Did You Know II?

The depiction of the 25 largest companies in 1999 and in 2009 is another interesting analysis from the Wall Street Journal's end-of-decade article. Only eight of the 25 companies on the 1999 list made the 2009 list. This illustrates the incredible dynamism of the (semi) free market we live in.

In contrast to the left's depiction of a static economic environment, with the implication that today's winners will be tomorrow's winners as well due to the advantages of precedent, a free market produces dramatic changes in a short period of time.

Instead, today's winners can be tomorrow's losers, and companies one has never heard of become wildly successful (think Google) in a short period of time.

Did You Know?

The Wall Street Journal produced an end-of-the-decade recap, and it had some very interesting information.

One analysis depicted the top five donors to the Democratic party and Republican party.

Other than ActBlue, which is self-described as " the online clearinghouse for Democratic action", the top donors to the Democrats were all labor unions, donating $116 million. The top five donors to the Republican party were two companies and three industry associations, donating a total of $59 million.

Add the ability to deliver volunteers for political activities, and now you know why labor unions are so critical to the Democratic party - and it helps explain Barack Obama's massive payoff to unions in the "stimulus" bill, the auto bailout, and other policies.

Crime and the Economy

In an email from the New York Times with today's headlines, the Times said:

"Despite the bad economy, [New York City] is on track to have the fewest homicides in a 12-month period since 1962."

That comment is based on the left's belief that economic conditions are the key determinant of criminal activity. Crime rates rose during the economic boom of the 1920's and fell during the Great Depression of the 1930's. The fact that this pattern was influenced by criminal activity associated with Prohibition during the 1920's and its repeal in 1933 suggests that crime is due to many factors and is not well correlated to economic conditions.

The drop in the number of murders in New York in 2009 during a recession further explodes this myth.

The article discusses the continued decline in murder that New York has enjoyed. From a peak of 2,245 murders in 1990, the number of murders this year as of December 27 was 461 - a staggering decline of almost 80%.

One of the tactics the New York City police employ is to question and frisk some people on the streets - which resulted this year in 7,000 weapons being seized, including 800 guns. Speaking of this tactic, Police Commissioner Raymond Kelly says, "We believe young people who may have a gun think twice before they take it out on the street."

This is a profoundly important policy. The NYPD is raising the cost to would-be thugs from bringing weapons on to the streets by confiscating them, and as with most things in life, if the "cost" of something is raised, people will engage in less of that activity.

Interestingly, this tactic is likely to be "politically incorrect", since its implementation is probably based on common-sense profiling (does he look like a gang member?). Perhaps city residents are enjoying the 80% drop in murders too much to protest.

So Long TARP

Being tarped is such a bad thing that banks are racing to repay government investments to escape restrictions on their compensation and business practices.

Citigroup and Wells Fargo are the latest firms to announce plans to repay the government $20 billion and $25 billion respectively.

The government may make $14 billion on its Citigroup investment, which if realized soon would work out to approximately a 30% return for a year - which is a rate of return similar to what LBO investors and venture capital firms achieve.

As I have previously mentioned, the government's bailout of the banking sector was fundamentally a different exercise than its bailout of the auto industry. One bottom line measure of that difference is the government is making money on its bank bailout, while it is deeply in the red on its bailout of GM and Chrysler.

Here We Go Again

The Wall Street Journal reports that academics and housing experts believe the U.S. government should retain the part public entity / part private company aspect of Fannie Mae and Freddie Mac, with Fannie and Freddie promoting loans to low-income borrowers and the government insuring mortgages.

This is exactly the type of government intervention in the housing market that caused the financial crisis.

It is said that "people who forget history are doomed to repeat it."

And then there are those who never learned the "history" of our recent financial crisis to begin with.

Iran Takes Hostages, Again

Iran announced that it will try three American, who were hiking near the Iranian border, as spies. This continues a pattern of similar incidents, such as last week capturing five British citizens who were sailing in or near Iranian waters. The five Brits were released, and I suspect the three Americans will eventually be released after a show trial followed by a pardon by the Iranian regime.

You may wonder why Iran would do such a thing. I can see a number of benefits to the regime:

• It sends a message to Iranians, many of whom are protesting stolen elections from earlier this year, that if America can't even help its own citizens it surely won't help you in your protests.

• It creates the impression domestically that America is threatening the country, in a hope of rallying disenchanted Iranians to support the regime against external threats.

• It allows the thuggish regime to gain credibility and respect when American leaders have to ask for the return of the three captives.

• The regime looks "generous" when it subsequently releases them.

• It demonstrates to America that Iran can hurt us in many ways, attempting to deter an American military strike on Iran's nuclear facilities.

And what price does Iran pay for this behavior, which in previous times would have been grounds for war? Nothing. Iran knows very well America won't make them pay a fearful price for harming or threatening Americans.

If there only benefits, and no costs, from acting thuggishly, expect more of the same.

Now He Tells Us

The Obama administration is defending its Afghan war strategy by pointing to the success of George Bush's "surge" in Iraq in 2007.

Senator Barack Obama opposed the Iraqi surge, voting against it in February 2007.

For a man who has apologised for American's purportedly bad behavior, and who claims he wants to change the political culture in Washington, Barack Obama could acknowledge he was wrong, and Bush was right, about the Iraqi surge.

Don't hold your breath.

Expropriation, Global-Style

Recent actions by the U.K. and North Korean governments indicate that the desire to expropriate the assets of people who are politically out of favor thrives in the world.

In the U.K., the Labour government announced its plan to impose a 50% tax on bonuses paid to bank employees above $40,000. The shockingly punitive rate, directed at certain workers but not all, is a disgrace to the nation that has done so much to advance freedom in the world.

North Korea, who can't claim such an honor, has issued a new currency - but limited the amount of money per person which can be converted to the new currency (about $50-75 worth), and the old currency will no longer be legal tender. So anyone with more than $50-75 in cash, and $100-150 in a savings account, will see their entire savings above those amounts wiped out.

It appears this despicable act is directed against those who have earned some money in the limited markets that have sprung up in the heavily socialized nation, and the totalitarian regime is seeking to make the people even more dependent on the government.

While many disregard the relationship between private property, the reality is that the growth of wealth provides the motivation and means to seek to change oppressive government policies.

The dictatorship in North Korea understands this all to well. Do we?

Three Cheers for Michelle Rhee

Michelle Rhee is the chancellor of the Washington, DC public schools. She was hired in 2007 to shake up one of the worst educational systems in the country despite spending more than most, about $14,000 per student annually.

Rhee created a firestorm with the DC teachers union by firing 266 teachers in September based on quality, and not on seniority.

That which is normal course for many organizations is, however, a crisis for the American Federation of Teachers. The AFT is one of the two main teachers unions in the country, and it is battling Rhee out of fear this example of sound management could spread to other school districts in the country.

Rhee has also tried to create a performance-based compensation culture for the DC schools, where teachers can opt out of tenure-based job protections in return for being able to earn significantly more money. As example, first year teachers could earn up to $78,000 a year, as compared currently to $45,000, while experienced teachers could earn up to $131,000, or double their pay. The union rejected the plan as a threat tenure.

Rhee is a courageous and determined women, fighting to make common sense reforms in education. She deserves our admiration and good wishes.

Thanks, Ben

You may wonder why oil prices have more than doubled from their lows this past year, when demand is not growing much or at all. This rise is pushing up the cost of gasoline, acting as anti-stimulus tax increase. Moreover, it is increasing the money flowing to nations like Iran, Russia, and Venenzuela and making it easier for them to oppose America.

The staggering monetary easing by the Federal Reserve under Chairman Ben Bernake is to blame. The Fed is keeping interest rates at all-time lows and flooding the financial system with cash, and one consequence is that the money is bidding up the price of gold, oil, and other assets. Investors have an incentive to move money from money market investments that pay little or no return, or borrow money at low rates, and invest in assets with the hoped-for higher returns.

The Fed is creating bubbles around the world, and while the monetary easing will do far more to aid in recovery than Obama's "stimulus" bill, we are paying a high price for its actions.

