Friday, March 29, 2013

The Rich Poor Divide and the Obama Administration

Progressives hate income inequality. It eats at their souls. It obsesses them. The progressive Obama administration has shown that it would rather wreck the world economy than pass up a chance to raise taxes on the rich.

Despite this, the gap between the rich and the poor is growing? Blame the Progressives in general and the Obama administration in particular.

Little attention has been paid to the Obama administration's actual efforts to stimulate the economy. These are separate from the stimulus. They consist mainly of pouring money into Wall Street in the hopes that it will trickle down to the rest of the economy.

The Obama Administration has been keeping interest rates near zero for years. This allows banks and other financial institutions to borrow money at almost no cost then invest it in high-return investments, many in the so-called shadow economy. Worse, these institutions have been deemed too big to fail so the government will bail them out of bad investments. Worse yet, the Obama administration has admitted that it will not prosecute illegal investments because that could cause a "loss of confidence".

The amounts involved are huge and the profits are too good to pass up, especially since the government has eliminated the risk. So everyone involved is getting richer and richer. This has nothing to do with Bush tax cuts or Republican policies. The Republicans have been pushing to remove the safety nets and let the banks rise or fall on their own.

Monday, March 25, 2013

The False Arguments Against Same Sex Marriage

I keep seeing a number of arguments against same sex marriage. While often given as killer arguments, they are not actually very strong. Here are the main ones:

Marriage is an institution for raising children.

Before you say that you believe this, answer a few questions:

  • Should childless post-menopausal women be bared form getting married?
  • Should a childless woman be given an automatic divorce if she has a hysterectomy?
  • Should couples who have not had children be given an automatic divorce after a reasonable period?

Unless you agree with these, you don't really believe that marriage is only for raising children.

"What about adoption?" you may ask. What about it? Gays can and do adopt and studies show that it is better to have two gay parents than none.

Marriage is a religious institution and the Bible forbids it.

Marriage straddles the line between being a civil and religious institution. Historically, Catholics saw it as religious and puritans saw it as civil. That is why both a clergy and a judge can perform a marriage. In this case we are talking about the civil portion of it.

There is also the First Amendment which forbids passing laws based on religion.

Same sex marriage is an attack on the institution of marriage.

 Marriage is in a lot of trouble but not because of a tiny minority. An increasing number of hetro couples skip getting married and an increasing number of women have children by multiple fathers before marrying (and seldom to the father of her children). A distressing number of presidential candidates (and one ex-president) have been caught in affairs. Having a new group that wants to be married can only strengthen it.

Same sex marriage will lead to polygamy.

 Maybe it will, maybe it won't. That's a different fight for a different day. There are a lot more people in same-sex relationships than multiple-partner ones. But those relationships do exist and they are pushing for recognition regardless of same sex marriage. The two are not directly linked.

Thursday, March 21, 2013

No Way to Run a Bank

The idea of taxing Cypress bank accounts seems reasonable if you look at it from the viewpoint of the Euro Zone administrators in Brussels. The banks attracted a lot of foreign business, mainly Russian. They lost a lot of money in bad investments including in Greece and the amount of money needed to bail them out will push the Cypress national debt into the danger zone. Investors in stocks and bonds have had to stomach a haircut (sharing the cost of the bailout) so why shouldn't these customers?

There is also an echo of the Occupy movement and progressivism in general. A lot of money from the bailout will go to rich Russians. The tax is an attempt at getting someone else to cover the costs.

None of these arguments are good enough because of the special nature of banks. When we invest our money we know that there is a chance that we will lose it instead. Banks are supposed to be the alternative - someplace where we can put out money to keep it safe. Banks work because people trust them. If you take away 10% of their money because it is in a bank then you destroy that trust. If I stuff my money into an old mattress it may not be making any interest but at least no one is confiscating part of it.

Cypress is a small country but the idea for this came from Brussels, the heart of the Euro Zone. The worry is that this will set an international precedent. This could cause an international run on banks and destroy the world's financial system. Against that, the arguments in favor of the tax are insignificant.

