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The anti-intellectuals

Monday, November 17th, 2008

The New York Times today has a piece on National Review, and its alleged decline in erudition. It looks to me, on reading the piece, that it is another in the Palin-bashing thread of the left. Erudition and intellectual power on the left have virtually disappeared in an academic world exposed by The Sokol Hoax. Books have been written about the implications of the Hoax for intellectual life in the 21st century.

Now, we have elected an alleged intellectual as president. The Republican Party has been attacked as “anti-intellectual. Sarah Palin has been the focus of some of these stories. Not everyone agrees with the premise.

the left has long been the welcoming home of fashionable postmodern nonsense like deconstructivism and moral and cultural relativism. Under these doctrines there are supposed to be different kinds of “logics” (male logic, female logic, &.) and none is more valid than the other. All of them are simply clever masks for a brutal competition for wealth and power. This is a profoundly anti-intellectual strain of pseudo-thought which avoids the need to take any arguments seriously, because such ideas simply be accused of corruption. When Sandra Harding called Newton’s Principia a “rape manual,” she did so from the left, not from the right. And the cultural relativists who demand that we treat the dismal productions of barbaric cultures as the intellectual equivalents of Shakespeare and Homer—and tars as “racist” anyone who suggests that some cultures and their mores are better than others—are fundamentally, even proudly anti-intellectual.

We’ll see how the “intellectual” president does.

The most common delusion of the intellectual today is the global warming hysteria, which is reaching a stage where facts appear to be irrelevant. Typically, it was a British newspaper that called attention to the errors.

A surreal scientific blunder last week raised a huge question mark about the temperature records that underpin the worldwide alarm over global warming. On Monday, Nasa’s Goddard Institute for Space Studies (GISS), which is run by Al Gore’s chief scientific ally, Dr James Hansen, and is one of four bodies responsible for monitoring global temperatures, announced that last month was the hottest October on record.

This was startling. Across the world there were reports of unseasonal snow and plummeting temperatures last month, from the American Great Plains to China, and from the Alps to New Zealand. China’s official news agency reported that Tibet had suffered its “worst snowstorm ever”. In the US, the National Oceanic and Atmospheric Administration registered 63 local snowfall records and 115 lowest-ever temperatures for the month, and ranked it as only the 70th-warmest October in 114 years.

So what explained the anomaly? GISS’s computerised temperature maps seemed to show readings across a large part of Russia had been up to 10 degrees higher than normal. But when expert readers of the two leading warming-sceptic blogs, Watts Up With That and Climate Audit, began detailed analysis of the GISS data they made an astonishing discovery. The reason for the freak figures was that scores of temperature records from Russia and elsewhere were not based on October readings at all. Figures from the previous month had simply been carried over and repeated two months running.

So the data was merely extrapolated from September to October. No matter that the time is fall when temperatures are falling in temperate climates.

In fact, there is some evidence that we may be entering a new Ice Age due to decreased sunspot activity.

The intellectuals will persist in their delusion until glaciers begin to appear in upstate New York.

Tags:cooling, global warming, intellectual, Obama, Sokol Hoax
Posted in education, politics, science | 5 Comments »

Liberal tolerance

Saturday, November 8th, 2008

As I was preparing to head east for my cruise, I read some accounts of the demonstrations at the Mormon temple in West Los Angeles. There was anger directed at the Mormon Church because it had contributed quite a lot of money to the Yes on 8 campaign. Apparently, Mormons are not the only ones gays are angry with.

It was like being at a klan rally except the klansmen were wearing Abercrombie polos and Birkenstocks. YOU NIGGER, one man shouted at men. If your people want to call me a FAGGOT, I will call you a nigger. Someone else said same thing to me on the next block near the temple…me and my friend were walking, he is also gay but Korean, and a young WeHo clone said after last night the niggers better not come to West Hollywood if they knew what was BEST for them.

This was directed at a gay black guy walking with “No on 8” buttons with his Korean boy friend.

Al Rantel is a gay conservative talk show host in LA. Periodically, he gets an angry letter from a left winger complaining about something he said on his show and the number of anti-gay comments (like calling him a “faggot”) are amusing. He reads the best of them on the air.

Of course, Hispanics also supported the gay marriage ban but I don’t see as much mention of them. The rest of us are coming in for our share of the “blame.”

There are so many other groups in the exit polling that voted for Prop 8 overwhelmingly (as in, more than 60%):

The elderly (65+)
Republicans
Conservatives
People who decided for whom to vote in October (but not within the week before the election)
People who were contacted by the McCain campaign
Protestants
Catholics
White Protestants
Those who attend church weekly
Married people
People with children under 18
Gun owners
Bush voters
Offshore drilling supporters
People who are afraid of a terrorist attack
People who thought their family finances were better now than 4 years ago
Supporters of the war against Iraq
People who didn’t care about the age of the candidates
Anti-choicers
People who are from the “Inland/Valley” region of California
McCain voters

Let’s see. How many apply to me ?

Anyway, it’s a nice lesson in the tolerance found in those of the left. Sort of like the nasty joke President-elect Obama made about Nancy Reagan at his first press conference.

Oh well, it’s early yet.

Tags:gay rights, Obama, Proposition 8, race
Posted in general | 4 Comments »

Post Mortem

Wednesday, November 5th, 2008

Obama won and the Republicans lost most major races.

The Republicans salvaged some Senate races and avoided a Democrat majority that equals 60, the cloture vote total. However, the 60 vote rule is a Senate rule and can be changed by simple majority vote. There was discussion during the Bush administration that the Democratic block on court nominations could be removed by dropping the 60 vote rule. The “Gang of 14” was made up of Democrats and moderate Republicans that tried to avoid the overturn of the rule in the interest of “bipartisanship.” Harry Reid will find no impediment to ending that rule to further his agenda and anyone who expects him to avoid breaking precedent is a fool.

I do not expect Obama to govern as a moderate.

I do not expect the Congress to discover bipartisanship.

That’s OK with me.

Republicans need to restructure their arguments. David Frum has one recommendation for the future.

A generation ago, Republicans dominated among college graduates. In 1984 and 1988, Ronald Reagan and George H.W. Bush won states like California, Pennsylvania and Connecticut – states that have been “blue” for a generation. (America’s least educated state, West Virginia, went for Michael Dukakis in 1988.)

Those days are long gone. Since 1988, Democrats have become more conservative on economics – and Republicans have become more conservative on social issues.

College-educated Americans have come to believe that their money is safe with Democrats – but that their values are under threat from Republicans. And there are more and more of these college-educated Americans all the time.

So the question for the GOP is: Will it pursue them? To do so will involve painful change, on issues ranging from the environment to abortion. And it will involve potentially even more painful changes of style and tone: toward a future that is less overtly religious, less negligent with policy, and less polarizing on social issues. That’s a future that leaves little room for Sarah Palin – but the only hope for a Republican recovery.

So we should try to restructure the message to appeal to the Creative Class.

The biggest difference between the creative class and the old business types isn’t on cultural issues–few traditional CEOs embraced the religious right’s agenda–but on environmental policy. Executives at places like Apple (nasdaq: AAPL – news – people ), as well as opportunistic investment firms, have become enthusiastic jihadis in the war against climate change. Conveniently, their companies don’t tend to be huge energy consumers and, if they make products, do so in largely unregulated facilities in China or elsewhere in the developing world. And youthful financial firms looking for the next “bubble” could benefit hugely from mandates for more solar, wind and other alternative fuels.

All this could prove very bad news for groups that produce tangible products in the U.S. or that, like large agribusiness firms, are big consumers of carbon. Also threatened will be anyone who builds the suburban communities–notably single-family houses and malls–that most Americans still prefer but that Gore and his acolytes dismiss as too energy-intensive, not to mention in bad taste.

Theoretically, there is opportunity for the Republicans–if they can somehow jettison the more primitive parts of their social agenda and come up with their own bold, environmentally sound energy agenda. The new hegemons could easily be painted as moralistic hypocrites who live the carbon-heavy luxury lifestyle of the super-rich while demanding ordinary Americans give up their cars, homes and even their jobs.

So, we “jettison” traditional religion and adopt the religion of Global Warming and Environmentalism.

My personal opinion is that the Creative Class is about 5% of the population; a wealthy and noisy 5% but still a very small group when the votes are counted. Of course, if the money is what counts, and the rules are easily broken as was done by Obama, they matter more.

But not enough.

I tend to think more along the lines of Victor Davis Hanson.

1. Spending. When Republicans spend at rates higher than Democrats they suffer the wage of hypocrisy, and discredit tax cuts, since the public blames lower taxes for mounting deficits even when they have been demonstrably proven to have brought in greater revenue. In the future, conservatives need to forget all the gobbly-gook about deficits being tolerable as this or that percentage of GDP— and just balance the budget, since the public deals in psychology and symbolism as much as abstract economic data.

I completely agree here. The failure of the Hastert Congress to control spending led to 2006 and 2008. There was a theory, advocated by Tom DeLay, that we could bribe our way to a permanent majority. It was called “The K-Street Project” and was an attempt to tie lobbyists to the party. Wikipedia is not unbiased on some subjects but this gives the outlines.

