Friday, May 29, 2009

A Modest Proposal

I would like to benefit from your experience by running the idea past you to see what you think.

I would like to help drive a one or two day event to discuss federal tax policy. I propose the main session to be a face off between Neal Boortz and Steve Forbes to discuss Fair v. Flat tax proposals, describing what are they, their benefits, etc. The event would be offered to CSPAN, and also streamed live over the internet, with questions taken from the internet and put before the panelists. A moderated live blog would gather the questions, also questions received via Twitter. I was thinking about someone like Saul to moderate the event. I would hope the RNC would participate to coordinate and fund advertising and marketing of the event, which I propose to be held just about anywhere other than inside the beltway. I do not see this any other RNC input other than getting to word out to the faithful.

Side sessions:

  • How to legislatively implement a new tax structure in place the current tax code, specifying what Ways and Means actions would be required. I know Peter Roskam who serves on Ways and Means, I could probably pester him to participate, and I am sure there are any number of legislators, lobbyists and legislative aides that could make the session worthwhile.
  • How to politically package and present a new tax structure to the electorate. Newt Gingrich, Dick Morris, Frank Luntz, Karl Rove

I would like to also make this event part of an effort to unite the Tea Party movement, the top conservatives on Twitter and the blogosphere, and the RNC. It would be nice to get these disparate groups united and focused on the 2010 elections.

Do you think this event would fly, and do you have any idea who would sponsor such an event, perhaps in conjunction with several others, with monetary support from various conservative organizations.

Contact: Twitter: @FrankCanzolino

Wednesday, May 27, 2009

We Have Clearly Lost Our Way

The Rule of Law and unambiguously defined constitutional principles dictate the actual administration of government.

Evidence of our lost freedoms is everywhere. We see local condo boards telling mothers they cannot display Service Stars for their kids serving in the military. We see municipal “preservation” boards telling homeowners what kind of shutters and paint colors they can use on their houses. State governments, county governments, regional governments, taxing authorities; endless multiple, overlapping, contradictory, levels of government; and any number of expensive, non-productive, confusing levels of bureaucracy through which you and I must slog on a given day. Lawmakers and unelected bureaucrats at all levels of official interactions are picking away at what little individual freedom we have left.

Every person in America is swimming in a deep and fetid pool of laws, codes and regulations created by individuals so arrogant they presume to know what is good for you, the individual. People who are so power hungry they will do anything to maintain their control over the agenda. And the biggest, smelliest pool, with the meanest critters is found in Washington, DC. There is no bigger threat to our freedom than the Hydra-headed monster that swims there.

I am no Constitutional scholar, and I did not even stay in a Holiday Inn Express last night. But I can say that I see a direct assault on our way of life with more freedoms being lost on a daily basis. Hundreds of thousands of pages of US Code of Federal Regulations, tens of thousands of pages dedicated to just taxes, each word created and endorsed by special interests. Is it any wonder we are confused, mad and upset? I refuse to believe we are fighting a hopeless battle.


A political battle took place in the latter part of the 18th century. The Framers waged a great debate between those interests demanding a strong Federal government and those requiring power be devolved to states and individuals. Ratification of the Constitution was no slam-dunk. Led by famous revolutionary figures such as Patrick Henry, who worried about an imperial presidency and excessive Federal power, several states withheld their ratification vote. It wasn’t until an agreement was reached to include Madison’s Bill of Rights to the document immediately after the Constitution ratification, that several states provided their votes. Arguably, the greatest achievement of the Framers was the balance struck in the Constitution and the Bill of Rights.

That classic battle continues to be waged today, as competing interests and successive Legislatures and Executive Administrations fight to gather and exercise power. The election of the Democrats to Congress in 2006 accelerated the Federal Government’s grab for power as a weakened George W. Bush refused to veto legislation. Now with Barack Obama as president, we have seen the government reach into virtually every aspect of American life.

The Obama administration has interfered with the rights of states to govern themselves, and the property rights of bondholders. Through tax policies, Obama and his cohorts in Congress are redistributing hundreds of billions of dollars while racking up trillions of dollars of debt. And is the irony lost on anyone that Obama’s recent speech at the National Archives took place in front of phony copies of the founding documents of this nation while the actual documents were hidden from view?

“Americans are increasingly out of synch with the liberal Washington establishment. But what are they getting from their leaders in Washington?”

- Newt Gingrich

We are getting much more than just a stick in our eye.

Congressmen and the Obama Administration are betraying their oath of office with each new law, regulation and action enacted that restricts the right of the individual in the pursuit of our natural rights.

Our liberty and rights are the underpinnings of governance in the United States.


We are starting to see the backlash.

Tea Parties have sprouted up all over the country. Hundreds of thousands of average citizens are voicing their displeasure with their government.

The National Council for a New America was formed by prominent Republicans who have launched a nation-wide listening tour.

Several states across the country have introduced “sovereignty resolutions” to reiterate their 10th Amendment rights:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Top Conservatives on Twitter act as a social media exchange of information and ideas.

