No One’s Capital Is Safe in Obama’s America

No One’s Capital Is Safe in Obama’s America

By Claude Sandroff

Obama’s poorly coded message to investors is to take your money out of America and keep it out. Whether through excessive taxation, suffocating over-regulation, or thuggish confiscation, the lesson to be drawn by anyone with excess capital is to look for friendlier places to put it to work.
The list of friendlier places excludes North Korea, Venezuela, and Iran for the time being, but almost everywhere else qualifies. Russia’s president spent several days in Silicon Valley recently looking for adventurous investors and came away with a $1B commitment from Cisco Systems. For Cisco, sitting on a cash hoard of $30B, with years of experience partnering with the burgeoning Russian venture capital industry, the decision was probably not a very tortured one. And what a perfect opportunity for Cisco’s CEO John Chambers to keep his cash as far from Obama’s collection agencies as possible. 
President Medvedev promises Cisco a capital gains tax rate of zero; President Obama promises to retire the evil George Bush capital gains rate of 15% and increase it to 20% in 2011. Cisco is merely telecasting to anyone who wants to tune in that Russia is taking advantage of Obama’s lurch towards socialism (or worse). While Russia is portraying itself as a stable bastion for capitalists, America is increasingly seen as the land that mauled Chrysler and GM bondholders. While erstwhile command economies are liberalizing, America under Obama is nationalizing. The lesson is clear: Don’t leave cash within the American financial system, earning minimal returns, with the fear that at any moment your assets can be confiscated or redistributed by a lawless and capricious federal government.
When will Obama decide that Cisco (or Wal-Mart, or Apple, or Google, or any other successful enterprise) is not paying its “fair share”? Aren’t the profit margins earned by Cisco on its routers — sometimes approaching 70% — too rich, or even obscene? Aren’t these gains, in essence, nothing but windfall profits resulting in the eventual gouging of the average American internet subscriber? Cisco might not drill in the Gulf of Mexico for its profits, but man-made disasters could await it too, in the form of arbitrary, BP-like shakedowns of its hard-earned wealth. Why risk shakedowns in gangland Obama when a much more competent criminal like Putin will guarantee your investments?
Cisco is not the only company sitting on a gigantic cash cushion. All told, the balance sheet cash for the non-financial segment of the S&P 500 totals around $1 trillion. Businesses sit on these huge asset cushions and accept earning virtually nothing in real terms because risks are too high to consider anything else. 
In 2011, one of the largest tax increases in American history goes into effect. Not only do capital gains rise, but so too does the payroll tax, the income tax, and the estate tax. And even then, businesses large and small, while in their final financial death throes, will have nothing to look forward to other than the doom of ObamaCare and the unknown costs that Obama will attempt to afflict via cap-and-trade and a European-style value-added tax.
Fears are also emerging about the eventual burden imposed on all of us by dozens of states virtually bankrupt, especially if the federal government structures bailouts for those states deemed too big to fail. Unfortunately, the biggest and most likely to fail — California, New York, and Illinois — are Democrat and union fortresses that Obama will not let topple.
These and many other states have already been thrown a life jacket during the last near-trillion dollar stimulus in the form of unemployment insurance and other transfer payments. But the effects of those financial stimulants are beginning to wear off, and the federal drug dealer has little inventory left — except for massive money-printing.
Inflation is almost the last strategy left for the Federal Reserve, having driven short-term interest to zero and purchased all the treasuries, agency, and mortgage debt thrown its way.
Fears of excessive taxation and unpredictable costs are muting American entrepreneurial animal spirits. These fears are likely at the root of our persistently high unemployment. The issue too often is not lack of loan supply to launch a new enterprise, but a lack of demand for the loans to get started. Strangling business creation translates into no new job creation. If you launch a business today and organize as an S-Corporation, how can you be even reasonably sure will you take home enough in profits to justify the initial risk of the undertaking? And if you were successful enough to reach the revenue heights of $250K, Obama would target you as a capitalist predator and promote you to the highest tax bracket.
In contrast to Jefferson’s goal of preserving “a model of government, securing to man his rights and the fruits of his labor, by an organization constantly subject to his own will,” our current administration is brutally determined to transform government into an organ that redistributes those fruits to its cronies. The reaction of sane, rational Americans to these perverse incentives is not to create or hire or produce. Instead, existing businesses and potential founders of new ones are hunkering down, hoping to wake up from this national nightmare in 2010 and 2012 with some of their wealth still intact.
Claude can be reached at csandroff@gmail.com.

