Recently in It's The Spending, Stupid! Category

Could New Jersey governor Chris Christie be the next Ronald Reagan? It certainly seems like he's channeling the Gipper, and to good effect.

Probably one of his most Reaganesque moments took place during a town hall meeting.

One of Christie's most popular YouTube moments is a confrontation with an angry teacher, who upbraids him for not paying her enough. When Christie replies that if she doesn't like the pay package "then you don't have to do it," the crowd cheers like the Giants just scored a touchdown.

Listening to the teacher's complaints makes it quite clear she believes she's entitled to more pay, that it's owed to her. It turns out her salary at the time of the video was $86,389 per year, not including benefits. I don't know about you, but $86K per year is nothing to sneeze at. Christie was right to give her the answer he did. It also reminds us of another of Christie's Reaganesque moments.

Christie's cuts to school funding have earned him the enmity of the state teachers' union, with 200,000 members. The governor asked teachers to agree to a one-year salary freeze and to kick in 1.5 percent of their pay to help fund their health care insurance -- most of the state's teachers don't contribute to their plans.

Teachers in many school districts refused. As he had threatened during discussions with the unions, Christie called on constituents to vote down local school board budgets that didn't conform to his requests. Christie won the public fight. A surprising 58 percent of proposed budgets were defeated, making it the largest number of rejections on state record.

Just as Reagan did in 1981, when he faced off with the air traffic controllers union, Christie called the bluff and seems to have won.

How many times did Reagan go to the airwaves to ask the American public to contact their congressional representatives in order to get something he firmly believed was needed to fix the problems plaguing America through Congress? And how many times did they respond, giving the Gipper what he needed? It looks like Christie is following the same path and getting similar results.

The present governor of New Jersey bears watching as he goes over, under, around, and through the entrenched bureaucracies, union constituencies, and 'gimmee' special interest groups to put New Jersey's fiscal house in order.

Do we need any more proof the Tea parties are getting short shrift from the media and being blamed for acts of violence actually committed by those on the Left.

It seems the media and the Left want to see the Tea party as nothing more than an extension of the GOP or the Religious Right, and therefore not worthy of their attention, unless it's for something negative (even if they have to make it up). They ignore that the Tea party isn't happy with the GOP either and have worked to "throw the bums out" from both the Republican and the Democrat parties. We've seen this in a number of state primaries where incumbents have been defeated by newcomers supported by their local Tea parties. If anything it can be said the Tea party isn't an extension of the GOP. Instead it's an insurgency aiming to reform the GOP and remove the RINO faction that has made it seem more like the Democrats, with profligate spending and expansion of the size of government (though to a lesser extent).

All kinds of motivations and political beliefs have been laid at the feet of the Tea parties and their supporters by the Left. Unfortunately for them they're wrong. All those supporting the Tea parties want is fiscal sanity by the government to to be left alone by that same government. How do we know that?

Because they've told us so.

As much as many have been using the financial difficulties in states like California, New Jersey, New York, and a few other states to illustrate the problems with profligate spending and over-the-top tax burdens, they are more like the extreme examples that not everyone can easily relate. So rather than repeating the same old same old, it would be better to use two other states. These two states are similar in population, demographics, and just happen to share a border. However it is the differences between these two states that may give us a better comparison for their different approaches to state spending and taxes policy.

Which two states are we talking about?

Maine and New Hampshire.

Amity Shlaes uses these two states to show how out of touch our President is when it comes to how tax policy and government spending can have an effect on the economy, positive and negative.

Even before Obama was born, some states were applying the Obama rule of "spend, even if it means higher taxes, and you will grow." Others operated on the philosophy that less government, even perhaps in times of trouble, served their residents better.

J. Scott Moody of Public Choice Analytics, a New Hampshire public policy consultant who specializes in cross-state analysis, ran his own experiment. Moody compared Maine, a state that more than 60 years ago embarked on one path, with New Hampshire, which went a different route. Like the president, Moody favors an emphasis on the household pocketbook. He therefore spends time looking at per capita personal income of individuals.

Amity goes on to explain how both states were at parity in regards to taxes, income, and government largess back in 1946, but took divergent paths from that point on. Maine ended up adopting both a sales and income tax while New Hampshire still has neither. (The point could be made that New Hampshire does actually have one in the form of an Interest & Dividends Tax, but most folks pay neither because they don't have enough income from either to trigger the tax.)

In the end the two different paths taken have illustrated quite handily how taxes and federal largess can have an overall negative effect on the state so afflicted.

Overall today, Maine residents shoulder a heavier tax burden than do those of New Hampshire. State and local taxes take 12.6 percent of personal income in Maine, the sixth-highest share among states. In New Hampshire state and local taxes take 8.7 percent, putting New Hampshire at 49th for tax burden.

The result? Decade in, decade out, New Hampshire's economy grew faster than Maine's, so that the Granite State surpassed the Pine Tree State in 1984 and today boasts an output that is 20 percent bigger. Maine's recessions and double dips were worse than New Hampshire's. Eventually New Hampshire also won the population contest, passing Maine, in part thanks to migration. Last month, joblessness was 8.1 percent in Maine, better than Ohio but still bad, and 5.8 percent in New Hampshire.

In general New Hampshire hasn't suffered nearly as much from this recession as the other states in New England and the rest of the northeast. Historically, New Hampshire has fared better during recessions and recovered from them more quickly since the 1970's. Such success can be attributed to the state's low tax burden and limited government.

Unfortunately over the past 4 years the state has been inflicted with a milder form of the Tax-And-Spend disease that has plagued so many other states. Fortunately the voters have managed to hold the line at the town/city level, reining in spending and keeping property taxes in check. They are also making known their displeasure with their spendthrift legislators, seeing them for the wastrels they have become. An example: the legislature made the mistake of trying to abscond with $110 million in private funds from a state chartered medical malpractice association to help fill a ~$250 million budget deficit of their own making. Fortunately the state Supreme Court saw through the maneuver and told the state government the money wasn't theirs and to keep their hands off. That hasn't stopped the legislature from trying an end run around the Court, but the voters are quite aware of what's been going on and will likely correct the problem this coming November.

How many other states would have had their Supreme Court slap down a money grab by their legislatures? How many other states would fire the legislators trying to spend and tax their citizens money to the point where the state would no longer be attractive to businesses? Not to many, from what I can see.

