Thursday, August 02, 2012

Warren Loves China,Really

What is it with the left and their admiration for China?  Elizabeth Warren most recent ads claim we should be more like China since they build a lot of roads.  This is the same Elizabeth Warren whose claim of being part native America got her a minority status at Harvard even with her blond hair and blue eyes and who influenced Obama famous, “You really didn’t build that” speech.  I will give Warren credit, she has no problem in claiming her root as a true lefty and Massachusetts is one of the few states where” let be like China” might actually sell.  The ad should give one pause on the direction of where the Democratic Party is headed.

In two previous columns, I pointed out this trend with another noted leftist.  Andy Stern, the former head of the SEIU, wrote a piece calling on America to be more like China.  Stern even observed that any economic activity must be done with the approval of the Chinese government and while the Chinese may have open up their economy; they view property and economic rights as gifts provided by government and economic outcome determined by the government.    New York Time columnist Tom Friedman asked, “What if we could be China for day. Where we could actually authorize the right solutions… I want my democracy to work with the same authority, focus and stick-to-itiveness. But right now, we have a system that can only produce suboptimal solutions.” Friedman point is that wouldn’t it be wonderful to have Obama be dictator for a day?
What is disturbing about the Warren ad and Obama famous “You didn’t build it speech” is the assumption that economic growth begins with government and economic activity needs to be directed by the government.  For Warren and Obama, their entire focus is to direct economic energy toward goals they approve of. This philosophy was seen in the action of ACORN, an organization that attempted to browbeat banks into loaning more to minorities and urban community, an organization that a younger Obama worked with.  (The ACORN objective was to increase economic activity in urban areas but actual market reality for these loans was never factor in. This was one of the factors that lead to the financial meltdown in 2008.) The goal then as now, force corporations to direct investment in areas the left believed it should go and ignore the market.
The Warren/Obama thesis is that economic development needs to be directed by the state and not by the market.  The left distrust the markets and view market economy as an obstacle to obtaining the greater good.             In Warren/Obama world, unless government builds the roads; no private development can happen.  It never occurs to them that maybe the revenues to build the roads come from entrepreneurs who builds the businesses that hires the people who then pay the taxes to pay for the roads.   No roads get built or no schools are open without the prosperity provided by the entrepreneur who risks it all. Our founding father believed the economic freedom was a necessity and important foundation to build a just society.  As writer PJ O’ Rourke once noted, the Constitution predisposes a limited government including free market economics. 
It is consider gauche to call Obama a socialist but one has to ask the question; if Obamanomics is based on a premise that government determines economic growth and that economic growth needs to be directed by the government, then what is Obama but not a socialist?   Obama believes government is the driving force of progress whereas Romney deep down views government as but one player in a greater society and the not the dominant factor behind society.  That is the crux of the debate we face and when you see politicians viewing China as model because “they build roads,” then maybe you have to question if those politician can be trusted.
Warren love for China shows a politician who has no true understanding the limits of what government can do and that is enough of a reason not to elect her to the United States or for that matter, the man on top of the Democratic ticket for another term.

Wednesday, August 01, 2012

Lesson of Cruz

Ted Cruz won a big victory in Texas. There are several meanings to this victory, the first being that the Tea Party still matters.  David Dewhurst was the establishment favorite and as Lt Governor, he had the perch to easily win the race including name recognition and access to money. 
Dewhurst had the money including his own wealth but what he lacked was the grass root support; which became obvious this past Tuesday.   Even his other leading opponents from the original primary endorsed Dewhurst for the run off. One would have assumed that Tom Leppert and Craig James voters would have either stayed home or given the majority of their votes to Dewhurst. Dewhurst was close to the magical 50% after the original primary, so he had very little to add for victory. 
Two things hurt Dewhurst, who actually lost votes from the primary to the runoff.  While Dewhurst received the support of much of the Republican establishment; his support was always mile wide but an inch thick.  If a politician is putting pressure on business leaders not to endorse his opponent as was reported, maybe there is a problem with the candidacy. 
The second problem was Dewhurst own campaign which was one negative ad after another. As one reporter noted, this only succeeded in raising the name ID of Cruz.  In the original primary, both men received nearly equal percentage of Tea Party members but this changed in the runoff as Cruz captured three quarters of Team Party voters.   Dewhurst negative ads not only backfired and gave Cruz a lifeline; it also showed that Dewhurst had little to offer the voters. You would have figured that Lt. Governor of a job creating state aided would be able to give the voters positive reasons to vote for him.  He didn’t. 
Cruz came in the race with no money and no real candidate ID but he managed to build up grass roots support one vote at a time and more importantly, he gave the grassroots reasons to vote for him.  He was taking their message and ideas to Washington and in a state where favoring smaller government is a plus; he showed to be fully capable explaining free market ideas. 
The lessons here are the following.  Ideas can triumph establishment support and money.  This lesson is important for the Romney campaign since they may be out raising Obama in fundraising; it is the message that will defeat Obama.  Dewhurst scorch earth and negative campaigning fail to move the electorate since it was not accomplished by what Dewhurst would do to keep the Texas economy going.   For Team Romney, it is not enough to say what you don’t like about Obama’s policy but what you will do differently and explain why what you will do is better for America!   Obama own campaign resembled Dewhurst for its negative tone and when you add that unlike Texas, Obamanomics has been a complete failure.  Ideas will triumph.
The second idea is that the Tea Party is evolving and becoming politically astute.   They showed that they would have been willing to give Dewhurst their support but he never gave them a reason. Cruz did and that is why he won.   The Tea Party is a force to be reckoned with. 

