Winning Minds to Conservatism

Paul Rahe at ricochet.com says Barack Obama has given conservatives "a perfect recipe for a conservative resurgence." Pivoting off a reader's dispirited comment, Rahe argues Obama is forcing Americans to rethink their relationship with their government:

Consider what Barack Obama has done. He has unmasked the tyrannical potential of the administrative entitlements state, and he has once again demonstrated the defects inherent in Keynesian economics. He promised us that the stimulus would bring unemployment down dramatically. He acknowledged that if it did not do so he would be unelectable. He attacked religious liberty, attempting through a court case to interfere with a Lutheran church's ability to choose its own religious teachers as it saw fit, and threatening to make Roman Catholics, the Roman Catholic Church, and Christians and Jews who regard abortion as murder complicit with that act by forcing them to pay for abortifacients. He jammed through Congress a bill designed to undermine the health insurance industry and to institute healthcare rationing. He brought our government to the edge of fiscal insolvency. At a time of rising energy costs, he blocked the building of a pipeline that would bring petroleum from our northern neighbor and friend Canada to the United States and reduce our dependence on the Middle East.

In short, Barack Obama is forcing the American people to rethink the relationship that connects them with their government. Where many of them once saw a helping hand, they now see a threat to their livelihood, their personal and religious liberty, and their well-being more generally. 

Moreover, it is "demonstrably false," Rahe asserts, to argue (as Reader does) that the country is less conservative than it was in 1980 when Reagan won a landslide. Massive conservative national and state wins in the 2010 midterm elections dispel this argument.

...you underestimate our compatriots. They know that our culture is in severe decline, that the family is disintegrating, that our schools indoctrinate our children with secular theology -- and they know whom to blame. All that it would take to turn the present discontents into a realignment would be for a forthright woman or man able to point out the connection linking cultural decline, family disintegration, and political correctness in the schools -- not to mention massive unemployment and fiscal insolvency -- with the administrative entitlements state and the doctrine that it is the responsibility of the government and not the individual citizen to make provision for his well-being. People rally to strength and confidence, not to weakness and timidity. 

Rahe challenges Reader (and conservatives generally) not to "go wobbly" but to "take the bull by the horns:"

One must indict those intent on creating “a new despotism” in which “a small group" is concentrating "into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives.”

A good little spine-stiffening read.

Myth of "Increasing" Economic Inequality

"The growth in [economic] inequality in America is illusory, a mirage," writes Diana Furchtgott-Roth, a Manhattan Senior Fellow and former chief economist for the U.S. Dept of Labor. "[B]y some measures economic inequality is no greater now than it was in the 1980s."

Studies that do find income inequality often rely on "pretax income" only, while ignoring government program payments, food stamps, rent supplements, Medicaid funded health care, subsidized school lunches, and other social programs.

Furchtgott-Roth evaluates spending instead. Why?

Spending is vital because it is the principal determinant of standard of living.

So what does the analysis of spending reveal?

• Government data on individual spending patterns show that the ratio of spending between the top and bottom 20 percent of the income distribution, measured on a per person basis, was essentially unchanged between 1985 and 2010. In 1985 people in the top quintile had spending that was 2.5 times that of people in the bottom quintile. By 2010, this ratio was 2.4.
• Spending per person by income quintile shows how individuals are doing over time both in absolute terms and relative to those in other income groups. These data can be calculated from the government's Consumer Expenditure Survey. An examination of these data from 1985 through 2010 shows that inequality has declined rather than increased.
• The average annual spending for a household in the lowest quintile in 2010 was $12,325 per person. In contrast, the average spending for a household in the top quintile was $29,022 per person.
• On a per-person basis, Labor Department data show that in 2010, households in the top fifth of the income distribution spent 2.4 times the amount spent by the bottom quintile. That was about the same as 25 years ago. There is no increase in inequality. In addition, the overall level of inequality is remarkably small. A person moving from the bottom quintile to the top quintile can expect to increase spending by only 140 percent.
• But compared with 1985, the big winners are the lowest-income group, whose expenditures per capital increased by 6.5 percent in constant dollars. In contrast, spending per person in the top income quintile increased by 1.5 percent. This shows that even though the income spread from top to bottom might be larger, those at the bottom are doing better than they did 25 years ago because they have greater spending power, after adjusting for inflation. This is important for the bottom quintile—economically, socially, psychologically.

"Much 'inequality' in the United States is a problem in search of reality," concludes the author, "caused by writers who know a certain storyline will sell to an audience anxiously looking for additional reasons to have the government inject itself even more into the lives of ordinary Americans."

Hats Off to Kirsten Powers!

"The truth hurts," writes liberal Kirsten Powers in her second article condemning the professional left for its selective—she calls it 'fake'—war against media misogyny following the Sandra Fluke-Rush Limbaugh kerfuffle.

Members of the professional left reacted with outrage to my column this week calling them out for their fake war against media misogyny. Instead of addressing the encyclopedia of left-wing misogyny I raised, many liberals chose instead to start a ferocious battle with all manner of straw men.