2. People. Conservatism means an allegiance to past values and behavior. When the Republican Congress not only spent lavishly, but was marked by a series of scandals—Foley, Cunningham, Stevens, et al.— then Republicans lost that high ground as well. Conservative reconstruction must focus on being above the ethical norm, not indistinguishable from corrupt career politicians. By the same token, highly-visible appointments of incompetent sycophants like Press Secretary Scott McClellan or “Brownie” at FEMA remind voters that conservatives have standards no different from the alternative when they claim otherwise.

Some of this was unique to the Bush family which is notorious in its devotion to loyalty to the family. A very good man in California, named Bill Jones, was the California Secretary of State when the 2000 primaries were held. He endorsed McCain and, in 2002 when he was running for the Republican nomination for governor, the administration got revenge by stiffing him. With that went the party’s best chance to win the California governorship. They ended up with a fellow named Bill Simon who lost in a gentlemanly fashion giving us Gray Davis. Bill Jones could probably have defeated Davis.

Bush loyalty gave us incompetents like the FEMA head and Scott McClellan, who rewarded Bush for making him Press Secretary, when he was unqualified, by endorsing Obama and writing a nasty tell-all book. Actually, he didn’t have much to tell.

3. Populism. Joe the Plumber caught on because (finally) the case was made that confiscatory tax rates (40% on top income, 15.3% FICA/Medicare, once caps removed, 5-10% state income tax) mean that none of us can hope to have the financial success guaranteed to others by birth.

Joe the Plumber was able to explain the consequences of Obama’s tax plan (at least that part he admitted to) better than McCain could do. The Republican Party is not the party of the “Creative Class” or of the very poor. I don’t think it will ever be so.

I think the party is best oriented to the concerns of those who own businesses, even very small ones. Salaried employees, who do not aspire to own the business, are not natural Republicans. This includes public employees, although some with unusual life styles, like firemen and policeman, will be different. Most bureaucrats and low level employees are unlikely to choose the Republican Party with one exception.

jettison the more primitive parts of their social agenda

Why did Proposition 8, which banned gay marriage in California, pass when Obama carried the state by a large margin ?

California’s black and Latino voters, who turned out in droves for Barack Obama, also provided key support in favor of the state’s same-sex marriage ban. Seven in 10 black voters backed a successful ballot measure to overturn the California Supreme Court’s May decision allowing same-sex marriage, according to exit polls for The Associated Press.

More than half of Latino voters supported Proposition 8, while whites were split. Religious groups led the tightly organized campaign for the measure, and religious voters were decisive in getting it passed. Of the seven in 10 voters who described themselves as Christian, two-thirds backed the initiative. Married voters and voters with children strongly supported Proposition 8. Unmarried voters were heavily opposed. LA Times 11/5.

Why is it a losing strategy for Republicans to support social issues when the gay marriage ban out polled Obama by 25% ?

Single voters and atheist voters are going to trend Democrat. Married voters and religious voters favor Republicans. Maybe we should figure out what the latter group have in common. I think we have lost many college graduates, partly because the left has dominated the faculty. They have had an impact on students. Once they get married and start a small business, they may change. Small business owners are probably disproportionately non-college graduates. They go to work and learn a business. Many are former junior college students but many, especially men, have given up on the value of a college education. Stories like this one don’t help.

Two other huge issues will be energy policy and health care reform.

I will be on the National Review cruise from next Saturday for a week. The topic will be “where do we go from here?” I will post more.

Tags:economics, government, Obama, Republicans
Posted in energy, health reform, politics | 22 Comments »

The energy president

Sunday, November 2nd, 2008

The Sunday political talk shows are all convinced that Obama will win the election. Who am I to argue with them ? Let’s say, for argument’s sake, that they are right. What will be the defining moment of the Obama presidency ?

The war ? The Iraq War is won. He might be able to sink the Iraqi government by withdrawing our troops precipitously, as the Democrats did in 1975 with South Vietnam, but Iraq is farther along than South Vietnam was.

The economy ? I think he will have a baneful effect on the economy as small business owners retrench in the face of sharply higher taxes and a hostile administration. However, the economy will already be in recession and that will be blamed on Bush. Hoover was still being blamed for the Depression in 1939 after years of misguided New Deal experiments.

I think the defining theme of the Obama presidency will be the energy crisis.

Coal provides nearly 50% of electrical generation. Obama plans to bankrupt the coal industry with carbon taxes. He will build no new nuclear power plants and his promise to “look at” offshore drilling will remain just that, a promise.

