The Question I Wanted to Ask Jack Abramoff

One of the advantages of living in Washington ,DC is that a lot of interesting people pass through this town. And thanks to the sheer number of organizations and events that this town attracts if you keep your eyes open you can see some of these interesting people in person. So when a few nights ago I noticed that Jack Abramoff was going to be speaking at the National Press Club, for the price of going to the movies Sister Babe and I got to hear a talk from one of the most fascinating criminals of modern times.

The subject of the talk was Campaign Finance Reform, and who more qualified to talk on the subject than the man who embodied the art of buying and selling our elected leaders for fun and profit? The group whom Abramoff is now affiliated with is The Corporate Reform Coalition, a group whose mission is to pass new legislation to limit campaign finance contributions from businesses in response to the Supreme Court's ruling against Citizen's United. The room was represented by an assortment of supporters. Apparently the coalition includes labor unions, educators, and environmentalists, or as a leftist would view them, the "good" kind of lobbyists.

Abramoff told some good stories about what he did to corrupt our political process, and his cohorts chimed in with a few points of their own. The solutions were nothing surprising, regulate the amounts of money coming in, restrict the actions of former politicos, etc. Although there was some pieces of balance to it (one of the panelists gave a surprisingly accurate of representation of Tea Party philosophy), most of the talk focused on how Big Business is to blame for our current woes, while naturally ignoring Big Labor, Big Green, Big Education, the various members of the NGO-Nonprofit Industrial Complex and any other leftist groups whose lobbying money wreaks havoc from their side of the aisle.

Like any good lecture with a prominent figure, there was a Q&A session afterward. It wasn't pretty. The questions were mainly nasty and accusatory ones thrown out by journalists whose motivation seemed to be hoping to catch Abramoff in some "gotcha" moment and make a name for themselves. One of the pressies managed to monopolize a few minutes with about four follow up questions until she was finally told to surrender the microphone during the ensuing answer. Another one had five pages of a scribbled manifesto that he read off until finally getting to his three questions at the end. On a side note, we almost made Abramoff bust out laughing during this guy's screed. By the third page turn of this guy's rant I was starting to have trouble keeping myself from cracking up, which of course started to have the same effect on Sister Babe. The Ranting Dude was standing directly between us and Abramoff, leaving us straight in his line of sight. According to Sister Babe apparently Abramoff could see us and looked like he was biting back a smile as this guy ranted and ripped on him. Not that I'm saying that Abramoff is some angel who should have been fawned over, but it would have been nice if the journalists there might have respected everyone else's time or maybe asked some question whose purpose was to, as one great journalistic organization would say, lean forward.

Every question save for one (that asked how any bill could pass against the strength of Republican corruption) was someone wanting to dig into things that Abramoff did several years ago. So as you might have guessed, I did not get to pose my question. Had I been given the chance to speak, I was ready to ask Jack Abramoff, "How much are they paying you to say this?" Just kidding. Sister Babe made me promise to be nice, and that wasn't the question that interested me. What I was going to ask would have gone something like this:

"Back in 2001 I attended a Campaign Finance Reform event hosted by Senators McCain and Feingold (No, I'm not that well connected - Back in 2000 I made a small contribution to McCain's presidential campaign, which earned me a place on his mailing lists). We heard about how Campaign Finance Reform was the first necessary step before we could even hope to see any meaningful reform in Washington . Here we are eleven years later and calling on new legislation designed to curb all of the abuses we've seen over the last decade.

Whatever law gets written and happily signed by the president with bipartisan support, it is going to be written by lawmakers designed to restrict their predecessors and mentors, all of the people who helped them get into their current job, all of the businesses that funded their campaigns, not to mention curbing the career path that many of them have their sights on. There is no doubt in my mind that whatever language is in the final law that gets passed it will contain enough loopholes or vaguely worded rules to ensure that in 2023 we will be back here in this same room discussing why we need a new law to address the failures of the Abramoff Lobbying Reform Act of 2012. Can you please convince me that I am wrong?"

I would have loved to have heard his response. I can also almost guarantee that it would not have convinced me. The problem with efforts like these to control money in politics is that however well intentioned they may be they are looking at this from the wrong direction. Anyone who has been reading my "Economics for Politicians" series (Thank you, both of you! Lesson Nine is coming soon, I promise!) knows that businesses are greedy, which is not necessarily a bad thing. How do you get them to stop throwing so much money into politics? Easy - you make it less profitable. Think about it, in today's business climate you are sitting on cash that you would like to use to invest in your business to expand and bring in more profit. You can:

Hire a new employee, which means also carrying in the expenses of Obamacare, threat of attacks by Big Labor, and whatever other surprises the various Big Anti-Prosperity groups might have aimed at you.

Invest in the business with capital or other ways to put your money to work for you. Now you have the specter of Dodd-Frank, or risk becoming too profitable, making you a target of the government for its "fair share" of the profits that resulted from the risk and hard work you put into earning it

You give money to a lobbyist to go out and buy you a politician who will pass legislation to regulate your industry to prevent new competitors from emerging, if not just funneling money directly to you in the interest of something like "Helping Acme Widgets to become an international leader in the growing global market of widget making while creating good jobs here in America!"

Which of these options carries the least risk while having the potentially highest return on your investment? That's right, option C! Do you want less money flowing into Washington ? Reduce what is flowing out of Washington . Get it out of our lives; start peeling back the insane amounts of regulation that's been imposed and when that day comes it will be cheaper and more profitable to grow the business and hire new employees versus paying bribes. Only when this is achieved will we see the flow of all of that corrupting money flowing into our Capitol and State Houses finally slow down. It isn't rocket science to understand, but making it actually happen makes rocket science look simple by comparison.

What the Recent Contraception Controversy Tells Us About Both Sides

*** Update - Cross Posted at Flopping Aces! ***

Leftists and conservatives will all argue that they support the freedom to live their lives as they choose. Like anything else in life, the devil is in the details and when you probe further you find a fundamental difference in what is defined as freedom. In a recent blog post discussing the difference between the Tea Party movement versus Occupy Wall Street, Flopping Aces' guest writer johngalt gave an excellent summary:

"I believe that the two differing groups have vastly different ideas on how freedom and liberty are achieved, and, in essence, who has the responsibility for making a person's freedom and liberty a reality."