The Fall of the Incumbents

The Fall of the Incumbents

Posted By Frontpagemag.com On May 19, 2010 @ 1:03 am In FrontPage | 5 Comments

For months now, speculation has been rife that the Tea Party movement and the grassroots revolt against big-government that it represents poses a real threat to political incumbents of both parties. Yesterday’s primary election results have transformed such speculation into political reality.

In Kentucky, the Tea-Party backed candidate, Rand Paul, the son of libertarian Texas Congressman Ron Paul, won a convincing victory over Kentucky Secretary of State Trey Greyson. Greyson enjoyed the support of the GOP establishment, including Senate Minority Leader Mitch McConell, but Paul had the Tea Party insurgents on his side. Unapologetically embracing the Tea Partiers, Paul ran on a straightforward small-government platform, calling for a balanced federal budget, a reduced national debt, and an end to government bailouts and subsidies for private industries and interests. In the end, he won by a comfortable margin.

Rand Paul’s victory is only the latest example of the Tea Partiers successfully gate-crashing the official Republican camp. In Utah earlier this month, voters in the Republican nomination convention heeded the Tea Party movement’s urging to dump Sen. Bob Bennett. Dooming Bennett was his support for several big-government initiatives, most prominently the Troubled Asset Relief Program bank bailout. Florida Gov. Charlie Crist has also met with the wrath of the Tea Partiers, whose opposition forced him surrender the Republican mantle to Tea Party favorite Marco Rubio in favor of an independent run. Polls suggest he faces an uphill struggle.

While the Tea Parties have had their greatest impact on Republican primary races, Democrats have also born the brunt of the anti-incumbent backlash. In Pennsylvania last night, Republican defector Sen. Arlen Specter lost the state’s Democratic primary to two-term Rep. Joe Sestak, effectively ending his political career. Even in the absence of anti-incumbent sentiment, Specter’s was a tall order: He had to convince voters that his political conversion was a matter of principle rather than, as was apparent to all, pure political expedience. It was an obvious fiction that not even President Obama, who campaigned for Specter and even cut radio and television ads on his behalf, could make credible.

Even here, though, the Tea Party, or at least its brand of anti-Washington angst, made its presence felt. In his victory speech, Sestak sounded like nothing so much as a Tea Party candidate, as he hailed his win as a triumph “over the establishment, over the status quo, even over Washington, D.C.” Of course, it’s a bit rich for a Democrat to style himself as an opponent of Washington, where after all Democrats control both houses of Congress. But such is the national mood that even the party in charge must distance itself from any association with leadership.

Arlen Specter meanwhile is not the only political veteran on the Democratic side, however recent his affiliation, to find himself out of a job for too-close a connection with Washington’s failures. In West Virginia last week, 14-term Democratic Rep. Alan Mollohan became the first House member in 2010 to lose a reelection bid. Although he lost to a fellow Democrat, key in Mollohan’s defeat was his support for the Obama administration’s health care overhaul. It is a sign of perilous times ahead for the party that, even in a Democratic primary, support for the Democratic administration’s signature legislative initiative has become a political death warrant.

Still, that does not yet make the Tea Party and its small-government vision kingmaker in political races. While the influence of the Tea Partiers has obviously been important, the usual primary season caveats apply. Primary elections tend to draw a more ideologically motivated cohort of voters, and it remains to be seen whether the Tea Party will be a significant factor in the fall’s elections races. And yet it is becoming increasingly implausible to claim, as many in the prestige media have, that the Tea Party and the backlash against big government are fringe phenomena. As Rand Paul declared in his victory speech last night: “I have a message from the Tea Party. We’ve come to take our government back.” They will soon have their chance.

Obama’s Big Government Problem

Obama’s Big Government Problem

Posted By Rich Trzupek On May 7, 2010 @ 12:10 am In FrontPage | 1 Comment

Listening to an Obama speech is like chowing down on a box of assorted chocolates – you never know what you’re going to get. The president’s commencement speech at the University of Michigan [1] last Saturday was a classic case in point. To paraphrase an orator whose reputation for greatness did not involve the use of either speechwriters or teleprompters: never in the course of American politics has a president used so many words to say so little. For example, on the one hand, Obama deplores the nature of debate in the nation today:

“You can disagree with a certain policy without demonizing the person who espouses it. You can question someone’s views and their judgment without questioning their motives or their patriotism. Throwing around phrases like “socialist” and “Soviet-style takeover;” “fascist” and “right-wing nut” may grab headlines, but it also has the effect of comparing our government, or our political opponents, to authoritarian, and even murderous regimes.”

