Lee Harvey Oswald is the Godfather of Today’s American Left

Posted by PITHOCRATES - November 24th, 2013

Week in Review

The assassination of JFK ruined this country.  Because it gave us LBJ and his liberal agenda (see If Kennedy lived: Imagining a different fate for JFK (and Johnson) 50 years later by Jeff Zeleny, Richard Coolidge and Jordyn Phelps posted 11/20/2013 on Yahoo! News).

Historian Jeff Greenfield imagines how history would have changed if Lee Harvey Oswald hadn’t been successful in firing a fatal shot to Kennedy 50 years ago. It’s the latest alternative history from Greenfield in his new book, “If Kennedy Lived: The First and Second Terms of President John F. Kennedy.”

Greenfield, who re-examined the political realities that were present prior to the assassination, told “The Fine Print” he believes that Kennedy’s survival would have likely meant the demise of then-Vice President Lyndon Johnson’s political career.

“The moment John Kennedy was shot, quite literally, LIFE Magazine — a very important medium back then — was launching a huge investigation into how this public servant had accumulated a $14 million net worth, and the answer wasn’t pretty,” Greenfield said of Johnson. “It had to do with radio and TV licenses, and something close to extortion.”

The investigation was halted once Kennedy died, Greenfield said, “Because it would’ve been too much of a shock to the system.” But in Greenfield’s alternate history, the investigation grows into a scandal for Johnson, and Kennedy ultimately replaces him in his second term.

So who gained the most with JFK’s assassination?  Liberals.  For in JFK’s December 14, 1962 speech to the Economic Club of New York he sounded more like Ronald Reagan than LBJ.  Where he championed private spending, not government spending.  He favored tax cuts over tax credits to stimulate the economy.  He talked about increasing consumer spending via personal tax cuts.  And using corporate and personal tax cuts to increase investment and profits.  Yes, he talked about businesses making more profits.  So they would hire more.  Something no liberal would say.

Instead of the Ronald Reagan-like JFK we got one of the most corrupt politicians ever to become president.  LBJ.  According to LIFE Magazine.  And the greatest explosion of the welfare state since the New Deal.  The Great Society.  Turning the U.S. away from capitalism and towards European-style social democracy.

This is the great tragedy of the JFK assassination.  Thanks to that anti-capitalist, Cuba-loving, America-hating assassin who had once defected to the Soviet Union.  A nation long admired by liberals since the day of Joseph Stalin.  This is the great tragedy the leftist communist Lee Harvey Oswald gave us.  Lee Harvey Oswald gave us LBJ, the Great Society and the rise of state-capitalism in the United States.  Everything liberals want.  And conservatives eschew.  Making Lee Harvey Oswald the godfather of today’s American left.

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2012 Endorsements: JFK and Ronald Reagan

Posted by PITHOCRATES - October 31st, 2012

2012 Election

JFK did all the Democrat things to Stimulate the Economy out of Recession but none of it Worked

John Fitzgerald Kennedy (JFK) was a Cold War warrior.  Not to mention a World War II combat veteran.  He warned Nikita Khrushchev that any Soviet interference with U.S. access to West Berlin (located behind the Iron Curtain in East Germany) would be an act of war.  Which meant a nuclear war with the USSR.  The Soviets responded by building the Berlin Wall between East and West Berlin.  Blocking free passage between East and West.  JFK authorized the Bay of Pigs Invasion to topple the Soviet-backed Castro government in Cuba.  The invasion failed for the lack of air support.  Castro feared another US invasion.  Shortly thereafter the Soviets installed intermediate-range ballistic missiles in Cuba.  To counter US missiles placed in Turkey.  Once discovered JFK ordered a quarantine of Cuba.  A US naval blockade.  Leading to the Cuban Missile Crisis.  And the closest the US and the USSR ever came to all out nuclear war.  Khrushchev and JFK finally resolved the crisis.  Khrushchev agreed to remove their missiles with a public US guarantee that they would never invade Cuba.  And a private promise to remove those US missiles from Turkey.

JFK sent the Special Forces to South Vietnam to stem the spread of communism in Southeast Asia.  He also initiated the coup that toppled the government of Ngo Dinh Diem (though he did not call for his assassination).  Leading to America’s long involvement in the Vietnam War.  And Kennedy’s Secretary of Defense helped make all of this military action possible.  Robert McNamara.  One of the ‘Whiz Kids’ who helped to rebuild the Ford Motor Company.  And he ran the Department of Defense like he ran Ford.  By the numbers.  He made it more efficient.  Saving a lot of money from the existing budget.  While JFK added an additional $8 billion (about $58 billion in 2011 dollars) of defense spending.  Paying for a lot of the weapons a Cold War warrior needed.  However, he was still concerned about the size of the deficit.  So JFK also included some domestic spending cuts to help offset the increases in defense spending.  But it wasn’t enough.  He had a deficit.  Worse, he had a recession.

JFK did all the Democrat things to stimulate the economy out of recession.  Typical Keynesian economics stuff.  Government spending.  And keeping interest rates artificially low.  But it wasn’t working.  One of the problems was that Keynesian stimulus just doesn’t work.  But another problem was the baby boom following the war.  Who grew up and were looking for jobs in the Sixties.  That just weren’t there.  He needed some really solid economic growth to create those jobs.  And for that he turned to supply-side economics.  What we would later call Reaganomics.  He created a more business-friendly environment.  He offered businesses tax credits for investments in new machinery and equipment.  He accelerated depreciation schedules, allowing businesses to expense their assets more quickly.  Which encouraged investment into new assets.  And he proposed tax cuts on both business AND personal income.  It worked.  Unleashing an economic boom that lasted until 1966.

When Reagan entered Office he did what JFK did and created a Business-Friendly Environment

Ronald Reagan was a Cold War warrior.  While President Carter pursued a policy of detente with the Soviet Union Reagan’s policy was more in keeping with JFK’s policy.  He called the Soviet Union the Evil Empire and pursued a goal of destroying it.  And like Kennedy he built up a strong military.  Reagan invaded Grenada when hard-line communists overthrew a moderate socialist government.  While there were Cuban construction workers and military personnel building a 10,000 foot reinforced runway.  Which would be handy for the Soviets to use in their Central American activities.  Which Reagan also opposed in Nicaragua.  As he helped the Mujahideen resist the Soviets in Afghanistan.  Reagan revived the Carter-canceled B-1 Lancer bomber program.  He introduced the MX intercontinental ballistic missile program.  And when the Soviets deployed SS-20 intermediate-range ballistic missiles Reagan deployed Pershing medium-range ballistic missiles in West Germany.  Then he took it up a notch and introduced a strategic ballistic missiles defense system.  The Strategic Defense Initiative (SDI).  When Reagan gave a speech at the Berlin Wall’s Brandenburg Gate with Mikhail Gorbachev in attendance he said, “General Secretary Gorbachev, if you seek peace, if you seek prosperity for the Soviet Union and Eastern Europe, if you seek liberalization, come here to this gate! Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall!”

The Soviets couldn’t keep up with the spending as their command economy was a mess.  It was a different story in America.  In fact, it was Morning in America.  Not only did the Americans spend the Soviets to the brink of collapse they did that in what those on the Left call the Decade of Greed.  Because economic times were so good there was excessive materialistic consumption.  So while the Soviets stood in line for soap and toilet paper the Americans enjoyed Sony Walkmans, CD players, VCRs, new cars, big houses and all the delicious food you could eat.  Americans had a weight problem.  While the Soviets had a malnutrition problem.  The Soviet Union would collapse about 3 years after Reagan left office.  George H. W. Bush, Reagan’s vice president, having the honor to be in office at the end of the Soviet Union.

Like JFK Reagan also had a recession.  As he entered office following the disaster of the Carter presidency.  Carter did all of the Keynesian stuff like JFK.  Using inflation to try to end unemployment.  Which only gave the nation high inflation and high unemployment.  Stagflation.  And malaise.  But unlike JFK Carter refused to try something different when it didn’t work.  When Reagan entered office, though, he did what JFK did.  He created a business-friendly environment.  That included tax cuts.  Tax cuts that stimulated economic activity.  So much economic activity that federal tax receipts went up even though tax rates went down.  So Reagan’s deficits weren’t a revenue problem.  They were a spending problem.  Much like they are today.  Much like they always are.

If JFK and Ronald Reagan were Alive Today they would likely Endorse the Republican Candidates Mitt Romney and Paul Ryan

The attacks on 9/11 didn’t just happen.  It was the last in a chain of events.  There was the 1993 World Trade Center Bombing.  The New York City Landmark Bomb Plot (1993).  The Khobar Towers Bombing (1996).  The United States Embassy Bombings (1998).  The Millennium Attack Plots (2000).  The USS Cole Bombing (2000).  Then 9/11.  Until 9/11 we treated all of these events as criminal offences.  Not acts of war.  While Osama bin Laden and his al Qaeda acted from the start as if they were fighting a war.  Not breaking the law.  President Obama is also reluctant to call these radical Islamist attacks war.  When a radical Muslim in the US Army killed fellow soldiers on an Army base because of America’s ‘crimes against Islam’ the president called that workplace violence.  And when an American ambassador asked for additional security in Benghazi someone in the Obama administration denied the request because President Obama had killed Osama bin Laden.  And defeated al Qaeda.  Having to beef up security to defend against a growing al Qaeda presence, though, would have gone against that narrative of defeating al Qaeda.

The current so-called economic recovery is about the weakest on record.  Despite doing the normal Keynesian things to revive the economy.  Including an almost trillion dollar stimulus package.  Leading to record deficits.  Money the government had to borrow.  Borrowing which required an increase in the official debt ceiling.  This excessive debt and government spending cause the first downgrade of US sovereign debt.  All of this to fix the economy.  Only the economy is not fixed.  And the people who can’t find a full time job holds steady at 14.7% (U-6 unemployment rate).

So if JFK and Ronald Reagan were alive today who would they support in the 2012 election?  Who would a couple of Cold War warriors who risked nuclear war to protect the United States support?  These practitioners of supply-side economics who brought their economies out of recession to record economic growth?  Probably not the candidates foolishly hanging on to failed Keynesian policies despite a real unemployment rate of 14.7%.  Or the ones refusing to accept that we are still being targeted and killed by al Qaeda and other radical Islamist elements in the ongoing War on Terror.  No.  If JFK and Ronald Reagan were alive today they would likely endorse the Republican candidates Mitt Romney and Paul Ryan.

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JFK, Tax Cuts, Vietnam, LBJ, Great Society, Hippies, Race Riots, Keynesian Spending, Nixon, Carter and Ronald Reagan

Posted by PITHOCRATES - August 21st, 2012

History 101

Ronald Reagan would follow the Kennedy Example of Cutting Taxes to Grow the Economy

In 1961 West German Chancellor Ludwig Erhard gave John F. Kennedy (JFK) some good advice.  During JFK’s visit he told him not to make the same mistake the British had.  He told Kennedy NOT to follow their policy of high taxation.  Because it killed economic activity.  And economic growth.  England was suffering from her bad tax policy.  He urged the American president not to make the same mistake.

JFK heeded Erhard’s advice.  And cut tax rates.  This did not please liberals in his Democrat Party.  Who were all Keynesians.  And believed in large government interventions into the private sector.  Funded by large government expenditures.  Which in the Keynesian world you got in one of three ways.  Tax, borrow or print money.  You did not cut tax rates.  Which was blasphemous in Keynesian doctrine.  You never, ever, cut tax rates.  But Kennedy did.  Arguing that “an economy hampered by restrictive tax rates will never produce enough revenue to balance the budget—just as it will never produce enough jobs or enough profits.”

A message Ronald Reagan would give time and again some 20 years later.  And would follow the Kennedy example of cutting taxes to grow the economy.  Generating more tax revenue without having to cut spending.  The result of JFK’s ‘trickle-down’ economics were impressive.  He cut the top marginal tax rate from 91% to 70%.  And cut the 20% rate to 14% at the other end of the scale.  What did people do with these tax savings?  They saved.  And invested.  Savings rose from an annual growth rate of 2% to 9%.  Business investment from 2% to 8%.  New jobs grew at a rate of 100%.  And unemployment fell by one third.  With GDP rising some 40% in two years.  And despite cutting tax rates tax revenue rose.  The booming economy generating more tax revenue even at the lower rates.  Even more than the Keynesians said Kennedy was going to cost the government with his tax cuts.

The Social Upheavals of the Sixties, the Race Riots and his Unpopular Vietnam War all took their Toll on LBJ

Liberals love JFK.  But for none of these reasons.  They prefer to wax poetically about his fight to end economic and racial injustice.  Which were in reality low on his priority list.  Addressing civil rights only after trouble was escalating in the south.  But that’s the Left’s cherished memory of him.  And of Camelot.  The American royal family.  They don’t talk about JFK’s trickle-down economics.  His Bay of Pigs fiasco (the plan to oust Fidel Castro from Cuba that he withdrew support from after it met difficulty on the beaches).  His Cuban missile crisis (near nuclear war with the Soviet Union) which his indecision at the Bay of Pigs may have invited.   Or his war in Vietnam.  No.  They stay silent on the best part of his presidency.  As well as the worst parts.  And focus instead on the fairy tale that was Camelot.  Ignoring completely his excellent economic policies and the strong economy they gave us.  And all that tax revenue that poured into the treasury.  Yes, they may have liked having that money.  But they didn’t have to like how it got there.

Following JFK’s assassination Lyndon Baines Johnson (LBJ) ascended to the presidency.  An old school politician that knew how to make deals to advance legislation.  And boy did he.  He declared unconditional war on poverty.  And unleashed the Great Society to spend America out of poverty.  Keynesian to the core.  Pure demand-side economics.  Give poor people money which they will use to buy consumer goods.  That Keynesian consumption that was so crucial to a healthy economy.  So Johnson made good use of all that tax revenue JFK created with his tax cuts.  And LBJ’s Great Society consumed enormous amounts of that tax revenue.  As did JFK’s Vietnam War.  Now LBJ’s war.  Which LBJ escalated.  Government expenditures exploded during the Johnson administration.  And the spending obligations he put into place were only going to escalate future expenditures.  Oh, and we were also trying to land a man on the moon during this time.  All during a time when the world was changing.  When a bunch of filthy hippies began to protest anything that didn’t somehow gratify them (their rallying cry was sex, drugs and rock & roll).  And racial tensions simmered to the boiling point in our crowded cities.

The social upheavals of the Sixties.  The race riots.  The unpopular war on our living room televisions.  They all took their toll on LBJ.  The race riots especially hurt him as he had spent so much money on ending economic and racial injustice.  On a televised address he told the nation that he was through being the president.  He wasn’t going to run for another term.  And he wouldn’t accept a nomination for a second term.  He basically thanked an ungrateful nation.  And planned for his retirement.  Leaving a fiscal mess for the next president.  As well as a mess in Vietnam.  And the job for cleaning up these messes fell to Richard Milhous Nixon.

When Nixon entered the Presidency all those Spending Obligations of the Great Society were Coming Due

Nixon had a lot of liberal tendencies.  He was actually a member of the NAACP since 1950.  Long before JFK or LBJ talked of civil rights.  He believed in New Deal economics.  Of the good government could do.  He was also an environmentalist.  Giving us the Environmental Protection Agency (EPA).  And giving us emissions standards for our cars.  He gave us the Occupational and Safety Health Administration (OSHA).  And a flurry of other regulations.  Not what you would expect from a Republican these days.  Of course, few probably know this.  But they probably do know about Watergate.  At least the word ‘Watergate’.  Which was pretty tame by today’s standards.  Spying on the political opposition.  Then lying about it.

When Nixon entered the presidency all those spending obligations of the Great Society were coming due.  The cost of LBJ’s Great Society really hit the Nixon administration hard.  Enormous amounts of money were flowing out to poor people (so they could spend it and buy consumer goods).  To the war in Vietnam.  To the Cold War.  To the space program.  To the enlarged federal government.  Government spending was going off the chart.  But it wasn’t having the affect on the economy the Keynesians said it would.  They were taxing, borrowing and printing money like good little Keynesians.  But they were devaluing the dollar in the process.  And igniting inflation.  Worse, the U.S. dollar was the reserve currency of the world.  Foreign nations pegged their currency to the U.S. dollar.  The U.S. pegged the dollar to gold.  As the Americans devalued the dollar, though, the foreign countries traded their dollars for gold.  Gold began to fly out of the country.  So Nixon did what any responsible Keynesian would do.  Instead of playing by the rules of the game he changed the rules.  And decoupled the dollar from gold.  The Nixon Shock.  Ushering in the era of unfettered Keynesian economics.  Deficit spending.  Growing debt.  High inflation.  High unemployment.  Stagflation.  And malaise.

Jimmy Carter would see the worse of LBJ’s Great Society.  As it left his economy in a mess.  Despite all of that government spending.  And Carter suffered because he, too, was a Keynesian.  He believed in that GDP formula where GDP equaled the sum of consumption, investment, government expenditures and net exports (exports – Imports).  And the formula clearly states that the way to increase GDP (and increase the number of jobs) was to increase government spending to give money to people so they could buy consumer goods (increasing government spending and consumption in the formula).  It was simple arithmetic.  But the formula left out about half of all economic activity.  The intermediate business spending that takes place before any consumer goods enter our stores.  Think of things consumers don’t buy.  Like railroad track, blast furnaces, construction front-end loaders, etc.  Economic activity that JFK encouraged with his tax cuts.  As Ronald Reagan did so, too, some 20 years later.  Which is why the JFK and the Reagan economies were far better than any Keynesian administration.

Even after more than a decade of unfettered Keynesian spending consumption was only 34% of all economic activity in 1982.  Even though official GDP figures reported it at 65%.  Why the discrepancy?  Intermediate business spending.  The stages of production before consumer goods.  Coming in at 54% of real economic activity in 1982.  Which is why the tax-cut policies of JFK and Ronald Reagan worked.  And the spending policies of JBJ, Nixon and Carter didn’t.  Trickle-down works.  Because it creates jobs.  And those lower tax rates generate higher tax revenues because more people are working and paying taxes.  All things a Keynesian wants.  But they will reject them because they resulted from the ‘wrong’ policies.  Because Keynesians want to tax, borrow and print.  Regardless of their effect on the economy.

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Tax Cuts, Gold Standard, Roaring Twenties, Great Depression, New Deal, Great Society, Stagflation, Ronald Reagan and Class Warfare

Posted by PITHOCRATES - February 28th, 2012

History 101

The Twenties saw one of the Greatest Explosions in Economic Growth in History despite being on a Gold Standard 

There is a duality in economics.  There is Keynesian economics.  And the Austrian School.  The Keynesians believe in central banking.  Forcing interest rates below market rates.  Purposely creating a permanent but ‘manageable’ inflation rate.  And other government interventions into markets.  The Austrians believe in a strong currency.  Even bringing back the gold standard.  Letting the markets set interest rates.  Are against purposely creating inflation.  And oppose government intervention into markets.  So these two schools are sort of the Yin and Yang of economics.  The dark and the light.  The wrong and the right.  The Keynesian and the Austrian.

So it’s not surprising to see periods of history where these two schools bump up against each other.  As we transition from good economic times to bad economic times.  And vice versa.  When politicians change policies for political reasons.  Or when politicians change policies for economic reasons.  When the Keynesians are out of power and want to get back into power.  Or the Keynesians are in power, have destroyed the economy and the electorate wants to throw them out.  Starting shortly after World War I.  When John Maynard Keynes’ ideas came to light.  Economic policies that used smart people and an active, benevolent government.  Exactly what Woodward Wilson and his progressives were looking for.  Who wanted to quantify human behavior and improve it.  With an activist and scientific government.  To bless the United States with their brilliance again now that the war was over.  And return to the new enlightened way.  Helping people everywhere to be better citizens.  And fixing all the ‘faults’ of free market capitalism.

But the progressives lost the 1920 election.  The voters favoring Warren Harding’s message to return to normalcy.  And rejecting the progressives and their new scientific ways of government.  They wanted jobs.  And that’s what Harding gave them.  By cutting taxes.  Thanks to the advice of his brilliant treasury secretary.  Andrew Mellon.  And getting out of the way of businesses.  When he died Calvin Coolidge continued his policies.  And the Twenties roared.  It was one of the greatest explosions in economic growth in history.  Where credit was plentiful.  Despite being on a gold standard.  As the United States electrified.  And modernized.  Electric power.  Telephones.  Radio.  Electric appliances.  Movies.  Even on the farm.  Where mechanization provided bountiful harvests and inexpensive food.  The Roaring Twenties were great times for consumers.  The average American.  Thanks to minimal governmental interference into the free market.  And capitalism.  But, alas, that wouldn’t last.

Ronald Reagan won in a Landslide based on an Economic Platform that was Austrian to the Core 

It was the mechanization of the farm that began the process that lead to the Great Depression.  The average American benefited greatly from those low food prices.  But not the farmers who went into debt to mechanize their farms.  And when those European World War I soldiers traded their rifles for plows the American farmers lost some valuable export markets.  Farmers were struggling with low prices.  And heavy debt.  Some defaulted on their debt.  Causing bank failures in the farming regions.  Which soon spread throughout the banking system.  And when president Hoover came to office he was going to help the farmers.  For Hoover, though a Republican, was a progressive.  He brought back activist government.  He interfered with the free market.  To fix these problems.  Price supports for farmers to import tariffs.  Raising costs for businesses.  And prices for consumers.  Then the Smoot-Hawley Tariff launched an all out trade war.  Crashing the economy.  And giving us the Great Depression.

The 1930s was a lost decade.  FDR’s New Deal policies increased the size of government.  And their reach into the free market.  Which prolonged the Great Depression.  But nothing they tried worked.  Despite trying their progressive brilliance for some ten years.  It took World War II to pull the United States out of the Depression.  When the government at last allowed businesses to pursue profits again.  And got out of their way.  This surge in economic activity continued after the war and through the Fifties.  And into the Sixties.  With none other than JFK cutting taxes in a very Austrian way.  Yes, Kennedy was an adherent to the Austrian school.  But LBJ wasn’t.  And when he took over things changed.  The progressives were back.  Calling themselves liberals now.  And instead of the New Deal they gave us the Great Society.  Which grew the government even larger than the New Deal did.  And the Great Society spent the money.  Along with putting a man on the moon and the Vietnam War, government spending exploded.  The Keynesians were hitting their prime.  For once they could do all of the great things they always said they could.  And in the process fix a ‘broken’ free market system.  Finally having brilliant people in all the right places in government.  Making brilliant policies to help people live better lives.

And then came the Seventies.  The government was spending so much that they turned to the printing presses.  Because they could.  Thanks to central banking.  Even if it was hamstrung by gold.  You see, at that time the dollar was convertible into gold.  And with the Americans printing so much money and depreciating the dollar countries holding U.S. dollars said, “Screw that.”  And converted their dollars into gold.  That great sucking sound they heard in the Seventies was the sound of U.S. gold reserves getting sucked out of the country.  Well, even though the Keynesians hated gold they didn’t want to see all their gold reserves disappearing.  So Nixon did something very Keynesian.  And decoupled the dollar from gold.  Freeing the government at last to spend as irresponsibly as the Keynesians wanted.  And spend they did.  Turning the printing presses on high.  Depreciating the dollar ever more and causing double digit inflation.  Worse, all that Keynesian spending did nothing for the economy.  There was high unemployment as well as inflation.  An unusual phenomenon as you typically had one or the other.  Not both.  But this was stagflation.  A Keynesian phenomenon.  And you measured how bad it was by adding the unemployment rate to the inflation rate.  Giving you the misery index.  And the misery was pretty high during the Keynesian Seventies.  It was so miserable that they joked about it on Saturday Night Live.  With Dan Aykroyd impersonating Jimmy Carter.  Joking about high nice it would be to own a $400 suit.  And how nice it was just to make a phone call to get the printing presses to print more money.  The people thought Aykroyd’s Carter was funny.  But they didn’t care for the real one all that much.  And made him a one term president.  As Ronald Reagan won in a landslide.  Based on an economic platform that was Austrian to the core.  Including a promise to return responsibility to government spending by reinstating a gold standard.  (Which was a political ‘bridge too far’.)

The Electorate paying Federal Income Taxes fell from 80% when Reagan was in Office to about 50% by 2009 

The Eighties were so prosperous that the Keynesians, liberals and progressives derisively call them the decade of greed.  They tried everything within their power to rewrite history.  Calling the exploding economic activity ‘trickle down’ economics.  But the figures don’t lie.  Despite the liars figuring.  The inflation rate fell.  Interest rates fell.  The unemployment rate fell.  And despite the cuts in tax rates the government was never richer.  Tax revenue collected under the reduced rates nearly doubled.  But there was little cutting in government spending.  Flush with all that cash they kept spending.  In part to rebuild the military to win the Cold War.  Which Reagan won.  But all the social spending continued, too.  Which led to some record deficits.  Not the trillion dollar deficits of the Obama administration.  But large nevertheless.  Which provided the meme to explain away the prosperity of the Eighties.  “But at what cost?” being the common refrain.  They talk about the deficits.  But very conveniently leave out that part of how tax revenues doubled at the reduced tax rates.