Thank you, Australia

The Australian Senate handed a defeat to Prime Minister Kevin Rudd by rejecting Rudd's cap-and-trade plan to limit carbon emissions.

Since countries are reluctant to adopt carbon limits if other nations don't also adopt them, so as not to put domestic industries at a disadvantage to international competitors, Australia's rejection of cap-and-trade makes it less likely other nations will adopt it.

Thank you, Australia.

Global Warming Fraud

A number of years ago, I read a column by a scientist who said that many scientists often found it difficult to know whether they should disclose all they could about various issues or focus on the message they want to deliver to the public. He gave as an example the issue of smoking, where many researchers don't publicize the chances that a person would die from smoking out of fear if the real probability was known, some people would be less motivated to quit.

He finally disclosed in the article that the chances of dying from smoking are about 33%, and while in reality that is a shockingly high number since so many things can kill you, it is possible some smokers implicitly assume the probability is even higher. So for such smokers, scientists fear that disclosure of the details would deter some from quitting smoking.

This was a specific example of the broader problem he wrote about it, and it has made me very concerned since then about the nature of scientific claims. Adding to that concern is the intellectual trend among leftists in academia, which of course is where scientists spend so many years studying and teaching, to deny that there is objective truth, and therefore one should simply express one's political preferences so there is no truth anyway. Journalism schools have taught this (which is the intellectual underpinning of why the media is so biased), and the "softer" intellectual disciplines, such as history, sociology, and literature, are filled with this approach.

The "hard" sciences, such as physics, chemistry, and biology, have been less immune to this assault on reality, since it is harder to ignore the data.

All of this led me to be very skeptical of the claims of environmental activists in general and global warming activists in particular. Although it would seem that environment science falls more into the hard science category, global warming concerns are driven by what models project the weather will be like tens and hundreds of years from now so it is open to enormous interpretation. And given the intellectual climate, with a desire to focus on one's political goals and to be "effective" as scientists, the inherent uncertainties in projecting the future left much room for political goals to get in the way of science.

The recent disclosure of emails by environmental scientists has exposed the shocking disregard for the truth that must animate scientists and instead has made clear the scientific thuggery of many: seeking to prevent different views from being publicized, corrupting the peer-review process, and "losing" data provide compelling evidence of corruption and politicization of these global warming crusaders.

The "lost" data is, of course, a joke: it has never been easier in the history of mankind to store data than in recent years, and such data is the essence of the scientific method (i.e., what is actually going on in the world), so the proper inference is that these scientists must have discarded data because it didn't help their cause.

In addition, look at the nature of the debate. The proper discussion of any issue is to gather the evidence, integrated in a logical manner, to make the case. Instead, we see global warming advocates seek to denounce those who disagree, even implying that disagreeing with the global warming hypothesis (an estimate of the future based on inherently uncertain computer models) is analogous to the anti-Semites who deny the Holocaust occurred (a historical event).

The proper attitude of anyone toward those who argue by denunciation is to assume their claims are false since, if they were true, they would argue with facts and logic. And to demand the thuggery to stop.

So it is time that global warming advocates present the world, with data that is verifiable, with a rational argument that addresses: is the world warming and to what degree? what are the possible causes of the warming? how likely and important is the warming due to emissions from human-activity? is it bad, good, or indifferent to humanity if the Earth warms? is the cost to stop the warming worth the benefit?

The last two questions are critical and often lost in the shuffle, as if any change must be bad and any cost must be appropriate to pay to stop such change. It is important to realize that warm weather is generally more supportive of life than cold (note the death rate is lower in the summer than winter) and that there has been a massive migration of people in America from the cold north and Midwest to the warm south and west.

People's real choices belie the concern that global warming is necessarily a bad thing, assuming it is true and is caused by human activity. And Bjorn Lomborg has dramatically highlighted that the cost to effect changes in the climate are staggeringly expensive for trivial change, while many other problems are so pressing.

Obama to U.S. Military: Die for Nothing

Barack Obama's "thoughtful" review has produced the worst of all outcomes in Afghanistan: adding troops without a clear commitment to winning the war. By saying that the additional troops are temporary, with their withdrawl beginning 18 months from now, Obama sends the message to the enemy that they can wait us out.

For people we hope to keep or recruit to our side, from the Afghan and Pakistani governments to the Afghanis living with Taliban forces or sympathizers nearby, they have to worry we will abandon them later - and if so, they should abandon us today and accommodate the Taliban today.

But worse of all is the message to America's military personnel. We are sending you to fight, and some to die, but we don't have the courage or capacity to see the war through to victory. It would be more honorable to withdraw them all now, and not have a single soldier die, if we won't fight to win.

It is a despicable decision by the President.

Supporting Iranian Reformers

For years many have suggested that the best way to support reformers in Iran was for the U.S. to be silent, out of fear that American support would taint the reformers politically within Iran.

The Iranian regime's crackdown on dissidents this year in response to the rigged election has provided a test of that advice, and it has proven to be dead wrong. As reported in the Wall Street Journal, Iranian opposition leaders continue to press the Obama administration to support their cause publicly.

Tragically, Barack Obama has shown no sign of doing so. It turns out the big change Obama promised us in the 2008 presidential campaign has been to support dictators and undermine allies.

Sneak Preview

A battle between two unions in California provides a preview of what the Democrats card check legislation would produce in labor relations in this country.

The Wall Street Journal reports on the struggle between the Service Employees International Union (SEIU) and the National Union of Healthcare Workers (NUHW) to organize 10,000 healthcare workers in Fresno, CA. The SEIU won the election earlier this year but the NUHW is suing to overturn the results, claiming the SEIU intimated workers to favor them over the NUHW.

Note, this is a battle over which union gets to represent the workers; it is NOT a battle between a union and a company.

The SEIU is alleged to have visited workers up to five times per day; to threaten them with a loss of wages and benefits if they voted for NUHW; and to question their immigration status.

This shows how valuable it is to union bosses to have more members, and more members' dues filling union coffers.

And it illustrates the type of tactics used by labor to pressure workers to vote for unionization that card check legislation would only make worse. Under card check, a secret ballot would no longer be used in union-organizing elections, and instead workers could just check a card during a period of time to vote for unionization. This means workers could be pressured by union activists, at work or home, to sign the card in front of the activists.

Fortunately, card check legislation has been losing steam due to these concerns. The union battle in California reminds us why it is important card check not be passed.

The New Meaning of Going Green

The prospect of legislation to address "global warming" gives new meaning to "going green", as various businesses hope to cash in on cap-and-trade. Among the biggest beneficiaries would be operators of nuclear power plants, since their facilities don't produce carbon dioxide and would receive carbon credits that would be sold to others who produce carbon dioxide - providing a huge windfall for some businesses at the expense of others and the economy as a whole.

Tarped Again

Bank of America is finding it difficult to recruit a new CEO, made more challenging by the prospect of pay czar Kenneth Feinberg needing to review any new employment agreement.

One possible candidate turned down an approach out of fear Feinberg wouldn't approve buying out his unvested stock at his current employer, which is a common and necessary practice to induce an executive to leave his current employer.

So the Obama administration has made it harder to recruit a CEO where the government has a huge investment, making it more difficult for BoA to succeed and make that investment a success.

This is what government intervention produces in the economy. And this type of behavior is what Obama wants to inflict on our healthcare system.

Asset Bubbles

With the Federal Reserve keeping interests at near zero percent and printing money through quantitative easing, many believe asset bubbles are forming in various stock and real estate markets around the world.

The concern has become so great that shortly before Barack Obama arrived in China, the chairman of the China Banking Regulatory Commission warned that the weak dollar and low U.S. interest rates have led to "massive speculation" around the world.

At best, we are distorting investment decisions which will retard long-term economic growth. At worst, we may be sowing the seeds of the next financial crisis.

The Partisanship Canard

The Wall Street Journal reports an interesting pattern of Congressional voting that shows increasing partisanship over the decades.

The table above from the Wall Street Journal shows that 40 years ago, individual Congressional Republicans and Democrats voted with the majority of their party in 61-63% of the time. Today, they do so to a much higher degree, 85% for Republicans and 89-92% for Democrats.

But the other interesting insight from this chart is that while 40 years ago Democrats and Republicans were equally likely to vote with their party, today Democrats are much more likely to do so. This year, House Democrats voted against their party's majority only 8% of the time, while Senate Democrats did so 11% of the time. Meanwhile, Republicans voted against their party's majority 15% of the time - 88% more often than House Democrats and 36% more often than Senate Democrats.

Obama and the media like to portray Republicans as the source of partisanship in American politics. This data shows partisanship is common to both parties, but particularly so to Democrats.

The Future of Healthcare?

The U.S. Preventive Services Task Force made a startling announcement this week, changing guidelines for screening for breast cancer. The group seven years ago recommended that women over 40 years old get mammograms, but have now issued revised guidelines advising women to get mammograms after turning 50.

It is certainly the case that new data can lead to a change in a diagnostic or treatment regimen, so the USPSTF's decision hopefully reflects their best current thinking.

But the worry is that the decision could reflect a desire to keep government health care costs down. Even if that wasn't the motivation for this decision, the mammogram controversy illustrates what may be a common occurrence under government-guided healthcare: to what extent will the advice, guidelines, or requirements be a function of the government's desire to cut costs?

Real Economics

This Wall Street Journal article on the negative impact of political uncertainty on small business activity illustrates the "anti-stimulus" actions that Barack Obama and the Democratic-controlled Congress have taken. Healthcare and global warming legislation suggest that businesses costs may increase in unpredictable ways, while the risk of increasing taxes takes money and incentives for businesses to grow.

On February 1, I laid out my own suggestions in this column for a proper plan to promote economic growth: cutting taxes, barriers to trade, and regulations without PR and legal assaults on businessmen. Instead, Obama and the Democrats have pursued the exact opposite strategy, inducing fear and uncertainty among the very businesses and people we need to feel confident to expand their activities and grow the economy.

The Iran-Venezuela Axis

I wrote on September 29 that the growing relationship between Iran and Venezuela had as one of its goals the installation of Iranian nuclear missiles on Venezuelan soil to threaten America.

I'm now not the only on with that view, since recently Warren Kozak in the Wall Street Journal expressed a similar view.

Iran's nuclear problem is not just of concern because of its impact on the Middle East or Israel, as big a problem as that is for Amercia given the multiple wars we have fought in the region since 1991. If left unchecked, it also poses a direct military threat to American cities.

Clean Water

Bjorn Lomborg, a former member of Greenpeace, has done yeoman's work to explain to anyone willing to listen that, of all the problems in the world, global warming is low on the list of priorities to address (and he assumes global warming is a problem).

Lomborg convenes policy makers and economists to develop the Copenhagen Consensus, which represents this group's assessment of what are the truly urgent problems facing the world. Top on the list is access to clean water for the three billion people in the world who lack it.

Lomborg's recent column in the Wall Street Journal discusses the awful conditions that the lack of clean water creates, and why a focus on global warming pales in comparison for the world's poor.

Terrorism in America

Nidal Hasan's shooting rampage at Fort Hood is the worst terrorist attack in America since 9/11.

Naturally the left prefers to think of this as an example of what befalls stressed-out soldiers, but there are lots of soldiers dealing with psychological problems who don't scream "Allahu Akbar" and then proceed to gun down fellow soldiers.

Thankfully, Joe Lieberman is promising an investigation into what the government knew, or didn't know, about Hasan's actions and state of mind before his terror rampage.

The Anti-Stimulus

Johnson & Johnson announced layoffs of 8,200 people. This is just the latest announced job cuts in the pharmaceutical industry, where Pfizer (19,500 job cuts), Merck (15,930), and Eli Lilly (5,500) have recently announced job cuts.

Job reductions are unfortunately a normal part of companies and the economy more broadly reacting to changes in business conditions.

But one such changing condition is the assault being waged by the Obama administration and Democrats on the health care industry through its proposed health care legislation. If profits are tougher to come by, companies will cut jobs and costs to help offset their losses.

J&J went out of its way to say that its job cuts were not related to pending healthcare legislation, and while that may be true, it is certainly possible that they feel the need to say that as the company looks to garner favor with the government.

Think of it as a form of "anti-stimulus", with Obama trying to create public sector and make-work jobs with his "stimulus" bill while high quality private sector jobs in the pharmaceutical industry are lost.

Auo Fiasco

The Wall Street Journal reports that politicians are exerting political pressure on GM to help its constituents, under the premise that since GM took government money, it is like a government agency.

The article highlights a number of efforts by politicians that hurt GM financially, and by extension, the American taxpayer through the government's ownership stake in GM.

This is the face of socialism, where those with political pull get favors to help them economically. And with GM's vast size, there are lots of favors that can be doled out.

More Financial Debacles

The Wall Street Journal reports on a long-predicted problem finally coming to fruition. The Federal Housing Administration is a government-owned company that guarantees mortgages, and during 2007 and 2008, the government wanted the FHA to guarantee more mortgages for those who couldn't otherwise qualify for a mortgage.

If a borrower can't get financing on the open market, there is usually a good reason - they are a bad credit risk. So when the FHA took on guaranteeing such debt, it was stepping into a minefield.

Well, the mines are now bursting. The FHA expects 24% of the loans insured in 2007 and 20% of the 2008 loans to default, wracking up huge losses for the American taxpayer.

America's Image

The Wall Street Journal reports that Iranians staged large protests of the regime on the day traditionally used by the government to demonstrate against America. The regimes gets its thugs to chant "Death to America", so the protesters chanted "Death to the Dictator", a reference to the Iranian leadership.

But the protesters added a remarkable element to their demonstration, also chanting "Obama, Obama, you are either with us or with them".

So there you have it. America's image in the mind of freedom fighters is now one in which they believe we side with the authoritarian regime - a regime that is one of our leading enemies in the world.

With better presidential leadership, this is an easy call. America should side with the protesters and against our enemy.

Is this the kind of change Americans thought they were getting when they voted for Obama last year? Tuesday's vote suggests not.

Nobel / Noble Insights?

While much has been said about Barack Obama winning the Nobel peace prize, including becoming a punch line of many jokes, there is an important element that has generally been overlooked.

The Nobel committee lauded Obama for his commitment to rid the world of nuclear weapons, and while most realize Obama doesn't have achievements worthy of the peace prize, I want to raise the issue that the Nobel committee, and Obama, are wrong to think that trying to rid the world of nuclear weapons will make the world a safer place.

In the 64 years since the atomic bombs were dropped on Hiroshima and Nagasaki, there have been no direct wars between the major powers. In the 75 year prior, there were two world wars that claimed tens of millions of lives, plus wars between Germany and France (1870), the United States and Spain (1898), and Russia and Japan (1905).

The stunning fact that the nuclear era has been free of war between the major powers isn't a mere coincidence. Instead, it is a function of the protection that the American nuclear umbrella provides to nations in Europe and Asia who are otherwise in close proximity to enemies (the Soviet Union and Europe and China and Japan / Korea) and that the consequence of war between the major powers would be so catastrophic.

It is true we stand at the precipice of rampant nuclear proliferation if we don't stop Iran's nuclear weapons programs. An Iranian nuclear arsenal will spur Arab nations to build nuclear weapons and raise the real specter of nuclear war involving Iran and Israel.

Unfortunately, it seems the only realistic to stop Iran's nuclear program is to destroy it militarily, which no doubt is the exact opposite of what the Nobel committee hopes to achieve with Obama's award.

The Norwegian leftists on the Nobel committee have gotten it exactly backwards: nuclear weapons in the hands of America and its allies have made the world more peaceful than it otherwise would have been, and a military attack is exactly what is needed to stop the disastrous consequences of Iran developing nuclear weapons.

