The Daily Switch

Archive for April, 2009

Common Misconceptions

Posted by Ender on April 24, 2009

Recently, a commenter in this post voiced a few common misconceptions about Bush and Obama. Here is the quote: “As I said, taxes would have needed to be increased anyway as a result of the Bush’s spending. I know this sounds like I am saying [Obama’s] spending ok, Bush’s spending bad. I can’t deny that and I won’t back down from that argument. With [Obama’s] budget though you see the results of the country fighting 2 wars. W buried that and never had it reflected in his budget. So people need to take the wars into account when they see [Obama’s] budget.”

Deficits

Deficits

Aside from the glaring inaccuracies there are other problems with this statement. I think we have to address the tax issue. The commenter claims that taxes would have to be raised as a result of Bush’s spending. The purpose of raising taxes I would assume would be to get rid of the deficit. Please reference the chart on the right. These numbers include all war spending. Now if we look at this chart we can see that even including the wars Bush’s deficit was drastically less than the proposed Obama deficit. So, if the purpose of raising taxes is to reduce the deficit then I am thoroughly confused. What is the point of raising taxes if you are going to increase spending by astronomical amounts? Even with tax increases Obama’s deficit will be more than all previous Presidents’ combined.

The commenter also claims that Obama had to reflect the wars in his budget which is causing it to look so bad. Although it is true that Bush funded the wars through emergency supplementals; it is false to say that this is the reason Obama’s budget is horrible. The spending although not in the budget had to surface somewhere. It surfaced in the deficit. Riedl writes, “President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.” So, forget about the budget and focus on the end result, the deficit.

Another similar misconception (not voiced by the commenter) is that Obama is creating $2 Trillion in savings with his plan. “During his recent address to a joint session of Congress, President Obama previewed his budget by asserting that the Administration has “already identified $2 trillion in savings over the next decade.”[9] This is simply not true. His budget increases spending by $1 trillion over the next decade, which he attempts to offset by reclassifying as “savings” $1.4 trillion in tax increases and $1.5 trillion in reduced spending in Iraq. However, gov¬ernment savings have always referred to spending cuts that save taxpayer dollars, not tax increases that feed the government. Furthermore, the Iraq “sav¬ings” are measured against an implausible spending baseline that assumes a permanent $180 billion bud¬get for the global war on terrorism, without any troop withdrawals through 2019. This is the equiv¬alent of a family deciding to “save” $10,000 by first assuming an expensive vacation and then not taking it. Without these false savings, only the $1 trillion spending hike remains, and that does not account for the extra $250 billion proposed for another round of financial bailouts in the current fiscal year.”

The poster also wrote “I don’t believe in a recession that giving tax breaks to the rich is the answer.” This is also hopelessly false. Firstly, the cuts benefit everyone. Secondly, “In the 18 months following the 2003 tax rate cuts, economic growth rates doubled, the stock market surged 32 percent, and the economy created 1.8 million jobs, followed by 5.2 million more jobs in the next 27 months.” The fact of the matter is that tax cuts encourage spending, investment and growth. Even extremely liberal and economically ignorant people like Alec Baldwin admit this. In an interview, Baldwin said “I’m telling you right now, if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television production is going to collapse, and it’s all going to go to California.” The only thing Baldwin got wrong here is that the business will not move to California where the taxes are already worse and driving the movie industry to places like New Mexico, Montana and Canada. Taxes hurt business more than anything else. Reducing taxes on businesses as well as individuals will bring us out of the recession. To look back at the Bush years as having no economic prosperity is completely shortsighted and biased. Even taking into account the housing bubble burst; the economy is still better off then before.

Unfortunately, arguments based on false information never end well. The fact of the matter is that Obama has drastically increased unaccounted for spending to levels that will be detrimental to the economy. I’ll end with a quote:

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.-John Adams

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Posted in Capitalism, Conservatism, Economics, Obama, Politics | Tagged: , , , , , , , , | Leave a Comment »

Guns, taxes and much, much more…

Posted by Ender on April 21, 2009

At the end of March there was yet another propaganda push to villianize guns in America. It took the form of the media and state leaders saying that American guns were fueling the Mexican drug violence. By state leaders I’m not talking about low level mayors and city councilmen. I’m talking about Obama and Clinton…  Here’s a great article about the whole thing…

It appears that Obama’s whirlwind tour of Europe left some with a sour taste in their mouths. Shockingly, even France had several criticisms of Obama. A report leaked by French staffers stated “Most of Mr Obama’s proposals had already been made by the Bush administration and Washington was dragging its feet on disarmament and treaties against nuclear proliferation.” Once Obama was elected I thought they were going to love us over there…guess not. Read about it here.

