Obama's Bargain: Continued Stagnation
“No taxes can be devised which are not more or less inconvenient and unpleasant.” –George Washington
While on his “Look What I Did to the Economy” tour in our hometown of Chattanooga Tuesday, Barack Obama offered up a new “grand bargain.” In exchange for raising corporate taxes, he promises to spend more money on Big Government priorities. As The Wall Street Journal quipped, “President Obama made himself an offer he couldn’t refuse.”
The president’s offer includes lowering the world’s highest corporate tax rate of 35 percent to a more competitive 28 percent (25 percent for manufacturers), but only in exchange for closing loopholes and eliminating deductions in order to raise more revenue. Furthermore, Obama wants to saddle companies with a new minimum tax on foreign earnings. Then he wants to spend the windfall on more failed “stimulus” projects. Usually, tax reform simplifies the code while remaining revenue neutral, but not for Obama and his NeoCom cadres.
One of the biggest problems with this proposal is that most small business owners file taxes as individuals, and – thanks to Obama’s tax hike earlier this year – the highest individual rate that many of them pay is nearly 40 percent. Many small businesses operate with far tighter margins than their large competitors, and sticking it to them with a 16 percentage point tax penalty puts them at an even greater disadvantage. We support lowering the corporate rate, but it must be done equitably and to encourage economic growth.
If creating jobs is Obama’s focus, he needs glasses. As usual, headline numbers look good – unemployment dropped to 7.4 percent in July from 7.6 percent in June. But the underlying data is not at all good. The number is only ticking downward due to attrition, not job creation. Though the economy added 162,000 jobs, a third of them were in retail (read: part-time), while construction lost 6,000 jobs. Numbers for May and June were revised downward, hours and earnings declined (while Obama’s tax hikes take a bite out of paychecks), and the number of people who gave up looking for work increased. If labor participation remained what it was in 2009, unemployment would be 10.7 percent.
Also, given Obama’s high-tax, high-spend proposal, one is left to conclude that this tepid job growth, as well as the second quarter’s GDP growth of 1.7 percent, is too fast for Obama. Reported first quarter growth was revised from 1.8 percent down to 1.1 percent. The fourth quarter in 2012 – as businesses stopped everything waiting for the Obama tax increase to hit – grew at a barely detectable 0.1 percent. Normal growth is well over 3 percent.
Which brings us to an interesting aspect of the latest Commerce Department GDP report. Every few years, the Bureau of Economic Analysis revises the National Income and Product Accounts in order to better account for changing elements of economic growth. After the first such revision since July 2009 – one that, based on new assumptions, remeasures the U.S. economy back to 1929 – the Obama administration says that “the recovery from the Great Recession has been slightly faster than previously reported.” The new estimate shows cumulative growth of 8.5 percent from 2009 to 2013, up from the previous estimate of 8.1 percent.
The White House also claims growth would have been faster if it weren’t for that blasted sequester. You know, the one that was Obama’s idea.
Despite the spin seemingly in Obama’s favor, this new assessment isn’t entirely a bad thing. It better measures intellectual capital in a modern information age, resulting in a U.S. economy $551 billion bigger than previously thought. Furthermore, the Great Recession itself wasn’t as bad as previously thought, and growth in the years of Ronald Reagan and George W. Bush turns out to have been even better.
Even the good news for Obama is mostly spin, though. The truth is his “recovery” is even more dismal by comparison to others – especially the Reagan recovery, in which growth from the 1981-82 recession averaged 5 percent for four years compared to just 2.2 percent since 2009.
It’s galling that Obama talks about the stagnant national economy as if he just landed from Mars, when, in fact, the economy is mired in the mud because of five years of his failed policies. His deficit-spending binge, which nearly doubled the national debt, brought us nothing but slow growth and persistently high unemployment. His solution is to “play it again, Sam,” and to see if he can’t finish running the economy into the ground.
