What is the Republican “Nuclear Option”?  That’s simple, – the “unlimited amendment” provision of the Reconciliation Process.  Use it to turn the Obamacare Bill into a real Budget Bill – you know, the kind of bill Reconciliation was really meant to be used for.  Let’s help them by turning this Health Care Bill into a true budget bill and take the opportunity to dismantle the tax-and-spend programs of this administration.  Put every aspect of current spending on display as an individual amendment – use the Cloward-Piven strategy against them.  Overwhelm the process and use this opportunity to expose this administration’s out-of-control spending for what it is.

What an opportunity for Republicans!   Take advantage of this wonderful opportunity to not only force the Democrats to “own” this massive new entitlement, but we can force them to “own” every single aspect of this administrations liberal agenda by fileing an individual amendment for every earmark currently in the budget and require an up-or-down vote on each and every one.  Attach an individual amendment for every single unspent provision of Stimulus and TARP and require an up-or-down vote on that as well.  Attack the funding of every Czar and require an up-or-down vote.  Put Speaker Pelosi’s federally funded family travel plan on display and require an up-or-down vote on that.  Make individual amendments regarding the funding of every expenditure of the National Endowment of the Arts.  Go through the entire budget of the EPA and require up-or-down votes on them.  Go after all the funding for ACORN and their affiliates as well as Planned Parenthood and their affiliates.   Let there be no “sacred cows” - go after it all, but do it with small, clearly worded, amendments – each requiring an up-or-down vote.  Attach so many budgetary amendments to this bill that it would be physically impossible to finish the debate and vote on them before the end of the decade.

Why wait for reconciliation, I’d start to put the list of amendments together now and put them up on a web site.  Let the Dems know  now that there is no way a Reconciliation process is gong to “fix” the Senate Bill they are about to accept on the pretense it will all be fixed with a Reconciliation process.  Show them we really want to help them make this a bipartisan budgetary bill worthy of the Reconcilliation Process and that no stone will be left unturned in making that a reality.  If the President wants to lead his party over a cliff on this, I say we help him out.

You seem Mr. President, we know how to read Saul Alinsky as well.  Let’s get it on!

Now that we have the attention of the main-stream media and have shaken the foundations of the socialist/status-quo agendas of the politically entrenched, many voting citizens are taking note and wondering – what exactly does a “Conservative Leader” look like.  For those of us who are old enough to have witnessed the leadership of President Ronald Reagan, we have the benefit of our witness.  However, many voters only know of President Reagan from news reports or perhaps text books.  More likely, they learned about him from a source with a liberal bias that paints a rather unflattering portrait.  Reagan was president over 20 years ago.  Since then, our youth have experienced the extreme-left (Pres. Obama) and the middle-left (Pres. Clinton), and the middle-right (Pres. George W Bush); all of which to some extent had domestic policies that increased the size of government and helped raise a generation of people that look to the government for their provision

Fortunately for those who are now asking the question, “What does a Conservative Leader look like?” we have a living example.  On February 11^th, recently elected New Jersey Governor Chris Christie called an emergency joint session of the New Jersey legislature to address the states $2.2B deficit – in a state where the constitution requires a balanced budget no less.  If you are wondering what a true “conservative” leads-like, have a listen to his speech.

Keep in mind that the relatively small state of New Jersey has a $2.2B deficit.  They got that deficit by playing “shell games” with the state budget – like forecasting state revenue increases when everyone knew that revenues would decrease.  The same kind of shell games our leaders in the U.S. Senate and House of Representative play when they send legislation off to the Congress Budget Office for scoring with a set of “assumptions” with which the CBO is required to constrain their analysis.  ”Assumptions” everyone knows have a near zero probability of coming to fruition. 

To further develop your understanding of how a “conservative” leads, I’m providing you with an example of how socialists and defenders of the status quoe lead for contrast.  Have a look at the response of democrats in New Jersey legislature as they try to defend spending money the citizens of New Jersey – one of the most heavily taxed states in the union – don’t have:

It’s time that our government officials, at all levels of government, come to terms with the same thing that every head-of-household knows – You need to live within your means.  And living within your means does not mean printing more money, borrowing more money, and spending your children’s money.   If you believe in these principles, if you believe in the power of the individual – not the provision of the government – then you are a Conservative.  Now, vote like one.

