Columnist.
Remember the much-maligned Tea Party movement? These were the patriotic Americans — millions of them — who took to the streets and the town halls across America and revolted against Bush's corporate bailouts, Obama's stimulus spending blowout and Obamacare, and the Fed's policy of tossing trillions of dollars out of helicopter windows (figuratively). Good news: They helped change and maybe even slightly fix America. The latest budget deficit numbers — for the fiscal year that just ended — find that the deficit has fallen by $1 trillion since Obama's tragic first term. The deficit is still near half a trillion, but the hole is a lot smaller than it was before the Tea Party's spontaneous combustion happened back in 2009.
So-called progressives love to talk about how their policies will create a workers' paradise. Why is it, then, day after day, month after month, year after year, people are fleeing liberal blue states for conservative red states? New census data on where we live and where we moved to in 2014 shows that the top seven states with the biggest percentage increases in inbound migration from other states are, in order: North Dakota, Nevada, South Carolina, Colorado, Florida, Arizona and Texas. All of these states are politically red, except Colorado, which is purple.
I, as with almost all of my fellow Catholics, am awaiting Pope Francis' arrival this week with Christmas-morning type anticipation. This relatively new pope is maybe the most popular man on the planet as he spreads the core Christian message of loving thy neighbor and caring for the least among us. He is an apostle of hope and virtue, and he comes at a perfect time when so many millions of Americans are mesmerized by such false idols as egomaniac Donald Trump. A national publication recently labeled me one of Francis' four most severe Catholic critics, along with Ken Langone, a founder of Home Depot. My critique has been over the Vatican's alliance of late with anti-Christian environmental groups on global warming and his recent encyclical letter attacking free-market capitalism — which he says leads to "poverty and income inequality."
When I grew up in the north suburbs of Chicago in the 1960s and '70s, Illinois was still a financial and industrial powerhouse. The Land of Lincoln had a low-rate flat income tax, the property taxes were reasonable, the state ran budget surpluses, and Illinois was the home of such iconic mega-employers as Caterpillar, Sears Roebuck and the Chicago Mercantile Exchange. The public schools were pretty good back then and a dedicated corps of teachers put kids first — they didn't walk out on strike, and they didn't have the fat pensions they can get now when retiring at age 55.
My 22-year-old son lives at home and still depends on his old man for spending money. My profoundest fear is that like Will Ferrell's character in "Wedding Crashers," he will never leave the nest. I'm not alone. There are some 20 million college grads living at home. A 2014 study reported by CNNMoney found that half of kids who are two years out of college rely on their parents to pay some or all of their bills. It's the new normal for 20-somethings. Gee, parents sure are getting a great financial return on the $150,000 they've shelled out for four years of college.
"The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground." —Barack Obama, 2011. In August 1859 on the eve of the Civil War, Col. Edwin Laurentine Drake completed the first commercial oil well in the United States on Oil Creek just outside of Titusville, Pa. Over the next century and a half, oil and gas companies have extracted tens of billions of barrels of oil from the ground from California to New York and nearly everywhere in between.
Last month I bought a house in Potomac, Md., a trade-up on my current home, and was shocked to learn in the ensuing weeks that I couldn't get a mortgage loan. First, I went to PNC bank. Then Wells Fargo. Then another. Denied. Denied. Denied. No, I don't feel entitled to a loan, and the banks have every right not to lend me money. But my tale of woe tells a broader tale of what is going on in the lending industry these days. All the bankers told me the same thing: "Steve, if you'd walked in our bank eight years ago with this mortgage application, we would have rubber-stamped it in five minutes, and you would have walked out with a bag of money."
In the days ahead, millions of kids will pack their bags and leave home (hopefully for good) to go to college. For parents experiencing this for the first time: welcome to the biggest financial scam in America. Richard Vedder, an economist at Ohio University and an expert on college costs, puts it very plainly: "Colleges and universities may be the least cost-efficient institutions in the United States. No industry, perhaps other than prostitution, has seen less productivity improvements than higher education."
"It's time to label the Obama green policies what they truly are: steep taxes on red state America."
Here's today's political quiz question: What do these five states — Rhode Island, Connecticut, Vermont, California and Maine — have in common? Yes, they are blue states ruled by Democrats, but that's not all. These are the states that use the least amount of coal — 2 percent or less — for electric power. In fact, almost all the states that are politically liberal and vote unfailingly Democratic are low coal use states. For instance, Washington, New York, Oregon and New Jersey are also in the top 10 states least reliant on coal. Only conservative Idaho is a red state with low coal consumption.
The late, great Jack Kemp, an architect of the Reagan tax cuts, used to say, "Without capital, capitalism is just another ism." Capital is the plants, the machinery, the computers and trucks that businesses invest in to become productive and efficient providers of goods and services. So it's strange that last week Hillary Clinton declared war on capital with her plan to nearly double the capital gains rate for investments held less than six years. The capital gains tax rate fell to 15 percent in the George W. Bush years, was raised 23.8 percent under Barack Obama and Hillary Clinton would jack up the rate to as high as 42 percent — with the rate falling the longer the asset is held.