So what does any of this have to do with what's been going on in Washington? Simply this: If the tax, spend, and grow the government at any cost agenda doesn't work at the state level, what makes Obama, Pelosi, and Reid think it will work at the national level? The only difference will be the number of zeroes in the size of the deficits. Unfortunately I doubt any of them will take the hint.

As the various state primaries are held and incumbents from both parties are finding themselves being seriously challenged by newcomers, the question we must ask ourselves is will the voters back tough steps to reduce the deficits? So far the answer appears to be yes.

Despite the disdain that many in Congress feel for the American electorate, more of them are feeling the heat back home. Some have already lost their primary bids to run for re-election, becoming victims of hubris after they decided it was just a dandy idea to spend the nation into debt to a level never seen before with little hope of ever being able to pay it off. And should the Republicans manage to take back one or both houses of Congress, there's another question all of us have to ask them, that being do they "have the stones" to take the measures necessary to bring our government's fiscal house into order?

Reading comments to the two posts linked above it appears that a substantial number of people on the left cannot conceive of the actual size of the deficit or what it will take to fix it. More than one of those commenting wrote something along the lines of "All we need to do is slash defense spending and we'll have enough to pay for everything." All that phrase did was prove to me and others commenting that they really have no idea how much money we're talking about. As one commenter put it in response to the clueless:

If we cut defense spending to zero, we'd still have almost a trillion dollar deficit to deal with every year. Better to cut things that really do nothing more than suck up tax dollars with little, if anything to show for it.

This same commenter also brought up the point that defense is one of the duties of our federal government as defined in the Constitution. ObamaCare, Cap and Trade, corporate bailouts, union bribery, and government departments like the Department of Education, the Department of Energy, and a number of others are not. Yet we waste billions on them with little return for that 'investment' of our tax dollars except more needless regulation, more costs associated with complying with those needless regulations, and tighter restrictions on our economy's ability to function. How does any of this help anyone...except those in Washington wishing to exercise more power over our lives?

I have a feeling those in power are in for a rude awakening come this November and November 2012. A lot of them will be hitting the unemployment lines.

Yup. I'd say that pretty much says it all.

(H/T GraniteGrok)

This is a concept that needs to be repeated again and again and again until it sinks in to the minds of the Progressives: You cannot tax our way into prosperity.

Again and again it's been tried, even here in this country, and it's failed EVERY. SINGLE. TIME. Yet the Progressives are incapable of realizing a very simple and easily proven truth, that being you cannot enrich the poor by impoverishing the rich. Yet again and again they insist that in order to be "fair" they need to spread the wealth. Unfortunately they will quickly do away with what wealth there is (except theirs, of course) and make sure everyone is poor. As if that were somehow fair.

The argument they use is that the wealthy can afford confiscatory taxes. But for every means the Progressives come up with stealing what isn't theirs through taxation, the wealth producers find ways around them. And as the tax rates climb, they collect less revenue from the wealthy. Should it become bad enough, the wealthy will leave, taking their wealth with them. That's a lesson the UK learned during the 1970's, when their 'wealth' taxes caused a mass migration of wealth to more tax-friendly locations, with the end result being the collapse of the British economy.

Could the same thing happen here? Absolutely. We've already seen some elements of that occurring, with US corporations moving their 'headquarters' to tax-friendly nations like Bermuda, allowing them to greatly reduce the amount of corporate taxes they pay. Why? Because the US has some of the highest corporate taxes in the world. Only a sucker or an idiot wouldn't make moves to lessen their tax burdens if at all possible.

Now that Obama, Pelosi, Reid, Frank, and Dodd have decided the rich are the problem, they've been wasting no time trying to figure out even more ways of extracting money they did nothing to earn to give to their 'core' constituents, meaning not the average working man or woman. One commenter to the piece linked above has some of it figured out.

[They] are not really interested in raising revenue - but to continue punishing those that have money - ... It is as simple as that.

They are so envious of those that can create wealth, that the only thing Obama and his ilk can do is grab onto as much as they can, spread the misery and distribute anything they can grab - The fact that they may have less to distribute is also irrelevant - As long as those that have money feel the sting, Obama is happy - and when those that have money do whatever it takes to try and escape the taxman, the misery creators, Obama will keep turning the screws ...

The Progressive mindset does not allow them to think anything other than wealth is a 'zero sum' game. That means they believe that if someone became wealthy it was because they stole it from someone else and made them poor. It appears it is hard for many of them to believe the wealthy became that way through hard work, long hours, and taking risks others were not willing to take. That many Progressives in government have managed to become wealthy through their government connections and not through the traditional American system of hard work again leads far too many of them to think their way is the only true way to become wealthy. It is true in a kleptocracy, something it seems a lot of Progressives are working very hard to create. One thing they have overlooked though is that most kleptocracies are Third World nations, with a vast majority of their populace living in poverty because that's exactly the way the kleptocrats in power want it. The Progressives in this nation are no different, though they'll try to pretty up their attempts in mind-numbing governmentalese and politically correct speech, trying to make it seem as if it's a good idea.

In the end, though, it all comes down to envy. Democrats, and particularly the Progressives within the party, envy the successful. It's all they have that might reach others of the same bent of mind. They'll work hard to take away what the successful have made, but won't work that hard to make themselves successful. They are, as Ayn Rand described them, looters.

But all of that aside (I do go off on tangents, don't I?), what Laffer describes, what most Americans understand, and what the nation needs can be broken down into two simple sentences, provided by yet another savvy commenter:

Who cares if tax breaks don't fill the pockets of lower wage earners (like myself)? If raising taxes doesn't help the economy, then don't do it. (Emphasis added)

Indeed!

One of the more lucid commentaries I've ever read dealing with the financial mess the Democrats have been foisting upon us came not from this Wall Street Journal op-ed piece, but from a WSJ reader who manages to put it into perspective for those of us not infected with the progressive mind rot about economics (how it should work rather than how it does work).

Reader Geoff Wilson writes:

The Progressive mindset is a curious one. It only makes sense or becomes predictable once you realize that to them, Utopia is reached through faith in the inherent goodness of their goals. As such, it is really a religion. I say this not to disparage the concept of religion in general, but to recognize that religion is marked by a belief that "faith is the substance of things hoped for, the evidence of things not seen." Thus, to a true believer, no amount of logic or objective evidence will sway their opinion, since in their eyes, the true test of faith is to adhere to your beliefs when all else tells that your course of action has no chance to bring about the result you wish it to.

