The Daily Gouge, Wednesday, June 6th, 2012

On June 5, 2012, in Uncategorized, by magoo1310

It’s Wednesday, June 6th, 2012….and 68 years ago today the forces of freedom gained a toehold in Nazi-occupied France. The words of Admiral Chester Nimitz, marveling over the unconquerable courage of the Marines on Iwo Jima, were no less emblematic of the grit and dogged determination demonstrated by the Allied forces who landed on the beaches of Normandy: uncommon valor was truly a common virtue.

Now, here’s The Gouge!

First up, though Scott Walker soundly thumped Tom Barrett….

Wisconsin Results: Walker Wins

….Hell Bells, let’s call a spade a spade; it was a good, old-fashioned ass-whuppin’!!!….the real winners in today’s vengeful recall election were not only the taxpayers of Wisconsin, but fiscal conservatives throughout America. As for the public employee unions and their supporters….

But hey, Progressives needn’t pine; after all, the results of this recall DON’T MEAN A THING! Just say it to yourself; over, and over, and over….like a mantra. Get used to it; you’ll likely be repeating the same self-deluding bullsh*t come our next birthday….on November 7th.

In the words of the immortal Dr. Peter Venkman…..

Remember: Walker only beat Barrett by 5 percentage points the FIRST time around!

Which brings us to the “He Makes Us Proud To Be A Conservative” segment, and the latest from Hairplug Joe as he confirms anew why we predict he won’t be part of the final 2012 Dimocratic ticket:

Jill and Michelle ‘Would Not Have Any Chance’ Without Govt.

WTF was I THINKING?!?

Vice President Joe Biden said Tuesday that his wife, as well as the wife of President Barack Obama, would have had “no chance” in life had it not been for government help. According to vice presidential pool reports:

Vice President Biden met with leaders from 10 colleges this afternoon to kick off a new effort to increase transparency in financial aid packages. …

“I know, literally, Barack and I talk about it. Neither one of us would have had any shot,” Biden said. “The same with our wives. Both wives are smarter than both of us. Literally, these very accomplished women would not have any chance without some help.”

We don’t doubt the veracity of Biden’s statements for a moment. Then again, “Both wives are smarter than both of us“; talk about a back-handed compliment!

Next up, James Pethokoukis, writing at AEI‘s Enterprise Blog courtesy of Conn Carroll and the Morning Examiner, relates why….

No, it’s not time for another trillion-dollar stimulus

Here we spend again, I mean, “go” again. Two of America’s leading liberal economists, Paul Krugman and Larry Summers, want Washington to start spending more—probably much, much more—to boost the sputtering U.S. economy. Extremely low interest rates, they argue, both allow government to borrow cheaply and signal a deep hibernation by bond market vigilantes unconcerned by federal debt levels.

Lots of potential reward with little potential risk—or so Krugman and Summers argue. Their proposal raises many questions and issues:

1. How much? The 2009 stimulus cost $831 billion, not counting borrowing costs. Without it, according to the Congressional Budget Office, the unemployment rate today would be 0.1 to 0.8 percentage point lower. Using, charitably, the most favorable CBO estimate, we are talking about $100 billion per tenth of a percentage point. So how much is enough for Krugman and Summers, $800 billion? $900 billion? $1 trillion? Or is the sky the limit?

2. What would the money be used for? Summers says in his op-ed that it would be “amazing if there were not many public investment projects” that would pay for themselves by “expanding the economy’s capacity or its ability to innovate.”

First, I would like to vet that short list. Second, is a check from Washington the best way to make these supposed projects happen? Third, what happened to Summers’s famous admonition that stimulus should be “timely, targeted, temporary?” These projects would likely take some time to get going. And if you believe the economic forecasts from the Obama White House, the economy is—yet again—approaching a mini-boom: 3% GDP grow this year, 3.0% in 2013, 4.0% in 2014, 4.2 in 2015, 3.9% in 2016, 3.8% in 2017. Now, I don’t place much stock in those predictions from Summers’s old pals on Team Obama, but he just might.

3. Would the bond vigilantes really stay asleep? Krugman and Summers are preternaturally confident that another big step-up in U.S. indebtedness would have no effect on our ability to borrow. That’s a big assumption, argues AEI’s Desmond Lachman: “An important lesson that the U.S. should be drawing from the Greek experience is how mistaken it is to be guided by low market interest rates. Since it might be recalled that as late as 2009, when it should have been obvious to all that Greece’s public finances were on an unsustainable path, the Greek government was able to raise as much long-term money as it liked at a mere 0.2 percentage points above the rate at which Germany could borrow such money. It might also be recalled how quickly markets turned on Greece and how soon a country that had no difficulty in borrowing from the international capital market at unusually favorable terms found itself totally shut out from that very same market.”

