“Obama Pay Czar Driving Execs to Go Galt?”

From The Foundry blog at the Heritage Foundation,

At Marginal Revolution George Mason University economics professor Alex Tabarrok comments on Obama administration’s pay czar Kenneth Feinberg’s decision to cut bailed out firm executive pay by an average of about 90 percent from last year:

There is no way this will work as advertised. If the administration actually follows through, most of these executives will quit and get higher paying jobs elsewhere. Executives not directly affected by the pay cuts will also quit when they see their prospects for future salary gains have been cut. Chaos will be created at these firms as top people leave in droves. Will the administration then order people back to work?

End TARP. End the Obama Czar State.

Published in: on October 23, 2009 at 2:14 am  Leave a Comment  

“3.6 Million Jobs Lost is ‘Quite Positive'”

From the Foundry blog at the Heritage Foundation,

The Obama administration released the first hard numbers on how many jobs their $787 billion stimulus package has created or saved on Recovery.gov today. The number: 30,383 jobs from roughly $16 billion worth of stimulus contracts awarded directly by federal agencies.

Crunching the numbers, that comes to $533,000 per job “saved or created.” To put those 30,383 jobs in perspecitve, consider that the U.S. economy lost 263,000 net jobs just last month and has lost 3.6 million net jobs since President Barack Obama was sworn into office.

But the administration also claims that federal contractor spending is just one portion of the overall stimulus “buckshot.” Last month at the Brookings Institute, Vice President Joe Biden claimed that White House computer models showed their stimulus plan had already saved between 500,000 and 750,000. And just how accurate are these White House economic  models? Well, when the White House was pitching its plan to the American people, White House economic adviser Jared Bernstein wrote a reportA a 26-year record high of 9.8% unemployment rate. claiming the stimulus would keep unemployment under a peak of 8%. And what have actual Bureau of Labor and Statistics shown?

So what does Bernstein have to say about the stimulus now? Associated Press reports:

Jared Bernstein, the chief economic adviser to Vice President Joe Biden, said it was too early to draw conclusions from the data “but the early indications are quite positive.”

Heritage fellow J.D. Foster explains where Bernstein’s fancy model went wrong:

The Keynesian stimulus theory fails for the simple reason that it is only half a theory. It correctly describes how deficit spending can raise the level of demand in part of the economy, and ignores how government borrowing to finance deficit spending automatically reduces demand elsewhere. Exculpatory allusions to idle saving simply do not wash in a modern economy supported by a modern financial system. Deficit spending does not create real purchasing power and so it cannot increase total demand in the economy. Deficit spending can only shift the pattern of demand toward government-centric preferences.

Exactly what the Obama administration is after.

Published in: on October 16, 2009 at 2:19 am  Leave a Comment  

“Mad High Tax Rates”

From The Foundry blog at Heritage.org,

“On this week’s season premiere of the popular AMC show “Mad Men” viewers were reminded about the punitive high tax rates in the 1960s:

This episode of Mad Men takes place in 1963, when the top income tax rate was 91 percent on incomes over $200,000 ($400,000 for married couples). That translates to about $1.4 million in 2009 dollars. The top rate today is 35 percent on incomes over $372,950. In 1963, by comparison, incomes over $10,000 (about $70,000 in 2009 dollars) paid 38 percent. As the scene from Mad Men makes clear, high tax rates in the 1960s discouraged working harder to get ahead because a large portion of the worker’s additional income went to paying taxes.

Discouraging work lowers economic growth. When this happens we all suffer because lower economic growth means fewer jobs and lower wages across the economy.

Tax rates have fallen significantly from the 1960s. The top rate today is 56 percentage points lower than it was in 1963, so the incentive to work hard and get ahead is a lot bigger now.

But if President Obama’s plan to raise the top two marginal income tax rates to Clinton-era levels and the House’s plan to slap a 5.6 percent surtax on top of that to partially fund a nationalization of the health care system become law, the top average tax rate in the U.S. will climb to 52 percent- higher than in France, Italy, Germany and Spain.

Many workers faced with a marginal tax rate that takes over half of their additional income will decide the extra effort just is not worth it- just like workers in the 1960s did. This will impede economic growth at the worst possible time as the economy suffers through its most severe contraction since World War II.

Mad Men has brought retro-1960s clothing and decor back into style. Let’s not bring back the economically stifling tax policy with it.”

