The EPA is Poisoning People while Fracking is making People’s lives Better

Posted by PITHOCRATES - April 5th, 2014

Week in Review

There have been a lot of movies showing how fracking is polluting our groundwater.  Giving people cancer.  Causing fire to blow out of people’s water faucets.  Makers of movies appear on The Daily Show and The Colbert Report talking about how horrible and dangerous fracking is.  So the evils of fracking are all around us.  But, strangely, these dangers are conspicuous by their absence in one area.  Actual news stories.

We hear about how global warming is getting worse.  We hear example after example of how Republicans hate the poor and women and want to take away health insurance from everyone.  We are bombarded with news about how the rich aren’t paying their fair share and how Republicans are trying to buy elections.  But we don’t see reporters filming fire shooting out of a water faucet.  And we don’t see the CDC in fracking areas responding to soaring cancer rates.  Or fracking fields being turned into superfund cleanup sites.

It’s odd because when Malaysian Airways Flight 370 went missing 4 weeks ago CNN covered the missing airplane 24/7.  Even though they had nothing to report.  They just brought in experts (and a physic) and theorized about what might have happened.  The other news channels covered the non-news with nearly the same fervor as CNN.  So you would think that if fracking was causing fire to shoot out of water faucets and was giving everyone cancer they would be covering that 24/7.  For most of these news channels are liberal.  And liberals hate fracking.  But they don’t go to North Dakota to report the abject misery fracking has brought them.  Probably because they don’t want to show the economic boom going on in North Dakota.  Where people are going to for jobs.  Where the unemployment rate there (2.6% as of February 2014) is the lowest in the nation.  Perhaps that’s why they don’t report the abject misery fracking is causing in North Dakota.  Because there is none.

So if the media isn’t in North Dakota is the government?  Is the EPA documenting the abject misery fracking is causing the good people of North Dakota?  No.  Instead, they’re purposely trying to give people cancer (see What’s more dangerous to your health than fracking? The EPA, apparently by Ashe Schow posted 4/2/2014 on the Washington Examiner).

An EPA inspector general’s report found that the agency did obtain approval to conduct five “human research studies” exposing “81 human study subjects to” toxic pollutants including diesel exhaust…

So the EPA asked people to expose themselves to dangerous pollutants — some at levels 50 times greater than what is safe — but didn’t tell them about the dangers.

Why would the EPA, which supposedly cares so much about the public’s health, do this, especially to people who already had health problems?

To justify more regulations and funding, of course.

They are desperately trying to kill people by exposing them to something they can later call a toxic pollutant.  So they can “justify more regulations and funding.”  And they will tell the people they kill, “Fear not, you shall not have died in vain.  Your horrible death will bring about the greatest kind of good there is.  It will enable us to expand the size of the federal government.  Allowing it to reach further into your lives.  Well, not yours per se because you’ll be dead.  Thanks to us.  But other people will know the joy of having the federal government intruding further into their private lives.  Until one day there are no more private lives.”

This is what the federal government thinks is good.  Not a 2.6% unemployment rate.  Like they have in North Dakota.  Thanks to fracking.  Which the people living there don’t seem to mind.  As the people moving there don’t seem to mind.  Interestingly, the blue states with higher concentrations of liberals aren’t enjoying such economic prosperity.   The unemployment rate in New York is 6.8%.  In Illinois it’s 8.7%.  And in California it’s 8%.  So they’re doing something right in North Dakota.  And something very wrong in New York, Illinois and California.  Perhaps committing too many resources on liberal policies.  Instead of creating an economic climate that will give people the thing they want most.  A job.

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Cash Flow

Posted by PITHOCRATES - March 24th, 2014

Economics 101

New Complex and Confusing Regulatory Policies require Additional Accounting and Legal Fees to Comply

There have been demonstrations  to raise the minimum wage.  President Obama even called for Congress to raise the federal minimum wage to $10.10 an hour.  He also wants employers to pay salaried people overtime.  There have been demands for paid family leave (paying people for not working).  Unions want to organize businesses.  To get employers to pay union wages.  Provide union health care packages.  And union pensions.  Obamacare has made costly health insurance mandatory for all employees working 30 hours or more a week.

Environmental regulations have increased energy costs for businesses.  Sexual harassment training, safety training, on-the-job training (even people leaving college have to be trained before they are useful to many employers), etc., raise costs for businesses.  New financial reporting requirements require additional accounting fees to sort through.  New complex and confusing regulatory policies require additional legal fees to sort through them and comply.

With each payroll an employer has to pay state unemployment tax.  Federal unemployment tax.  Social Security tax (half of it withheld from each employee’s paycheck and half out of their pocket).  Medicare tax.  And workers’ compensation insurance.  Then there’s health insurance.  Vehicle insurance.  Sales tax.  Use tax.  Real property tax.  Personal property tax.  Licenses.  Fees.  Dues.  Office supplies.  Utilities.  Postage.  High speed Internet.  Tech support to thwart Internet attacks.  Coffee.  Snow removal.  Landscaping.  Etc.  And, of course, the labor, material, equipment and direct expenses used to produce sales.

The Problem with Guaranteed Work Hours is that there is no such thing as Guaranteed Sales

The worst economic recovery since that following the Great Depression has created a dearth of full-time jobs.  In large part due to Obamacare.  As some employers struggling in the worst economic recovery since that following the Great Depression can’t afford to offer their full-time employees health insurance.  So they’re not hiring full-time employees.  And are pushing full-time employees to part-time.  Because they can’t afford to add anymore overhead costs.  Which is hurting a lot of people who are having their own problems trying to make ends meet in the worst economic recovery since that following the Great Depression.  Especially part-time workers.

Now there is a new push by those on the left to make employers give a 21-day notice for work schedules for part time and ‘on call’ workers.  And to guarantee them at least 20 hours a week.  Things that are just impossible to do in many small retail businesses.  As anyone who has ever worked in a small retail business can attest to.  You can schedule people to week 3 weeks in advance but what do you do when they don’t show up for work?  Which happens.  A lot.  Especially when the weather is nice.  Or on a Saturday or Sunday morning.  As some people party so much on Friday and Saturday night that they are just too hung over to go to work.  Normally you call someone else to take their shift.  Then reschedule the rest of the week.  So you don’t give too many hours to the person who filled in.  In part to keep them under 30 hours to avoid the Obamacare penalty.  But also because the other workers will get mad if that person gets more hours than they did.

The problem with guaranteed work hours is that there is no such thing as guaranteed sales.  If you schedule 5 workers 3 weeks in advance and a blizzard paralyzes the city you may not have 5 workers worth of sales.  Because people are staying home.  And if no one is coming through your doors you’re not going to want to pay 5 people to stand around and do nothing.  For with no sales where is the money going to come from to pay these workers?  Either out of the business owner’s personal bank account.  Or they will have to borrow money.  It is easy to say we should guarantee workers a minimum number of work hours.  But should a business owner have to lose money so they can?  For contrary to popular belief, business owners are not all billionaires with money to burn.  Instead, they are people losing sleep over something called cash flow.

Cash Flow is everything to a Small Business Owner because it takes Cash to pay all of their Bills

To understand cash flow imagine a large bucket full of holes.  You pour water in it and it leaks right out.  That water leaking out is expenses.  The cost of doing business (see all of those costs above).  A business owner has to keep that bucket from running out of water.  And there is only one way to do it.  By pouring new water into the bucket to replace the water leaking out.  That new water is sales revenue.  What customers pay them for their products and/or services.  For a business to remain in business they must keep water in that bucket.  For if it runs out of water they can’t pay all of their expenses.  They’ll become insolvent.  And may have no choice but to file bankruptcy.  At which point they’ll have to get a job working for someone else.

Cash flow is everything to a small business owner.  Because it takes cash to pay all of their bills.  Payroll, insurance, taxes, etc.  None of which they can NOT pay.  For if they do NOT pay these bills their employees will quit.  Their insurers will cancel their policies.  And the taxman will pay them a visit.  Which will be very, very unpleasant.  So small business owners have to make sure that at least the same amount of water is going into the bucket that is draining out of the bucket to pay their bills.  And they have to make sure more water is entering the bucket than is draining out of the bucket to pay themselves.  And to grow their business.

This is why business owners don’t want to hire full-time people now.  Because full-time people require a lot of cash (wages/salary, payroll taxes, insurances, training, etc.).  They’re nervous.  For they don’t know what next will come out of the Obama administration that will require additional cash.  For every time they want to make life better for the workers (a higher minimum wage, overtime for salaried employees, guaranteed hours, etc.) it takes more cash.  Which comes from sales.  And if sales are down future cash flow into the business will also be down.  Leaving less available for all of those holes in the bucket.  So they guard their cash closely.  And are very wary of incurring any new cash obligations.  Lest they run out of cash.  And have to file bankruptcy.  Which is why they lose sleep over cash flow.  Especially now during the worst economic recovery since that following the Great Depression.