And let’s also keep in mind that the last time Summers tried to outsmart financial markets he lost $2 billion for Harvard’s endowment fund. (See “Morgan, J.P.”, or “Dimon, Jamie”.)

4. Might not more debt actually hurt long-term U.S. growth? A new paper from Kenneth Rogoff, Carmen Reinhart, and Vincent Reinhart finds that very high debt levels of 90% of GDP are a long-term burden on economic growth that often lasts for two decades or more: “The average high-debt episodes since 1800 last 23 years and are associated with a growth rate more than one percentage point below the rate typical for periods of lower debt levels. That is, after a quarter-century of high debt, income can be 25% lower than it would have been at normal growth rates.”

5. What about taxes? One huge mistake the high-tax EU has made is making nearly half its austerity program come in the form of even higher taxes. Not only should the U.S. not be raising taxes, we should be cutting them. Our corporate tax is so high that cutting it to 25% from 35% might well pay for itself—not to mention boosting business and investor confidence.

The U.S. economy has been malfunctioning since 2006. Shouldn’t it finally be time to address the deep problems of an anti-growth tax code, economy-stifling regulations, and out-of-control spending?

Which brings us to our next item, courtesy of Tom Bakke, and Simon Black addressing the very same point at SovereignMan.com:

An Example Of Why This Country Is Headed In The Wrong Direction

This past Friday, Barack Obama was at a Minneapolis-area Honeywell plant touting his economic recovery credentials to cheering disciples. One of the excited faithful was a young boy, fifth-grader Tyler Sullivan, who took the day off from school to hear the President speak.

The President was full of the usual bombast about how Congress needs to work with him to ‘build a strong economy’, and how he wants to get $3,000 to everyone in the American middle class so that people can go out and buy ‘thingamajigs’.

Naturally, the crowd cheered. It was the typical sort of gross misunderstanding of economic prosperity that you see from politicians… and most people at this point. People these days think it’s a great idea when the government sprinkles money around the middle class, and love the idea of politicians ‘coming together’ to build a better economy.

In reality, when people hear talk about politicians ‘building an economy’ they should run away like a scalded dog.

Throughout history, a lot of other politicians have also tried building an economy– it’s called central planning, and it just doesn’t work. From Diocletian’s failed ‘Edict on Prices’ in 301 AD in which the Roman emperor tried to fix wages and prices, to Stalin’s Soviet Union, to Mao’s China, to Mugabe’s Zimbabwe, the verdict is obvious: economic growth is better left to the private sector, not government.

The other important mischaracterization was this idea of the economy getting better from people spending money, in this case, the government sending everyone $3,000 to buy stuff.

Most people seem to think this is a good idea, even the ones who consider themselves to be educated about economics (having been brainwashed with deeply flawed Keynesian fluff). The truth is that a nation is like an individual… and individuals do not become wealthy by going into debt and consuming. They become wealthy by saving and producing.

Yet there was the country’s exalted leader energizing the crowd with talk of sending them free money to spend. And as I mentioned, one of them was fifth-grader Tyler Sullivan. The President’s even shook Tyler’s hand, commenting that he would offer to write an excuse note to pardon the boy from skipping school.

On the exact opposite end of this spectrum is the case of 17-year old Diane Tran, a Houston area high school student who has had to take on two jobs in order to support herself and her siblings after her deadbeat parents divorced and skipped town. Tran reportedly misses a few days of school per month so that she could hold down her jobs, yet somehow still found time to complete her schoolwork and make the honor roll.

She was arrested by local officials for truancy and hauled in front of the ‘Honorable’ Lanny Moriarty who threw the girl in jail so that he could show everyone that he’s ‘tough on truancy.’

Tran has aspirations to become a physician someday, and she is despondent now that her new arrest record may tarnish her chances of being accepted to medical school.

For the sake of brevity, I’ll skip commenting on how worthless the government-managed education system has become, and simply point out the obvious dichotomy:

– Boy skips school to cheer the President as he extols debt and consumption: OK
– Girl skips school to work, save, and support her family: NOT OK

These examples are the most obvious signs yet that, like the tax and regulatory frameworks, those who mindlessly support the political process of debt and consumption are rewarded, while those who produce and save are punished.

Such is life now in the Land of the Free. Have you hit your breaking point yet?

Uhhh….that would be: