The Dictator of Fairness

What is fair is a very subjective thing. It means different things to different people and it’s relative to all sorts of circumstances or situations. Unless you have a king or a dictator, what’s fair is rarely decided by a single individual. That’s why we have laws. Still some people think certain laws are unfair, and that’s why we have lawyers, arbitrators, judges, and juries. They help us interpret the law and decide what is fair. Those of us, who have been around for some time, have come to realize that this world is not always fair. We have wars, sickness, criminals, famine, poverty, terrorists, corruption, and con men operating everywhere in the world, all the time.

This leads us to the question of whether any head of state, including President Obama, has the right or authority in a democracy to decide what is fair for all the people. Politicians seem to believe that they have the job to decide what is fair for their constituents. For example, the other day both the Mayors of Chicago and Boston (who happened to be on the left side of our political spectrum) have decided because of their “authority”, that they will prevent Chick-Fil-A to open anymore stores in their cities because the founder/owner of the company supports the conventional definition of marriage. Is that fair? Why don’t they just not patronize Chick-Fil-A restaurants? That would be fairer! I don’t like Alec Baldwin’s politics, but I still go to his movies because he is a good actor and comedian, however, I have a choice not to and that would be fair. Wouldn’t it?

Our progressive tax system is another way to look at fairness. I think most of us accept the fact that those who can afford to pay more due to their income should, and thus we accept a progressive system. However, at what point does the system become unfair? A new Congressional budget office report shows that the share paid by the top 20% of income earners (those making more than $74k/yr.) pay nearly 70% of all federal taxes collected. The remaining 30% is borne by 80% of the taxpayers. In addition, the progressive trend in this group continues in the unfair direction. This same group paid 55% of all taxes in 1979; by 2009 their share was 68%. Over this same period the top 1% of wage earners paid 14% of all taxes in 1979 and now pays 22%.

By contrast, the bottom 20% paid a paltry 2% of total taxes in 1979 and now pays a minuscule 0.3%. After looking at this data, I have come to the conclusion that President Obama is right, the system isn’t fair, but not because the top 1% pay too little. It’s because they pay too much!

It’s clear from this that fairness is in the eyes of the beholder, and Mr. Obama is not the arbitrator of fairness. In fact, he is one opinion out of 300 million of us. When he told Joe the Plumber in 2008 that, “it’s only fair to spread the wealth around, right?” Who knew that a community organizer from South Chicago would be the sole judge of fairness for the United States?

Reflections on the Massacre in Aurora

My wife, Mary, and I like to go to the movies. We prefer movies that suit our demographic but also go to “pop” movies that reflect the current culture, so we can keep up with what is “in” with the younger generation. Therefore, we purchased tickets in advance to the new The Dark Knight Rises film of the Batman trilogy. After the horrendous tragedy in Aurora, Mary wanted to refund the tickets and was uneasy about going after seeing the TV coverage of the events. I convinced her that these events should not deter us from carrying on our normal life activities.

So we went to this now infamous movie and it turned out to be pretty awful, replete with an incoherent story line, an idiotic message, and the proverbial computer simulated destruction and violence scenes that seem to attract our youth in the adolescent and early college age groups. I agonized that people had to die just over a midnight showing of this trash.

This is a generation raised on video games as the prime source of entertainment and diversion, where the number of people you kill or vehicles you blow up in the shortest amount of time, is a measure of your skill and hand-eye coordination. In my generation, your ability to hit a baseball coming at you at high rate of speed, or to leap in the air and release a basketball and swish the basket, were measures of that same talent. In the process, you could burn some calories, build your developing body, and release the frustrations and pressures of growing up.

It appears to me that the deranged perpetrator of this horrific act is a product of this video game virtual world that eventually becomes reality, even for an apparently scholastically smart young man that is so mentally sick he cannot separate a Batman character from the real world.

It is also disturbing to observe how Hollywood, in the name of money, can put together a film that equates a video game to the real world, and gives actors ridiculous lines, and creates scripts that no normal person would believe has any semblance of reality, and results in many young people flocking to it like they are about to observe some artistically satisfying experience.