Later this week, the highway trust fund officially runs out of money unless Congress authorizes more funding for roads and bridges. But the bill that is being pushed by Democrats and some Republicans is starting to look like a Republican Party Dunkirk that could infuriate conservative voters and even wind up costing the GOP the 2016 election. The $320 billion six year public works funding bill would raise government spending, increase taxes on businesses and possibly provide a new lease on life for the corporate welfare queen — the Export-Import Bank. This happens every time a highway bill comes up for a vote. Republicans toss out their fiscal conservative credentials and line up for the pork. Some Republicans are even suggesting that a gasoline tax hike should be part of the plan. This would sock middle class voters, who haven't seen a pay raise in seven years and are financially strained. Polls show Americans hostile to new gas taxes paid at the tank.
I'm asked every day if America is the next Greece or Detroit or Puerto Rico — and the answer is an unequivocal no.
A few years ago, the prestigious economic publication Journal of Economic Literature dubbed the period from 1980-2005 "the age of Milton Friedman." The article described this era of greater reliance on free markets and privatization, which the Nobel laureate economist Friedman advocated, as arguably the period of greatest economic advance for mankind in world history. It would be hard to argue against that. As freedom and free markets were on the march, more than 1 billion people worldwide, mostly in China and India, were moved out of poverty. Tens of trillions of dollars of new wealth were created worldwide. But the past decade could be described as the comeback of socialism. In response to the financial crisis, nations foolheartedly turned to central governments to steer them out of crisis. Government debt, spending and regulatory activity soared all across Europe and in the United States. The Keynesian model that sees government welfare spending as a "stimulus" came storming back in vogue — nowhere more so than in the United States.
The Green citizens have rolled the dice and voted overwhelmingly to reject the "austerity" referendum. This was a way for voters to stick a finger in the eye of their creditors. The left around the world has responded to the vote with thunderous applause — and is selling the results as a vote for "the little guy." The Greeks believed that voting against the debt restructuring plan would give them more leverage with the banks, the IMF and the EU. But what happens now in Greece? The banks are shutting down this week. Withdrawals from bank accounts are being tightly restricted. Greece is formally in default on its loans and in the weeks ahead as more IMF and EU loans come due, Greece is about to slide into fiscal oblivion. This is the natural and unavoidable consequence of socialism everywhere it has been tried.
Is America hard at work? Or hardly working? I ask this because Thursday's Labor Department report for June found yet another 430,000 Americans of working age (16 and older) dropped out of the workforce. Over the last year, only 1.3 million Americans of working age have entered the workforce, even as the population of this same demographic increased by more than 2.8 million. Just over 1 million members of this group found jobs. That's right — of the new additions to the working age population, less than four in 10 found jobs.
It's summertime and that means millions of Americans will soon be cramming in the minivan for family vacation. But Congress may soon be raising the cost of those trips by increasing the federal gas tax. Why? The highway trust fund that finances our national highway system is running out of money. The 18.4 cents a gallon federal gas tax will raise about $34 billion this year, but that isn't enough revenue to cover all the spending Congress wants to do. The lobbyists in Washington — including mayors, road builders, transit operators and civil engineers — are demanding higher taxes as the only way to fix potholes and keep traffic flowing. I refer to this crowd as "the gas-tax guzzlers."
Recent polling shows a big majority of Americans think it will be more difficult for this generation of millennials to achieve the American Dream of climbing the economic ladder. That's probably way too much pessimism, but what is troubling is the early indicators of how young people are faring in the economy and what they are doing with their money. The first bad sign is that fewer young people between 18 and 24 are working. The labor force participation rate for this age group is now near a 50-year low, at 65 percent. If you're 22 and not working, you are dependent, not independent. Just over half of 18- to 23-year-olds live with their parents. Will they ever leave home?
Sometimes it seems President Obama lives in a parallel universe where facts are floating around to be plucked out of suspended animation. Never more so than on the effects of the Affordable Care Act. So let's see whether anything he says on the new law, including that it "is working," comports with the facts: • No "adverse effect on people who already had health insurance." In 2013, as Obamacare's policies were phasing in, nearly 5 million policyholders across 31 states and the District of Columbia were notified that their current coverage was being discontinued. This doesn't include nearly 20 states that weren't tracking these numbers so the total could have been several million more. In California alone, 1.1 million policies were canceled.
President Obama recently acknowledged what every sane person knows to be true: The best anti-poverty program is a job. Mr. Obama said this at a recent conference on poverty. But he continues to repeat a falsehood over and over. This is the claim that the poor work just as hard as the rich do. Well, yes, many people in poor households heroically work very hard at low wages to take care of their families. No doubt about that. Yet the average poor family doesn't work nearly as much as the rich families do. And that's a key reason why these households are poor. The most recent Census Bureau data on household incomes document the importance of work. Census sorts the households by income quintile, and we will label those in the highest quintile as "rich," and those in the lowest quintile as "poor." The average household in the top 20 percent of income have an average of almost exactly two full-time workers. The average poor family (bottom 20 percent) has just 0.4 workers (see chart). This means on average, roughly for every hour worked by those in a poor household, those in a rich household work five hours. The idea that the rich are idle bondholders who play golf or go to the spa every day while the poor toil isn't accurate.