On nuclear power, Sen. Obama says he’s open to expanding nuclear energy, which now provides 20% of the nation’s electricity, as part of an effort to increase power sources that emit little or no carbon dioxide. But he also has said there is no future for expanded nuclear energy until the U.S. comes up with a safe, long-term solution for disposing of nuclear waste. He opposes the Bush administration’s plan for storing waste at Yucca Mountain in Nevada.

I predict that, by 2012, we will see nationwide rolling blackouts. A Third World level of energy production will be Obama’s legacy from his one term presidency.

Sen. Obama is also framing the climate-change debate in more explicit language than Sen. McCain. “We can’t drive our SUVs and eat as much as we want and keep our homes on, you know, 72 degrees [Fahrenheit] at all times and then just expect that every other country’s going to say OK. That’s not — that’s not leadership,” he told a crowd in Portland, Oregon, last month.

That is his energy policy. I am not the only one who thinks this.

Jeffersonian Says:
November 2nd, 2008 at 3:27 pm
I’ve long held that the success of the United States has been based largely on the fact that politicians have either lacked the hubris to attempt to micromanage things they do not comprehend or have just been plain unsuccessful at grasping the levers that would give them the power. This is the first time I’ve ever felt like we’re about to put into office a President who hasn’t successfully run anything but his own mouth, yet feels compelled to command everyone to act in a certain way based on some ill-conceived ideas of “social justice.”

We’re likely to be squatting in the dark a few years from now as a result.

Ralph Peters has a look-back at an Obama Presdency from 2012. Of course, that is only a prediction.

Tags:election, energy, Obama
Posted in energy, politics | 13 Comments »

Maybe it is 1929 again

Tuesday, October 28th, 2008

The world financial crisis has been blamed on the mortgage market in the US although it seems to be as bad in Europe and Asia, especially Japan. This seemed a bit odd as European markets should not have been as exposed to sub-prime American mortgages as American financial institutions are. It turns out that they have generated their own problems with little contribution from us.

French President Nicolas Sarkozy has been leading the way with the finger pointing, kicking American capitalism and calling for an end to the “hateful practices of the past.” Super Sarko has demanded that the upcoming economic summit to be hosted by US President George W. Bush be held in New York because, he said, “that’s where everything started.”

Newspaper headlines cheer that, suddenly, “Europe looks pretty smart.” Dutch newspaper Trouw announces that “European capitalism is better suited to meet the challenges of the present financial crisis.” German weekly Der Spiegel features the Statue of Liberty with an extinguished torch as “the price of arrogance.” German Chancellor Angela Merkel and her Finance Minister Peer Steinbruck tell us that the financial crisis is an American affliction. London’s The Daily Telegraph talks about “emboldened Europeans” eager to ambush Bush to impose a “European vision” for new financial market regulation.

Is this true ?

Well, maybe not. What have sub-prime mortgages got to do with Iceland, for example ?

Bayerische Landesbank, a state-owned regional bank, has put out its hand for a E5.4 billion ($11 billion) bailout from the German Government after writing down E2.6 billion in investments during the first half of this year, much of that related to sub-prime mortgages.

Indeed, the most recent data from the Bank for International Settlements should wipe the smirk from many European faces. Western European banks lent three-quarters of a total $US4.7 trillion ($7.5trillion) to emerging markets in eastern Europe, Latin America and Asia: a bursting bubble that surpasses the US sub-prime mess. Again, in Germany alone, financial institutions lent $US21.3 billion to Icelandic banks now collapsing, accounting for more than a quarter of all foreign lending to Iceland and more than five times the level of British lending, Iceland’s next biggest creditor country.

Iceland is in trouble because the big US air base at Keflavik and other US installations have closed.

Germany’s economic newspaper Handelsblatt speared European self-righteousness by listing eight German myths about the financial tsunami. Editor Bernd Ziesemer pointed out that the German Government’s bank bailout is almost the same size as the US package: “The truth is the most awful weapons of mass financial destruction came from London and Frankfurt.” Aggressive German financiers were busily inventing and packaging up derivatives that Europeans would prefer to frame as a curse of American capitalism.

In 1929, a large part of the collapse was due to profligate lending to Latin American countries, countries that had no reason for us to expect them to repay their debt. Similar things happened with the Mexican bailout under Clinton.

Before we embrace European solutions as our saviour, remember that in the past decade, Europe has had the distinction of stagnant job growth: unemployment in France and Germany has not fallen below 7 per cent. With European governments addicted to regulation and with work practices mired in rigid inflexibility, it could be that the US will recover much more quickly from a recession that many European countries. In that vein, beware of sniggering Europeans peddling myths about the demise of American capitalism and the need for a new inspiring European solution. The triumphalism behind talk of a new grand European model of economics may turn out to be short-lived.