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The High Cost of Employing People has some replacing People with Technology

Posted by PITHOCRATES - March 8th, 2014

Week in Review

Self-serve checkouts at stores are reducing the number of cashiers in the economy.  As bar codes and credit cards make it easier to live in a world that isn’t served by people.  You can even pay with cash at these self-serve checkouts.  And people love them.  Why?  Shorter lines.  You can have 10 or more self-checkout lanes managed by one employee to fix problems and approve alcohol sales.  Whereas 10 checkout lanes with cashiers require 10 cashiers.  And these days full-time employees are expensive.  Especially in low-margin industries.  Like retail sales and grocery stores.

So stores don’t like to have a lot of checkout lanes with no lines with some cashiers getting paid for working part of the time.  They’d rather have 3 checkout lanes with long lines with 3 cashiers working all of the time.  Or one cashier overlooking 10 self-serve checkout lanes.  Because fewer people cost less.  Making it easier to survive in a world of thin margins.  And this concept may soon be coming to a restaurant near you (see Pizza Hut table lets you touch-screen your toppings by Amanda Kooser posted 3/4/2014 on cnet).

Touch-screen tables already exist. Pizza Hut restaurants already exist. Put the two together and you end up with a touch-screen table concept for ordering pizzas using your fingers…

The interactive table idea isn’t far-fetched at all. The technology to make it happen is already available. If this were to be rolled out, however, it would require a pretty hefty investment for the hardware, which would need to be rugged enough to stand up to countless greasy fingerprints, soda spills, and other abuse.

People love their gadgets.  There’re apps for everything these days.  To make our lives more efficient.  To speed things up in our lives.  In large part by removing those slow and time-consuming people.  This is the brave new world we live in.  A world where we even use that technology to communicate with each other.  Instead of meeting face-to-face.  It is clear we’re addicted to technology.  And losing our desire to interface with people.

Which is why it’s sad that costly government regulations (such as Obamacare) and higher taxes are squeezing margins so much for businesses that they prefer to invest in technology instead of hiring people.  Because with technology you don’t need to pay for unemployment insurance.  Workers’ compensation insurance.  Health insurance.  Mandated paid-leave.  Holidays.  Vacation days.  Drug testing.  Sexual harassment training.  Sexual harassment lawsuits.  A higher minimum wage.  Etc.  All of those things our liberal Democrats have burden our businesses with to make it better for employees.  But the costs are so great to comply with these regulations and taxes that businesses are now replacing employees with technology wherever they can.  Just so they can remain in business.

What’s next?  Restaurants where you sit down and select something from your touch-screen table?  And a pre-cooked dinner (appetizer, entrée and dessert) is warmed in an automated kitchen?  Only to be delivered to your table by an automated conveyance system?  Eliminating cooks, waitresses and even food-runners?  If you keep raising the cost of employing people this may be our brave new world in our not so distant future.  If you doubt this just think of the last time you went to the post office.  Did your banking face-to-face with a bank teller.  Dropped your film off to be developed into photographs.  Used a newspaper to find a movie to see.

Our love of technology, our impatience to wait for anything and the high cost of hiring people (especially low-skilled workers) has taken us far down the road to that people-less future.  You can’t stop the march of technology.  But you can stop making it so costly to hire people.  If we focused on this we wouldn’t have to worry about a people-less future.  Something we should think about the next time we enter a voting booth.

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President Obama’s 2014 State of the Union Address

Posted by PITHOCRATES - January 30th, 2014

Politics 101

Democrats offered Enthusiastic Applause for Unsound Policy Proposals that have no Basis in Reality

President Obama’s 2014 State of the Union address was a little longer than an hour.  But if you didn’t look at a clock it felt a lot longer.  For it was the same tripe you hear all the time from this administration.  And the political left.  It was full of misleading statements.  Inaccurate facts and figures.  And some lies.  The usual stuff you expect from the liberal left.  But what was really disturbing was the enthusiastic applause for some really unsound policy proposals that have no basis in reality.  Showing either how clueless these enthusiastic Democrats are about economics, business, national security, etc.  Or how amoral they are in their quest for power.  As they judge and implement policy not by how it will improve the lives of Americans.  But how it will improve their lives in government.

Some Big Reasons why Businesses export Jobs are Taxes, Regulations and Labor Costs

If there was ever an example of what people not to have in power this state of the union theater was it.  Following are excerpts from President Obama’s speech (see FULL TRANSCRIPT: Obama’s 2014 State of the Union address posted 1/28/2014 on The Washington Post).  Comments and analysis follow each excerpt.

And here are the results of your efforts: the lowest unemployment rate in over five years; a rebounding housing market — (applause) — a manufacturing sector that’s adding jobs for the first time since the 1990s — (applause) — more oil produced — more oil produced at home than we buy from the rest of the world, the first time that’s happened in nearly twenty years — (applause) — our deficits cut by more than half; and for the first time — (applause) — for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.

The total number of people who left the civilian labor force since President Obama took office is 11,301,000 (see The BLS Employment Situation Summary for December 2013 posted 1/13/2014 on PITHOCRATES).  Which means the unemployment rate is meaningless.  The only reason why it’s falling is that the BLS doesn’t count unemployed people who gave up looking for jobs that just aren’t there.  Oil production on private land may be up.  While overall oil consumption is down because of the Great Recession that just won’t end.  Which is helping to keep gas prices down.  Unemployed people just don’t have the money to buy gas.  So they don’t.  Greatly reducing the demand for gas.  Thus reducing gas prices and oil imports.  George W. Bush’s last deficit was $498.37 billion.  President Obama’s first deficit was $1,539.22 billion.  And it was over $1 trillion in 2010, 2011 and 2012.  It fell to $680 billion in 2013 thanks to the sequester.  But the deficit is larger now than when President Obama assumed office.  The only reduction in the deficit is a reduction in the amount he increased it.

Now, as president, I’m committed to making Washington work better, and rebuilding the trust of the people who sent us here.

Really?  You’re committed to rebuilding the trust of the people?  Mr. “If you like your health insurance you can keep your health insurance.  Period.”  Otherwise known as the lie of the year.  You’re going to rebuild the trust of the people?  Good luck with that.  What with your pants on fire and all.

Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren’t working at all.

Well, finally something Republicans can agree with the president about.  Yes, his economic policies have benefitted Wall Street.  While hurting Main Street.  Finally some bipartisan agreement.

So let’s make that decision easier for more companies. Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home. (Cheers, applause.)

There are only a few reasons why businesses export jobs.  And the big three are taxes, regulations and labor costs.  The Obama administration wants to raise taxes.  They’ve increased regulatory costs.  And they support costly union labor.  So everything they stand for encourages businesses to export jobs.

But — but I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible. (Applause.)

So how’s that approval for the Keystone XL pipeline coming along?  That thing you’ve been studying since 2010?  Which by the laws of arithmetic is approximately 4 years ago.  Is this slashing bureaucracy and streamlining the permitting process?  At this rate it would probably be quicker to elect a Republican president in 2016.  You know, someone who, when it comes to economic activity, walks it while the Democrats only talk it.

We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs. And my administration’s launched two hubs for high-tech manufacturing in Raleigh, North Carolina, and Youngstown, Ohio, where we’ve connected businesses to research universities that can help America lead the world in advanced technologies.

Universities are in the grant business.  They want as many grants as they can get to help bring money into the university.  And to do so they will study anything the government wants them to.  No matter how wasteful it is.  While some of the biggest high-tech companies started in garages.  Apple, Google, Hewlett Packard and Microsoft.  To name a few.  Yes, there is a lot of university-driven research.  But the big innovation is more entrepreneurial.  Created by people thinking up new stuff no one thought of yet.  Which is the last thing you want government involved in.  That same government that can’t build a website using 1990s technology.

Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other. And when 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create even more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment and open new markets to new goods stamped “Made in the USA.” (Applause.)

You want to help entrepreneurs and small business?  Get rid of Obamacare.  And slash tax rates.  This will provide incentive.  And allow them to reinvest more of their earnings to grow their business.  Allowing them to create those jobs.

Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The “all the above” energy strategy I announced a few years ago is working, and today America is closer to energy independence than we have been in decades. (Applause.)

‘All of the above’ as long as it isn’t coal, oil or nuclear.  But if it’s solar power and wind power they are committed to giving more tax dollars to their friends and bundlers in the green energy industry.

Meanwhile, my administration will keep working with the industry to sustain production and jobs growth while strengthening protection of our air, our water, our communities. And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations. (Applause.)