Which brings me to the final point, Cruz can make the case and demonstrate that free market and conservative ideals can lead to economic revival among Hispanic communities.  Cruz, like Rubio, Governor Susan Martinez and Brian Sandoval, are part of a new generation of conservative leaders who are ready to take up the mantle of free market ideas and yes, they are also part of the fastest demographics, Hispanics!  

Monday, July 30, 2012

Tax the Hollywood 1%

In the early 1950’s, the motion picture industry suffered from the effects of an excise tax passed during World War II.   Interesting enough, the film industry produced a film calling for the tax repeal on the assumption that the tax hurt their industry bottom line and cost jobs.  The film featured industry leaders to those who worked the theaters including the ticket collectors talking about how the tax hurt them.  The message to the public was that this tax reduced tax revenues, cost jobs and if repealed, would lead not only to increase governmentrevenues but more economic growth.   Name the last time a Hollywood big shot or even very highly paid actor managed to say, “Hey higher taxes is costing us jobs?”  Probably since this tax was repealed. 

Hollywood discovered Laffer Curve before Laffer did.  In this 22 minute film, charts and personal testimony makes the case that tax reduction can lead to both economic growth and jobs.  One chart compares those industries that are not burden by the 20% excise tax with the movie industry, and showed that while the movie industry suffered losses in revenues, other industries profited.  The film pointed out how many towns were losing their theatre and one small business owner lamented how his business and others suffered since theatre closed down in his town.  As he noted, his own mother would no longer come to town in the evening since the theatre was closed and with the theatre closed, there was little to attract people to downtown Main Street and spread the wealth among other businesses.    

The film showed near the end of the film how the tax did not lead to more revenues but less as theatres closed and there were less revenue to tax.  They made the supply side case that a lower tax revenue actually could produce more revenues while reviving the industry.  As one individual note, Hollywood was not asking for special treatment but an elimination of a tax that the other industry did not pay.  Could this be Hollywood making the case for a simpler tax system with lower rates for all?  In 1953?

Today, Hollywood is a playground for Democratic fund raiser and Obama has found that Hollywood remains loyal to his vision and re-election. While those on Wall Street are having second thought about the guy they helped put in the White House, there are no second thoughts among Hollywood elites. 

Instapundit Glen Reynolds made the suggestion that if we are going to raise taxes to cut the deficits, why not start with a 20% excise tax on the film industry?  Since many of these Hollywood stars and producers are forever telling us how we need tax increases to help close the deficits, why not let Hollywood lead the way?  The tax, which was imposed on the gross income and not the net, took a 20% hit off any Hollywood bottom line and can you imagine how much a major star can contribute with a 20% tax on a gross income on one of those 10 to 20 million dollar salary for a single movie?

Let face it, much of Hollywood may talk of the down trodden but the reality, Hollywood is the home of the 1%.  So if the Hollywood 1% are going to help elect the most leftist President, then let them lead by sacrificing the first 20% of their gross income!.  As Glen Reynolds argue, tax the Hollywood 1%.  Or least let them squirm. Who knows, maybe George Lucas or Steven Spielberg might just produce their own film defending supply side economics if they are faced with the idea that the first 20% of their income will go to the government even before they even cash that big eight or nine figure check!   