Published in: on August 20, 2009 at 9:25 pm  Leave a Comment  

“Just a Reminder: Cash for Clunkers Requires Destroying Perfectly Usable Cars”

Destroying working cars and common sense in the process.

Just how environmentally friendly is that?

Financial guru and Fox Business host Dave Ramsey rips “Cash for Clunkers” as an incentive for irresponsible spending.

Hot Air’s ALLAHPUNDIT points out some of the ironies that aren’t being reported about the program.

Rarely do you encounter a wealth-destroying green measure that literally destroys wealth but this is an exception and therefore a sweet, sweet metaphor for Obamanomics. I think some people are under the impression that C4C is just a trade-in program, where the dealer gets to keep the buyer’s old ride and sell it for parts or to a used-car dealer, etc. Not so. The whole point is to get fuel-inefficient vehicles off the road, which means the engines — the most valuable part — have to be destroyed. The Examiner’s Bill Dupray is horrified at the sheer inefficiency of it all:

“The Cash for Clunkers program is stupid for a lot of reasons. Not only is it just another tax-payer bailout of the unions automakers, who can sell more cars at artificially depressed prices so they can keep the doors open. It also screws with the free-market (big surprise there) by pulling forward demand that isn’t there now, only to kill demand over the next 1-2 years. Killing off the clunkers also hurts the used car market, the spare parts market, and the auto repair business. If there aren’t any old cars to buy or fix, those guys are all out of a job.

But one of the most asinine parts of the plan is that they take old cars, many of which were being used as functional day-to-day transportation the day before, and destroy them. A perfectly good and useful machine destroyed for political reasons…

I know people will say that some of these cars were maintenance disasters to own and if the blue book is less that what someone will pay you for it, then there is no point in keeping it. But the Cash for Clunkers program requires that a working vehicle be destroyed. What about giving it to charity, or to your teenager, or to whomever deems the thing more useful than a $4,500 credit on a new car.”

Via Dupray, here’s video of a Volvo in its death throes for the sake of Mother Gaia, but if you only have a few minutes to spare, skip it. Spend it instead on the Times’s must-read about the last hours of a clunker and watch the (sadly non-embeddable) video at the link. Not only is the program inefficient in the macro sense, but the feds’ underbudgeting and rickety Internet interface have made it inefficient at the micro level too by leaving dealers uncertain about whether they’ll ever be reimbursed for the rebates they’re paying out. Sample quote: “There is absolute frustration across the board.” No wonder a majority of the public is against the program.


“Obama Hiding Budget Numbers”

Sure to torpedo his cap-and-tax and health care legislation, Obama has delayed the release of a presumably bad report until after Congress leave for summer break.  How convenient…

Here’s more from Hot Air.com,

Barack Obama has insisted on getting a health-care bill passed before the August recess, despite the complex issues involved and the massive amounts of spending it will require.  Why the rush?  Polling numbers explain part of it, of course, but the AP’s report on a delay in announcing budget numbers may hold the key:

The White House is being forced to acknowledge the wide gap between its once-upbeat predictions about the economy and today’s bleak landscape.

The administration’s annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama’s budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.

The release of the update — usually scheduled for mid-July — has been put off until the middle of next month, giving rise to speculation the White House is delaying the bad news at least until Congress leaves town on its August 7 summer recess.

The administration is pressing for votes before then on its $1 trillion health care initiative, which lawmakers are arguing over how to finance.

Obama cannot afford to have another report hit the street showing that he has miscalculated — again — the extent of the deficit, just as he proposes a deficit-busting program.  The White House has instead iced the report to keep people from seeing just how badly Democratic spending has dented the budget, and how revenues have not recovered despite their predictions of growth by Q2.  They want to hold off those numbers until Obama has a bill he can sign on his desk, by which time it will be too late.

Consider this: if those budget numbers looked good, would the White House postpone revealing them?  Obama could use all the good news he can get at the moment, especially with two big-spending bills stalling in Congress.  If the deficit looked better than their May predictions, or even if it looked the same, those numbers would have already hit the front pages of newspapers across America and every network news broadcast, with the message that the worst has passed.

This is a shell game, a 3-card Monty being played by the Obama administration.  They are withholding data that rightfully belongs in the public square, so that the electorate can inform themselves of the nation’s fiscal standing before Congress votes to spend more of our grandchildren’s money.  Perhaps the news media might remind Obama of this during his prime-time presser on Wednesday.