On the other hand, there’s really nothing to worry about, for that’s the way it’s always been:

“In fact, this isn’t a new phenomenon. Since the days of our founding, American politics has never been a particularly nice business – and it’s always been a little less gentle during times of great change. A newspaper of the opposing party once editorialized that if Thomas Jefferson were elected, “Murder, robbery, rape, adultery, and incest will be openly taught and practiced.” Not subtle.”

The president is also happy to acknowledge that too much government is obviously a bad thing:

“The democracy designed by Jefferson and the other founders was never intended to solve every problem with a new law or a new program. Having thrown off the tyranny of the British Empire, the first Americans were understandably skeptical of government. Ever since, we have held fast to the belief that government doesn’t have all the answers, and we have cherished and fiercely defended our individual freedom. That is a strand of our nation’s DNA.”

Which, of course, is why we need more government:

“But what troubles me is when I hear people say that all of government is inherently bad. One of my favorite signs from the health care debate was one that read “Keep Government Out Of My Medicare,” which is essentially like saying “Keep Government Out Of My Government-Run Health Care.” For when our government is spoken of as some menacing, threatening foreign entity, it conveniently ignores the fact in our democracy, government is us. We, the people, hold in our hands the power to choose our leaders, change our laws, and shape our own destiny.”

It’s pretty much all like that. It always is when Barack Obama hits the teleprompter. If you only listened to his words, you’d have a hard time figuring out what exactly this president stands for. Fortunately, we have the benefit of observing his actions, so America has a pretty good idea where his real sympathies lie. The mainstream media touted the Michigan commencement speech as a blast back at the “anti-government” crowd [2] and, with a small correction, that’s what it was. Despite the bromides, the president was clearly firing back at what should correctly be called the “small government” sentiment in America that is embodied by the tea-party movement. (“Anti-government” is a phrase that properly describes anarchists, not patriotic Americans protesting more bureaucracy, more spending, more debt and less self-determination).

Nobody outside of crazed militia types says, or thinks, that “government is bad.” Rather, millions of Americans believe that government is inefficient, expensive and stifling and should therefore be used as a means toward accomplishing an end only when absolutely necessary. “Absolutely necessary” can be defined as some of the examples that Obama cited: police officers, highway safety and the laws and regulations designed to prevent workplace injuries and promote environmental responsibility. There’s a role for government in all of these cases that no private entity could fulfill, but it should be self-apparent that we all pay a price when we employ government to do so.

Having police protect us requires a justice system and, the government being what it is, that justice system is necessarily bloated, inefficient and burdened by mountains of contradictory rules. We deal with OSHA and the EPA, because most of us realize that somebody has to do what some private companies won’t: ensure that both employees and the environment are protected. But again, we pay a price. OSHA may help prevent injuries, but it’s also enormously powerful and too often petty. The EPA has done a stellar job of cleaning up America, but the massive bureaucratic structure it created while doing so now intrudes in the operation of private enterprise in stifling ways that have little or nothing to do with environmental protection. It’s always that way. Once the nose of the bureaucratic camel pushes through the tent, you’ve got yet another dromedary for a roommate, and the basic problem is that there’s not much room left in the tent that used to be our private lives for more camels.

The crux of Obama’s defense of big government is that, in a democracy, the “government is us.” No doubt the president really believes that, because his entire working life [3] has been spent working for the government, in academia or as an advocate for people trying to get more out of government. His “real world” experience, as those of us who work in the private sector understand it, is zero. Accordingly it’s no surprise when Obama doesn’t understand that for the majority of us in the private sector – who pay for the ever-expanding public sector, by the by – the government isn’t “us” at all. The government isn’t the people we actually elected, as the president styled it, the government is rather the army of nameless bureaucrats to whom the people we elected have bequeathed, and continue to bequeath, enormous power over our lives.

The liberal myth says that conservatives and libertarians trust the private sector and don’t trust the public sector. That’s not the case. The truth of the matter is that we don’t trust anybody. But, when it comes to excess in the private sector, at least we have a chance of winning. If some company rips off a consumer, the consumer can go to the Better Business Bureau, complain to the Attorney General, call the local media watchdog, or employ a vast number of other means to settle the score. If a consumer thinks that a particular corporation’s product is inferior, there’s a host of other companies willing to fill the need. But, when it comes to government excess, people don’t have any hope of leveling the playing field unless they’re very rich or very lucky. There is no protection from our protectors. Anyone who has been victimized by an over-zealous IRS agent, EPA official, OSHA inspector or any other member of the bloated, blustering bureaucracy that runs more and more of our lives knows exactly how stifling big government is.