You say, “George, don’t get so high and mighty, it’s only entertainment and people don’t really act that way. This is an aberration!” Well, I have seen too many of these events in recent years that are not spontaneous acts of crazy people, but rather diabolical and planned acts of misguided and mentally trouble people who have easy access to weapons and devices of mass killing and destruction. Yes, we will always have evil people who commit horrible acts, but this kind of trend is a direct result of the permissiveness and lower standards in the “entertainment” that we expose to our less mature generations.

The Internet is a marvelous tool for information, communication, and learning, but it is unrestricted and therefore also a source of perversion and pornography, where curious minds can type in a browser and get access to things they cannot process and that provide them with an unseemly view of life and predators. This is a dangerous world in many ways, and technology is wonderful when channeled in the right direction.

As I am writing this, I am watching a prayer ritual in the city of Aurora, CO. My heart goes out to the victims and their families and the many heroes that arose from the depths of this dastardly act. I feel great admiration for the courage and decency of people who will risk their lives to help others in distress. It was illustrated on 9/11 in NYC and in other recent events like this, and gives me great faith in the goodness of our people.

This is the Turning Point

This is the day that made the election of Mitt Romney a certainty! Today was the turning point in this campaign that will ignite and empower the conservative wing of the Republican Party behind Romney, which was previously a concern given his reputation as a moderate. His promise to repeal this travesty as his first act as President will propel him to a convincing win.

We already know that we have the greatest health care system in the world based on quality and access. We know that even those who are uninsured, for whatever reasons, get quality care at the expense of those who can afford insurance. We have now handed this system over to the government and they have concocted a 2,700 page description of how they will run it, and the document is totally incomprehensible even to those professionals who currently are part of it.

We have seen premiums go up anywhere from 10% - 30% in the past year as we prepare for enforcement, compared with a much smaller rise in health care costs in the previous 4 years. Also, we have seen the various “glitches” that have occurred as we try to understand it, such as the violation of our First Amendment rights related to freedom of religion. Once again we have been deceived by this President, who sold this as a mandate when in fact it was a tax increase on all Americans and he did not have the guts to admit it. He left it to the Supreme Court to say it was a tax in order to be constitutional.

What this means to us, the consumer, concerning the impact on quality and accessibility, is virtually unknown. But what we do know is that if you are on Medicare there is now $500B in benefits that you will lose, much of which will go to Medicaid under State control which will be funded by the government for the first year. States than have the option to opt-out if they are concerned about their ability to sustain that program long term. If they do, the cost will go back to federal taxpayers. Also, those who have their health insurance through their employer may lose it and be force to buy it independently at a higher premium if they want the same coverage, should their employer elect to opt-out and pay a fine if it makes economic sense.

This may be a temporary victory for Obama, but it was earned on a technicality, since the President has repeatedly denied it is a tax. He has now violated another promise to the American public and it will unseat him in the final analysis. The unbiased Government Accounting Office has said that the Affordable Healthcare Act is unaffordable, because it will cost at least $2 trillion more than originally estimated and further exacerbate our debt problem. We are now on the path of socialist Europe in healthcare. Let’s make sure we repeal it before it is implemented in 2014 and becomes an entitlement that we can’t get rid of.

I hope it makes you work harder towards unseating this Administration and electing a President and Congress that will undo this fiasco.

Vulture or Crony - Pick Your Poison

This President seems to have a knack for being on the wrong side of the argument on most issues and the fact that his campaign is continually on the defense bears this out. His recent attack on Governor Romney’s so called “vulture-style” of capitalism as opposed to his “crony-style”, as he moonlights as CEO-in-Chief, is a futile attempt to justify the fact that an economy driven by political favoritism is preferable to one run by the pursuit of profit.

Of course, the scientists who work for the Energy Dept (their leader is a Nobel Prize winner) were a bit turned off by this profit thing, and decided to hand Solyndra a $535M loan guarantee even as government accountants said this was a loser. So the White House said let’s have the IRS triple the tax credit for Solyndra customers which would offset the fact that they were not competitive, not recognizing the fact that when you are in a global market this doesn’t work! So 1,100 people get laid off, no severance, no vacation back pay, but there still was room for $370,000 in bonuses for 20 “selected” employees.