Thus, Progressives cling to their backwards, illogical view of the workings of the economy not because they have ever been proved correct, but because they have faith that this is the way the world works, and because this is the only pseudoscientific framework that has ever been constructed that gives their desire to control other people for their own good some sort of supposed systematic logical basis. Thus, telling them that their logic makes no sense actually only serves to solidify their resolve, because Keynesian thought is actually based on the economy being controlled by "animal spirits" that are illogical. Thus, economic crashes are not brought about by predictable, understandable chains of logical cause and effect, but instead are brought about by the capricious whimsy of illogical humans, who stampede over the cliff of liquidity traps with wild abandon like lemmings.

They don't expect the economy to make sense. Rather, they expect to follow the wisdom of their high priests no matter what the economic dials and guages (sic) are showing, because the two things they have faith in are that good intentions will always triumph, and that the economy is a backwards, illogical machine that can only be steered by turning left if you want to go right.

Ah, yes, good intentions. We all know where that road leads, don't we?

How many times have we seen a government decide it knew best how to handle its national economy, only to see all its efforts make things progressively worse to the point where the economy collapses, and with it, the government that tried to 'save' it? The harshest example has to be the the old Soviet Union, where all their 5-year economic plans failed to produce anything in abundance except inefficiency, shortages of vital goods, and misery. Venezuela has been heading down that road to hell and Argentina is following close behind.

Britain narrowly escaped the same fate when Maggie Thatcher became prime minister and proceeded to undo all the damage done to the British economy by her wrong-headed, though good intentioned predecessors. She understood, as did Ronald Reagan, that no one person or group of people are smart enough to control an economy to the betterment of all.

One of the most easily documented examples has been economic central planning, which was tried in countries around the world at various times during the 20th century, among people of differing races and cultures, and under government ranging from democracies to dictatorships.

The people who ran central planning agencies usually had more advanced education than the population at large, and probably higher IQs as well.

The central planners also had far more statistics and other facts at their disposal than the average person had. Moreover, there were usually specialized experts such as economists and statisticians on the staffs of the central planners, and outside consultants were available when needed. Finally, the central planners had the power of government behind them, to enforce the plans they created.

What is remarkable is that, after a few decades of experience with central planning in some countries, or a few generations in others, even communists and socialists began to repudiate this approach.

All such control diminishes economies and acts as a disincentive for anyone trying to do anything to improve it. China and India came to understand the concept and abandoned tight government control over their economies and they boomed to a level never seen before in either country's history. It's too bad the Progressives in this country have failed to learn that lesson and are willing to make the same mistake. Of course I expect their refrain will be "But we'll get it right this time!"

The only explanation I can come up with for the Progressives' belief they can succeed where everyone else has failed is insanity. You know, the type of insanity defined so: "Doing the same thing over and over again but expecting different results this time."

Indeed.

It was while reading the comments to this Brian Riedl piece about the myth of the Bush tax cuts and the deficit that a suspicion of mine was confirmed, that being that far too many otherwise educated and experienced people still have little understanding of the relationship between taxes, government spending, and economic growth.

First, the three myths.

The Bush tax cuts wiped out last decade's budget surpluses.

The next decade's deficits are the result of the previous administration's profligacy.

Declining revenues are driving future deficits.

I won't delve into the rebuttal Riedl provides as you are more than capable of reading it for yourself. However I can boil it down to a simple, easily understood phrase: It's the spending, Stupid!"

Tax cuts didn't cause the deficits during the Bush Administration. They didn't cause the unprecedented deficits during the first 19 months of the Obama Administration. The shortfall in revenue was not the problem then, and it's not the problem now. It's the spending by our government that exceeds what it takes in that is causing the deficits, period. Raising taxes won't solve the revenue shortfall because they won't generate the revenues Congress expects. Instead, revenues will fall off as the higher taxes discourage the very economic activity the government needs in order to expand the tax base.

Now comes the fun part.

Reading the 200+ comments to Riedl's op-ed piece, it is quite obvious who gets it and who doesn't.

Probably one of the most disturbing set of comments came from someone who is purportedly an experienced CPA, yet doesn't understand the Laffer Curve for what it is: a graphic representation of the relationship between tax rates and tax revenues. More than one comment showed her lack of understanding that the relationship between tax rates and tax revenues is not linear, meaning that if tax rates are doubled on some economic activity the revenue collected does not automatically double. It will be less than that because the higher taxes discourage the activity being taxed, hence less money changes hands, in turn decreasing the amount of money available to be taxed.

She also likes to make claims she doesn't back up or is unwilling to admit she was wrong when confronted with facts from the very sources she (sometimes) quotes. An example:

Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to.

She then goes on the quote economist Greg Mankiw, saying he wrote that the Bush tax cuts didn't raise revenues, in effect debunking the claim. But what Mankiw wrote was that they didn't raise revenues as much as had been expected, but they still rose. There was also a lag between when taxes were cut and the economy reflected the boost in available capital. It also depended upon which taxes were cut and by how much. That's not quite the same thing.

On the other hand, another commenter appeared to have a better understanding of the effects of the tax cuts on the average taxpayer and even provides some numbers generated using "some great tax preparation software" to debunk claims by others that the tax cuts actually placed a greater tax burden on them.

In the end what it all boils down to is that the only way to reduce deficits in a manner that won't take decades or generations to accomplish is for the government to spend a lot less money, not tax the bejeezus out of everyone that has an income. Or to put it more simply, again: It's the spending, Stupid!"

It was 80 years ago yesterday, June 17th, that President Herbert Hoover signed the Smoot-Hawley Tariff Act into law, which instantly turned the Great Recession into the Great Depression. It was an act of trade protectionism that had exactly the opposite effect from the one intended. Call it an example of the Law of Unintended Consequences writ large.

Hoover and his congressional allies thought that reducing imports would strengthen the economy. Instead, it contributed to a collapse in world trade and the spread of protectionism around the globe. The lessons from this policy mistake are unfortunately all too relevant today.

The Smoot-Hawley tariff, conceived as a Republican ploy to gain the farm vote in the 1928 election, was a bad idea from the start.

It was one of the biggest mistakes the Republican Party ever got involved with.