Fortunately, the tax was so unpopular that Cypress is having to resort to an unnamed Plan B. Even so, the banks are likely to stay closed for the rest of the week to prevent a run that would cripple them.

It would be a good idea for US leaders to promise to never consider taxing savings. It would strengthen the US banking system.

Wednesday, March 13, 2013

Nanny State Run Amok

The Progressive vision of the government is a powerful but benevolent entity that mediates nearly every aspect of life in order to assure optimum outcomes. The desire on the left to "do something" often results in legislation or regulations that are meant to address a problem. Often the more pressing the problem appears the less likely the response will be meaningful. The news is full of examples of this on all levels. The result of this is a nanny state that treats its citizens as if they were small children.

The current proposals for gun legislation top the list. None of the most common proposals would have stopped any of the recent mass-shootings. All of the shooters would have passed a background check so expanding the checks to include private sales simply penalizes law-abiding citizens for no good reason.

The efforts to outlaw "assault weapons" goes beyond silly. The AR-15 is the country's most popular gun but it is seldom used for murders. Lawmakers might as well propose a ban on "assault clubs" (baseball bats) since they are used in more murders. This is the nanny state at its "best". A group arbitrarily decided that something might be misused therefore it must be banned. The fact that millions of these guns are used peacefully and regularly for target shooting is irrelevant. The argument that "no one needs one of these assault weapons" trumps everything. Similar logic is advanced to outlaw the most common style pistol.

The extreme version of this logic has been showing up nationwide in a series of incidents where small children are punished for even thinking about guns. Students of one class were offered counseling after a child brandished a gun-shaped breakfast pastry.

The nanny state swings into high gear on obesity. Everyone is now treated as a potential fatty who has to be protected from bad food choices. For decades, school lunches were prepared with the idea of making sure that all children got at least one good meal per day. Now, as a result of the First Lady's fitness initiative, the top goal is preventing obesity. The new meals go a long way in this direction since most students find them inedible.

Ironically, last week the First Lady announces that she does not weigh her children or talk about weight with them. She wants them to be comfortable in whatever bodies they inhabit. The rest of the country's children will continue to be judged against an arbitrary standard.

Then there is New York City where the citizens have to be protected from the dangers of soft drinks. When he struck down this regulation the Chief Justice of the state Supreme Court noted that it was unevenly applied. Many high-calorie drinks were allowed including alcoholic ones. Many studies indicate that artificial sweetener is more to blame than sugar but that was also given a pass.

Another example of the nanny state in action is the decree that everyone must be insured. The real problem facing the country is the rising cost of health care. Obamacare will make that worse by increasing demand and by taxing medical equipment.

Obamacare came about originally because the President wanted something important for his legacy. It was quickly decided that real health care reform would be too difficult but that a law that forced 20-30 million of uninsured to purchase insurance would be significant.

Since this is the government, satisfying the insurance requirement will not be easy. The application form was just released. It is 15 pages with 21 pages of instructions.

Given a chance, the Progressives want to control how much money you make and how you move around. They strongly prefer limited range electric cars and high-speed trains to regular cars and airplanes.

Because they are doing things for our own good, the Progressives see themselves as having the moral high ground. If results don't meet expectations then it means that a new round of regulations is in order. And it is always better to try to solve problems by expanding government.

Thursday, March 07, 2013

Everyone Loves a Dictator

The press coverage of the death of Hugo Chavez is interesting. I've seen stories about grieving thousands and his outrageous statements. Some coverage has mentioned that he created a fund for helping low-income families in the US pay for heating oil (without mentioning how insignificant this fund is). Many stories mention his work for the poor.

Several celebrities mourned him. These include Oliver Stone, Sean Penn, Danny Glover, Roseanne Barr, and Michael Moore.

Several things have not been mentioned. Chavez tried to overthrow the elected government in 1992 and was arrested. He was later pardoned and was elected president in 1998. He also formed an alliance with Fidel Castro. Once in power, he rewrote the constitution and nationalized oil production. He attempted to pass a law that would have required schools to teach pro-Bolivian propaganda (his party was the Bolivian party).