Why Did CNN Die?

The head of CNN, Jim Walton, said goodbye as CNN continued its decline in the ratings war.  CNN was once the leading light of cable news but FOX have long passed CNN by and now MSNBC is running ahead of CNN.  CNN present problems are the result of many factors swirling around at once.   It runs behind MSNBC for the simple reason, CNN has attempted to play the neutral news observer while hiding its own leftist bias whereas MSNBC decided a decade ago; no more attempt at being unbiased. MSNBC is the leftist playground including all the hatred and venom directed at the right.  There is no rumor or bigotry too small for MSNBC to publicized against their opponent and the evening line up is nothing that one leftist hosts after another detailing the news from one side.  There is no attempt to be a news gathering organization but to represent one point of view and that is the latest talking point of the left.  MSNBC has stolen the leftist audience and FOX surge in ratings left CNN with few audience left to cultivate.

Fox is the news station that leaves left in apoplectic but the irony, Fox news has become the least bias news programing.  Roger Ailes has managed to snag some of the better reporters from other networks.  Former CNN reporter Ed Henry and John Roberts joined Fox to strengthen their new coverage plus Bret Baier has become a leading anchor in the tradition of Walter Cronkite and others.  
Charles Krauthammer once observed that FOX has managed to grab a niche audience, half of America.  The genius of Ailes was to produce a news network that appealed to conservatives and considering that 40 percent of Americans consider themselves conservatives; this represent a significant audience that have long given up on the mainstream media telling them the full truth.   Ailes added entertaining hosts just as Bill O’ Reilly while building a news organization that rivaled CNN. CNN lost the left side of the audience and did little to attract the right side of the audience and the middle either kept their loyalty to traditional news program or drifted to FOX.  There was time when a major new story broke out, cable audience would return to CNN for coverage but now FOX is now the station that people turn to during crisis.  This is due to Ailes building up the news department.
As for CNN, they are presently caught between the rock and the hard place. There are no hosts that grab public imagination and the Piers Morgan experiment has proven to be a failure so far.  The colorful Brit had never attracted much of audience and let face it, if you want an entertaining leftist, you can simply watch Rachel Maddow.  So where do they go for audience and how do they build up their news programing and ratings?  As Fox discover, having centrist like Bill O’Reilly or conservatives like Sean Hannity hosting their program attracts a bigger audience.   Considering there are nearly three plus decades of showing the liberal ideology of most reporters, approximately half of America viewed much of the news establishment is biased against them. 
Which leads to what does CNN do?  Good question since FOX audience is still smaller than the combine of the ABCNBCCBSCNNMSNBC mainstream machines, there is still audience to garner by rejecting the liberal bias inherited in most news program.   So what would happen if CNN actually turned their evening program over to a noted conservative to compete with the FOX evening line up?  CNN does have a news organization good at investigating and a solid foreign coverage, so they have good news organization to build around.  
Interesting enough, NBC best news reporters are located in CNBC, their business network and CNBC shows that good journalism can still be found within the mainstream of news media.  So can CNN combine the solid news reporting with a more broad based evening program that covers all angles?  There are those who will argue that FOX is bias and there is no doubt that many of their programs are hosted by conservatives but one should understand that if you are viewing Bill O’ Reilly or Sean Hannity, you are watching a program with an ideological edge just as you should understand that Ed Schultz will give you his opinion from the hard left.  The real question is how does the news programs report the news and FOX has two hours of simply news program detailing the day’s event.   Bret Baier is not hired to be an opinion maker but a news reporter; a big difference.  CNN has Wolf Blitzer produced a similar role and remember MSNBC has no counter to either program.
There is no doubt that there is a liberal bias; that is like a story dog bites man.  The real question is how this bias affects new coverage and for many, the answer is yes that this bias does affect new coverage.  CNN may find that maybe being more balanced in their news department might be the way back to the old days when CNN was the voice of cable.  It is certainly that going the opposite way is a complete failure.

Sunday, July 22, 2012

What Can A President

What can a President do for the economy?  My own theory begins with the idea that government positive effect upon the economy is minimal but bad government policies could do devastating damage to an economy.   I have written on why there was no depression in the 1920’s.  The answer was simple; Warren G Harding rejected Keynesian economics while cutting taxes, cutting spending and balancing the budget. (The last years of the Wilson’s administration included double digit inflation and double digit unemployment and Harding solutions lead to a decade of growth.) The economy roared throughout the decade. It would take a moderate Republican who didn’t follow Harding’s prescription to jump start the Great Depression of the 1930’s.