It seems modern day Democrats are now looking to make the same mistake as the Republicans did in Hoover's day and for the same reasons. Should they pull it off, the unintended consequences won't be the same as those back in 1930. Instead, they'll be far worse.

Perhaps it's time for Congress and the President to stop punishing American businesses for succeeding here. Who knows, maybe new jobs will be created here as a result.

Just when I think Obama and/or Congress couldn't come up with any more ways to delay or destroy economic recovery, he proves me wrong.

First, there was the stimulus. Then Cash for Clunkers, followed by ObamaCare. Cap and Trade still lurks, waiting to make energy cost skyrocket. (Like that will help the economy). Then there was the first time home buyers tax credit, followed by a modified version that covered anyone buying a home. Now, to kill off the housing market entirely, they're looking to do away with the mortgage interest tax deduction, which will add thousands of dollars per year to the taxpayer's tax burden.

Do they really think this will help anything? Estimates predict elimination of the tax deduction will bring in $208 billion over the next ten years, but at what cost? What will the actual revenues be when all factors are taken into consideration?

Frankly, I doubt they'll collect anywhere near what they expect to because a lot of people that might have otherwise bought homes will decide it's no longer financially attractive to do so. What will that do to the housing values and the housing market? Two things that I can see.

First, housing values will drop, making an already shaky housing market even more so as an increasing number of homeowners will see their equity disappear. Some of those will find themselves upside down on their mortgages. This in turn means we'll probably see an increase in foreclosures and 'walk-aways', where people abandon their homes because they can no longer justify paying the mortgages even if they do have the money to pay them. Why should they when they'll end up with far less than they started with when they first bought their home? It will make more sense to let the home go into foreclosure rather than to keep paying for housing guaranteed to depreciate greatly in value. (In effect, it's like having your mortgage rate increase from 5.5% to 20%. Even if you can afford to pay it, you're really getting little in return for tall he money you spend.)

Second, the housing market will shrink even more than it has since the home buyer tax credits ended this past April. The only difference will be that the effect on the market will be semi-permanent. It could take decades for the market to recover and even when it does, there will a large stock of homes looking for buyers that don't exist.

In turn, all of this could affect the financial industry as people won't be taking out mortgages or equity loans. The banks won't be making any money because of the dearth of loans (and likely a large supply of foreclosed homes they can't sell at any price).

Again, Congress is getting ready to shoot itself (and the economy) in the foot by proposing legislation that will have the unintended consequence of killing off yet another part of the economy and ending up with even less revenue than they started with. If they really want to help reduce the deficit, then perhaps they should stop spending money we don't have.

If Congress were really interested in generating a little more revenue, then perhaps they could do away with the interest deduction for second homes. It's been done before and had little overall effect on the housing market as most activity on the market is for primary homes.

But they won't do that because, after all, it makes sense.

On a number of occasions I have mentioned the Laffer Curve, an illustration of the relationship between tax rates and tax revenues and how once tax rates fall above or below a certain point tax revenues fall off. It is a simplistic illustration but no less correct for its simplicity. Simply stated, if the tax rate for a given tax is either 0% or 100%, the amount of revenue collected will be zero. As the tax rate moves away from either extreme the amount of revenue increases. The trick is to figure out the magic tax rate that maximizes the revenue collected. And that magic number will be different depending on what kind of tax is being imposed, meaning the tax rate on income that maximizes revenue will be entirely different from the tax rate on sales of goods and services, and so on.

It can be argued that the taxes we pay to the federal government are well above the sweet spot, meaning that when the government increases taxes the expected revenues will not meet projections. Others seem to believe no tax rate is too high and that the rich, meaning those of us with jobs that actually pay taxes, should have even more of our money taken from us to fund things we neither need or want.

Now comes what is being called Hauser's Law, which states that regardless of the total tax burden of the American taxpayers (this includes all taxes imposed, and not just on individuals), the revenues collected will be less than 20% of Gross Domestic Product. The chart below, created by using the National Income Accounting method rather than the CBO or OMB methods, shows that since 1929 the revenues collected have always been below 20% of the GDP. (The chart isn't all that clear, but it is readable...sort of.)


Click on image to enlarge

As tax rates increase economic activity slows when billions are siphoned out of the economy and used for non-wealth producing activities. The more money siphoned out of the economy, the more economic growth declines and the less revenue is collected by the government. Hauser's Law implies the Laffer Curve, showing revenues fall as taxes rise or fall above a certain point.

What's the origin of this limit beyond which it is impossible to extract any more revenue from tax payers? The tax base is not something that the government can kick around at will. It represents a living economic system that makes its own collective choices. In a tax code of 70,000 pages there are innumerable ways for high-income earners to seek out and use ambiguities and loopholes. The more they are incentivized to make an effort to game the system, the less the federal government will get to collect. That would explain why, as Mr. [W. Kurt] Hauser has shown, conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenue.

Far too often those projections fall victim to the Law of Unintended Consequences, where higher taxes on some economic activity discourages that activity, in turn lessening the activity being taxed and reducing the revenues expected. (Ayn Rand wrote about that over 50 years ago in Atlas Shrugged, though she's not the first to do so.)

But we know that won't stop our tax and spend Congress from taxing the hell out of everything that moves in an effort to pay for all the 'free' programs they and the President are trying to shove down our throats. Too bad they'll be limited by Hauser's Law, meaning they'll keep spending far more than they will ever be capable of collecting in taxes.

This letter to the editor appeared in Monday's Laconia Daily Sun. The author, one E. Scott Cracraft managed to use every single discredited and bigoted cliché in the book in his effort to paint the TEA party and its activists and supporters as the next Nazi Party. Originally I thought to just post it and my reply and leave it at that. But after rereading Mister Cracraft's diatribe, I realized what it really deserved was a complete fisking to show what a clueless and unthinking "useful idiot" he has become.

In spite of the efforts by the Tea Partiers (and the corporate media) to make the "Tea Party" movement appear "mainstream," the movement's "core" is far from mainstream. This movement includes people who arm themselves to overthrow a legally elected government. In some states, they have advocated succession from the Union. Some anti-Obama activists have even gone as far as calling for a military coup against the Obama administration.

This guy has tried to tie just about every fringe group he can think of to the TEA party movement. I'm surprised he hasn't tried to include the Weather Underground. Oh. Wait. It's President Obama who has ties to members of that domestic terrorist organization!

