It’s Wednesday, September 14th, 2011….and here’s the Gouge!

First up on the mid-week edition, the latest from Thomas Sowell, who asks if The Obamao’s latest transfer of taxpayer’s hard-earned cash to his union cronies doesn’t bring to mind….

Back to the Future?

Those who are impressed by words seem to think that President Barack Obama made a great speech to Congress last week. But, when you look beyond the rhetoric, what did he say that was fundamentally different from what he has been saying and doing all along?

Are we to continue doing the same kinds of things that have failed again and again, just because Obama delivers clever words with style and energy? Once we get past the glowing rhetoric, what is the president proposing? More spending! Only the words have changed — from “stimulus” to “jobs” and from “shovel-ready projects” to “jobs for construction workers.”

If government spending were the answer, we would by now have a booming economy with plenty of jobs, after all the record trillions of dollars that have been poured down a bottomless pit. Are we to keep on doing the same things, just because those things have been repackaged in different words?

Or just because Obama now assures us that “everything in this bill will be paid for”? This is the same man who told us that he could provide health insurance to millions more people without increasing the cost.

When it comes to specific proposals, President Obama repeats the same kinds of things that have marked his past policies — more government spending for the benefit of his political allies, the construction unions and the teachers’ unions, and “thousands of transportation projects.”

The fundamental fallacy in all of this is the notion that politicians can “grow the economy” by taking money out of the private sector and spending it wherever it is politically expedient to spend it — so long as they call spending “investment.”

Has Obama ever grown even a potted plant, much less a business, a bank, a hospital or any of the numerous other institutions whose decisions he wants to control and override? But he can talk glibly about growing the economy.

Arrogance is no substitute for experience. That is why the country is in the mess it is in now.

Obama says he wants “federal housing agencies” to “help more people refinance their mortgages.” What does that amount to in practice, except having the taxpayers be forced to bail out people who bought homes they could not afford?

No doubt that is good politics, but it is lousy economics. When people pay the price of their own mistakes, that is when there is the greatest pressure to correct those mistakes. But when taxpayers who had nothing to do with those mistakes are forced to pay the costs, that is when those and other mistakes can continue to flourish — and to mess up the economy.

Whatever his deficiencies in economics, Barack Obama is a master of politics — including the great political game of “Heads I win and tails you lose.” Any policy that shows any sign of achieving its goals will of course be trumpeted across the land as a success. But, in the far more frequent cases where the policy fails or turns out to be counterproductive, the political response is: “Things would have been even worse without this policy.”

It’s heads I win and tails you lose.

Thus, when unemployment went up after the massive spending that was supposed to bring it down, we were told that unemployment would have been far worse if it had not been for that spending.

Are we really supposed to fall for ploys like this? The answer is clearly “yes,” as far as Obama and his allies in the media are concerned.

Our intelligence was insulted even further in President Obama’s speech to Congress, when he set up this straw man as what his critics believe — that “the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own.”

Have you heard anybody in any part of the political spectrum advocate that? If not, then why was the President of the United States saying such things, unless he thought we were fools enough to buy it — and that the media would never call him on it?

Aye, there’s the rub; for in their unbridled zeal for The Anointed One, America’s once-venerated Fourth Estate has sacrificed every remaining ounce of what little integrity and credibility they still possessed.  And now, their only hope to realize even a pyrrhic victory is to do whatever it takes to ensure Tick-Tock’s continued tenure.

And since we’re on the subject of the Great Prevaricator, as the WSJ details, at the same time he’s once again jetting across the skies, The Obamao’s driving the country smack-dab off….

The 2013 Tax Cliff

Business had better enjoy the next 16 months.

President Obama unveiled part two of his American Jobs Act on Monday, and it turns out to be another permanent increase in taxes to pay for more spending and another temporary tax cut. No surprise there. What might surprise Americans, however, is how the President is setting up the U.S. economy for one of the biggest tax increases in history in 2013.

