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Wednesday, March 18, 2009

Kemp’s Law

Kemp’s Law
Several years back, Jack Kemp made a very wise observation.  I call it Kemp’s Law.  What Jack said was this, “When you subsidize something, you get more of it.  When you tax something, you get less of it.”  You’ll find that this law is universal and immutable.  There are no exceptions.

The more you subsidize something, like non-farming, the more non-farming you get.  The more you tax something, like business success, the less success you have.

I understand that the new Obama tax plan not only calls for higher taxes on those who make more than $250,000 per year, but also plans to limit tax-deductibility on mortgages for anyone who makes $250,000 or more per year.  This plan guarantees that there will be less people making today’s equivalent of $250,000 per year.  Some may say that’s great.  Ah, but there’s a big catch.

When a government engages in massive deficit spending—think bail outs and all sorts of crazy pork projects—it means that we have increased the number of dollars in circulation, chasing the same number of goods and services.  The net result is Carter style inflation.  But Jimmy Carter was a piker.  The kind of deficit spending being engaged in by the Obama Administration will certainly create inflation that puts the Carter years in the shade.

A devalued currency means you and I will be paid more dollars that are worth less.  Soon that $250,000 threshold will be closer to everyone.

Of course, higher taxes do not necessarily mean higher tax revenues.  Taxes have a direct impact on the health of our nation’s economy.  Higher taxes rob entrepreneurs of the capital they need to start new businesses and expand current businesses.  The net result is fewer jobs, higher unemployment, and less tax dollars.  Unemployed people don’t pay taxes.  This follows another law—the law of unintended consequences. 

Higher taxes, especially on businesses and those who invest in businesses, actually drive down tax revenues because they directly hurt corporations who employ people.  Accordingly, both the corporations and the employees pay less or no taxes.

The record shows that the Reagan tax rate reductions actually increased tax revenues by growing the economy.  That’s right.  The positive impact of tax cuts on economic growth actually created more tax revenues.

The Obama plan is the right recipe for turning a modest recession into a massive depression.  Will this President be remembered as the Herbert Hoover or Jimmy Carter of his era? 

Fortunately, this is not 1932.  If the current economy is in a downward death spiral due to out-of-control spending and tax increases heaped upon tax increases, by the time the 2010 midterm elections roll around, the misjudgments, miscalculations and misunderstandings of the Obama Administration will be stopped in favor of common sense.

The outcome of the 2009 off-year elections will send a clear signal as to whether the American people are buying into the redistributionist policies of the Obama Administration.  Meanwhile, hang on!

Tuesday, March 10, 2009

Bait & Switch

Bait & Switch
Why is the Obama administration stumbling so badly after just a few weeks in office?  Some are even saying that the administration is imploding, but I think that’s a rush to judgment.  All new administrations have their challenges.  Several of President Bush’s appointees had to step aside when conflicts were uncovered.  Clinton’s immediate plunge into the troubled waters of homosexuals in the military turned out to be a bonehead decision that damaged his credibility.  All new administrations have to get their “sea legs” and this administration is no exception.
There is, however, one huge problem that may prove to be insurmountable for our new President.  As I write this, only 37% of the American people support the massive, pork laden bill that is euphemistically labeled a “stimulus package.”  On the other hand, Obama’s personal popularity remains relatively high, about that of any new president at this stage of the game.  The American people are good natured and generous.  They want their president to succeed, but that does not mean they embrace policies that they see destructive to the economic well-being of the nation.
The President’s problem is not just the ill-conceived trillion dollar “stimulus” package.  It’s a far greater problem.  Democrats have learned that they cannot run for office as Mondale did, promising to raise taxes.  That’s not something that will ever be popular with the vast majority of the American people.  They also know they cannot successfully run for President as soft on terrorism.  And they did an about face, and now proclaim themselves as supporters of the Second Amendment.  Obama even publicly opposed another third rail of politics, gay marriage. 

In short, Barack Obama ran on a platform that called for tax cuts, eliminating wasteful spending, against gay marriage, support for Israel, against re-imposition of the so-called “Fairness Doctrine,” against gun control, for secure borders, for defeat of the terrorists, and support for American servicemen and women.  That’s a platform that Ronald Reagan could have run on.

And therein lies the rub.   While Obama genuflected to the far-left on pet issues like water boarding, closing Guantanamo, and their other anti-Bush rants, he was careful to steer a course that was, with few exceptions, pretty much down the middle.  He ran for the cover the mainstream media provided on his far-left affiliations with domestic terrorists Bernadine Dorn and hubby, Bill Ayres, as well as his 22 year plus affiliation with the far-left preacher from South Side Chicago, Jeremiah Wright.

Obama’s campaign message was as non-specific as possible—he was for hope, change and the future.  It’s hard to disagree with those things, especially when we don’t know what kind of hope, change, or future he plans to work toward.