(Addressing the demands of the OWS) "These “demands” all have one thing in common. That is, the removal of responsibility to individuals over their own lives. Even the requests for spending money on “ecological restoration” removes their own responsibility over the environment they can affect, dumping it on someone else. To put it quite simply, in order to attain what the OWS movement sees as freedom and liberty, their demands only “liberate” themselves from personal responsibility."

And after summing up core Tea Party principles - "The TEA party groups universally espouse Personal Responsibility over one's own life. Which means, that when a TEA party member starts to talk about freedom and liberty, they are not talking about imposing upon another person to provide for that freedom and liberty, but rather, that each person take their own responsibility over their lives."

That sums up the philosophies nicely, and I can break it down into even simpler terms. If an act involves the freedom to insert something into your body or somebody else's for pleasure, the leftist will choose the option that offers greater freedom. Freedoms that entail responsibility for one's actions will fall onto the side of the conservative.

There is one exception I can see to this that does not fall squarely into either camp, and I want to briefly examine it before we go any further. I am, of course, talking about gay marriage. On the surface, this looks like a no brainer that conservatives seek to restrict the freedom of consenting adults. When you dig deeper though, there is more to it. A good portion of conservatives (including your author) actually favor civil unions (43% conservative GOP, 59% Mod/Lib GOP, 54% Cons/Mod Dems). It is ridiculous that two consenting adults who love each other shouldn't be able to enjoy all of the legal benefits that their hetero counterparts do simply because their brains are wired to be attracted to the same gender. Where the line gets drawn is with marriage because marriage itself has a deep meaning within their religion. If you think that sex is no different than race look no further than my analogy regarding gays in the military. The other issue that conservatives have is that it also leads to the state using it to impose its will on its citizens. It's not homophobic to think that Kindergarten is too young to start teaching children about sex or that forcing the church out of the adoption business is a good idea. This topic warrants its own post, but I needed to discuss it before going any further.

Back to the original point, what are the topics where the leftists will favor greater personal freedom over the right? Simply put, any involving sex, drugs, or alcohol. This is not to say that granting such individual freedoms would be a bad thing. Reforming our drug laws will get quite a few people out of prison and reduce a slew of law enforcement costs, not to mention allowing society to focus treatment on addicts rather than punishment. Are there negative sides to this? Absolutely. The same with sex - there is no reason why the government should interfere in personal relationships provided they do not cause harm to others. Unfortunately, the left never knows when to stop, and suddenly it is a right to have someone else pay for your contraceptives, morning after abortifacients and sterilization services. What the left fails to realize is that having access to something does not constitute the right to have it paid for by someone else. Again, conservatives will for the most part support a woman's right to access to these services, but draw the line when suddenly the First Amendment to the Constitution is trumped by your need for pleasure. And there are also legitimate medical reasons for these services - some women take the pill to help fight conditions they may have or may need a hysterectomy, and few conservatives will oppose these. They just don't want to be forced to pay for your weekend romp.

Now look at the other side, and where conservatives desire freedom. Theirs are the ones that our president laments as "negative freedoms:"

• Freedom to defend yourself and your family


• Freedom to not have the state impose on your religious beliefs


• Freedom to choose where your children go to school


• Freedom to decide how your retirement is funded


• Freedom to make the choices over your personal health care

In each one of these the conservative seeks freedom from the state to make choices over the major decisions over their lives, where those of the left focus on their pursuit of pleasure. One wants the freedom to live and grow and take responsibility for one's life, where the other only looks at short term happiness. Also ironic that for all that leftists claim to love freedom, in each of the bullet points above the leftist happily surrenders his freedom to the state in return for absolution from responsibility for his actions. The conservative freedoms also come with great responsibility, and they not only willingly accept them, but vehemently fight for the freedom to fail.

The leftists can argue that each of those negative freedoms cuts both ways:

• Gun control will protect you and your family from gun-wielding criminals

• The church has no business being granted any kind of exemption from laws of the land that the rest of the citizens live under.


• What is to stop people from using vouchers to send their children to poorly run schools, or to use the extreme example, a school whose teachings are based on White Supremacy?


• What happens to the person who put their entire 401(k) into Enron stock?


• What recourse does a citizen have against an insurance company that rejects their expensive health care claim or they exceed their cap and are forced into bankruptcy over a medical condition?

These are valid questions, and any one of them is worthy of its own post debating the various arguments. But back to my main point, in each of the leftist arguments you are entrusting the state to make the best decision over your life in dealing with these issues. Each one of these issues can be answered with individual freedom and free markets. At the end of the day, it comes down to one simple question: Who do you most trust to make the most important decisions over your life - you, or the state? I know where I stand - where do you?

President Obama - The Original Occupy Wall Streeter?

*** Update! Cross Posted at Flopping Aces! ***

Now that the Occupy Wall Street movement is dying down and shifting from creating mass group therapy sessions and breeding grounds for crime to its main goal of getting President Obama re-elected, it dawned on me that the president shares a very disturbing trait with the occupiers. And no, it's not a love for playing hackey sack while avoiding personal hygiene.

One of the things that the occupiers notably avoided was any kind of specific demands, save for the occasional mention of Glass-Steagal. Most of their "demands" could just be summed up as "Dude, give us money." The specific demands that they gave were easily torn apart for their unrealistic selfishness - these links summarize it pretty well. And that is actually the heart of the problem with the OWS movement, and with the left itself. They're big on ideas, but good luck pressing them to actually craft the details to make them work.