Well, as time passed the Keynesians got back into government.  In the late Nineties as they kept interest rates low again to stimulate the economy.  Creating the dot-com bubble.  And the early 2000s recession.  George W. Bush cut taxes.  Brought the economy out of recession.  But then the Keynesians went back to playing with those interest rates.  Kept them artificially low.  Creating a great housing bubble.  And the Subprime Mortgage Crisis.

Keynesian economics have failed throughout the last century of trying.  And taxpayers clearly saw this along the way.  Voting for Austrian policies every time economic policy mattered.  Especially after another failure of Keynesian policy.  Every time their policies failed, though, the Keynesians had an excuse.  Supply shocks.  Liquidity traps.  Something.  It was always something that caused their policies to fail.  But it was never the policies themselves.  Despite Mellon, Harding, Coolidge, Kennedy and Reagan proving otherwise.  So they had to try something else.  And they did.  Class warfare.  They transferred the tax burden to the wealthier.  Reduced the number of people paying federal income taxes.  And gave ever more generous government benefits.  This took the failed ideology out of the equation.  Making it easier to win elections.  For when Reagan was in office more than 80% of the electorate were taxpayers.  And Austrian economics won at the polls.  The Nineties ended with only about 65% of the electorate paying federal income taxes.  By 2009 that number shrunk to about only half of the electorate.  Which gave the tax and spend Keynesians an edge over responsible-governing Austrians.  Because people who don’t pay income taxes will vote for policies to increase taxes on those who do.  Not because of concern over economic policy.  But just to get free stuff.  Something Keynesians learned well.  When at first you fail just buy votes.  And then you can continue your failed policies to your heart’s content.

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Trump Blasts the Scots for Planning to Build Windmills off the Coast of his Golf Resort

Posted by PITHOCRATES - February 11th, 2012

Week in Review

Putting up windmills in the country is one thing.  Sure, the famers may hate not being able to get a decent night’s sleep because of the incessant noise from the windmills but what are they going to do about?  They’re poor farmers.  It’s not like they’re rich (see Angry Donald Trump blasts plans for Scottish wind farm near his luxury golf resort by Associated Press posted 2/10/2012 on The Washington Post).

Trump has launched a blistering attack on Scotland’s First Minister Alex Salmond over plans to build a “horrendous” wind farm off the coast of his luxury Scottish golf resort. In an open letter, Trump accuses Salmond of being “hell bent on destroying Scotland’s coast line and therefore Scotland itself…”

He ridicules the Scottish National Party’s renewable energy policies, claiming the economic benefit is going to China and other countries, not Scotland.

 “Jobs will not be created in Scotland because these ugly monstrosities known as turbines are manufactured in other countries such as China. These countries, who so benefit from your billions of pounds of payments, are laughing at you!” Trump said.

Trump isn’t alone.  The late Ted Kennedy felt the same way.  Back when they were trying to install windmills in Nantucket Sound that could provide three-fourths of Cape Cod’s power cleanly without any carbon footprint Kennedy said whoa now, just wait a minute.  This champion of green energy said windmills are all well and fine when they spoil someone else’s view.  But not ours.  We’re rich.  Put them someplace else.

It just goes to show you that rich people don’t like green energy.  At least, not when it’s in their own backyard.  But at least Trump notes an economic argument as well.  And then there’s the fact that sometimes the wind doesn’t blow.  Which is why windmills have a pretty low capacity factor (only 20-40% of the installed capacity is typically generated).  A lot of money for little benefit to combat the lie of man-made global warming.  If Trump knows anything it’s return on investment.  So not only will they spoil his view they’ll do so for a bad investment.  Which must just add insult to injury for an investor like Trump.

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FT96: “The Left uses propaganda more effectively than the Right uses the truth.” -Old Pithy

Posted by PITHOCRATES - December 16th, 2011

Fundamental Truth

Liberals lie because only about 20% of the People are Liberal Democrats

Politicians lie.  On both sides of the aisle.  Democrats lie because they always want to raise our taxes.  And campaigning to raise your taxes just doesn’t win a lot of votes.  So they lie.  Republicans lie, too.  Especially those that want to act like Democrats.  And join the Washington elite where you go to the best of parties and rub shoulders with the best of A-list celebrities.

So that’s why politicians lie.  To fool you into voting for them.  So they can live a far, far better life than you can ever imagine.  Some have grown pretty adept at it.  In particular liberal Democrats.  Who have taken the lie and elevated it to pure party propaganda.   Again, because they have too.  With only about 20% of the people being liberal Democrats, there aren’t enough people out there buying what they’re selling.  So they have to lie about what they’re selling.

And what, exactly, are they selling?  Privilege.  For themselves.  And their friends.  Which they give themselves after winning elections.  Power, control and money.  The usual things a privileged class covets.  Like in the good old days.  In the Old World.  Where a good last name set you apart from the rabble.  And let you live the good life without working.

The more Wretched and Impoverished the Poor get the Better it is for Big Government

Today’s aristocracy is Big Government.  For those in it have power, control and money.  Just like a Baron in medieval Europe.  Except for one thing.  This nobility never has to put on armor and mount his steed and fight for the king.  So it’s even better.  Of course, in the Old World, there were oaths of fealty.  The price of privilege was the possibility of fighting, even dying, for your king.  A liberal Democrat has no such thing to fear.  Hell, they can break the law even and nine times out of ten they’ll get away with it.  Because their kind takes care of their own.  And doesn’t let a little thing like the law get in the way of their good life.

So how does one get to live better than everyone else?  Even being above the law at times?  Simple.  You champion the little guy.  The poor.  The downtrodden.  Those at the bottom of the ladder.  You take care of these people.  At least, you say you are.  By expanding the size of government to, say, alleviate poverty.  Then you raise taxes and expand government again and again.  And again.  And because you do this with the best of intentions no one ever points out that everything you’ve done has failed.  There’s still poverty.  In fact, it seems that every year more people are living below the poverty line.  At least according to government statistics.  Or should I say Big Government statistics?  Convenient, yes?  A little of putting the fox in charge of the henhouse, isn’t it?

Of course, that’s the plan.  Because if you got rid of poverty you’d put Big Government out of a job.  I mean, if everyone was living happily ever what would you need them for?  Happiness is not good for Big Government.  That’s right, the more wretched and impoverished the poor get the better it is for government programs that ‘care’ for them.  And spend more money on them.  Which means more taxes, more control and more positions within the new aristocracy for more of their own.

JFK and Ronald Reagan were both Tax-Cutting Supply-Siders

To keep raising taxes and to keep creating new government programs you have to demonize tax cuts and limited government.  Which is important because history has shown that everyone lives better with lower taxes and a more limited government.  Except, of course, the new aristocracy.

Liberals refer to the Kennedy White House as Camelot.  They absolutely loved JFK.  But they carefully guard his legacy.  Why?  JFK was a tax-cutter.  He believed in supply-side economics.  What the liberal Democrats dismiss snidely as trickle-down economics.  But Kennedy’s tax cuts worked.  They caused an economic boom.  Which the Left is very hush-hush about.  Because they can’t have their hero known as a tax-cutter.  But they have no problem belittling another Kennedy-esque tax-cutter.  Ronald Reagan.

Reagan cut the top marginal tax rate.  The Big Government liberals called him mad.  Out of touch.  Said he hated the poor.  And wanted to starve government programs ‘vital’ for the poor while rewarding rich people.  But like Kennedy, his cut in the tax rates caused an economic boom.  And tax receipts (tax money collected by the IRS) nearly doubled.  None of which was supposed to happen according to the liberals.  So they lied about it.  Said, “yes, there was increased economic activity, but at what cost?  Ronald Reagan’s tax cuts gave us huge deficits that exploded the federal debt.”  Yes, there were huge deficits.  But that’s beside the point.  The cut in the top marginal rate nearly doubled tax receipts.  That’s the key point.  The Reagan tax cuts worked.  The government just spent this new tax revenue faster than they could collect it.

Liberals are such Good Liars that few know the Successful Track Record of Tax Cuts

Cuts in tax rates have a successful track record.  That’s fact.  The Republicans could run on this truth.  But they do such a pathetic job in telling the truth that no one knows about this successful track record.  The liberal democrats, on the other hand, lie through their teeth about this record.  And they’re so good at lying that it’s what most people believe.  Tax cuts explode the deficit.  Grow the debt.  Take money away from the poor.  Gives it to the rich.  While the poor and downtrodden wait for all that wealth to trickle down to them.  But it never comes.  All lies.  But told so well that it’s what most people believe.

JFK was a tax cutter.  A lot like Ronald Reagan.  There were others.  And they all proved that tax cuts increase economic activity.  Which is always good.  Because more economic activity means more jobs.  And more tax receipts.  Which is bad for a caring and nurturing Big Government.  Because if free market capitalism can do this then there is no need for Big Government.  And this is something the new aristocracy just can’t have.

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‘More Taxes, Regulations, Uncertainty and Spending’ is the Mantra of the Obama Administration

Posted by PITHOCRATES - September 21st, 2011

Obama’s Proposed Aviation Fees will Fall Predominantly on the People who can Least Afford It

In Obama‘s deficit reduction plan he plans to tax the rich.  Those who can most afford it.  Rich people.  And by rich people he means anyone who has any money to spend (see Airline groups attack Obama proposals to boost fees for aviation security, air traffic control by Associated Press posted 9/21/2011 on The Washington Post).

The aviation fees are part of Obama’s deficit-cutting plan that was released Tuesday. The plan would:

— raise the passenger security fee — now $5 to $10 per round trip — to $15 by 2017 and give the Homeland Security Department the power to push it higher.

— impose a surcharge of $100 per flight to help pay for air traffic control.

But college students fly.  Middle class families fly on vacation.  Non-rich people everywhere fly to visit family members that have moved away.  A lot of people fly.  And an interesting tidbit about the flying public?  They’re not all rich.

The rich people that Obama wants to tax?  Because they can most afford it?  Those well-to-do folk who fly those private jets?  Well, a lot of them do just that.  Fly private jets.  And, therefore, do NOT fly on commercial planes.  So they won’t be paying these new taxes/fees.  So these taxes/fees will fall predominantly on the people who can least afford it.  Imagine that.

The Air Transport Association, which represents large airlines, said it’s unfair for airlines and passengers to pay for security against terror attacks that target the U.S. and not the airlines themselves. The trade group says a typical $300 round-trip ticket already includes $60 in taxes and fees.

The Regional Airline Association, a group of smaller carriers, said the fees could lead to a loss of flights to smaller cities. The group’s president, Roger Cohen, said the $100 surcharge would cost more than regional airlines earned last year, threatening service to smaller cities.

The groups also complained that some of the money raised from airlines and passengers would be used to pay down the federal budget deficit and not to improve the air-travel system.

The airlines have a vested interest in protecting their planes.  Because they bought them.  And planes that blow up or crash in terrorist attacks don’t help the bottom line.  There’s the loss of an expensive airplane.  And the future revenue from that airplane.  The cost of replacing that airplane.  And the lost business from passengers who tend to shy away from an airline whose planes are easy pickings for terrorists.

So let them hire a security contractor to secure their planes.  Using the Israeli model.  Ask very pointed questions and observe people’s responses.  It works well for the Israelis.  Couldn’t be any worse than what the TSA is doing.  I mean, what passengers are going to complain about being groped less?

The administration estimated that boosting passenger security fees will raise $24.9 billion over 10 years. It proposed to spend $15 billion of that to reduce federal debt.

This is telling.  The airlines did not run up that federal debt. So there’s something really troubling about this.  Taking $15 billion from the airlines under the auspices of national security.  Just so they can continue their irresponsible spending ways in Washington.  This is no different than an addict stealing from his mother’s purse to support his habit.

This is Washington’s problem.  Not the airlines.  Washington has a spending problem.  And they can’t stop spending.  Or simply choose not to.  Instead they look for other people to steal from.  Like an addict.  While denying that they have a problem.  And always blaming others.  Like the rich who don’t pay their fair share.  And by rich they mean anyone that has any money to spend.

Tax Cuts Stimulate, not Keynesian Stimulus Spending Funded by Taxes

So how bad is this spending?  How much of a debt problem has it given us?  That the president is shaking down the airlines for $15 billion (see Committee Searches for Economic ‘Tipping Point’; Prefer Not to Find It by Jim Angle posted 9/20/2011 on Fox News)?

“We know that the debt is now 100 percent — approximately 100 percent of (gross domestic product),” said Allan Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh. “That doesn’t include the unfunded liabilities. It doesn’t include (mortgage lenders)Fannie Mae and Freddie Mac. It doesn’t include a number of other things.”

By unfunded liabilities, Meltzer means entitlement programs. Social Security and Medicare alone have $46 trillion in unfunded liabilities, meaning that much more is promised in benefits than the government — and taxpayers — have as a plan to pay for them.

Oh.  It’s that bad.  We owe a dollar for every dollar our economy produces.  But it’s even worse than this.  All of those unfunded liabilities that don’t appear in the official budget.  Fannie and Freddie.  And let’s not forget the Social Security and Medicare trust funds.  Which are filled only with IOUs from Uncle Sam.  Because Uncle Sam spent our money.  That money we put aside with each paycheck.  Those FICA and Medicare withholdings.  That money they forced us to save.  Because we were untrustworthy with our own money.  As they apparently are, too.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute, a libertarian think tank in Washington, argues that U.S. debt is so far out of control that it must be contained soon.

“We’ve had five trillion (in) deficit spending since 2008, the most enormous sort of Keynesian stimulus you can imagine, and yet we’ve had slower growth than any time since World War II. So I don’t think spending helps.”

So the government owes more money than taxpayers can fund.  And yet that didn’t stop them from spending $5 trillion more.  For stimulus.  Which is just code for throwing money at political cronies.  I mean, it’s obvious that it didn’t stimulate anything.  Because the economy is still in the toilet.

And there’s a very good reason for that.  Because tax cuts stimulate.  Not Keynesian stimulus spending funded by taxes.

Meltzer pointed to three “fiscal changes that really did enormous good.” One was the tax cuts from the Kennedy and Johnson administrations, the most effective part of which were business tax cuts.

“They got the biggest bang for the buck,” he said.

The second were the Reagan-era tax cuts which came in two rounds and boosted a flagging economy. Meltzer said a completely different option worked well too.

“(The) third policy that gave people confidence were the Clinton tax increases, which assured people that their future tax rates were not going to go up, that they had seen what they were going to have to take, and there wouldn’t be anymore.”

Meltzer said the increases gave people certainty about what tax rates would be, which reassured businesses they wouldn’t go higher, allowing employers to plan and create jobs with confidence.

The Clinton tax increases?  That’s not why the Nineties were booming.  It was because of greedy capitalists.  Looking to strike it rich in the dot-com boom.  The economy was smoking hot because of irrational exuberance.  Not higher taxes.  And the budget went into surplus when all those dot-com people cashed in their stock options.  And they paid a boatload of capital gains taxes.  Before the dot-com bubble burst.  And threw the economy into recession.

But he’s right on the Kennedy and Reagan tax cuts.  Both used good Austrian supply-side economics.  Which exploded economic activity.  And similar policies could do that again.  If we would just stop with the Keynesian nonsense.  And the belief that crippling regulations will spur economic growth.

Business Owners Hate Uncertainty because, Unlike Uncle Sam, they can’t Print Money

And speaking of regulation, remember the Dodd-Frank act?  Have you read it?  Probably not.  For I doubt anyone in Congress has read it in its entirety (see Dodd-Frank and Uncertainty by Veronique de Rugy posted 9/20/2011 on National Review).

Remember how President Obama promised that the Dodd-Frank bill would provide certainty, stability and growth…?

It’s 1,623 pages long. It is very heavy. If it could fit it in my purse, I could use it as a protective weapon. Whatever else this will do, however, it will not make lending cheaper or credit more readily available, and it will not protect us from another financial crisis. And it will not protect consumers or taxpayers.

What it will do, and already does, is continue injecting gigantic uncertainty into the economy, paralyzing entrepreneurship and job creation. Imagine how long it will take for all the rules to be written and for U.S. businesses to figure out how they are supposed to operate from now on. The vagueness of the law as written means that even business owners and consumers who have the courage to pick up this book and try to figure out what’s in their future won’t get the answers they are looking for.

Really, is there any doubt that some of the $2 trillion in cash that companies are sitting on is a direct result of this uncertainty?

That’s right.  If you don’t know what tomorrow may bring you save your money.  You deleverage.  Pay down debt.  And hoard cash.  Because cash is king.  It’s the only thing you can pay your employees with.  The only thing you can pay your suppliers with.  The only thing you can pay for your insurance with.  And it’s the only thing you can pay Uncle Sam with.  So if you don’t have enough of it around during bad times you may not be around for the good times.  When they return.  If they return.

