Wednesday, October 8, 2008
Comments on the 2008 Second Presidential Debate
Rick Warren's Saddleback debate was the most informative of all the candidate debates. If the first two presidential debates had followed the Saddleback format and / or asked similarly insightful questions on key issues like the economy, energy, the war, education, and healthcare, perhaps the American people could determine the difference between each candidate’s position. To me the choice is straightforward. We can either vote for the McCain / Palin team, which supports a Judeo Christian worldview, demonstrates high personal moral character and integrity, and has a proven track record or we can vote for Obama, who has a Marxist / humanist world view, a questionable moral character, and no proven track record. I purposely left Biden out because his views are immaterial: he has demonstrated consistently that he cannot even get his facts straight. As the mortgage guy on the radio says, "This must be the biggest no brainer in the history of the earth." Any further discussion is little more than rearranging the deck chairs on the Titanic ...
... at least they had a band.
Thursday, October 2, 2008
Obamanomics 101 – The Root Cause of Our Current Economic Crisis
Attached is an article published in the Urban Affairs Quarterly, March 1979, discussing the topic of “Financing Home Ownership, The Federal Role in Neighborhood Decline.” It traces the history of home financing from 1934 to 1979. Its conclusion, ironically, is that even at the time of its writing in 1979 that “federal policies and programs designed to expand the opportunities for home ownership have often contributed to neighborhood decline rather than curing it.” It also describes the credit market that was created for “community organizers” by federal policies. In essence, these federal policies view communities as “sophisticated conglomerates, whose major subsidiaries, the housing market, the business sector, and the social institutions, are themselves composed of smaller economic units, such as households, individual organizations, and enterprises – all of which are integrated through interdependent financial interactions, each depending upon a supply of credit to expand its own capital and make new investment in order to survive.”
In contrast to a capitalist view of the market where monetary investment is made by individuals and by corporations in ideas and capital equipment and the consumer determines winners and losers, the community organizer model relies on the federal government passing socially progressive legislation that makes monetary investment in the “conglomerates,” described above, through quasi-governmental agencies like Freddie Mac and Fannie Mae. Freddie and Fannie provide tax-payer money and access to easy credit to persons who otherwise could not afford it. Enter the “community organizer,” who trains the so-called “disenfranchised” to believe that they are victims of a corrupt capitalist society, that they are entitled to the “American Dream,” and then indoctrinates them in a liberal, socialistic ideology. For the organizer, the medium of exchange for the “American Dream” no longer becomes money, but instead a vote. The “organizer” organizes the communities to believe that they are “companies,” in which society has a moral mandate to “invest.” The “organizer” then forms organizations like the Association of Community Organizers for Reform Now (ACORN) – funded at taxpayer expense – to encourage low income, poorly educated, disenfranchised persons, whose principal asset is that they are over 18 years old but otherwise are clueless, to vote for socially progressive legislators, who will further expand these socially progressive programs. In essence, the “social progressive” seeks to replace equality of opportunity, with equality of outcome. Obama’s euphemism for this model is “being neighborly.” My definition is Marxist socialism.
So the real question is this. If we are about to elect “The Organizer in Chief” to be the next President of the United States of America, does his “trickle up” economic model work? I guess some would point to Europe as a success story; I would think most Americans would disagree. So instead of debating that issue, a better question to ask is “how has the ‘organizer’ model benefitted the community represented by Barack Obama – Chicago?” Chicago is a good example, because of Obama’s long history of service in the community, as a community organizer, state congressman, state senator, and US senator. The elected representatives from this area are all democrats – no republicans to blame! So here goes:
1. In the last six months, more people have been murdered in Chicago (292) than killed in combat in Iraq (221).
2. The state pension fund is $44B in debt – the worst in the country.
3. The Chicago school system is one of the worst in the country.
4. Cook County Illinois (Chicago) sales tax is the highest in the country – 10.25%.
I know, I know – we have not invested enough, the folks have been victimized, and they are entitled to better. I submit we have invested more than we can afford in this 30 year social engineering project. It has resulted in the need to enact a $700B bailout of the credit system that will have to be borne by all of us, our children, and their grandchildren. This “investment” in the alternative economic world of social progressive politics has bankrupted all of us. For someone whose self described strong suit is “economics,” Obama would be well advised to read the modern version of the “Goose that Laid the Golden Egg” by Richard Cummings.