Okay, so that’s one example – right?  Well, how about the other government backed stimulus program – the one targeted at saving the real estate industry.  In this program, the government is giving home buyers an $8,000 tax credit.  This program was originally estimated to cost us – the taxpayer – a mere $7 billion.  It is now on track to cost us double that – or $15 billion.  So, what are we getting for our money?  Well, according to the National Association of Realtors, the program has created 350,000 new sales [2].  A simply analysis shows that this little program cost the taxpayer only $43,000 per a sale.  Oh, and Sen. Reid wants to expand this program, set to expire soon, to the end of 2010.  The projected cost – an additional $30 billion dollars.  The projected impact– an additional 500,000 in home sales.   This means that extending this program will cost the taxpayer $60,000 for each additional house sold.  Great idea Harry.

CAN WE JUST STOP THIS NONSENSE PLEASE!  Is it any wonder our Nation’s financial house is an absolute mess.  Look, I know first-hand people who have good paying jobs, who could well afford to buy a car without any incentive by the government, who were in fact in the market to buy a car.  And here comes the government, dropping eight grand in their lap for doing something they were going to do anyway.  And one by one, the politicians step up to the microphone and proclaim what a great job they are doing for our benefit.

I thought we had Czars with vast experience in business giving the President advice on how to best stimulate the economy.  I guess we have a new adage:  “Those who can’t succeed in business try politics. And those who can’t succeed in politics become Czars.”

Footnotes:

[1] Edmunds.com Press Release: Cash for Clunkers Results Finally In; Oct. 28, 2009

[2] The Washington Post: The home-buyer tax credit; throwing good money after bad; Oct. 27, 2009

According to the Michigan Film Office web site, in 2009 alone, these productions were completed:

• Up in the Air – Paramount Pictures
• Betty Ann Waters – Innocence Productions, Inc.
• Hopeful Notes – Red Future Entertainment, LLC
• Oogie Loves in the Big Balloon Adventure – Big Balloon Adventure Movie, LLC
• Caught in the Crossfire – Caught in Crossfire, LLC
• Stone – Stone Productions, Inc.
• The Irishman – Sweet William Productions, LLC
• Hung – Hangman Films Inc. / HBO
• What If – What If Productions, LLC
• The Lake Effect – Growing Up, LLC
• Crash Course – Crash Course Productions, Inc.
• Meltdown – Meltdown Productions, LLC
• Clark Family Christmas - Karew Records, LLC
• Capitalism: A Love Story - Front Street Productions, LLC
• Flipped – East of Doheny
• Jump Shipp – Dot&Cross, LLC
• The Genesis Code – American Saga Productions, LLC
• Trivial Pursuits – 3,4 Women Productions
• The Next Great Mission – 45 North Productions, Inc.
• Little Murder – Cine Grande Films
• Fitful – Fitful Film Associates, Inc.
• Daisy Tells a Secret – One of Us Films, LLC
• Annabelle and Bear – Radish Creative Group
• John, The Revelator - Revelator Movie, LLC

Films currently in production include:

• Wooden Boats – Wooden Boat productions, LLC
• Red Dawn – Wolverine Productions, LLC
• Motor City Motors – Original Productions
• Wannabes – Savvy Production LLC
• What’s Wrong with Virginia? – Tic Tock Studios
• Highland Park – Highland Park Productions, LLC
• Alleged – Dean River Productions
• Game of Death – game of Death Productions, LLC
• Grey Skies – Grey Skies, LLC
• Vanishing on 7^th Street – Vanishing Film LLC
• Naked Angel – Dancingstar Productions LLC
• Jerusalem Countdown – White Horse Entertainment, LLC
• Grave – Iron Helmut, LLC

In the last week, suburban Detroit commuters were routed around the filming of the re-make of “Red Dawn” and the filming for the new move “You Don’t Know Jack”.