Chattanooga Free Press Editor Fired
After the Chattanooga Free Press ran a Tuesday editorial that was critical of Barack Obama’s “jobs plan,” and that we quoted in our Chronicle Wednesday, editor Drew Johnson was fired. Johnson’s headline was the problem: “Take your jobs plan and shove it, Mr. President: Your policies have harmed Chattanooga enough.” It was a riff on Johnny Paycheck’s famous ‘70s country song, “Take this job and shove it,” but the paper said, “The headline was inappropriate for this newspaper.” Then the paper claimed Johnson was terminated for not following proper procedure on his headline change. So much for a free press – and for speaking truth to power.
Publisher’s Note: August Recess
Fortunately, Congress has adjourned for its August recess and won’t be collectively mounting legislative assaults on Liberty while its members are outside the Beltway. Thus, given that your Patriot Team members work very long hours in defense of Liberty, they take a week off every August for some well deserved R&R with their families. They will be out on a recess – or, as Congress now calls it, a “District Work Period,” next week.
Of course, our Patriot Headline Report and The Right Opinion will be updated around the clock. Please visit our website for those resources. Also, our Founder’s Quote Daily emails will be delivered on schedule. (If you’re not subscribed to Founder’s Quote Daily or Tuesday Patriot Humor, log in to your account and select those options.) We’ll be back on the regular publication schedule on Monday, Aug. 12.
Government and Politics
Hope 'n’ Change: ObamaCare Roundup
Barack Obama told the New York Times last week that he thinks he has the legal authority to unilaterally suspend ObamaCare’s employer mandate. “I will seize any opportunity I can find to work with Congress,” Obama said. “But where Congress is unwilling to act, I will take whatever administrative steps I can in order to do right by the American people.” In other words, Obama is willing to work with Congress unless it won’t do his bidding. Then he’ll act in whatever manner he sees fit, legal or otherwise, to continue his fundamental transformation of America. Of course, the president does not have such authority, but he’ll get away with it in part because Republicans ultimately agree with his refusal to enforce the employer mandate. Unfortunately, this awful precedent allows Obama (and future presidents) to do basically whatever pleases him.
In related news, the Congressional Budget Office determined that by putting the breaks on the employer mandate, Obama will add $12 billion to the deficit in 2014, and an additional one million employees will also be kicked off their employer’s health insurance. If you like your current plan… uh, never mind.
Also, remember how Democrats called for people to support ObamaCare because it would lower insurance premiums? Well, on the contrary, premiums have risen across the board. Carefully crafted Leftmedia puff pieces reporting that ObamaCare is leading to lower insurance premiums are misleading – “lower” is only in comparison to insurance premiums outside of the exchange network. And the only reason that states like New York and California are touting big savings is because officials in those heavily regulated regions have put the squeeze on insurers to lower rates, not because ObamaCare is having some magical effect on the insurance market.
Around the nation, the state of Oregon is going to spend $10 million of its taxpayers' money on an ad campaign to encourage younger citizens to sign up for ObamaCare beginning Oct. 1. The state needs to draw at least 200,000 participants, including a significant number of younger, healthier people, for older and sicker people to be covered. The same is true nationally.
Meanwhile, Detroit is the latest financially strapped municipality considering pushing its public sector retirees into ObamaCare in order to save money. Many cities, including Chicago and Stockton, California (another bankrupt city), are facing severe financial troubles because public sector pensions remain unfunded while payments to retirees continue to grow. These plans would ultimately shift a large portion of the cost of these unfunded pensions onto the federal government.
Finally, a taste of things to continue. According to the Centers for Medicare and Medicaid Services, the number of doctors opting out of Medicare has tripled over the last three years. Other doctors are limiting the number of Medicare patients they treat, and fewer doctors are taking on new Medicaid patients. The numbers of non-Medicare doctors is still statistically smaller than those who accept Medicare, and some industry experts maintain that it’s not enough to throw ObamaCare off the rails, but there’s no denying that seeing a doctor will only become more difficult in the years to come for those on Medicare.