In her articles, Powers names liberal names—Bill Maher, Chris Matthews, Keith Olbermann, Matt Taibbi, Ed Schultz—and documents specific incidents, asking,

...if Limbaugh's actions demand a boycott—and they do—then what about the army of swine on the left?

Powers has no patience with fellow liberals who operate by such a blatant double-standard.

If the left reacted with the same furor to liberal misogyny as they have reacted to Limbaugh, misogynist cracks would go the way of racist and anti-gay “jokes.” Let’s just call a spade a spade: the uproar over Limbaugh is only because it fits into the Democratic narrative that the GOP is “anti-woman.” It’s Democratic Party activism dressed up as feminism.

In an painful-to-watch video posted to YouTube today, Democratic congresswomen Sheila Jackson Lee and Jan Schakowsky—who both blasted Limbaugh for his behavior—repeatedly refuse to condemn Bill Maher calling Gov. Sara Palin a "c--t" and a "dumb twat." Why is this so difficult?

She doesn't let President Obama off the hook either.

President Obama has seen fit to wade into the Limbaugh kerfuffle, even telling reporters Tuesday that Limbaugh’s behavior was an attack on everyone’s daughter and “I do not want them attacked or called horrible names.” Speaking of daughters, do you remember when Bill Maher said that the real name of then-20-year-old Bristol Palin’s book should be “Whoops, There’s a Dick in Me?”

Liberals have demanded that GOP leaders denounce Limbaugh, but President Obama, who has opined repeatedly on the Limbaugh controversy, refuses to denounce Maher. This despite the fact that Maher has made a high-profile $1 million donation to Obama's super PAC, which is run by longtime Obama aide Bill Burton.

Hats off to Powers for her honesty and fortitude!

Real Unemployment Rate "Sure Isn't 8.3%"

"The true measure of U.S. unemployment is much, much worse" than 8.3%, writes James Pethokoukis at the American Enterprise Institute, who concludes the U.S. labor market "is a long way from being healthy." He explains:

1. If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7% then vs. 63.9% today—the U-3 unemployment rate would be 10.8%.
2. But what if you take into the account the aging of the Baby Boomers, which means the labor force participation (LFP) rate should be trending lower. Indeed, it has been doing just that since 2000. Before the Great Recession, the Congressional Budget Office predicted what the LFP would be in 2012, assuming such demographic changes. Using that number, the real unemployment rate would be 10.4%.
3. Of course, the LFP rate usually falls during recessions. Yet even if you discount for that and the aging issue, the real unemployment rate would be 9.5%.
4. Then there’s the broader, U-6 measure of unemployment which includes the discouraged plus part-timers who wish they had full time work. That unemployment rate, perhaps the truest measure of the labor market’s health, is still a sky-high 14.9%.
5. Recall that back in 2009, White House economists Jared Bernstein and Christina Romer used their old-fashioned Keynesian model to predict how the $800 billion stimulus would affect employment. According to their model—as displayed in the above chart, updated—unemployment should be around 6% today.
6. As Ed Carson of Investor’s Business Daily points out, it’s been a whopping 49 months since the U.S. hit peak employment in January 2008. The average job recovery time since 1980 is 29 months, not including the current slump.
7. And how long might it take to get back to the 4.4% unemployment rate that existed under President George. W. Bush? Well, let’s say the goal was to get back to that rate in 5 years. And let’s assume the LFP rate returns to the CBO trend. According to a jobs calculator created by the Atlanta Fed, the U.S. economy would have to generate about 225,000 jobs a month, every month, for the next 60 months to hit that target. But few economist think we’ll see sustained job growth like that ...

Voigeli: The Case for Anti-Tax Absolutism

In "Not a Penny More," William Voigeli makes the case for why "anti-tax absolutism" is smart public policy. Anti-taxers, he asserts, are simply "confronting a governing failure—an abiding lack of candor about what our welfare state costs." Moreover, "by restricting the fiscal oxygen supply that sustains a fundamentally flawed system," anti-taxers are forcing welfare state proponents to face reality.

Federal spending occurs in three broad categories:

1. National defense;
2. Welfare state — Social Security, income support programs (disability, unemployment), health care (Medicare, Medicaid, Children's Health Insurance Programs), education, job training, and social services; and
3. "Housekeeping" — law enforcement (federal courts, prisons, prosecutors, FBI), Amtrak and air traffic control; national parks and EPA; embassies, veterans programs, NASA and so on.

How have each grown over the last few decades? From 1965 to 2008,

• National defense grew 42%
• Welfare state grew 583%
• "Housekeeping" grew 76%

By 2008, the welfare state consumed 61% of all federal government spending.

Welfare state expansion over the decades has been built on deception and dishonesty. Two examples:

• In 1965, proponents predicted the Medicare hospital insurance part would cost taxpayers $9 billion by 1990. Actual cost: $67 billion. 
• In 1987, proponents predicted Medicaid expansion would cost $1 billion by 1992. Actual cost: $17 billion.

