Neil Armstrong, RIP

The first man to set foot on the moon has died.  Neil Armstrong landed on the moon in July of 1969 when I was 2 years old and Nixon was 6 months into his first term.  The last moon landing took place in December of 1972 when I was 5 and Nixon was finishing his first term.  No one has gone beyond low earth orbit since then.

President George W. Bush proposed to go to Mars and the Constellation program was born.  The plan was to return to capsules - like Mercury, Gemini, and Apollo - when the shuttle was retired.  We would return to the moon as a way station to Mars.  In the wake of the financial panic of 2008 and the funding issues of government, Obama canceled Constellation in 2010.  Rather than the moon, we could perhaps try for an asteroid.  Much as I admire cutting government budgets, it is hard to swallow when the President found nearly a trillion dollars for his failed stimulus and has run trillion dollar deficits every year he has been President.  NASA's budget is around $20 billion a year, a pittance.

I have often said that government does not invest but, in the case of NASA, I may be wrong.  The technological achievements of the space program brought a great many new products to the consumer, Tang being the least of them.  Certainly, NASA has more long term benefits than food stamps ($71 billion) or Ethanol subsidies ($6 billion).

Neil Armstrong and many other astronauts from the Golden Age of the US Space Program spoke out in opposition to Obama's plan to dump Constellation.  Armstrong, who became something of a recluse after he left NASA, was a rarity on the national stage so his comments on this had added weight.  Nonetheless, Constellation was ended.

 

The US had unquestioned dominance in space and it has been abandoned.  SpaceX and its Dragon may provide another means to get to the International Space Station but the moon and Mars are unlikely in the near future.  Whereas Columbus was followed by the likes of Drake, Magellan, and Cook, Armstrong and the Apollo astronauts have seen 40 years of nothing.  The giants of the US Space Program are dying and there is no one to replace them.

Debt Crisis dependent on Income

Recently, I have noticed comparisons between Reagan and Obama with the handling of their respective economies.  By some graphs, Obama compares favorably.  For example, Reagan grew the debt by 70% in his first term and almost tripled it by the end of his second term.  By contrast, Obama has increased the debt about 60%.  But this is only half of the story.  It is like learning that Tom has $5 million in debt but not knowing his income.  If his income is $10 million a year, then his debt is very low but if his income is $100,000, he is in serious trouble.  With that in mind, let's look at the income side of Reagan vs. Obama.

In Reagan's first term, the economy grew about 40%.  Yes, the growth in debt outpaced GDP but the debt was only 40% of the economy; the GDP was nearly $4 trillion while debt was $1.6 trillion.  By 1988, the debt had grown to $2.6 trillion, which was 51% of the economy.  Not good, but not a crisis.  The trajectory was in the wrong direction.  Whereas the increase in debt under Reagan was mitigated by GDP growth, Obama has had an anemic expansion of only 7% since 2008.  Thus, his comparatively lesser increase in debt is not offset by economic growth.

Looking at spending, Reagan saw a 44% expansion in the government at the end of his first term.  A large part of that was his military buildup for the Cold War but there was a lot of other spending as well.  Obama is only spending 20% more than was spent in 2008.  That makes Obama sound downright conservative.  But, taking into account the growth in income, Reagan's expansion was only moderately larger than his 41% growth rate whereas Obama's government expansion triples his 7%.  As obvious as it sounds, more income allows for more spending.  Reagan had more income while Obama doesn't.

So, looking only at one aspect, one might commend Obama for holding the growth of debt and federal spending below Reagan.  Image that Fred and Joe both make $50K a year.  Four years later, Joe has $200K in debt while Fred only has $150K in debt.  Sounds like Fred is the responsible one, right?  Until you learn that Joe got a promotion and makes $100K a year while Fred was downsized and now only makes $30K a year.  Joe's debt is double his income while Fred's is catastrophic at 500% of his income.  Changes the story, doesn't it.

Obama has had the misfortune of bad timing. Reagan had room to grow the debt; it was only 33% of the GDP when he inherited the Carter economy. Obama had little room for debt expansion since it was already at 70% and has rocketed over 100% during his term. Moreover, the Baby Boomer retirement is at hand and the income streams of Social Security and Medicare are starting to reverse course.  However, he knew this from the start and wanted the job anyway.