This great joint effort by the Gov. Granholm and the Michigan legislators is having a wonderful impact by bringing real jobs to Michigan – a state hard hit by a decade long recession.  They cut taxes and the market responded by bringing business to Michigan.  These businesses employ people, buy equipment, use restaurants and hotels, and more.

Yet, it seems the Governor and legislators have learned nothing from their success.  In recent budget negotiations she is pushing for higher taxes on individuals and business.  Instead, she should be drastically cutting taxes on corporations and business.  To bring business to Michigan you must create a great business climate – one that is unparalleled to any other state… or nation for that matter.  For example, Ireland has a maximum corporate tax of 12.5% resulting in global corporations re-locating their offices to Ireland. [2] Additionally, China has 0% tax on stock capital gains and as a result, there is huge capital investment happening in China. [3]

Gov. Granholm needs to understand that Michigan is in competition for a limited number of businesses in the country.  If she wants to attract business to Michigan – and therefore bring jobs to Michigan – she needs to make Michigan so attractive that businesses throughout the country would be crazy not to consider Michigan their high priority for relocation.

When people work, the state revenue increases while people needing financial support from the state decreases.  When people don’t work, revenue drops and the people needing state social programs increases.  It’s not rocket science.  We need jobs here in Michigan, not unemployment benefits.  The Governor’s number one priority needs to be job creation in the private sector.

Michigan needs to take a long hard look at ALL the barriers to job creation in this state.  This includes tax law, labor laws, regulatory laws, environmental laws, occupational safety laws, … you get the idea.  We need to look at all things that contribute to the business environment and get brutal about making changes.  There can be no sacred cows.

The Governor’s 2008 Film Industry incentives should be seen as the laboratory test for what is possible when you get government on the side of business development.  The results have been very positive.  Now, let’s apply the same ideas to the broader business environment.

Footnote:

[1] Michigan Film Office; Public Acts

[2] IDA Ireland; Tax Regime – Deloitte, 2009

[3] The Journal of the American Enterprise Institute; Capital Gains Tax: An Argument for Repeal, by Newt Gingrich, August 13, 2009

We’ve heard a lot about change over the past three years; first during a two + year presidential campaign and now 9 months into the presidency of the Barak Obama.  On the domestic front, the ideas on the table from the left:

• Cap and Trade
• Massive Health Care Reform
• Repeal of the Bush tax cuts
• T.A.R.P.

Just to name a few…

Of the above, only T.A.R.P – an $780 billion economic stimulus package – has been enacted.  This legislation was so massive in scope and so out of control that even today legislators are “surprised” by its content.  Why?  Because by their own admission they did not, and could not, have read the bill before the House and Senate leadership brought it to the floor for a vote.  The President, his Treasury Secretary, and congressional leadership had everyone whipped into a panicked frenzy with claims that if this legislation was not passed in days the entire world economy would collapse. 

So, it passed, and the deficit ballooned, and the money is rolling out and the results are pouring in.  Month after month, the unemployment rate continues to rise – e.g. reaching 9.8% nationally just yesterday (17% if you include the underemployed and those who have just stopped looking for work).  Month after month, businesses continue to fail – e.g. GM announces the closing of Saturn this week. 

Saturday, during the Defending The American Dream Summit sponsored by American’s For Prosperity, CNBC’s Larry Kudlow said. “Look, if it (T.A.R.P) was going to work, it would have worked by now.”  In Kudlow’s opinion, T.A.R.P. is already a failed, massive, government intervention into the free market and our society. 

Regardless if you agree with Kudlow’s assessment or not, one thing is true:  Irrespective of the success or failure of T.A.R.P. to stimulate our economy, our children and grand-children are going to have to foot the bill.  To me, that is simply irresponsible on our part to allow that to happen.

According to Senator Demint (R – SC):  “This year alone, the Senate has passed a $787 billion stimulus, a $350 billion Wall Street bailout extension, a $400 billion earmark-infested omnibus spending bill, a $109 billion loan to the International Monetary Fund, $6 billion to federalize charities and pay volunteers, $3 billion for cash for clunkers, $400 million in corporate welfare to help tourism corporations advertise overseas, and a $4 billion bailout of the Postal Service.” [1]

Given the apparent dismal, albeit short, track record of this administration, would it not be helpful if we were able to test their ideas before implementing them?  After all, don’t we test drugs before we give them to humans to cure them and don’t we test cars before we give them to drivers to drive them?  So, before we try to fix or drive our economy/health care/environment, would it not be a good idea to test these ideas before our legislators vote on concepts (not content) and implement change blindly?