Monday, September 29, 2008
An Open Letter to the Virginia Members of the United States Congress
Taking money out of the hands of “hard working” Americans and putting them in the hands of politicians has resulted in a 334% increase in Federal spending since 1965 (from $628 billion to $2.7 trillion in 2007 inflation adjusted dollars), while the median income of the average American has risen 35% ($28,346 to $38,386). Over this period, mandatory spending on entitlement programs has grown from 26.9% of the budget to 52.9% of the budget. When interest is considered (8.3%), only 38.8% of the budget is discretionary (within the control of the President). A better solution is to take the decision making out of the hands of a do-nothing, socially progressive government and let the average “hard working” American decide for himself or herself how to spend his or her income.
In my mind the decision is simple. Do we want a country in which individuals create and distribute wealth (equality of opportunity -- capitalism) or one in which the government taxes the successful and puts it in the hands of a few (the Government) who then redistributes it as it sees fit (equality of outcome – socialism)? We are rapidly moving from an economy where the medium of exchange is one of money to one of votes (47.3% of wage earners do not pay federal income tax, but receive benefits and tax credits). We would be well served to remember the advice of Thomas Jefferson: ““Every government degenerates when trusted to the rulers of the people alone. The people themselves, therefore, are its only safe depositories.” – Thomas Jefferson, Notes on the State of Virginia, Query 14, 1781.”
Saturday, September 27, 2008
What Happened to Our Economy?
Wednesday, September 10, 2008
Taking America To School … And to Other Places We No Longer Recognize
My first indication there was a real problem was on September 7, 2008, when Eric Shawn of Fox New’s Weekend Live asked Bob Beckell why Obama had not released his college transcripts and his college thesis, a requirement for graduation. Apparently, Obama’s wife had already released hers. Beckell’s response was that the average American didn’t wake up in the morning asking about Obama’s college transcripts. Alarm bells went off. So, I did some immediate investigation and learned that Obama was a Political Science major at Columbia University. The alarm bell got louder. I remembered reading in Pat Buchanan’s book Death of the West (DOW) that Columbia University was the home to the transplanted Frankfurt School, a school of German Marxist thinkers, and to Herbert Marcuse who championed this cultural revolution school of thought in America in the 1960s. With a little additional research I found that Marcuse’s son, Peter Marcuse, retired as a professor at Columbia and is the “keeper” of the official Marcuse home page (www.Marcuse.org). Disciples of this ideology include Frank Marshall Davis, Malcom X, and Saul Alinsky, all of whom were identified by Barack Obama in his books (Dreams from My Fathers and The Audacity of Hope) as either mentors or influential thinkers in the formation of his world view. In fact, Alinsky was the founder of the Industrial Areas Foundation, the school that taught Obama how to organize. Alinsky was also the subject of Hillary Clinton’s undergraduate thesis.
So what is the Frankfurt School and how has had it shaped political thought on the left in America and possibly the world view of one of our candidates for President? The Frankfurt School was originally established in 1923 as the Institute of Social Research at Frankfurt University by Gyorgy Luckacs and other German communists. According to Pat Buchanan in his book Death of the West (pg. 75), it grew out of a recognition by them that “capitalism was not impoverishing the workers. Indeed their lot was improving, and they had not risen in revolution because their souls had been saturated in two thousand years of Christianity, which blinded them to their true class interests … In biblical terms, the word of Marx, seed of revolution, had fallen on rock-hard Christian soil and died … the Marxist had bet on the wrong horse.” In his work, History of Class Consciousness, Luckacs reiterated his commitment to dialectical materialism: “It is not men’s consciousness that determines their existence, but on the contrary, their social existence that determines their consciousness ... Only when the core of existence stands revealed as a social process can existence be seen as the product, albeit the hitherto unconscious product, of human activity." Translation: man’s social nature shapes the core of his existence, that is his consciousness. There is no room for God. To bring the world into alignment with this thinking, Luckacs “… saw the revolutionary destruction of society as the one and only solution. A world-wide overturning of values cannot take place without the annihilation of the old values and the creation of new ones by the revolutionaries.” Lukacs’s ideas became known as “cultural terrorism.” As the Hungarian Peoples Republic Commissar for Education and Culture, Luckacs put his program into action by instructing students in free love, the archaic nature of the middle-class family codes, rejection of monogamy, the irrelevance of religion, and called women to rebel against the sexual mores of the times. His basic aim was to destroy the institution of Christianity, which is the foundation of western culture. Fifty years later, these ideas were adopted by the baby boomers. Is this starting to sound familiar?