We’ve made sure to do everything we can to dig ourselves out of this incredible hole that I inherited.

Barack Obama, February 23, 2012

The buck stops here.

Harry S Truman

Debt Crisis Ignored by Democrats

I check the US Debt Clock (link in the left column) about once a week.  I first learned of it in November of 2009, when US debt broke $12 trillion, per citizen debt was $39,000, and per taxpayer debt was $111,000.  Things are much worse now:

• US National Debt: $15.7 trillion (source: US Treasury)
• Gross Debt to GDP Ratio: 104% (US Treasury)
• Debt per citizen: $50,827 (US Treasury)
• Debt per Taxpayer: $139,890 (US Treasury; Federal Reserve)
• Budget Deficit: $1.27 trillion (Congressional Budget Office)
• Net Interest on the Debt: $225 billion a year (US Treasury)
• Social Security Liability: $15.8 trillion (Federal Reserve)
• Prescription Drug Liability: $21 trillion (Federal Reserve)
• Medicare Liability: $83 trillion (Federal Reserve)
• US Unfunded Liabilities: $120 trillion (Federal Reserve)
• Liability per Taxpayer: $1,052,598 (Federal Reserve)

These are dire numbers that don't include a fully implemented Obamacare.  The anemic economy, high unemployment, and expanded use of social services make the situation that much worse.  VP nominee Paul Ryan proposed a plan to bring this under control, making spending sustainable.  He has been savaged as a radical and extremist by President Obama and the Democrats.  The President has proposed raising taxes on those making $250K or more a year, which might sate the class warriors but will do nothing for the debt crisis.

According to the numbers, my 6 week-old sons are each $51K in hock and it will get vastly worse when they become taxpayers: $1.2 million.  None of these social programs will survive long enough for them to benefit; in fact, on the current trajectory, they won't survive for me to benefit.  They will pay for them though, through high taxes or a crippled economy.

Government Involvement is Bad for Business

I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back.  Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.

Barack Obama

Obama said this with the belief that he saved the auto industry.  But at what cost?  The federal government wrote a check for just shy of $80 billion.  Of that, only $35 billion has been repaid and $7 billion was written off as a loss.  GM stock has lost a third of its value since the special bankruptcy, putting it at just over $20 a share.  For taxpayers to breakeven, that needs to reach $51 a share.  The Volt, Obama's car of the future, has a sales record like the Edsel despite a $7,500 government subsidy for those who buy it.  Though GM posted a profit last year, it paid negative taxes thanks to a special tax break, courtesy of the US government.  The 'success' of the US auto industry is being financed by the taxpayer, not the car buyer.  However, since the bottom has not yet fallen out, it is being proclaimed as a success but the market knows better (i.e. the stock price is falling).  By comparison, Ford (which didn't get a bailout) had $8.8 billion in profits in 2011.

Rather than seek to aid private companies with federal bailouts at taxpayer expense, maybe the President could work on the US Postal Service which has so far lost $11.6 billion this year.  Or maybe he could look into Amtrak food service which is somehow losing $80 million a year despite selling soda for $2 and hamburgers for $9.50.  Or perhaps he could look at that trillion dollar a year deficit.  All of these are legitimately within his purview.

Government is ill-suited to running a business because it has no interest in the bottom line.  Everywhere that government has sought to run business, shortages are common, poor quality is typical, and taxpayer bailouts inevitable.  Without profit motive, cost containment goes out the window.  Without competition, quality falls.  If government was capable of running an efficient business, Europe would not be in such financial trouble, the Soviet Union would still be a going concern, and Cuba would be overrun with immigrants seeking the good life.

A Tale of Two Resumes

But Ryan’s Washington experience is also light, at least for a potential President—which, after all, is the main job description of a Vice-President. Ryan has worked as a think-tank staffer and Congressman, but he’s never been in charge of a large organization, and he has little experience with foreign policy.

The New Yorker

This floors me.  Ryan has been in Washington for 14 years but is 'light' for a VP.  Obama had been in Washington for two years and had been in the Illinois State Senate for 7 years before that but was President material.  Really?  As far as qualifications, Ryan has vastly more Washington experience than Obama had and has been the chairman for the House Budget Committee, considered one of the high positions in the House.  By contrast, Obama was chairman of no committees during his tenure in the Senate.  Somehow, I suspect the New Yorker gave high praise to Obama's lesser credentials even though he was on the top of the ticket.

