At Least We Know He Cares...

Mr. Bloomberg is a man of many talents.  He's a billionaire after all. And although we aren't supposed to like rich people anymore we can certainly infer from his wealth that he is smart, right?  Plus, he was clever enough to secure a third term as mayor in a city with a two term limit.  Wow.

So when he added Gothem's top nanny to his notable achievements I took notice.  His most recent ban on sixteen ounce sugary soft drinks and coffee was declared, Mr. Bloomberg assures us, because he is very concerned about obesity and its growing affects on New Yorkers.  (That the ban was announced the day before the mayor celebrated National Donut Day was a rich irony not lost on those of us who reside outside the Big Apple.)  This on the heels of Mr. Bloomberg's salt and trans fat bans which led to a ban on food donations to homeless shelters because the salt and trans fat levels of donated food couldn't be measured.  Talk about unintended consequences.

Now the good Nanny has endorsed a proposal to decriminalize the open possession of marijuana.  In small amounts, of course.  This presumably will free up law enforcement to monitor those New Yorkers who try to skirt the sugary drink ban by buying two eight ounce cups.  And it will silence the critics who declare the marijuana arrests made by New York's finest are racially biased because "most of those stopped are black or Hispanic"  (New York Times).

I like this upside down world.  It's like a daily romp with Alice and the Mad Hatter.  I never know quite where I am but I'm always happy to discover that I'm not there.  And that's something isn't it?  

Flying by the Seat of Our Pants

Most of us attribute our values to others whether we realize it or not.  By that I mean that we believe those we come in contact with share similar values and morals.

If, for example, you are the kind of person who believes in personal liberty you might find yourself saying something like: "Well I don't believe smoking is good for you but it's a free country and it's your life."  If, on the other hand, you believe that the collective mind (the government) is wiser than the individual then you most likely support the passage of strict no-smoking laws, aggressive anti-smoking ad campaigns, punitive cigarette taxes and a culture which ostracizes smokers-- all in an effort to assert your belief that smoking is bad and should be stopped.  No matter what the individual thinks.

Don't get me wrong.  I grew up with parents who smoked and remember vividly the suffocating cloud filling the car and the dirty job of having to clean the ashtray.  As an adult I remember the stench permeating my clothes after a cross country flight just one row away from the smoking section.  I am not a fan.  But my view of the world celebrates personal choice.  If you want to smoke, by all means,  go ahead.

So when those on the left equate border security with racism many who support secure borders stop to examine their own motives.  No American wants to be accused of racism after all.  It is a tried and true weapon the left employs.  Accuse.  Change the subject.  Take a herculean leap of logic:   If you don't support gay marriage you hate all gays.  If you don't think the government should pay for abortions you hate women.  If you want a secure border you are the denying rights of illegal aliens and are committing an act of racism.  If you don't agree with President Obama...well you get the idea.

The problem with the name-calling is that it diverts us from an important public debate on national security.  Countries have borders for a reason.  To protect their citizens.  And for me the border issue is a matter of national security.  Last year alone, Border Patrol arrested 800 Middle Easterners illegally crossing the Arizona border.  According to the Department of Homeland Security's own statistics the arrest of 800 illegal Middle Easterner immigrants means that 2400 successfully crossed the border into the United States.  Free to take pilot's lessons if they want, without scrutiny, under the radar so to speak.

Now that is the debate we should be having.  

FDR, Obama and the Supreme Court

Amity Shlaes should be awarded the Nobel Prize for literature for her epic history of the Great Depression: The Forgotten Man. But, she won't. She won't because she portrays an historical and economically sound assessment of the facts of the Great Depression rather than the whitewashed history taught in our schools.

Much like the Obama Administration's profligate spending and castigation of the court, FDR greatly expanded government spending during his first term and used the Commerce Clause to attempt to regulate private businesses.

The Schechter brothers were butchers, the middle-men between the farmer who raised chickens and the retail stores who sold them. FDR's Justice Department sued the brothers for violating the National Recovery Administration's code of " fair practices." The NRA was an agency with dubious and unprecedented authority over private business which was later unanimously ruled un-constitutional by the Supreme Court. In the meantime, however, the small-business Schechter brothers were sued by Justice for violating an NRA code.

The case centered around a section of code which prohibited the selling of unfit produce. "Straight killing" a practice employed by the kosher Schechter brothers according to the Kasruth allowed clients to select their chicken (to ensure the good health of the bird) and the brothers would then slaughter it. The NRA did not approve of this kosher practice and that is how the Schechter's ended up in court. The case ultimately went all the way to the Supreme Court and was argued under the Commerce Clause. The court unanimously ruled in favor of the Schechter's against the government. The ruling argued--among other things--that "Extraordinary conditions do not create or enlarge constitutional power." The Justices argued that the NRA had "abused the Schecters...through unconstituional "coercive exercise of the law-making power."" (242)

Shlaes records a comment made by Justice Brandeis after the ruling to one of FDR's New Deal advisers: "This is the end of this business of centralization, and I want you to back and tell the president that we're not going to let this government centralize everything. It's come to an end." (243)

After this loss (and others) at the hand of the Supreme Court Justices, FDR acted. In an amazing act of hubris he determined he would "skip state ratification and simply send over to Congress legislation that would increase the number of justices from nine to a figure that could range as far as fifteen. For each justice who stayed past the age of seventy, a new one could be added." (302) FDR's stunning court-packing proposal to amend the Constitution without state ratification and to alter the Supreme Court's make-up was a step over the line that even the Democratic Congress could not stomach. But it was the public outrage that surprised many in Washington.