Unless Obama is elected to “spread the wealth.” Then Laffer’s article in the Wall Street Journal may sound prophetic.

Financial panics, if left alone, rarely cause much damage to the real economy, output, employment or production. Asset values fall sharply and wipe out those who borrowed and lent too much, thereby redistributing wealth from the foolish to the prudent. This process is the topic of Nassim Nicholas Taleb’s book “Fooled by Randomness.”

Somebody once said “government is the problem, not the solution.”

To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn’t create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.

If you don’t believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they’ll do with Wall Street.

Oh well. I’m getting a bumper sticker for next year. “Don’t blame me, I voted for McCain.”

Maybe I won’t need it.

Tags:economy, Europe, financial crisis, McCain, Obama
Posted in financial, History, politics | 1 Comment »

Is America really going to do this ?

Sunday, October 26th, 2008

Melanie Phillips, author of Londonstan, an analysis of the Islamization of England, has a column on the coming American election.

The impact of the financial crisis on the American presidential election has somewhat obscured the most important reason why the prospect of an Obama presidency is giving so many people nightmares. This is the fear that, if he wins, US defences will be emasculated at a time of unprecedented international peril and the enemies of America and the free world will seize their opportunity to destroy the west.

I share her fears.

McCain ?

I do not trust McCain; I think his judgment is erratic and impetuous, and sometimes wrong. But on the big picture, he gets it. He will defend America and the free world whereas Obama will undermine them and aid their enemies.

Here’s why. McCain believes in protecting and defending America as it is.

I have not been an admirer of McCain on certain issues, like immigration and campaign finance reform where he has been suckered by Obama’s flood of illegal funds. On the other hand…

Obama tells the world he is ashamed of America and wants to change it into something else. McCain stands for American exceptionalism, the belief that American values are superior to tyrannies. Obama stands for the expiation of America’s original sin in oppressing black people, the third world and the poor.

Obama thinks world conflicts are basically the west’s fault, and so it must right the injustices it has inflicted. That’s why he believes in ‘soft power’ — diplomacy, aid, rectifying ‘grievances’ (thus legitimising them, encouraging terror and promoting injustice) and resolving conflict by talking. As a result, he will take an axe to America’s defences at the very time when they need to be built up. He has said he will ‘cut investments in unproven missile defense systems’; he will ‘not weaponize space’; he will ‘slow our development of future combat systems’; and he will also ‘not develop nuclear weapons,’ pledging to seek ‘deep cuts’ in America’s arsenal, thus unilaterally disabling its nuclear deterrent as Russia and China engage in massive military buildups.

On militant Islam ?

Obama assumes that Islamic terrorism is driven by despair, poverty, inflammatory US policy and the American presence on Muslim soil in the Persian Gulf. Thus he adopts the agenda of the Islamists themselves. This is not surprising since many of his connections suggest that that the man who may be elected President of a country upon which the Islamists have declared war is himself firmly in the Islamists’ camp.

On Israel ?

Most revolting of all is Samantha Power, a very close adviser whom Obama fired for calling Hillary a ‘monster’ but who says she still expects to be in Obama’s administration. Not only has Power has advocated the ending of all aid to Israel and redirecting it to the Palestinians, but she has spoken about the need to land a ‘mammoth force’ of US troops in Israel to protect the Palestinians from Israeli attempts at genocide (sic) — and has complained that criticism of Barack Obama all too often came down to what was ‘good for the Jews’.

Yet older Jews are voting for Obama in Florida and elsewhere.

The future is very troubling and this woman, who has been unsparing in her criticism of British weakness, is very worried. So am I.

Michael Yon is the most reliable source of information on the war in Iraq and now the war in Afghanistan. What does he say ?

The outcome of the upcoming U.S. elections will have a profound impact on the war. Meanwhile, the day to day fighting continues. If Senator Obama is elected, I expect to spend a great deal of time covering the fighting. Judging by his words, Senator Obama must be watched closely or we might see some terrible decisions. I expect 2009 to be the worst year so far in the Af-Pak war, which has serious potential to eventually become far worse than Iraq ever was. If Senator McCain is elected, I’ll breathe easier in regard to the war.