Over time, Chavez moved further to the left. He financed the Columbian guerrilla movement FARC which was known for violence and kidnapping. He had close ties with Iran and other anti-US governments. He insisted that al Qaeda was a fictional creation of the US. His government also engaged in antisemitism.

Under his rule, Venezuela has suffered from high inflation and crime. The murder rate increased by 300%-400% during his administration. There were food shortages. Chavez responded by nationalizing food production and farm land and by putting ceilings on food prices. Predictably, this compounded the shortages.

Human rights under Chavez were criticized by Human Rights Watch, Amnesty International, and the Organization of American States. Reporters Without Borders accused Chavez of silencing critics. The country's largest cable TV company was taken off the air for having supported the opposition.

When Chavaz was diagnosed with cancer he insisted that the US caused it. This charge was repeated by his successor who expelled two American diplomats after Chavez's death.

Chavez's hand-picked successor took charge instead of the official named by their constitution. This has led to charges that the Cubans are now in control of Venezuela.

So, why has so little of this been mentioned? Because many people, especially on the left, admire Chavez's policies and wish that President Obama had used Chavez as a model for reforming the US.

Tuesday, March 05, 2013

Obama and the Republicans

In his first national speech, Barack Obama condemned the bitter partisanship of Washington. While running for president he promised to change the culture of Washington.

He made good on that promise. He made the partisanship much worse. A case can be made that winning political points over the Republicans has become Obama's top priority and actually running the country is a distant second (if that).

Relations went downhill fast after Obama's first inauguration. He did make the gesture of inviting members of both parties to the White House to watch the Super Bowl but this did not go well. A better politician would have used the time to work the room. Football was more important to Obama than politics so he sat in the front seat and watched the game.

One of the first pieces of legislation was the stimulus bill. Republicans were completely shut out of writing it. They were not able to add a single amendment. As a result, they opposed it unanimously. While trying to lobby the Republicans, Obama seemed confused at their reaction. He is reported to have said something to the effect of, "We put in things that you are supposed to like."

With solid majorities in both houses, the mood in the White House was "We have the votes. F---- them!"

That changed in the mid-term elections when the Republicans took over the House and made gains in the Senate. Obama did not react well to the change. When negotiating for a debt ceiling increase, the Republicans demanded cuts in future spending. One of their proposals would have flattened the tax rates while removing deductions which would have resulted in higher revenue. The White House responded with a proposal for the most progressive tax rates in history - something the Republicans would never consider.

This led the White House to propose the Sequester. The idea was that all discretionary spending would be cut but defense would have disproportionate cuts. The White House hoped that pro-defense Republicans would eventually agree to almost anything rather than see defense cuts. The Sequester was supposed to be avoided by an agreement to be reached by a super-committee. This failed, setting the stage for the Sequester.

Obama effectively stopped governing in July, 2011. He spent that August on vacation and writing a new stimulus bill. This turned out to be nothing but a political stunt. He was leading crowds in chants of "Pass the bill" before it had even gone to Congress. Predictably, it was unacceptable to the Republicans and went no where.

During his campaign, he told supporters that Congress had a Republican Fever and that his reelection would cure it. He seemed to think that Republicans would see his reelection as a mandate for his (largely unstated) platform.

The President did have the upper hand in negotiations for the Fiscal Cliff. He proved that he was perfectly willing to let the economy fail as long as he won political points in the process. What is more, he had the upper hand. If he did nothing then the Bush tax cuts expired on everyone. He would only allow cuts for lower-wage earners to be extended. With little choice, the Republicans surrendered.

This brings us to the Sequester. Obama refused to agree to anything that did not include new taxes. The Republicans could not agree to this so the Sequester took place. rather than trying to work with the Republicans, Obama spent his time campaigning on how disruptive the cuts will be.

Reportedly, Obama's plan is to put governing on hold and spend the next year and a half running against the Republicans. His hope is to retake the House and get back to the days of, "We've got the votes! F---- the Republicans!" At this point he will rush the rest of his progressive platform through Congress.

That means that we will have three and a half years in which the President is more concerned with scoring political points than doing what is best for the country.