Economics & Politics

And the truth is, there were no budget cuts – only a slight decrease in the rate of perpetual spending increases. John Hayward, always right on target with his assessment, correctly identifies the problem with Ebola and lots of other things in our country: the government is an ineptocracy, and the consequence of failure in an ineptocracy is MORE MONEY to spend on stupid stuff that has nothing to do with what they’re supposed to be doing.ebola virus

Case in point: the Centers for Disease Control and National Institutes of Health. Swimming in funding, they find money to study why lesbians are obese, but can’t seem to come up with a cogent strategy to stop the spread of a disease that the Chief Ineptocrat said would “likely never come here.” Right. I’m thinking minor epidemic, at least.

And it’s not just nutjob progressive groups or loony cable-TV hosts spreading this nonsense; last week, Hillary Clinton also blamed the Left’s all-purpose failure demon, the sequestration “cuts” actually mild reductions in the rates of spending growth from the 2011 Budget Control Act for any problems that might arise in the government’s response to Ebola.  “They’re working heroically, but they don’t have the resources they used to have,” Mrs. Clinton sniffed.

Thus is the one and only example of spending restraint from the hilariously misnamed “Budget Control Act” – a tiny tap on the spending brakes, which has since been largely rescinded – blamed for every blunder of the $3.5 trillion super-sized government worshiped by the Left as the best doctor, investor, builder, business manager, charity, and employer in human history.  Every dollar the State does not receive is the one dollar that causes the whole damn operation to unravel.  The sort of actual, honest-to-God spending cut that most private-sector businesses deal with on a regular basis would reduce Washington to rubble.  And if people like Hillary Clinton are going to keep blaming sequestration for everything, should we pause for a refresher course on the history of that ill-fated bit of automated fiscal restraint, and remember exactly whose idea it was?  Hint: his initials are “BHO,” and the reason he came up with the idea was to terrorize Republicans into accepting tax increases by threatening them with mandatory cuts to defense spending.  That would be the same “BHO” who is currently losing a war in the Middle East against a threat he refused to see until it was far too late).

In truth, the CDC and NIH are swimming in money, just like every other appendage of this ridiculously overpriced, painfully mis-managed government.  Like every other agency, they fritter away their money on silly distractions and naked attempts to extend their power.  They put more effort into “mission creep” than their actual mission.  When confronted with a crisis that exposes an inability to handle core functions, the agency curls into a defensive crouch and begins whining that it’s under-funded.  If that works – and until now, it often has – the result is growth through failure.  Instead of being torn to bits by enraged taxpayers, the agency gets more money than ever before, and promptly begins wasting it on robot-squirrel studies to cite one of the more memorable examples of madcap spending from Senator Tom Coburn’s epic “Wastebook” series.The NIH makes an appearance in the most recent edition of the Wastebook, for spending $325,525 on a study to determine if marriages are happier when angry wives calm down quickly.  The answer, you will be shocked to learn, is “yes,” although the Wastebook archly advises, “Regardless, men who want a happy marriage are probably wise to avoid telling their wives the government’s advice to resolving marital conflicts is for her to calm down.”The 2014 edition of the Wastebook hasn’t been released yet, but it’s a fair bet that the NIH’s $1.5 million study of “biological and social factors” to determine why lesbians tend toward obesity more than homosexual males will make the cut.

via Blaming Ebola on Republican budget cuts: The Ineptocracy Strikes Back | Human Events.

This is from a couple of years ago, but the premise is the same: folks who argue that the rich ought to “give back” (that is, pay taxes) at a higher rate than the rest of us are misinformed on a couple of key points.

  1. The top 10% of earners already pay a disproportionately large share of the taxes that are paid (I’ve written about this a couple of times, but lots of folks don’t understand this, or willfully ignore it).
  2. “Give back” implies a voluntary act of returning something that was previously given. Paying taxes is not a voluntary act; it is transacted at the point of a gun. Society didn’t “give” wealthy people anything, but they did make voluntary exchanges of dollars for goods or services. (h/t Speedmaster)

Over the course of the recent debt-ceiling debate, one argument made in favor of raising taxes on the rich was that they ought to be “giving back.” It wasn’t always clear to whom they were supposed to be giving back, but the argument is that since “society” has made it possible for them to become rich, they should “give back” by paying higher rates of taxation to support government programs.Who pays taxes from NTU

There are quite a few problems with this argument, not the least of which is that the total share of the tax burden shouldered by the rich is actually very high. The top 10 percent of households paid about 70 percent of total taxes in 2008. According to the nonpartisan Tax Foundation, in 2008 the top 1 percent of households paid 38 percent of all federal income taxes even though they earned 20 percent of total adjusted gross income. That’s a higher percentage than 30 years ago, when the top tax bracket was double what it is now. In addition, the average rate the rich actually pay is still notably higher than all the income groups below them. The top 1 percent pay 23 percent on average, and the top 10 percent pay 19 percent. So by those measures, the rich already do “give back” plenty.