Enabler in Chief

If there is one politician who, above all else, shares the largest responsibility for the financial crisis, it is Representative Barney Frank. He aggressively pushed Fannie Mae and Freddie Mac to expand subprime lending, and he has continued to demonstrate his reckless disregard for sound financial policies by pushing for more aggressive lending to lower- quality borrowers since the financial crisis has begun.

So what is Barney Frank's latest gambit? He and fellow Democrat Walt Minnick wrote a letter to Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Blair urging them to "show some temperance in their regulation of traditional banks.". Specifically, Barney Frank is worried that regulators are being too tough on smaller banks, many of whom have failed this year and many more which may fail due to poor loans quality.

Given the premises of our public-private financial system, this is exactly what regulators should be doing to protect taxpayers from shouldering an ever-higher cost to bail out these banks. Instead, Barney Frank wants these banks to get a break, at the risk of even greater taxpayer losses.

If Barney Frank were ever voted out of office, the stock market should rise 5% on the news - that's how harmful he has been and continues to be to America.

Change We Really Need

Election night was a bad night for Barack Obama and the leftist agenda of Democrats. Big losses in the governor's races in Virginia and deeply blue New Jersey grabbed the headlines, but Republicans made large gains in suburban communities that drifted Democratic the past ten years. One year of Obama's and Nancy Pelosi's leftist agenda has changed that.

This bodes poorly for the left's health care and global warming legislation, as the large number of Democratic congressmen from states or districts that McCain or Bush won in 2008 and 2004 presidential elections will realize their jobs are in jeopardy unless they tack right.

While much can happen in a year, as the change in political fortunes from the 2008 election to today demonstrate, Republicans must feel good about their prospects for picking up many congressional seats in 2010.

Obama Bests Bush

Barack Obama has taken the presidency to new heights as compared to his predecessor.

Obama has had 26 fundraisers in his first nine months in office as compare to six for George Bush during his first 12 months.

Obama also has golfed far more often than Bush: Obama has golfed in nine months as many rounds of golf that Bush took well over two years to play.

That's sure change we need.

You Can't Make This Up

In its attempt to get people to buy electric cars, the Obama administration provides a federal tax credit of up to $5,000 to subsidize their purchase.

Golf carts, which are electric-powered, are covered by this program. And when combined with subsidies provided by state government, up to 100% of the golf cart's price can be free.

While there may be no free lunch, with the advent of the Obama administration, there are free golf carts.

Where's the Outrage?

The Congressional Budget Office believes that none of the $50 billion in TARP funds used to modify home mortgages will be repaid to the U.S. Treasury.

$80 billion of TARP funds was invested in the auto companies, and GMAC just announced it needs several billion dollars more. It would be shocking if the government gets its money back, yet alone turns a profit. Staggering losses are more likely.

Meanwhile, many of the banks that received TARP funds have returned the money or have produced a profit for the Treasury.

So in a rationale world, you would expect intense scrutiny of why the government's spending on the mortgage modification and auto company investments has been squandered.

Instead, we are treated to attacks on the banks who have returned the money or where the government made a profit.

Why? Because the Obama administration and the Democrats are doing all they can to deflect attention from the government's role in causing the financial crisis, through encouraging subprime lending and the low interest rate policy of the Federal Reserve, by focusing on the employee compensation at the banks. And in the process, Obama can hand subsidies to his union supporters and people looking to restructure their mortgage obligations.

This is America?

Pay czar Kenneth Feinberg cut salaries before he raised them. If that sounds like one of John Kerry's flip-flops from the 2004 presidential election campaign, it is probably because Feinberg has a job that simply shouldn't exist in America.

Feinberg is responsible for reviewing employee compensation at the largest recipients of government bailout funds.

He announced last week significant reductions in employee compensation for the top 25 employees at seven large TARP and auto bailout recipients, saying: "One of the critical aspects of what I tried to do was to vastly diminish the amount of guaranteed cash salary that would be paid these top officials."

"Guaranteed cash salary" is another phrase for your weekly paycheck. But now we learn that Feinberg increased salaries, while reducing discretionary cash bonuses.

Bonuses are paid based on the employee's individual performance, as well as the success of the company and the groups within the company for whom they work.

Feinberg aslo increased significantly the amount of stock employees are paid and the amount of time they have to hold the stock before it can be sold. While this seemingly ties compensation to the company's performance, the reality is that for most of the effected employees, outside the CEO and perhaps a handful of senior executives, their individual performance has only a modest effect on the company's stock price at these large companies.

So Feinberg, in bowing down to the anti-compensation crowd, has moved away from a pay-for-performance compensation culture through his intervention in the market for employee compensation.

And as bad as this is for the health of the companies in question and the overall economy (note that Feinberg and the Obama administration want this to serve as an example other companies to emulate), it represents another in the long line of outrageous interventions by the government in matters that ought to lie outside the proper scope of government.

Anti-Trust Insanity

Independent booksellers have asked the Justice Department to investigate Wal-Mart and Amazon for possible anti-trust violatons as a result of their price war in best-selling books.

Recently, Wal-Mart's website has slashed the price of best-sellers in an attempt to attract customers to its internet operations, and Amazon has matched the price reductions to stay competitive.

This is good news for customers, as businesses battle to win customer loyalty by aggressively cutting prices.

So how could other book retailers have an anti-trust case?

That's because anti-trust law produces crazy and outrageous results. Literally, every action by a business could potentially be deemed a violation of anti-trust law. Here are various violations of anti-trust law:

• Predatory pricing means a competitor lowers prices in an attempt to increase market share.

• Collusion in pricing means competitors charge the same price as one another.

• Monopolistic pricing means a competitor charges highers prices as a result of its leading market share.

So a price that is lower than competitors, the same as competitors, or higher than competitors can all be violations of anti-trust law - and since that covers the entire range of prices possible, literally all business behavior is at risk of violating anti-trust law.

Further, the Wal-Mart/Amazon matter illustrates that anti-trust law is often used by one business to seek an advantage over another by running to the government to seek protection from competition in the marketplace.

All of this makes anti-trust law one of the most unjust laws in the land.

Let's Bleed 'Em Dry

Ford is running into problems with the auto workers approving concessions which the company and the UAW leadership agreed. These concessions would keep Ford competitive with GM and Chrysler, who previously won the same concessions from the UAW and its members.

Because Ford is doing better than GM and Chrysler, auto workers are thinking that they don't need to make the same concessions - since if Ford is in better financial shape, it has more room to be bled with above-market compensation.

This continues the destructive behavior that the UAW and other large unions have shown for decades, destroying companies and industries (think auto, steel, and airlines with their multiple bankruptcies) in the process.

And thanks to Obama's bailout of GM and Chrysler, Ford pays the price for its success.

Change We Need

Barack Obama is waging a campaign to destroy Fox News. Obama doesn't like an organization that doesn't fawn all over him and his administration, and is trying to get other media outlets to treat Fox as not a news organization.

The thuggishness of Obama and his gang is really astounding. He has told his opponents to stop talking, his administration sought adverse emails opposing his health care plans, and now he is striking at Fox.

It is important that we not find this "ironic", since Democrats / leftists ostensibly support free expression. That train left the station long ago, as best evidenced by college campuses that are rife with speech codes and other restrictions on open debate that, in practice, generally act to limit conservative views.

Obama and his gang are largely living what they experienced in their academic careers (recall Obama taught in law school). The First Amendment is critical to protect your own speech, but not so relevant when it is dissenting voices that speak.

It is a shocking thing to say, but Obama is tougher on Fox News than Iran.

What's the Big Deal with the Berlin Wall?

Barack Obama is apparently too busy to attend the 20th anniversary of the fall of the Berlin Wall that marked the collapse of the Soviet Union's empire in Eastern Europe, the reunion of East and West Germany, and two years later the collapse of the Soviet Union. It was the defining moment that ended 45 years of Cold War, and with it the specter of a nuclear holocaust, with freedom, and America, securing one of the greatest victories in history.

Germany naturally regards the fall of the Berlin Wall as a great event in it history, and the 20th anniversary celebrations will include various notables, including Mikhail Gorbachev.

But incredibly, it won't include Barack Obama.