The article goes on to note a weakness is that "Ryan has no significant private-sector experience."  Again, you must be joking.  Ryan's private sector experience is certainly equivalent to Obama's almost non-existent work history.  This is like complaining that Eisenhower didn't choose a fellow military man or Clinton didn't pick a governor.  Isn't diversity (of experience) a good thing?  Romney has plenty of private sector and gubernatorial experience so a legislator ads to the ticket.  By contrast, Senator Obama chose another senator as his running mate giving the ticket no executive or private sector experience and the results of that choice are in: 42 months of 8% or higher unemployment and 4 consecutive budget deficits over a trillion dollars.

Looking at legislation, Ryan has submitted a budget that passed in the House, which admittedly is run by his party.  Obama submitted a budget that failed 99-0 in the Senate, which is run by his party.  Ryan has offered a plan to avert the fiscal catastrophe (think Greece) that looms and Obama's response has been to demonize Ryan while offering no alternative plan.

The article reminds me why I seldom read the New Yorker.

A New Low in Political Ads

When Mitt Romney closed the plant I lost my healthcare and my family lost their healthcare. A short time after that, my wife became ill. I don't know how long she was sick and I think maybe she didn't say anything because she knew we couldn't afford the insurance.

Joe Soptic

Mr. Soptic goes on to imply that the closing of the steel mill led directly to his wife's death of cancer on account of lacking health insurance.  The ad is tantamount to accusing Romney of murdering Mr. Soptic's wife; unless a genocide accusation materializes, we have hit bottom.  But, as Paul Harvey used to say, here is the rest of the story.

First, Romney left Bain in 1999, 2 years before the steel mill closed and Mr. Soptic lost his job.  Though most people would not hold Romney responsible for what was done after his departure, Democrats see things a little differently; Obama is still blaming Bush for the economy more than 3 years after his departure. 

Second, GST was closed in 2001, two years after Romney had left Bain.  So, Romney had invested in GST in 1994 (GST had requested Bain invest to save the company) and it was a going concern when he left to work on the Salt Lake City Olympics.  So, had Bain not invested, Joe would have been out of a job back in 1994!  He should be thanking Romney for the extra years he got.  Interestingly, the man who was heading Bain at the time GST was closed is an Obama bundler.  How embarrassing.  Luckily, the ad doesn't mention that.

Third, Joe's wife had insurance through her job for an additional 2 years.  Meanwhile, Joe got a job as a janitor which supplied his insurance.  On that basis, one would think Joe might be angry at one of these insurance providers rather than the one from the last job.  What happened to his wife's job in 2003?  Maybe he should direct his rage there.

Finally, Joe's wife died in 2006.  That is 7 years after Romney had left Bain and 5 years after GST had closed but Joe nonetheless implies that his wife's death from lung cancer is Romney's fault!  So, apparently, Mr. Soptic thinks that Romney owed him a job and healthcare for life and failure to provide that resulted in his wife's death.  Shame on you, Mr. Romney!

It should be noted that the ad was produced by a SuperPAC, not the Obama campaign.  However, when pressed on the appropriateness of the ad, Obama campaign spokesmen have ducked, dodged, and weaved to avoid denouncing the ad.  In other words, we approve this message but don't want to admit that we approve this message.

So, to recap the campaign so far: the Obama campaign and its supporters have called Romney a bully, a wimp, a gaffe-prone buffoon, a vulture capitalist, a tax cheat, a felon, Romney-hood (wants to steal from the poor and give to the rich), and now a murderer.  By contrast, the Romney campaign and its supporters have viciously attacked Obama with claims that the economy could be doing better, making ads that quote the President ("You didn't build that"), and accuse the President of being a nice guy who is out of his depth on economic issues.  Oh, the humanity!  What cruel attacks while Obama is trying to be civil.

Obama's Columbia Scandal

William Allyn Root, the Libertarian VP candidate from 2008 (I voted for him), coincidentally graduated Columbia University the same year as President Obama.  Despite the fact that they both had the same major, Root has no recollection of Obama.  With a typical student, that would hardly seem surprising but Obama managed to get into Harvard afterwards, so one expects him to be a stand out student.  The Wall Street Journal contacted 400 other graduates from 1983 and none of them remembered Barack Obama (his name was Barry Soetoro at the time).  That's peculiar.

