets failed, the underlying money fund collapsed.

Why was the money supposedly low-risk?  Because the government artificially lowered the risk.

d. Still MORE companies wrote mortgages with zero income to debt requirements, or wrote HELOCs with equity percentages above 100%, or agreed upon mortgages with HUGE balloon payments that they should have had zero expectation the customer would be able to pay when the interest rate or the balloon shot up.

And why did these companies change their policies?

Because the government mandated Fannie and Freddie assume the risk!

Second – Wall Street knows it full well too. You’d be hard pressed to find anyone worth a damn actually blame CRA

Well, perhaps among Penigma’s legions of powerful-yet-anonymous Republican friends on Wall Street.

Elsewhere?  Not so much.

Note to Penigma:  please provide the names and credentials of anyone laughing.

Audio, too.

While the global economic meltdown has caused immense problems, it might have dealt a major jump ahead to my plan to have my own island nation:

The Greek state must sell stakes in companies and also assets such as, for example, unpopulated islands,” Frank Schäffler, a member of parliament for the pro-business Free Democrats, told the Bild daily.

Marco Wanderwitz, an MP for Merkel’s own conservative Christian Democrats, said Athens should provide collateral for any money it receives from the European Union to help it out of its debt crisis.

“In this case, certain Greek islands also come into question,” added Wanderwitz.

“We give you cash, you give us Corfu,” the Bild commented.

Greece has around 6,000 islands off its coast, of which only 227 are inhabited, according to the country’s National Tourism Office website.

The Kingdom of Berg, at the corner of the Adriatic and the Med.  Of course, we’d have to import snow, but that’s a small price to pay for being my own potentate.

Now I just have to get someone to pay me a ton of money.

1977:  Home ownership should be increased via government incentives and if necessary penalties for those that don’t lend money to people that can’t pay it back.

Result:  The Great Recession.

2009: Access to banking services should be increased via government incentives and if necessary penalties for those that don’t offer banking services to people that don’t have any money.

Result:  [insanity]It’ll be different this time folks.[/insanity]

A report from the (coincidentally insolvent) FDIC:

Consider defining a national shared government-industry
goal to lower the number of unbanked and/or underbanked
individuals and households…

There are people that have never been banked?

Do you know anyone that is “underbanked”

“[There is] an imperative for government and industry to expand financial access to the substantial number of households that have never been banked,”

…or “unbanked” (!!!!!!!!!!!)?

A push to extend basic services such as accounts to poorer communities with patchy credit histories would be especially sensitive because of the role of the subprime mortgage crisis in sparking the recent turmoil.

Ya think?

Not having enough money to need an account was the most common reason cited for staying outside the banking system. One third of households that no longer had accounts said they closed them because of the cost of maintaining them, such as minimum balance requirements, service charges and overdrafts.

“As a society, we should make banks cover these people.”

That’ll have a positive outcome.

But wait! We already have a solution here in the Twin Cities…it’s called Twin Cities Federal*. $50 for opening up a free checking account; $25 for referring your friends, open 7 days a week.

The bank for the underbanked…no TARP required, thank you.

*Johnny Roosh does not endorse Twin City Federal and was not paid a fee to mention them. Yet.

Last quarter’s “numbers” confirm that the stimulus didn’t stimulate, clunkers was one, the unemployed are still growing in ranks and the consumer is still cowering at home. Democrats are looking for someone to take the fall when in fact they are all making exactly the wrong moves economically, and soon time will show, politically.

One big difference between Washington and private markets is that politicians think everything they do is free-standing. Markets, however, combine all the potential costs of Washington’s policies and then decide whether to invest, or not. Consider what private decision-makers [read job-creators; employers-JR] see in their future:

A 2,074-page, trillion-dollar health-care bill to redesign 17% of the U.S. economy. A carbon tax—cap and trade—that remains an Obama priority ahead of the Copenhagen climate summit next month. A falling dollar and gyrating commodity prices, with no idea where those prices will go next.