In another flagrant case of crony capitalism, let’s look at Obama’s Detroit venture. The campaign is crowing about the success of saving GM and Chrysler. Yes, they are both still operating but they arguably would be at the same place if they went through an orderly bankruptcy like the steel and airline industries did which made them more competitive. Instead, with Obama’s capitalism we hand a total of $83B to both firms and give the UAW union controlling ownership as a prize for causing the bankruptcies in the first place. In turn, the UAW bars 2,500 non-union laid-off workers from transferring to other plants. Wow, this is beginning to look somewhat vulture-like! Also, let’s forget about contract law and screw the unsecured bondholders in favor of the union. All those bonds go belly-up and all those people who invested in GM and Chrysler for their retirement, well, they just have to work a little longer. That is, if they can keep their job.

Also, lets subsidize GM’s electric car and give everyone who buys one a $10,000 tax credit. No wonder GM is doing well, they have a gigantic loan for which they don’t have to make a payment for another two years, and all their money-losing activities are subsidized by you and me. Even Barney Frank can run that company and make it look good, at least, for a while.

OK, now you decide. Do you want Obama crony capitalism, which is driven by political favors, subsidies, mandates, and tax credits or Romney vulture capitalism driven by profit? At least when vulture capitalism fails its private money that suffers, not you or me. I don’t know about you, but I’ll take vulture every time.

When the President Talks - Don't Laugh

I can’t really resist this! The more President Obama talks during this campaign, the more we realize how unequipped he is to be President. At a recent press conference after the NATO meeting in Chicago, he managed to turn it into a campaign opportunity to get at Governor Romney.

He was trying to justify his attack on Bain Capital and rationalized why he thought that Romney’s business experience did not make him more qualified to solve our economic woes. He said that the goal of “profit maximization” by private equity was not the appropriate goal for all the people; that as a President he has to consider the needs of all our citizens not only shareholders. I wish he would tell me when maximizing profits does not benefit all the people and the consumer in the long run. This just illustrates that Mr. Obama knows nothing about economics and that another 4 years of his logic can be ruinous to our economy.

Companies that maximize profits are making products or providing services that consumers are willing to pay a premium price for, therefore, they generate higher margins over their costs. When their competitors can provide the equivalent products or services, demand goes up and prices come down and so do profits. The next step in the cycle then provides the incentive to lower production costs or improve efficiency to maximize profit. Both these actions and events benefit the consumer because they either generate demand, lower prices, or improve productivity. This translates into benefit for the consumer, which is great for the economy.

Consumer welfare is the prime reason for an economy. Skill at profit maximization translates directly into skill at governing an economy. The fact that Obama doesn’t recognize this is astonishing. His failure to understand this simple and basic tenet of economics makes him totally unfit to navigate us out of this morass.

The more profits that companies generate, the more they invest, the more they grow and innovate, the more jobs they generate, the higher salaries they pay, the more their stock appreciates, the more pension funds grow. Tell me again Mr. Obama, when are profits bad for all Americans, what segment of the population suffers when profits are good?

Now that Obama has taken this class warfare, anti-business approach, he is putting himself in a corner that will make him a one-term President. Take heart, Republicans.

A "Bush League President"?

Conservatives take heart! After viewing the mainstream Sunday morning talk shows it’s no wonder why conservatives get so pessimistic about the possible outcome of the 2010 election. However, after watching this weekend’s round of shows it became obvious that the Obama campaign is desperate and even the liberal-bias networks are beginning to feel the pressure. Meet the Press devoted most of their show to the 1st Anniversary of the Osama Bin Laden capture. Now we hear that everyone was opposed to it (Biden, Gates, Clinton, etc.) and our president made the courageous decision to go with the Navy Seals instead of a missile attack on the house, or doing nothing. You have got to be kidding! First of all, most of the people writing stories about that decision have no direct information from any of the participants, and Time magazine’s version of the account is not exactly what I would call objective given their track record.