One of the most despicable organizations in America is the Teacher’s Union. In truly liberal fashion they are the epitome of claiming to care for X while simultaneously looking out for themselves while hurting X. The fact of the matter is that Unions only benefit the corrupt, lazy teachers. The students and education suffer. Here is an article detailing how layoffs are handled.

Apparently, Obama has made an about face on his fiscal irresponsibility. He has made a budget cut of $100M. Wow, I am almost ready to renounce all the times I have said he is economically ignorant. But wait, let’s put this into perspective: Brian Riedl writes “It is 1/40,000 of the federal budget; It is 1/7,830 the size of the recent “stimulus” bill; It would close 1/1,845 of this year’s budget deficit; It is the amount the federal government spends every 13 minutes; and for a family earning $40,000 annually, it is the equivalent of cutting $1 from their family budget.” I’m pretty sure that if the family making 40k a year peed outside instead of in the toilet it would save at least that $1. Glad you are taking this seriously Barry.

And finally, here’s a great video about all those taxes you pay. Did you know that most of you are actually slaves to the state for about 1/3 of the year?

Posted in Conservatism, Culture, Economics, Education, Liberty, Media, Obama, Politics, Quick Links | Tagged: , , , , , , , , , , , , , | 3 Comments »

Creative Destruction & Failure

Posted by Ender on April 18, 2009

Schumpeter

Schumpeter

The term Creative Destruction was coined by Joseph Schumpeter in 1942. Creative destruction is the process where old established companies or technologies are destroyed by new or more efficient ones. Schumpeter argued that creative destruction “is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in…” (Schumpeter) What he means is that creative destruction drives capitalism, which makes sense. Capitalism is the only economic theory that encourages innovation and efficiency. With innovation comes the necessity of ridding yourself of the old. Out with the old in with new, if you will. Seems right, why would we want to keep the horse and buggy industry alive when we have cars, right?  With industries constantly evolving and improving lagging companies and technologies will be left behind.

History is rife with examples of creative destruction. Even the youngest of our readers are witnessing creative destruction as we speak. The music industry is a perfect example we have gone from records to 8 tracks to cassettes to CDs to MP3s. This is creative destruction at its finest replacing costly, low quality, inefficient products with cheap, high quality, efficient products. Other examples include iron to steel, Polaroid to digital camera, warehouse sized computers to the iPhone. One generally can’t complain about these advances.

In my opinion there is another branch of creative destruction that is usually poorly received. This type of creative destruction is the failure of businesses. The media, politicians and consumers in general decry the failure of business. But to be good citizens we must reject this urge and ask “why do businesses fail?”

At the most basic level businesses fail because a.) they are not satisfying the consumer and/or b.) they are using resources ineffectively. We should view this failure as a triumph of the free market because a.) who wants to keep a company around that is making warehouse sized computers these days? And b.) inefficient companies failing frees up valuable resources for efficient companies. Both good things.

Walmart is a good example of this second type. Walmart discovered a way to use its resources more efficiently thus lowering the cost of its products for the consumer, which in turn drove inefficient companies like KMart or various mom and pops out of business. The failure of these other businesses benefited the consumer. Unfortunately, failure of business is fought to the inevitable death (of the business) by politicians looking for votes. All this fight does is waste the taxpayers money and delay the inevitable.

Watch this video for a debate on GM going bankrupt.

In the video Gillespie tells us why we need to let GM fail. They are not too big to fail. He really summed it up perfectly in the opening minute when he says [to paraphrase] “that GM and Toyota sold about the same amount of cars worldwide, GM lost $38B and Toyota made $19B.” Clearly, there is something fundamentally and systemically wrong with the way GM runs its business. It just cannot compete in today’s economy. We need to let creative destruction or failure take place to free up resources for the better companies. Gillespie brings up several other good points about GM and bailouts in general. He also has to defend a cheap pot shot from his counterpart when he says something to the effect that the free market only works on paper.

Let these companies fall into bankruptcy, restructure their business and come back with the ability to compete.  Don’t spend taxpayer money on corporate welfare.  Don’t throw good money after what is clearly bad.  Don’t follow the politicians and drones in the media down the path of state run economies and massive systemic failure.  Rejoice that the free market separates the wheat from the chaff.  Appreciate creative destruction.

Posted in Capitalism, Economics, Socialism | Tagged: , , , , , , , , , , , | 3 Comments »

No, the fish was really this big….

Posted by Ender on April 17, 2009

Seriously, this big

Seriously, this big

It has been awhile since we have posted anything about Biden. Now that I think about it, has he really done anything since being elected? Either way, Joe’s one of a kind witti -ness was displayed last week.