Democratic liberals are talking about an income tax surcharge to pay for any commitment in Afghanistan. Card check, to expand unionization of the private economy, remains a priority. Domestic discretionary spending in fiscal 2010 is set to rise at 12.1%, with inflation near zero.

Nurturing a fragile economic recovery into a durable expansion requires policies that restore public confidence and reassure investors, risk-takers and employers. The Democratic agenda is doing precisely the opposite, which is how you get subpar growth and fewer new jobs. [emph. mine-JR]

High unemployment will progressively weigh more heavily on a Congress and Administration that has shown how ill-equipped and out of touch they have become they have been all along. They remain without a clue as it regards restoring our economy in a way that is meaningful for their constituents: jobs growth.

At the same time, they have failed to capitalize politically on the crisis (they themselves created), revealing how utterly failed and irrelevant their policies and leadership have become. How effectively they have shown once again that they are the wrong party at the wrong time, or at any time.

Check this out.

This is how a recession gets fixed…

A crop of potentially groundbreaking companies is emerging from the wreckage of the Great Recession. No question, some will blow up, and others will fail to reach their potential. But the downturn has done little to dampen the entrepreneurial spirit. During the first half of this year, angel investors financed 24,500 new ventures, 6% more than during the same period last year, according to the Center for Venture Research. The overall amount of money going into startups has declined, but the figures suggest that this year will see the birth of roughly 50,000 companies with enough promise that someone is betting money on them. “It may be that this is the best time to start a company,” says Carl Schramm, president of the Kauffman Foundation, an organization that promotes entrepreneurship.

History shows that great companies are often built during bad times. In 1939, at the tail end of the Great Depression, two engineers started Hewlett-Packard (HPQ) in a garage in Northern California. Silicon Valley itself was largely created during the nasty recession of the mid-1970s. During that decade, entrepreneurs laid the groundwork for the boom of the 1980s, building companies that pioneered three new industries: Atari in the video game business, Apple (AAPL) in personal computers, and Genentech in biotechnology. “The only people who venture out in tough times are on a mission, which is what you need,” says Michael Moritz, managing partner of Sequoia Capital, a venture capital firm that invested in Apple back in the ’70s.

The entrepreneur; the capitalist, seeking the American dream of wealth and freedom, has always been the seed of who we are as a nation, our standard of living and what we’ve done for other nations. Despite Michael Moore’s attempts to discredit it, and Barack Obama’s attempts to destroy it, capitalism is still our only hope for recovery.

The silver lining in The Great Recession…you can afford to invite more in-laws over this Thanksgiving.

This year’s survey, released yesterday, put the cost of feeding 10 people at $42.91. The grocery bill fell 3.8 percent, the steepest reduction since its 4.3 percent drop at the start of this decade. The slump was also the first since 2004.

Don’t miss the click-through to a graph of Class 1 Whole Milk prices – fun!

It’s The Unemployment, stupid.

The announcement a week ago of 10.2% unemployment is a significant political event for President Barack Obama. It could well usher in a particularly serious crisis for his political standing, influence and ability to advance his agenda.

Double-digit unemployment drove Ronald Reagan’s disapproval ratings in October 1982 up to a record high 54%. It was only when unemployment dropped to 7.3%, roughly two years later, that he was able to win a landslide victory over Democratic challenger Walter Mondale in the 1984 presidential election.

Alas, Barack Obama will not have the same opportunity that Reagan did – he doesn’t have the tools (the ideology)…or the people.

Barack Obama is all-in already with his “Stimulus Plan” in the sense that

1) He wants us to think that it’s working, and it is not.

2) As such, he doesn’t want us to think that his Stimulus Plan made things worse, which it did.

Had Barack Obama given America the message that they should have had, that they deserve, it would have been something like this:

Dear fellow Americans: You’ve lived beyond your means and so has your government, and now we must all pay the painful price as our economy returns to a more normalized state. We in the federal government will do what we can by extending unemployment benefits and such, but beyond that, as much as you will hear otherwise from those on the far left, stimulus programs and other gargantuan government spending programs will only worsen and extend the inevitable pain we must all go through to right the ship.