The administration claims he is too busy - but he isn't too busy to fly to Europe to lobby for Chicago's Olympics bid nor is he likely to be too busy to go to Oslo to claim his Nobel prize.

So for this great event in American, and world, history, being too busy can't possibly be the real reason for Obama avoiding the celebration.

I think the real reason is that Obama is doing another favor to Russia, for whom the fall of the Berlin Wall led to the Soviet Union's shattering defeat and dissolution. Obama is keen, even desperate, to bend over backwards to appease Russia in the hope it will help pressure Iran.

So far, Russia has repeatedly said it doesn't support sanctions against Iran. So even if you believed double-crossing Poland and the Czech Republic over missile defense, making it harder for Georgia to join NATO, and now avoiding the Berlin Wall celebration were good ideas in order to secure Russia's support on Iran, we aren't even getting the pay back for our efforts.

And we are betraying fundamental American values and interests in the process.

The Miracle of Capitalism

This article in the Wall Street Journal shows the extraordinary power of what freedom can do to improve the human condition.

India has been enjoying the benefits of capitalist-oriented economic reforms for over 15 years, improving the well-being of millions of people. Much of India's economic growth has been driven by serving export markets.

But there is a growing trend for Indian companies to develop new products for low income Indians, producing low-cost products that before had been too expensive for hundreds of millions of Indians. From cars that cost $2,200 to refrigerators that cost $70, many Indians can now begin to enjoy conveniences that the West has taken for granted.

Capitalism is the most revolutionary force in human history, producing incalculable benefits to the human condition. It is wonderful to see it finally coming to India after so many decades of socialism.

Denmark to US: Get Your Act Together II

The civilian head of NATO, Anders Fogh Rasmussen, endorsed General Stanley McChrystal's strategy to add more troops to the Afghan war effort.

Meanwhile, Barack Obama continues to deliberate over whether to try to win the "war of necessity" (Obama's words) in Afghanistan.

The Pay Czar

Citigroup solved a political problem by selling its Phibro commodities-trading business for book value. The problem? Andrew Hall, the star trader at Phibro, is likely to make nearly $100 million this year pursuant to his employment contract with Citigroup that pays him a percentage of Phibro's revenues.

Kenneth Feinberg is the "pay czar", appointed by Barack Obama to evaluate employee compensation at companies the U.S. government has invested in through TARP and the auto bailout. He was planning to produce an embarrassing report to Citigroup on Hall's pay, so the firm decided to avoid a political backlash by selling Phibro.

However, Citigroup gets no value for the business beyond compensation for the net assets of the business, which is the equivalent of liquidating its assets - despite Phibro earning hundreds of millions of dollars a year for Citigroup.

So the U.S. government, through its pay czar, has pressured Citigroup to sell a business for such a low price that Citigroup's value has declined as a result - and the U.S. government is Citigroup's largest shareholder. In effect, the government took money out of its own (and taxpayers) pockets to satisfy political correctness.

And Andrew Hall will continue to earn vast sums, at his new employer.

I hope you "feel" better as a result, because that's all the good that will come from this bizarre outcome.

Democrats Run Amok

Democrats are anxious to raise taxes to feed their spending dreams, so the latest tax plan is a real doozey: a tax on financial transactions that could raise $100-150 billion per year. The idea is each time a stock trades, a tax is levied on the trade.

Two things will happen with such an obscene tax. Financial transactions will move offshore, destroying high-paying financial services jobs in America. And the value of U.S. companies will decrease, as investors factor into their valuations the tax liability from selling shares.

Lower stock prices reduce American's net worth for retirement and college savings and all the other reasons people save and invest, and raise the cost of capital for businesses seeking to grow - which retards economic growth.

Pigs at the Trough

Barack Obama has proposed giving $250 to over 50 million recipients of government spending, such as people who receive Social Security or federal pensions.

Total cost: $13 billion.

One motivating factor is that Social Security recipients will have no cost of living adjustments, and the horror of that is causing politicians to consider this giveaway. But since the lack of a cost of living adjustment corresponds to a lack of inflation, which it is based on, there is no need for the handout.

But with fiscal discipline obliterated with a $1.4 trillion, what's another $13 billion when votes can be bought?

Three Cheers for Thomas Friedman

You will rarely hear me say good things about the columnists in the New York Times, but Thomas Friedman's column on what Barack Obama should do with winning the Nobel Peace Prize is truly outstanding.

The premise of the column is that Obama should state, when giving his acceptance speech, that he cannot accept the prize on behalf of himself. Instead, he accept it on behalf of the greatest peacekeepers in the world for the past 100 years - the U.S. military. Friedman writes what he thinks Obama's acceptance speech should say, with this key quote:

"Let me begin by thanking the Nobel committee for awarding me this prize, the highest award to which any statesman can aspire. As I said on the day it was announced, 'I do not feel that I deserve to be in the company of so many the transformative figures who've been honored by this prize.' Therefore, upon reflection, I cannot accept this award on my behalf at all.

But I will accept it on behalf of the most important peacekeepers in the world for the last century - the men and women of the U.S. Army, Navy, Air Force and Marine Corp."

I couldn't have said it better myself.

UK to US: Get Your Act Together

British Prime Minister Gordon Brown announced plans to deploy 500 more troops to Afghanistan and indicated support for General Stanley McChrystal's counterinsurgency strategy.

The timing of Brown's announcement is quite remarkable, since Barack Obama is engaging in a well-publicized, drawn-out debate within his administration on whether to carry out General McChrystal's counterinsurgency strategy or pursue Joe Biden's counterterrorism strategy.

Gordon Brown is clearly trying to influence Obama's decision, and is a further sign that our allies are growing nervous at Obama's leadership. Obama called Afghanistan a "war of necessity" and critical to America's security throughout the presidential campaign and in the first seven months of his presidency, yet got cold feet when the effort looked harder than he hoped.

Even if Obama stays the course, Afghans and Pakistanis will now be more reluctant to side with America in the struggle against the terrorists and Taliban, due to Obama's waffling. Why side with someone who may abandon you, against someone who lives in your community?

While Obama's rhetoric may warm the hearts of leftists around the world, he is scaring key allies by waffling on the war on terror and in promoting nuclear disarmament as Iran works feverishly to develop nuclear weapons.

Leviathan Wins Again

Bank of America has succumbed to the pressure of New York Attorney General Andrew Cuomo, who had demanded that BofA hand over documents subject to attorney-client privilege.

A bulwark of our (supposedly) free society is that people and companies can receive confidential legal advice, so that you can receive the full benefit of legal counsel without constraints on what is said by the prospect of future discovery by the authorities.

But companies are subject to great political pressure, with many facets of their business at risk if they oppose the demands of government. While it would have been a defiant blow for freedom if BofA could have stuck to its guns and resisted breaking attorney-client privilege, the real outrage is directed at Andrew Cuomo and the other prosecutors around the country who believe winning is more important than justice.

"History Calls"

Olympia Snowe, the sole Republican on the Senate Finance Committee to vote for the health care bill, said of the bill she just voted for: "Is this bill all that I would want? Is it all that it can be? No. But when history calls, history calls."

It is a telling comment and speaks to the type of political leader who wants to "make history" rather than good policy.

In its more extreme manifestation, such sentiments lay behind other "monument builders" in history. The pharaohs of Egypt used tens of thousands of slaves and vast resources to build the pyramids, gigantic tombs to house pharaoh after death. Adolph Hitler dreamed of a "1,000 year Reich" and sought his vision through conquest and genocide. The Soviet Union had its succession of five-year plans, slaughtering millions in the process but sending men into space.

Of course, the health care legislation in Congress isn't likely to reach those levels of human suffering as part of its efforts to satisfy the dreams of its advocates, but it is a democratic version of the same principle: pursuing one's vision of society at the expense of individual rights and freedom.

Thanks to Olympia Snowe's desire to respond to "history's call", we know where she stands.

The Pigs at the Trough Continue to Feed

Just when you thought the Obama administration might be running into bailout fatigue, think again.

The latest plan is to spend $35 billion to support lending to lower income people to buy homes.