Joe has a long history of gaffes, exaggerations and lies. His latest was an attack on Bush. “I remember President Bush saying to me one time in the Oval Office,” Biden began, “‘Well, Joe,’ he said, ‘I’m a leader.’ And I said: ‘Mr. President, turn and around look behind you. No one is following.'” According to White House staffers not only did this exchange never happen but Biden never even had a meeting with the President alone in the Oval office.

This is not the first time Biden has made Bush the goat in his whimsical fantasies. In 2006 Biden said the following on Real Time with Bill Maher “And the president will say things to me, and I’ll literally turn to the president, say: ‘Mr. President, how can you say that, knowing you don’t know the facts?’ And he’ll look at me and he’ll say – my word – he’ll look at me and he’ll say: ‘My instincts.’ He said: ‘I have good instincts.’ I said: ‘Mr. President, your instincts aren’t good enough.'”

Karl Rove gave this analysis “If you notice, all of these incidents have the same structure: Joe Biden courageously raises the impudent question; the president befuddles the answer; and Joe Biden drives home the dramatic response.”

I believe everyone has had exchanges with people where afterwards you think to yourself “I should have said X.” Unfortunately, Biden does not merely think he should have said X, but actually claims that he did say it.

The Right often accuses Obama of living in a dream world when it comes to his policies and whether they will succeed. It seems that poor Joe’s dream world is a bit more all-encompassing.

Posted in Biden Watch, Liberalism, Politics, The Daily Switch | Tagged: , , , , , | 2 Comments »

From the Field

Posted by maker on April 15, 2009

Can you feel it?

Can you feel it?

Today I was driving through western Tennessee for work.  One of the real benefits of my job is the privilege to get to know this country a little better, first hand. I was struck by the beauty of the land even on a cool and overcast day. The rolling hills and quaint little towns seem so far away and insulated from the rest of the country which is reportedly rife with turmoil and despair. I also noticed that more than any other area I’ve travelled, northwest Tennessee and southwest Kentucky seemed packed with birds of prey. Nearly every mile I travelled brought with it the sight of an owl, hawk or bald eagle. At the risk of  inordinate sappiness, I’ll tell you that every time I see a bald eagle I find myself overcome with a sense of nostalgia and patriotism. I try to imagine what the founders must have intended with the choice of this majestic bird as a national symbol and I am proud. 

As I passed by small town after small town I listened to a long line of callers reporting in to conservative talk radio shows about their experiences of the Tax Day Tea Parties they attended. I was struck by the unique nature of today’s events. When do we as conservatives ever do something as a group? When do we clearly articulate a feeling, belief or sentiment in a way so attractive to so many?  These thoughts caused me to regret being away from home and unable to participate.  I even looked up locations in Tennessee just in case I might have time to stop on the way to the airport. Unfortunately, the event in Nashville was scheduled to end before I would arrive. I resigned myself to live vicariously through the callers speaking of their ‘electrifying’, ’empowering’ and ‘encouraging’ experiences.

Original Tea Party Tea

Original Tea Party Tea

As I navigated my way through the town square of Springfield, TN (pop. approximately 16,000) on my way to Franklin, KY, I noticed a large crowd forming in front of the courthouse.  I checked the clock and was thrilled that I had an hour and a half  to spare before my next appointment about 30 minutes down the road. I turned around, parked and walked towards the courthouse to find that the crowd I had seen just moments before had already grown and was continuing to do so.  I approached the outskirts of the crowd and was struck by the diversity of the assembled throng. Business men and women in various levels of formal work attire mixed with obvious farmers who rubbed shoulders with young mothers pressed up against men in full revolutionary war garb. It seemed as though everyone in the crowd, regardless of dress, held something in their hands, whether it be a sign, child, camera, placard or breifcase (no pitchforks or torches. Sorry, acorn).

As I pressed in a little closer I noted the countenance of the people around me. Despite the reported rage that was fueling these ‘radical’ protests, I was met with bright eyes and ready smiles, doubly surprising if you knew what I look like. This was not an angry mob. This was a peaceful gathering of good-willed citizens exercising their constitutional right to assembly, many for the first time.

I caught the attention of a nearby participant to ask what time things were scheduled to start. He informed me that they were running behind because of a court proceeding that was running long that they didn’t want to interrupt. Twenty minutes, two renditions of This Land is Your Land, God Bless America, countless chants of U.S.A! and one Pledge of Allegiance later, a local pastor named Bob Carroll stepped up to a podium to deliver his speech. The speech was well written, well delivered and well received. It was met with loud applause at times, shouts of encouragement and agreement at others. It was stirring and surprisingly non-partisan. The greatest strength of the speech, however, was its seamless inclusion of direct quotes from the constitution.

Sadly, at this point I had to hit the road again. Nonetheless satisfied, I proudly returned to my work comforted by the knowledge that even in what some would label a “backward’ southern area these tea parties were being conducted in a respectful, peaceful and effective manner.

My sincere hope for this country is that these Tea Parties might stir something up within the citizenry. I pray that we would consult history to learn from what our leaders are so eager to repeat. I pray we would each set aside our prejudice and party affiliation and embrace common sense and respect for the constitution upon which this great country is founded.

Posted in Capitalism, Conservatism, Culture, Economics, Liberty, Politics, The Daily Switch | Tagged: , , , , , , , | 12 Comments »

Wait, that wasn’t for Prom King?

Posted by Ender on April 11, 2009

The essence of cool?

The essence of cool?

I stumbled across a recent poll by RealClearPolitics. The results of the polls were interesting to me:

President Job Approval  60.4 approve 30.1 disapprove
Congressional Job Approval  33.3 approve 58.0 disapprove
Direction of Country  32.4 right 61.2 wrong

Does anything strike you as odd with these results?  Obama has gotten every single thing he has wanted and yet the country is going in the wrong direction according to the poll, but his approval rating is great.  This is just another example of an uneducated electorate rearing its head.  They are so caught up in his cult of personality that they refuse to acknowledge he is taking the country down the wrong path.

All the Obama fanatics out there listen up.  We get it, we get that you think Obama is the cat’s meow, that he is so cool, that he smokes, that he plays basketball with pants on.  But, just because someone is suave doesn’t mean they can be president or do a good job in the office.  Obama has endeavored to have the most amateurish start to a presidency ever and is succeeding.  He gave the British PM DVDs that could not be played in the UK, he gave the Queen an iPod, he bowed to the Saudi King, he is setting up to make the same mistakes as FDR when it comes to the economy, he hired a tax cheat to be the Treasury Secretary and he called an act of war (by the pirates) a distraction.

He is in over his head.  His initial reaction to every situation has been wrong.  Please take a step back, analyze the situation objectively.  If you think the country is on the wrong track Obama must not be doing a good job.  Last November’s election wasn’t for Prom King, it was for the most important job in America.

Posted in Obama, Politics | Tagged: , , , , | 5 Comments »

It’s for your own good, don’t ya know?

Posted by Ender on April 10, 2009

Of all tyrannies a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.  C.S. Lewis

Tyranny does not always start with goose stepping soldiers storming your house to take away unauthorized items.  Sometimes it starts with the government taking small things that you actually agree with.

For instance in NYC, Mayor Bloomberg banned smoking in the early 00s.  I am sure that many out there appreciate this ban because they don’t have to worry about stinking for the rest of the day after going out to eat.  However, think about your liberty and the liberty of all the restaurant owners in the state of NY.  Aside from the fact that the ban was based on junk science and bad statistics we need to remember that the government should not have the power to force businesses and individuals to ban a legal activity.

Mayor Bloomberg

Mayor Bloomberg

Bloomberg’s basis for the policy was to prevent “thousands” from dying each year.  The problem is that the individuals involved (waitresses, bar tenders, customers, owners) chose to work in these restaurants.  They could have chosen to go to different restaurants, have different jobs or own different businesses.  Beware of policy that tells us to do something for our own good.  I am much better qualified to decide what is  for my own than the government.

In 2006, NY moved to ban trans fats from restaurants. Again, I am left to wonder on what basis is the government allowed to do this?  Can’t I decide whether or not I want to risk the slight increase in risk of heart disease by eating trans fats?  If consumers truly wanted a ban on trans fat they would stop eating at places that cooked with it.  This in turn would lead those businesses to stop using it in order to keep their customers.  No law necessary.  But, who’s going to argue when it’s for your own good.

Perhaps there are some out there reading this who say “Well, I see your point but smoking in public and trans fats are really bad so I don’t mind the government taking those things.”  My question to you would be: where does it stop?  What would they have to take away?  What about Twix bars or table salt?  That would be ridiculous, no?

If you had to guess which mayor in the US was attempting to ban table salt; who would be your first guess?

Bloomberg?  You’d be correct. Bloomberg announced “that the city is starting a “nationwide initiative” to pressure the food industry and restaurant chains to cut salt intake by half over the next decade.”  Don’t bother him or others with the fact that it is based on junk science.  (Read the article for details)  Just remember that this is for your own good.