Michael Totten is another reliable source of the Middle East…

Senator Barack Obama hopes to be the first American president to engage in diplomatic negotiations with the Islamic Republic regime in Iran. He even says he’s willing to meet with Iran’s President Mahmoud Ahmadinejad without preconditions. Surely he must understand that what he’s proposing is a radical departure from foreign policy as practiced by both parties. Franklin Roosevelt didn’t meet with Adolf Hitler or Emperor Hirohito, Harry Truman didn’t meet with Kim Il Sung, Ronald Reagan didn’t meet with any Soviet leader until after glasnost and perestroika were in place, Bill Clinton didn’t meet with Saddam Hussein or Iran’s Mohammad Khatami and Ayatollah Akbar Hashemi Rafsanjani, and no American president met with Fidel Castro.

In any case, whether Obama’s wish to engage Ahmadinejad is mainstream or radical, and whether it’s foolish or wise, may not even matter. It isn’t likely to happen. Obama may not care about preconditions, but the Iranian governmentcertainly does. Mehdi Kalhor, Iran’s Vice President for Media Affairs, told the Islamic Republic News Agency that “as long as U.S. forces have not left the Middle East region and continues its support for the Zionist regime, talks between Iran and U.S. is off the agenda.”

Samantha Powers may have the solution for that objection.

UPDATE: The Economist endorses Obama but, typically, misrepresents his positions on Iraq and Iran in order to make him seem wiser than he is. The press is desperate to elect Obama for their own reasons and they are not good ones.

Tags:Islam, national security, Obama
Posted in politics | 11 Comments »

Obama’s tax plan explained.

Friday, October 24th, 2008

The Wall Street Journal today explains the Obama tax plan. We have all been saying it is not a tax cut if the recipient has no income tax obligation. Obama has also talked about lifting the income maximum on FICA deductions. Social Security was enacted by Roosevelt as a self funded retirement plan. He specifically insisted that workers contribute to the program in order to receive a pension after age 65. Wikipedia has a pretty good summary of the history. Congress kept expanding the pool of beneficiaries since the trust fund had surpluses in the early years. Nobody ever accused Congress of being concerned with the future beyond the next election.

The income subject to FICA tax was capped, just as benefits were capped. I collect Social Security and the amount I receive is about 10% of my after tax income when I was working. The amount of tax I paid was also much smaller than the income tax I paid so I have no complaint. Now that will all change.

Barack Obama proposes a Social Security payroll tax cut for low earners. Workers earning up to $8,000 per year would receive back the full 6.2% employee share of the 12.4% total payroll tax, up to $500 per year. Workers earning over $8,000 would receive $500 each, with this credit phasing out for individuals earning between $75,000 and $85,000.

Low wage earners would pay no FICA if they earn less than $8,000 per year. They would have to file a tax return. At about $80,000 per year, the full FICA would be paid by each person. The employer’s share would be paid for all, even those who do not pay the employee contribution. When Obama advisors try to explain this plan, they have trouble because it doesn’t add up.

Austan Goolsbee, the University of Chicago economic professor who serves as one of Sen. Obama’s top advisers, discussed these issues during a recent appearance on Fox News. There he stated that the answer to the first question is that these Americans are getting an income tax rebate. And the answer to the second is that the money would not actually come out of Social Security.

“You can’t just cut the payroll tax because that’s what funds Social Security,” Mr. Goolsbee told Fox’s Shepard Smith. “So if you tried to do that, you would undermine the Social Security Trust Fund.”

Now, if you have been following this so far, you have learned that people who pay no income tax will get an income tax refund. You have also learned that this check will represent relief for the payroll taxes these people do pay. And you have been assured that this rebate check won’t actually come out of payroll taxes, lest we harm Social Security.

You have to admire the audacity

Well, audacity is what he is selling.

This tax cut would make an already progressive Social Security program even more redistributive. Under current law, a very low earner receives an inflation-adjusted return on his Social Security taxes of around 4%. That’s a good return, given that government bonds are projected to return less than 3% above inflation. A high-earning worker, on the other hand, receives only around a 1.5% rate of return. Under Sen. Obama’s proposal, returns for very low earners would rise to around 6% above inflation — about the same return as on stocks, except with none of the risk. Compounded over a lifetime’s contributions, the difference in the “deal” offered to workers of different earnings levels would be extreme.

This would change Social Security from self-funding to a welfare program funded by high income earners. It would also add to the deficit that is looming for the program due to the Baby Boom Generation retirement.

Moreover, this payroll tax cut plan would reduce Social Security’s tax revenues by around $710 billion over the next 10 years. If made permanent, the Obama tax cut would increase Social Security’s long-term deficit by almost 60% and push the program into insolvency in 2034, versus 2041 under current projections.