Mr. Root has a theory: Obama got into Columbia as a foreign exchange student.  He had lived in Indonesia from 1966 to 1971.  His mother went back to Indonesia in 1975 and remained there while Barack lived with his grandparents in Hawaii before going to Occidental in 1979.  How did a self-confessed member of the Choom Gang (i.e. pot smokers) who spent part of his high school years in a haze (according to his autobiography) manage to get into a prestigious private school?  It wasn't family wealth.  Then he transferred to Columbia in 1981 where we are led to believe that he excelled though none of the alumni remember him.  Root posits that all this makes perfect sense if Obama had been accepted as an exchange student.  The requirements would be lower, such students often missed classes, and there could even be a competition among Ivy League colleges to recruit him.  Add to this that his publisher in the early 90s listed his birthplace as Kenya:

http://www.obamaconspiracy.org/2012/05/publishers-booklet-obama-born-in-kenya/.

Still, this is just a theory supported by some deductive reasoning based on Obama's refusal to release his college transcripts. That's not unusual, right?  Let's look at recent candidates.  George W. Bush, John Kerry, and Al Gore all released their college transcripts, which is how we know Bush and Kerry got equivalent grades at Yale and Gore got a D in Natural Sciences at Harvard. By contrast, we know nothing of Obama's academic record though we presume it is awesome. If the grades are awesome, why not release them to great fanfare?  Even if they aren't great, he wouldn't be the first president with mediocre grades.

Root suggests that Romney agree to swap tax records for college transcripts.  He is certain that Obama  won't take the deal and will have to drop the tax record demands.  If that were to happen, it would almost certainly confirm Root's theory.

Tax Returns

Senator Harry Reid is still claiming that Mitt Romney has not paid taxes for ten years.  He says he has a credible source, an investor from Bain Capital.  I have some questions.  First, how would a Bain investor or even and employee know whether or not Romney had filed taxes?  The only people who should know are the Romney's, their accountant, and the IRS.  Second, why doesn't Senator Reid put this investor in touch with the IRS?  I'm sure the IRS would be eager to audit a multi-millionaire who didn't pay taxes for ten years.  If he did skip paying taxes for 10 years, how did they miss that?  Senator Reid has inadvertently made an argument for getting rid of an apparently incompetent agency that didn't notice the long gap in tax returns.

Since we are on the topic of releasing tax returns, word is out that Harry Reid became a multi-millionaire through shady land deals in Nevada while he has been Senator.  Clearly, Senator Reid needs to answer this rumor.  He has not released ANY tax returns.

Rational Immigration Reform

Years ago, I watched one of those Sunday political programs and there was a debate between two people on immigration.  This may have been during the uproar about Pat Buchanan saying something along the lines of Europeans can more easily integrate into American society than Zulus so we should give preference to Europeans.  The two guests were pitted against each other, one arguing for open immigration and the other for limited immigration.  When the debate began, I was entirely on the side of limited immigration but by the end I was mostly on the other side.  What happened there?

People are capital.  More people equal more capital and more production.  The brain drain from Europe to North America after WWII was a boost to our economy for exactly that reason.  Thus, immigration is wealth migration.  At least, it should be.  This is where we run into another side of the argument.  If immigrants had to completely support themselves, there is no question that open immigration would be the policy to choose, arguably limited only by the ability of the country to absorb and assimilate them.  However, thanks to our numerous government assistance programs, many low-skilled immigrants and even citizens do not support themselves and instead become a drag on the economy.  Instead of being assets, they are liabilities.  Why import liabilities?

Many would argue that these immigrants do jobs Americans won't do.  Even if that is so, the money they earn in these low-skill jobs often does not make up for what the immigrant costs in healthcare, education of their children, etc.  If immigrants paid these costs, I would open the floodgates.  Come on in, the water's fine.  So, it is not a matter of racism as the Democrats paint it but a matter of cost-benefit.  Who hires an employee for $20 an hour when they only produce $10 an hour of product?  That's a $10 an hour loss.  The same argument applies to immigrants who often earn less housecleaning and doing yard work than they cost in social services.