Fortunately, the ideas being proposed by the Democrats in charge in Washington D.C. have in fact been tried and we have the ability to examine the results.  For example, California has implemented Cap in Trade and the Federal legislation passed by the U.S. House and under consideration by the U.S. Senate.  So, how’s it going in California – and elsewhere – where Cap and Trade has been implemented?

According to the Legal Planet, a blog run by UCLA’s Berkeley Law School (hardly a conservative think-tank), Cap and Trade laws have a dismal track record where ever they have been implemented.  In his article, “Cap and trade: it’s never worked, so let’s try it on a massive scale”, the author Ethan Elkind points out that the failure is the result of the lack of ability for government(s) to effectively legislate and administer environmental change with the resulting outcome being only massive tax increases and manipulation of so-called Cap and Trade markets [2].  Elkind’s position is supported by a law suit recently filed by several environmental advocacy groups against the California Air Resources Board (CARB) – the agency charged with implementing California’s Can and Trade Law – claiming that the government is failing to meet the objectives of the legislation [3].

So, if Cap and Trade laws have failed because governments, for a number of reasons, have been unable to implement them in a way to achieve the desired outcomes, then why are we moving forward to implementing them on a national scale with one economic analysis after another warning of massive job loss to India and China along with massive tax increases and massive negative economic impact on both businesses and individuals.

This is not the kind of change we need.

Footnotes:

[1] Washington Politicians’ Most Titanic Lie The Washington Examiner, Oct. 1, 2009 by Sen. Jim DeMint

[2] Cap and trade: it’s never worked, so let’s try it on a massive scale; Legal Planet, the Environmental Legal and Policy Blog, by Ethan Elkind

[3] Lawsuit alleges California’s cap-and-trade plan fails to minimize GHG emissions; Global Climate Law Blog by Lucy Wheatley Sept. 17, 2009

Today, the Treasury Dept., in response to a Freedom of Information Act (FOIA) request by the Competitive enterprise Institute released demonstrates that the Obama administration calculated the potential cost of Cap and Trade to be over $1700 per a family per a year. [3][4]

I guess we should not be surprised that a mere $1,660 discrepancy in tax impact to the American family would be overlooked by a democratic party that continues to allow the House Ways and Means Committee – you know, the committee that writes the tax code – to be chaired by Charlie Rangel (D-NY).  Yesterday, the National Legal and Policy Center filed a complaint with the House Committee Standards of Official Conduct to expand its ongoing investigation in Rangel’s under-reporting his income and capital gains by some $2 million dollars. [5][6]

Yet, we are asked to blindly believe Pres. Obama and the Democratic House and Senate leadership when they tell us that the Health Care Reform Act will be “deficit neutral”; that only the Federal Government can provide proper oversight of the health insurance industry; that only the Federal Government can provide meaningful competition to health insurance companies; that only the Federal Government can find waste, fraud and abuse in the system.  So far, the confidence meter in the ability of this administration to get anything right is pegged at zero. 

Footnotes:

[1]  Joint Program on the Science and Policy of Global Change, Massachusetts Institute of Technology, letter to Rep. John Boehner (R-OH) April 1, 2009 

[2] Cap and Trade a ‘Declaration of War’ say Republicans by Josiah Ryan, CNSNews.com Staff Writer May 01, 2009

[3] Global Warming Tax Costs Revealed in FOIA Treasury Dept Documents, CEI Analysis Confirms Massive Tax on Energy by Christine Hall, Sept. 17, 2009  

[4] Dept. of Treasury reply to FOIA request from Competitive Enterprise Institute

[5] NLPC Alleges Charles Rangel Hid More Income in Complaint to House Ethics Committee by Ken Boehm, Sept. 17, 2009 

[6] Complaint by National Legal and Policy Center filed with the Committee of Standards and Official Conduct Sept. 16, 2009 

When it comes to federal spending, the system is Broke² :

• Broke:  No longer functioning correctly
• Broke:  Out of money

As a family, we have been through tough times financially.  We have learned that in order to get the family budget under control you have to ruthlessly control those things you can control such as discretionary spending, borrowing, luxuries, etc. 