Instead, he doubled down on the failed fiscal policies of George Bush and simply dug the hole deeper.

Now the hole is filling with water and Barack Obama can’t get out.

Obama’s only option politically is to lobby for more stimulus spending and sell the American people on the efficacy of the last one. The former will fall on deaf ears as the deficit becomes an issue with the American people; the latter as the din of high unemployment washes over Obama’s Teleprompterings^™.

His dithering on Afghanistan and misappropriated focus on health care “reform” will be transferred to his economic impotence, and so on and and so on.

A look at more detailed data shows why Mr. Obama’s ratings are likely to drop even further.

A CNN poll released Nov. 6 found that 47% of Americans believe the top issue facing the country is the economy, while only 17% say its health care. However, the bulk of the president’s efforts over the past six months have been not on the economy but on health care, an issue in which he continues to draw negative ratings.

In a Rasmussen Reports poll taken after the House of Representatives passed health-care reform by the narrowest of margins last Saturday night, 54% of likely voters say they are opposed to the plan with only 45% in favor. Furthermore, in the all-important category of unaffiliated voters, 58% oppose the bill. That’s one of the reasons why so many moderate Democratic House members opposed it.

The CNN poll also shows that in addition to health care, a majority of Americans disapprove of how Mr. Obama is handling the economy, Afghanistan, Iraq, unemployment, illegal immigration and the federal budget deficit. Put simply, there isn’t a critical problem facing the country on which the president has positive ratings.

The only way the President gets out of this alive is to willfully and publicly abandon the failed liberal approaches to virtually every issue that has presented itself in his short Presidency.

What are the chances?

Mr. President, Mr. Rock.

“Hello, nice to meet you.”

“Likewise, Mr. President.”

Mr. President, Mr. Hard Place.

“Hello, nice to meet you as well.”

“It’s an honor, Mr. President. Thank you for inviting us into your Presidency. Should we get started?”

2012.

Indeed.

Interesting webtoy from the NYTimes for figuring and visualizing unemployment trends by demography, age, gender and edumacation.

White college educated males (Mitch raises hand) over 45 are around 4.1% so far.  Which is up from somewhere around 2% two years ago.  Rates for women in pretty much every combination seem to be lower than for men, indicating that feminists can quit their whining about the unfairness built into the system.

Black males from 15-25 without high school diplomas are up toward 50%, unfortunately; the rate drops by about half with a high school education, and half again with college; the feminization of poverty would seem to have missed a spot.

Question:  I wonder if anyone’s done crosstabs for people who were home-schooled, charter-schooled, parochial-schooled or alt-schooled versus recent public school graduates?

This past week Keith Ellison issued a breathless, well-worn and blatantly specious (if not utterly ignorant) monologue to justify the further distension of the bowels of the federal government via yet another bloated agency. As I read his drivel, in my ears rang the sultry voice of classic SNL fixture Jane Curtain, warbling on and on and on; aptly blunted by Dan Ackroyd’s signature catchphrase.

the American dream of home ownership, and borrowing generally, washed up on the shores of a financial disaster — the most serious since the Great Depression.

One cause (there were many) was the failure of our system of consumer financial protection. No one was there to review transactions or protect consumers. The proposed Consumer Financial Protection Agency provides the lifeline that consumers need.

Oh, someone was there. Federal regulators were there, telling banks they couldn’t borrow funds at the best rates unless they met certain ratios of mandated risky sub-prime transactions to the prudent and secure deals banks would normally seek.

A free market cannot be held culpable if it is not free.

These so-called predatory lenders Keith, were not only incented to push unqualified home buyers into loans they couldn’t afford, they were strong-armed to do so via quotas and measures put in place during the Carter administration and given teeth during the Clinton administration. Sadly, G.W. Bush failed to preemptively unwind the brewing disaster despite the behest of Senator John McCain, among others.