Contrast the last years of the Bush Administration and the Obama years to the Reagan years and you can see how government policies affect economic growth.  Reagan followed a policy of sound money, lowering marginal tax rates followed by tax reforms and by the end of the decade, reduced the budget deficits as percentage of the GNP.   Federal spending slowed down and a recovery ensued that lasted through four Presidents and only interrupted by two minor recessions.   Reagan years led to America becoming the premier economic power in the world.
Since 2007, Bush administration worked with the Democratic control Congress to increase spending even more than the previously profligate Republican Congress.  As the economy slowed down, the first stimulus plan was passed but this did little to stall the coming recession and when the financial meltdown occurred due to past government policies that came to roost; the Bush administration bailed out the banks and then began to bail out GM. 
Obama increased spending and like Bush, set up a new entitlement program (Obamacare) and produced budget deficits worth trillion of dollars as far as the eyes could see.  The conventional wisdom has Obama saving us from a Great Depression but conventional wisdom is wrong.  The Fed easy money is what kept the economy going. This has proved to be worse economic recovery on record since World War II and now the economy is slowing down again while possibly marching to another recession.  If Obama imitated Reagan like policies or even followed Clinton policies 1995 to 1998, the America would be roaring and Obama on his way to a massive re-election.
For those who always promote Clinton policies, in particular his raising marginal tax rates in 1993 fail to recognize that the first two years of the Clinton years were hardly world beater.  After the defeat of Hillary care and Republicans take over of Congress, Clinton retreated from his leftist path and moved to center.  If Obama truly wanted to imitate Clinton in 2011; he would have to repeal Obamacare, cut the budget deficits which would have required massive spending cuts, cut capital gains, reform entitlements and expand free trade.  He could keep the marginal tax rates on the rich but would have to reduce taxes on capital formation. And this could reduce the overall tax burden of the investing rich and you will have a situation in which Warren Buffet would pay at a lower rate than his secretary. You may even have a roaring economy in which jobs are being created and not destroyed!
Obama has just scuttle Bill Clinton welfare reform by allowing states to redefined work and go back to a system where one could get paid for not working, so much for entitlement reforms in a second Obama administration actually being passed.   Obama taxes increases will be massive in a second  Administration, and Obamacare alone has at least 21 taxes with many reaching into the pocket of the Middleclass and members of the investment class that includes many of the Middle Class will see their tax burdens rise and their future retirement funds reduced or simply disappear.
 Obama has led the economy into a dead end and his policy has brought us to this point.  Reagan and Harding showed that government policies properly applied will lead to growth if it includes a recognition that government polices need to be limited.  Obama showed that government policies improperly applied will lead to slow growth and recession.  In the case of Hoover in 1929 to 1932, government policies improperly applied could lead to depression.   Government policies matter and the number one things that a politician needs to understand, there is a limit to government ability to produce economic growth.  In an economy where billions of market exchanges occur every hour of the day, no government is capable of managing an economy that is that big.    This is why Obamanomics is failing and will continue to fail for Obama policymakers do not recognize the limits of government programs to produce growth.

Friday, July 20, 2012

Veep Deep Thoughts

Rule number one in selecting a Vice-President, the Vice-President will not win you an election; that is the job for the guy on the top of the ticket.   Vice-President doesn’t have to be charismatic; just solid.  Charismatic helps and may even get a few extra vote but in the end, the guy on the top of the ticket determines his fate. The following candidates are listed as the leading candidates for team Romney: Rubio which I dealt with in a previous column, Bobby Jindal, Paul Ryan, Tim Pawlenty, and Rob Portman. 

Paul Ryan and Bobby Jindal are part of the GOP future, young guns with both experiences and knowledge of the key issues.  Jindal has been a solid governor, with extensive experiences dealing with variety of issues including health care and energy.  As the governor of an energy producing state, he has the experience with Americas’ Future; the development of American energy resources.  His knowledge of health care will benefit the Romney campaign, especially in the wake of the Obamacare decision.   The biggest item that the media will look into his conversion into Catholicism, and as one Washington Post reporter claimed that Jindal rise has been “quicker than Obama” but this is sure nonsense.  Jindal was the head of Louisiana Medicaid, a congressman and a governor for five years; hardly the career of a novice.   Jindal has promoted education reform, taken on Obama during the BP disaster and dealt with a corrupt political institution.  Some will remember his lack luster response to Obama three years ago, but if one bad speech can destroy a career, Bill Clinton would never have been President.  (His 1988 speech at the Democratic convention was one of the worst, but it didn’t stop him from being elected four years later.)  Louisiana unemployment is below the national average, so Jindal can show success in the Obama era.   

