Archive for the ‘Economics’ Category

Report on Rep. John Carter’s Open House on August 17, 2010

Tuesday, August 24th, 2010

My congressman, Rep. John Carter (“Warlord of Mars”) of Texas House District 31 held an open house in Round Rock on Tuesday, August 17. Here’s my brief report. (I’m quoting from memory, so please forgive me if I get any quotes slightly wrong.)

This was a standing-room only crowd (my rough estimate would be 300-400 people), predominately older (not uncommon for political events), and 95% conservative (this is, after all, Williamson County). Save one liberal that shouted questions from the audience rather than waiting to use the microphone, it was also very well-behaved. (It would probably be unfair to compare Rep. Carter’s open house to those of Russ Carnahan or Claire McCaskill or even Ciro Rodriguez, all Representatives catching flack from their constituents for voting for the Obama-Pelosi agenda.) I think about two people in the Q&A session voiced approval for ObamaCare, but even those two were against cap-and-trade.

Indeed, there seemed to be overwhelming sentiment for smaller government in the room, and there were probably more hardcore libertarians than liberals. One attendee suggested the abolition of all federal departments except those (War (now Defense) and State) listed in the Constitution.

Carter, a former Williamson County judge, himself looks a bit older than his website’s official photos, and is a solid public speaker, if not a natural one.

Rep. Carter talked about how he had voted against TARP, the Stimulus, ObamaCare, Frank-Dodd, and cap-and-trade (the first four of which passed anyway). He said they had about two days to consider TARP, with the Bush Administration saying the banking system was about to collapse. He voted against it anyway, despite the pressure brought to bear for him to vote for it. “I told them I had presided over five death penalty case, three of which resulted in the death penalty being carried out, and compared to that their pressure was nothing. After that, they agreed I wasn’t going to change my mind, went away and left me alone.”

He also told us that worst effects of Obama’s policies may not have been felt yet, which is an ominous thought.

He showed off the infamous ObamaCare chart with its myriad array of boxes and new federal entities. He said he had experienced socialized medicine firsthand in The Netherlands (his wife is Dutch) and wanted no part of it.

He said that Washington was destroying small businesses. He talked about a subdivision developer in Bastrop who was making money, had sold half the lots in the subdivision, and was current on all his payments, but because of Dodd-Frank, the bank said he had 30 days to take his loan to another bank because Dodd-Frank said they had too many real estate loans in their portfolio. He said he had to take on a partner just to move the loan.

He also said that Republicans had pleaded with their Democratic colleagues not to let the Bush tax cuts expire. “Where I come from, when you pay more money, that’s a tax increase.” He also said that lower-income earners were going to be some of the hardest hit.

Come question and comments time (Carter appeared as part of the GOP’s “America Speaking Out” tour), there was the usual mixture of personal issues: one small business owner said she thought the government was trying to drive her out of business, questions about having to pay taxes on social security, a recent veteran (standing ovation) relating how he had a job offer pulled at the last minute due to a credit check, exhortations to read the constitution, etc. The usual panoply of grassroots American democracy. (At least in a Republican district. Perhaps speakers at Nancy Pelosi’s town halls exhort people to read Karl Marx or Howard Zinn.)

When it came my turn to ask a question (I was about 15th in line), I asked how, if Republicans were to recapture the majority, they would ensure they showed more fiscal restraint than the last time they were in the majority. Carter flatly admitted “We screwed up,” including himself in some votes early during his tenure when colleagues had urged him to vote for big spending bills “because we have to govern.”

I feel fairly confident that Rep. Carter has repented of the free-spending ways of the late Dennis Hastert-led Republican House, but I’m not sure his colleagues have.

I had to leave shortly after that, but I had a chance to say hi to Republican State House District 52 candidate Larry Gonzales, who I interviewed and endorsed (and have since contributed to) on the way out. I asked him how the campaign was going, and he said “Great! We’re loaded for bear.”

Because Democrats just weren’t unpopular enough in Texas…

Thursday, August 12th, 2010

…some of them are now pushing (again) for a state income tax.

And they wonder why they’re out of power…

(Hat tip: Larry Gonzales.)

LinkSwarm for July 19

Monday, July 19th, 2010

A few random links to kick off your week:

  • Wondering how congressional candidates are doing in the fundraising sweepstakes? This handy chart provides the lowdown.