The switchboards and email in-boxes at the House, Senate and White House are awash with messages from angry constituents.

How do we unite these disparate organizations under one coherent plan to take back the government and return the power to the citizens, as the Framers intended?

Let’s unite behind the “sovereignty resolutions” and broaden that effort to have state legislators call for a Constitutional Convention. Conservatives of all stripes can unite behind such an effort. We will learn to work together with our state and Federal legislators. Even if a Convention call fails, we will send a powerful message to liberals in the Congress and the administration that we have had enough.

Update: 5/29/09 7:40 AM - Local officials stop prayer group in someone's home.

Contact: Twitter: @FrankCanzolino

Monday, May 18, 2009

Obama Assaults the Rule of Law

Shredding the Constitution

According to the Constitution, the Federal government has few powers. The Constitution only allows the Federal Government the only the execution of specific powers enumerated within the document, and leaves all other powers to the states, or the individual. One basic principle of the constitution prohibits the Federal government from telling a state how to govern its citizens. One example of a basic power that falls to the Congress is described in Article I, Section 8 that establishes a uniform law of bankruptcy across the U.S. (Congress defines the law in Title 11 of the U.S. Code).

Our constitutional law instructor president apparently has forgotten his lesson plans, or has made a conscious decision to ignore those basic tenants of the Constitution he sees inconvenient. Two recent examples of overreach by the Obama administration:


California faces a $21 billion budget deficit. Its state government is working feverously to avoid bankruptcy. After months of bi-partisan effort, an agreement was finally reached by the duly elected officials of the citizens of California that trims healthcare costs and lowers wages of state employees, helping reduce costs and deficits.

Then the Obama administration got physical.

Citing a quietly inserted clause in the hurried passed stimulus package, Obama officials alerted California that it would be ineligible for $6.8 billion of federal funding. The stimulus package prohibited cuts in state funding to cities as a condition for receiving Federal funds. The Obama administration alerted California officials that it was interpreting this provision to mean that California state officials could not trim the wages of any state employee and still receive stimulus funds.

Attempting to receive clarification and find compromise, California officials, headed by Governor Arnold Schwarzenegger, called the Federal Department of Health and Human Services, the agency tasked with oversight of these particular types stimulus funds. Surprisingly, and inappropriately, a third party was on the call, representatives of the Service Employees International Union (SEIU). Their own state employees had torpedoed California officials.

The Obama administration in a sop to a labor union, had preempted the decision making process of elected California state officials on how best to accomplish state goals, a clear violation of constitutional principles.

By the way, the SEIU contributed $33 million and countless workers to the Obama 2008 election campaign.


After years of mismanagement, a shrinking economy has dealt a deathblow to Chrysler. After receiving $4 billion in Federal bailout money to tide the Chrysler over while it reorganized, the current owner, Cerberus Capital Management, refused to inject any further funds into the company. Neither could a new owner be found to assume Chrysler’s liabilities. This drove the struggling automaker into bankruptcy. In order to qualify for any additional Federal dollars, the Obama administration dictated that Chrysler undergo an arranged bankruptcy.

Bankruptcy proceedings, established by the Constitution, and governed and uniformly applied by U.S. code, say that those individuals and institutions holding secured credit (normally bonds) are the first to be paid. Bankruptcy law is clear and settled, its roots running back to the Magna Carta.

The White House-sponsored and negotiated settlement established that Fiat receives the company at virtually no cost. The United Auto Workers (UAW) receives about 50¢ on the dollar for the money it had invested, and secured bondholders are paid out only 30¢ on the dollar. The Treasury department has been quoted as saying that the UAW is an important component to Chrysler’s recovery. No argument there. But should the long established and well-litigated property rights of the bondholder shoveled aside?

The UAW contributed $4.9 million dollars to the 2008 Obama campaign and provided it with countless volunteers.

Chrysler's secured creditors may well have funded the bus under which Obama has thrown them.


Centuries of settled law are now being questioned. Obama sends a new message to the world, “If you lend money to one of my favorite interests, I will wipe you aside with government intervention if I wish.” Is it any wonder that foreign governments are looking to replace our currency and reducing their investment in our country?

We are now seeing an Obama administration that no longer considers the rule of law to be the paramount consideration. Instead, Obama considers the rule of law just one consideration in his deliberations on how to proceed with his presidency. This is a nation founded under the rule of law, not by the rule of men. Obama has forgotten.

We are in danger of becoming a society no longer governed by dispassionate law, but by passionate men who provide payback to their political supporters. We are now being held at the mercy of Obama’s political objectives.

Obama shreds the Constitution by trumping the decisions of the states. Obama shreds property rights for his brand of “social justice.” He makes a mockery of bankruptcy laws. Politicians, on a whim, will now rewrite contracts. Obama, and his Congressional supporters, ignore the Constitution.

The Framers were so keenly aware that overpowering government was possible that in the first article of the constitution define the powers of government. The Framers felt so strongly about limited role of government that they immediately passed first ten Constitutional amendments to further define those limits.