Don't believe me? Take the issue of Global Warming, Climate Change, or as we used to call it when I was younger, "weather." Lefties love calling for drastic changes to our lives, heavy government intrusion, and of course, a massive regressive tax that would hurt the world's poorest people. Granted, putting more people into poverty so they can become dependent on the government would be a win-win for lefties, but that is neither here nor there at the moment. So how do they justify this? Any good leftie will bombard you with studies proving beyond all doubt that the crisis is real and we must immediately take drastic action. Until of course, you get to the details. For example, take the simple questions that I had inadvertently plagiarized from Wizbang's former writer Jay Tea a while back. For example, one would ask questions such as, "What is that actual temperature you want to achieve, or what is that rate of change that we need to sustain?" Or his second question that goes along the lines of, "One of the means of proving a scientific theory is true is disproving the theories that show it to be false. What would convince you that Global Warming theory is not correct?" I've posed this question to a number of lefties, and am yet to get an answer. Yes, they will respond at length but they'll never give details beyond some vague "slowing the rate of change". And unlike lefties, I don't hate the poor enough to want to punish them over something that doesn't have concrete evidence to support it.

This is why the occupiers are railing against this proverbial 1% that's supposedly destroying the country. I'm not sure how, since we members of the 99% willing bought gasoline from them, accepted student loans and mortgages from them, purchased cars, clothing, vacations, and food willingly and without coercion. Oh, that's right - they're not paying their "fair share" of taxes. For starters, we can dispel the usefulness of punishing the wealthy as pure bunk. More importantly, there is one thing missing from the occupiers, and President Obama's, demands to eat the rich.

They keep calling for the rich to pay their "fair share". So here is my question - what is that number that constitutes fairness? Is it 30%, 40%, 50%? How about 100%? Why stop there? In addition to taking all of the one percenters' ill-gotten wealth why not start seizing their assets? A better question is who determines what that "fair share" number is? The occupiers? The president? And what is it that qualifies them to be the ones to pass judgment over who has earned their income and who hasn't? Is one only qualified if your career has never been touched by the taint of private sector or actually producing something useful at some point in your life? It's ironic that these are the same people who have to reserve judgment and not jump to conclusions over motives when a lunatic shouts "Allahu akbar!!!" while on a murderous rampage.

Save for an occasional tantrum, the OWS movement has mostly gone away, as it's funding is back to focusing on getting the president re-elected. Not to mention that the public quickly grew tired of the vandalism and other crime that followed their camps, not to mention destroying the public ares that have been subject to their occupation. Even with the sympathetic coverage of the press it became impossible to mask the selfish parasitic heart of the movement, and without a diet of attention and approval the unspecific-demand-ridden beast starved. Sadly, the same can not be said of the current resident at 1600 Pennsylvania Avenue.

Look at the president's domestic economic policies. The best that can be said of him at this point is that he is economically illiterate, and at worst, he is truly trying to destroy this country. If you're wondering where I stand, I think it's somewhere in the middle - President Obama seems to see this country as too big for its britches and needing to be taken down a notch, but not intelligent enough to understand the impact of his actions. His policies illustrate that:

• He wants the private sector to start hiring more, as does everyone in America. And yet he continues to state that he will punish profitability (profitability means expanding one's business, and hiring more workers to handle the increased business), make it more expensive to hire workers with mandates like the ever shifting Obamacare and various other "protections" that adults need from everyday transactions. I haven't seen any explanation as to way any business would want to expand in this climate.


• He says we have an "All of the above" energy policy that has put the brakes on offshore oil drilling and domestic gas pipelines, while allowing tech EPA to end-run Congress begin regulating the coal industry out of business. I understand that lefties want our energy to a wind and solar only sourced power supply. We haven't seen any road map as to how we get there or how much it would actually cost.


• In the "too true to be funny" category, the president claims that he's committed to reducing the deficit, while he may be on track by the end of his first term to inflict on the American people as much debt as his predecessor did in eight years. And rather than talk honestly about how this gets paid back and what it will cost all of us we just get a hockey stick you can believe in.

Sadly, as long as he has his enablers in the press Obama will continue to get away with not having to ever give his constituents any kind of serious policy discussion. Although the president is too well groomed to truly fit in at an OWS camp, his policies show that he is truly the father figure of that movement.

"And I will leave you debt that can't repaid... 'til the end of timmmme"

As Good a Conspiracy Theory as any to Explain Obama's Attack on the Catholic Church

President Obama's recent decision to force the Catholic Church to violate their religious beliefs and provide contraceptives and morning after pills in their health care packages surprised me. No, I was not surprised to see this as a logical progression of Obamacare - I was more surprised by the timing. I am among those who believe that Obama will get re-elected in 2012 no matter what happens in the next few months - that will be a separate post in it itself. Without going too much in depth into what I plan to write a big part of my theory comes down to two observations: What is Barack Obama's greatest love and passion in his life? Barack Obama. And what is his greatest talent, the one thing that sets him above the rest? Convincing other people that they should love Barack Obama almost as much as he does. In other words, he has the perfect skill set for getting elected to public office, regardless of experience or his record. Given how Catholics came out in support of Obama in 2008, why would he spit in the church's eye right now and risk alienating this voter base with just a few months to election?

It makes absolutely no sense, unless you look at the bigger picture. Obama's re-election campaign unofficially kicked off with the Occupy Wall Street movement. It got the unionistas and professional leftists out to energize his "young and stupid" demographic that had lost a lot of its enthusiasm for Obama, and also to help set his 2012 campaign theme of envy and resentment toward your neighbor. Does that sound like an over the top statement? The president can't run on his record - sustained high unemployment, soaring deficits, high fuel prices thanks to an anti-energy policy, not to mention a foreign policy where the good guys don't trust us and the bad guys think we're a joke. How many leaders have you seen who after three years in their position continue to whine about the job they inherited? Hence, the "Obama in 2012 - It's someone else's fault" campaign theme.

The president is very good at getting himself elected to office - whether getting opponents thrown off the ballot, sealed divorce records released, accepting illegal campaign contributions from foreign donors, or having a fawning press ignore his every flaw while shining a glaring light on every weakness of his opponents, no matter how small or petty. When Mitt Romney shaped up as the most obvious opponent for him to face in November, the OWS campaign makes perfect sense to start building resentment and envy toward Americans who are actually competent enough to lead successful careers. But then a funny thing happened.