Cracraft's accusations ring hollow if for no other reason that there's been absolutely no evidence tying any of the militia groups to the movement. The "core' as he calls it has no desire to overthrow the government except by the same means the present government came to power - the ballot box. But there will be one difference: we won't need to stuff ballot boxes or commit massive voter fraud in order to throw the bums out.

The Tea Partiers also include religious conservatives who have forgotten that the U.S. Constitution does not make the American Republic a "Christian Country" but rather separates church and state while providing the most religious freedom possible. Others want to ban a woman's right to reproductive freedom. Interestingly, these same people who cry out against abortion also judge "welfare moms" for having too many babies! And yes, in spite of the movement's public rejection of racism, there are some racists in that movement These people cannot accept the fact that the American people (and the Electoral College) elected an African-American President with a "foreign" sounding name. Many of these are "Birthers," who even question President Obama's right to be president even though he won the election fairly and legally. No mainstream politician of either party has supported this lie but this urban legend persists, largely due to some of whom are in the Tea Party movement or who support it.

This country was first settled by religious refugees seeking to be free to practice their religion without interference from either their rulers or the established churches. Cracraft seems to forgotten this as well as the Constitution states there is a freedom of religion, not just freedom from religion. Over the past 50 years or so too many in this country have done their best to drive free expression of religious belief underground as if it were a dirty little secret to be hidden away from prying eyes. They have used the courts to redefine the meaning of the First Amendment in such a way as to ban almost all public displays of belief. Being a person of faith is not a disqualifier for holding public office, despite what Mr. Cracraft would apparently like to believe.

He also seems to believe that only the TEA party has racists. I hate to disillusion him, but there are far more racists within the Democratic Party than the TEA parties. He also ignores the fact that quite a few TEA party supporters voted for Obama and have since come to see him for the disingenuous big-government socialist he is. That isn't racism. That's regret. The only similarity between the two is that they both begin with the letter 'r'.

Then too, the anti-immigrant sentiment on the part of many Tea Partiers can be construed as racist. I rarely hear those opposed to immigration reform talking about white, European immigrants. It is usually about Asians, people from the Middle East, and Hispanics. Racist or not, there does seem to be and element of the "politics of meanness" among the Tea Partiers.

We aren't anti-immigrant. Many of us are immigrants or children of immigrants. We are anti-illegal immigrant. There's a big difference between the two. It's possible Cracraft is incapable of telling the difference because to him all the illegal immigrants are future Democrat supporters...once they can figure out a way to grant them amnesty and a short ride to citizenship. Never mind the legal immigrants such a move will screw over.

Conservatives have frequently criticized liberal presidents in the past, including President Clinton, but no conservative has gone so far as to question their qualifications to serve. "Red-baiting" has become common on Tea Party signs and at Tea Party gatherings. No liberal candidate has been called a "communist" or a "traitor" to his or her country in a long time. This includes people that are more liberal than Obama. The Constitution, in order to protect our political freedom, narrowly defines what "treason" is and I fail to see how our current president fits this definition. Thus, I cannot help but believe that there is a strong racist element in the movement against President Obama.

As the old saying goes, "You shall know them by the company they keep." It is Obama who has consorted with known and self-avowed anti-American terrorists (Bill Ayer and Bernadine Dohrn, just to name two). It is Obama who, for almost 20 years, attended an unabashedly racist church with a pastor who spouted bigoted, racist rhetoric and called upon God to damn America, much like any radical Muslim cleric.

Of all our previous Presidents, only Obama has worked so hard to conceal his past, the details of his upbringing, his scholarship, and his vital statistics. Every other President's life was an open book. But not Obama's. We know nothing of his academic achievements. We know nothing of any articles or papers he might have authored while editor of the Harvard Law Review. And what we do know of his time at HLR is not flattering, with more than one colleague of his from his time there saying he was basically a do-nothing editor-in-name-only, deigning to grace the others working there with his presence from time to time and not much more.

The Tea Partiers are not engaging in "mainstream" talk. They have an extreme reactionary agenda which should be a concern of every American. They are using violent language, arming themselves, and even calling themselves "right wing terrorists." I have to laugh when a self-commissioned militia "colonel" spoke of defending themselves against leftists at a recent Tea Party in Washington. In case you have not heard, armed left-wing groups in the United States pretty much died out with the Weather Underground in the 1970s. It is not the liberals or progressives who are dressing up in camouflage and conducting field maneuvers utilizing automatic weapons (I think the Second Amendment calls for a "well regulated militia" with a chain of command subordinate to the elected civilian authorities and not a bunch of grown boys playing army in the woods). Nor is it the liberals and progressives who are making death threats to members of Congress with whom they disagree.

There he goes again, painting a picture of the TEA party supporters as fringe militant wackos. Well guess what? All these guys are are fringe element wackos, but they aren't TEA party folks. They have as much to do with the core of the TEA party movement as you do, which means none.

If all he knows of the TEA party is what he's seen on TV or from the New York Times, Washington Post, the Huffington Post, or the Daily Kos, then Cracraft is so mis- and un-informed as to be laughable. Not one of these 'sources' is reliable, unbiased, or without a political agenda that does not have the good of the American people as their focus. Like any media source, left or right, they can't be trusted. The fact that he appears to do so shows he's become incapable of thinking for himself and can only parrot what these sources have programmed him to say.

Some Tea Partiers, in their literature and websites, even call for employers to fire liberal employees simply because they are liberal. It does not matter what the employee's work performance is like. They also want to remove liberal teachers from our schools whether or not they are good teachers. They even encourage their followers to break off social relations with liberals and to totally marginalize them. And they accuse liberals of "intolerance?"

I've heard this claim, but I haven't seen a shred of evidence. He's made the claim. It's up to him to prove it.

I know I don't want the good teachers to be fired. But what I don't want are educators that aren't teaching what they're supposed to be teaching and are instead indoctrinating our children, teaching them what to think, not how to think, how to reason things out on their own. These days far too many of our kids are coming out of school totally unprepared to make it in the real world. They haven't been taught the critical thinking skills that will allow them to succeed away from the indoctrination centers we call schools. All they've been taught is how to allow others to think for them and to not question what they've been told.

As far as tolerance is concerned. The most intolerant people I have come across in my life have all been liberals. For them, tolerance is something other people must have, not them.