You can’t sustain production and jobs growth by strengthening protection of our air, water and pristine federal lands.  That’s just more regulatory costs.  And raising energy costs by not allowing any oil or natural gas production on those pristine federal lands.  Raising energy costs by restricting supply.  Which raises business costs.  In addition to those new regulatory costs.

Every four minutes another American home or business goes solar, every panel pounded into place by a worker whose job can’t be outsourced. Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it so we can invest more in fuels of the future that do. (Cheers, applause.)

That says it all.  Fossil fuels don’t need subsidies because their costs are affordable.  While solar (and wind power) are so costly that they are unaffordable.  Unless government heavily subsidizes them.

But the debate is settled. Climate change is a fact. (Applause.) And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did. (Cheers, applause.)

There is no such thing as settled science.  Only science that has yet to be disproved.  Besides, once upon a time glaciers stretched down from the poles to near the equator.  And then receded back to where they are now.  All without any manmade carbon in the atmosphere to warm the planet.  As we were still simple hunter and gatherers then.  So if the glaciers moved more before there was manmade global warming they’ll move again regardless of what man is doing to warm the planet.

Finally, if we’re serious about economic growth, it is time to heed the call of business leaders, labor leaders, faith leaders, law enforcement — and fix our broken immigration system. (Cheers, applause.) Republicans and Democrats in the Senate have acted, and I know that members of both parties in the House want to do the same. Independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades. And for good reason: When people come here to fulfill their dreams — to study, invent, contribute to our culture — they make our country a more attractive place for businesses to locate and create jobs for everybody. So let’s get immigration reform done this year. (Cheers, applause.) Let’s get it done. It’s time.

Funny how that argument doesn’t apply to birth control and abortion.  The reason we need to “fix our broken immigration system.”  For if we were having babies at the rate when government created the welfare state we could pay for that welfare state today.  But thanks to the Sixties, birth control, abortion and feminism women stopped having babies.  Which is fine if a woman doesn’t want to.  But the progressives designed the welfare state based on them being baby machines.  Creating a greater number of taxpayers with each generation.  So more people pay into the welfare state than collect from it.  The way it must be for a Ponzi scheme to work.

That’s why I’ve been asking CEOs to give more long-term unemployed workers a fair shot at new jobs, a new chance to support their families. And in fact, this week many will come to the White House to make that commitment real.

When you raise the cost of labor (union labor, Obamacare, etc.) businesses tend to look at automating production instead of hiring that costly labor.  They may not be able to do anything about the higher regulatory costs but they can do something about higher labor costs.  Use more machines than people.  If you want CEOs to create new jobs stop making labor so costly.  And you can start with getting rid of Obamacare.

Of course, it’s not enough to train today’s workforce. We also have to prepare tomorrow’s workforce, by guaranteeing every child access to a world-class education. (Applause.)…

Five years ago we set out to change the odds for all our kids. We worked with lenders to reform student loans, and today more young people are earning college degrees than ever before. Race to the Top, with the help of governors from both parties, has helped states raise expectations and performance. Teachers and principals in schools from Tennessee to Washington, D.C., are making big strides in preparing students with the skills for the new economy — problem solving, critical thinking, science, technology, engineering, math.

Yes, more kids are going to college than ever before.  But they’re going there to have fun.  And to facilitate their fun many are getting easy, worthless degrees in the social sciences and humanities.  Costly degrees that universities sold them promising them future riches.  Enriching the university.  While impoverishing their graduates.  For a high-tech company has no use for these degrees.  Which is why a lot of these people end up in jobs they didn’t need that costly degree to do.  And our high-tech companies are using the visa program to get foreigners who have the skills they want.  Problem solving, critical thinking, science, technology, engineering and math.

It requires everything from more challenging curriculums and more demanding parents to better support for teachers and new ways to measure how well our kids think, not how well they can fill in a bubble on a test. But it is worth it — and it is working.

If you want kids to do better we need to champion marriage and family more.  And they should embrace religion a little more.  Instead of encouraging our young women to use birth control and abortion to avoid marriage and family.  And pulling every last vestige of religion from our lives.  Kids growing up in a household with a mother and a father who go to church do far better on average than kids growing up in a single-parent household and don’t go to church (see Strong families steeped in Conservative Values and Traditions do Well in America posted 1/11/2014 on PITHOCRATES).

Research shows that one of the best investments we can make in a child’s life is high-quality early education. (Applause.) Last year, I asked this Congress to help states make high-quality pre-K available to every 4-year-old. And as a parent as well as a president, I repeat that request tonight.

Actually, research doesn’t show that.  Yet they keep saying that.  For it’s like that line in the musical Evita, “Get them while they’re young, Evita.  Get them while they’re young.”  The sooner they can take them away from their parents the sooner they can start turning them into Democrat voters.  Such as teaching them to blame their parents for the manmade global warming that is killing the polar bears as they have no ice to rest on while eating their baby seals.

You know, today, women make up about half our workforce, but they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.

Women deserve equal pay for equal work. (Cheers, applause.)

Actually, it’s closer to 91 cents (see The White House’s use of data on the gender wage gap by Glenn Kessler posted 6/5/2012 on The Washington Post).  And the small difference is not due to discrimination but personal choice.  When you look at aggregate wages women will make less than men.  Because more women are teachers (with 3 month off without pay) than men are.  Some women work fewer hours at work to spend more time with their children. While men tend to work more overtime.  Men also work the more dangerous and higher paying jobs.  And are more likely to belong to a union.  When you compare childless, single men and women with a college degree some women are actually earning more than men.  Figures don’t lie but liars figure.  And for the contortions the Obama administration did here The Washington Post’s The Fact Checker gave the president one Pinocchio.

Now, women hold a majority of lower-wage jobs, but they’re not the only ones stifled by stagnant wages. Americans understand that some people will earn more money than others, and we don’t resent those who, by virtue of their efforts, achieve incredible success. That’s what America’s all about. But Americans overwhelmingly agree that no one who works full-time should ever have to raise a family in poverty. (Applause.)

In the year since I asked this Congress to raise the minimum wage, five states have passed laws to raise theirs.

You’re not going to have a lot of upward mobility when you pay people more to remain in the jobs they hate.  All the talk about making college more affordable and bringing employers and community colleges together to help give people the skills they need to fill the jobs employers have is all for nothing if they just pay people more for doing an entry-level job.

Let’s do more to help Americans save for retirement. Today most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why tomorrow I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a — it’s a new savings bond that encourages folks to build a nest egg.

Once upon a time people opened a savings account at their local bank and they saved to buy a house.  And they saved for their retirement.  That’s how people saved when they didn’t have a pension or a 401(k).  They can’t do that today because of the Federal Reserve destroying the banking industry by keeping interest rates at zero.  If the Fed stopped printing money and let investment capital come from our savings like they did before the Keynesians gave us the Federal Reserve people would be saving like we once did.  And we’d stop having Great Depressions, stagflation and Great Recessions.  Created by their prolonging the growth side of the business cycle.  Which raises prices higher than they normally would go.  Making the contraction side of the business cycle that much more painful.  As those prices have a much longer way to fall than they normally would.  Thanks to the Fed’s meddling with interest rates.

MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little or nothing for middle-class Americans, offer every American access to an automatic IRA on the job, so they can save at work just like everybody in this chamber can.

You know why they want these MyRAs?  Because they can’t stand people saving money.  They love Social Security.  Because they can borrow from the Social Security Trust Fund.  Which is what they will do with these MyRAs.  They will take this money and spend it.  Filling the MyRA Trust Fund with a bunch of IOUs.  Just like they do with the Social Security Trust Fund.  And then provide a retirement benefit like Social Security.  That is too small to live on.  Whereas if we saved the money ourselves our retirement nest-egg will be much larger.  And it will provide for our retirement.  Unlike Social Security.

And since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations. (Applause.)

It was Bill Clinton that set the stage for the subprime mortgage crisis with his Policy Statement on Discrimination in Lending (see Bill Clinton created the subprime mortgage crisis with his Policy Statement on Discrimination in Lending posted 11/6/2011 on PITHOCRATES).  Using the heavy hand of government to get lenders to qualify the unqualified.  Then the Fed’s artificially low interest rates were the bait for the trap.  Enticing people to borrow huge sums of money because those interest rates were just too good to pass up.  Even if they weren’t planning to buy a house to begin with. The subprime mortgage crisis and the resulting Great Recession were government made.  If we want to prevent the taxpayers from footing the bill for another housing crisis we need to get the Keynesians out of government.

Already, because of the Affordable Care Act, more than 3 million Americans under age 26 have gained coverage under their parents’ plans. (Applause.)

More than 9 million Americans have signed up for private health insurance or Medicaid coverage — 9 million. (Applause.)