Paul Ryan, like Jindal, is under the age of 45 but yet a leading light on the right.  Ryan is the expert on the budget and been a leader on entitlement reform including Medicare.  Ryan ideas are in the forefront when it comes to budget reforms and he has shown the ability to get his ideas to be accepted by those on the other side including Democratic Senator Ron Wyden, who put his name on a joint Medicare reform.  The biggest complaint is the Democrats will wage war on Ryan throwing little old ladies over the cliff but one only has to look at Obama own proposal which includes death panels, severe cut in Medicare with the funds switch to Obamacare and his reduction of the social security and Medicare tax rates, which has reduce the funding for the both programs.  You can argue if the tax reduction of these taxes was good but you can’t argue that Obama tax reduction doesn’t cripple the viability of both programs in the future. Besides, no matter who Romney selects, that person will be demonized and the Democrats will always use the Republicans will destroy Medicare line, no matter what.  (The Democrats proposal are doing a pretty good job of destroying the entitlement programs for future generation.)

Tim Pawlenty and Rob Portman are the candidates with no charisma but reeks with competence.  Pawlenty is the son of blue collar parents, a successful two term governor and just completed an unsuccessful run at the Presidency that didn’t make it to the Iowa caucus.   In many ways, this blue collar governor is much like Ryan and Jindal in that he can be geek on policies.   He knows his stuff and certainly has often times over the past several months done a better job of explaining Romney policies better than Romney.

Portman, in many ways, can be the joker in the deck of cards.  He speaks fluent Spanish, an outdoors man with experiences as a trade representative, a congressman OMB and United States Senator.  This is what you call a man with a resume, the son of an entrepreneur and a man who understand Main Street.    While some view him as the safe, boring choice; he might not prove to be so boring.  It will be nice to have one candidate who can explain Romney economics in Spanish to a key demographic.

There is one last thing you can say about these Vice-President candidates; they are better qualified than the present President and Vice-President.    But then Obama and Biden seem to be setting the bar low.  A couple of years ago, one of my liberal friends went into a rant on what an idiot Sarah Palin was.  I reminded her that she had already voted for the left version of Palin.  Today, I should  apologize to Palin for comparing the less knowledgeable Obama to her. 

(A note on Rubio, I made the case for Senator Rubio but I have received notes from Republican Hispanics that Rubio Cuban ancestry would not make him appealing to majority of Hispanic who are Mexican descents. Could this open the door to Susan Martinez or Brian Sandoval?)