The government-inflated and guaranteed demand for housing and all the furnishings that go inside created a bubble with all the periphery that usually comes with one. It ended as they usually do – otherwise we’d not know it was a bubble, now would we?

If anyone needed regulatin’ it was the regulators.

The American Dream is just that, Keith. Home ownership, while beneficial to all of us, is not a Government-Given right. With rare exception, when liberals act with politically motivated and self-serving mandates under the auspice of a “lifeline”, disaster follows close behind.

…and that disaster, our Great Recession, is the direct result of exactly the same type of programs Mr. Ellison and his ilk offer as it’s “solution.”

No one around here shall be surprised by the Star Tribune’s confusion of a deliberate expansion of government with the genesis of a sustainable economic recovery.

From new dishwashers for the Albert Lea School District to a new counterterrorism police force to patrol buses and trains, federal stimulus money is pouring in to Minnesota and has directly preserved or created 11,800 jobs so far, state officials reported Monday.

I am sure the dishes at Albert Lea need to be washed and there is no doubt buses and trains need to be kept safe but federal stimulus dollars might just as well be called what they are; broad-based spending of future taxpayer dollars.

Normally called pork but in the heat of a crisis caused by liberal meddling during the watch of another Nobel Prize-winner, the very same wasteful practices that used to give liberals a bad name are now lauded for their “stimulation.”

But of what?

Management and Budget Commissioner Tom Hanson said statistics showed that the stimulus money “puts people to work,” and was having a “snowball effect” by indirectly sparking more job growth. As an example, he said, a highway construction job in Minnesota made possible with federal stimulus money might cause a company to buy a bulldozer from Tennessee that also meant jobs for workers at an out-of-state factory.

…or they might not buy that bulldozer because they might not be stupid enough to think that this economy is coming back any time soon. One project awarded by and funded with government dollars does not a recovery make.

Smart business owners and consumers alike are now finding ways to make the old bulldozer do the work instead of buying a new one simply because the bank will lend them the capital. Easy credit is long gone for the foreseeable future and even if it wasn’t, businesses and consumers will not soon be lured again into the tender trap of “buy today, pay tomorrow.”

The American consumer can no longer drive two thirds of our economy and like their banks, will spend the next several years rebuilding balance sheets by paying off debt, shoring up diminished retirement accounts and accumulating cash reserves to replace buffers formerly consisting of home equity credit lines and credit cards.

As for “Stimulus” spending and it’s true impact, any relief, dubious as it is, will continue only as long as the stimulus dollars keep flowing. Don’t believe that? Just ask your local car dealer how they’re doing now that the Clunkers Cash has dried up.

Government dollars are probably well spent on temporarily extending unemployment and health care benefits until workers claw their way back into the workforce, but continuing to borrow, tax and spend to create temporary relief will cause potentially permanent and devastating damage to our economy, leaving us worse off in the long run.

It is this very prospect, the fallout of our continued fiscal irresponsibility, that is sparking interest in stripping the US dollar of it’s current de facto status as the world’s currency. A national disaster that at best would force us to quickly revert to a low-wage manufacturer nation and at worse result in a catastrophic collapse of the dollar and our economy.

In either case, a catastrophic collapse of the Democratic Party’s reign looms inevitably as the inexorably slow recovery and sustained unemployment will surely outlast the diminishing effects of empty rhetoric, impotent stimulus packages and the patience of unemployed workers.

In the mean time, President Obama and his misguided policies serve only to distract and delay the healing that only the forces of capitalism can effect; the painstaking process of reorienting, realigning, innovating and ultimately forging true and sustainable models for America’s next economic era.

When I was getting into the voice-over business, I encountered an “agent” who said that for a small fee – I think it was $100 – they’d start representing me to potential clients.

Fortunately I went to Don Vogel, who was a highly-experienced V/O guy, and whose show I’d been producing for a while. 

He chuckled.  “Mitch, run, don’t walk, away from anyone who says they’ll represent you for a fee”.