  • If you wanted to make conservatives and libertarians paranoid, how would you go about it? How about sneaking a provision into ObamaCare requiring dealers to report all gold and silver purchases? But what’s the big deal? It’s not like a Democratic President ever ordered the seizure of American’s gold before. Oh wait, yes he did.
  • Europe is even more screwed than most of us think.
  • For a look at where ObamaCare is leading us, take a look at Massachusetts.
  • This story is about a guy’s horrible experience buying a used Saturn. I’m linking to it here because along the way it provides a pretty sobering look at the parts of the Hope and Change Economy that the usual media sources don’t cover:

    I immediately began looking for work, but by this point the recession was in full swing and over half the yards on our street had ‘For Sale’ signs up. In fact, the town of Marion, SC has lost nearly 30% of its residential population since January, 2009. There were no jobs within two hours of the town and any jobs that were available were swamped with applications. The high school put up a notice that they were looking for two custodians. They had over 600 people show up for applications. The unemployment rate was over 50%, but people like myself, who didn’t qualify for unemployment benefits, and people on welfare, don’t go on the national unemployment statistic. It’s only for people receiving unemployment checks. Those who didn’t comprised such a huge chunk of that ratio, that the official statistic only stated a 19% unemployment rate for the PeeDee region of South Carolina. Yeah, MSNBC didn’t mention the fine points of that statistic, did they?

(Hat tips: Instapundit, Real Clear Politics, Fark)

LinkSwarm for Wednesday, June 30

Wednesday, June 30th, 2010

A collection of sundry links to enliven your day:

Hat tips to Instapundit, Real Clear Politics, Slashdot, Whipped Cream Difficulties.

LinkSwarm June 16

Wednesday, June 16th, 2010

A swarm of links for your perusal:

LinkSwarm for Sunday, June 13

Sunday, June 13th, 2010

A few random links to while away your day:

(Hat tips: Instapundit, Real Clear Politics, NRO’s The Corner)

The “Mystery” of the Resilient Texas Economy

Friday, April 23rd, 2010

Daniel Gross on Slate and Mickey Kaus on his campaign website (he’s running against incumbent Barbara Boxer for the California Democratic Senate nomination) ruminate on why the Texas economy is so much more resilient than that of most states. Gross points out that Texas has successfully globalized our economy, that energy is more resistant to recessions than most industries, that high tech plays a bigger role than crude oil, and that the independent nature of the Texas Interconnect Grid meant Texas was able to deregulate its energy sector without having to play “mother may I” with the feds. Kaus argues that since Texas is a Right-to-Work state, we don’t have unreasonably powerful public sector unions to drive up budgets, and the lack of rigid work rules results in a more dynamic economy. All of which is true. However, being from the left, Gross and Kaus both miss one of the biggest reasons for Texas’ economic success:

Texas has no state income tax.

People want to move to Texas (and people already here want to stay) because we get to keep more of our own money. Not only does this make our economy more resilient during downturns, but it limits the size and scope of state government. Numerous studies have shown that high earners flee high-tax states for low-tax states. California and New Jersey’s loss is Texas’ gain. There’s a reason blue states are the ones hit hardest by the recession.

Liberals never bring this up because, well, big government and high taxes go hand in hand, and love of big government and its redistributionist policies are all the left have left these days. Even relatively sane anti-New Left liberals like Kaus want to believe that bigger government can improve people’s lives with the right reforms/cost controls/etc., which is why he favored the abomination that is ObamaCare.

Clueless liberals have been calling for a state income tax for decades. Indeed, when you see a newspaper editorial headlined with “Texas Needs a More [Equitable/Fair/Robust/Just] Tax System,” when you read it you see that what they want is an income tax, and what they really want is bigger government. It’s no wonder that when you look at the board of the pro-state income tax group Citizens for Tax Justice, their guiding board is filled with union cronies. State income taxes mean more money for public employee unions, which is why unions always push for higher taxes. (Are you reading, Mickey?)

Here’s a handy breakdown of the differences between California and Texas. Note that it only covers up to 2007; since then, the economic and budgetary picture for California has only deteriorated.

To be sure, the lack of a state income tax isn’t a cure-all panacea; Florida and Nevada are hurting badly in The Great Recession, mainly because they were among the hardest hit in the housing bubble collapse. But Nevada’s estimated $1.24 billion 2010 deficit, and Florida’s $6 billion shortfall, look positively Utopian next to the yawning chasm of California’s $41.6 billion deficit.

Despite liberal contention to the contrary, it is low tax states that have low budget deficits, and high tax states that have the largest problems, and the lack of a state income tax is a big contributing factor to state budget discipline. That’s unlikely to change, even when the current recession ends.

Edited to add: Here’s a fine piece by Kevin D. Williamson that appeared in National Review on why Texas is doing so comparatively well. I had read it when it came out last year, but didn’t realize it was now available online. Well worth reading.

Mark Steyn on The Greek’s Welfare State Tragedy (And Our Own)

Sunday, February 28th, 2010

I’ve talked about the problems facing countries like Greece and Spain before.

The problem with this Mark Steyn piece isn’t what to quote, but rather what not to quote. It’s filled with the usual Steyn pith, vigor, and remorseless demographic logic.