Quote of the Week
“I would prefer to stay with the current [health insurance] policy that I’m pleased with rather than go through a change if I don’t need to go through that change.” –IRS chief Daniel Werfel, whose agency is in charge of enforcing ObamaCare, and who wants to keep his plan and not switch to ObamaCare
News From the Swamp: Phony Scandal Talking Points
The White House continues to brush off the IRS scandal as “phony” even though stubborn facts keep popping up in the matter. Treasury Secretary Jack Lew hit the network Sunday shows last week to claim that there has been no evidence of undue political influence on the IRS. On the contrary, it’s known that IRS Commissioner Douglas Shulman and Chief Counsel William Wilkins met with Barack Obama the week of April 23, 2012. The substance of those meetings is not clear, but on April 25 Wilkins' office issued instructions to hold Tea Party groups to a higher standard for non-profit status. Lew and Press Secretary Jay Carney admit that IRS activity was unacceptable and unjustifiable, but nevertheless they and their boss keep calling it a phony scandal. Which is it?
Meanwhile, Lois Lerner, the official behind much of the political targeting, remains on paid vacation since she pleaded the Fifth before Congress in May.
From the Left: ATF Chief Confirmed
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has been without a full-time leader for seven years, but that changed Wednesday when the Senate finally confirmed B. Todd Jones to the post. Jones had served as the U.S. attorney for Minnesota and has been the acting part-time director since September 2011. He won confirmation in part because the NRA and the National Shooting Sports Foundation (NSSF), which represents firearms manufacturers, did not oppose his nomination.
Jones first took the acting director position in the aftermath of the Obama administration’s disastrous Fast and Furious gunrunning operation. That fact didn’t please House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), who said, “Because of the numerous ATF mistakes during his tenure as Acting Director pertaining to Fast and Furious, his nomination is a slap in the face to the family of fallen Border Patrol Agent Brian Terry, Mexican citizens whose murder has been linked to Fast and Furious weapons, and ATF whistleblowers whom he failed to support.”
Obama’s Continued Stall of Keystone
In order to placate one group of sycophants – radical green environmentalists – at the expense of another – Big Labor Unions – that also supported him during two presidential elections, Barack Obama now claims that approving the Keystone pipeline would have little effect on the economy. His latest whoppers, delivered in an interview with the New York Times and oft-repeated during his economy tour, were that building Keystone would be a “blip in the economy” because only 2,000 jobs would be created, while it would increase gasoline prices in the Midwest as oil was transported for export rather than local use. He spent this week telling audiences that Keystone would create just “50 jobs.”
Pipeline owner TransCanada dismissed Obama’s assessment, claiming its own “transparent [and] verifiable” studies came up with the original 20,000-job estimate, one which doesn’t count the spinoff jobs created by the newly enriched workforce in the region. Ask residents of North Dakota, with its own natural gas boom and the country’s lowest unemployment rate, how the energy industry is working.
The president also dismissed the Keystone jobs as “temporary.” Government assistance for those not working is supposed to be temporary, too, but it’s rapidly becoming a way of life for millions.
Most important, however, is that the pipeline proposal is not primarily about jobs but national security and the need to import less oil from the Middle East. That’s politically inconvenient for Obama to mention, though.
All this seems to be playing out toward the eventual rejection and abandonment of the Keystone pipeline due to a lack of federal approval. And that 2,000-job estimate is ironic, given that Obama’s Department of Energy pledged over a half-billion dollars to a failed project with supposedly about the same number of jobs in Solyndra. Many similar “stimulus” projects promised far fewer jobs, but Obama was willing to bankroll them with taxpayer money. Apparently, only government-approved and politically correct jobs are allowed in Obama’s America – others need not apply.
Around the Nation: A Sickly Illinois Cash Cow
The focus on Detroit’s bankruptcy due to massive unfunded pension demands brings the issue to the forefront of public consciousness. Perhaps the next shoe to drop will be in Illinois, where the city of Chicago learned last week that Moody’s Investors ordered a triple drop in the city’s bond rating due to billions in unfunded liabilities, while the state is holding legislators' paychecks until its own pension fiasco is resolved.
In Chicago, an audit of last year’s finances revealed that the city had just $33 million of unallocated cash on hand – a paltry sum compared to the $200 million fiscal experts recommend and orders of magnitude below the nearly $29 billion in debt the city holds. That staggering figure was caused by a quartet of pension funds for public employees and first responders that are only covered somewhere between 25 and 56 percent of future liabilities, and it led to Moody’s unprecedented downgrade.