Mr. Obama said last week that he wants $240 billion in new tax incentives for workers and small business, but the catch is that all of these tax breaks would expire at the end of next year. To pay for all this, White House budget director Jack Lew also proposed $467 billion in new taxes that would begin a mere 16 months from now. The tax list includes limiting deductions for those earning more than $200,000 ($250,000 for couples), limiting tax breaks for oil and gas companies, and a tax increase on carried interest earned by private equity firms. These tax increases would not be temporary.

What this means is that millions of small-business owners had better enjoy the next 16 months, because come January 2013 they are going to get hit with a giant tax bill. Let’s call the expensive roll:

• First comes the new tax hikes that Mr. Obama proposed on Monday. Capping itemized deductions and exemptions for the rich would take $405 billion from the private economy for 10 years starting in 2013. Taxing carried interest would raise $18 billion, and repealing tax incentives for oil and gas production would get $41 billion.

• These increases would coincide with the expiration of the tax credits, 100% expensing provisions and payroll tax breaks in Mr. Obama’s new jobs program. This would mean a tax hit of $240 billion on small business and workers. That’s the downside of temporary tax breaks and other job-creation gimmicks: The incentives quickly vanish, and perhaps so do the jobs.

So even if the White House is right that its latest stimulus plan will create “millions of jobs” through 2012, by this logic a $240 billion tax hike on small businesses in 2013 would cost the economy jobs. This tax wallop would arrive when even the White House says the unemployment rate will still be 7.4%.

• January 2013 is also the same month that Mr. Obama wants the Bush-era tax rates to expire on Americans earning more than $200,000. That would raise the highest individual income tax rate to about 42%, including deduction phaseouts, from 35% today. Congress’s Joint Committee on Taxation found in 2009 that $437 billion of business income would be taxed at higher tax rates under the Obama plan. And since some 4.5 million small-business owners file their annual tax returns as subchapter S firms under the individual tax code, this tax increase would often apply to the same people who Mr. Obama is targeting with his new tax credits.

The capital gains and dividend taxes would also rise to an expected 20% rate from 15% today. The 10-year hit to the private economy for all of these expiring Bush rates: about $750 billion.

• Also starting in 2013 are two of ObamaCare’s biggest tax increases: an additional 0.9-percentage point levy on top of the 2.9% Medicare tax for those earning more than $200,000, and a new 2.9% surcharge on investment income, including interest income. This will further increase the top tax rate on capital gains and dividends to 23.8%, for a roughly 60% increase in investment taxes in one year.

The White House’s economic logic seems to be that its new spending and temporary tax cuts will so fire up investment and hiring in the next 16 months that the economy will be growing much faster in 2013 and could thus absorb a leap off the tax cliff. But this requires its own leap of faith.

The White House also predicted a similar economic takeoff from the 2009 stimulus that was supposed to make a tax hike possible in 2011. Then last December Mr. Obama proposed new tax incentives only for 2011 because the economy was supposed to be cooking by 2012. Now it wants to extend those tax breaks so the economy will be cruising in 2013.

All of this assumes that American business owners aren’t smart enough to look beyond the next few months. They can surely see the new burdens they’ll face in 2013, and they aren’t about to load up on new employees or take new large risks if they aren’t sure what their costs will be in 16 months. They can also reasonably wonder whether Mr. Obama’s tax hike will hurt the overall economy in 2013—another reason to be cautious now.

For the White House, the policy calendar is dictated above all by the political necessities of the 2012 election. Mr. Obama will take his chances on 2013 if he can cajole the private economy to create enough new jobs over the next year to win re-election, even if those jobs and growth are temporary. Business owners and workers who would prefer to prosper beyond Election Day aren’t likely to share Mr. Obama’s enthusiasm once they see the great tax cliff approaching. Look out below.

In a related item forwarded by George Lawlor, Bill Frezza, writing in RealClearMarkets.com, echoes The Obamao’s resemblance to an infomercial huckster:

Obama, the Veg-O-Matic President. Act Now!

Did you catch Barack Obama’s This-Is-Not-A-Stimulus infomercial just before the NFL season kicked off last week? Were you amazed at how the wunderkind once hailed as the greatest orator of his generation has been reduced to a TV pitch man for a product that is so tired it can no longer be called by name?

Here is what our president read off his Teleprompter. Alas, this is what many of us heard:

“Mr. Speaker, Mr. Vice President, do-nothing members of Congress, Tea Party terrorists, handmaidens of the media, and all you little people out there in TV land:

Tonight we meet at an urgent time. The economic crisis you hired me to fix has gotten even worse. As unemployment rises and my poll numbers sink it’s harder to blame George Bush. Reporters keep asking, “What will this speech mean for the President?” TV viewers ask, “Will this windbag shut up before the game starts?”

Many people in this country work hard to meet their responsibilities. The rest are happy to take handouts from me. The question tonight is, can we stop the political circus long enough for Congress to spend another half trillion dollars so I can buy the votes I need to get re-elected? And if not, can I leverage this speech to blame my opponents?

So I am sending Congress a plan that you should pass right away. Call, email, fax, and tweet right now, operators are standing by! I call it the American Jobs Act, although around the West Wing the interns are drawing little Charlie Brown placekick cartoons captioned This Time For Sure.

There should be nothing controversial about this piece of legislation since you’ve seen it all before. But this time everything will be paid for. Everything! I have no clue how, but I promise to pass the buck to the suckers on the super duper committee so if they screw up there will be someone else to blame. That’s why you should pass this bill right away.

The purpose of the American Jobs Act is simple: I have 14 months to save my job and I’m willing to spend unlimited amounts of your money to make sure that happens. This plan will buy more votes from construction workers, more votes from teachers, more votes from veterans, and more votes from the long-term unemployed. Sure, we have to borrow all this dough from the Chinese. But heck, by the time Bearded Ben is through all those T-Bills won’t be worth the paper they’re printed on.

Everyone knows that small businesses are where most new jobs begin. At least that’s what my advisors tell me, having never had a real job myself. Pass this jobs bill – pass it now – and starting tomorrow, small businesses will get a tax cut if they hire new workers or if they raise workers’ wages. Pass this jobs bill, and all small business owners will also see their payroll taxes cut in half next year. Sounds too good to be true? But wait, there’s more!

There’s a bridge that needs repair between Ohio and Kentucky spanning two of the most important voting districts in North America. A leaky faucet in Fargo. Broken windows in Wisconsin. Need your yard cleaned? No job too big or too small! Call now, operators are standing by!

And here’s a special bonus for the first 35,000 callers – act now and we will repair and modernize your kid’s school! Are you concerned about all the money we’ve already sunk into failing public schools just to watch dropout rates go up? Well, this time is different. This time we’re going to eliminate all the waste and fraud.

So don’t delay! Pass this jobs bill right now and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job. Plus free summer jobs for any teenager or illegal alien that ACORN registers to vote!

Some of you remember that when George McGovern ran for President he promised every American $1,000 dollars. Well, I’m going to do him one better. Act now and I promise $1,500 for every working American! That’s right, $1,500 is yours for the asking. And if you’re not working? $2,000 in extended unemployment benefits! In this time of prolonged hardship, where are you going to get a better deal? You should pass this bill right away.

I’m sure that if my fellow great orator and founder of the Republican Party Abraham Lincoln were alive today he would heartily endorse my plan. After all, didn’t he finance the Transcontinental Railroad? OK, so it went bankrupt just like Solyndra. But nobody remembers that because journalists have the attention span of a flea.

Speaking of limited attention spans, I want everyone to repeat after me. Millionaires, Billionaires, Private Jets, Oil Companies – BAD. Teachers, teamsters, shared sacrifice, bridges and trains, Warren Buffet – GOOD. Got that?

Finally, did I mention the Infrastructure Bank I want to set up to funnel your money to construction unions? Of course not. I buried that in the fine print. After watching Fannie Mae and Freddie Mac incinerate $154 billion of your tax dollars chasing government mandates to increase homeownership by people who can’t afford mortgage payments, who wants another government directed bank? Too bad, you’re going to get it anyway! That’s the price of letting me give a campaign speech before a joint session of Congress in an election year.

Thank you very much. God bless you, and God help the United States of America.”