Sunday, July 08, 2012

Rock and Roll and Capitalism

It is hard to believe that the Rolling Stones and Beach Boys are still active after a half century.  In a business where groups or singers come and go; often just one hit wonders or celebrities for a short period of time.  Today pop singers are more noted for what they do on stage or off as oppose to the music they create.  Fifty years from now, Lady Gaga will be a forgotten voice but somehow we will still be talking about the Rolling Stones or the Beatles.  I remember a teacher in my junior high telling us that Beatles will still relevant as historic figures decades later and she was right.
The Rolling Stones sums up the strange trip of Rock n Roll from experimental and reflection of teenage angst in the 1950’s and 1960’s to multi-billion dollar businesses where celebrities hit the stage and the show is the deal and music is mere background.
The Beach Boys represented a simpler California often portrayed in the various beach movies of the early 60’s.  It was about fast cars, surfing and girls with long flowing blond hair.  Songs like Little Deuce Coup, Surfin Safari, I Get Around and Fun, Fun, Fun told stories teenagers looking for the perfect wave or shutting down their rivals over a quarter mile strip of pavement. To paraphrase lyrics for Fun, Fun, Fun, she was going to have fun, fun, fun until Daddy took the keys of the T-Bird away and even teenage girls love to drive hot cars fast.   Brian Wilson was the genius behind the Beach Boys, capable on putting together lyrics on a Saturday afternoon but it was his brother Dennis, who presented himself as the representative of California cool.  Brian, like his other brother Carl, did not have the appearance to match their brother Dennis, but Brian was the man behind the music.
The peak of the Beach Boys was 1962 to 1965, when many of their songs hitting number one quickly but the British invasion spearheaded by the Beatles changed everything. The Beatles, with their neatly cut mop tops and suits, brought together American blues and rock into one neat package.  Starting in 1965, the Beatles started to pay attention to lyrics as they followed along the footsteps of Bob Dylan.  The Beach Boys decided that it was time to change their music and develop a more mature sound with their album Pet Sounds. Pet Sounds was considered a precursor to Sgt. Pepper where lyrics, music and a specific theme tied the entire album together.  Brian Wilson stretched his own talents and actually produced a solid musical effort. Unfortunately for the Beach Boys, the album proved to be a commercial failure.  Fans never could imagine the Beach Boys singing about nothing more than surfing and fast cars but as the 60’s progressed, Rock and Roll decided to become the voice of a generation.  Beach Boys could never be the prophets of a new generation; that was left to the Beatles and the various groups that came after 1966. With Vietnam War hitting its peak and opposition to the war becoming more intense, it was left to others to sing about the new angst.  The Beach Boys were forced in a corner singing about Endless Summers but their audiences were no longer sweet 16 and moved on with their lives.
The Rolling Stones played second banana to the Beatles, playing the dirty rock band to the cleaner image of the Beatles.  If the Beatles wore matching suits and kept their mop top neat; the Rolling Stones sang about getting no satisfaction and momma taking a little yellow pill.  In 1967, the Stones were running out of steam; Mick Jagger and Keith Richards got involved with legal problems associated with drugs possession and it looked like the Stones were close to being irrelevant.   Beatles released Sgt. Pepper and the Rolling Stones released Their Satanic Majesty Request in response but it proved to be a musical and commercial failure.  The Stones moved away from their rock basis and tried to be artist and found that in the end, it was all about rock and roll.
Mick Jagger proved to a shrewd business strategist as he did study economics before becoming a Rock and Roll star.  He returned the group to their roots with the release of their single Jumpin Jack Flash.  From there, the Stones produced some of the finest Rock and Roll albums with Beggars Banquet, Gimme Shelter, Sticky Fingers and Exile on Main Street.
The disastrous Altamont concert, in which one member of the audience was killed by the Hell Angel, did not derailed their rise back to Rock and Roll prominence. (The Rolling Stones actually hired the Hell Angels as security, and the results were not just the one murder but even a member of another band got beaten up as well. It was all part of the bad boy image of the Rolling Stone but Stones were like children compared to the real bad boys of the road.)  Beggars Banquet was the Stones political statement with songs like the Salt of the Earth, Sympathy for the Devil and Street Fighting Man, in which Jagger sings “What a poor boy can do but sing in a Rock and Roll band.”  The song, Stray Cat Blues, detailed the perk of being a Rock and Roll star as Mick Jagger asked the question about the teenage groupies who followed the Stones around, “Does your mother know that you scratch my back, that you can screw like that?”  
Beggars Banquet was the last album with Brian Jones, who shortly died of a drug overdose but it was a beginning of the Stones revival.  Exile on Main Street was the album that completed the journey from Rock and Roll band to corporate status.  Exile was produced in southern France in a villa and far from any garages. From this point, the Stones cease to be a Rock band but instead a corporation that specialized in rock and Roll.  Their tours from this point earned hundreds of millions as a business venture and the Stones made the transformation to a business entity complete with hired employees, which included for a short period of time, Ron Woods, who replaced Mick Taylor as guitarist. 
The Rolling Stones are the story of rock and roll, a music form designed to entertain and rebel against the establishment to becoming part of the establishment.  The magazine Rolling Stone original began as anti-establishment but now is part of the leftist elites in spreading the gospel and the group Rolling Stones celebrate their 50 years as a separate corporate entity that has earned hundreds of millions.  Exile on Main Street, despite the title, showed that the Stones were no longer poor but part of the 1% that could own villas in Southern France.   The Rolling Stones continued to produce new music but their golden age ended in 1972 and they would never produce anything resembling those golden years.  Yeah, they continued to rock and roll, it is no longer about rebellion but about making money; so Rock and Roll is about capitalism.  Beach Boys represent a simpler time in which guys chase women, drove fast cars, surfed and didn’t have a worry beyond those things. Rolling Stone are royalty part of the establishment, rich and corporate.  Rock and Roll is no longer Rock and Roll but celebrity pop and MTV is no longer Music Television but realty stories after reality stories.  The visual art of MTV may have killed what was Rock and Roll and turned it into dollar making machine that produced billions of dollars of entertainment.  My father continued to enjoy jazz and big band until he died and I still enjoy the Beach Boys summer tunes and Rolling Stones.  Yes, I do get some satisfaction from their music and my feet still move up and down when I hear Gimme Shelter or Can’t get no Satisfaction.  Have no illusion, Rock is now just another business model, producing billions and employing thousands while entertaining the next generation of fans.   Lady Gaga may be entertainment but she is hardly memorable but in the entertainment business, very few transcend generations or stay relevant for long.  The Stones managed to stay relevant and get rich at the same time.  Art, like Rock and Roll, blossoms in a capitalist society, where imagination, singing outside the box and realizing dreams from playing guitar in a garage to making stardom is allowed.   Rock and Rollers like their movie counterparts in Hollywood rails against the system that allowed them the chances to make millions and let it be known that only Capitalism would allow art that challenges the system to exist for it allows the business produce music that the public like.  In a free society, rebellion can actually be profitable.