I’ve followed that advice, in and out of the broadcast industry, ever since. 

And I’m grimly gladdened to note the number of scandals I’ve seen over the decades with “head-hunters” and “employment agencies” that charge fees to, supposedly, find people jobs.  It’s especially common when times are hard.  I remember back in the early nineties, when things in the Twin Cities were slow, and I had two kids and another on the way, and a company in Minneapolis was advertising all kinds of decent jobs, for a $95 fee.  I thought about it…

…and declined.  And sure enough, the WCCO “I-Team” busted them.  It was a scam; hundreds paid in, almost nobody got a job.

Some things never change.  And it seems that every example of a company that tries this results in rampant weaselry, and there really don’t seem to be any exceptions:

A Minneapolis headhunting firm has closed its doors and shut down its website, leaving a trail of questions and disgruntled customers who say they shelled out thousands of dollars to land a job but never got results.

A paper sign taped to the locked glass door of the company’s 12th-floor office in the Baker Building in downtown Minneapolis says: “Arthur Group Executive Search.” On it, someone scribbled, “Fraud! I want my money back!”

The Better Business Bureau (BBB) said Thursday that it began investigating the company about three weeks ago and was moving to yank its accreditation but the firm’s closing beat them to it.

“I think they were preying on middle- to high-level executives who were at their weakest moment,” said Dana Badgerow, president and CEO of the local BBB, adding that she feels many were embarrassed to even file a report. She said the company flew under the BBB’s radar for a long time by resolving complaints right away, often by paying out a settlement.

A common theme among those who claim they were scammed: They felt the service would give them an edge looking for a high-level position in a tough job market. They say the company’s owner, Barry Trimble, was a smooth salesman who didn’t follow through on promises. While the company provided some services, the clients say, it often did a less-than-adequate job. And they question whether the jobs and connections the company touted existed at all.

In a phone interview Thursday, Trimble, 46, of Dellwood, denied misleading clients, saying it’s clear in the company’s agreements that it does not make any guarantees. He also said that the jobs did exist. “We had numerous jobs right up until the end. They were real jobs.”

A real agency, or agent, gets their money from either a finders fee or a percentage of your cut.  And that’s what makes a real agency or agent actually go out and work to represent you; if you don’t get a gig, they don’t get paid.

What is the impetus for someone who’s already been paid to go out and beat the bushes to get you hired, even in the unlikely event they are on the up-and-up?

I do understand that desperate feeling, and the lengths someone will go to when things are looking ugly. 

But some things never change.  Vogel told it to me; I’ll tell it to you:  If someone asks you to pay up front for job leads, run.  Don’t walk.  Get away.  Save your money for something that’ll work.

Yeesh. 

I was biking on a Three Rivers bike trail in and around my home in Hennepin County today and came upon some young workers building a little area of stairs onto the biking/walking trail from a park.

They had arrived in an official Hennepin County van, so I would have to assume that they were county workers.

Posted proudly near their little project was a sign:

“Your Stimulus Dollars at Work”

Government workers, working on government land, on a government project. Dare I say an unnecessary one at that.
Riddle me this: Just exactly what stimulus was this project providing?

How many sustainable private sector jobs, the only source of true economic growth, were created?

Obama and his ilk are selling the July economic numbers, telling us the stimulus is working, the recession is ending and the economy is on the mend.

Businesses shed “just” 247,000 jobs in July, far fewer than the 330,000 most economists and Wall Street analysts were looking for. As bad as that still sounds, July’s toll was only two-thirds the monthly average since December 2007, when the recession began.

So your carotid is still gushing blood, but it’s coming out more slowly now.

It’s not that there isn’t good news to be had, it’s that politicians are connecting dots that shouldn’t be connected.

Americans are desperate for some good news, and this recession will someday be behind us, but our recovery will have nothing to do with wasteful government borrowing and spending. A recovery will come from small businesses and free enterprise, finding ways to succeed despite the government’s increased burden in the form of inflation and ultimately, higher taxes on everyone.