The Tea Partiers and their ilk protest and claim that as a "grass roots" movement, they are not responsible if there are some "wackos" in their ranks. But, while urging the American people not to "paint them with the same brush," the Tea Partiers seem to paint all liberals and progressives as Marxists, communists or terrorists, if not worse. And, I am not sure that they are even using these terms accurately. Therefore, it should not come as a surprise that many of their opponents tend to paint them as "racists" and "fascists."

When a large majority of the liberals/progressives in power spout Marxist/Communist ideals and support leftist/fascist dictators over democratically elected governments, then yes we'll call them Marxists and Communists and fascists.

When our President insults our staunchest allies and embraces our enemies with open arms, then yes, we will paint him with the same broad brush. To quote yet another old saying, "By their actions you shall know them." So far our President's "smart diplomacy" has done more damage to America's foreign relations in a little over a year than eight years of Dubya's presidency.

One also has to be cynical about the "grassroots" label: the Tea Partiers and their Tea Parties are being funded by some very wealthy conservative interests. Some of these interests do not want banking reform. Others have a personal stake in seeing that meaningful health care reform is eventually defeated. How else could Sarah Palin pull down $100,000 per speech? Also, one look at a typical Tea Party website shows the movement's close association with extreme right-wing national movements and organizations.

Oh, really?Just who is financing the TEA party movement? I notice he didn't name names. He made the claim, it's up to him to prove it.

On the other hand, the Democrats, and particularly the extreme left-wing of the party, has been heavily financed by multi-billionaire George Soros, an unabashed socialist (his claim, not mine) and someone who is not a friend of the American people. Like most on the Left, he believes we aren't capable of making our own decisions and he's willing to spend his billions to make sure our ability to do so will be stripped from us, one step, one right at a time. Also, much of the Hollywood elite are willing to support political causes most Americans find repugnant. They pour millions into the Democrat party to help elect candidates that are more than willing to dismantle the Constitution because we're too stupid to understand that we need the morally bankrupt progressives to tell us what we need.

As to Sarah Palin's $100,000 speaking fee: So what? When she speaks at TEA party functions she has given that money to help fund the movement on more than one occasion. Bill Clinton pulls down that much for the same thing, but Cracraft hasn't asked who's financing his speaking engagements, has he? It's a specious point. Get over it.

I have no doubt that there are well-meaning members of the "silent majority" in the Tea Party movement who are simply afraid of government and who came blame them? The Federal Government can be scary to all of us! After eight years of George Bush, who turned a federal budget surplus into a deficit through his wars and giving tax breaks to rich Americans, who would not be suspicious of the federal government and its motives? The well-meaning Tea Partiers should consider who their real "enemy" is: the "Military/Industrial Complex" (a term, incidentally, coined by a Republican, not a liberal Democrat) which has received more taxpayer money than every "welfare cheat" combined.

First, a good part of Clinton's budget surplus was funded by borrowing money from the Social Security Trust Fund, which has not been paid back and never will be.

Second, Bush didn't give tax breaks just to the rich. He gave them to every tax payer...unless Cracraft's definition of 'rich' is the same as that of the Democrats in Congress - Anyone with a job.

Third, at least one of those wars was not started by us, not by George Bush. It was started by Osama Bib Laden after his follower committed an act of war against the United States, one that was greater than the attack on Pearl Harbor back on December 7, 1941.

Fourth, the other war was started by Saddam Hussein in 1990. We merely got around to finishing it.

Initially, this anti-government movement included a large number of libertarians. While not always agreeing with them, I have always respected the libertarians more than the Republicans who seek to hijack their movement. The libertarians oppose government intrusion into any aspect of our lives. While they are against taxation and "big government," at least they are consistent. They may oppose taxation but they also are champions of personal liberty and oppose government interference in what one smokes or who one sleeps with.

I have to agree that the GOP has been trying to hijack the TEA party, trying to 'bring it into the fold', as it were. But we're too pissed off at the GOP, and particularly those within the party that we call RINOS, - Republicans In Name Only. The GOP betrayed its libertarian roots and became a somewhat less liberal version of the Democrat Party with the same spendthrift tendencies.

As we have seen, the RINOS had no problem spending money the American people didn't have. But that's no excuse for the Democrats to double down and create a deficit in one year that was bigger than Bush's deficit over eight years. (And we must remember these two things: the Democrats controlled Congress during the last two years of the Bush Administration - a time during which the two biggest budget deficits occurred - and that all spending starts in the House of Representatives.)

Mainstream America is sick and tired of being ignored by our employees, who spend without our leave, impose programs upon us we neither want or can afford to pay for, and forget that they work for us, not the other way around.

Unfortunately, the Tea Party Movement seems to have been taken over by extreme GOP conservative hypocrites who are committed to protecting corporate interests. While they whine about government interference in terms of regulating business, they seem to have no problem with regulating a person's personal lifestyle choices. While the Tea Partiers oppose government getting involved in health care, they seem to have no issue with banning same-sex marriage or medical marijuana. I hope the "well-meaning" Tea Partiers eventually realize which side they are really on.

Oh, and the Democrats haven't been doing just that, and rather blatantly while they're at it? They haven't passed legislation that created 'regulations' and 'rules' and laws whose sole aim is to cripple competition and lock out the small guy. They aren't pandering to those same corporate interests?

Cracraft has attributed far too many motivations to the a vast majority of TEA party supporters and activists. Mostly, we want to be left alone by government, want government to get its financial house in order, want the government to start following the Constitution, want the government to stop spending money it doesn't have and won't have in the future. Abortion, gay marriage, and a host of other social issues aren't even a blip on our agenda. The resistance to health care has nothing to do with denying people health care, but does have to do with its unsustainable cost, its intrusive nature, and its destruction of one of the best health care systems in the world all in the name the overused and purposely misdefined term 'fairness'. My question is, fair to who?

'Nuff said.

Thursday I attended one of the hundreds of TEA party protests held around the nation. Turnout was around 1000, which was similar to last year's Tax Day TEA Party protest.

Of the myriad of speakers at the protest, only one was a sitting member of the House of Representatives and he was visiting from Michigan. A number of Congressional hopefuls were there, but none spoke, preferring to press the flesh and speak one-on-one with TEA party supporters. Not surprisingly, only GOP candidates showed up even though invitations were extended to candidates from all parties.