Marriage Matters

Does marriage matter?  With the debate swirling around the decline of the Middle Class, the inability to move percentage of those below poverty downward and the future of the family structure; the question that needs to be asked, does marriage matter?
From an economic point of view, there is no doubt that marriage does matter.  Thirty-five percent of Black families headed by single females live in poverty compared to 7% of Black Families and 38% of Hispanic single female head of households live in poverty compared to 12% of married Hispanic couples.   Living in single parent home increases the chances of children living in poverty and receiving government assistance.
Marriage is a significant factor in poverty and as Heritage Foundation Researcher Robert Rector noted, “Marriage remains America’s strongest anti-poverty weapon. As husbands disappear from the home, poverty, and welfare dependence will increase. Children and parents will suffer as result.” Family structure plays a factor in combatting poverty and the evidence shows decline in family formation plays a role in the number of minorities in poverty.  In 1930, only 6.3% children were born out of wedlock but today that number has risen to 40%. 36% of single parents live in poverty compared to 6.3% of married couple. Only one out of four families with children are poor when contrasted to nearly 71% of families headed by single parents, showing that family formation is a significant factor in poverty.  While many blame teen pregnancy for increase single parents, three out of five unwed children are born to women 20 -29. Education plays a significant role in unwed mothers as the least educated women are more likely to have children out of wedlock. 67% of Women without high school degree have children without marriage whereas mothers with college degrees or higher have 8.3% chance of children out of wedlock.

Education is a factor in whether a woman will have a child out of wedlock but regardless of education, married women are less likely to live in poverty. Only 15% of women who are married and without a high school diploma live in poverty whereas 47% of single female head of household dropouts live in poverty. 31% of Single female head of households with high school diploma live in poverty compared to only 5% of married families and 24% of single female head of households with some college degree live in poverty compared to only 3.2% married women live in poverty. Nearly 9% of women with college degrees or higher live in poverty compared to 1.5% of married families with college degree or higher.
Something has obviously gone horribly wrong with family formation; the hardest hits are minority women and children. “The gag rule about marriage is nothing new," Rector writes in his Heritage Foundation report. "At the beginning of the War on Poverty, a young Daniel Patrick Moynihan (later Ambassador to the United Nations and Senator from New York), serving in the Administration of President Lyndon Johnson, wrote a seminal report on the negative effects of declining marriage among blacks. The Left exploded, excoriating Moynihan and insisting that the erosion of marriage was either unimportant or benign. ..Four decades later, Moynihan’s predictions have been vindicated. The erosion of marriage has spread to whites and Hispanics with devastating results. But the taboo on discussing the link between poverty and the disappearance of husbands remains as firm as it was four decades ago.”
Marriage is the key to eliminating poverty because it causes husbands to earn more for the family. As Kay Hymowitz pointed out, "Marriage itself, it seems, encourages male productivity. One study by Donna Ginther and Madeline Zavodny examined men who’d had “shotgun” marriages and thus probably hadn’t been planning to tie the knot. The shotgun husbands nevertheless earned more than their single peers did."    
We can conclude that there are many factors in the decline of the Middle class and live in poverty but one significant factor is marriage.  Married parents are less likely regardless of education level to live in poverty compared to single head of households and family structure matters as part of an anti-poverty strategy. 

Monday, July 02, 2012

Repeal Obamacare!