Published in: on July 20, 2009 at 2:45 pm  Leave a Comment  

“Eat the Rich”

I enjoy checking in with the Las Vegas Review-Journal, my old hometown newspaper.  It’s usually awash in juicy libertartianism and is the only paper I ever really looked forward to seeing on my doorstep.

This editorial is no exeption.  Enjoy.

“In a message accompanying his fiscal year 2010 budget, Barack Obama said: “For the better part of three decades, a disproportionate share of the nation’s wealth has been accumulated by the very wealthy. Yet, instead of using the tax code to lessen these increasing wage disparities, changes in the tax code over the past eight years exacerbated them.”

In fact, IRS figures show that the top 5 percent of wage earners pay 60 percent of total income taxes, while the bottom 50 percent of income earners pay virtually zero.

Never mind. Mr. Obama and his congressional Democrats still believe the pie should be cut in equal pieces. So whether or not their proposals will really generate enough to “pay for” their ambitious plans to socialize medicine and ban fossil fuels, “equalization” takes on a life of its own.

According to figures compiled by the U.S. Office of Management and Budget on May 8, Mr. Obama proposes to:

1) Reinstate the 36 percent and 39.6 percent personal income tax rates for taxpayers earning more than $250,000 (married) and $200,000 (single).

2) Reinstate the personal exemption phase-out and limitation on itemized deductions for those taxpayers earning more than $250,000 or $200,000, respectively.

3) Increase the top rate on capital gains and dividends from 15 percent to 20 percent for those taxpayers earning more than $250,000 or $200,000, respectively.

Also being bandied about is the elimination of the Social Security “cap” — the level beyond which additional wages are no longer subject to Social Security taxes, under the sensible rationale that there’s also a cap on how high benefits can rise under the program. Eliminating the cap will complete the process of turning the program into an outright wealth transfer scheme, since wealthy conscripts will never be able to get all their “contributions” back.

Democrats including Mr. Obama also seek a jacked-up death tax. And — if you haven’t heard enough — “House Democrats at work on health legislation are narrowing in on an income tax surcharge on the highest-paid wage earners to help pay the cost of subsidizing insurance for the 50 million who lack it,” The Associated Press reported last week.

Rep. Shelley Berkley, a Democrat from Nevada and a member of the House Ways and Means Committee, said the proposed surtax on high-income taxpayers appealed to her and others as a way to avoid a “nickel-and-dime” approach involving numerous smaller tax increases.

Yes, holding off the crying brats while breaking into the individual little piggy banks can become tedious, can’t it?

It seems frighteningly clear where this administration stands on the moral question of whether all of a “wealthy” person’s earnings really belong to folks such as Barack Obama and Shelley Berkley, who hold power so they may arbitrarily decide how much we deserve to retain and how much shall be seized and “spread around.”

Published in: on July 13, 2009 at 6:35 pm  Leave a Comment  

“White House Pushing to Gag Stimulus Critics”

From Michelle Malkin,

Caution: Obama gangland tactics at work.

In keeping with his past campaign tactics to shut critics up through brute force, the White House appears to be taking steps to crack down on critics of the trillion-dollar porkulus law.

Is anyone surprised? Mark Tapscott at the Examiner reports:

A new White House policy on permissible lobbying on economic recovery and stimulus project has taken a decidedly anti-First Amendment turn. It’s a classic illustration of Big Government trying to control every aspect of a particular activity and in the process running up against civil liberty.

Check out this passage from a post on the White House blog by Norm Eisen, Special Counsel to the President on Ethics and Government Reform (emphasis added):

“First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program.

Writes Tapscott:

The key passage is the reference to expanding regulation from registered lobbyists to “anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program.”

This is the Camel’s nose under the tent…

More from Ed Morrissey at Hot Air,

Silencing dissent and criticism is “necessary under the unique circumstances of the stimulus program”?  Gee, what “unique circumstances” might those be?  Perhaps the fact that it costs more than the Moon shot, and has yet to halt the economic skid.  Maybe it’s the fact that most of the stimulus package doesn’t actually stimulate anything except doctrinaire liberal dreams and the pens that check off the items from the Democratic wish list.