As the Not-Romneys fell by the wayside one by one, somebody that nobody saw as a viable threat was still standing and going strong. No, I'm not talking about Gingrich. I'm talking about the recent rise of Rick Santorum. Aside from running against Ron Paul (which will never happen), no remaining candidate is as desirable an opponent for Obama as Rick Santorum. He is by far the most social conservative among the candidates, and he has made enough statements regarding women and gays that he would make the perfect target to whip up enthusiasm in a very unenthusiastic left wing base, not to mention the 24/7 news cycle will allow the Palace Guards in the press to ignore real issues and President Obama's performance while painting Santorum as enough of an extremist to turn off any moderates.

As for abandoning the Catholic vote, Obama has already issued his faux-compromise. My guess is that he's got enough tricks up his sleeve to throw out between now and November to convince Catholics that he doesn't really believe that the right to free contraceptives trumps religious freedom. On one of the Sunday new shows George Will chided the Catholic bishops for getting behind Obamacare without thinking through where it would logically progress. I would argue the same about the American people making the decision to elect Obama in 2008. For that matter, I sincerely hope that you are not among the economically illiterate who were led to believe the claims of, "If you like your insurance you can keep it" or that "your premiums will not go up."

Back to the Catholic Church insurance decision - why now? Obama could have easily waited until after the November elections to show his views on religious liberty in this country. If you're reading this you already know about Santorum's surge in the polls and recent victories in the primaries. The timing of this announcement was perfect to push religious conservatives toward not the Mormon, but the outspoken Christian in the bunch who is suddenly riding a wave of momentum. We've seen how quickly political fortunes come and go, and with enough momentum Santorum could ride this wave to the nomination, helping Obama not only get re-elected, but fire up enough turnout from his base to take back the losses from the 2010 elections.

Any of my regular readers (thank you, both of you!) probably notice something missing from this post. I'm big on citing my sources and embedding links to support my assertions - there aren't any here. Yes, I could put links backing my statements about the economy and foreign policy, etc, but that wasn't the purpose of this post. The rest of what I've written here are nothing more than my own observations, personal analysis, and theories taking them to a logical conclusion. I won't insult your intelligence by suggesting that this is anything more than a conspiracy theory. I just see something happening that makes no sense and am looking for an explanation. If anyone has a better theory, please comment!

Economics for Politicians Chapter Eight - Do You Know What an Unfunded Liability Is? It's Why You Belong in Jail!

*** UPDATE - Cross posted at Flopping Aces! ***

Welcome back, class! As I warned you last time this subject would be painful for you, so strap yourselves in. As you've probably noticed with all of the charts and graphs we use that economists love to use pictures to make their points. In this case instead of a picture I'm going to use a hypothetical story to get things started...

Let's say that at some point during your childhood your mother promises you that if you get straight A's in school and do all of your chores upon graduation from high school your father will buy you a Ferrari. Needless to say, you are very well motivated to be a good kid. You spend the next few years busting your butt, getting all of your chores done and making whatever sacrifices to your social life that are necessary to get straight A's. Graduation day comes and you walk up to your father and tell him about the promise your mom made and ask when you're going to get your new car. Your father looks back at you and asks how you thought the family could ever afford a gift like that. Even with both of your parents working full time your family can only afford to live a pretty modest lifestyle. If you had just looked around you would have understood that there is no way the family could have fulfilled such an outrageous promise.

Having your dream crushed would not go over well, and you are justifiably unhappy for having been duped. Now, where is your frustration directed - at your mom or dad? Even though the fault lies with the person who made the ridiculous promise, chances are that most of your anger is at the person who had to point out the reality of the matter and say "no" to you.

To most of us who live outside of the beltway or state capitols the concept of making outrageous financial promises that can never be kept sounds absolutely insane, and sadly for you this is just basic strategy to win an election.

Before we go any further let's ensure that everybody understands exactly what an unfunded liability is. Break down the two words:

Unfunded - A desired purchase that one does not have the means to buy based on current finances

Liability - Financial commitment to be paid at a later date

What this means is that every time you decree that something will be paid for with funds that have not been budgeted you are creating what is called an unfunded liability (UL). Be careful - don't confuse unfunded liabilities with capital expenditures. Capital expenditures (CE) can be defined as purchases that are paid over several years and will appear in outyear budgets. Where CE's are planned and already factored into future budgets, UL's are not.

To illustrate this think of a household budget. Sister Babe and I have all of our regular expenses that we pay as we consume them - groceries, utilities, gasoline, clothing, etc. We also have items that we had to finance because we are unable to buy them with cash, such as our car or our home. The car and home are not ULs because we have budgeted for their expenses in future years based on our current income level. We know that based on our salaries we can afford the car and our home, so these are not unfunded liabilities. Now, let's assume that one of us decides to do something stupid like make a large, unplanned purchase that goes enough beyond our budget that has to be financed with the money from elsewhere. In terms of scope, a cup of Starbucks during the day or going to grab a beer with a coworker after work are not expenses we budget, but are small enough that we don't have to plan for them. If one of us decides to surprise the other with the gift of a Lexus as a Christmas gift, that would have a significant impact on our household finances (If you want to see a great parody of those obnoxious ads click here. Warning - the language is NSFW). We would have to either cut back on other expenses, find a way to make significantly more money, or borrow against our future and make plans to pay for this for years to come, preventing us from using our money for other financial goals.

From your perspective, our consumption would be the equivalent of the day to day services that your level of government provides, such as police and fire services or payments to retirees. Our car or home would be your long term projects, such as building bridges or highways. As for the Lexus, that is everything that you have planned that you don't have in the budget. Examples of these would be wars, natural disasters, or Obamacare. Sure, if you spend too much you can just raise taxes and rely on unrealistic revenue forecasts from a tax base that your laws incentivise to shrink. Or, if you spend spend recklessly you can just tell people not to worry and that we can just pay for it down the road or punish the wealthy.