As such, we’re bracing for the inevitable self-congratulatory back pats from the White House and Congress, lauding their own economic stewardship for pulling us back from the abyss. On Friday, President Obama said his policies “rescued our economy from catastrophe” while building “a new foundation for growth.”

Don’t believe it. Claims that higher taxes and a total of $2 trillion in stimulus, TARP and bailout spending this year have turned the economy around are unconvincing. Indeed, they’re farcical.

As economist Casey Mulligan noted on the New York Times blog after dissecting second-quarter GDP data, total stimulus at the state and federal levels amounted to about $12 per person. That’s stimulus?

Suggesting that government is responsible for what looks to be a rather weak recovery is an insult to all the small private companies and millions of laid-off workers who bore the brunt of bad government policies over the past two years.

I will put my party hat on when banks start lending, businesses start hiring and consumers start spending. On that day we’ll have a true recovery. At the same time, I will be watching the beach for the inflation title wave that will be the unavoidable result of “Stimulus,” “Cash for Clunkers,” corporate bailouts and “pedal to the metal” fed monetary policy.

In the mean time, whatever Obama says about the economy from now on, you can pretty much disregard.

The Teleprompter in Chief^™ defies reality, regurgitating well-worn propaganda that flies in the face of reality as revealed in real numbers.

President Barack Obama said his $787 billion stimulus bill “has worked as intended” as he pushed back against Republican criticism that his recovery program has failed to rescue the economy.

“It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession”

…which is a good thing, and probably all the “Stimuless” spending package should been enacted to do; provide a safety net. The rest of the plan is a combination of deferred liberal agendas and political payback.

Meanwhile, unemployment continues to rise, oil prices are falling (which believe it or not is bad), and the stock market has fallen four weeks in a row in anticipation of an extended worldwide recession as global government borrowing digs an ever-deepening crevasse.

Oil prices and the stock market are accepted leading indicators. Obama’s rhetoric has no substantive or predictive value whatsoever.

In asking for public patience, Obama said the recovery act “wasn’t designed to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall.”

This is what you call backpedaling – where are even some of our 2-3 Million New Jobs? – a number Barack Obama pulled from his backside some time ago – why is unemployment above 8% and still rising? If this is not a free fall….

…the bill “was designed to spur demand and get people spending again and cushion those who had borne the brunt of the crisis,” the president said.

Both missions: Unaccomplished.

Obama said the measure “was not designed to work in four months — it was designed to work over two years.”

“Remember, we’re only 140 days into this deal,” Biden said in a speech in Cincinnati. “It’s supposed to take 18 months.”

Well, at least you guys have your stories straight.

President BHO enlisted the support of our forefathers against their will in his 4th of July radio address.

He said the same “unyielding spirit” that drove the pioneers and Depression-era workers was needed now to push for a national health care overhaul, make major energy policy changes, and deal with a struggling economy, he said in his weekly address.

“We are not a people who fear the future. We are a people who make it,” he said. “And on this July 4th, we need to summon that spirit once more. We need to summon the same spirit that inhabited Independence Hall two hundred and thirty-three years ago today.”

Yeah, I am pretty sure our forefathers, having fled tyranny, taxation without representation, and the plundering and ravaging of Great Britain were thinking big government, a huge national debt, unfair and burdensome tax codes, an administration seeking to usurp “checks and balances,” post-modern moral relativity, and “dialogue” with the enemies of freedom and human rights. That’s not what drove them to endure the hardships of an oceanic voyage and a revolutionary war.

That is the spirit we are called to show once more. We are facing an array of challenges on a scale unseen in our time. We are waging two wars. We are battling a deep recession. And our economy – and our nation itself – are endangered by festering problems we have kicked down the road for far too long: spiraling health care costs; inadequate schools; and a dependence on foreign oil.

Meeting these extraordinary challenges will require an extraordinary effort on the part of every American. And that is an effort we cannot defer any longer.