Taking, Not Giving – However, I want to focus on two different problems. First, note the phrase “give back.” Whatever one thinks should be the optimal rate of taxation on the wealthy, using the phrase “give” is highly misleading. When one “gives” something, it is voluntary. Taxation, whatever else is true, is not a citizen giving; it’s a government taking. Again, even if one thinks the rich should be taxed more, referring to it as “giving back” is at best inaccurate and at worst dishonest.The bigger problem with the rhetoric of “giving back” is that it is shows a misunderstanding of the fundamental process by which wealth is generated. In particular it ignores the mutually beneficial nature of exchange and assumes that those who have become rich did so by “taking” from others. The only reason one would “give back” is that one has “taken” something inappropriately from others. The “back” in “give back” assumes that the thing in question rightfully belongs to someone else.

via Giving Back : The Freeman : Foundation for Economic Education.

Economists like to say that there are no solutions, only tradeoffs. This must be a dilemma for the environmentalists: do “green” energy sources justify large-scale killing of wildlife? This is a report about just one plant; thousands of eagles, bats, and other birds are killed by wind turbines every year. The government gives those facilities a pass for killing protected species.

The workers call them “streamers.” Hapless birds that fly over a massive California solar array, only to be golden-eagle-430immolated in midair, leaving a brief plume of smoke and a medium-well carcass.

BrightSource’s Energy’s state-of-the-art plant in the Mojave Desert is the largest solar thermal power plant on earth — and the deadliest.

Federal wildlife officials counted an average of one “streamer” every two minutes. The energy company estimates that only 1,000 birds are scorched each year, while a prominent environmental group puts the number at 28,000.

Federal and state biologists call the number of deaths significant, based on sightings of birds getting singed and falling, and on retrieval of carcasses with feathers charred too severely for flight.

Ivanpah officials dispute the source of the so-called streamers, saying at least some of the puffs of smoke mark insects and bits of airborne trash being ignited by the solar rays.

Wildlife officials who witnessed the phenomena say many of the clouds of smoke were too big to come from anything but a bird, and they add that they saw “birds entering the solar flux and igniting, consequently become a streamer.”

U.S. Fish and Wildlife officials say they want a death toll for a full year of operation.

Given the apparent scale of bird deaths at Ivanpah, authorities should thoroughly track bird kills there for a year, including during annual migratory seasons, before granting any more permits for that kind of solar technology, said [Garry] George, of the Audubon Society.

The facility has concerned environmentalists in the past, as its construction bladed over 3,500 acres of virgin desert. Being California, the state government required BrightSource to relocate a bunch of desert gopher tortoises to the tune of $22 million. The installation also endangers pilots flying the busy Los Angeles–Las Vegas corridor; they can be dazzled by the intense light.

It remains to be seen if regulators will stop the plant’s operation, but at least the world’s largest bug zapper should educate environmentalists and green energy boosters.

For too long, the public has been told that energy production is less a matter of physics than one of morality. Renewable energy like solar and wind are sold as “good” while reliable energy sources like oil and coal are “evil.” Methods like hydroelectric, nuclear and natural gas all were initially sold as clean and green, but became demonized the instant they turned a profit or revealed unintended consequences.

via California Solar Plant Kills 30 Birds an Hour | Ricochet.

I’m constantly amazed at the economic ignorance of some of our solons in the Congress. Dick Durbin thinks Walgreen’s is unpatriotic, or something, for considering moving the company to Switzerland to reduce their U.S. tax burden. Has Mr. Durbin ever considered that the U.S. corporate tax rate (one of the highest in the world) is maybe too high? Corporations don’t have patriotic obligations to the countries in which they’re founded. They do, however, have an obligation to their shareholders – to maximize the value of the enterprise. Reducing their tax burden is one way to do that. I’m guessing that Walgreen’s customers don’t care one whit about where the company is incorporated; they just want their prescriptions and other sundries to be conveniently located, and purchased at the lowest price possible.  sc-ct-durbin-1209

Illinois Sen. Dick Durbin on Tuesday urged Walgreen Co. to reconsider a possible move of its headquarters to Switzerland to lower its U.S. tax bill.In a letter to Walgreen Chief Executive Gregory Wasson, Durbin said the company could face a backlash from its customers. “I believe you will find that your customers are deeply patriotic and will not support Walgreen’s decision to turn its back on the United States,” Durbin wrote.  “Nearly all of your $2.5 billion in profits earned last year were from sales to U.S. taxpaying customers.” The senator ended his letter with a twist on Walgreen’s advertising campaign: “Is ‘the corner of happy and healthy’ somewhere in the Swiss Alps?”