But now, the rubber hits the road.  It’s one thing to run as a mainstream, middle-of-the road candidate, but it is something entirely else to govern from a clearly leftwing position.

What a pickle!  Obama did a wonderful job (with great help from the mainstream media) selling himself to the American people as a mainstream candidate, but now the bill comes due from radical groups like and ACORN who supplied the ground forces in his campaign.

It’s a bait and switch operation that will most surely fail.  If he tries to govern from the center, his leftwing allies will drop him like a fish that’s been dead for a week.  The head of the NAACP is already threatening that they will oppose him if he does toe their line.  If he moves to the left, he’ll quickly lose the support of the American people.  The current opposition to the massive spending bill is just the tip of the iceberg.

The self-delusion of a mandate, coupled with a far-left philosophy, is a recipe for a political shipwreck.  And he’s not getting any help from his Democratic leadership in Congress.  Ron Dellums wants to hold kangaroo court on George Bush as Chairman of the Judiciary Committee.  The far-left Congressman from Oakland has already subpoenaed Karl Rove and that’s just the beginning.  Another Congressman has already introduced a bill to re-impose the Fairness Doctrine.

The American people are indeed kind-hearted and generous, but, their good-will and support will dissipate quickly if the new President starts down the path to socialism.  No amount of mainstream media cover will protect him from himself.  Bait and switch always fails, whether in advertising or in politics.  The public is quickly turned off by false advertising.  They not only refuse to buy the product, they become angry that they were deceived in the first place. 

Much was made of the low popularity rating of President Bush (although the rating of the Democratic Congress was substantially lower), but this is indeed a honeymoon for President Obama.  Right now he is squandering opportunities to show the American people that they made the right decision.

If he continues on the current course, his presidency is going to
look a lot more like Jimmy Carter’s, than FDR’s.  No wonder the tiny Republican minority is already reinvigorated and licking its chops.  No wonder the Conservative Movement is expanding rapidly.  No wonder the audience of talk radio is exploding. 

No matter what happens, it’s certainly going to be a wild ride.  We’d better buckle up!

Tuesday, March 3, 2009

Chewing Gum & Mary Jane

Chewing Gum & Mary Jane
You’ve all read the story about how the greatest problem teachers had with high school students in the 1950’s was chewing gum during class.  There were, of course, other problems.  I began high school in 1958 and there were stories in the local newspaper about gangs at the high school I attended—the Crew Cuts and the Duck Tails.  I think the “gangs” were more imagined than real in the minds of both the newspaper reporters and the so-called “gang” members. 

I’ve also been told by one of my employees that she and her 13-year-old friends frequently took the ferry from Long Island to spend a day un-chaperoned in Manhattan shopping.  My wife, Kathi, talks about being dropped off by her mother when she was very young at the local roller rink in Alexandria for an afternoon of skating with her friends. 

This does not, of course, happen today.  My daughter and her husband would never consider letting their children out of their sight in their local neighborhood.  What has happened to our society?

Drugs are rampant.  Sex outside of marriage is common and accepted.  The number of children born outside of marriage is nearly equal to the number born in marriage.  Abortion and even infanticide are “rights.”  Foul, filthy language in public abounds.  Affairs outside of marriage are public knowledge, even when it involves the President of the United States.  Heinous violent acts against children are common.  Shame is a word that has passed from our society.  Nothing, absolutely nothing, is shameful today.

What has happened?  America has undergone a spiritual meltdown.  God’s standards of morality have been replaced with human standards of morality.  Absolute standards of virtue have been replaced by “if it feels good, do it.” 

Ted Turner has put in writing what most won’t say—his own Ten Commandments.  The means justifies the ends, whatever floats your boat, it’s none of my business, are today’s accepted public standards.

Commentators write about a divided America in terms of politics, but the real division in our nation is not politics, it’s our world view.  Is there a God?  Half say yes, half say no.  Is it OK to live with someone outside of marriage?  Half say yes, half say no.  Is it OK to use illegal drugs?  Half say yes, half say no.  Is homosexuality OK?  Half say yes, half say no.  Is vile language in public OK?  Half say yes, half say no. 

The United States is a nation divided, but it’s not just a political division, it’s a moral division.  As the ancient nation of Israel had to learn over and over, it is only submission to God and His will that will solve our problems.  The other direction leads to chaos and eventually to destruction.

The good news is that there are signs of spiritual renewal in our land.  People are turning back to God and to His standards of morality.  It’s happening on college campuses and in many quarters across our land.  It may be a trickle today, but with God’s blessings it can turn into a flood that sweeps our nation in the years ahead.  It’s my prayer that spiritual renewal will once again make our nation not just the land of the prosperous, but the land of the virtuous.