History is not on the pensioners' side, as Chicago has long been pound foolish. Nor is the lesson being learned: a kitty of tax-increment financing money valued at $1.5 billion is being eyed by city aldermen as a way of bringing back 3,000 laid-off Chicago Public School workers rather than to shore up the pension funds.
On the other hand, the state of Illinois is playing hardball. Comptroller Judy Baar Topinka said last week that she “had no choice” but to suspend legislators' paychecks after Democrat Gov. Pat Quinn cut the line item from the state budget. They are being held hostage, as is Quinn’s own pay, until legislators come up with a plan to address the state’s $97 billion pension shortfall.
Despite a provision in the Illinois constitution that bars legislators' pay rates from changing midterm, Quinn was backed by a court ruling that interpreted his action as a withholding of pay, and not a change in salary. The state could address this in a special session beginning next month, but neighboring states are already licking their chops in anticipation of more Illinois tax hikes.
The High Cost of Manning the WikiLeaks Post
The stomach-churning case of Pfc. Bradley Manning finally came to a close this week. Recall that Manning is the gender-confused Army private who chose to display his angst over everything from the military’s now-repealed “Don’t Ask, Don’t Tell” policy to U.S. military “bloodlust” to U.S. military involvement anywhere and everywhere by leaking more than 700,000 classified battlefield reports and other military and diplomatic documents to America-hater and WikiLeaks founder and owner Julian Assange. Assange promptly dumped all of the information on his WikiLeaks site, which Manning knew or should have known would be viewed by America’s enemies. Is Manning a traitor? That depends on who answers the question.
Apparently, for the court-martial judge, Army Col. Denise Lind, the answer is “no.” Although she did find Manning guilty on 19 other counts, including espionage, the single-person-judge-and-jury found him not guilty on the most severe charge, “aiding the enemy.” Even so, Manning faces up to 136 years in prison.
For our part, we think the Uniform Code of Military Justice (UCMJ) – the underlying statute criminalizing “aiding the enemy” – is straightforward: “Article 104 (Aiding the Enemy) – Any person who … without proper authority, knowingly harbors or protects or gives intelligence to, or communicates or corresponds with or holds any intercourse with the enemy, either directly or indirectly; shall suffer death or such other punishment as a court-martial or military commission may direct.” That Manning satisfied each of these elements and is a traitor, at least in our analysis, is without question, especially in light of the qualifier, “indirectly.”
Manning’s defense characterized his massive leaks as simply “whistleblower” information leaked to what amounts to a 21st-century newspaper. Setting aside the fact that Manning does not pass even a cursory laugh-test as a “whistleblower”; that WikiLeaks nowise qualifies as a “newspaper,” 21st-century or otherwise; and that foreign-org WikiLeaks has no First Amendment rights as do U.S. news media; even if the defense’s claim were true, these facts are wholly irrelevant. Releasing to the enemy highly classified information that could cause grave damage to U.S. national security – whether that release is direct or indirect, and regardless of the source, individual or “newspaper” – is punishable under the UCMJ, up to and including the death penalty. For this, yes, Manning should fry.
The broader picture, however, is the venue of The Patriot Post. Accordingly, we must ask the questions no one wants to answer: First Manning, now Snowden – why do men like this have access to classified national security information? Why release it now? How do we stop these compromises of highly classified information and betrayal of sacred trusts? What is going on in our military? In our society? The answer is not one the highly pluralistic, all-values-are-equal, leftist segment of our society wants to hear, but it’s valid, nonetheless: America has lost its moral compass. Getting it back begins on one’s knees in prayer, flows through the home, proceeds to the church, and ends in all levels of government. The next “Chosen One” – Republican or Democrat or other – is not the answer to America’s problems. The answer is in the mirror, and it begins with the conviction to do the right thing, raise God-fearing families, and represent communities with sound conviction in the halls of government.
New FBI Director Pressed on Drones, Benghazi
This week, by a vote of 93 to 1, the Senate confirmed James Comey as the new director of the FBI. Kentucky Republican Rand Paul had previously placed Comey’s nomination on hold after Paul repeatedly received “insufficient” answers to his inquiry about the use of drones over American soil.