So yes Mr. President, we understand that we need some government in our lives. The problem, as we see it, is that we have so much damned government that it’s getting harder and harder to breathe.

Obama’s Burden of “Brightness” touted by Left wing media

Obama’s Burden of Brightness

By John Dietrich

President Obama is frequently described as highly intelligent. His advisor Valerie Jarrett has described this as a “burden.” She announced at the John F. Kennedy School of Government that “[p]art of the burden of being so bright is that he sees his error immediately.” Advisor David Axelrod claimed, “He does have an incisive mind. This is someone who in law school worked with [Harvard professor] Larry Tribe on a paper on the legal implications of Einstein’s theory of relativity.” The president obviously shares this opinion, having told Senate Majority Leader Harry Reid early in his Senate career, “Harry, I have a gift.”
The “progressive” media can be counted on to regurgitate this mantra. They have, in fact, surpassed it, and they have often entered the realm of idolatry or even adolescent infatuation. Chris Matthews is perhaps the leading example of this. Following one the president’s press conferences, Matthews claimed that “[t]he president showed his analytical mind. He was at his best intellectually. I thought it was a great example of how his mind works. What a mind he has, and I love his ability to do it on television. I love to think with him.” Matthews is famous for the frequent “thrill” that goes up his leg. He apparently also suffers from gender confusion. Watching Obama board a helicopter, Matthews gushed, “We agree, we girls agree. I don’t mind saying that. I’m excited. I’m thrilled.” Following Obama’s speech at the Democratic National Convention, reports on the president became so fawning that even Bill Maher, no right-winger, commented that “the coverage … that I was watching from MSNBC, I mean these guys were ready to have sex with him.” 
The commentators at MSNBC were not alone. Judith Warner, who writes for the New York Times, claimed that many women are dreaming of having sex with the new president. How did she know? Well, from personal experience. She shared her fantasy of finding President Obama in her shower. Was this news “fit to print”?
Another New York Times columnist, David Brooks, shared the experience of his first encounter with the President: “I remember distinctly an image of — we were sitting on his couches, and I was looking at his pant leg and his perfectly creased pant,” Brooks reported, “and I’m thinking, a) he’s going to be president and b) he’ll be a very good president.” Evan Thomas, Newsweek editor, provided this analysis: “I mean, in a way Obama’s standing above the country, above — above the world…he’s sort of God.” Historian Michael Beschloss, who might be considered an expert on American presidents, claimed that the current president’s IQ is “off the charts.” When pressed to reveal what he thought the President’s IQ was, Beschloss could only say, “he’s probably the smartest guy ever to become president.” Even many of Obama’s critics have bought into the intelligence hype. FOX news contributor Fred Barnes of the Weekly Standard claimed that “for all his brainpower,” he is a “slow learner.”
This adulation may cause a serious problem for supporters of the president. Joe Scarborough pointed this out on his MSNBC program: “I tell you my biggest fear for Barack Obama, he has been sainted. He is Saint Barack. The same mainstream media that tried so desperately to get him elected has engaged in hyperbole, engaged in exaggeration. They have deified this man. … They have set up such unrealistic expectations that no politician could meet those expectations.” Scarborough might blame the media for this hyperbole, but they are only willing accomplices. The president himself has set the bar rather high. On June 3, 2008, he announced that future generations would look back on his primary victory as “the moment when the rise of the oceans began to slow and our planet began to heal.”
It would be unfair to elaborate on all of the president’s gaffes in order to bolster the argument that he is not as intelligent as his supporters claim. It was unfair of the progressive media to pillory Vice President Dan Quayle for misspelling “potatoe.” It was unfair to highlight every instance of Ronald Reagan and George Bush misspeaking. But is it professional for the media to edit a president’s remarks in order to correct them? President Obama, speaking of the Somali pirates, stated, “And I want to be very clear that we are resolved to halt the rise of privacy in that region.” This was obviously a mistake. However, the major media reported that he vowed to “halt the rise of piracy” off the coast of Africa.
Can an individual who is obviously infatuated with a public figure provide an objective analysis of that figure’s policies? It seems unlikely.
John Dietrich is a freelance writer and the author of The Morgenthau Plan: Soviet Influence on American Postwar Policy (Algora Publishing).

Obama overstretch

Obama overstretch

Thomas Lifson

Will President Obama’s attempt to bring “fundamental change” to America backfire and ultimately push America to the right? Although far from certain,  the possibility grows, as the tea parties symbolize a growing public awareness that government is expanding rapidly, at the expense of individual liberty, the private sector, and our standard of living.