Obama feels no limits. The Federal Government will tell us what to think, how to behave, how to live. Call your Congressman and stop this agenda. The insidious control being exercised by Obama and the Congress are stealing the single-most important thing we have in the U.S. – our freedom.

Contact: Twitter: @FrankCanzolino

Balancing the Budget – The Hellinois Way

Guest post by Nick Primrose Twitter: @npwrites

As Illinois gets closer and closer to a vote on raising the income tax 50%, I can’t help but shake my head when I hear Governor Quinn, Speaker Mike Madigan, and Cook County President Todd Stroger use draconian budget tactics to scare citizens into supporting the tax hike. Much like what you will hear from Congress, the only way some politicians see to surviving these economic times is by raising revenue (i.e. raising taxes, higher fees/fines, and adopting new ‘sin’ taxes). Whenever you question this thought the immediate response is what we see today in Illinois, ‘doomsday’ budgets and draconian cuts.

Todd Stroger said the 1.75% county home-rule sales tax was responsible for keeping sick people in hospital beds and criminals off the streets, anything less would ruin this harmony. Governor Quinn released his ‘doomsday’ budget on May 18th citing massive teacher cuts, reducing funding for public transportation, and cutting countless other government services. All of these scare tactics seem to work too well, and most likely we’ll see the newly increased Cook County sales tax live on and a 50% income tax hike in Illinois.

I’m here to tell you that this is nothing but a smart political move on behalf of the Democrats, the one party that has consistently utilized this tool. In reality raising taxes only furthers the agendas of Stroger and Quinn by giving them more money to spend on non-essential government services.


How do I know this? I’ve read through the Illinois budgets from fiscal year 2008, 2009, and proposed 2010. In every one of those budgets there is countless amounts of wasteful spending, increased spending, and non-essential spending that could be cut to meet revenue. However year after year politicians in Chicago, Springfield, and Washington are allowed to spend because the typical citizen is oblivious to where the money is going. This is a perfect reason for further transparency in the budget process from Federal to local levels of government.

Chicago’s own Barack Obama is/was trying to create a new level of transparency by putting stimulus spending online, but he seems to have fallen short on that effort. Many state and local governments have seen savings by adopting transparency and accountability sites. Kansas, Texas, and Missouri have all created online databases for everyone to search spending. DuPage County in Illinois has seen success from their database and Cook County looks to adopt a similar check register soon.

When spending habits, checks written, and funds transferred are open to the public, then politicians start to reign in their spending. Politicians are held accountable for every dime that is spent whether it is $50 at an office supply store or thousands of dollars on travel. Last week, HB35 passed both houses to create an accountability portal in Illinois. This is a great step towards allowing citizens to act as a spending watch-dog in the state – but it is only the first step of many more towards fixing the corruption and out-of-control spending in Illinois and the Federal government.

Update: 5/19/09 9:15 AM See what Laffer and Moore say about Quinn in the Wall Street Journal

Thursday, May 14, 2009

Waiting to Exhale

Obama and the Democrats in Congress must be hyperventilating

Emissions exchange, more commonly known as Cap and Trade, is a scheme where a government sets limits on a substance (the Cap) and issues allowances to entities that permit the entity to emit a specific amount of the substance. That entity may either use the allowance or exchange, for profit, all or part of the allowance (the Trade) to a second entity that may then use the allowance as it sees fit. That second entity may elect to either cash-in the allowance to cover those emissions that exceed the Cap, or speculatively hold and trade the allowance to another entity. A handful of emitted substances (e.g. nitrogen oxides, methane, carbon monoxide) are normally considered to be the pollutants covered in a Cap and Trade system.

You’re quite familiar with carbon dioxide (CO2). Let’s start with an experiment. Breath in. Hold it. Now breath out.

What you just inhaled is 78.08% nitrogen, 20.95% oxygen, 0.93% argon, 0.038% carbon dioxide, and trace amounts of other gases. When we exhale we’ve used about 4% of the oxygen and increased the CO2 by about the same amount. CO2 is a common substance and is nothing more than the inevitable byproduct of combustion. Fires make it, and so do living animals in the normal course of their conversion of food to energy. In mid-April the Environmental Protection Agency issued a ruling that considered CO2 to be a pollutant. The addition of CO2 to the list of commonly considered pollutants has set off a firestorm.

The non-partisan Congressional Budget Office (CBO) reviewed the EPA ruling. The CBO questions the underlying methodology used by the EPA used to add CO2 to the listing of pollutants (the GHGs mentioned below):

“In the absence of a strong statement of the standards being applied in this decision, there is a concern that EPA is making a finding based on (1) "harm" from substances that have no demonstrated direct health effects, such as respiratory or toxic effects, (2) available scientific data that purports to conclusively establish the nature and extent of the adverse public health and welfare impacts are almost exclusively from non-EPA sources, and (3) applying a dramatically expanded precautionary principle. If EPA goes forward with a finding of endangerment for all 6 GHGs, it could be establishing a relaxed and expansive new standard for endangerment. Subsequently, EPA would be petitioned to find endangerment and regulate many other “pollutants" for the sake of the precautionary principle (e.g., electromagnetic fields, perchlorates, endocrine disruptors, and noise).”