The Washington Post gave this lie three Pinocchios (see Warning: Ignore claims that 3.9 million people signed up for Medicaid because of Obamacare by Glenn Kessler posted 1/16/2014 on The Washington Post).  For they’re counting some 3.9 million who would have signed up anyway for Medicaid regardless of the Affordable Care Act.  Also, the government was counting people who put a health care plan into their shopping cart as if they signed up for it.  Which many couldn’t.  As they haven’t programmed the back end of the health care website yet to actually accept payment or to pass that information on to the insurers.

And here’s another number: zero. Because of this law, no American, none, zero, can ever again be dropped or denied coverage for a pre-existing condition like asthma or back pain or cancer. (Cheers, applause.) No woman can ever be charged more just because she’s a woman. (Cheers, applause.) And we did all this while adding years to Medicare’s finances, keeping Medicare premiums flat and lowering prescription costs for millions of seniors.

That’s right.  Women with reproductive systems that men don’t have won’t pay more for their health insurance than men pay for theirs.  How can they do that?  Simple.  They just are charging men more.  To cover the cost of a reproductive system they don’t have.

Citizenship means standing up for the lives that gun violence steals from us each day. I have seen the courage of parents, students, pastors, and police officers all over this country who say “we are not afraid,” and I intend to keep trying, with or without Congress, to help stop more tragedies from visiting innocent Americans in our movie theaters and our shopping malls, or schools like Sandy Hook. (Applause.)

If you take away guns from law-abiding gun owners that won’t keep dangerous people with mental health issues that want to harm people out of our movie theaters, our shopping malls or schools like Sandy Hook.  For there are other ways to harm people.  Just look at the Boston Marathon bombers.  The people he’s talking about not only had mental health issues but they were also smart.  Many were even college students.  Who probably could think of other ways to hurt people.  And you just can’t take away everything they might use to harm people.  But you can place these people somewhere where they can’t harm anyone.

You see, in a world of complex threats, our security, our leadership depends on all elements of our power — including strong and principled diplomacy. American diplomacy has rallied more than 50 countries to prevent nuclear materials from falling into the wrong hands, and allowed us to reduce our own reliance on Cold War stockpiles.

Since President Obama assumed office he did nothing to support the Green Revolution in Iran.  Which kept the hard-line Islamists in power there.  He gave Egypt to the Muslim Brotherhood by telling Hosni Mubarak that he had to go.  Removing the stable anchor of the Middle East.  And moved Egypt closer to Iran.  (The Egyptian people eventually rose up to overthrow the oppressive Muslim Brotherhood).  He went to war in Libya and helped to overthrow Colonel Muammar Qaddafi.  Who at the time was a quasi ally in the War on Terror.  After the Iraq invasion frightened him into believing he may be next.  President Obama was thanked for his Libyan war by al Qaeda with 4 dead Americans in Benghazi on the anniversary of 9/11.  He waited too long to act in the Syrian civil war.  Which only brought al Qaeda into the conflict.  He failed to attain a status of forces agreement in Iraq.  So he pulled all U.S. forces out of Iraq which has only invited al Qaeda in.  And it looks like this will be repeated in Afghanistan.  He blamed George W. Bush’s wars as recruitment tools for al Qaeda.  While his extensive drone use is doing the same thing.  Especially in Yemen.  The hotbed of al-Qaeda in the Arabian Peninsula.  All that his diplomacy and leadership has done was to make the world a more dangerous place.

American diplomacy, backed by the threat of force, is why Syria’s chemical weapons are being eliminated. (Applause.) And we will continue to work with the international community to usher in the future the Syrian people deserve — a future free of dictatorship, terror and fear.

His diplomacy with Bashar al-Assad in Syria only gave his oppressive regime legitimacy in the civil war he was raging against his people.  Making it easier for Assad to kill Syrians with conventional arms while he gives up a token amount of his chemical weapons.  While also making Russia who brokered the deal the dominate player in the region.

And it is American diplomacy, backed by pressure, that has halted the progress of Iran’s nuclear program — and rolled back parts of that program — for the very first time in a decade. As we gather here tonight, Iran has begun to eliminate its stockpile of higher levels of enriched uranium.

It’s not installing advanced centrifuges. Unprecedented inspections help the world verify every day that Iran is not building a bomb. And with our allies and partners, we’re engaged in negotiations to see if we can peacefully achieve a goal we all share: preventing Iran from obtaining a nuclear weapon. (Applause.)

All Iran is doing is pausing their program.  And chemically altering some of their enriched uranium to meet the requirements of this diplomatic deal.  But this chemical process is reversible.  And they will reverse it once they get what they want.  This deal makes the world no safer.  If anything it makes it more dangerous.  For it does not diminish the Iranian nuclear program in the least.  But gives them more time to work on it as they prop up their regime with much needed supplies thanks to a relaxation of the sanctions against them.

These negotiations will be difficult; they may not succeed. We are clear-eyed about Iran’s support for terrorist organizations like Hezbollah, which threaten our allies; and we’re clear about the mistrust between our nations, mistrust that cannot be wished away. But these negotiations don’t rely on trust; any long-term deal we agree to must be based on verifiable action that convinces us and the international community that Iran is not building a nuclear bomb. If John F. Kennedy and Ronald Reagan could negotiate with the Soviet Union, then surely a strong and confident America can negotiate with less powerful adversaries today. (Applause.)

The sanctions that we put in place helped make this opportunity possible. But let me be clear: if this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it. (Applause.) For the sake of our national security, we must give diplomacy a chance to succeed.

The Soviet Union never attacked U.S. soil.  And there was a reason they didn’t.  They were rational.  And knew they would lose a great deal in a war with America.  Especially a nuclear one.  Which is why they never used their nuclear weapons.  But Iran giving a nuclear weapon to a shadowy group that is not a state?  With little to lose in using a nuclear weapon?  If it’s not a nuclear missile there will be no way in knowing where the nuclear bomb came from.  We can have our suspicions that Iran made it and gave it to someone.  But do we nuke Iran over that?  What if there are more nukes in the hands of al Qaeda, Hezbollah, al-Qaeda in the Arabian Peninsula, etc.?  You could nuke Iran back to the Stone Age but it won’t stop those others being used.  The president insists this will not happen as Iran signed an agreement.  The only problem with that is the Iranians are liars.  And they call the United States the Great Satan.   These two facts suggest that replacing those sanctions with a promise not to build nuclear bombs was probably not a wise trade.

But for more than two hundred years, we have put those things aside and placed our collective shoulder to the wheel of progress: to create and build and expand the possibilities of individual achievement; to free other nations from tyranny and fear; to promote justice and fairness and equality under the law, so that the words set to paper by our founders are made real for every citizen.

Use our collective shoulder to expand individual achievement?  The president believes in the former more than the latter.  He didn’t help the Iranians get free from tyranny when he had the chance.  And he turned the Egyptian people over to tyranny.  The Muslim Brotherhood.  Who were oppressing women and Christians.  Fairness and equality under the law?  Ask those Tea Party groups who were targeted by the IRS about fairness and equality under the law.  The Constitution?  That document of negative rights?  The left hates it.  And insists it’s a living document that can evolve over time to suit the needs of an expanding government.  So they can do exactly what the Founding Fathers wrote the Constitution to prevent from happening.

The Left endorses Unsound Policy Proposals with no Basis in Reality to improve their Chances of Winning Elections

The country is more conservative than liberal (see Liberal Self-Identification Edges Up to New High in 2013 by Jeffrey M. Jones posted 1/10/2014 on Gallup).  Which is why liberals want state-funded pre-K to start indoctrinating our children as soon as possible.  To get them away from their parents so they can begin the process of turning them into Democrat voters.  It’s why kids are getting worthless social science and humanities degrees.  To further indoctrinate them.  Because their views are minority views.  So they need to play loose with the facts.  And lie.  Which is easier to do with indoctrinated kids than educated adults.  You’ll even hear Democrats talk about lowering the voting age.  To get a few more years of voting out of these kids before they grow old and wise.  And begin voting conservative.  So they do what they can to dumb down education.  Lie.  Cheat.  And buy as many votes as they can by giving away free stuff.  And the thing they really want to give away is citizenship for illegal aliens.  Who they are sure will be forever grateful.  And show it by voting Democrat.

This explains the enthusiastic applause for unsound policy proposals that have no basis in reality.  For the left is not interested in improving the lives of Americans.  They just want to improve their chances of winning elections.