Antonio Gramsci, a contemporary of Luckacs, was an Italian communist, who also understood that traditional Marxism had failed. John Fonte of the Hudson Institute argues that Gramsci believed in “absolute historicism, meaning that morals, values, truth, standards, and human nature itself are products of different historical epochs. There are no absolute moral standards that are universally true for all human beings outside of a particular historical context: rather, morality is socially constructed.” In other words, truth and morality were not absolute, they were relative. Gramsci argued the culture must be changed, starting with the arts, cinema, theatre, schools, colleges, seminaries, newspapers, magazines, and the new electronic medium radio. Through these institutions the public could be captured and converted to the cause. He encouraged fellow Marxists to form alliances with Western intellectuals who embraced human secularism.
In 1930, Max Horkheimer (Traditional and Critical Theory) became the director of the Frankfurt School and the school began to systematically translate Marxism into cultural terms. Musician Theodor Adorno, psychologist Erich Fromm (Escape from Reason), and sociologist Wilhem Reich (The Mass Psychology of Fascism and The Sexual Revolution) joined the school. In 1933, Hitler’s rise to power interrupted the school’s development of its cultural Marxist ideology. The school relocated to America at Columbia University were it developed its Critical Theory, which has been described by Buchanan in DOW (pg.80) as the “essentially destructive criticism of all the main elements of Western culture, including Christianity, capitalism, authority, the family, patriarchy, hierarchy, morality, tradition, sexual restraint, loyalty, patriotism, nationalism, heredity, ethnocentricity, convention, and conservatism … the crimes of the West flow from the history of the West, as shaped by Christianity.” Buchanan then concludes, “Critical theory ultimately results in ‘cultural pessimism,’ a sense of alienation, of hopelessness, of despair where, even though prosperous and free, a people comes to see its society and country as oppressive, evil, and unworthy of its loyalty and love. The new Marxists consider cultural pessimism a necessary precondition of revolutionary change.”
During the fifties, Herbert Marcuse, an ex-OSS officer and Brandeis University professor, defined the proletariat of the American Cultural Revolution: radical youth, feminists, black militants, homosexuals, the alienated, and the asocial. His battle cry: “make love, not war.” In Carnivorous Society, he wrote: “One can rightfully speak of cultural revolution, since protest is directed toward the whole cultural establishment … there is one thing we can say with complete assurance. The traditional ideal of revolution and the traditional strategy of revolution have ended. These ideas are old-fashioned … what we must undertake is a type of diffuse and dispersed disintegration of the system.”
Critical Theory forms the basis of Western Marxism and post-modernist thought. Malcom X, Frank Marshall Davis, Saul Alinsky – all self-described by Obama as being influential in his life – studied and practiced the principles of Critical Theory. In his Rules for Radicals, a book that Alinsky ironically dedicated to Lucifer, "the very first radical" [2], Alinsky – Obama’s mentor – outlines his strategy in organizing, writing,
"There's another reason for working inside the system. Dostoevsky said that taking a new step is what people fear most. Any revolutionary change must be preceded by a passive, affirmative, non-challenging attitude toward change among the mass of our people. They must feel so frustrated, so defeated, so lost, so futureless in the prevailing system that they are willing to let go of the past and change the future. This acceptance is the reformation essential to any revolution. To bring on this reformation requires that the organizer work inside the system, among not only the middle class but the 40 per cent of American families - more than seventy million people - whose income range from $5,000 to $10,000 a year [in 1971]. They cannot be dismissed by labeling them blue collar or hard hat. They will not continue to be relatively passive and slightly challenging. If we fail to communicate with them, if we don't encourage them to form alliances with us, they will move to the right. Maybe they will anyway, but let's not let it happen by default."
Why haven't we heard anything about this in the media? The silence is deafening. Do you think we need to know more about Obama’s mentors, his world view, and how it came to be formed? He is asking us to place our country and its future in his hands. With such trust comes transparency. We are not getting that from the media or the man.
America is "being taken to school."
Tuesday, September 9, 2008
“Neighborliness” – The New Form of Social Redistribution of Wealth
Who are the “rich?” By “rich,” Obama means those who have been financially successful. This is distinction that deserves emphasis, because the term “rich” is not necessarily the same as being “financially successful.” To the average American, “rich” has a negative connotation, and it is easier to tax the “rich” than it is to tax success. In fact, many people are “rich,” but would not be classified as financially successful. For example Mother Teresa was rich but she was not what the world would claim to be financially successful. Second, it is important to distinguish exactly who Obama wishes to tax: those who have taken financial risks far beyond those of the average employee, who in many cases failed multiple times before succeeding, who worked hard, who invested in their businesses, and who created the jobs that ALL Americans enjoy.