Business owners hate uncertainty.  Because, unlike Uncle Sam, they can’t print money.  So they have to be very careful with what they have.  To survive things like recessions.  Depressions.  And Dodd-Frank.

In these Tough Economic Times, it is the People that are Suffering, not Rich Liberals

‘More taxes, more regulations and more uncertainty’ is the mantra of the Obama administration.  And, of course, more spending.  Always more spending.  Is it any surprise the economy is not responding well to Obama’s policies?

There is no way businesses will grow in this environment.  Or create jobs.  And without new jobs the economy will never recover.  People understand this.  That’s why Democrats are losing elections.  Even in New York.  It’s a repudiation of Obama.  And the liberal Democrat agenda.

For though the mainstream media has been a loyal propaganda outlet for the liberal elite, the people aren’t buying it anymore.  For in these tough economic times, it is the people that are suffering.  Because of Obama’s policies.  While rich liberal elitists are living well everywhere.  And continue to fly on their private jets.  While the common people will be paying Obama’s new aviation fees.

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LESSONS LEARNED #64: “National security can be a messy business. Especially when your enemies don’t play by the same rules.” -Old Pithy

Posted by PITHOCRATES - May 5th, 2011

Stalin Contained in Europe and Asia

Following the defeat of Nazi Germany, Soviet communism filled the Nazi world conquest void.  The Soviets paid the highest price in blood in the war against Hitler.  And the way they looked at it, that gave them the deed to any land the Red Army found itself on after hostilities came to an end.  Those countries who once welcomed their Soviet liberators from Nazi oppression soon found themselves under Soviet oppression.  The Soviets weren’t going anywhere.  They stayed in Eastern Europe.  They tried to stay in Iran but the British and the Americans got them to pull out, thanks in large part to America’s nuclear status.  Communist guerillas in Greece that once harassed the Nazis were trying to ascend to power with the help of the Soviets.  The Truman Doctrine checked the Soviet influence and kept Greece independent and out of the Soviet camp.  Russia was once again trying to take Turkish lands to give them that elusive warm water port via the Bosporus and Dardanelles into the Mediterranean.  Again, the Truman Doctrine helped keep the Turks independent and out of the Soviet sphere.

The German capital, Berlin, was completely inside East Germany.  But it was partitioned between East and West.  This was a problem for the Soviets as the people in East Germany didn’t like them, the KGB or the East German Stasi (which formed in 1950).  East Berlin was a gateway to freedom via West Berlin.  The first attempt to shut this down was the Berlin Blockade.  Truman overcame the blockade with the Berlin Airlift.  Thwarted, the Soviets lifted their blockade.  But then built the Berlin Wall to keep the unhappy East Germans from fleeing Soviet oppression.  West Berlin remained free within un-free East Germany.  And was still the gateway to freedom.  Only attaining freedom was a lot more difficult, with many East Germans dying in the attempt.

Being rebuffed in Eastern Europe, Berlin, Greece, Turkey and Iran, Stalin looked next to the Korean peninsula.  President Truman had hastened the end of World War II with the atomic bombings in the Pacific for a couple of reasons.  One was to spare American lives resulting from an invasion of the Japanese homeland.  The body count had only increased as MacArthur island-hopped his way to Japan.  Another reason was to get the Japanese to surrender before the Soviet Union could get the Red Army on more territory in the Pacific.  Because Truman saw the writing on the wall.  The Soviets never willingly left land the Red Army occupied.  With the end of hostilities in the Pacific, and the Japanese out of the Korean peninsula, the Allies partitioned Korea into North and South.  The Soviets occupied the North.  The Americans the South.  The Soviet sponsored North Korea eventually invaded the American sponsored South Korea, inaugurating the first open conflict by proxy in the Cold War.  After three years of a seesaw war, North and South signed an armistice setting the border between the two where it was in the beginning.  At the 38th Parallel.  Though the Korean War was a draw, it was still another Soviet defeat.  Who began to realize this world domination was trickier than it looked.  Especially when there were do-gooders out their like the United States always mucking up the works.

Eisenhower to Kennedy, Regime Changes and near Nuclear Annihilation

So the Soviets changed gears.  No more wars of invasion and conquest.  They had a new idea.  Wars of liberation.  They would help foment dissent in countries under the boot of American Imperialism.  Or at least in countries closer to America than the Soviet Union.  With America being in the Western Hemisphere that, of course, led the Soviets to Central and South America.  With the close of hostilities on the Korean peninsula in 1953, the Americans were now suspect of any communist-like behavior, eager to avoid another bloody and costly proxy war with the Soviet Union.  And they saw some in 1954 Guatemala.  Where the newly elected Jacobo Árbenz Guzmán started seizing private property and instituted agrarian reforms.  Along communist lines.  With more public property.  And less private property.  The developments in Guatemala may not have been Soviet in origin.  But it looked enough like it for President Eisenhower to approve a CIA coup in Guatemala.

After going through World War II and the Korean War, Eisenhower wanted to fight future wars before they became wars.  Like in Guatemala.  And elsewhere.  As in Cuba.  Where Eisenhower approved planning for Regime change in this Caribbean nation following the Cuban Revolution that ousted Fulgencio Batista who had seized power in a coup.  Putting the revolutionaries Fidel Castro and Che Guevara in power.  Once in power, the new revolutionary government did some very ‘communist’ things.  Seized private property.  Nationalized public utilities.  Created a bit of a police state.  The usual things.  But it was worse than in Guatemala.  And closer.  So President Kennedy approved the Eisenhower plan of regime change.  And we call that CIA plan the Bay of Pigs Invasion.  Which, of course, failed.  Unlike Eisenhower, Kennedy did not support this black ops mission with the U.S. military to stave off defeat.  So Castro, his brother, Guevara, and others, defeated the CIA backed Cuban exiles.  Which empowered Castro.  And pushed him closer to the Soviet Union. 

You know what Nikita Khrushchev saw when he looked across the Black Sea?  American nuclear missiles in Turkey.  Figuratively, of course.  Not literally.  He couldn’t even see the Turkish coast let alone missile installations.  But he knew they were there.  And that really got in his craw.  And the failed Bay of Pigs Invasion with the young and apparently reluctant American president provided just the opportunity he needed.  He would install Soviet nuclear missiles in Cuba.  And try this young and inexperienced president.  Castro was all for it, fearing another U.S. invasion (he apparently thought far more of Kennedy than the Soviets).  Guevara, too.  Because he was just reckless.  And crazy, as it turned out.  Well, the secret deployment was discovered by a U-2 spy plane.  Caught the Soviets with their pants down.  We threw up a naval blockade.  Came to the brink of nuclear war.  But Kennedy stood his ground.  The Soviets backed down and removed their missiles.  And then the Americans removed the missiles that had so bothered Khrushchev.  This last was part of a secret agreement to keep the young American president from looking bad.  But the Soviets were a little glad to remove their missiles from Cuba.  Because Guevara wanted to nuke the United States.  And probably would have if he had control of those missiles.

From Iranian Coup to Iranian Revolution

Oil underground is useless.  It only has value when someone brings it up where it can be refined into something useful.  And that’s what the British did in Iran.  The Iranians did not like the split of profits (they were only getting 16% of the net profits which was greater than the 0% they were receiving before the British pumped the oil out of the ground).  Anytime there is huge money involved, there’s going to be trouble.  And after the oil infrastructure was set up the Iranians nationalized the oil industry.  Which didn’t make the British happy.  So they pulled their expertise from the Iranian oil industry and blockaded their oil exports.  The Iranians were not as good as the British and their production fell.  And what little they did produce they could not sell.  This led to unemployment, hunger, etc.  All the right conditions for a coup.

Truman was not interested.  He had his hands full with the Korean War.  But Eisenhower saw things differently.  Especially when the British told him Iran may fall into the Soviet sphere.  And with her would go all of that oil.  Eisenhower believed this.  For there was nothing more the Soviets would have wanted.  They’d still be in Iran if the British and the U.S. (backed by the United States’ nuclear monopoly) didn’t persuade them to leave following World War II.  So Eisenhower joined the British in the coup that placed Mohammad Reza Shah (aka, the Shah of Iran) on the throne in 1953.  And placed Iran into the American sphere.  And everyone lived happily ever after.  The West got Iranian oil on more favorable terms.  And the Middle East got a burning white hatred for the United States and the West in general.  Who apparently would do anything to steal their oil.  So that ‘happily ever after’ was more tongue in cheek.  It ended well in terms of the Cold War.  But not in terms of the nationalism or geopolitics of the Middle East.  For it turns some people can hold a grudge for a real long time.