We know that doing nothing was not an option; since our intelligence was 90% sure he was there. This would eventually leak out and would be suicide for Obama. Second, a missile attack on a town that housed the Pakistan military elite, and might cause peripheral damage, kill civilians, and be considered an attack on Pakistan, is not a particularly the low risk option. It would appear that what was done was a decision that you, me, or our military would have preferred. But now the Obama campaign says that Romney would not have done it! Just another indication of the desperation. Poor vs. rich, black vs. white, employer vs. employee, union vs. business, war against women, anything but focusing on the economy and Obama’s track record of spending us into the brink of insolvency.

Peggy Noonan had an excellent article this weekend in the Wall Street Journal entitled “A Bush League President”, in which she describes this president’s rather boring rhetoric, pandering to his special interests and emphasis on the small things with no vision for the future. She said “he lacks joy; he’s cool but lacks vigor. A lot of what he says could have been said by a president 12-20 years ago”. Noonan believes that Republicans should cheer up. She believes that this administration has no answers and when you add the GSA scandal, Solyandra, and a host of mistakes in the Justice and Energy Departments, day-to-day governance is essentially non-existent. It’s getting re-elected that only matters.

At this time in the election process Ronald Reagan was trailing the incumbent Jimmy Carter by 14 points and he won in a landslide. Romney and Obama are essentially even, and regardless of the power of an incumbent president and all that free exposure, it appears that the Republicans have the momentum, and Obama is desperately seeking a campaign theme, because he can’t run on his record. Take heart, a lot of surprises are ahead.

Obama's Fruitless War on Oil

Our President’s war on the oil industry may play well with his primary constituency but for the informed voter it is an exercise in futility. First of all, the $4 billion in tax breaks, or subsidies, or giveaways, or whatever he calls it, is peanuts compared to the $86M that the government rakes in from the oil and gas industry everyday! Yes, I said every day. He is using this as purely a political campaign ploy to make it appear he is really concerned about gas prices, when the truth is he is not. He believes that higher carbon-based fuel prices are good for his green energy agenda.
The fact is, your children, their children, and your children’s children, will primarily be using oil and gas for decades to come, long after Mr. Obama is history. His excursion into wind, solar, electric cars, etc. is pre-mature and wasting our money. These methods will best be developed by the private sector which can do the research necessary to eventually make them commercially viable. His political cronies are taking money from his national alternative fuel giveaway program with loan guarantees, tax breaks, and subsidies for investments that eventually fail for lack of a market, while they personally skim off the top and the government ends up paying the bill.
The reality is that fossil fuels are a gift from God! Not only are they a relatively cheap and excellent source of energy but also a source of chemical building blocks for most of the products that add value, benefit, and pleasure to our lives. Medicines, plastics, solvents, chemicals, building products, you name it, most anything we touch. The amazing thing is that we have loads of it, and are sitting on oil and gas reserves that will last us hundreds of years, if we have the will or desire to recover them.
Another ridiculous thing about this political ploy is that the $4B in “subsidies” is minor compared with the $35.7B in corporate taxes that the industry paid into the government in 2009 and every year, according to the Federal Energy Information Administration. In fact, the average effective tax rate for oil and gas companies was 41.1% in 2010. Most other manufacturers pay an effective rate of 26.5%. ExxonMobil reported that its profit in the 1st Qtr of 2011 for its retail gasoline operations was 7 cents per gallon. Gasoline taxes range between 26.4 cents per gallon in Alaska to 66.1 cent per gallon in California, and averages 48.1 cents/gal, which says that governments (federal and state) make at least 7 times the profit per gallon than the oil companies!
The oil companies really don’t care about the $4B in tax benefits; however, the fact that it is prejudicial to the industry is the issue. All other companies enjoy the same deductions so why should an industry that supports more than 9 million jobs in the U.S. be singled out because the President says “the oil industry is profitable enough without these tax breaks and that the money should be spent on alternative energy sources”. Since when does he get to decide whether Exxon, Apple, or any company is “making enough”?
Many taxpayers in this country have 401k’s that are invested in ExxonMobil and they like when its stock appreciates and it pays dividends to its stockholders. No single person, particularly one who never had a real job should decide the profitability limits of giant corporations, unless they live in China, Cuba, Russia, or Venezuela.