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Invoking the Nuclear Option to Legislate more Easily from the Bench

Posted by PITHOCRATES - November 21st, 2013

Politics 101

Liberals pack the Judiciary with Liberal Judges to Write Law they can’t Write in Congress

Harry Reid and the Democrats went nuclear today.  Changing the Senate rules for the first time since the Founding.  To increase the power of those in the majority.  So they can run roughshod over those in the minority.  Thanks to the poor launch of Obamacare.  And the sinking realization that because the Democrats have so angered the people in the process of implementing the Affordable Care Act (the president and Democrats lied and people are losing their health insurance and doctors) that Democrats up for election in 2014 are going to be thrown out with extreme prejudice.  Turning the Senate over to the Republicans.  Hence the need to go nuclear now.

It’s no secret the left legislates from the bench.  Using judges to write legislation that Congress won’t.  Such as making abortion legal via Roe v. Wade.  That was a law made not by the law-makers.  The legislature.  Congress.  But by liberal judges on the bench.  Who are to interpret law.  Not write it.  But in Roe v. Wade, as in so many other laws that came to be that Congress refused to write, judges wrote law in their legal rulings.  Allowing the liberal minority to make their will the law of the land.

America is a center-right country.  Which means there are more conservatives than liberals.  In fact, only about 21% of the people identify themselves as liberal while about 40% of the people identify themselves as conservative (see Conservatives Remain the Largest Ideological Group in U.S. by Lydia Saad posted 1/12/2012 on Gallup).  Yet this 21% has implemented a lot of their liberal agenda.  How?  Liberal judges.  The key to changing the country against the will of the people.  When you can’t get the people’s representatives to write your laws you turn to the judiciary.  Which is why Harry Reid went nuclear today.  So they can pack the judiciary with liberal judges.  Before they lose the Senate.  So they will be able to write law from the bench that they won’t be able to do after they lose the Senate.

The Filibuster is the Last Line of Defense for the Minority

The filibuster is a stalling tactic.  A tool the minority can use to prevent the majority from running roughshod over them.  To protect minority rights.  For majority rule can be dangerous.  The majority could write law that restricts the rights of the minority.  Don’t like the internal combustion engine?  Well, the majority could write legislation for a costly carbon tax.  Of course, the Democrats don’t have a majority in the House.  But they do have one in the Senate.  Which confirms the president’s judicial appointments.  So if the president stacks the courts with liberal judges the left can get their carbon tax.  By writing regulations for a carbon tax instead of legislation.  And having the courts make that regulation law.  With the left saying that they had that right under their environmental regulatory powers.  And if you don’t like that sue us.

This is why the left wants to stack the courts with liberals.  Who may or may not be actual judges.  For they don’t want judges to interpret law.  They want them to write law that Congress won’t.  If the right sues the government for exceeding their constitutional authority and the case ends up in a court packed with liberal judges the right will lose.  And the unconstitutional regulation will become law.  Despite the Republican-controlled House.

The right has been holding up some exceptionally liberal Obama appointees to the bench.  Frustrating the left.  Because they can’t move their liberal agenda through the Republican held House of Representatives.  While their plan B—stacking the courts—was being blocked by the Republicans because the Democrats did not have 60 Senators in the Senate.  For if they did they could invoke cloture.  End debate.  And force a vote.  Which they would, of course, win.  Making the filibuster the last line of defense for the minority.  For if the judicial appointment only appeals to the 21% of the population the minority can filibuster until they withdraw the appointment.  And appoint someone that doesn’t appeal ONLY to 21% of the population.

When the Democrats were in the Minority they said Opposition to the Republicans was Patriotic

Back when the Republicans held the Senate during the George W. Bush administration the Democrats were holding up Bush appointees.  The Republicans broached the subject of the nuclear option.  And the left attacked Republicans.  Calling it a power grab.  An affront to the Founding Fathers.  The worst thing that could happen to our republic.  Harry Reid, Nancy Pelosi, Hillary Clinton, Barack Obama and other Democrats spoke on the record opposing the nuclear option.  But that was then.  This is now.  After the rollout of Obamacare.  And the very likely possibility that the Democrats will lose control of the Senate in 2014.  Now Harry Reid, Nancy Pelosi, Hillary Clinton, Barack Obama, et al are all for the nuclear option.

Because the Republicans are so partisan the left had no choice.  They simply wouldn’t rubber-stamp the liberal agenda.  So they had no choice but to grab power.  To run roughshod over those in the minority in Congress.  So the minority in the nation can impose their rule on the majority.  When the Democrats were in the minority in Congress they said opposition to the Republicans was patriotic.  That it made the republic healthier.  Locking the Congress into gridlock because they couldn’t get their way was fulfilling the vision of the Founding Fathers.  By preventing one-party rule.

But all that changes when they are in the majority.  And those in the 21% are fine with it.  Those in the mainstream media.  Hollywood.  Late-night television.  Even the audiences of the late-night television shows.  Who are all for debate when they are out of power.  But are fine with one-party rule when they are in power.  Because they believe that their side is the only side that matters.  Which is decidedly NOT what the Founding Fathers envisioned.  The left believes everyone should think like they think.  And if they don’t there should be laws to compel people to act like they (the left) think they should act.  Even if it requires violating the Constitution.  Like Obamacare forces people to buy something against their will for the first time in the history of the republic.  But expecting people to pay for their own birth control instead of forcing others to pay for it?  Why, that’s an affront to the Founding Fathers.  Making any law-violating power grab acceptable.  As long as it’s the left doing the law-violating and the power-grabbing.  For the left believe the end justifies the means.  Just like the Nazis did.  The communists.  And other tyrannical regimes have throughout time.

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A Poll of Entrepreneurs shows President Obama as one of the most Anti-Middle Class Presidents Ever

Posted by PITHOCRATES - October 19th, 2013

Week in Review

This is the worst economic recovery since that following the Great Depression.  And it’s not George W. Bush’s fault.  Despite what he did to increase the size of government.  No.  The anemic recovery is due to President Obama.  And his anti-business policies (see Not open for business posted 10/12/2013 on The Economist).

America is not producing as many start-ups as it did a decade ago and those that have been created are providing fewer jobs—less than five each, compared with an historical average of about seven. Start-ups created 2.7m new jobs in the 2012 financial year compared with 4.7m in 1999.

The financial crisis clearly bears a lot of the blame for reducing America’s stock of capital and animal spirits. But it is only a partial explanation. The decline in the number of firms going public began in 2001. And these problems are continuing to delay the recovery despite the federal government pump-priming the economy and keeping interest rates near zero.

So there you have it.  Federal government pump-priming and near zero interest rates do NOT stimulate economic activity.  As these are the bedrock of Keynesian economics then Keynesian Economics does NOT work.  This is a problem for America.  Because President Obama and the liberal left are dyed-in-the-wool Keynesians.  And why are they Keynesian extremists despite the historical record of Keynesian failure?  Because Keynesian economics empowers Big Government.  That is, Keynesian economics favors those in power.  Not the people.

Three years ago John Dearie and Courtney Geduldig, who both worked for the Financial Services Forum, which represents America’s biggest financial institutions, came up with an inspired idea. Why not ask entrepreneurs themselves what is going wrong? Both big multinationals and established small firms have lots of representatives in Washington, DC. Entrepreneurs are too busy inventing their companies to spend time lobbying. The pair organised meetings and conducted lots of polls. Across a vast and diverse country they heard the same message from everyone they asked: entrepreneurship is in a parlous state. And everyone pointed to the same problems. The result is a new book, “Where the Jobs Are”, which should be dropped onto the heads of America’s squabbling politicians.

The first worry is over human capital. Entrepreneurs repeatedly complain that they cannot hire the right people because universities are failing to keep pace with a fast-changing job market. Small firms lack the resources to provide training and are consequently making do with fewer people working longer hours.

The problem with our educational system is that it teaches our young to become Democrat voters.  Not prepare them for a high-tech economy.  Our public schools teach our children about the evils and unfairness of capitalism while lauding the goodness and fairness of government.  Turning them from their parents who are selfishly destroying the planet with their global warming to the government.  Who is expanding further and further into the private sector to save the polar bears.  And when our kids get to college our system of higher education takes it up a notch.  Attacking the history and the culture that made America the greatest country in the world.  So our college graduates can tell you every bad thing America has ever done but they lack the math and science skills that our high-tech economy so desperately needs.  Forcing businesses to turn to immigrants for those skills.

Immigrants are responsible for launching about half the country’s most successful start-ups and producing a striking number of its patents. But the authorities do their best to drive them out of the country once they have been educated or to break their spirits on the visa treadmill…

The second problem is the complexity and cost of government. Entrepreneurs the world over complain about regulations and taxes. But America’s have lots to gripe about: in 2009-11 the Obama administration issued 106 new regulations each expected to have an economic impact of at least $100m a year. Besides this business founders suffer from the constant political uncertainty generated by a combination of ambitious new legislation, such as Obamacare, and ideological trench warfare. The Vanguard Group, an asset-management firm, calculates that since 2011 Washington’s bickering politicians have imposed, in effect, a $261 billion uncertainty tax that has cost up to 1m new jobs.