The government has spent so much money on a myriad of bailouts, "stimulus" efforts, and increases on regular-way government spending, another $35 billion doesn't produce outrage.

But it should, as we perpetuate the policies that brought on the financial crisis: Federal Reserve created super-low interest rates and government subsidies for home buying. And all paid by people who work hard and pay taxes.

Guantanamo Dreamin'

The news this week that the Defense Department has approved releasing an additional 75 detainees at Guantanamo no doubt delights the left, but should be of grave concern to the rest of us.

Recall that the first detainees released over the years were considered the least dangerous, and a number of them have returned to the fight against America. The New York Times mentions that Mullah Abdullah Zakir, a former Guantanamo detainee, is a leading Taliban figure active in organizing a shadow Taliban government in Afghanistan.

While some of the 75 include Uighurs who probably don't pose a threat to the United States, the rest come from the already-reduced detainee population containing the most dangerous terrorists.

Barack Obama is considering giving the forces of terror a major victory in Afghanistan by retreating from what he only recently described as a "war of necessity" - and apparently wants to make it harder for America to succeed by releasing more detainees.

It is now clear that Obama is driven by promoting his "image" in the world, as exemplified by his UN performance to the disgust of French president Sarkozy. Obama's policies on Guantanamo reflect that same desire, to the detriment of America's security.

The question remains: how many Americans should die in order for the left to feel good about themselves for closing Guantanamo and for Obama's "image" to improve?

Congressional Shenanigans

Republican Congressman Darrell Issa is trying to get the House Oversight and Government Reform Committee to subpoena records from Countrywide Financial regarding its VIP mortgage program, which provided low-cost loans to politicians.

The committee's Chairman, Democrat Edolphus Towns, has prevented the subpoena from being voted on by committee.

And Towns got two such loans from Countrywide.

So the government watchdog committee is led by someone who may need watching over himself.

Rome Burned While Nero Fiddled

Barack Obama has devoted considerable resources and political capital on the international stage to Chicago's bid for hosting the 2016 Olympics.

The Wall Street Journal reports that the Obama administration lobbied nations at the UN General Assembly, the G-20 summit, and a reception for African diplomats. Most prominently, the President and Michelle Obama personally met with the International Olympic Committee to lobby for Chicago's bid.

And Chicago lost.

For those who thought America's image in the world had changed for the better and that it would result in benefits for our country, this is further evidence that the international politics and foreign policy is more than about personalities.

Obama may be liked overseas, but that pales in comparison to awarding the Olympics (Rio de Janeiro won) for the first time to a South American nation and to snubbing America while doing so.

Moreover, the President is spending a meaningful amount of time and effort to do his hometown a favor while pressing matters weigh on the nation such as Iran's nuclear program and winning the war in Afghanistan.

Georgia, RIP

The EU has produced a whitewash report on the war between Russia and Georgia, saying both sides were at fault. In particular, the report said Georgia started the war by firing the first shot.

But the report said Russian troops entered Georgia before being fired at. So according to European diplomats, Russia can invade another country by marching across its border, and as long as it holds its fire until the invaded nation responds, the fault lies with the invaded nation.

This obscene report is designed to avoid antagonizing Russia, since amongst other things, the country supplies a significant portion of Europe's supply of natural gas.

So notwithstanding Europe's worries about global warming, it is so concerned with protecting its gas supplies that truth, justice, and freedom in Georgia take a back seat to good relations with Russia.

Good News?

The left must be pleased with recent reports that income inequality has decreased during the recession. Unfortunately, this change has been a result of decreases in the income of the wealthiest Americans, not increase in the incomes of the poorest.

Nothing captures the egalitarian problem more succinctly: would you rather everyone be poorer but more equal in the poverty, or everyone richer but with income disparities?

The recession, and its impact, illustrate this isn't an idle question.

Whither Turkey?

Turkey has long been held up by the west as an example of a moderate, secularized Muslim nation. Kemal Ataturk founded a secular republic in the aftermath of the fall of the Ottoman empire after World War I, and aggressively sought to limit the role of Islam in governmental affairs to spur the development of the nation.

A few years ago, an Islamic party, the Justice and Development Party (AKP) under the leadership of Prime Minister Tayyip Erdogan, came to power. The hope in Washington has been that the AKP could be an example to the Muslim world that freedom could co-exist during the rule of a Muslim-oriented political party. Moreover, the United States has sought to bring Turkey into the European Union to cement its ties to the West.

Unfortunately, a recent column in the Wall Street Journal raises concerns that such hopes could be trampled. Erdogan has used the power of government to reduce the freeedom of the press. A free press is critical to exposing and limiting abuses by any government, and most authoritarian regimes limit the press to prevent critical coverage of the government.

Let's hope the Obama administration is taking notice. Obama's attempts to reach out to the Islamic world have been long on criticism of America's actions and short on substantive measures to work for positive change in Islamic nations. Turkey is too important to ignore or fail to hold to high standards.

Iran-Venezuela Axis

Manhattan District Attorney Robert Morgenthau has undertaken the unusual step of writing an op-ed piece warning of the growing relationship between Iran and Venezuela. Morgenthau believes that Iran is interested in using Venezuela to launder money to purchase materials for its nuclear and missile programs, while Iran supports Venezuela's efforts to overthrow pro-American regimes and replace with Chavez-oriented dictatorships.

Remarkably for a district attorney, Morgenthau adds that law enforcement alone is not sufficient to deal with this threat, and he is no doubt correct.

But let me add what I suspect may be another long-term goal of the Iran-Venezuela axis. Caracas is less than 2,150 miles from New York and 1,400 miles from Miami. If Iran deployed the ballistic missiles it is developing, armed with nuclear weapons, to Venezuela, it would confront the United States with a direct, credible nuclear threat against the continental United States.

Every so often, a Chinese general will publicly ask, "will America sacrifice Los Angeles to protect Taiwan?" Someday Iran can ask, "will America sacrifice Miami to protect Israel or Saudi Arabia?"

If Barack Obama does not deal with the nuclear threat from Iran decisively with a military attack, it will be one of the greatest disasters in American foreign policy history.

Health Insurance 103

One of the many myths that Obama and the Democrats are spreading about health insurance is that there isn't sufficient competition in the insurance market, and therefore either a government-run insurance plan or government-led insurance exchange needs to be established to create such competition.

Reality so differs from this myth, it boggles the mind. There are many large, publicly-traded health insurance companies in America that compete aggressively with one another. The biggest include: United Health, Wellpoint, Aetna, Cigna, Humana, Healthnet, and Coventry.

But there are many other health insurance providers, and remarkably, some of the biggest providers in any given state are not-for-profit Blue Cross Blue Shield plans.

That's right: not-for-profit providers are already some of the leading providers of health insurance in America.

Now, the reality is, the not-for-profit health insurers need to operate profitably, so they can maintain and grow their capital base and have the financial means to serve customers properly. But that is just another way of saying, a proper not-for-profit insurance system has to reflect market realities and not the whims of politicians.

Obama and the Democrats know this, since the prominence of these not-for-profits in health insurance is unmistakable. So when they claim the need for government-provided competition, it is their excuse for ultimately creating a government-only insurance market. Because rest assured, the government will underprice insurance (as it always does, as evidenced by government-provided car and hurricane insurance) and ultimately drive the private insurers out of business.

So the public option, or its weakened version in the form of health exchanges, would slowly but surely lead to full government control of health insurance in America. And when the government eventually pays all the bills, it will then exert overwhelming influence over all aspects of healthcare, from drug development to how hospitals and doctors treat patients.

The Doomsday Clock is at 11:57 pm

The United States, UK, and France have sprung their "trap" on Iran by deciding to announce now the existence of a secret Iranian nuclear facility. Reports indicate we have known of this facility for some time, and that Barack Obama was briefed on it during his presidential transition.

Clearly, Obama and our allies are hoping that its disclosure, during the UN's General Assembly meetings and before the G-20 conference this week, will convince other nations to support tougher sanctions.