Here is the problem with unfunded liabilities - they ultimately have to be paid back, and those payments mean that in the future you will have less to consume or invest. If Sister Babe and I now have a $700 monthly Lexus payment that's money that we don't have for vacations, for funding our retirement, paying off the car we already have, or, heaven forbid, forcing Brother Bob to cut his beer consumption.

The same goes for you. The beauty from where you're sitting is that the pain is spread over many people and your constituents are so used to paying you taxes without question it goes largely unnoticed. But ultimately the debts have to be paid back. I believe it was the writers at Cafe Hayek who defined an unfunded liability as a tax on future generations that will have to be repaid either by raising taxes or inflating the currency. A few years ago I got to hear Ben Stein Speak when he got in front of the crowd and said, "Bueller... Bueller...". No, he actually didn't say that but what he did offer was a great definition for our soaring deficits - "Financial grandchild abuse."

A few years ago Chris Christie was elected governor of New Jersey, surprising many that a conservative Republican could win in such a blue state. The people of New Jersey got fed up with the leadership of one of the best financial minds that Democrats could produce in John Corzine. The state had (and still does) face some serious budget issues, but Christie was the one who was given the task of dealing with the problem. The Democrats in the state legislature naturally proposed taxes on the wealthy to pay for these, which Christie rightly vetoed as soon as the bill reached his desk. New Jersey already suffers from one of the highest tax burdens among the states, and only neighboring New York's even more oppressive taxes keep more people from North Jersey from fleeing the state. Christie had to make cuts to the budget, and one of the larger outlays that New Jersey has is to its bloated public sector workers. Specifically he targeted the teachers' union, making the unreasonable demands that they fund part of their pensions and health care - you know, like everyone else has to do. This and other spending cuts made Christie quite unpopular in New Jersey, but at the end of the day who's fault is the state's terrible financial condition? Was it the man who caused the problem or the man who enacted the painful solution?

Sadly, in your world these promises get you re-elected until the bill finally comes due. Or when you finally get thrown out of office you can fail upward into some think-tank or high paying lobbying job. And of course, we get stuck with the bill. Going back to Cafe Hayek's definition, any deficit spending that you commit is nothing more than a tax increase that you haven't bothered to pass yet. If you want a great example, look at what happened just recently when all of the president's sycophants in the media were baying over Mitt Romney's tax returns. The debt ceiling was quietly raised by $1.2 trillion dollars. Using a rough total US population of 308 million people, that averages out to a tax increase of $3,896 for every man, woman and child in America.

And if you think we can get around that tax increase that the president just passed by simply demanding that the wealthy pay their "fair share", think again. Declaration Entertainment's Bill Whittle does a great video walking through Iowahawk's analysis of how much of an impact on the debt we would have by confiscating private wealth. If you have five minutes it's well worth watching.

To shoot down another argument supporting deficit spending we can look at every lefty's favorite economist, Paul Krugman. By calculating that most of our federal debt is held by American entities, whether it be private citizens, banks, etc. the debt is meaningless because we "owe it to ourselves". This is a perfect illustration of why it is dangerous to listen to people with grand ideas and minimal experience in the real world. An old coworker of mine gave me a phrase I love to use, Krugman is "buzzword compliant but experience deficient." When you're looking at the world from eight miles high it's easy to make assumptions about a big picture without realizing that the big picture is made up of an incredible number of small moving parts. Every bit of that debt that "we owe to ourselves" is exactly that - it is owed to some person who is working under the assumption that at some point they will be paid back for the loan they made. Yes, the borrowee can take a loan from someone else to pay it but at some point there is an end where the debt has to be paid.

To show this point of owing to ourselves with a real life example we can look at an example from my past of betting on football with friends. When we were in 6th grade my buddy Richard (not his real name) sat behind me in Sunday CCD class. I would always tear out of the newspaper the latest betting lines and we would pass the paper back and forth negotiating which games we would bet on and at the end of class we would come to an agreement as to which games each would have. We were twelve years old, so our big stakes betting was a quarter or fifty cents per game. Every Tuesday morning when the gaming week ended after the Monday night contest we would settle our debt on the playground with the loser paying what he owed. If I remember correctly I trounced him pretty well that season, having an advantage for the year of being up around $6 after the Super Bowl. Being a good sporting friend I offered double or nothing on the following week's Pro Bowl all-star game, which Richard won - easy come, easy go.

In contrast, I started a new job just over a year after graduating college. A coworker who I'll call Charles suggested we bet each other on some of the weekend pro football games. This was probably the first time I was betting on football since my days with Richard, so I gladly accepted. This time was different though - I got out to an early lead in the season, but instead of paying each week Richard suggested we apply whatever he owed toward next week's games. This kept up until I was going out of town one weekend and asked Richard to pay up. At this point he got indignant and said that he bets for friendship and that he was annoyed that I suggested that he pay. Being that he was a coworker bodily harm would have been inappropriate, so I took that opportunity to realize that I was better off without this goon in my life. So for the $10 or $20 that this cost me I gained the ability to immediately send this fool scurrying away whenever he tried to start a non job related conversation.

The point of these stories is that "we owe it to ourselves" only holds up if it is never expected that the original money be paid back. And that money doesn't get to to, or from, this amorphous being known as "ourselves". It's made up of individuals, and at some point no matter how much our government bullies the banks and other institutions to buy its debt this shell game won't go on forever because it can't. Anyone remember the bank runs of the 1930's from your history books or the last time you saw "It's a Wonderful Life"? This is what happens when a few clever individuals realize they better move quickly if they want to get the debt that's owed to them back. Then more and more people will figure it out, and the result is not going to be pretty.

There is actually one other way to pay down our deficits other than ruinous tax increases or hyper-inflation , and that's by spurring the private sector to grow faster than the government that feeds off of it. No parasites can indefinitely grow faster than its host without killing both, yet leftists seem to be in love with gorging government growth for some improved economy that becomes their bizarro version of "Waiting for Godot." Dubya partially got this, which was how, despite his "irresponsible tax cuts" government tax receipts hit all time highs. Of course, that doesn't excuse his decision to start spending like a liberal.