Faced with unsustainable deficits and debt today along with Americans' strong desire to rein in government spending, liberals are now misleading Americans on the scope and scale of the tax increases necessary to sustain the current welfare state. They have vowed not to raise taxes on any individual earning under $200,000 or families earning under $250,000.

Do these vows hold water? A 2010 study by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute, found that reducing federal deficits by the second half of this decade to a reasonable 2 percent of GDP, while keeping Obama’s promise, would require increasing the rate in the second-highest federal income-tax bracket from 33 percent to 85.7 percent, the rate in the highest bracket from 35 percent to 90.9 percent, and the capital-gains tax rate from 15 percent to 39 percent.

The study, Desperately Seeking Revenue, pointed out that such tax rates would give the prosperous a strong incentive to defer income, shift it to nontaxable forms, or spend it on deductible items, like charitable contributions. The resulting revenue shortfall would necessitate even higher tax rates or might simply make reducing deficits to 2 percent of GDP impossible.

Even Jonathan Chait, who has devoted hundreds of New Republic blog posts over the years to advocating higher taxes on the rich, conceded after the August 2011 debt-ceiling agreement, “It has become clear that Obama’s pledge not to raise taxes at all on anybody earning less than $250,000 a year is no longer compatible with even the minimal demands of government over the next decade.” [emphasis added]

Liberals argue that anti-tax absolutists are fanatics who want to rip "the social safety net to shreds."

To see why that argument is wrong, think all the way back to 1995, when America had social insurance for the elderly, health care and welfare for the poor, and various other appurtenances of a welfare state, to say nothing of public schools and colleges, mass transit, public parks, and lots more. Since then, the federal government’s total revenues, adjusted for changes in population and inflation, have grown, despite the recession. In other words, to duplicate now the revenue stream that paid for the 1995 menu of government services would mean cutting taxes, not increasing them.

Voigeli argues that "by restricting the fiscal oxygen supply that sustains a fundamentally flawed system," anti-tax absolutists are forcing welfare state liberals to come to grips with reality and to finally be truthful with the American people as to what sustaining the ever-expanding welfare state will truly cost all of them.

Read the whole article.

The Political Class - Middle Class Disconnect

Drawing on recent national polling data, pollster Scott Rasmussen finds that "when a politician talks of helping the middle class with a new government program, it just doesn't ring true" with middle America.

What is especially interesting about the data is the income demographic. Upper-income Americans are evenly divided as to whether government management of the economy helps or hurts. Middle-income Americans, on the other hand, overwhelmingly view government management of the economy as hurtful.

"The affluent, perhaps because they can easily gain access to the policymakers, are OK with government management of the economy," writes Rasmussen, while "[t]he middle class, without friends in Congress or on Wall Street, has an entirely different view."

• a plurality of Americans now believe the United States has a system of crony capitalism rather than free-market competition
• only 27% of voters believe government management of the economy actually helps the economy
• 50% think government economic activitism does more harm than good
• 77% of voters think the government could help the economy by reducing the government deficit
• 71% think it would help to reduce government spending
• 59% think tax cuts would help
• 6 out of 10 voters agree with President Reagan's conclusion in 1980s that "government is not the solution to our problem; government is the problem."

Read Rasmussen's full article here.

Real Reason Libs Tax Wealthy

Why do so "many young liberal bloggers cheer on proposals to raise tax rates on high earners," wonders Michael Barone in an op-ed today. It isn't to increase government revenue, because it generally results in less revenue. And it isn't to ensure they pay 'their fair share', since as it is "the American tax system, including the payroll tax and state and local taxes, is more progressive — in the sense of extracting disproportionate shares of revenue from high earners — than most European tax regimes..."

I think the answer to the puzzle can be found in a remark Barack Obama made during the 2008 fall campaign — a remark that seemed to go mostly unnoticed.

ABC's Charlie Gibson asked candidate Obama if he would raise capital gains taxes even if, as in the past, that brought in less revenue to the federal government.

Yes, said Obama. "I would look at raising the capital gains tax for purposes of fairness."

Ponder that answer for a moment. A candidate for president — president now — said he wants to take more money from people who earned it even though doing so would produce less money for the government.

The philosophy that has to be behind that answer is also behind the Obama administration budgets that have proposed capping the charitable deduction for high earners. The clearly intended result would be a massive transfer of money from the voluntary sector of society into government.

Alexis de Tocqueville in the 1830s identified the voluntary sector as a unique feature of American democracy,one that gave it strength and character. He compared it positively with his own France, where centralized government stifled initiative and innovation.

[snip]

Higher tax rates on high earners, even if they produce less revenue, are an attempt to centralize power in government and to limit the autonomy and countervailing power of individuals in the voluntary sector.

Which is why the liberal bloggers cheer them on. And why they eagerly join the Obama White House in demonizing the Koch brothers, who donate large sums to conservative causes. (Disclosure: I have spoken at two Koch conferences and was reimbursed for travel expenses.)

The Obama Democrats don't want their funders like George Soros getting competition from the likes of Charles and David Koch.

In a contest "to make this country more like Toqueville's France" or "to keep it more like Toqueville's America," concludes Barone, "the liberal bloggers are rooting for France."