President Obama has employed many strategies out of FDR's playbook--most notably his attacks against the wealthy. But his recent politicalization and castigation of the Supreme Court is one move that, perhaps, should have been more carefully considered. His recent comments were a thinly veiled threat. An empty one, it would seem, given the Court's robust history of considering the Constitution first and foremost.

And given the American citizen's affinity for separation of powers to protect individual liberty.

Student Loan Default--A Question of Character

A few weeks ago I clipped a small article from Barron's which revealed some statistics on outstanding student loans. The numbers shake out like this: During the third quarter of 2011, a startling $85 billion of student debt was delinquent. There are 37 million borrowers with loan balances.

Last week I attended a presentation by Hillsdale College. They cited the student loan default rate at 28%. The percentage of Hillsdale students who defaulted? Less than .5%. And, sadly, both of those students died.

If you haven't acquainted yourself with Hillsdale. You should.

Federal Budget Explosion--Part 2

The New York Times reports on President Obama's proposed $3.7 trillion budget for 2013 with a viewer-friendly series of interactive graphics.

The president's budget projects a $901 billion deficit in 2013. The deficit represents spending in excess of revenues during the year. The deficit does not represent the national debt which, according to the U.S. National Debt Clock in real time, is $15,391,190,000 give or take. Call it $15.4 TRILLION dollars or $49,041 per citizen, $135,797 per taxpayer. Add in this year's deficit and the proposed deficit for 2013 plus interest and it is not a stretch to conjure up the kind of third world disaster currently stewing in Greece. All of this spending is before we begin gearing up for ObamaCare's $1 trillion spend-a-thon.

Especially noteworthy, Obama's budget calls for $2.5 trillion in "Mandatory Spending." This represents 70% of overall spending and includes "entitlements like Medicare, Medicaid and Social Security" and interest on the "public debt." The remaining $1.1 Trillion includes "Discretionary Spending." This is where defense spending is accounted for among other governmental agencies.

The big loser in the president's budget? Defense. The big winner? Entitlements which now dwarf all other spending in the federal budget.

The other big loser? The American taxpayer who is now on the hook for $135,797.00 of the national debt. And based on the president's proposed budget it looks the governmental spending machine is just getting warmed up.

http://www.nytimes.com/interactive/2012/02/13/us/politics/2013-budget-proposal-graphic.html?src=tp

Federal Budget Explosion--Part I

When politicians talk about the budget most of us listen with the best intentions until the caveats and accounting tricks conflate into a convoluted and polluted stream of rhetoric. For example, we learn that when politicians talk about a 5% cut in spending what that really mean is NOT that they are reducing spending by 5%, as those of us operating with a finite budget would assume, rather, they mean they are slowing the rise in spending by 5%. In fact, under a Congressional or Presidential 5% cut, spending could actually be rising by 5% or 10%. A cut is not a cut is often an increase. Huh?

Thankfully, the good folks at The Heritage Foundation have set out to explain the budget in pictures. Making the numbers accessible to us regular folks. We begin with the rate of growth of government spending versus the rate of growth of the median income of the Americans. It doesn't take a mathematician to deduce that the rate of growth of government is unsustainable. Since government is funded primarily by taxes paid by its citizens we can surmise that a growth rate in the income of those citizens of 27% over the last 39 years when compared to federal government spending growth of 299% is an equation for disaster.

And these levels of spending do not include the upcoming trillion dollar cost of Obamacare.

If is time to stop politicizing America's future and get serious about spending. The president submits his budget today. He has the opportunity to lead. Let's hope he does.

A Diversion?

In the last segment of The Lord of the Rings trilogy, during the final battle scene, Legolas, Elf of few words astutely assesses the opponent's strategy by declaring: "It's a diversion."

Frankly, the jobs numbers that fueled Friday's stock market euphoric surge feels a bit like a diversion to me.

First, when wrestling with the is the employment picture improving question it is imperative to consider that the numbers are seasonally adjusted. January is a notoriously awful month for jobs. According to Gene Epstein, in a recent Barron's article: "Over the past 20 years, January has never witnessed a decline of less than two million payroll jobs even in boom times...the unemployment rate always rises in January..." a fact for the last 64 years data has been available.

This January the loss of jobs actually came in at 2.7 million which is an improvement over recent years' losses. This difference--a decline in the number of jobs lost--resulted in the recorded improvement of "a rise in jobs by 243,000." To put it in the language of the real world: The jobs numbers reflect a slowing of jobs lost by 243,000 jobs over previous January periods rather than a growth in new jobs. For those of us who live in the reality an increase in jobs means there are more jobs not--as the calculation provides--a decrease in the loss of jobs.

Many of us play this game when we make a purchase we shouldn't have. "I saved $100!" we triumphantly declare. The remaining part of the transaction goes unmentioned. To save the $100 we had to spend $1,000. The savings is a phantom savings much as the rise in jobs reported Friday are phantom jobs.

That said, a slowing in decline is good news provided it holds up beyond seasonally adjusted January. But it is important to understand--as most media commentators don't--what the numbers actually mean before we begin the euphoric celebration.

Finally, the reporting of the jobs number which reflects the reality of the lives of tens of millions of Americans has risen to a distasteful level of political rhetoric. These are real people out of work. People who want to work and provide for their own families. The message should be clear. People are still hurting and a decline in the loss of jobs does nothing to help those who are without one. As mentioned in earlier blogs, the work force has declined from 66.1% at the end of 2007 to 63.9% at the end of 2011. When those people drop out of the work force, they cease being counted, understating real unemployment. That is why it is important to consider U-6, the employment number which counts those working part-time who are seeking full-time work and those who have simply stopped trying. That number weighs in at 15.6%.

Hardly a cause for celebration.