Any administration that raises taxes and issues 106 new regulations is no friend of small business, jobs or the middle class.  Therefore President Obama is no friend of small business, jobs or the middle class.  No matter how much he says that he is.  If you want to know why this is the worst economic recovery since that following the Great Depression it’s because of the Keynesian in the White House.  And the Keynesians in Congress.  That are waging a war on small business, jobs and the middle class.

The financial crisis has worsened the third problem: raising money. Over 70% of new businesses are launched using savings or assets—particularly houses. The crisis reduced the average net wealth of American households by about 40%. Business founders repeatedly mention other problems too. Venture capitalists are increasingly risk-averse. The Sarbanes-Oxley act imposes additional costs of $1m a year on public companies. Investors no longer bother with “growth stocks” because there is more money to be made in making lots of big trades in established firms. The dramatic decline in the number of firms going public since 2001 is worrying because, over the past four decades, more than 90% of jobs created by start-ups came into being after they went public…

Fixing the small-business problem should be at the top of the political agenda. Some 22m workers are either unemployed or underemployed, or have given up looking for work. If it continues to generate new jobs at its current anaemic rate, America will not return to pre-recession employment levels until 2020. The country is lucky that entrepreneurship is part of its DNA. It seems perverse to put unnecessary obstacles in the path of people whose ambition is to found businesses and hire new workers.

Yes, we should put fixing the small-business problem at the top of the political agenda.  Which the Republicans recently tried by defunding Obamacare.  And reining in out of control spending.  But as this would be a check on the growth of government the Democrats shut down the government before letting that happen.  For they will have their taxes, regulations and spending.  And the middle class be damned.  For theirs is a government of the ruling elite, by the ruling elite and for the ruling elite.

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President Obama goes out of his way to Raise the Price of Gasoline

Posted by PITHOCRATES - September 14th, 2013

Week in Review

Why is gasoline so expensive?  Because of President Obama.  He has shut down drilling wherever he can.  Reducing the American supply of oil (and increasing its cost) to refine into gasoline.  And he has been depreciating the dollar with his quantitative easing.  The Federal Reserve’s stimulus that is doing nothing to stimulate the economy.  But because oil is priced in U.S. dollars per barrel this devaluation of the dollar results in higher oil prices.  Because it takes more of a devalued dollar to pay for the same amount of oil those dollars once bought.  And then there’s this (see Valero Asks Obama Administration to Waive Ethanol Mandate by Mario Parker posted 9/10/2013 on Bloomberg).

Valero Energy Corp. (VLO), the world’s largest independent refining company, called on the Obama administration to waive the country’s biofuel target immediately, saying the cost to reach it has skyrocketed…

Refiners are required by law to use 13.8 billion gallons of ethanol in 2013. Renewable Identification Numbers are attached to each gallon of ethanol to track compliance. Once the additive is blended into gasoline, refiners can retain the certificate to show compliance or trade it to another party. RINs prices have risen more than eight-fold so far this year.

RINs have increased because of falling gasoline demand and higher biofuel consumption targets, Klesse said in the letter.

Gasoline demand will drop 0.5 percent next year, according to a forecast today from the Energy Information Administration, the Energy Department’s statistical arm. The Renewable Fuels Standard, set in 2007, calls for 14.4 billion gallons of ethanol to be used in 2014, up 4.3 percent from this year. The target increased 4.5 percent this year from 13.2 billion in 2012…

Ethanol is typically blended in a formula of as much as 10 percent in gasoline. While the EPA has approved blends of 15 percent, refiners haven’t adopted the higher concentration, citing engine damage concerns.

They only blend ethanol with gas so the percentage of ethanol in the gas doesn’t exceed 10-15%.  Because putting more into the gas could damage the engine.  So for every 10 gallons of gasoline they only need one gallon of ethanol.  For if they bought more than one gallon per every 10 gallons of gas they would have more ethanol than they could use.  With a fixed amount of ethanol required (14.4 billion gallons) instead of a percentage these refineries have a problem.  Because they need to buy 600,000 gallons more of ethanol in 2014 (a 4.3% increase over 2013) while gasoline demand will fall 0.5% in 2014.  Because of President Obama’s horrible economy.  Which means they will be blending less ethanol with gasoline in 2014.  Despite having to buy 600,000 gallons more.

They can’t use this extra ethanol.  And they sure don’t want to buy it just so they can store it someplace.  So instead they want to buy these Renewable Identification Numbers (RINs).  That certifies a gallon of ethanol has been blended with gasoline as required.  Even if it has not.  Which becomes a pretty handy thing to have (these RINs).  As you can avoid buying ethanol that you can’t use to meet the new higher requirement.  For people are buying less gas because of President Obama’s horrible economy.

These government regulations are greatly distorting the free market.  Increasing the costs of the refineries.  Who pass it on to the consumer in higher gas prices.  Which hurts Americans because they have to put more of their paycheck into their gas tank instead of using it on food or clothing for their children.  Pulling more money out of the economy.  Which helps to make President Obama’s economy so bad.  So why doesn’t he lower the number of gallons required when the number exceeds the amount the refineries need to blend with gasoline?  Because he doesn’t care about the cost of gasoline.  The higher the better for him as fewer people will be driving.  Which will create a greater demand for mass transportation.  Which will create more union jobs filled by people who will vote Democrat.  Also, the higher the price of gasoline the greater the tax revenue the governments collect at the state and federal level.  Which is what’s really important to governments.  Not food and clothing for children.

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Political Promises, Lies and the Advancement of an Political Agenda

Posted by PITHOCRATES - April 11th, 2013

Politics 101

Government Helps the Poor by Keeping them Poor so they Remain Dependent on Government

Politicians lie.  Everyone knows this.  It’s a running joke in comedy movies and television programs.  And a common plotline in dramas.  Because politicians will say and promise anything to get elected.  Which is their primary and only objective.  Winning an election.  And the needs and wants of the people are secondary.  Things they can easily brush aside once ascending to elected office.  Because they don’t really care about the people.  At least, they don’t care for them as much as they care for themselves.

And once they’re in office the promises keep coming.  To help them win the next election.  And to keep the size of government growing.  As well as the amount of taxes they collect.  Which gives them wealth.  And power.  The ultimate goal in running for elected office.  That’s why they sneer at the concept of limited government.  And tax cuts.  Because the less government we have the less wealth and power they enjoy.  For if we really are the self-reliant people of the Founding what need do we have for an expanding government?

Of course the answer to that question is we would have little need for an expanding government.  For we can earn our pay and take care of ourselves.  And our families.  The way Americans did before Woodrow Wilson, FDR, LBJ and Barack Obama.  Men who do not like that independent spirit.  And will use a host of arguments to condemn it.  It’s not fair being their favorite.  Because who can argue against being fair?  So everything they do is about leveling the playing field.  To make sure the rich pay their fair share.  And to help the little guy.  By making him dependent on government.  And perpetually poor.  So they will remain dependent on government.  So they can keep taking care of these poor.

Government rarely chooses Tax-Cutting for Stimulus as Cutting Taxes doesn’t Increase the Size of Government

LBJ declared a War on Poverty.  Justifying a huge increase in federal spending starting the Sixties.  And after spending untold billions to eradicate poverty what did we get?  Not much.  We still have poverty.  And the government spends more with each passing year to alleviate the suffering of the impoverished.  But it never goes away.  Poverty.  And the government nurtures it.  Protects it.  By making it more attractive to stay on a meager government assistance instead of going to work.  And building a career.  Doing something you love.  While leaving your mark on the world.  Instead we get ever increasing federal spending.  And a permanent underclass the government can be savior to.  You see they don’t want to win the War on Poverty.  Because if they win it then we won’t need them anymore.

The greatest killer of poverty is a job.  People gainfully employed can provide themselves food, shelter, etc.  They can have clean drinking water.  And heat in the winter.  It’s only the unemployed who look at food, shelter and heat as sought after luxuries.  For people with jobs are those self-reliant people.  Who provide tax dollars instead of consuming them.  This is no secret.  So it would follow that the best thing to do during a recession is to make it as easy as possible to create jobs.  You do that by lowering taxes.  And cutting regulations.  Not by raising taxes.  Or adding regulatory costs.  And you sure don’t pass a quasi national health care plan like Obamacare.