We need to start taking a hard look at how you've plundered our economy, and we need to start having those painful conversations right now about how much we're going to need to sacrifice thanks to your selfishness. Bernie Madoff's name has become almost synonymous for large scale financial rip-offs, yet the $65 Billion that he cost the people who believed in him is is only how much more you take from us in one month - and that's only at the federal level. And frighteningly enough, while you no doubt agree with us that Madoff belongs behind bars, you probably have the nerve and gall to think that we should be thanking you.

So spare us the talking points that Obama has "given" us these massive tax cuts. Since coming into office the President and his fellow Democrats have increased our federal debt by $3.5 Trillion to $14.2 Trillion in just three years - that's a tax increase of $11,363 per citizen.

Naturally, I'm picking on Barry O. since he is the one at the helm right now. Don't think that I'm letting our last president off the hook today. During his eight years in office Bush presided over deficits that increased to $5 Trillion dollars - using my formula above that's a tax increase of $16,233 for each of us. So you're on the right track when you tell us that Bush's reckless policies hurt our country, but it's not his tax cuts, it's his tax increases that hurt us. We all agree that Bernie Madoff's $65 Billion rip-off was criminal. What is it that makes his actions criminal and yours noble? You'd better be ready to answer that, and soon.

OK, that's enough for today. I know that I was a lot rougher on you than in previous lessons, but sometimes tough love is necessary. But in the words of the great Michael Muir, "And if I offended you, oh I'm sorry but maybe you needed to be offended..." Mr. Muir had a bit more to say on the subject, but in the name of the new civility those words won't be reprinted in this post. If you are interested you can hear the rest of his musings by clicking here .

"Who the H*** you callin' fiscally irresponsible? You wouldn't know what fiscal responsibility was if Milton Friedman was eating Fruit Loops on your front porch!"

The next lesson is only going to be somewhat better for you, as we explain why the unintended consequences of your actions often cause more harm than good. This next chapter will be a bonus section for journalists - never again will you have to type the word "unexpectedly" when explaining why jobless claims increase under President Obama! Next up:

Chapter 9: Unintended Consequences - Bonus Section for Journalists!

Previous Lessons:

Lesson One: It's Not Your Money

Lesson Two: Intro to Microeconomics, or Why Prices Matter

Lesson Three: Intro to Macroeconomics. or So that's Where Government Fits In!

Lesson Four: You Don't Create Jobs - It's Time to Get Over FDR!

Lesson Four A: By Definition the Government Can Not Create Wealth

Lesson Five: Businesses are Greedy - That's Not Necessarily a Bad Thing!

Lesson Six: You are Greedy - That is a Bad Thing!

Lesson Seven: You Don't Invest; You Spend

If Tim Tebow Did Not Exist, the Left Would Have to Create Him

*** UPDATE - Cross posted at Flopping Aces! ***

A few months prior to the 2008 election my friend The Destroyer of Colons asked me, "When Bush is gone, who are liberals going to hate?" He was only half joking. "Not to worry," I assured him with a smile, "liberals can always find someone to designate as an object of their hatred."

When I was in high school the priest who was teaching our Senior year psychology class had us write an essay based on the quote, "If God did not exist man would have to create him." This was many years ago, but I recall my conclusion being something to the effect of saying that given mankind's emotional and psychological needs if God did not exist we would have to create some divine being to believe in to give our lives greater meaning.

This was actually a blog post I was kicking around last year, looking back on 2008 when the focus of the left's anger was directed toward Sarah Palin. It was almost surreal watching the hateful delight they took in watching our press journalistically rape her family while these same "professionals" ignored trivial matters like the horrifically flawed economic policies or lack of experience and questionable past of one party's actual presidential candidate. Personally I'm not a big Palin fan - I see her as someone with very real flaws to go with some very real accomplishments, but the way she enunciates just grates on me (sorry, that's just me). Then again, at least I generally agree with the substance of what she's saying and if her speaking manner is fingernails on a blackboard to me hearing her talk is probably a Tabasco sauce enema to leftists. For that matter, the fact that the very mention of her name can send most leftists into a seething, purple-faced rage will always earn her a place in my heart. Not to mention this past summer's bus tour when the same press who had so much fun dumpster diving through her and her family's lives were now crying that she was treating them like paparazzi - that was a thing of beauty.

Getting back on topic, it seems that no matter what the time is, the left has to have someone as their focus as their anger. Even in those early days of the Obama presidency when all was right in the world their focus went toward Rush Limbaugh and Glen Beck - reliable standbys. And then came the Tea Party. If you missed it the first time, check out my two part posting illustrating the left's anger toward the Tea Party as told through the five stages of death and dying.

The left threw out every bit of hateful invective that they had in their arsenal. The Tea Party was labeled astroturfers, racists, seditionists, idiots, rubes, and terrorists. Their crowning slur came when none of these charges stuck and the left threw to the most disrespectful, malevolent smear they could find toward the Tea Party - they compared the Tea Party to leftists.

Another interesting case study in leftist anger is the comic strip Doonesbury. While I once enjoyed it as an actual comic, over the last decade it's morphed into a sounding board for the angry and bitter leftist, Garry Trudeau. From 2000 - 2008 his range of topics could be summed up as:

• Hatred for George Bush

• Hatred for Fox News


• Hatred for George Bush


• Hatred for Schwarzenegger


• Hatred for George Bush

And of course, during the 2008 presidential campaign Sarah Palin joined this crowd. Mix in some patronizing, if not outright disdain for the military, and that pretty much sums up every comic not involving the personal lives of the characters, although these themes are generally woven in as well. One would expect that with a president as spectacularly inept as President Obama, Trudeau would have a field day. So naturally his strips have become focused on hated for Palin, Donald Trump, the Tea Party, and of course sympathy for the OWSers and their distaste for... prosperity?