A few years ago, I listen to a speech on health care where a speaker shocked the audience when he told them that the number of Canadians who are not covered by health insurance in their country would be the equivalent of 15 to 20 million Americans. Studies by MIT, Cato Institute and CBO have supported these numbers, so how do we declare health care a right when at minimal 5 to 10% of Americans would not see the benefit of the law on any given day?
Ask any economist what is their definition of full employment in the United States, they will answer 4 to 5% simply because on any given day, someone is out looking for a job after quitting their job or being laid off, so the idea that any given day that everyone will be employed is an impossibility in real life. Health care is no difference for someone will be uncovered or fall through the crack on any given day so the idea of universal health care in which everyone is covered is as much impossibility in real life as it is to ensure that every American can have a job or own their home. The attempt to expand home ownership simply resulted in the near collapse of the banking system as well as the housing market.
So the first goal that policy makers must deal with is that regardless of the system, there will be millions of Americans uncovered and the question is to increase accessibility to the system while not bankrupting the healthcare system and the country. There are five realities about Obamacare:
1. The cost of Obamacare will be a drag on the budget deficit. Originally, the Obama administration claimed their plan would reduce the budget deficit but they manipulated data to make this claim. The original estimate used ten year data in which only five or six years benefits being handed out with ten years of revenue paid in the system. Once data is put on an apple to apple comparison, the cost of Obamacare doubled. And that is a conservative estimate and most government programs spending on entitlements have often exceeded government estimates. This plan will add more to the budget deficit, White House denial not withstanding.
2. Obama promised that we would keep our insurance but between the CBO and other studies ; we know that is bunk. Depending what study you accept, anywhere from 8 million to 30 millions of Americans will see their insurance changed or dropped. Again, these are conservative numbers and the actual number would be most likely worse.
3. The Supreme Court has already stated that the mandate penalties are taxes to be imposed on Americans. Economist Steve Moore estimated that majority of the mandate tax will fall on the Middle Class, so the promise that Obama made not to tax Middle Class is down the toilet. There are at least 21 taxes in Obamacare and many reach into the pocket of the Average America. Between the expiration of the Bush tax cuts and Obamacare, the Middle Class will be hit with the biggest tax increase in2013 unless the tax system is changed, Bush tax cuts expanded and Obamacare repealed.
4. Some of those taxes will be on healthcare companies and member of the investor class, which will make health care innovation less likely and increase the cost of investing in America at a time where more investment are needed.
5. And there is no guarantee that we will get better healthcare. Considering that Obama administration view the British as part of their model, one might examine what happens if you get seriously ill in Great Britain. Medical Journal Lancet noted that American Women diagnosed with Breast cancer are more likely to survive five years than British Women and American men survival rate from the Prostate are nearly doubled than their British counterpart.
If Congress and Obama stated from the beginning that Obamacare would increase budget deficit higher, All Americans will see higher taxes, there is a possibility of not keeping your present insurance, government rationing of healthcare, and millions would still not be covered; this bill would have been rejected even by Democrats. The Democrats and Obama sold the American people on a Health care on false data and false hope.
Obamacare is going to make American health care more expensive but not better. Obama care is nothing more than a mandatory health care tax to fund an inferior healthcare system. The question is what to do now. The first thing is to repeal Obamacare and start over.
We need to dispense with the notion that we can cover every American any more we can guarantee every American a job. Once this is done, we can begin to build a better Health care that gives patient more decision in their care and this will by itself lower cost. Over the years, there have been numerous proposals to reform healthcare just as the use of Health savings accounts, and reforms of Medicare that increases competition. These ideas have circulated around for the past two decades and Paul Ryan has already designed plans with Democrats to accomplish many of these goals with Medicare, so the Republicans do have ideas and better ideas than what Obama has given us. (Please spare me comments didn’t Heritage Foundation support the mandate? Yes, they did and they have long since rejected the idea long ago. A bad idea is a bad idea regardless of the source.) These ideas will be explored more in details but the first thing is to recognize is that Obamacare is not the best way to approach health care for all the obvious reason. It is too costly without improving healthcare. If you are a senior, your care will be ration by government bureaucrats and yes, you will be subject to a board that will act as a defacto death panel. Call it a war on seniors. If you are a woman and have breast cancer, you will not live as long as the present system. Call it a war on women. If you are man with prostate cancer, you will not live as long as the present system; and you can call this a war on men. Obamacare can simply described on war on Americans.