Also note that the CBO explicitly warns that adding this common substance, CO2, opens Pandora’s box. Other common irritants (e.g. noise) might be considered a pollutant. We might agree with this when we are at a stop light with the blasting stereo of the car next to us.

EPA would have the authority to fine “polluters”. Radical, activist environmental groups would be able to sue the government if the EPA failed to regulate a pollutant or a polluter. Bizarre lawsuits would be the norm. Perhaps an environmental group based in California would sue an Ohio manufacturer because icecaps are melting (let’s forget for a minute whether or not the icecaps are melting) in Alaska. These frivolous lawsuits would take years of litigation to resolve.

The CBO also warns of a significant cost impact to consumers, and all businesses across the country:

Making the decision to regulate CO2 under the CAA for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities. Should EPA later extend this finding to stationary sources, small businesses and institutions would be subject to costly regulatory programs such as New Source Review.”

(Emphasis mine, CBO analysis of Cap and Trade, .pdf download here)

Currently snaking its way through Congress, the Waxman-Markey proposal for Cap and Trade is the front-runner for government action. Waxman-Markey uses the EPA guidelines for its listing of pollutants and sets an arbitrary 15% reduction of the “greenhouse gases” by 2020. The CBO also analyzed the potential costs of Cap and Trade in this type of proposal:

“The price increases caused by a cap-and-trade program would impose additional costs on households. For example, without incorporating any benefits to households from lessening climate change, CBO estimates that the price increases resulting from a 15 percent cut in CO2 emissions could cost the average household roughly $1,600 (in 2006 dollars), ranging from nearly $700 in additional costs for the average household in the lowest one-fifth (quintile) of all households arrayed by income, to about $2,200 for the average household in the highest quintile.”

The Heritage Foundation performed a more detailed analysis of the many effects of a Cap and Trade proposal:

  1. Reduce aggregate gross domestic product (GDP) by $7.4 trillion,
  2. Destroy 844,000 jobs on average, with peak years seeing unemployment rise by over 1,900,000 jobs,
  3. Raise electricity rates 90 percent after adjusting for inflation,
  4. Raise inflation-adjusted gasoline prices by 74 percent,
  5. Raise residential natural gas prices by 55 percent,
  6. Raise an average family's annual energy bill by $1,500, and
  7. Increase inflation-adjusted federal debt by 29 percent, or $33,400 additional federal debt per person, again after adjusting for inflation.

If the Waxman-Markey proposal was only a Cap and Trade proposal for greenhouse gases, it would be bad enough. Additional provisions contained in Waxman-Markey are sufficient reasons to be highly critical of this proposal. In addition to Cap and Trade, Waxman-Markey introduces a new renewable electricity standard, a new low carbon fuel standard, and an appliance efficiency mandate that will be extremely difficult for manufacturers to meet with currently available technology. Cap and Trade really just becomes one more way for the Federal government to interject itself into another aspect of the US economy and the life of Americans.

So who is most harmed by this unprecedented control of the economy? You know as well as I that any business compliance costs will be passed along to the consumer. These consumers are people who drive, people who light their homes. People who use ovens, refrigerators, computers, lawnmowers, fireplaces. Virtually every element of our lives becomes within reach of intrusive government.

Cap and Trade is nothing more than a thinly veiled tax on every American and a heavy=handed power grab by the poobahs in DC to control our lives. It is the most regressive of taxes, falling disproportionately on lower income individuals. It expands the nanny state that allows the Federal government to control many of the aspects of your life.

Take a deep breath. Then call Congress.

Update 5/15/09 12:20 AM: Yet another reason to say no to Cap and Trade, inconclusive data on global warming. (h/t: @stix1972)

Update 5/15/09 8:00 AM: If you do not believe me, her is what Democrat Charlie Rangel, Chairman, House Ways and Means Committee, was quoted in the Thursday evening Congress Daily as saying:

"Whether you call it a tax, everyone agrees that it's going to increase the cost to the consumer," said Rangel. "At the end of the day ... if there's nothing there to repay [consumers] for their financial expenditures, it might be difficult to fight Republicans who call this a tax."

Update 5/15/09 10:00 AM: Indiana Says 'No Thanks' to Cap and Trade

Update 5/20/09 9:45 AM: Over at National Review, Jim Manzi provides the best cost-benefit analysis I have seen to date on Cap and Trade.

Update 6/1/09 9:25 AM: Martin Feldstein agrees.


Tuesday, May 12, 2009

Our Wimpy Government

When do Obama and the Congress think they’ll pay taxpayers back, Tuesday?

Yesterday, in my post Vampire Economics, we explored the outlandish spending, and resultant debt, that Congress and the Administration have racked up the past few months. If all the commitments recently made by the Democrat controlled Federal Government were actually executed with Treasury dollars, the taxpayer liability would be roughly $15 Trillion. Current projections of Gross Domestic Product (GDP) of the US are $14.5 Trillion. The committed spending exceeds by about $500 Billion the entire US GDP amount, one-fifth of the annual spending of the entire world.

One part of those $15 Trillion in commitments is the Obama budget of $3.5 Trillion dollars. Yesterday, the Administration issued a statement saying that tax revenues to the US Treasury are expected to be much less than Obama originally estimated. This $1.8 Trillion shortfall means that for every single dollar spent by the Federal Government on budgeted items (which do not include bailout or stimulus packages), about 50 cents will be borrowed. And all of the remaining commitments of about $11.5 Trillion will need to be borrowed.

Now sit down, because that is just chump change.

There are other promises by the Federal Government that we haven’t yet discussed. Ready? Medicare and Social security requires an additional commitment of roughly $105 Trillion (about seven times GDP).

Where in the world does the Obama Administration and the Congress think they are going to get sufficient money to pay for all of this spending?

There are only a limited number of places that the Federal Government can fund programs:

Increase Revenue/Decrease Spending

Growing the economy increases GDP, in effect making the pie bigger. Economic growth increases real wages, which increases the tax revenues collected by the Treasury. This is one of the underpinning tenants of supply-side economics (which says that if taxes are cut, the economy grows because people have more real wealth). Thirty years of relatively sustained economic growth is explained by restrained spending and low taxes (hat tip to Art Laffer, Jack Kemp, Ronald Reagan, Bill Clinton and the Republicans in the Congress in the 1990’s).

Obama and the Democrats in Congress propose to pay for their profligate spending by spurred economic growth. However, most of the assumptions being used appear overly optimistic. The assumptions are not called overly optimistic just by conservative economists, but also by liberal economists and economists from the Congressional Budget Office and Obama’s own White House advisors.

Government spending takes money from the private sector, where investment can be efficiently used by businesses to increase real wealth, and channels money to public programs that are, at best, inefficient at adding to the wealth of the country. And we all know there is no such thing of a collectivist Government program the Democrats and the Obama Administration do not like.

There are no serious spending cuts being proposed by this Democrat Congress and Administration That is, except for spending on military programs such as missile defense and other weapon systems. It is especially ironic that Obama pulls the plug on military spending. What is more “shovel ready” than a currently operating production line? Think about that next time you hear about a road construction or other infrastructure project being held up by the EPA permitting process.

To increase Government revenue, Obama has proposed to “tax the rich.” Above, I mentioned the increasing budget deficit because of decreasing tax revenues during this economic downturn. If Obama were to take every dollar from the “rich” he would not even make a dent in the indebtedness of the US. How long do you think Obama will keep the rich floor at $250,000 as he scrambles to pay for his collectivist agenda? Pretty soon, he may even have to tax the roughly 41% of the population that pay no taxes whatsoever, let alone the “rich.”

Head to the Bank

You borrow money all the time. When you buy a house or a car. When you use a credit card. Intelligent and responsible use of debt is beneficial to the individual, and also to the Government. However, you know that if you borrow too much money you can be quickly overwhelmed by your debt.

The cost of servicing just the debt incurred from US spending will rise from about $200 Billion per year now to over $725 Billion per year in 2019. This is just the INTEREST on borrowed money to cover budgetary spending, and not the actually spending itself.

Take your seats again folks. This three-quarters of a trillion dollars in interest cost DOES NOT INCLUDE THE SPENDING FOR ENTITLEMENTS LIKE SOCIAL SECURITY AND MEDICARE.

Far too many of our current spending plans and commitments are based on borrowed money. Not only will economic growth be stifled by the spending itself, but by the increased debt load of the interest on the borrowing.

We can already see the effects of our planned increased borrowing. China is already balking at buying our Treasuries as we begin printing more money and issuing more debt. Printing additional money dilutes the value our currency, and as investors no longer want our devalued currency, the US is forced to increase the interest rates offered on our Treasury bonds. Increased interest rates cause the US to pay even more money to service the debt that these securities have been offered to cover.

The cycle feeds on itself and more and more of the world’s investors will lose faith in the US.

Is it any wonder that other nations have joined China’s call to move the standard international currency from the US dollar to another instrument?

It looks like the Obama and Democrat plan is to pay for that burger on Tuesday. In the year 2050. Or beyond. Do you think you will even be able to afford a burger today with Obama and a Democratic Congress?


Monday, May 11, 2009

Vampire Economics

Obama has enough deficit spending to bring life to the dead.

At the time of this writing, the current federal public debt stands somewhere north of $11.2 Trillion dollars, yes, with a “T”. In February of 2009, the Congress established a debt limit of $12.104 Trillion, yes, with a “T”. According to the numbers released by the White House today, the budget deficit will top $1.8 Trillion (yes, with a “T”) this fiscal year alone, and will require Congress to raise the official federal public debt limit.

Gross domestic product (GDP) includes the market value of all final goods and services in a year, and is a basic measure of economic performance of the US. GDP is currently estimated to be somewhere around $14.5 Trillion for 2009, but that number may be somewhat lower as a result of the current recession.

In the very near future, the amount of the public debt, and the service on the interest of the debt will soon equal the total GDP of the US.

Using data from the non-partisan Congressional Budget Office, the General Accounting Office and analyses from the Wall Street Journal, we can investigate the obligated expenditures and guarantees of the US government. If we add together every program that has been obligated by the Federal Government, the taxpayer liability will be about $15 Trillion, yes, with a “T”. This enormous number is equal to one out of every five dollars spent on goods and services IN THE ENTIRE WORLD.

Here’s a quick breakdown on the heavy hitters of what you, the taxpayer are on the hook for from your elected officials:

$3.5 Trillion (yes, with a “T”) of expenditures, which includes:

$168 Billion Bush stimulus

$787 Billion Obama stimulus

$366 Billion Mortgage backed securities insurance

$300 Billion Aid to mortgage borrowers

$290 Billion CITI guarantees

$173 Billion AIG guarantees

$ 29 Billion Bear Sterns bailout

$ 15 Billion GM bailout

$700 Billion in TARP guarantees (of which $600 billion distributed)

$7 Trillion (yes, with a “T”) in Federal Reserve guarantees

The following guarantees have been established, but it is not anticipated that any taxpayer losses will occur, but who can guarantee that?

$2.8 Trillion (yes, with a “T”) money market guarantees

$300 Billion Corporate financing guarantees (e.g. GMAC, Chrysler Finance)

Expenditures and guarantees total roughly $15 Trillion, yes, with a “T”. These are the commitments we made ONLY during the past 12 months. Remember, that while George W. Bush participated this profligate, irresponsible spending, all of these commitments were made after the Democrats assumed complete control of both houses of Congress in the 2006 election.

We have seen a flattening of some of the indicators associated with the current recession. The free-fall in the markets is temporarily reversed. The freefall in new unemployment claims is slowing.

Is there any doubt that the recession has slowed when you look at how much money has been thrown at this problem? With this kind of money you know there will be waste. With this kind of money you know there is spending on unnecessary programs. This is not Voodoo Economics, it is Vampire Economics. With this kind of money the dead can be resurrected. But are we going to kill our children under the weight of debt?


Thursday, May 7, 2009

President Janus

Obama can look to the past to see the effects of his policies.

Janus was the Roman god of gates, doors and doorways (janitors keep them in good order), and of beginnings and endings. Janus is typically depicted as having two faces pointed in different directions. A gift from Saturn, those two faces allowed Janus the ability to see the future and the past.

It is only fitting that President Obama was inaugurated in January. Like Janus, Obama has two faces. Unfortunately, the face pointed to the future is unable to learn from the lessons seen by the one pointed to the past.

Obama releases the secret CIA interrogation memos, yet claims nobody will be affected. Does the backward-looking Obama remember the Church commission of the 1970’s that emaciated our intelligence services? Cannot the forward-looking Obama see that he will lose the confidence of some of his most valuable assets? CIA officers will no longer feel the President has their backs. Presidential advisors will no longer be able to provide confidential advice without fear of future retribution when political situations change. It must have been foggy the day Obama looked back.

Obama’s backward-looking face sees that while lobbyists may exercise undue influence over lawmaking, they also provide a resource for policy advice. He must have observed this during his years as a “community organizer” and legislator. Yet he proclaimed he would “tell the corporate lobbyists that their days of setting the agenda in Washington are over.” This silly prohibition on lobbyists would needlessly rob him of a valuable resource, and box him into a corner when he inevitably had to waive, at least 15 times, his own promises to fill his staff. I guess that backward-looking face was blindfolded.

Looking to the past, Obama could see the crippling effect of excessive deficits and profligate pork-barrel spending. He only had to look back 30 years to see it. He must have seen something because he went so far as to say there would be a strong series of checks and balances in place to eliminate wasteful spending. Yet he has spent enough to run trillion dollar deficits, as analyzed by the CBO and GAO, for as far as the eye can see. Have not the tired collectivist solutions of the past he proposes been tried and shown to fail? What does the forward-looking face see that the rest of us do not?

Obama must have looked at the past performance of the DC school system. With eyes wide open, he enrolled his daughters in the Sidwell school, a fine private institution. He could also see, if he bothered to look, that some students in that school were there on DC school vouchers. An undisputedly successful program, DC school vouchers allowed disadvantaged students to attend this exclusive school. Yet Obama refuses to come down strongly in favor of the voucher program, instead recommending continued funding only until the currently enrolled students graduate. This seems like a solution from Solomon. But unlike Solomon who would never have split the baby, Obama positions stops new students from escaping the failed DC educational system, and those schools that rely on voucher funding for their existence will be forced to close. I guess that forward-looking face only sees the NEA and its support in 2012.

Today, Obama will honor National Prayer Day with a proclamation and a day of private prayer. The National Prayer Day has roots in the founding of the US, and since 1952 has been a public reaffirmation of the role of faith in our lives. Backward-looking Obama would see this, if he opened his eyes. But forward-looking Obama does not want to offend his ACLU supporters. Obama wants to have it both ways. What he fails to realize that by trying to not offend anyone, he offends almost everyone.