As a country, we will never get our financial house in order as long as earmarks are allowed in the legislative process.  You would think that our elected officials would be tightening the federal government’s belt just like our families are doing.  But that is far from reality.  Here are some examples for the latest list of earmarks for the 2010 budget:

• $12 million to monitor sea turtles and monk seals.
• $5 million for a supercomputer to help study planets and fruit flies.
• $8 million for a cultural exchange between villages that once made a living killing whales.
• $24 million for the East West Center, a private think tank even President Obama wants to cut.
• $500,000 for music enrichment programs for Native Hawaiian children — part of $59 million for health and education programs targeted to Native Alaskans or Hawaiians.
• $201 million to his alma mater, the University of Mississippi, including $10 million for programs at the Thad Cochran Research Center (the Senator who earmarked the funds).
• $750,000 Mississippi Biotechnology Association building — an organization that has no members and doesn’t exist, and that got $450,000 last year.
• $4.4 million to build fire stations, $14 million to improve drinking water in local communities (responsibilities typically left to the states).
• $1.6 million for a mobile music lab.
• $650,000 to a private Christian school (Piney Woods) on 2,000 wooded acres where student tuition is $31,400.
• $400,000 to pay overtime for the Jackson Police Department to combat drug use.
• $950,000 for the local Audubon Society, despite national Audubon assets topping $18 million.
• $1 million for a trolley museum.

     (Source:  Fox News )

These are just a handful of earmarks from a three senators; Inouye D-Hawaii, Cochran R-Mississippi, and Murtha D-Pennsylvania.

I find that this kind of “back-door-budget” process violates the trust of the American people.  It demonstrates the kind of aristocratic thinking that led to the American Revolution.  The attitude in Washington is that it’s their money to spend as they like.  If they need more, well they will just come and take it from you and me.

Of course today politicians know that raising taxes on the middle-class is tantamount to political suicide.  So instead they say they are going to tax corporations and other businesses.  Former Fed. Reserve Chairmen Allen Greenspan said it best, “Corporations don’t pay taxes; people pay taxes.”  Some have misunderstood that statement to mean that corporations used loop-holes to get out of paying taxes.  But that is not what he meant.  What he meant was simply this:  Raise a tax on a corporation and the corporation has no choice but to pass that increased cost onto you and me – the consumer – in the form of increased prices.  These cost increases are known as “Hidden Taxes” and they cost you and me plenty every year. 

Tonight, President Obama is going to use the “bully-pulpit” of his office to try to convince us that the Federal Government can do the best job in providing healthcare insurance.  Frankly, I don’t see how that is possible when our elected officials cannot control themselves when it comes to spending our money and our children’s money.

Take a positive step Mr. President and demand a Federal Law that will put an end to earmark spending once and for all.  You claim that you are for transparency – well, let’s get transparent in the budget process before you try to re-engineer our society any further.

Cheng Siwei, a leading Chinese economic spokesman was very critical of Federal Reserve Chairman Ben Bernanke’s monetary policies stating, “If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard.”  He went on to say that China is so concerned that they have started to “diversify” their holdings of roughly $700 billion of U.S. foreign-exchange reserves, opting to sell their holdings off and purchase gold as a hedge to the dollar “falling hard”.

This is not good news for the U.S. economy.  China is the largest purchaser of our federal debt.  For years they have been financing our government’s addiction to deficit spending.  China is signaling very clearly that they will be less and less likely to continue this practice because of concern of the credit worthiness of our nation.  If the Chinese credit pool dries up, then the U.S. government will be left with a very limited number of choices:  raise taxes significantly on everyone, print more money, and/or drastically cut government spending.