Meanwhile, if you’re wondering where else the hard-earned tax dollars that funded Project Porkulus went, besides Solyndra of course, Special Report‘s Bret Baier has the answer:

A new housing development will soon be available for the formerly homeless in the affluent Maryland city of Bethesda. The project in suburban Washington will cost $4.3 million and house at least 12 individuals.

That’s roughly $360 thousand per occupant. A spokeswoman for the Housing Opportunity Commission cited various reasons for the high cost and noted quote — “Permanent supportive housing, which is what we are providing on Hampden Lane, has proven to be an effective approach to homelessness.” (According to who….other than of course Team Tick-Tock and the Housing Opportunity Commission?!?)

$1 million in federal stimulus money is allocated for that project. The state government and county housing funds will foot the remainder of the bill.

Which brings us to our next item, where we learn Dimocratic….

Senators Take Aim at Stealth Jet

The F-35 Joint Strike Fighter, the Pentagon’s costliest weapons program, has long presented a target for budget cutters: In fiscal 2012, the Obama administration requested $9.7 billion for development and procurement of the stealthy, supersonic aircraft.

But if recommendations issued Tuesday by the Senate Appropriations Committee’s defense panel hold, the F-35 is in line for a smaller share of the budget pie.

Soooo….tell us again why the jobs of union teachers, government bureaucrats and construction workers, let alone quarters for 12 homeless people in Bethesda at $360K a pop, are more important than those producing the means of America’s defense in an increasingly dangerous world?

On the Lighter Side….

Then there’s these tidbits from Taylor Chess:

And in the “What Goes Around Comes Around” file:

California Congresswoman Says Treasurer Robbed Campaign

A Southern California congresswoman told supporters, “We’ve Been Robbed” as she detailed the losses she said her campaign suffered at the hands of a longtime Democratic campaign accountant who’s been charged with fraud. U.S. Rep. Susan Davis told her contributors in a letter released Monday that her campaign was looted of about $250,000 and she blamed Kinde Durkee, whose clients included U.S. Sen. Dianne Feinstein and dozens of other California politicians.

Now the Congresswoman knows how the rest of the country feels!  By the way, reading Representative Davis’ file, we were struck by the fact she’s quite literally the quintessential Dimocrat:

• Undergraduate degree from Berkeley in Socialogy
• Worked with at-risk yutes in Israel and “also lived on a kibbutz (where she undoubtedly watched the Jewish elders play cards!)
• Masters in social work
• Her husband “honored” his military commitment by serving in the Air Force in Japan during the Vietnam war, giving Susan her check in the “military” block.
• Served in the California State Assembly, chairing the committees on Consumer Protection, Economic Development (yeah, Sacramento’s been doing a bang-up job on THAT!) and, hold onto your hats, Government Efficiency!

The only thing missing from her resume is designing the seals on the space shuttle’s solid-rocket boosters, formulating the number of lifeboats on the Titanic….and any semblance of either gainful employment or practical business experience!

Finally, as if anyone needed it one, here’s yet another reason to despise ambulance-chasing trial lawyers:

Lawyer: Beaten Giants Fan Medical Costs to Top $50M

Medical care for the San Francisco Giants fan who was brutally beaten outside Dodger Stadium is expected to cost more than $50 million, according to his lawyers. The figure was part of a damage estimate included in papers filed Friday in Los Angeles Superior Court, according to City News Service.

The filings come in a lawsuit Bryan Stow and his children have brought against Dodgers owner Frank McCourt and 13 others in the baseball team’s organization. The suit alleges a lack of security, lighting and other problems at the ballpark.

Pardon us, Stewardess, but we speak trial-lawyer-jive: what the Stow’s esteemed attorney MEANT to say was that the guys that actually perpetrated this heinous crime HAVE NO MONEY.  Hence the counselors in question cannot MAKE any money without going after the “deep pockets” that in reality bear no responsibility whatsoever for Mr. Stow’s unfortunate condition….AND grossly inflating the costs of Stow’s damages, which of course will determine their LEGAL FEES!

Which is why we firmly subscribe to the philosophy that a 1,000 trial lawyers at the bottom of the ocean merely constitutes a good start!

Magoo