After following the progression of Bush-Chaney-Palin-Limbaugh- Beck-Tea Partiers-The Un-Romney of the Month, we find ourselves at Tim Tebow. For those of you unfamiliar Tim Tebow is a pro football player, and is currently the starting quarterback for the Denver Broncos. He has gained fame for his erratic style of play, leading his team to several improbable come-from behind wins. That made him famous in the sports world, but what took him beyond was his religion. To build on Dr. John's analysis, Tebow became famous for combining his unusual talents with his spiritual beliefs. Tim Tebow is a devout Christian, and is quite public about it. "Tebowing", the act of kneeling and bowing one's head in prayer with fingertips on your forehead has become a national sensation in itself. He gained some notoriety for painting scripture verses in his eye black while playing college ball at the University of Florida. Tebow also caused a minor uproar during last year's Super Bowl when he starred in an ad for a Pro-Life group, telling about how his mother had an at risk pregnancy where abortion was recommended, and how happy Tim Tebow and his mother were that she chose to have him. This created a bit of controversy, but no more than if a tasteful Pro-Choice ad had aired during the Super Bowl starring a famous female athlete. An example off of the top of my head would be if a top track star mentioned how getting pregnant in high school would have cost her a college scholarship and ensured a life in the impoverished place where she grew up. An ad like that would have gotten some criticism on the right, and would probably have blown over as quickly as Tebow's ad did.

But then Tebow did the unforgivable - he became a famous Christian who is open about his faith. With the Denver Broncos' poor play early on in the 2011 season Tim Tebow, who opened the season at #3 on the Broncos' depth chart at Quarterback, was now the starter. And he started winning. And winning. And winning ugly. The team adjusted its offense to make the best use of Tebow's athleticism and, let's face it, terrible passing accuracy. Tebow had this strange habit of playing badly for three quarters and then pulling out an almost miraculous victory. I saw one person nickname Tebow "Uncle Miltie", based on an NSFW-ish story about the late comedian Milton Berle that ends with the punchline, "just enough to win."

The end of regular season's performance (losses) by Tebow and the Broncos have bought Tebowmania back to Earth, but during his ascent and decline and once again ascent in his playoff win over the Steelers we've seen no shortage of venom from the left directed at this young man. David Schuster, the always reliably unhinged Bill Maher, even one of the more rational leftists in Bill Press all took their turns attacking Tebow. Heck, even The Nation, not exactly known as a sports publication, had to write several articles on the quarterback that the left loves to hate.

Why all of this hatred for someone who has done nothing wrong, or broken any laws? For that matter, while some may find his openness about his faith obnoxious, Tebow isn't out trying to beat everyone he meets over the head with a Bible and preaching conversion. You know what else he isn't doing? He's not doing drugs. He's not driving drunk. He's not participating in dogfighting rings. He's not bringing guns into nightclubs. He's not fathering children out of wedlock to several different mothers. And he's not murdering anyone. Granted, the athletes in each of the scenarios I just mentioned have gotten varying degrees of scorn for their actions, but none that were so ideologically centered. So why do leftists give the athletes in the categories I just mentioned a pass while directing so much venom at one man who most people would actually be happy to see their sister or daughter dating? It's the same reason the left has so much hatred for the likes of Sarah Palin or the Tea Party.

They have to. Leftist policy just doesn't work in the real world - look at Communism in Soviet Russia, Europe's socialistic gradual death spiral (and that's despite the US subsidizing their national defense) or or that matter, look no further than the White House. When Oregon was considering an Obamacare/Romneycare-esque health care mandate The Destroyer of Colons mused, "I hope that this bill passes, just so we can show leftists once and for all that government run health care doesn't work." I just shook my head and responded, "That won't happen. Leftist policies never fail because they are bad ideas, only because greedy individuals refuse to throw enough money at their bad ideas."

This is what leads to the Left's permanent state of anger. When your bad ideas don't work you can either reflect on them and learn from it, or you can cling to your bad ideas and be angry because nobody gets your genius. Without introspection as an option, a target must be found - hence the left's continuous rotating figurehead as the object of their anger.

Even worse is how badly it is often misdirected. Look at the OWS'ers and their anger at... something. Granted, most of the movement is made up of Unionistas, career grievance mongers (Code Pink, ACORN, etc), students who have no idea what the real world is like, and criminals. These are all traditional Democrat-leaning groups, but at some point one would think that the Obama-rose-colored glasses have to come off and the realization has to set in that the president and Congress are the reason our economy is flagging. Maybe people who demonize profitability and threaten to punish the prosperity that leads to job creation are why companies are afraid to hire. On a personal level, maybe their facial piercings, lack of personal hygiene, and sense of entitlement are why nobody wants to hire them for any of the ever-scarcer job openings. Sorry, but the 12-16 years spent getting gold stars and being told you're special for just showing up are over.

Again, rather than look at the causes of their unhappiness it is easier for the left to lash out in unthinking rage. The worst example that would actually be comical if it weren't so disgusting was the shooting of Gabrielle Giffords. So blinded by their hatred for Sarah Palin were the leftists that they had to manufacture an excuse to pretend that she was somehow responsible for the shooting. To make matters worse, when she called them on their idiocy, they double downed on stupid and got even angrier at her simply for pointing out the error of their ways. And the sad part is the lefties started shrieking about how classless and stupid Palin was for doing so, when the place they should have been looking was the mirror.

This is not to say that all leftists are constantly out looking for someone to hate to fill the void in their lives. I understand that the tone of this post is a lot more accusatory than what I usually write but, as I dispel my own straw man a better question does come from it. Why does there always seem to be someone in the news who is the object of leftist anger, and why is it so vicious?

So where will Tebow go? Maybe he fizzles out by losing to the New England Patriots this weekend as badly as he did a few weeks ago, or maybe he goes on to win the Super Bowl.

"Only Tim Tebow can save us now!"