My preferred immigration policy would be to abolish government welfare programs and then allow immigrants to come in droves.  Those who make it will add to the country while those who don't can migrate back to their home country and not become a liability to us.  For those who still want an influx of non-self-supporting immigrants, I would not prevent them from writing a check to the charity of their choice and thereby privatize the safety net.

A Game of Chicken

Dan Cathy, President of Chick-fil-A, declared that he believes that marriage should be between a man and a woman, the traditional definition.  Chick-fil-A does not deny services to gays or refuse to hire them though Mr. Cathy does support causes that hold his values. It was no surprise that this stance provoked a backlash from those who want gay marriage.  That is not unusual and hardly newsworthy.  What made it newsworthy was when mayors across the country declared their displeasure with Mr. Cathy and announce their intent to block him from opening stores in their jurisdiction.  Mayor Emanuel of Chicago declared that Mr. Cathy did not share the values of Chicago (President Obama, himself from Chicago, agreed with Mr. Cathy until 3 months ago) and was therefore not welcome.  The mayors of Boston and San Francisco said much the same.   This is what made the story big news.  Elected politicians were discriminating on the basis of religion.

In response to attacks by government, citizens showered support on the company.  The reaction to this was puzzling.  Shepard Smith of Fox News called it the National Day of Intolerance.  Some have compared those who supported the company with those who stood against integration in the 60s.  As with the contraceptive issue that struck the churches recently, the defender has been transformed into the aggressor.  Mr. Cathy and all those who supported Chick-fil-A are being painted as hate-filled bigots because they don't embrace gay marriage.  As for the comparison with the Civil Rights movement, black pastors across the country are vocally denouncing the comparison.  Gays are not sitting in the back of the bus, being sent to separate bathrooms and water fountains, being set upon by police dogs or blasted with fire hoses, or denied voting rights.  The Civil Rights argument only works on those who don't know history.

Who is intolerant?  Chick-fil-A doesn't discriminate against gays.  Those who support traditional marriage aren't calling for Jim Crow laws against gays.  They are willing to tolerate gays though not embrace gay marriage.  On the other side, we have mayors who want to punish those who voice support for traditional marriage.  A man in Tucson, AZ, berated a Chick-fil-A employee at the drive-thru window and posted it on YouTube.  Someone painted graffiti on a Chick-fil-A that said 'Taste the Hate.'  So which of these groups tolerates differing beliefs and which doesn't?

One Baseless Claim Deserves Another

The majority leader said he was told that Romney "didn't pay any taxes for 10 years" by someone who invested with Bain Capital, Romney's former private equity firm. But Reid hasn't named names, and went so far as to admit that he didn't know if his information was accurate.

The Huffington Post

That's just great.  Harry Reid has just tossed a baseless allegation at Romney with the goal of making Romney disprove it by releasing his taxes.  In short, Romney is guilty until he proves his innocence.

Two can play that game.  I say that Obama had a GPA of only 2.2 while attending Columbia and failed Constitutional Law at Harvard.  Obviously, he's guilty unless he releases his transcripts.  The evidence for my claim is just as solid as for Reid's claim.

It is said that the first person to resort to name-calling has lost the argument.  So far, the Obama campaign or its surrogates have accused Romney of being a bully (incident where he cut a fellow student's hair when he was a teenager), a felon (supposedly misreporting when he departed Bain), a wimp (he's dodging the press and hiding his tax returns), and a tax cheat (Harry Reid's current claim).  The Obama campaign is throwing accusations and seeing what sticks.

The attacks on Romney are meant to deflect from the President's record.  Obama is not heralding the Stimulus or Obamacare.  He's not campaigning on bailouts.  The unemployment rate is worse today than when he was inaugurated.  The debt has grown by more than $5 trillion.  He did kill Osama bin Laden.  The record is not impressive.  If he can't win by positive accomplishments then he must resort to disqualifying his opponent.  Thus we have the long line of attacks.

Obama is in a very precarious position.  Europe is on the brink and could shove the world economy into recession.  The US economy is slowing down and threatening to dip back into recession.  The military cuts will provoke layoff letters the week before the election.  The most loyal Democratic constituency, African-Americans, is angry over his support for gay marriage.  Another loyal constituency, Jews, are not pleased by his relations with Israel.  In many ways, he has surprisingly little control over his fate, which should tell us something.