Also, history has shown that Keynesian stimulus spending does not pull economies out of recession.  If it did Ronald Reagan would not have won in a landslide against Jimmy Carter.  And Europe would not be in a sovereign debt crisis.  Keynesians know this.  But they can’t pass up the opportunity to increase federal spending.  So they promise lower unemployment rates and higher GDP numbers if only Congress does the right thing and “pass this stimulus bill.”  And when it doesn’t work they have two predictable explanations.  They didn’t spend enough.  And that even they didn’t realize how bad their predecessor destroyed the economy.  Calling the recession du jour the worst since the Great Depression.  Covering their lies about ending the recession with statements like “things would have been worse if we didn’t act.”  And though they didn’t reduce unemployment they’ll make incredulous claims like “we saved 800,000 jobs with this bold action.”  Predictable.  For their primary objective isn’t to end any recession.  It is to exploit the crisis to advance their agenda.  Basically, increasing the size of government.  And we know this because there are two ways to put more money into people’s pockets to stimulate the economy.  You can cut taxes so they have more money to spend.  Or you can tax, borrow and print money so the government can spend more.  Very rarely do they ever choose the tax-cutting route.  Because the tax-cutting way works against their agenda of increasing the size of government.

Politicians Promise and Lie to the Young and Naïve to Advance a Political Agenda

And speaking of Obamacare President Obama promised the American people that if you liked your private health insurance plan you could keep it.  And the cost of that health care plan would go down.  Because they had a massive convoluted health care plan that was going to give health care to everyone.  Increase the quality of health care from what it is now.  And it was going to be less expensive.  Which was a lie.  Because you can’t have more of anything for less money.  Life just doesn’t work that way.  As they implement Obamacare its taxes and regulations are forcing business owners to push people from full-time to part-time.  So they aren’t forced into providing mandated health insurance plans.  Some even have no choice but to drop their health care coverage for all of their employees.  Because their health care costs went up.  Not down.  And they’re predicting doctor shortages.  Because the only cost savings they can get is by forcing people to work for less in the health care industry.  So they’re leaving.  Under Obamacare there will be higher costs, longer wait times, rationing, denial of services and lower quality.  Everything they promised wouldn’t happen.  And everything critics said would happen.  So are the proponents of Obamacare just so utterly ignorant?  Or were they lying through their teeth because they just wanted to take over one-sixth of the U.S. economy?  With an agenda to increase the size of government one has to go with lying through their teeth.

President Obama blamed George W. Bush for the world hating America.  When he became president he no longer projected American power.  Instead he wanted to talk to our enemies.  To negotiate with them.  He even dropped words from official usage.  Like the War on Terror.  To make our enemies like us.  Because people like people who aren’t bullies.  And that was what George W. Bush was.  A bully.  So President Obama warmed up to the Islamic world.  So the Islamic world would warm up to us.  Even announcing withdrawals from Iraq and Afghanistan early in his administration.  Ending the war on you-know-what.  So he could use that money for Obamacare.  Promising the American people the world would be a safer place.  Even passing on an opportunity to help overthrow the government in Iran.  America’s greatest enemy.  Instead, he helped people overthrow a couple of our allies.  Hosni Mubarak in Egypt.  And Muammar Gaddafi in Libya.  Who since the Iraq war had been an ally in the War on Terror.  And the thanks for this new Islam-friendly American policy?  They killed our ambassador in Benghazi along with three other Americans.  Al Qaeda is now in Libya.  And the Muslim Brotherhood is in Egypt.  And it looks like al Qaeda is now in Syria.  Another enemy of the United States the people were trying to overthrow that President Obama chose not to help.  The Middle East may burn now.  Making the world a more dangerous place.  But the president got what he wanted.  All that money we were spending overseas they can now spend at home.  Rewarding friends and campaign contributors.  As well as buying votes.

And now they are calling for tighter gun control measures.  Greater background checks.  And a national gun register.  To protect the kids they say.  So another Newtown massacre doesn’t happen.  Even though they themselves will admit that every measure they proposed thus far would not have stopped the shooter at Newton.  Aurora.  Tucson.  Virginia Tech.  Or any other shooting where some mentally unsound person killed random strangers.  These people didn’t kill because guns made them kill.  They killed because they were sick.  And we didn’t protect society by institutionalizing these people.  The only thing we could have done to stop them once they started shooting we didn’t do.  Having someone armed in these ‘gun-free’ zones.  For these sick people shoot unarmed innocents until someone with a gun arrives on the scene to shoot back.  So arming teachers may save children from another Newtown.  While everything they proposed thus far will do absolutely nothing to prevent a future Newton.  Yet they press for further restrictions on gun ownership.  And if it won’t make children safer one wonders why they want to exploit these shootings to advance their anti-gun-ownership agenda.  As they are interested in acquiring greater wealth and power one would have to assume it’s the power.  Perhaps making them feel more all-powerful if they can actually nullify the Second Amendment.

So politicians promise and lie to advance an agenda.  Which is why the young typically vote for those who promise and lie so much.  The liberal Democrats.  As the young are naïve and easy to lie to.  While older people tend to vote Republican.  For they are older.  They have heard all of the promises and lies before.  And they’re wiser.  Which comes with age.  Which is why the liberal Democrats get them while they’re young. For it’s hard to keep them once they gain knowledge and experience.

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Disposable Income, Federal Taxes, Federal Debt and our Spending Problem 1940-2012

Posted by PITHOCRATES - February 27th, 2013

History 101

Excessive Federal Taxes reduce Disposable Income which reduces New Economic Activity

The key to economic growth is disposable income.  The more disposable income people have the more economic activity they will create.  So the key to a healthy economy is maximizing disposable income.  And we can do that in a few ways.  First of all we need jobs.  And we can create more jobs with fewer costly regulations.  And lower taxes.  If we make it less costly to hire people businesses will hire more people.  Which they aren’t doing right now.  Primarily because of Obamacare.  Which is so costly to businesses that they’ve frozen new hiring.  And are pushing some full time employees to part-time.  As well as investing in capital equipment wherever they can.  Replacing people with machines.  Because machines don’t incur Obamacare costs, taxes or penalties.

For those lucky few who haven’t been replaced by machines they can earn some disposable income.  Depending on their skill level.  A low-skilled person who never graduated from high school cannot earn as much disposable income as a thoracic surgeon.  So if you want stuff.  And you want to stimulate the economy.  Become a thoracic surgeon.  Or something else that takes years of college and years of on the job training.  And hundreds of thousands of dollars of student loan debt.

But earning a good income isn’t enough.  Because from that income we must pay an enormous amount of taxes.  Greatly reducing our disposable income.  Some of the taxes we can see.  Such as those itemized on our paycheck stubs.  Federal and state income taxes.  And Social Security and Medicare taxes.  But there are a lot of taxes we don’t see.  Such as excise taxes on the things we buy from gasoline to liquor to cigarettes.  And then there are property taxes.  Sales taxes.  And the list goes on.  All of which take a bite out of our disposable income.  Siphoning away real economic activity over the years as the federal government added new taxes.  And increased the tax rates of the old taxes.

The Federal Government came up with the Withholding Tax to Prevent an all out Tax Revolt

When the Founding Fathers ratified the Constitution there weren’t many taxes.  Mostly custom duties and tariffs.  Which was enough to fund the limited government they created.  But ever since the Founding some in the federal government have been trying to destroy what the Founding Fathers created.  And replace it with what they fought so long to get rid of.  A very large government that reaches into all parts of our life.  Like a monarchy.  Where those in the federal government belong to a new aristocracy.  Who are more equal than everyone else.  And live a far, far better life.  If you don’t believe this just check out property values around Washington DC.

With the American Civil War killing a generation of fathers a lot of boys grew up with over protective and doting mothers.  When these boys came of age and entered politics they weren’t as manly as their father’s generation was.  Because they grew up without fathers to teach them to hunt and fight.  Instead, they grew up with mothers who taught them to be more nurturing.  Giving us the progressive movement.  Woodrow Wilson gave us a permanent federal income tax.  And tried to expand the federal government to be more of a monarchy with a powerful executive that can govern against the will of Congress.  And the people.  After World War I we returned to normalcy.  And Warren Harding and Calvin Coolidge gave us the Roaring Twenties.  And the modern world.  Then Herbert Hoover and other progressives caused the Great Depression.  With a crisis too good to let go to waste FDR picked up where Woodrow Wilson left off.  Exploding the size and reach of the federal government.  And the great surge in federal taxes began.  Over the years they added more and more.  Such as these (see Table 2.1—RECEIPTS BY SOURCE: 1934–2017).

Income Payroll Excise and Other Taxes Key

Some of these you are no doubt familiar with.  The biggest bite is the individual income tax.  Something most of us have received our W-2s for and have just prepared our federal income tax returns.  Or are about to.  Dreading it.  Unless we’re getting a refund.  Those who owe money will probably take their sweet time.  As they hate writing a check to the federal government.  Which is why the federal government came up with the withholding tax.  For if people had to write a check for the full amount of their federal income taxes each year there would be an all out tax revolt.  And probably a lot more imprisonment for people not paying their federal taxes.  For no one has that kind of money sitting around.  Which is why the government takes it from you before you can spend it yourself.