Consistent with our typical understanding of two-faced, President Barack Obama always wants it both ways. But Janus is about looking forward, and looking back. Janus is about beginnings and endings. Now that we are at 100 days, really just the beginning. Will Obama ultimately fail because he does not see, learn or understand the past? Hopefully, the scales will fall from his eyes, learning from the past as he plots our course to the future.

Somehow, I doubt it.


Wednesday, May 6, 2009

Congressional TeaParty

Does the GOP gets it?

By now, you have heard that several prominent Republicans have formed a new organization. The National Council for a New America has a stated goal of uniting “leaders from across the country to begin a dialog about how to meet our common challenges and build a strong country through common-sense ideas and solutions that will help every American.” The effort, spearheaded by House minority whip Eric Cantor, intends to bring together party leaders, a panel of prominent experts, and citizen activists in an informal setting for a robust debate. The first such town hall style meeting was held on May 2, 2009 in a suburban DC pizzeria. Cantor was joined by Mitt Romney, Jeb Bush, more citizens than the number of Senate Republicans, and several pepperoni pizzas.

Rep. Cantor should be applauded for his efforts to revitalize the GOP from the bottom up. Prediction: Cantor does not fall into the camp of those Republicans who think it is only necessary to simply “re-brand” the GOP. You know as well as I do, that the “brand” is not the problem. The GOP is in the classic position of what happens to every political party after a butt-kicking. The party flounders for a while, struggles to regain its footing, then finds its voice as a leader emerges that leads it out of the darkness.

Optimist that I am, I know it is just a matter of time before the Republicans assume the leadership role. Almost every poll shows that core American values align more closely with those of the Republican party than those of the Democrats. The most recent Rasmussen polls confirm this. It shows that Republicans outpoll Democrats in the Generic Congressional Ballot Republicans are trending upward with Americans as Obama and the Democrats reveal their true collectivist stripes.


Some argue that the best use of the TeaParty momentum is to focus on local level politics. Others promote third parties as a place to throw support. By all means, we need to win municipal and state elections. It is from these local levels that our national politicians and leaders are born. The true long-term viability of the conservative movement resides with these local leaders. But I see in a unique circumstance to rebuild the party, and to clip years off the normal cycle for conservatives to regain power.

In my last post, I posit that the TeaParties may be the first step in a groundswell of conservative governance that fights the collectivist trends we see in America. I think that now, today, this minute is the time for TeaParty conservatives and the GOP to join forces.

Huge barriers exist, and it is incumbent that that the true leaders on both sides step forward to break down those barriers. That’s what leaders do. They recognize an opening, marshal their forces and exploit the opportunity.

I propose that the National Council for a New America and the Republican Conferences in both the Senate and the House adopt a "TeaParty Model.” The TeaParty Model can be loosely defined as a confederation of local leaders who are given local level responsibility to generate local level enthusiasm for a national goal. The hundreds of TeaParty organizers showed this could be accomplished in a short period of time with limited resources to a huge effect. TeaParties generated active participation of over half a million people, and from their workplaces and homes, the support of multiple millions more.

Now is the time for outreach. Outreach from the GOP to the TeaParty activists. Outreach from the TeaParty activists to the GOP. With the infrastructure in place at the GOP and the new ideas and enthusiasm of the TeaParties, a powerful force for good in American politics can be created. The TeaParties have showed the way. The TeaParties have shown us the theme around which to unite. Together activists can stop the creeping collectivism of the Democrats in Congress and the Obama Administration.

Here is how it can work:

I propose that the GOP sponsor town hall meetings similar to the one the National Council for a New America just held. These town halls are held during the same week, and preferably on the same day in every congressional district in the US. High profile districts get high profile nationally recognized speakers. Where possible, the events are coincident with election/re-election campaign announcements.

The organization of each meeting is the titular responsibility of the Congressional District’s House of Representative member. In those districts without Republican representation, the highest ranking local Republican spearheads the effort. While the Member is responsible for making it happen, he is tasked with working intimately with a TeaParty activist who, using the experience and contact lists from the Tax Day TeaParties, actually coordinates the event. The Member provides input and support, but the activist sets the agenda.

No pissing contests allowed.

The GOP provides technical (e.g. webcasts, message boards, points of contact) assistance and provides the technology. The GOP would also provide financial assistance. The TeaParty activists frame the issues and the debate. They provide the enthusiasm and the motivation for the individuals.

I think the time is ripe to integrate GOP and TeaParty activists. Barack Obama went from a junior second tier liberal Senator to President in just 20 months. There are 19 months until the 2010 Congressional elections. We have time to move wisely and make major gains in the House and Senate.

Is Cantor taking the second step on the road to recovery? Contact him and let him know. He may well be taking that second step, but only time will tell.


Tuesday, May 5, 2009

We Must all Hang Together

First, I wanted to thank Chicago Bungalow for inviting me to sit on the stoop for a while. I was just passing by, and asked if CB had any idea what the Tea Party movement was all about, and where it was going from here. We got to talking.