To fill the hole in Social Security’s finances, Mr. Obama would increase income taxes on high earners and pour that money into Social Security. This would be the first time that income tax revenues have been used to finance Social Security, which has always relied on its own dedicated payroll tax to differentiate itself from other government programs. Filling the gap with higher taxes on high earners would further increase Social Security’s progressivity, pushing it closer toward a welfare-program approach.

This means high taxes for anyone over the $85,000 income level. It also means that FICA, which is charged to pre-income tax income, will become a much greater burden for the self-employed, who pay both halves. Joe the plumber again.

This will be a job killer and discourage a lot of people who might otherwise start small businesses. I wonder if he plans to lift the cap on benefits, as well. Don’t bet on it.

Tags:FICA, income tax., Obama, taxes
Posted in financial, politics | 1 Comment »

Where is the money coming from ?

Thursday, October 23rd, 2008

UPDATE: The best summery, including a description of the whitewash by the MSM is Atlas Shrugged, which has many links to details of the story.

Barack Obama has recorded unprecedented contributions the past few months. Most, apparently, are internet based. This story makes me wonder what is happening. How is the credit card company processing these items ? I use my middle initial in my name on credit cards as a way to avoid possible fraud. If my middle initial is not included in the name field, the charge is rejected. Then we hear this.

Mary T. Biskup, of Manchester, Missouri. Biskup got a call recently from the Obama campaign, which was trying to figure out why she donated $174,800 to the campaign — well over the contribution limit of $2,300.

The answer she gave them was simple. “That’s an error.”

Biskup, a retired insurance manager who occasionally submits recipes to the local paper, says someone used a credit card to donate the money in her name. No charges ever showed up on her credit card statement.

“We’re not out a penny,” Biskup said. “I gather that someone has hacked into something using other people’s credit cards and putting my name on it.”

How did the Obama campaign get any money from this transaction if the credit card was never debited ? Yet it appears that they did get the money. Even the pro-Obama media is getting interested.

The Obama campaign has shattered all fund-raising records, raking in $458 million so far, with about half the bounty coming from donors who contribute $200 or less. Aides say that’s an illustration of a truly democratic campaign. To critics, though, it can be an invitation for fraud and illegal foreign cash because donors giving individual sums of $200 or less don’t have to be publicly reported. Consider the cases of Obama donors “Doodad Pro” of Nunda, N.Y., who gave $17,130, and “Good Will” of Austin, Texas, who gave more than $11,000—both in excess of the $2,300-per-person federal limit. In two recent letters to the Obama campaign, Federal Election Commission auditors flagged those (and other) donors and informed the campaign that the sums had to be returned. Neither name had ever been publicly reported because both individuals made online donations in $10 and $25 increments. “Good Will” listed his employer as “Loving” and his occupation as “You,” while supplying as his address 1015 Norwood Park Boulevard, which is shared by the Austin nonprofit Goodwill Industries. Suzanha Burmeister, marketing director for Goodwill, said the group had “no clue” who the donor was. She added, however, that the group had received five puzzling thank-you letters from the Obama campaign this year, prompting it to send the campaign an e-mail in September pointing out the apparent fraudulent use of its name.

What is going on ?

Obama spokesman Ben LaBolt said the campaign has no idea who the individuals are and has returned all the donations, using the credit-card numbers they gave to the campaign. (In a similar case earlier this year, the campaign returned $33,000 to two Palestinian brothers in the Gaza Strip who had bought T shirts in bulk from the campaign’s online store. They had listed their address as “Ga.,” which the campaign took to mean Georgia rather than Gaza.)

If the credit card numbers are fraudulent, how do they return the money ? If the credit card is never debited, as in the first case above, where did the money come from ? In at least one case, the credit card was debited, so there are cases on conventional fraud benefiting Obama.

Steve and Rachel Larman say a strange credit card charge appeared on their statement this month — a $2300 donation to Barack Obama’s presidential campaign. The Larman’s say they don’t want this to be about their political affiliation, but they say they’re not about to give the Obama campaign any help from their pocketbook.

They said they notified Chase, their credit card bank, to report the fraud.

“(They) said that they had seen-they were familiar with this,” said Steve Larman. “It was fraud, they believe through telemarketing but they were going to be doing some more investigations.”

This is a mystery that will never be solved if Obama is elected. Here is part of the answer. You turn off address verification to facilitate anonymous donors. You’re supposed to refund the money but I wonder if that will ever happen. Not if the Democrats run all three branches of government.

More here. When we laughed at the 200,000 Germans cheering Obama and said they could not vote, the joke was on us.