Three of the more inspiring speakers included former US Senator Gordon Humphrey (R-NH), Thom Thomson - son of the late New Hampshire governor Meldrim Thomson, and former New Hampshire Senator George Lovejoy.

Senator Humphrey related his experiences of serving in the Senate for two terms. (He promised when he was elected that he'd only serve two terms, then come home. He kept his promise.) The one thing he said that stuck in my mind was his comparison of Congress to "a pit of vipers." He also warned that even those with the best of intentions when they arrive in Washington are eventually seduced by the power their office confers. It doesn't happen quickly, but it does happen, which is why he has supported term limits. He also led the call to "Throw the bums OUT!", something the crowd quickly picked up and chanted with increasing volume. Humphrey said we shouldn't discriminate as there were plenty of Republican bums deserving to be thrown out as much as their Democrat colleagues.

Both Thom Thomson and Senator Lovejoy spoke about the fiscal problems visited upon the people of New Hampshire by both the legislature and the governor, with legislative Democrats willing to spend money the state doesn't have, implementing tax hikes that hit the people most affected by the recession, and attempting to 'appropriate' private funds from a medical malpractice fund in an effort to fund the runaway budget. The governor also failed to protect the taxpayers in the state by refusing to use his veto pen to stop the 30% increase in state spending over the past 2 budgets.

While other TEA party protests drew some number of infiltrators/agitators, the Manchester protest drew only one 'visitor' from the New Hampshire Democrat Party, and he pretty much just watched the activities.

All in all it was a great gathering with appreciative crowd all sharing the same message: "We're mad as hell and we're not going to take it any more!"

I attended the Tea Party in Manchester, New Hampshire this afternoon/early evening and got back just before 9PM.

I'll have an honest to goodness post about it tomorrow Saturday.

It is quite obvious the one course University of California students protesting against tuition hikes have not taken but desperately need is Economics 101. The UC system-wide protests highlight the financial crisis facing California, a state verging on being forced into federal receivership because every effort to resolve the its financial problems has failed.

Taxes are sky high and getting higher. Revenues are falling off. Unemployment is over 12%. Taxpayers and businesses are leaving in growing numbers. Union compensation and pensions have reached unsustainable levels and are still climbing. Is it any wonder California has become a financial basket case? How can the students of the UC system expect the state to be able to fund the system when they don't have the money to do so? Do they really believe that just by making demands and throwing mass temper tantrums the state will somehow find a source of funding they haven't already taxed to death? Obviously they do. And by doing so they have displayed their economic ignorance. They don't understand: Their politicians have sold them a bill of goods and the time to 'settle up' has finally come.

I have to say the opening statements of the President's State of the Union address were on target, talking about the problems that we, as a nation and as individuals, are facing. But once he started addressing the main issue we face - the economy - he lost me.

He talked about tax cuts, but only the temporary tax cuts. The somewhat more long term cuts, the Bush tax cuts, expire next year, meaning everyone will see a tax increase once they're gone.

On the stimulus bill - blah blah blah blah blah blah. (At least that's what I heard.)

As much as I agree that jobs are an issue, I have to disagree with the president that somehow it's up to the government to stimulate them with our money. Better that government get the heck out of the way. We don't need it to take $30 billion of the repaid TARP funds and spend it again.

I agree with Obama that we need to upgrade our infrastructure to help American businesses compete in the global marketplace. But what do high-speed trains have to do with that? Better that electrical systems and broadband communications networks be built, which will do far more to support American businesses than trains.

And while the president says he "won't accept second place for America", he's been doing what he can to make sure that's where we'll end up, if not third or fourth place.

After that I started nodding off as he started mouthing the same old platitudes but in different wrappers. (Make energy less expensive by taxing the hell out of it. Punish all the banks for the actions of a few. Spend billions more on education even though study after study after study shows more money doesn't equate to better education. Destroy our health care system in order to save it. And so on and so on.)

I. GOT. BORED.

ZZZZZZZzzzzzzzzzzz........

UPDATE 1/28/10: Going back and watching the address again, I saw that as time passed he shifted more and more blame for all our troubles on to others. He laid all the blame for the failure of health care reform and cap-and-tax squarely on the Republicans, saying they now owned the blame. Senator John Kyl rebutted that allegation today on NPR, stating the Senate Republicans were following the will of their constituents, blocking bad legislation that would do little more than cost the American people untold hundreds of billions of dollars with nothing to show for it.

I've seen all kinds of reports and so-called exposés about the TEA party movement in MSM. Many were derisive, a few tried hard to be neutral, a few more were big supporters, and some were outright hostile.

But then, out of nowhere, comes a piece that even a cynic like me has to admit was pretty well balanced, and from a source I never would have thought of as fair.

Ben McGrath does a pretty good job covering the rise of TEA party activism for the New Yorker, resisting the urge to paint everyone involved with the TEA party activities as inbred right-wing rednecks beholden to Big Oil, Big Finance, and Big (place name of latest scapegoat du jour here).

My first immersion in the social movement that helped take Ted Kennedy's Massachusetts Senate seat away from the Democrats, and may have derailed the President's chief domestic initiative, occurred last fall, in Burlington, Kentucky, at a Take Back America rally.

About a thousand people had turned up at the rally, most of them old enough to remember a time when the threats to the nation's long-term security, at home and abroad, were more easily defined and acknowledged. Suspicious of decadent élites and concerned about a central government whose ambitions had grown unmanageably large, they sounded, at least in broad strokes, a little like the left-wing secessionists I'd met at a rally in Vermont in the waning days of the Bush Administration.

If there was a central theme to the proceedings, it was probably best expressed in the refrain "Can you hear us now?," conveying a long-standing grievance that the political class in Washington is unresponsive to the needs and worries of ordinary Americans. Republicans and Democrats alike were targets of derision.

Addressing McGrath's last point, more than a few Republicans have made the mistake of thinking the TEA party movement is a phenomenon automatically supportive of the GOP. They're wrong. Most Americans are sick and tired of being ignored or marginalized by both political parties. TEA party activists like me see both the Democrats and Republicans as being part of the problem, so GOP congresscritters, governors, and state legislators are no more immune from our displeasure than Democrats. (It's just that there are so many more Democrats in office these days that they're taking the brunt of our pushback.)