Unfortunately, it illustrates the depths of Iran's nuclear program and adds to the overwhelming evidence that Iran's nuclear efforts are designed to produce weapons and not energy.

If Obama were a bold leader, dedicated to protecting America's interests, he would seize on this disclosure to further justify an immediate attack on Iran's nuclear facilities.

Instead, Obama, having set September 30 as the deadline for constructive negotiations, has in the spirit of all efforts with Iran for the past seven years, extended the deadline another three months - rewarding Iran for its defiance with more time to harden its facilities to attack, build its defenses, and continue to develop its nuclear program.

America, not Israel, is the only nation that has a realistic chance of dealing a decisive blow to Iran's nuclear program. As this article by military analyst Anthony Cordesman suggests, Israel doesn't possess anything close to the military capabilities of the United States to devastate Iran's nuclear program.

The answer, with all its attendant difficulties, is that we must bomb Iran now to disrupt and destroy as much of its nuclear program as we can - and continue to bomb Iran if we haven't destroyed their facilities or if Iran resumes working on its nuclear program.

How About That

Buried in the news is that the Obama administration has asked Congress to renew three provisions of the Patriot Act that expire at the end of this year.

Recall that Democrats attacked the Patriot Act as a violation of our civil liberties, while the Bush administration argued they were necessary to protect us from terrorist attacks while preserving our freedom.

So despite all the bombast directed at President Bush, now it is Barack Obama who agrees with the policy.

This is just part of a long litany of Bush terrorism policies Democrats opposed that Obama now favors. The responsibility to protect Americans no doubt now weighs on Obama. Too bad Democrats couldn't have exercised real leadership rather than engage in baseless partisanship when the country needed it.

How to Harm the Economy and Our International Relations

The "buy American" provision in the $787 billion "stimulus" bill is raising trade frictions and harming businesses, as described in the Wall Street Journal.

This is just one concrete example of how the "stimulus" bill actually harms the economy, and is harming America's relations with other countries.

Do you think this what Obama meant by "resetting" our relationships in foreign affairs?

The Great Depression of 2008-09?

With Ben Bernake saying that recession is "very likely over", it is time to take stock of the politically-inspired fear mongering that has surrounded this recession.

The Federal Reserve pursued policies in 2008-2009 completely contradictory to those pursued during 1929-1933. In 1929-1933, the Federal Reserve reduced the supply of money, creating a huge deflation and destroying the financial system. In contrast during in the past 18 months, the Fed has flooded the economy with money, with a predictable result: the recession would end led by monetary policy.

But the Democrats saw political gold in creating the impression that the economy was in terrible shape, and with a compliant press, succeeded. It was a critical element to Obama's victory last November and to passing the "stimulus" bill, whose effects have barely registered and for which most of its spending has yet to take place.

Monetary policy, along with government led subsidies for housing, got us into the financial crisis and recession. Now it is getting us out of the recession. Obama deserves no credit for this since he wasn't the architect of monetary policy - that is the Fed's job, which is an entity independent of the executive branch.

Instead, Obama's spending extravaganza, raising taxes, nationalizing the auto industry, proposing radical changes to the healthcare industry, opposing free trade pacts, and promoting cap-and-trade all serve to increase uncertainty in the economy and slow recovery and growth going forward.

How Much Do I Love Thee?

The Obama administration delivered another gift to labor unions, by imposing tariffs on tires imported from China.

So Americans can pay higher prices for tires and have worse relations with China - so Obama can deliver more favors to the unions.

A few days later, Obama spoke to union members in Pennsylvania and Ohio asking for their support for this health care plans.

If you think that's a coincidence, I've got a bridge you can buy.

Honduras Outrage

Barack Obama is pursuing "change" in our foreign affairs: he is punishing our friends and coddling up to thuggish regimes.

From pushing Israel to stop settlement activity to help the Palestinians, imposing trade restraints to help unions, and ending the missile defense system in Poland and the Czech Republic to help Russia, the Obama administration has decided it is easier to get "progress" on its diplomatic efforts by hurting our friends and helping our enemies.

No where is that more evident than Honduras. Mary Anastasia O'Grady of the Wall Street Journal has done yeoman's work on the Obama administrations efforts to pressure Honduras to overturn its constitution to force its former president back in office (see here and here). The administration has even threatened not to recognize the victor in the November presidential election, all the more stunning since the ousted president wasn't constitutionally allowed to run again.

The beneficiary of Obama's efforts is the Venezuelan dictator, Hugo Chavez.

Nice trade: out with the Honduras constitution, in with Chavez authoritarianism.

"You Lie" Takes on New Meaning

Barack Obama pushed back on George Stephanopoulos' questions by claiming it is not a tax if the government requires people to pay up to $3,800 if they don't buy health insurance.

Stephanopoulos is a former member of the Clinton White House, so is a partisan advocate of Democrats. Even he was astounded by Obama's tax denial, going so far as to say he looked up the definition of "tax" to criticize Obama.

So let's look at various definitions of "tax" from online sources:

Merrian-Webster defines a tax as "a charge usually of money imposed by authority on persons or property for public purposes."

Dictionary.com says a tax is "a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc."

The Cambridge Dictionaries Online say a tax is "an amount of money paid to the government, which is based on your income or the cost of goods or services you have bought."

Google's dictionary says a tax is "an amount of money that you have to pay to the government so that it can pay for public services."

Wikipedia says "to tax" is "to impose a financial charge or other levy upon a taxpayer."

The point is clear: Obama is completely wrong . He is proposing a large tax, directed overwhelmingly on those making below $250,000 - the very group he claimed during the campaign for whom he wouldn't raise taxes.

Not So Smart After All

It is now official: Barack Obama isn't that smart or verbally talented after all.

On his weekend blitz of the Sunday morning talk shows, Obama was asked by Bob Schieffer of CBS if the extra costs of new health care legislation would be passed on to consumers.

Obama replied: "Here"s the problem, they're passing on those costs to the consumer anyway."

Huh? The president is saying that health care providers are passing on costs that don't currently exist?

And when pressed by Schieffer that "this would be more" costs, Obama said: "No, the difference is, they're making huge profits on it."

Here is an economics lesson for Obama: businesses must pass on to consumers the cost of producing their products or services, since if they don't they can't remain in business. Higher costs means higher prices.

This reminds me of an incident with my dentist, who expressed dismay with Obama's health care plans. My dentist believed that Obama was such a smart guy (and voted for him on that basis) he'd never do something so stupid as what the Democrats are proposing.

So for my dentist and all voters, the message from this and other incidents: check your premises. Democrats aren't as smart as you think, and the values they hold are inimical to prosperity.

Russia Wins Again

Barack Obama keeps on handing victories to Russia on important matters. The latest victory is Obama's decision to abandon plans to place missile defense systems in Poland and the Czech Republic to defend Europe against a missile attack from Iran.

Although the system would have had only 10 interceptors, far too few to thwart a Russian missile attack, Russia felt threatened by the system. So Obama has accommodated Russian pressure, at the expense of our allies who took risks to help defend the region.

Obama's decision comes on the heels of Russia announcing it won't support sanctions against Iran. Perhaps with this gift, Russia will change its mind.

This incident also highlights that bombing Iran is not just the only viable alternative to stopping its nuclear activities, but that the price we are paying to try to stop them through diplomacy keeps on growing.

Crime and the Economy

One of the left's shibboleths is that poverty and difficult economic times are a root cause of crime.

But facts are a difficult thing, and the facts tell a different story.

During the economic boom of the 1920's, crime increased significantly, while crime decreased in the 1930's during the Great Depression. The imposition of Prohibition in the 1920's, and its repeal in the 1930's, no doubt had an important role. But it illustrates that crime is not just about poverty and hard times.

And now we turn to today. The FBI recently announced that crime dropped in 2008, despite the difficult economic environment.

Don't expect the left, so disconnected from reality, to change its tune.

Medical Innovation

Obama's plans to increase government control of the healthcare system will further erode the incentives for medical innovation, which requires confidence by investors and entrepreneurs that they can profit from their long-term investments in new drugs and medical products.