My favorite take on Tebow came in ESPN columnist DJ Gallo's weekly satire of Peter King's "Monday Morning Quarterback." In this week's "The Hangover" Gallo speculates as to where Tebow may be in twelve years:

"Will a wholesome, handsome ex-football star who can draw the religious vote and appeal to the tens of millions of Oprah-loving pop psychologists win 51 percent of the vote in the 2024 presidential election? No, he will win 91 percent of the vote in the 2024 presidential election. The 9 percent who don't vote for him will just be hard-core Raiders, Chargers, Chiefs, Alabama, LSU, Georgia and Ron Paul fans."

Tebow for President in 2024!

I'm kidding, of course. The only person to get Brother Bob's coveted endorsement for president is none other than the great Stannis Baratheon.

But until then we have Tim Tebow.

Economics for Politicians Chapter Seven: You Don't Invest; You Spend

*** UPDATE - Cross Posted at Flopping Aces! ***
Welcome back, class! I know that it's been a while since our last lesson but things have been pretty busy here in Bobville. When we last left off we had to take a step back to explain wealth creation for some of you who still were having trouble understanding why you do not create jobs. Now we can start moving forward again, and this chapter will be the calm before the storm. Today's lesson will actually be the lightest in terms of content, but you're going to need it. The next two lessons on unfunded liabilities and unintended consequences are going to be the most difficult ones for you to grasp, much less accept.

Wikipedia defines investment as "investment is the amount purchased per unit time of goods which are not consumed but are to be used for future production." In other words, investment is something willingly purchased at the present time in hopes of gaining a return on that investment. Over time, whether or not is is a good or bad investment will be based on growth or failure to grow. This is why government spending can not be called investment in the strictest sense of the word. Society can benefit by items purchased by the government, such as:

• Education (improving the quality of our workforce, while how those dollars are allocated will be an endless debate)


• Waging a war on foreign soil (sending trained professionals to kill those who would harm American citizens)


• Foreign aid (bribing foreign governments to improve opportunities for Americans abroad)


• Highways (creating a commerce and transportation infrastructure).


• The important distinction is that while the items just listed produce benefits to society, but by their nature they do not allow for the same measurement as conventional investments.


• Also under the government spending umbrella are items that are simply produced while yielding no value but simply waste money. The president's czars and regulation designed to increase mercury levels in landfills fall in this category.


• The easy pinatas in the room are government ventures that have lost money for the taxpayers hand over fist. Amtrak, Solyndra, the GM bailout and Fannie and Freddie Mac fall into this category. There's no need to beat you up with the details of these, but if you're going to call your spending investment please give the American people a clear picture of how these investments have performed, and in turn how you as an investment manager have performed over the years.

If you've understood the previous lessons on job creation and wealth creation this concept should be pretty easy for you. Since there is nothing more to teach here I thought I'd add a fun exercise to wrap this up. Presidents like to brag about how much they've "invested" in our country, so what is each President's return on investment? We use this measurement for all real, tangible investments, so why not here? Here are the exercise's assumptions:

• Return on investment is simply a measure defined as (Total Receipts -Total Spent) / Total Receipts. This is not a real measure given that we just covered how government spending is not true investment, but is more of a measure of how wisely our leaders are spending our money relative to what they collect.


• Raw data is from the White House's web site, and the original spreadsheet can be found here.


• Early presidents are lumped in together - we don't start to get good individual presidential data until the start of the last century.


• Each president's measured years lags one year behind his entrance into office, since each new president operates under the budget of his predecessor.


• Total dollars gained or lost are not our primary driver for success or failure - percentages are used instead. The most popular measurement for return on investment performance is by percentage, so that is what is being used here. Here is how the presidents fared in chronological order. Click here for a larger version:

What does all of this tell us? Not too much, to be perfectly honest. By the measure used a president who decides to have the government confiscate every last piece of private wealth while less rapidly increasing government spending would look like Peter Lynch. At least they would look good for a year until reality sets in, of course.

• It was interesting that the only president in modern history to show a net "gain" during his tenure was Clinton. He finished fifth best with a 0.5% net gain. Yes, I know that Congress actually passes the budgets and that the gridlock that Gingrich created helped to control spending, but let's give some credit where it's due. The president is the highest ranking official in his party and has some sway over how his party's members in Congress behave.


• The bottom surprised me more. I wasn't all that surprised that Reagan and Bush 41 finished at 5th and 6th worst. Yes, I'm aware of the Democrat-controlled congresses as well, but let's give some blame where it's due as well.


• And even bigger surprise was Dubya - 7th worst, while I was expecting a worse rating. Although he and Tom Delay decided to go on a spending binge, the fact that skyrocketing receipts collected during his presidency prevented him from finishing lower on this list. Maybe there is something to be said for not continuously demonizing and threatening the very businesses that generate your tax revenue after all.


• One that will surprise many but was no shock to me - Hoover. Many Americans still subscribe to the notion that Hoover took no action against an economic downturn and only when FDR came into office did his New Deal programs save us. Yes, Hoover saw tax revenue drop as a result of the recession, but like his successor he chose to spike government spending, and with similar results.


• The fact that our worst investment manager was FDR shouldn't surprise anyone, especially his supporters. Having paid attention to your previous lessons, I know it didn't surprise you.


• And of course, the only way to conclude this is by looking at President Obama. For this exercise we're only looking at his 2010 actuals and 2011 projections. It will be interesting to see how he ranks after his four years, but as it stands right now the president is selling himself short. While he thinks he is only our 4th greatest president, in terms of bankrupting our nation he stands solidly at #3!

Up next is Lesson 8 - "Do you know what an unfunded liability is? It's why you belong in jail!"

Previous Lessons:

Lesson One: It's Not Your Money

Lesson Two: Intro to Microeconomics, or Why Prices Matter

Lesson Three: Intro to Macroeconomics. or So that's Where Government Fits In!

Lesson Four: You Don't Create Jobs - It's Time to Get Over FDR!

Lesson Four A: By Definition the Government Can Not Create Wealth

Lesson Five: Businesses are Greedy - That's Not Necessarily a Bad Thing!

Lesson Six: You are Greedy - That is a Bad Thing!