McGrath credits Rick Santelli, a CNBC reporter, as being the spark that started the TEA party fire with his rant on the floor of the Chicago Mercantile Exchange last February. The rant, reminiscent of Peter Finch's portrayal of Howard Beale in the movie Network, expressed the frustration so many of us were feeling at being ignored by the very people we put in office to serve us. Instead, they decided that we served them, and as such, all that was ours was theirs to use or misuse as they saw fit.

They were wrong.

And so the movement grows, as McGrath has shown.

I have to agree with Eric the Viking on this one: Who's writing Nancy Pelosi's material these days?

"The American people have an anger about the growth of the deficit because they're not getting anything for it. ... If somebody has the idea that the percentage of GDP of what our national debt is will go up a bit, but they will now -- and their neighbors and their children -- will have jobs, I think they could absorb that, and then we ride it out and bring money in," she said.

She's kidding, right? (Unfortunately, she's not.)

This statement and the others in Eric's post and link shows me three things about our Speaker of the House:

a) She really has little understanding of economics.

b) She really has no idea what motivates average Americans, particularly when it comes to matters economic.

c) She really doesn't care because she knows better than everyone else in the nation, including the very folks she claims she wants to 'help'.

The angry American taxpayers don't want Congress to spend even more money we don't have on more stimulus, health care reform that will reform nothing, or any other dubious and expensive government programs.

Sucking over $1.4 trillion out of the economy (the present budget deficit figure) is not helping the economy in any way, shape, or form. Pulling even more out of the economy with higher deficits and higher taxes in a second effort to 'stimulate' the economy will only make the recession worse. This is something Pelosi, as well as Reid and Obama, do not understand. I find that difficult to believe considering there's plenty of history to show previous attempts to do just that have failed miserably and, in fact, made things worse.

Watching what's happening to our economy today it's easy to forget that this isn't the first time we've been through this, with government trying to spend its way out of a recession. The effort back in the 1930's failed miserably, extending the Great Depression for years, as did the 'stimulus' of 1962, which prompted Ayn Rand to comment on the error on the part of government in thinking such spending would do anything but have negative effect, that our economic IQ was sadly deficient. From her column in the L.A Times back in 1962:

Since "economic growth" is today's great problem, and our present Administration is promising to "stimulate" it--to achieve general prosperity by ever wider government controls, while spending an unproduced wealth--I wonder how many people know the origin of the term laissez-faire?

France, in the seventeenth century, was an absolute monarchy. Her system has been described as "absolutism limited by chaos." The king held total power over everyone's life, work, and property--and only the corruption of government officials gave people an unofficial margin of freedom.

Louis XIV was an archetypical despot: a pretentious mediocrity with grandiose ambitions. His reign is regarded as one of the brilliant periods of French history: he provided the country with a "national goal," in the form of long and successful wars; he established France as the leading power and the cultural center of Europe. But "national goals" cost money. The fiscal policies of his government led to a chronic state of crisis, solved by the immemorial expedient of draining the country through ever-increasing taxation.

Colbert, chief adviser of Louis XIV, was one of the early modern statists. He believed that government regulations can create national prosperity and that higher tax revenues can be obtained only from the country's "economic growth"; so he devoted himself to seeking "a general increase in wealth by the encouragement of industry." The encouragement consisted of imposing countless government controls and minute regulations that choked business activity; the result was dismal failure.

Colbert was not an enemy of business; no more than is our present Administration. Colbert was eager to help fatten the sacrificial victims--and on one historic occasion, he asked a group of manufacturers what he could do for industry. A manufacturer named Legendre answered: "Laissez-nous faire!" ("Let us alone!")

Apparently, the French businessmen of the seventeenth century had more courage than their American counterparts of the twentieth, and a better understanding of economics. They knew that government "help" to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.

Regardless of the purpose for which one intends to use it, wealth must first be produced. As far as economics is concerned, there is no difference between the motives of Colbert and of President Johnson. Both wanted to achieve national prosperity. Whether the wealth extorted by taxation is drained for the unearned benefit of Louis XIV or for the unearned benefit of the "underprivileged" makes no difference to the economic productivity of a nation. Whether one is chained for a "noble" purpose or an ignoble one, for the benefit of the poor or the rich, for the sake of somebody's "need" or somebody's "greed"--when one is chained, one cannot produce.

There is no difference in the ultimate fate of all chained economies, regardless of any alleged justifications for the chains.

It seems that we still haven't learned that lesson four decades or four centuries later. As the late Ronald Reagan said more than once, "Government isn't the answer. Government is the problem." It was true back during Louis XIV's reign and it's true today. Our government is bent on controlling more businesses, either through direct take over like GM, Chrysler, the banks, and health care, or through onerous regulation and taxation, all in the name of 'stimulus' and 'fairness'.

Apparently our leaders have learned nothing from past attempts to tighten control over economies and businesses that their attempts won't work, won't create the results they want, and won't lead to anything but more poverty, less business, and a weaker economy than if they'd just left everything alone. But government is incapable of not fiddling about with things they really don't understand. And that's our biggest problem today.

As John Stossel writes, it's not the taxes that are the problem, it's the spending.

Last week on "The O'Reilly Factor", we talked about California's and New York's enormous budget deficits and planned tax increases. Those states would have big surpluses had they just grown their governments in pace with inflation. But of course they didn't. Now the politicians act like their current deficits are something imposed on them by the recession.

But that's nonsense. They created the problem with their reckless spending.

--snip--

O'Reilly told me that America is ready for a tax revolt. I hope he's right. But I don't think it will happen until more people see the ruling elite for what it is: a gang of arrogant bullies that has the audacity to believe that they know how to direct our lives better than we do.

That's why, bad as the taxes are, I'm more upset about ObamaCare, Medicare, the "stimulus," the auto bailout, the bank bailouts, the Fannie/Freddie bailouts, the trillions in guarantees, and on and on.

The need for all those extra taxes would be reduced if government at state and federal level could get their spending under control. For the most part that's not going to happen because far too many of those in power like to "bring home the bacon" regardless of the actual costs to their constituents. Only those states forced to address their spending issues, like California, New York, New Jersey, and Michigan, to name a few, will actually have the opportunity to trim spending by billions of dollars. They won't have a choice because if they don't cut spending higher taxes won't fill the empty coffers and the states will face bankruptcy. They simply don't have the money to pay for all those really 'neat things' everyone thought they could afford during the good times. But the good times are gone and with them, the revenues the states had gotten used to having.

To paraphrase James Carville, "It's the spending, stupid!"