C.S. Lewis had it right when he said “those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”  Who would have thought that the smoking ban would have led NYC down this slippery slope?  People need to realize that they are responsible for their own health, not the government.  The government needs to realize that it cannot legislate a healthy society.

You’ll have to excuse me for a moment while I convert my flask to be able to handle covert salt transportation because eating a steak without salt is just plain unacceptable to me…….

Posted in Conservatism, Culture, Health care, Liberty, Politics | Tagged: , , , , , , , , , , , | 9 Comments »

The Great Overreach

Posted by Ender on April 4, 2009

The problem with the Liberal philosophy is that it has an unquenchable thirst for power. When was the last time you heard a Modern Liberal, not to be confused with a Classical Liberal, call for a decrease in Government? I guess I should clarify, when have they asked for a decrease in Government outside of Law Enforcement and the Military? This should not be a surprise even to Liberals because the idea that the Government can solve any problem is at the core of their belief system. “Failure is not the product of his beliefs but merely want of power and resources.” (Levin) A belief system with this at its heart will invariably lead to severe overreaches when they are in power. In only about two short months we have seen several examples of overreach.

Salaries

Barney Frank

Barney Frank

On March 22nd, I wrote a piece about how the administration was seeking to control executive pay. I asked “How long until it’s not just executives anymore?” Well, unfortunately, it appears the answer was 2 days. On May 24th, the House Financial Services Committee Chairman Barney Frank passed the Pay For Performance Act of 2009. The act “is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.” It would give power to the Treasury department to determine if salaries are unreasonable.

Initially, this would be justified by only applying to companies that took bailout money. The problem I see is the problem of the slippery slope. Just look at where it has taken us so far, from just executives to all employees of bailout companies to…..what? I am reminded of Wickard v. Filburn, a case tried before the Supreme Court. In the 1940s (through today) the Federal Government has the ability to regulate interstate trade. In the Wickard ruling, the Supreme Court decided that it could regulate whether a private citizen could grow crops on his own land to use for his own consumption. How could the Court do this, you ask? Well, the Court said that by not participating in interstate trade the farmer affected interstate trade, thus opening him up to regulation. With rulings like this it doesn’t take much to imagine a situation where the Government declares it can control all salaries.

Running a Business

Giethner and Bernanke

Giethner and Bernanke

Treasury Secretary Geithner and Federal Reserve Chairman Bernanke argued for the ability to “regulate and even take over financial goliaths whose collapse could imperil the entire economy.” Shockingly, Obama agreed. This is such a large overreach/power grab that I am surprised they had the audacity to ask for it. The Government has no right to take over companies like this. The only thing Geithner and Bernanke disagreed on was which of them should have the power. In another post I wrote I talked about how Obama and his team decided that they knew more about the auto industry than the board of GM. The Government cannot run a car company, a bank, a financial institution, a hospital (see Walter Reed) or a post office. A commenter asked what Wagoner (former CEO of GM) knew about running a car company. I ask what does the Government know about running an economy, specifically Geithner. You can learn all about how Geithner devastated the Indonesian Economy in the 90s. In a post on what caused the Tech Boom I briefly mentioned part of its cause was due to the Asian crisis. Guess who was behind it? “[B]y frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy.” Three cheers for Geithner!

Free Speech

Supreme Court

Supreme Court

There have been many attacks on Free Speech in the last few years. Most of them are under the guise of fairness. McCain-Feingold was a blatant attack on free political speech. “Just last week, the Obama administration argued before the Supreme Court that it has no principled constitutional problem with banning books.” (Goldberg) The Supreme Court is hearing a case about a documentary called Hillary: The Movie. “Several justices asked the deputy solicitor general, Malcolm Stewart, if there would be any constitutional reason why the ban on documentaries and ads couldn’t be extended to books carrying similar messages. Stewart, speaking for a president who once taught constitutional law, said Congress can ban books “if the book contained the functional equivalent of express advocacy” for a candidate and was supported, even slightly, with corporate money. Such advocacy, Stewart conceded, could amount to negatively mentioning a politician just once in a 500-page book put out by a mainstream publisher.” I guess these words just aren’t clear enough “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” (Before people start commenting on McCain being on the Right, give me a break. He has more in common with the Left than the Right, which is why he lost the election.)

These are just a few examples of the overreaches we have seen lately. Let’s hope the American people remember Liberty and wake up soon.

Posted in Capitalism, Conservatism, Culture, Economics, Liberalism, Liberty, Obama, Politics, Socialism, War on Business | Tagged: , , , , , , , , , , , , , , , , | Leave a Comment »