While President Obama was making his latest pitch for a brand new, even more unsustainable entitlement at the health care “summit,” thousands of Greeks took to the streets to riot. An enterprising cable network might have shown the two scenes on a continuous split screen – because they’re part of the same story. It’s just that Greece is a little further along in the plot: They’re at the point where the canoe is about to plunge over the falls. America is further upstream and can still pull for shore, but has decided instead that what it needs to do is catch up with the Greek canoe. Chapter One (the introduction of unsustainable entitlements) leads eventually to Chapter 20 (total societal collapse): The Greeks are at Chapter 17 or 18.

What’s happening in the developed world today isn’t so very hard to understand: The 20th century Bismarckian welfare state has run out of people to stick it to. In America, the feckless insatiable boobs in Washington, Sacramento, Albany and elsewhere are screwing over our kids and grandkids. In Europe, they’ve reached the next stage in social democratic evolution: There are no kids or grandkids to screw over.

Snippage.

So you can’t borrow against the future because, in the most basic sense, you don’t have one. Greeks in the public sector retire at 58, which sounds great. But, when 10 grandparents have four grandchildren, who pays for you to spend the last third of your adult life loafing around?

Snippage.

When seeking to ingratiate himself with conservative audiences, President Ford liked to say: “A government big enough to give you everything you want is big enough to take away everything you have.” Which is true enough. But there’s an intermediate stage: A government big enough to give you everything you want isn’t big enough to get you to give any of it back. That’s the point Greece is at. Its socialist government has been forced into supporting a package of austerity measures. The Greek people’s response is: Nuts to that. Public sector workers have succeeded in redefining time itself: Every year, they receive 14 monthly payments. You do the math. And for about seven months’ work – for many of them the workday ends at 2:30 p.m. When they retire, they get 14 monthly pension payments. In other words: Economic reality is not my problem. I want my benefits. And, if it bankrupts the entire state a generation from now, who cares as long as they keep the checks coming until I croak?

We hard-hearted, small-government guys are often damned as selfish types who care nothing for the general welfare. But, as the Greek protests make plain, nothing makes an individual more selfish than the socially equitable communitarianism of big government. Once a chap’s enjoying the fruits of government health care, government-paid vacation, government-funded early retirement, and all the rest, he couldn’t give a hoot about the general societal interest. He’s got his, and to hell with everyone else. People’s sense of entitlement endures long after the entitlement has ceased to make sense.

Read the whole thing.

Socialism Works Its Usual Magic In Spain

Sunday, February 21st, 2010

You may have heard about how Greece is fuxored thanks to a combination of high taxes, stagnant economy, restrictive job rules, and widespread tax evasion. Indeed, the sins of the Greeks may be enough to bring the Euro crashing down. It may come down to that, or else getting a bailout from an already-resentful Germany.

Somewhat less reported is the fact that the other members of Europe’s PIGS (Portugal, Italy, Greece, Spain) aren’t doing a whole lot better.

In particular, Socialist Prime Minister José Luis Rodríguez Zapatero seems to have worked socialism’s usual magic on Spain’s economy:

Spain now has the highest unemployment rate in the European Union. Nearly 20 percent of working-age Spaniards (or 4.5 million people) were without a job at the beginning of 2010. That compares with an average rate of 10 percent among the 16 countries that use the euro currency.

Spain is also facing an exploding budget deficit. The collapse of the labor market, which has resulted in a steep drop in tax collections, and the Zapatero government’s haphazard (and spendthrift) policy response of increasing unproductive public sector spending skyrocketed the deficit to nearly 12 percent of GDP in 2009 (or five times higher than in 2008).

The combination of negative GDP growth, rising unemployment, and a high deficit has raised concerns about the sustainability of Spain’s finances.

Hmmm: High unemployment, out-of-control spending, a huge budget deficit. Where have I heard that before?

In response to Spain’s economic crises, Zapatero has admitted that his socialist policies were a mistake, and set out a platform for lowering taxes, cutting the budget, an monetary reform.

Ha! Just kidding! He’s ordered Spain’s secret service to hunt for “Anglo-Saxon conspirators” as the cause of Spain’s problems. It’s always easier to scapegoat America than make hard choices, or face the consequences of your own failure.

At this point, I don’t it’s a question of if the Euro will crack, but rather when. Despite Obama’s mismanagement, the basic U.S. economy is still a lot more resilient and flexible than Europe’s. Europe has huge demographic problems combined with an unsustainable welfare state. Combine that with the the anti-democratic elites in Brussels, plus the fact that certain number of nations (the PIGS, certainly, but not limited to them) that are playing fast a loose with the EU’s deficit guidelines, and the chances are good that the Euro will crack sooner rather than later.

And the fallout from that isn’t going to be pretty for the U.S. economy either.

Is everything we think we know about China’s economy wrong?

Tuesday, November 10th, 2009

Could be.

(By way of Instapundit.)