The letter increases political pressure on the company as it contemplates leaving Deerfield, as part of its plan to buy the rest of Alliance Boots, which operates a drugstore chain in the United Kingdom and is based in Switzerland. The controversial move, known as an inversion, could save the company millions of dollars a year in income taxes because Switzerland’s tax rates are lower than U.S. rates. Walgreen paid $1.4 billion in state and federal income taxes in its last fiscal year.In a statement, a Walgreen spokesman said, “We’ve had a long relationship with Sen. Durbin and appreciate his view on this subject. As we’ve said before, we are in the process of evaluating all aspects related to the second step of our strategic partnership with Alliance Boots, and we will do what is in the best long-term interests of our customers, employees and shareholders.”

via Sen. Durbin derides Walgreen for possible tax-driven overseas move –

Sure, Cantor suffered a humiliating defeat at the hands of college professor Dave Brat, but now he’s freed up to make some serious money. Who needs all those rules and restrictions? The inside-the-beltway free market awaits.

The Cantor sweepstakes has become a source of fascination within the backslapping carousel of the capital. “He’s got a lot of private-sector friends he has done favors for,” says Tom Davis, a former Republican congressman from Virginia who now works for Deloitte & Touche. “I think it would be easy for him to become Eric Cantor Inc. and make a few million dollars a year.” After all, Cantor, whose net worth is already listed between $4.4 million and $14.3 million, will soon be 046-0326044732-3-4-Revolving-Doorunburdened by pesky House ethics and disclosures and restrictions. Given his contacts and pedigree, he could one day eclipse the Tauzin Line, which is named for the former Louisiana congressman Billy Tauzin, who made $11.6 million as a pharmaceutical lobbyist in 2010. Even if he follows the more modest route of Dick Gephardt, the former House majority leader, he’ll still do O.K. Gephardt, who played a convincing working-class hero during his two Democratic presidential campaigns, now runs a consulting firm that made $4.8 million in lobbying income alone last year.

There was a time, it’s worth remembering, when outgoing public officials would return to their farms, stores, law firms, medical practices or whatever quaint things the founders envisioned our citizen leaders doing after their public lives ended. In the 1970s, Davis worked for two Nebraska senators, Carl Curtis and Roman Hruska, each of whom wound up living out his days in the Cornhusker State. “You did not have the lobbying class that you have today,” Davis told me. In 1974, according to The Atlantic, 3 percent of retiring members of Congress became lobbyists. Now half of all senators and 42 percent of representatives enter the field. And those numbers don’t include our former leaders who call themselves “policy advisers,” consultants or strategists. (“Unregistered lobbyists” is how they are known, winkingly, around town.) Or the fact that more than half the members of Congress — who tend to be well educated, well raised and well married to begin with — are already millionaires.

What’s notable is how naturally D.C. commentators have accepted the “monetization” of Cantor’s “contribution.” In an article in CQ Roll Call, Julian Ha, a headhunter at Heidrick & Struggles, urged Cantor’s staff members to “call in the chits they’ve been accumulating and cash them in.” In a National Journal article headlined “Eric Cantor’s Loss Could Be the Best Thing That’s Happened to Him,” one former Republican Capitol Hill aide and current lobbyist earnestly wondered, “The question is how rich does Eric Cantor want to be.” Chris Jones, an executive-search specialist, guessed that the answer was very, very rich. He suggested to Time that Cantor would move to New York and join a major investment bank. “I don’t think he’ll be a standard lobbyist at a law firm,” Jones said. “I think he’ll go big. . . . I think he’s a major power player.”

Therein lies the uncomfortable reality of our gilded capital. Cantor’s loss was widely attributed to his growing “out of touch” with his Richmond-area constituents — he had become too steeped in Washington’s machinations, too cuddled up with Wall Street, too beholden to the entrenched insider’s world. An oft-quoted factoid, courtesy of Open Secrets, is that Cantor’s campaign spent more money at Bobby Van’s steakhouses ($124,177) than David Brat, his opponent, did on his entire campaign ($122,792). Yet those qualities are precisely what now make him such a prized recruit in his next career. As Brat presciently noted on the campaign trail, “All the investment banks up in New York and Washington, whatever. . . . Instead of going to jail, where’d they go? They went on to Eric’s Rolodex.”

via LeBron and Melo Have Nothing on Eric Cantor –