Shah-rule proved at times to be rather oppressive.  And highly Western.  Democratic, anti-Shah protests began in 1977.  First by Islamists.  Who didn’t really like Western influence.   Then eventually well-educated and unemployed college students (men and women).  Who wanted more freedoms.  And jobs.  Ayatollah Khomeini returned from exile in 1979.  As the democratic revolution grew in fervor, Khomeini consolidated his power behind the scenes.  There were no public statements about creating a theocracy.  Because the people didn’t want a theocracy.  Especially the women who had graduated from college with great hopes and dreams.  Because in a theocracy, women become second-class citizens with fewer rights.  And fewer hopes and dreams.

There was then a referendum asking if Iran should be an Islamic Republic.  It passed with near unanimity.  A draft constitution was put up to vote on.  It passed, too.  Some complained about voting irregularities.  Which became moot when Khomeini stated Iran would be based on Shari Law.  With no republic parts.  Then the Shah (now in exile) went to the United States for medical treatment.  Complications extended his stay, infuriating the Iranian protesters (who wanted him back to try and execute) and ratcheting up the American hate (who recalled the 1953 coup).  Young Islamists stormed the U.S. Embassy taking 52 hostages, holding them for 444 days.  Sunni Iraq then invaded Iran, fueling the Islamist furor.  The Islamists suppressed political opposition.  Shut down the free press.  Made women second-class citizens.  And, well, the rest is hardcore Islamist theocratic history.

Conquerors Lie and Exploit Political Instability

The world is a big place.  Sometimes events are interrelated.  Sometimes they’re not.  Sometimes we pay a price for acting too late.  And sometimes we pay a price for acting too soon.  Sometimes our actions prevent a bad situation from getting worse.  Sometimes our actions make a bad situation worse.  Or even makes a not necessarily bad situation a complete and utter disaster.  You never can be certain.  For one thing, everyone has some ulterior motive.  Sometimes those motives align with your national security interests.  Sometimes they don’t.  Unfortunately, we can never know for certain at the time we need to make a decision.  We can only base it on our current intelligence.  And history.

One thing we do know, though, is that there are people who want to conquer other people.  Hitler wanted to conquer the world and spread Nazi rule.  Stalin wanted to conquer the world and spread communist rule.  And now Islamist fundamentalists want to conquer the world and spread Islamist rule.  How do we know this?  They told us.  And demonstrated this by their actions.

Two other key points we can learn from history.  Those who want to conquer lie.  And they exploit political instability.  Hitler lied about his intentions in Czechoslovakia and took advantage of a war-weary Europe still recovering from the Great Depression.  Khrushchev lied about placing missiles in Cuba.  Which he placed in Cuba by taking advantage of the political instability following the failed Bay of Pig Invasion.  And Khomeini lied about his intentions in Iran knowing the people didn’t want a theocracy.  And he took advantage of the chaos of the democracy uprisings and other events to steer the nation where he wanted it to go.  Islamic theocracy.

The Nazi threat gave way to the Communist threat.  Which gave way to the Islamist threat.  So we should pay close attention to any country with political instability/democracy movements.  That has any Islamist elements.  Especially one that feels they’ve been wronged by the United States.  For that would be the perfect storm in the Islamic world.

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LESSONS LEARNED #55: “Liberals are all for trickle-down economics as long as the wealth trickles down from those who support liberals.” -Old Pithy

Posted by PITHOCRATES - March 3rd, 2011

 JFK Governed as a Conservative

We’ve had two ‘trickle-down’ administrations in recent times.  Both JFK and Ronald Reagan were proponents of supply-side economics.  Between these two administrations we had a few Keynesians (LBJ, Nixon, Ford and Carter).  JFK and Reagan cut tax rates.  The Keynesians never lowered the tax rate lower than JFK’s.  Reagan did.  But not the Keynesians.

JFK was a Democrat.  But he governed as a conservative.  He was strong on defense.  Even got us into Vietnam to prevent the dominoes from falling in Southeast Asia.  And he was business friendly.  But that doesn’t stop Democrats from loving him, though.  Most probably don’t know anything about his conservative side.  They think about Camelot.  Jackie.  John John.  “Ich bin ein Berliner” (the big Cold War speech after the Soviet Union built the Berlin Wall).  Landing a man on the moon and returning him safely.  “Ask not what your country can do for you; ask what you can do for your country.”  And the civil rights stuff.  Not that he was a hawk when it came to war (Bay of Pigs-sort of, Cuban Missiles Crisis and Vietnam).  And a tax cutter.

LBJ may have been JFK’s vice president but he was no JFK.  Kennedy wanted to build a strong economy and he believed that started with making a business-friendly environment.  Which he did.  Johnson, on the other hand, was a big, old school, liberal.  To him businesses were just cash piñatas for the government to whack.  He wanted their money.  Because he wanted to spend it.  And boy did he.  He exploded the role of government in our lives.  Increased taxes.  Increased regulation.  And increased the government bureaucracy.  He called it his Great Society.  And he gave FDR‘s New Deal a run for its money.

JFK’s Tax Cuts Stimulated Economic Activity

When Kennedy became president, there was a bit of a recession going on.  Unemployment got as high as 6.7% in his first year.  And the top marginal tax rate was 91%.  When he looked at the two the answer was obvious to him.  With a top marginal tax rate of 91%, there was little incentive to invest.  If your earnings exceed a certain amount, you only kept 9 cents of each additional dollar?  So why bother?  Like Billy Joel said, “You can pay Uncle Sam with the overtime.  Is that all you get for your money?”  Or like George Harrison said, “There’s one for you, nineteen for me.  Cause I’m the taxman.”   

No one likes paying taxes.  Especially confiscatory taxes.  It’s why the Beatles left the UK.  All you need may be love.  But even hippies want to keep their money.  And JFK understood this.  High taxes discouraged investment.  And drove some business away.  So he put together an economic plan that included cuts in the tax rates.  He brought the top marginal rate from 91% to 70%.  And how did that work?  Not too bad.  Based on the numbers.

In the four years following his tax cuts, tax receipts increased 41%.  So he brought more money into Washington by cutting tax rates.  And it gets better.  The unemployment rate went down 33% (from 5.7% to 3.8%).  And GDP increased 35%.  In the technical language of economists, these numbers are awesome.

The LBJ/Nixon Policies End the JFK Economic Expansion

Well, the party wasn’t going to last.  Thanks to Lee Harvey Oswald.  JFK was dead.  Assassinated.  And LBJ took the oath of office in Air Force One before leaving Texas.  Who can forget the image of a grief-stricken Jackie as Johnson took the oath?  Much like with the assassination of Lincoln, the consequences of that action was to forever change the country (we all wonder how Reconstruction would have gone with Lincoln).  JFK was gone.  LBJ was in.  And he was bringing his Great Society with him.  And the size of government would never be the same.

Johnson raised taxes in his last 2 years to pay for the massive federal spending.  Nixon cut them.  He brought the top marginal rate back to the Kennedy level.  But he didn’t cut spending.  And to keep up with the spending he started printing money.  Gold started flying out of the country so he decoupled the dollar from gold, igniting inflation.  The heady days of the JFK economic expansion were over.  Looking at a period that included the last 2 years of LBJ’s term and Nixon’s 6 years, it’s not a pretty picture.

Tax receipts soared 77% to pay for all that government spending.  And, not surprisingly, the unemployment rate soared, too.  It went from 3.8% to 5.6% (an increase of 47%).  GDP shot up an impressive 80%, too.  Landing on the moon, Vietnam and the Great Society created a lot of economic activity.  But that economic activity wasn’t real.  It was a bubble.  Paid for with high taxes and printed dollars.  So prices were high thanks to inflation.  And a lot of us didn’t have a job.  And this is what Carter got when he entered office.  Malaise.  Stagflation (high unemployment and high inflation).  And something we called the misery index (the sum of the unemployment and inflation rates).  Carter was not going into the 1980 election with a lot going for him.  And the Iranian Hostage Crisis didn’t help any either.

Ronald Reagan Cuts Taxes, Stimulates the Economy and Wins the Cold War

Then came Ronald Reagan.  He put Carter out of his misery by winning the 1980 election.  Then rolled up his sleeves.  And got to work.  When he came into office the top marginal tax rate was 69%.  By the time he left it was 28%.  The Left called him reckless and irresponsible.  That he ran high deficits.  And exploded the federal debt.  Well, yes, both of these did increase during the Reagan years.  But it’s not because of the tax rate cuts.  Those were caused by spending more money than the treasury collected.  And, believe you me, the treasury really raked it in during the Reagan presidency.