It Was Only a Matter of Time

Nancy Pelosi's opposition to sending additional troops to Afghanistan means she opposes the "war of necessity" that Barack Obama has said is so important to American security.

It was alleged by many Democrats in the past few years of the Bush administration that they believed fighting in Iraq detracted America from its efforts in Afghanistan - implicitly or explicitly saying that Afghanistan was important to our security.

In reality, it was a convenient way for Democrats to look tough on national security by supporting more troops for Afghanistan while opposing the war in Iraq. Now that our military efforts are being scaled back in Iraq and increasing in Afghanistan, some Democrats are now voicing concern over our efforts in Afghanistan.

The one constancy by the left is an opposition to America protecting its interests and asserting its values around the world.

Russia to Obama: Nyet

Russia opposes Iran sanctions, after the Obama administration's "reset" of relations was designed to elicit Russia's support on issues of importance to America, such as Iran. On missile defense in allies Poland and the Czech Republic and on Georgia, Obama has suggested policies to help Russia while hurting our friends.

And Russia has rewarded Obama's efforts by saying it won't back new sanction on Iran, which has been the cornerstone of Obama's Iran policy.

As I have said, that leaves us with one viable option: bomb Iran now.

Goldman's Gambit

Goldman Sachs CEO Lloyd Blankfein seemingly took the high road by calling for a ban on multi-year contracts in the investment banking industry.

Instead, his suggestion, while appealing to the critics of Wall Street compensation, also helps Goldman.

Because Goldman is one of the most successful Wall Street firms, for other firms to recruit away its employees, they often need to offer multi-year contracts. So if such contracts were banned, it would help Goldman retain its employees and hurt its competitors.

In the part capitalist, part socialist economy we have, using the government to help one's competitive position has sadly become a common occurrence in business. That's one reason why business leaders shouldn't be seen as advocates of a capitalist system, since they will often embrace government interference with the market to advance their goals.

The Doomsday Clock is at 11:56 pm

The Wall Street Journal reports that Iran may have the capability to quickly develop a nuclear bomb. Meanwhile, Barack Obama continues to pursue a long drawn out diplomatic path that won't stop Iran from building the bomb.

While I believed when he took office that Obama would eventually seek to destroy Iran's nuclear facilities, not because he wants to, but because of domestic political necessity, his foreign policy to date has been alarming: apologizing for America's actions, appeasing Russia on a host of issues, doing Hugo Chavez's bidding in Honduras, and gutting missile defense.

The answer, despite all the risks and complications it will produce, is: bomb Iran now and threaten its leadership with greater destruction if they respond against Iran, Israel, or elsewhere with terror attacks or through its proxies.

Healthcare, Indian-Style

This Wall Street Journal article highlights an underreported story about an existing government-run healthcare system in the United States: the one run for Native Americans.

The government spends 65% less per person on medical care for Indians than the U.S. average, so it sure "wins" on keeping costs down. But it does so with dismal performance. Indians suffer from worse health indicators on many levels, including the most fundamental: their life expectancy is four years less than the American average.

Granted, lifestyle is an important determinant of healthcare, and greater Indian rates of obesity and alcoholism are a major health problem.

But Indians deserve a better healthcare system than this. And so do we all.

We Don't Need No Stinkin' Missile Defense

As these recent Wall Street Journal articles (see here and here) illustrate, the Obama administration is significantly reducing spending on defensive systems to stop a ballistic missile attack. Obama would rather the United States have no defense against missile attack, so our enemies feel "safer" and be comfortable in not developing nuclear weapons and ballistic missiles.

Instead, our enemies such as Iran see such behavior as further encouragement to develop these weapons, since we appear weak in our resolve to stop them.

The Line of Pigs at the Trough Takes at Least Ten Years to Feed

The Obama administration published its estimates for the total government deficit for the next ten years: a staggering $9 trillion, an increase of $2 trillion over previous estimates earlier this year.

Since the "stimulus" bill passed earlier this year added $787 billion to the deficit, over $8 trillion of the deficit has nothing to do with the "stimulus" bill. Moreover, the administration assumes any healthcare legislation won't increase the deficit, which is absurd.

All of this indicates the monumental profligacy of Obama and the Democrats, as they fund their leftist agenda with a spending burden that will be a drag on our future growth and prosperity.

More Healthcare Myths

One popular myth is that the quality of health care in America is worse than in the past.

This is one of those comments that risks becoming a Big Lie, something that gets accepted as true because it is repeated often enough.

Well, the National Cancer Institute indicates that the five year survival rate for children diagnosed with cancer is now 80%, up dramatically from 58% 20 years ago.

That's over a 50% decrease in the chance of kids dying from cancer. Such a transformation doesn't come cheaply, and requires companies to charge high prices and make significant profits to give them the incentive to develop the drugs and treatments which make this life-saving change possible.

So the next time you hear someone bemoaning the profits of drug companies, recognize that without those profits, you, a loved one, or a friend may suffer or die from the drug not developed because of the reduced financial resources available, and weakened incentive, to develop drugs in the future.

Bloated Government

The Wall Street Journal reports on the growing backlog of patents waiting to be examined by the U.S. Patent Office. The cost to the economy of slow patent approvals include greater risks and costs for companies and investors, which slows down the pace of innovation.

If you think underfunding the Patent Office is the cause of this backlog, think again. After adjusting for inflation, the Patent Office has had a staggering 630% increase in funding from 1988 to 2008. The number of patent examiners increased 287%. In the meantime, the number of patent applications grew by only 213%.

So the number of patent applications per patent examiner has decreased 24%.

So there is vast more money and fewer patents per examiner. And the result is a backlog that has grown 180%.

This is the kind of efficiency that we get from government activities. Just think what greater government control of healthcare will mean.

Healthcare Myths

One of the myths used to attack our healthcare system is that we have lower quality healthcare today at a higher cost.

The higher cost is undeniable, driven by many factors including those of government's making. But according to the Congressional Budget Office, two-thirds of the increase in the price of health care relate to using new drugs and devices.

These medical advances provide enormous benefits to the quality of healthcare. As one example, in the 1980's, there was a 60% chance of surviving a heart attack. Now its 90% - in other words, there has been a 75% reduction in chance of dying from a heart attack in the last 20 years.

That's a remarkable achievement. And for the wealthiest country in the world, one well worth paying for.

Atlas Shrugs in England

The Wall Street Journal reports that a number of hedge funds and their employees are moving from England to Switzerland to escape the new, higher taxes the U.K. has imposed.

For those who don't believe people respond to tax regimes by fleeing high tax areas for low tax ones, think again.

And England will be poorer for it.

Republicans Gone Amok

The Republican National Committee has proposed a healthcare bill of rights for senior citizens, which opposes cutting Medicare spending or limits on end-of-life care. While this may provide tactical benefits to the GOP in its efforts to defeat Obama's plans for greater government control of healthcare, it comes at potentially a high price down the road.

We have a profound problem with the current government healthcare plans, Medicare and Medicaid. Medicare has an unfunded liability of over $50 trillion (yes, that's trillion) - necessitating either reductions in benefits or enormous increases in taxes. As such, the Repbulican party needs to promote policies that reduce the financial time bomb of government-provided healthcare benefits.

This is of a piece with George Bush's healthcare policies, where his most notable "accomplishment" was a new, large entitlement - adding a prescription drug benefit to Medicare. Bush did it thinking he could secure improve Republican's image on healthcare policies. Instead, it has added to the our financial burden and did nothing to help Republicans.

The RNC's current efforts will probably be tactically helpful to Republicans, but at the price of undercutting efforts to reform Medicare to avoid a crushing financial burden.

Life in the Slow Lane

Under the premise that a picture is worth a thousand words, I am inaugurating a new feature, posting clever or amusing political cartoons.

The Obama administration has decided to cut funding for the F-22 fighter, which is the most advanced fighter jet in the world, under the false premise that there aren't too many risks from Russia and China and to save money. Meanwhile, it pushes its healthcare agenda at staggering cost to the government and to our nation.