Remember when the Left took to the streets to declare dissent “patriotic” during wartime?  I didn’t have a problem with dissent then, but apparently the Left has a curious definition of “patriotism”.  Now, suddenly, the federal government can silence their critics at will, not to protect critical national-security programs or keep from undermining a war effort, but to protect a Democratic president intent on seizing control of private industry across a wide swath of the nation.  Suddenly, that kind of dissent threatens America.


Published in: on May 30, 2009 at 4:33 pm  Comments (1)  

“Federal Employees Never Get Voted Off the Island”

You might want to put one hand on your chin, so you can be ready when your jaw drops over this.

The pampered life of a federal employee…

Via The- invaluable- Heritage Foundation,

If you need another reason to not let bloated government run wild, watch this video and read this paper:

…the federal civilian workforce has become an elite island of secure and highly paid workers, separated from the ocean of private-sector American workers who must compete in today’s dynamic economy.


Published in: on May 23, 2009 at 10:54 pm  Leave a Comment  

“Democrat Visits Disney World, Suddenly Decides Everyone Should Have Paid Vacations”

Walt Disney Co. TM

Walt Disney Co. TM

You want to get paid to sit around?

Then MOVE TO FRANCE!!

Via Hot Air‘s ALLAHPUNDIT,

I always suspected this was how they came up with policy. One fun ride on the teacups and they’re ready to lay down a mandate for 300 million people. At least it was somewhere wholesome, though; imagine where Ted Kennedy must have been when he came up with all of his “good ideas.”

Millions of paid employee absences imposed in one fell swoop on business already struggling with the worst economy since the Depression. What could go wrong?

“There’s a reason why Disney World is the happiest place on Earth: The people who go there are on vacation,” said Grayson, a freshman who counts Orlando as part of his home district. “Honestly, as much as I appreciate this job and as much as I enjoy it, the best days of my life are and always have been the days I’m on vacation.”

According to the Center for Economic and Policy Research, 28 million Americans — or about a quarter of the work force — don’t get any paid vacation. The center says that a lack of vacation causes stress and workplace burnout and that those evil twins cost the economy more than $300 billion each year.

One more if-you’re-reading-this-then-you’re-probably-not-on-vacation fact: The United States is dead last among 21 industrial countries when it comes to mandatory R&R.

France currently requires employers to provide 30 days of paid leave…

The Society for Human Resource Management issued a statement Wednesday warning that “a one-size-fits-all, government-imposed mandate is not the answer.”

Because of the 50- and 100-employee thresholds, most small businesses wouldn’t be directly affected by the bill immediately. But the National Small Business Association warned of indirect consequences; companies might artificially hold their hiring at the 50-to-100-employee level to avoid the costs of paid vacation time.

We’re dead last in vacation time yet have the world’s largest GDP by far, and naturally Grayson wants to tinker with that by meddling with the market. I’ll give him this: He’s certainly grasped the basics of Obamanomics.

Update: Ah, now it all makes sense. No wonder Grayson was inspired. Meet “Robobama.”

The nation’s 44th president was in obvious distress. At least it looked like him. But with silicone skin and a tangled nest of wires for veins, this Obama was a 21st-century reproduction.

More specifically, it was an audio-animatronic representation of the president, as imagined by the Walt Disney Company, and assembled with the direct involvement of the White House staff — and of Mr. Obama himself. The president supplied not just his measurements, but he also recorded that speech (which was initially drafted by a Disney writer) — and yet another recitation of the oath of office, this one in Disney high-definition sound.

In that Hollywood building here, the life-size, three-dimensional figure was being put through its final tune-up, its chin rising and hands gesturing in response to technicians, in preparation for shipment to the Hall of Presidents exhibit at Disney World in Orlando, Fla.

Published in: on May 22, 2009 at 2:10 am  Leave a Comment  

“Responsible credit-card users to ‘subsidize’ deadbeats now”

Via Hot Air’s ALLAHPUNDIT,

Just a little friendly congressional intervention in the marketplace to shift risk from people who can’t afford the product to people who can. Hey — it worked out with mortgages, didn’t it?

“Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”…

The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.”

You’re already helping to pay off deadbeats’ homes. Why not help free them up to rack up some more credit-card debt too?

Exit question: Er, isn’t this an exceedingly bad idea during a recession? People with good credit will be less likely to make major purchases for fear of the monthly interest and people with bad credit will be more likely to start charging, and then inevitably defaulting. Good work, Congress.

Published in: on May 19, 2009 at 8:17 pm  Comments (1)