While Pres. Obama sends Vice-Pres. Biden around the country to tell the American people that the “stimulus is working just as we planned”, I’m left to wonder what the heck their plan is anyway.  As of yesterday:

• The value of the dollar has fallen to the point where global monetary investors are pulling money out of U.S. Monetary funds and placing their investments with emerging markets like Brazil.
• Unemployment deepened with the announcement this week that we are now at 9.7% for the nation.  When you factor in those who have given up on looking for jobs or who can only get part-time work to replace their lost full-time job, we are at 16% unemployment/underemployment.
• Trillion dollar deficit spending has become the new billion dollar deficit spending
• We now learn that taxpayers will most likely never recover $80 billion of the automotive bail-out
• There appears to be no end to the Obama administration’s willingness to spend then tax.

Mr. Vice-President – if all is going “according to plan”, then where is your plan taking us?  China seems to know, do you?

You will hear accusations about greedy business, those evil corporations, and the evil Wall Street investors. But to understand the real culprit of inflation we need to understand what inflation is and what it is not.

Inflation is NOT the rise in price due to supply and demand of goods. It’s not even the rise in prices of products in a certain market segment (let’s say fuel). In fact, the rise in prices during an inflationary period is a symptom of inflation, not inflation itself.

Inflation is simply this, an increase in the supply of printed/minted money. Money is manufactured just like any other “product”. Under normal circumstances, when the government prints new dollar bills and puts them in curculation, it takes an equal amount of old dollar bills out of circulation at the same time. This one-for-one exchange of old bills for new bills keeps inflation in check because there is the same number of bills in circulation.

When the government prints new money and puts it into circulation without removing old money, the value of money decreases due of the increase in money supply. The result of this decrease in the value of money results in the increase of in the price of goods. Note that I did not say the increase of the value of goods, but the increase in the price of goods – big difference.

For those of you who are visual thinkers, picture this. There is a scale that weighs value. On left side of the scale is a bag of groceries. If we could measure the value of the bag of groceries as weight it might weigh 10 pounds. On the right side of the scale is a stack of ten one dollar bills. The value of the ten dollar bills also weighs 10 pounds. The value of the groceries equals the values of ten dollars so the scale is level. Now, we apply inflation – not to the groceries – but to the dollar bills (inflation impacts the value of money, not products). If inflation is at 10%, now our ten dollar bills weigh 10% less – or 9 pounds. The result is that it would take more money on the money side of the scale to represent the value of the bag of groceries. The scale dips down on the grocery side not because its value increases, but because the value of money decreases.

The drop in the value of money because of increased money supply does not just impact the cost of products, but it applies to every aspect of our economy – it will take more dollars to represent the value of products, services, wages, utilities, taxes, … everything.

So, why did I say at the open of this note that a storm is looming. Lost in all the conversation about our economy and healthcare reform is the fact that on March 19th, 2009 the Federal Reserve said it would flood our financial markets with an additional $1.2 trillion. What this means is the government is printing an additional $1.2 trillion and putting it in circulation without taking an equivalent amount out of circulation.

They did this to try to break what they perceived as a financial log-jam of money that is preventing the circulation of money in our economy. Here’s the problem: there is no “money log-jam”… in fact, quite the opposite is true. A log-jam is because the supply of logs is hung-up somehow in a river preventing the logs from being floated down-stream… so the up-stream logs keep piling up at the point of the jam. Break the log jam and logs will flow unimpeded.

But our credit crisis is not a money-jam… it’s a lack of money because we borrowed, borrowed, and borrowed some more. For decades, we as a country have been borrowing more than we are saving. Because we are not saving, the money is not in the banks to be lent out – hence a credit crisis. People have borrowed money against the “perceived value” of their homes and spent it on other “stuff – a practice that was encouraged by the real-estate bubble nationwide. When the bubble broke, the value of home prices fell – but we spent that perceived value in credit borrowing. Now, we owe more in debt then we own in value. So the current credit crisis is not a result of a money log-jam, it’s a result of overextended credit – we’ve spread our money out too thin.

Simply adding money to the money supply will not fix this problem. It may have a short-term impact – it will be ture that banks will have more physical dollars to lend out. But the long-term impact is INFLATION – and lots of it. Like I said, there is a storm on the horizon, and its name is “Inflation”.