In its most recent response to Sen. Paul, however, the FBI argued that drones can be used, on a limited basis, without a warrant. While there is no direct precedent for this position, the agency pointed to related Supreme Court decisions indicating that aerial surveillance does not qualify as a “search” under the Fourth Amendment because there is no “expectation” of privacy. Furthermore, the FBI claimed, drones were only employed 10 times since 2006, each time involving exigent circumstances such as search-and-rescue missions, kidnappings, escaped fugitives and major drugs deals.
After receiving the letter, Paul lifted the hold on Comey’s nomination; however, he still voted against making him FBI director. Comey, who served in the Justice Department under President George W. Bush, defended that administration’s counterterrorism policies when they came under attack in 2006.
As Comey takes over, he’s already being pressed by congressional Republicans for answers to questions regarding what Obama calls the “phony scandal” in Benghazi. We’ll see if those answers are forthcoming, or if Paul’s doubts prove correct.
Meanwhile, the CIA is evidently working very hard to keep quiet its own role in Benghazi at the time of the attack. CNN reports that there were “dozens of CIA operatives on the ground during the Benghazi attack,” and that several were wounded. If the report is true, it may shed light on why Marines were not sent – it might have blown the CIA’s cover. So what was the CIA doing there?
From the ‘Non Compos Mentis’ File
Former Secretary of State Hillary Clinton’s sycophants continue to prop her up for an expected second presidential run in 2016. This week, the National Defense University Foundation announced it would honor Clinton with the “American Patriot Award,” which is given to “leaders who have strengthened America’s strategic interests and advanced global security.”
Let’s see, Clinton ignored requests for better security at U.S. embassies and consulates in hot spots around the world, contributing to the death of four Americans – including our ambassador – in Benghazi. Clinton then lied about the cause of the attack, blaming it on that infamous YouTube video instead of assigning the correct blame: Al-Qa'ida affiliates in Libya. This, of course, was to reinforce the Obama’s campaign’s election narrative that al-Qa'ida was “decimated.” We’re having a really hard time seeing what part of her record makes her an “American Patriot.” Oh well, as Hillary herself once said, what difference does it make?
“The sequester has ‘cost jobs,’ says President Obama, and ‘gutted investments in education and science and medical research.’ But somehow he’s earmarked $500 million for Hamas terrorists. Circumventing Congress and with no fanfare, President Obama last week issued an executive order enabling him to send an additional $500 million directly to the Palestinian Authority in the West Bank – much of which you can bet will wind up going to the Iranian-backed Hamas terrorist organization.” –Investor’s Business Daily
Profiles of Valor: Staff Sgt. Ty Carter
U.S. Army Staff Sergeant Ty Carter will become the fifth living recipient of the Medal of Honor for actions in Iraq or Afghanistan. Carter will also be the second soldier to receive the Medal of Honor for actions in the battle at Camp Keating in Afghanistan on Oct. 3, 2009. Staff Sergeant Clinton Romesha received the first. The ceremony will take place Aug. 26.
The Army’s lengthy Official Narrative recounts Carter’s bravery, including his daring rescue of wounded soldier Stephan Mace: “When Mace was struck with a new volley of gunfire and pleaded for help, Carter decided he had no choice but to try to reach his fellow Soldier. Knowing that he would almost certainly be killed, and with no regard for his personal safety, Carter jumped from the truck and sprinted forward to Mace. With small arms fire riddling the Humvee and the ground around him, Carter stanched Mace’s bleeding and placed a tourniquet on his shattered leg. With enemy fire intensifying around him, Carter summoned the strength to lift Mace and carried him through the hail of bullets up to the rise and to the Humvee. Carter placed his fellow Soldier in the back seat of the damaged carriage and returned to the fight.”
Furthermore, “Carter’s remarkable acts of heroism and skill, which were vital to the defense of COP Keating, exemplify what it means to be an American hero.”
On a related note, be sure to read Mark Alexander’s recounting of the life and heroism of Medal of Honor recipient Col. “Bud” Day, who died last weekend.