Now if it’s against the law for customers to do business with you anonymously, then facilitating anonymous transactions goes beyond just being a business decision. But if the consequences of looking the other way are no more than having to refund the money several months down the road, then maybe you’re happy to take the money as an interest free loan in the meantime.

They are donating millions to Obama by credit card and laughing at us rubes. We thought our elections were ours to decide. Obama knew better.

The essence of Palin hatred

Saturday, October 18th, 2008

This essay is marvelous in its ability to explain something that has puzzled me. Why the irrational hatred of Sarah Palin ? He has found the key.

Noam Scheiber has a particularly grave case.

Scheiber’s attempt to understand Sarah Palin, detailed in the New Republic, took him all the way to Wasilla, as strange to him as Ethiopia to Evelyn Waugh. Scheiber spoke to various people from Palin’s past, all of whom have two things in common: Every one of them is smarter than Palin and none of them has been heard of since their encounter with her. Scheiber’s pet specimen among what he calls “the more urbane members of the community” is a Dartmouth graduate who reads Civil War histories, self-published a book, and not only does but “savors” the New York Times crossword puzzle. This sort of résumé wouldn’t get your niece an unpaid internship on L Street–but for a Rhodes Scholar lost in Alaska, the Dartmouth degree, the Civil War buffery, the Times crossword puzzle all take on huge significance. Unable to comprehend how Palin could have outpaced the Wasilla gentry, poor Scheiber clings for dear life to these sad fragments of class dignity.

While Palin threatens class solidarity, Obama is emollient. The more urbane members of the Hyde Park community are cleverer than their Wasilla counterparts and believe that they have captured Obama for their class–just as Richard Stern persuades himself that the still-radical couple he dines with are merely Unitarians in a hurry. But the man who may be president is cleverer still.

Obama and his surprising choice for vice president have spent most of their career working on their own images, smoothing out the rough edges, trying out devices, rhetorical and cosmetic, to make the nicer sort of people feel comfortable with them. Obama wrote his own life, and then wrote it again; Biden practiced for years in front of a mirror to overcome his childhood stutter. Carefully composed, Obama holds the upper-middle class in his steady hands, and has no need of Stern’s help to assure our anxious electorate that he will not shock their class sensibilities.

Sarah Palin and even John McCain refuse to pay tribute to this would-be aristocracy. Uniforms, to the New York gentry, signify doormen who are servants. No one would consider a military officer as a member of their class.

The Republicans, alas, are stuck with this election’s true and unrepentant revolutionaries. McCain and Palin have each refused, by sheer cussedness, to fulfill the social expectations of others. This may make them poison to undecideds who suffer, more than most, from class anxiety. But do not despise the undecideds. Even conservatives can contract Scheiber Syndrome. Think of David Brooks, Christopher Buckley, David Frum, Peggy Noonan, and George Will. The symptoms? Curiously amplified, obsessively repeated, sometimes elaborately stage-whispered doubts about the Republican ticket.

There is no cure, but there is an etiology. All share a dreadful secret–their writing is driven by an anxiety to be tastemakers to the gentry, not merely thinkers and entertainers. There is nothing more anxious-making than striving to create taste for the classes, not masses, or even to keep up with it.

At last an explanation that makes sense to me.

Tags:Alaska, Obama, Palin, Wasilla
Posted in politics | 13 Comments »

Joe the Plumber

Friday, October 17th, 2008

I’m getting tired of posts about Obama but here’s one more. Maybe the last. There is an absolute frenzy going on about a guy who was playing with his kid in his front yard when Obama, trailed by TV cameras, walked up to him and started a conversation. There was no Rove plot to station Joe on a “rope line” because there was no rope line. Obama walked up to him. Joe made a comment about taxes and Obama’s answer has caused an earthquake. It wasn’t the question that caused the problem, it was the answer.

Feel free to ignore the rest of the ad but note the question and the answer. I’m sure Obama wishes he had said, “No, I won’t,” and walked away. Instead, he made a revealing statement that got him into a lot of trouble with middle class voters.

“Spread the wealth around.”

Joe wishes Obama had just walked by now, as well, because the enraged Obama supporters are doing everything they can to punish this “disrespectful insect” who would dare to question The One.

The LA Times is on the case. That post refers to an LA Times story denigrating the plumber and informing the readers that he even had a small tax lien. Mysteriously during the night, that story disappeared and was replaced with another story about the Al Smith dinner.

Anyway, I would advise any ordinary people, who might be approached by Obama on the campaign, to run as fast as you can away from the candidate. I can’t give Obama advice but this sounds a little late.

Obama has an interesting take on the matter.

Tags:Obama, plumber
Posted in politics | 5 Comments »

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