…so let’s borrow 800 Billion Dollars. If that’s not a deferral, I don’t know what is. Oh, and not every American. Just the 40% or so that actually pay taxes. True to form, there is no mention of the federal government’s part in our current malaise.

Now is the time to reform an unsustainable health care system that is imposing crushing costs on families, businesses, large and small, and state and federal budgets. We need to protect what works, fix what’s broken, and bring down costs for all Americans. No more talk. (No more talk? Then what do we need Obama for?-JR) No more delay. Health care reform must happen this year.

…because dagnabbit, only 80% of Americans are satisfied with the current system.

One can imagine the disgust John F. Kennedy (“Ask not…”) would have, let alone our forefathers, if they could see rugged individualism replaced by a nanny state, the enabling of bad personal decisions, the welfare rolls both individually and coporate, IOU’s issued by states, the US Federal Government  becoming one of the largest employers in the world, the interpretation or utter disregard for our Constitution by our courts; and more recently what the Obama administration and our liberal congress have proposed in the name of “Progress” in America.

They might have stayed home.

Its easy for the rest of America to disassociate with the fiscal crisis in California. After all, it represents a bigger-than-life culture of Hollywood, celebrities, extreme lifestyles and a Bush-era “conservative” Guvernator. Even more so in Minnesota where our culture and demographics make us an unlikely analog.

Nonetheless, we are subject to national policies now mirroring those of California and to think the results will somehow be different on an national scale is a predictable exercise of liberal insanity.

California, too, spent lavishly in the fat years and issued bonds when state revenues did not cover the costs, bringing its once-sterling credit rating down to the nation’s lowest. So, too, U.S. Treasury bonds, T-bills and the American dollar are now increasingly suspect.

California, like Minnesota has a mandatory budget-balancing provision in force and watching California comply is going to be a lesson in fiscal responsibility – the hard way.

with the state under a constitutional mandate to balance its budget, yet facing a $24 billion deficit this July, a chainsaw is about to be taken to state government.

At arms length (a 2000-mile arm that is), California’s issues hold little import for Minnesotans, and probably won’t have an immediate effect on us here. We should count ourselves fortunate that our Governor is willing to take the heat by refusing to hike taxes and un-allotting what our legislature wouldn’t un-budget. What is troubling is California’s microcosmic prognostication for the rest of the country.

California and it’s economy are faced with the fallout of massive over-spending, immigration, health care and arbitrary and burdensome emissions regulations – which have failed by the way. Sound familiar?

Some 38,000 of 168,000 state prisoners may be released. As Barack Obama is pushing universal health insurance, California will cut Medi-Cal for the poor. Education will be slashed, resulting in a shortened school year, thousands of laid-off teachers, school closings and an end to summer programs in a system that has plummeted from the nation’s best to one of its worst, as measured by dropout rates and academic achievement.

The Obama administration represents the worst of fiscal liberalism as evidenced by the climate bill passed by the House, massive bailouts and a stimulus package that is nothing more than a veiled attempt to enlarge the federal government. Obama is making all the wrong moves, belying the lesson California’s fiscal train wreck offers the rest of us, and deservedly drawing comparisons to Jimmy Carter.

Under George W. Bush and Obama, the U.S. government has undertaken huge new responsibilities: No Child Left Behind, Medicare prescription drug benefits, wars in Iraq and Afghanistan, the takeovers of banks and auto companies, bailouts without end and national health insurance.

The “We Inherited it from Bush” plea will provide little cover as the Obama administration and virtually the same Congress that was in place during much of the Bush administration continue to ignore the signs. In six months they have done more damage to our nation’s solvency than Bush and Company did in eight years.

Richard Nixon and Ronald Reagan carried California nine times. But the state is now a fiefdom of liberalism. John McCain’s share of the vote was smaller than Barry Goldwater’s. California today believes in Big Government, open borders, diversity, multiculturalism and the politics of compassion. But what liberalism has wrought in California, its native-born are fleeing.

The rest of us have nowhere to flee. We can’t all move to Florida.