Excessive Federal Spending requires ever Higher Taxation and ever more Borrowing to Feed

The big debate in Washington now is the sequester.  And the automatic cuts of the sequester.  Which were proposed by President Obama.  Which Congress wrote into a bill.  And the president signed into law.  In hopes that Republicans and Democrats would come together and find a way to reduce the record high deficit.  The Republicans want to do the obvious.  Cut the spending that caused the record deficit.  Democrats want to do what they always want to do.  Raise taxes.  Saying that we don’t have a spending problem.  That the four years of trillion dollar deficits isn’t because we’re spending too much.  It’s because we’re not taxing enough to pay for that spending.   That rich people aren’t paying their fair share.  But that’s not what you see when you look at the numbers.

Income Payroll Excise and Other Taxes

These taxes are identified in the above table.  As government spending grew so did taxes.  In particular personal income taxes which provide the majority of federal tax revenues.  Which exploded after LBJ’s Great Society added a lot of new federal spending.  And after President Nixon decoupled the dollar from gold in 1971.  Unleashing inflation.  Note that personal income taxes are greater than corporate income taxes.  That’s because there are more people than corporations.  For example, Siemens AG is an international corporation that employs about 360,000 people.  Who all pay personal income taxes.  After personal income taxes comes old-age and survivors insurance.  Otherwise known as Social Security.  And all of these taxes have continued to grow.  Taking a bigger and bigger bite out of disposable incomes.  Putting a drag on new economic activity.  Note that the only falls in federal tax revenue were due to two Democrat-caused recessions.  Bill Clinton’s dot-com bubble burst causing a bad recession in 2000.  And his subprime mortgage lending bubble he started with his Policy Statement on Discrimination in Lending burst causing a bad recession in 2007.  Apart from these, though, the pattern has been more spending.  Not less.  Which would suggest that we do have a spending problem.

Also included on this chart is the federal debt.  Note how it spiked up during World War II.  Then settled down at a constant rate for about 30 years.  Until LBJ’s Great Society spending increased federal spending.  But these massive new taxes weren’t enough.  For that’s when the big deficits started.  Adding on to a growing federal debt.  With the only decline in this growth coming during President Clinton’s presidency.  President Clinton’s dot-com boom (before the bubble burst), the peace dividend from President Reagan winning the Cold War, the Asian financial crisis and Japan’s Lost Decade all helped the American economy shower the treasury with cash.  Putting the nation into a surplus for a year or so.  But that didn’t last.  As federal spending continued to outpace tax revenue.  Culminating with President Obama’s trillion dollar deficits.  With federal tax revenue at the highest since President Bush’s record high just before Clinton’s subprime mortgage bubble burst into the subprime mortgage crisis.  And the Great Recession.

So yes, Virginia, we have a spending problem.  A spending that requires ever higher taxation and ever more borrowing to feed.  Taking an ever bigger chunk out of disposable incomes.  Leaving less and less for new economic growth.  Explaining why the economy has never recovered from the Great Recession.  For President Obama’s policies only increase taxes and the cost of doing business.  And do nothing to create disposable income.

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Disposable Income and GDP Growth

Posted by PITHOCRATES - February 25th, 2013

Economics 101

With less Disposable Income there will be less New Economic Activity Created

The key to economic growth is disposable income.  For when we live from paycheck to paycheck economic growth is flat.  It’s when we have disposable income that we can spend money beyond our basic needs.  Such as on a vacation.  A new car.  A television.  New windows, carpeting, appliances, furniture, etc.  Movies, ball games, dinners, the theater, etc.  New clothes, jewelry, shoes, accessories, etc.  Tennis rackets, skis, baseball gloves, hiking boots, fishing gear, etc.  Smart phones, MP3 players, iPads, laptops, etc.  Jet skis, boats, motorcycles, mountain bikes, etc.  Radio-controlled cars/helicopters/planes, Game Boys, Xboxes, Wiis, PlayStations, multiplayer role-playing computer games, etc.

Buying these things creates a lot of economic activity.  But we can’t buy any of these things unless we have disposable income.  So the only way to increase economic activity is to increase disposable income.  Which means there is a direct relationship between GDP and disposable income.

There’s been a lot of talk about real incomes being flat.  Even falling during the Obama presidency.  Which is bad.  For if median incomes are falling people will have less disposable income.  And with less disposable income they will be buying less of all those things that create new economic activity.  The things we enjoy.  That make our lives more fun.  More enjoyable.  And less miserable.  Those things that increase our standard of living.  And the quality of life.  So a flat and falling median income reduces our standard of living.  And our quality of life.  As we live from paycheck to paycheck.  Making barely enough to meet our living expenses.  And sometimes not even making enough for that.  Having to turn to government assistance to make up the difference.

We add Disposable Income and Discounted Government Spending to get the Net Add to GDP

The key to disposable income and GDP growth is jobs.  And the more jobs the better.  So job creation is very important.  Which means we need a business-friendly environment.  With a minimum of costly regulations.  And low taxes.  To encourage employers to hire more people.  So more people have jobs.  Those who do use their income to meet their living expenses.  And use their disposable income to create new economic activity.  The more disposable income they have the more new economic activity they can create.  So what’s the best way to increase their disposable income?  The same way we encourage employers to hire more people.  Low taxes.  We can illustrate this in the following table which is based on assumptions and approximations.

GDP Discounted Required and Average Calculations

The effective tax rate a person pays includes all taxes he or she will pay.  Property tax, sales tax, gas tax, telecommunication tax, liquor tax, cigarette tax, import tariff, dog license tax, fishing license tax, luxury tax, watercraft registration tax, vehicle sales tax, state income tax, federal income tax, Social Security tax, Medicare tax, capital gains tax, etc.   Median income and living expenses are constants.  We subtract taxes from median income to get net income.  Subtracting living expenses from net income gives us disposable income.  We then calculate these numbers for additional effective tax rates that are multiples of 4%.

We add disposable income and stimulus together to get the net add to GDP.  What we call ‘stimulus’ is a percentage of all those taxes reentering the economy through government spending.  In our example 80% of those taxes find their way back into the economy.  While 20% is lost through waste and inefficiency.  This stimulus can pay for a government worker, a government contractor or a direct government benefit that helps people meet their living expenses.  This redistributed income is money that the income earner would have spent had it not been taxed away.  Instead, someone else will spend it.  But not as efficiently.  As it must first pass through an inefficient government bureaucracy.

Giving People Benefits does not Replace Disposable Income

We extend the table out to an effective tax rate of 52% and graph the results.  We see that as the effective tax rate increases disposable income falls.  As does GDP growth.  Showing that increasing taxation reduces GDP.  That said, average GDP growth has been approximately 3% during the latter half of the 20th Century.  Despite increasing taxation reducing GDP.  So how do we reconcile a falling GDP and a 3% GDP growth?  With aggressive increases in productivity.  And investments in capital equipment.  Allowing business to produce more with less.  Resulting in a rising real GDP growth rate.  As shown in the following graph.

GDP Discounted Required and Average

In order to maintain a 3% growth rate in GDP we need a rising real GDP growth rate (in one America doing very well despite government) to offset the falling discounted GDP growth rate due to falling disposable income (in another America not doing well because of government).  When we add the real and the discounted GDP growth rates together we get the constant 3% of average GDP growth.  Which is why businesses have never been more profitable despite stagnant economic growth during President Obama’s time in office.  They’re doing well because they’re producing more with less by exchanging people for new capital equipment.  Hence the higher profitability along with chronic high unemployment.  With more unemployed workers than available jobs there is a downward pressure on median income.  That combined with higher personal effective taxes has greatly reduced disposable income.  And new economic growth.  Which subtracts a lot away from that real GDP growth.

Giving people benefits does not replace disposable income.  For government assistance helps people meet basic living expenses.  While having a job offers the ability to earn disposable income.  Which is key for new economic growth.  If we bring the effective tax rate down the discounted GDP growth graph will flatten out.  As this happens the gains in productivity would remain.  Leaving real GDP growth unchanged.  With real GDP growth unchanged and discounted GDP growth decreasing the average annual GDP growth would therefore increase.  And approach real GDP growth.  With double digit GDP growth tax revenues would soar even at lower effective tax rates.  Requiring less borrowing.  Which would give us smaller deficits.  While reducing the growth in the federal debt.  Perhaps even reducing the debt.  Solving all of our financial problems.  By simply cutting taxes.  And the spending those taxes fund.

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