The “rich” are typically people who either own businesses in America or receive employment from those businesses. From a demographics perspective, 80% percent of these businesses are sole proprietorships, partnerships, or S-Corporations (which are taxed at individual tax rates) and 20% are large C-corporations (which are taxed at corporate rates). The small businesses they own are recognizable in every town: gas stations, laundries, retail franchises, and other boutique family businesses. According to 10 Secrets that Millionaires Keep, by Daren Fonda of Smart Money, the financially successful, who have a net worth of $1M, are 90% more wealthy than other US households, earn on average $366,000 per year, and are in the top 1% of taxpayers. Their number has doubled since 2002, with half of them earning their wealth from small business, one-third from large corporations, and less than 3 percent through inheritance. Most come from families, which would not be classified as wealthy, and have enjoyed their financial success for less than 15 years. Their median grade-point average in college was 2.9, with an average SAT score of 1,190. Fifty-nine percent attended a state college or university. Their secrets to success, in their words: hard work, discipline, education, and treating others with respect. Other than their wealth, the “rich” seem to be a lot like the average American, except they have taken extraordinary risks, worked smarter and harder, and converted the opportunities presented to them into greater financial success.
How do the “rich” spend their money? Before they can spend it, they must pay taxes to the government. The top 1% of earners pay 40% of America’s federal income tax. In fact, the top 10% of earners pay 70%, and the top 50% pay 97%. Like all other wage earners, in addition to FICA, the “rich” pay 6.2% on their personal wages to fund social security, up to a maximum salary of $97,500 and 1.45% on all wages to fund Medicare. Because the average wage earner makes approximately $50,233 (2007 Census Bureau), the average wage earner pays, on average, $3,868 in payroll taxes. This is matched by the employer, who pays an additional $3,868. Under the current tax scheme, the financially successful, who earn over $97,500, will pay $7,459; however, fifty percent of them who own their businesses or are sole-proprietors will pay twice this, or $14,918, because they have to pay their own matching contribution. In effect they are paying 3.9 times more than an average wage earner working for a large corporation. These taxes are paid before any other taxes are paid. If Obama eliminates the cap on the Social Security payroll tax, so that all income is exposed to this tax, the average “rich” person who owns his own business will pay 12.4% on his or her full $366,000 in earnings or $45,384, or 3 times his or her current payroll tax level and almost 12 times that of the average American. This is before he or she pays increased marginal capital gains and income tax rates under the Obama plan (see Taxing the Rich is Really Taxing All of Us). Is this fair? It does not seem fair to me, especially in light of the fact that the financially successful person will never receive a payout from social security that even comes close to what was paid in. Based upon projections provided to me over the years by the Social Security Administration, I expect that I will receive approximately $1,500 per month in benefit. This will be substantially offset by income from other financial sources: in effect, my contribution will be transferred to others – simply another tax and redistribution of wealth.
So what does the financially successful person do with what is left? He or she invests it or spends it. Investment means capital formation that leads to further business growth and jobs. Spending includes both consumption and charitable contribution. Expenditure on consumption – you guessed it – creates jobs and opportunities for others to become financially successful. Charitable contributions meet the many social needs of our communities and fund that aspect of “neighborly” which can only be met by monetary investment. According to Arthur C. Brooks, of the American Enterprise Institute, charitable giving in America, which was $265B in 2006, has risen faster than the growth of the American economy over the past half-century. For example in 1995, “Americans gave per capita three and half times as much to causes and charities as the French, seven times as much as the Germans, and 14 times as much as the Italians.” The top ten percent of American earners are responsible for seventy-five percent of giving, and the top 1% of earners represents half of the giving. So who gives more, conservatives or liberals? According to Brooks, “The fact is that self-described ‘conservatives’ in America are more likely to give – and give more money – than self-described ‘liberals.’ In the year 2000, households headed by a conservative gave, on average, 30 percent more dollars to charity than households headed by a liberal. And this discrepancy in monetary donations is not simply an artifact of income differences. On the contrary, liberal families in these data earned an average of 6 percent more per year than conservative families.”
What are the implications of Obama’s tax policy? Simply put, instead of returning a tax rebate to wage earners based upon their contribution (viz., a rate reduction across the board), he proposes to tax the “rich” and return their tax receipts in the form of payments to a majority of Americans who pay little or no income tax. In effect, he is going to take from the financially successful – the backbone of the American economy – and redistribute the wealth to those who did not earn it to ostensibly meet their day-to-day “needs.” In the process, he will: (1) remove capital from the economy that creates opportunities and jobs; (2) drive down charitable contributions by individuals that fund truly “neighborly” projects and place decision making for social concerns in the hands of government rather than individuals; and (3) most importantly, destroy the incentive of financially successful people to compete in the marketplace while incenting those who are either unwilling or unable to compete to “vote” rather than work for their financial success. This is not capitalism; it is social Marxism.