In 1981, tax receipts were about $600 billion.  In 1990 (adding in the first year of George H.W. Bush), tax receipts were about $1 trillion.  In other words, the Reagan tax rate cuts increased tax receipts by 72%.  The treasury collected more tax dollars at the lower tax rates.  So there is no way no how you can blame deficits and debt on the Reagan tax rate cuts.  And it gets better.

During the Eighties, the unemployment rate fell 26%.  And the GDP rose 86%.  Lower tax rates.  Higher tax revenue.  Lower unemployment.  And a surge in economic activity.  Wow.  Can it get any better?  Why, yes.  Reagan spent the Soviet Union into defeat in the Cold War.  They just couldn’t keep up.  Caused a lot of trouble on the other side of the Iron Curtain.  Long story short, after his presidency, Eastern Europe would be free of Communism.  And the Berlin Wall would be no more. 

Supply-Side Economics Works

The moral of this lesson?  Supply-side (aka, trickle-down) economics works.  It worked for JFK.  And it worked for Reagan.  What doesn’t work is the Keynesian economics of LBJ, Nixon, Ford and Carter.  They grew government.  Increased government spending.  Giving us higher taxes, higher unemployment, higher inflation and malaise.  The only thing that trickled down was their misery.

So if trickle-down can fill the federal coffers why do liberals hate it?  Because those who support supply-side economics are typically in the private sector.  Have jobs.  Don’t belong to a union.  And don’t need any help from government.  You put that all together and the answer is clear.  These people don’t lobby liberals.  So what good is their wealth when no part of it makes its way to liberal pockets?  Like Big Labor?  Or public sector unions?

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Kennedy Wrong on Kennedy, the Constitution, Catholicism and Abraham Lincoln

Posted by PITHOCRATES - December 4th, 2010

There’s no Separation of Church and State in the Constitution

Sarah Palin wrote about JFK’s Houston speech in her new book America by Heart.  I haven’t read her book but, according to Kathleen Kennedy Townsend, she doesn’t get JFK or his speech. 

Ms. Kennedy says JFK took a lofty stand to separate church and state.  Palin said JFK dissed the Founding Fathers (see Sarah Palin is wrong about John F. Kennedy, religion and politics by Kathleen Kennedy Townsend posted 12/3/2010 on The Washington Post).

Palin’s argument seems to challenge a great American tradition, enshrined in the Constitution, stipulating that there be no religious test for public office.

I gotta side with Palin on this.  For I know history.  And a little about JFK.

A lot of people get this wrong.  Especially those on the Left.  They don’t know America’s history.  Or the Constitution.

Briefly, then, here is some American history.  The English founded British North America.  The Church of England is Protestant.  At the time of our founding, the English (and Protestants) hated Catholics.  Americans, then, had a deep-rooted hate of Catholics.  They left England because they felt the Church of England was getting too Catholic for their liking (pick up a history of the English Civil War for more on this).  So they came to America and founded new colonies.  Christian colonies.  Protestant, Christian colonies (except for Maryland which was a Catholic colony.  Go figure.).

All right, long story short, the American colonies were religious colonies.  They had established religions.  And they didn’t want any new fangled central government infringing on their established religions.  The so called wall between church and state in the Constitution has nothing to do about separating church from state.  It was all about keeping the federal government out of the states’ religious business. 

To get the states to ratify the Constitution, the new federal government had to agree not to interfere with the religious business of the individual states.  Hence the ‘shall not establish clause’.  Because the states already had established.  Religions.

Catholics didn’t Feel the Love for a Long Time in America

George Washington was perhaps the first to break down the walls between religions.  He had Protestants and Catholics fighting side by side in his army.  And he was trying to get Catholic French Canada to join the American cause.  So he forbade anti-Catholic demonstrations.  To help serve the army.  And his vision of the new nation.  But it took a long time for Protestant British Americans to warm up to Catholics.

When JFK ran for president, many Americans were still not ready for a Catholic president.  And this was a BIG problem for JFK.  People were worried that Rome would be calling the shots in America with a JFK presidency.  Ergo the Houston speech.

My uncle urged that religion be private, removed from politics, because he feared that making faith an arena for public contention would lead American politics into ill-disguised religious warfare, with candidates tempted to use faith to manipulate voters and demean their opponents.

Yes, he urged this.  Because he wanted to be elected president.  Not because he believed in it.  JFK was pragmatic.  He did/said what was necessary.  Whether he believed it or not. 

The Kennedys were Catholic in Name Only

You know, it might have been easier to stress that JFK wasn’t a ‘good’ Catholic.  He was an adulterer.  A good Catholic doesn’t use birth control or abortion.  They only have sex to make babies.  You know, according to Catholicism.  An adulterer, then, is obviously not having sex to make babies.  They’re having sex only for a bit of fun.  And that just ain’t good Catholicism.  According to Catholicism.

Apparently, Palin criticized Nancy Pelosi in her book.  Pelosi, pro-choice (i.e., pro-abortion), is a ‘Catholic’ who believes in something very un-Catholic.

For instance, she criticizes Rep. Nancy Pelosi (Calif.), a Democrat and a faithful Catholic, for “talking the (God) talk but not walking the walk.”

Who is Palin to say what God’s “walk” is? Who anointed her our grand inquisitor?

Palin criticized Teddy Kennedy, too.

Teddy Kennedy believed that his stands were at one with his faith. He did disagree with the Roman Catholic hierarchy at times. But as we have seen, the hierarchy’s positions can change, and in our church, we have an obligation to help bring about those changes.

The Catholics have the Pope.  And he is infallible.  So, unless the Pope reports that God changed his mind on the abortion issue, God hasn’t.  You can still be pro-choice if you want to be.  But not in the Catholic Church.

Abraham Lincoln Based his Morality in Religious Beliefs

Abraham Lincoln was a very religious man during the Civil War.  In fact, he thought that the war was God’s punishment for the sin of slavery.  He observed that both the North and the South prayed to the same God.  And that they both couldn’t be fighting on the side of God.

Lincoln’s original goal was to save the union with or without slavery.  That changed.  Because of his religious beliefs.  When once he said a house divided could not stand, he spoke of two options.  All slave.  Or all free.  His religious beliefs changed those two options.  He saw a nation all free.  Or he saw no nation.

Palin, for her part, argues that “morality itself cannot be sustained without the support of religious beliefs.” That statement amounts to a wholesale attack on countless Americans, and no study or reasonable argument I have seen or heard would support such a blanket condemnation. For a person who claims to admire Lincoln, Palin curiously ignores his injunction that Americans, even those engaged in a Civil War, show “malice toward none, with charity for all.”

Many historians say the Confederate ‘high tide’ of the Civil War was the Battle of Gettysburg.  (Many other historians, myself included, believe the Western Theater was where the war was decided.  But that’s another story for another time).   After three bloody days, General Meade telegraphed Lincoln that the Confederates were repulsed from Union territory.  Lincoln was infuriated (that Meade let a beaten army escape).  For it was all Union territory.

(In Meade’s defense, he was the last general commanding the Army of the Potomac.  General Grant found him one of his more capable general officers.  He put him in the company of General Tecumseh Sherman.  High praise indeed.)

The war would go on for another 2 years.  In all, some 600,000 Americans would die (total North and South).  The Union prevailed.  But the cost was devastating.  There were some who wanted revenge.  They wanted to punish the South.  Not Lincoln.  With the war over, he wanted to bring the South back into the Union as quickly as possible.   There were to be no reprisals.  No trials.  No executions.  He wanted to heal the nation’s wounds.  Put that bloody war behind them.

Thankfully, he imparted this to Generals Grant and Sherman before his assassination.  They followed his orders and granted very generous terms of surrender to Generals Lee and Johnston.  And they in turn helped keep the Civil War from degenerating into a protracted guerrilla war.

When Lincoln said

With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation’s wounds; to care for him who shall have borne the battle, and for his widow and his orphan – to do all which may achieve and cherish a just and lasting peace, among ourselves, and with all nations.

he wasn’t saying ‘judge not lest ye be judged’, he was saying we suffered enough as a nation.  He was saying the war was over.  The healing was to begin.  And that God would help us find our way.

Distorting History to Protect Family

I can understand protecting family.  But when you’re protecting family against presumed misunderstandings of history, one shouldn’t distort history even further to protect your particular version of the facts.

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