The Tea Party movement is something I could never have done myself. There is no way I have the skills and the contacts to get it off the ground. I doubt that I could get 350,000 people across the US to attend the 500 or so Tea Parties that took place around Tax Day. We owe a debt of gratitude to the original organizers that got this movement going. They have shown us one way to move forward as Americans become more vocal in their dissent of the current policies being implemented in DC.

I did some data entry for the organizers. We exchanged emails. I began to ask them questions: “What are you trying to accomplish?” “Where do you want the movement to go after the first wave of Tea Parties takes place?” “Are you reaching out to elected officials?” I never really received an answer that made sense to me, when I received an answer at all.

Perhaps the original organizers and the many participants never asked themselves these questions. Perhaps they never considered a plan on where they wanted to go. The spontaneity of the Tea Parties may actually explain their success as people acted on their widespread frustration with the establishment. I think the organizers and the participants were unprepared for their success. However, after a few weeks, the big questions remain unanswered. The participants of the Tea Parties still don’t have a cause around which to rally.

Don’t look to the Fourth Estate for an exploration of the Tea Party Movement in any reasonable depth. The Main Stream Media (MSM) missed the boat completely. Watching the MSM coverage, with the notable exception of FoxNews, you would think that Tea Party participants were right-wing whack jobs who are consistent with President Obama’s views he outlined at a fund raiser in San Francisco: "they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

What nonsense. Nothing could be farther from the truth.

I can tell you first-hand that the Chicago Tea Party was anything but a confluence of bitter people. Businessmen, mothers, construction workers, students, kids, blacks whites. You name it and they were there. You would have been hard pressed to find a demographic not represented in Chicago all of whom were protesting in a serious but good-natured manner. From my experience, the only bitter person may have been Susan Roesgen, the CNN reporter who embarrassed herself with her obviously biased reporting of the event.

The questions I asked the Tea Party organizers still hang out there, waiting to be answered. Let us start with the most fundamental question: What are the Tea Parties trying to accomplish? If you ask x-number of people, you will get at least x+1 responses. You will hear a litany of complaints about spending, taxes, bailouts and gun control, abortion and politically correct education. But while there are problems associated with all of those things, the REAL problem is none of those things.

Oink, Oink

Local guy, Jonathan Hoenig, managing member of Capitalistpig Assent Management, LLC, spoke at the Tax Day Tea Party in Chicago’s Federal Center (Video, Text). Hoenig outlined the problems in America, and precisely defined that feeling about the direction of America you have in your gut, “It has been described as socialism, fascism or communism. In various contexts, all are true, but let's refine it. From loans to the automakers to the bailouts for the banks, the taxation, spending and control, the primary philosophy that's powering the country now is collectivism.” That’s exactly it.

The root problem that all of the Tea Party organizers and participants are concerned about is the creeping adoption of the philosophy behind those that are haphazardly instituting change in America.

The most recent election may be about a lot of things, but I do not recall it being about the abrogation of our individual rights. In your gut, you feel that your fundamental beliefs are under attack, the way you live your life is no longer mainstream, and the way you earn your living is somehow immoral. You feel that your connection with the future generations of Americans is somehow severed.

Every element of American life is under attack: from without (terrorism, international courts of law, the UN, our allies and our enemies), and from within (spending, taxes, unions, special interests, fat-cat lawyers and your elected officials). Everything you felt were sure things in your life no longer are; your safety, your job, your income, your home, your upward mobility, your retirement. All of these things are now uncertain.

As Hoenig said, “over the past few years, America has gone from a country that “was the once land of ‘rugged individualism,’” to a country where “the ‘will of the people’ is implemented by force, not by voluntary trade.” Not only are our individual rights under constant attack, so is the republican form of government which was created to protect our individual rights.

We now live in a country ruled by the soft tyranny of self-appointed masters of the universe.

Professional politicians, jurists and opinion makers have slowly marshaled the power formerly held by individuals. In the Declaration of Independence, the Founding Fathers proclaimed individual rights to belong to the individual, not the group. In the Constitution, the Framers enumerated the limits of government to prohibit infringement on those rights.

On a daily basis we are ill-served by our elected politicians who have been entrusted to honestly represent us, lied to by a MSM that has Constitutionally protected status to assist with their duty to report, and betrayed by the organizations that were formed to protect our rights.

The Tea Parties were held on Tax Day, but they were not about taxes. I will hazard a guess about why the organizers worked so hard to make the Tea Parties a success. I will risk saying that I know why the participants from all over the U. S. descended on 500 locations.

All were expressing their deep frustration about the arrogance of opinion-makers who are creating a series of events that are overtaking our civilization and our culture. All were dismayed about the behavior of their elected officials. All of them want the Tea Parties to be the first step. They want to stop the power grab that they see on a daily basis: by the President, by the Congress, and by the Courts.

Is it naïve to believe that the Tea Parties are that necessary first step? If not, we shall most assuredly hang separately.

(h/t: @ChicagoBungalow, @OrinocoPat)


Twitter: @FrankCanzolino