Coast Guard Birthday
On Aug. 4, 1790, the U.S. Coast Guard was created by Congress, which authorized Treasury Secretary Alexander Hamilton to build a small fleet of 10 cutters to protect the coast. The Coast Guard continues to serve a critical role under the Department of Homeland Security, and we at The Patriot Post offer our thanks for a job well done. Happy Birthday and Semper Paratus! Please visit the Patriot Post Shop for a great selection of items bearing the Coast Guard’s insignia.
Village Academic Curriculum: HOPE Doesn’t Float
With school just around the corner, we bring you yet another example of government programs creating more problems than they solve. In 1993, Georgia introduced the HOPE (Helping Outstanding Pupils Educationally) scholarship program funded by the state lottery and promising to help deserving students attend college. Under HOPE, any student with a B average whose parents earned less than $66,000 annually would receive free tuition for two years at a public college or university or a $1,000 per year grant for a private college. Almost immediately, the program expanded (as government programs are wont to do) to include four years of tuition with a $100,000 household income cap. And in 1995, Georgia ditched the cap altogether and tossed in extra money for books, college fees and larger grants for private college students. Educational utopia? Not quite.
Colleges saw dollar signs and raised tuition rates while student enrollment skyrocketed – though grades did not, leading to abysmal scholarship retention rates. Meanwhile, since most who play the lottery are low-income individuals, HOPE turned into an income redistribution scheme with poor people paying for middle-class kids to go to college. Then came near-bankruptcy for the program in 2011, forcing the legislature to step in with reforms. HOPE’s woes notwithstanding, multiple states have adopted similar programs. Unfortunately, a cost-neutral college education is simply non-existent. And believing in government programs that claim otherwise is hope misplaced.
Bloomberg’s Nanny State Rebuked
“An appeals court ruled Tuesday that New York City’s Board of Health exceeded its legal authority and acted unconstitutionally when it tried to put a size limit on soft drinks served in city restaurants,” reports the Associated Press. New York Mayor Michael “Nanny” Bloomberg has made his mark during his three terms with ludicrous rules like banning Big Gulps, all allegedly in the interest of taking care of people. In reality, for a statist like Bloomberg, it’s about control.
However, “Since soda consumption cannot be classified as a health hazard per se,” the court said, “the Board of Health’s action in curtailing its consumption was not the kind of interstitial rule making intended by the legislature.” The court further noted that the myriad exceptions and loopholes made the rule unworkable. Naturally, Bloomberg plans to appeal.
Meanwhile, Bloomberg remains one of the nation’s leading anti-gun crusaders and is continuing his push for more gun control everywhere he can exert influence. This week, he again blamed New York’s crime on guns from other states. “Despite all we do to keep our city safe, we are increasingly at the mercy of weak national gun laws and gun laws in other states,” Bloomberg complained. “We’ve done what we can, but it’s unfortunately very easy to carry a gun from one state to another.” Yes, that’s because we have a God-given right to self-defense codified in the Second Amendment. And besides, New York’s (and Chicago’s and Detroit’s, etc.) problem isn’t a gun problem; it’s a crime-and-culture one.
Pilots tend to have rather high self-confidence, because it’s necessary when you’re flying to be sure of yourself. Pilots have also long worn patches to designate their squadron, and they usually feature tough images such as cougars, scorpions and skulls. A recent class of pilots in training at Vance Air Force Base took that confidence and creativity to the next level. Each class picks its own unofficial patch to wear during training, and Class 14-05 at Vance picked something somewhat unusual – one based on the cartoon “My Little Pony, Friendship Is Magic.” The pink patch adaption reads, “My Little Pilot, Flying Is Magic.” According to 1st Lt. Thomas Barger, a spokesman for the base, the patch started as a joke during a slide presentation of several different patch options. In the end, the magic didn’t wear off. “They thought it was so off the wall that it was hilarious. They have embraced the irony and humor of the patch and in so doing have fostered closer ties with each other.” Well, if a pink pony patch helps these pilots preserve Liberty, who are we to tease?
Semper Vigilo, Fortis, Paratus et Fidelis!
Nate Jackson for The Patriot Post Editorial Team