Richard Viguerie helped invent the modern conservative political movement with his pioneering use of targeted direct mail lists, and has watched political dynamics in this country as closely as anyone. In today’s Washington Post, he writes:
…with the emergence of the “tea party” movement, for the first time in my life I sense that it may be possible for conservatives to actually shrink the federal government.
He sees, as do I, that the essence of the tea party movement is the return to constitutional limited governance, restoring the legacy that our wise and divinely-inspired founders bequeathed us. But how to translate this vision into reality, given a movement that is largely leaderless?
Viguerie offers five excellent suggestions for tea partiers.
Be independent.
Most important, tea partiers must remain distinct from both political parties. The GOP would like nothing better than to co-opt the movement and control the independent conservatives…. [snip]
Go on a policy offensive.

We must take on policy initiatives that will fundamentally change America but that, because of crony politics, neither political party will touch.
For example, push hard on the 10th Amendment, reserving those powers not expressly delegated to the federal government to the states and the people, and auditing the Federal Reserve.
Get involved, then stay involved.
Tea partiers must make ourselves a constant presence and conscience in the lives of those we elect. Once politicians get into office, they are surrounded by lobbyists and special interests that want more, not less.
This is the hardest of his points to implement, because sustaining enthusiasm and activism is always a challenge. Regrettably, the seriousness of the economic crisis (for example, the pending massive tax increases), and the growing probability of a military/terror crisis arising out of Obama’s projection of weakness and appeasement, may be the painful “solution” to the problem of maintaining intensity among the opposition.
Pressure institutions to change.
We must expand our cause beyond anger at politicians. [snip] … we also need to train a spotlight on the failed leaders of other major American institutions from Hollywood to Wall Street, including big business, banks, mainstream media, labor unions and organized religion (notably my own Catholic Church).

Avoid the third-party trap.

Just as the tea party movement must not be co-opted by either of the major parties, nor can it yield to the temptation to start a third party. In 2008, Republicans lost three Senate races because of conservative third-party candidates.

I am greatly heartened that there is little visible enthusiasm for third parties on the right. Charlie Crist is not exactly igniting enthusiasm from the tea partiers. I am personally hopeful that the tea parties’ emphasis on limited government may end up inducing many libertarians to support tea party-endorsed candidates cartrying the GOP label who are also committed to limiting government.

Barack Obama and his allies on the left — the serious left which seeks structural transformation of the United States into a state-dominated society, and a non-superpower — thought they could bamboozle the media and the public long enough to kick out of place key foundations of American life as it has been. Because they have contempt for those foundations (capitalism, constitutionalism, our military, and Judeo Christian values), the underestimated their power, and the attachment of the people to them.
It is worthwhile reading Viguerie’s advice, as we head toward midterm elections, and contemplate 2012.

Question Authority (the Cartoon)

Want to get rich? Work for feds

Want to get rich? Work for feds

Examiner Editorial
April 29, 2010

Data shows the pay gap between state and local government and private sector workers. (Chris Edwards/Cato Institute)

For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let’s not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

Data compiled by the Commerce Department’s Bureau of Economic Analysis reveals the extent of the pay gap between federal and private workers. As of 2008, the average federal salary was $119,982, compared with $59,909 for the average private sector employee. In other words, the average federal bureaucrat makes twice as much as the average working taxpayer. Add the value of benefits like health care and pensions, and the gap grows even bigger. The average federal employee’s benefits add $40,785 to his annual total compensation, whereas the average working taxpayer’s benefits increase his total compensation by only $9,881. In other words, federal workers are paid on average salaries that are twice as generous as those in the private sector, and they receive benefits that are four times greater.

The situation is the same when state and local government compensation data is compared with that of the private sector. As the Cato Institute’s Chris Edwards notes in the current issue of the Cato Journal, “The public sector pay advantage is most pronounced in benefits. Bureau of Economic Analysis data show that average compensation in the private sector was $59,909 in 2008, including $50,028 in wages and $9,881 in benefits. Average compensation in the public sector was $67,812, including $52,051 in wages and $15,761 in benefits.” Those figures likely underestimate the true gap on the benefits side because the typical government employee gets a guaranteed defined benefit pension under very generous terms, while the private sector norm is a 401(K) defined contribution plan that is subject to the ups and downs of the economy.

With the federal deficit and national debt heading into the stratosphere, taxpayers can no longer afford to support such lucrative government compensation. Public sector pay and benefits at all levels should be reduced to make it comparable to the wages and benefits earned by the average working taxpayer. The first politician to propose a five-year plan for this purpose is likely to be cheered mightily by taxpayers.!