Sunday, August 31, 2008
Global Warning on Global Warming
Recently, the American Water Resources Association (AWRA) held a three-day, 300-person conference at Regent University, in my hometown of Virginia Beach, VA. An objective of the conference was to create carbon offsets to mitigate the carbon footprint created by the conference attendees. To meet this objective, attendees planted 115 trees and shrubs on the campus. According to Al Todd, the conference committee’s chairman and a watershed program leader for the US Forest Service, the “carbon cost” of the conference, excluding air travel, was 15 to 20 metric tons of carbon dioxide. When confronted with the fact that one acre of forest can sequester between 0.5 and 2.5 metric tons of carbon dioxide annually, Todd admitted it would take 20 more years to offset the conference’s energy consumption. In his words, “We’ve got a lot of work to do, don’t we?”
This report makes you wonder if the AWRA accomplished anything in its three day conference other than planting trees. At a minimum it does suggest that before America commits all of its resources, energy, and economic prosperity to saving the planet and what some believe to be settled science, it would be prudent to ask ourselves some important questions. Principal among these are: “Is global warming real?” and “Does man’s activity contribute to global warming?” My conclusions are:
1. Yes, the planet is warming.
2. No, man’s activity has no appreciable impact on global warming.My conclusions are supported by a scientific study, Increased Effects of Increased Atmospheric Carbon Dioxide, by Robinson, A.B., et al, reviewed and endorsed by more than 9,000 Ph.D.s (http://www.petitionproject.org/) , and the testimony of David Evans, the scientist who wrote the carbon accounting model (FullCAM) that measures Australia’s compliance with the Kyoto protocol (http://mises.org/story/2571# and http://mises.org/story/2795 ).
The conclusion of the Robinson research is that the earth is warming at a rate of 0.5 degrees Centigrade per 100 years, and that this trend is naturally occurring, as the earth recovers from what is referred to as the Little Ice Age. The current warming trend can be traced to about 1800. The researchers conclude that over the last 3,000 years, the earth’s temperature has varied within a 3 degree Celsius range. Arctic temperature variation correlates strongly with solar activity and not with world hydrocarbon use.
In fact, the study concludes that overall the climate has improved. The number of tornados has decreased, the number of hurricanes has remained constant, and rainfall has increased. During the past 50 years, atmospheric carbon dioxide has increased 22%, much of that due to human activity, but no correlation exists between temperature increase and carbon dioxide production. In fact the major effect has been to increase plant growth and biological diversity (that is, a positive effect).
The results of this study are confirmed by David Evans, one of the principals behind the global warming theory. His conclusions:
“After further research, new high-resolution ice core results (data points only a few hundred years apart) in 2000–2003 allowed us to distinguish which came first, the temperature rises or the CO2 rises. We found that temperature changes preceded CO2 changes by an average of 800 years. So temperature caused the CO2 levels, and not the other way around as previously assumed. The world should have started backpedaling away from blaming carbon emissions in 2003."
"There are several possible causes of global warming, and they each warm the atmosphere at different latitudes and altitudes — that is, each cause will produce a distinct pattern of hot spots in the atmosphere, or ‘signature.’ The greenhouse signature is very distinct from the others … There is no hotspot in the tropics at 10 km up, so now we know that greenhouse warming is not the (main) cause of global warming — so we know that carbon emissions are not the (main) cause of global warming.”
So what are the potential effects of global warming? I am not sure we know yet, except that the effects will not be principally due to man-made carbon dioxide production. In fact, by committing our resources, energy, and economic future to eliminating carbon production, we will deliberately make the situation worse. The well being of our society, the well being of the world, and the solution to the real effects of global warming depend upon low cost, abundant energy sources, of which carbon-based fuels is the backbone and will be the backbone for the next twenty years.
My solution is to develop ALL energy sources, including alternative energy sources and conservation. In the near term, we need to drill in America. We need to further develop natural gas and nuclear to build an energy bridge to the future. As I have documented in prior blogs, alternative energies, today, will not provide our energy need – they only satisfy a psychological need. Unfortunately, that psychological need is not based on science.
Remember ...
"Against public stupidity, the gods themselves are powerless." Schiller.
“Who controls the past controls the future. Who controls the present controls the past.” – George Orwell, 1984
"Statistics are no substitute for judgement," Henry Clay
"The problem with socialism is that you eventually run out of other peoples' money," Margaret Thatcher