Laffer's Four Prosperity Killers

Liberals have had a lot of fun with Arthur Laffer, author of the Laffer Curve. That's because the last thing they'd ever want to admit is that tax rates matter.

Never mind about that. The other day Larry Kudlow did a blog and listed Laffer's four prosperity killers. Let's take them one by one.

1. Rising tax rates. That's the Laffer Curve. When you raise tax rates, as the Obama administration proposes to do, you discourage people from saving and investing. That means you kill prosperity.
   
   
2. Inflationary money. The Fed is printing money like mad right now to soak up the $2 trillion deficit. The way that government does inflation is that it pays for government spending by printing money. As the value of money goes down, people start to avoid holding money. They start to buy real estate and jewelry and precious metals to try and hold onto their wealth. This is not what creates a healthy economy. We want people with savings to invest in businesses that will increase productivity and wealth. Inflation is a prosperity killer. As anyone from Zimbabwe.
   
   
3. Trade protectionism. The Obama administration just slapped duties on cheap Chinese tire imports. That means that the US government is preventing US producers and consumers from buying low and selling high. High tariffs helped to deepen and prolong the Great Depression.
   
   
4. Government control/re-regulation. The Obama administration is proposing to put about 15 percent of the economy under direct government control with its health care reform, and regulate CO2 as a pollutant. Government control always creates waste and crony capitalism. Government is a prosperity killer.

None of this is rocket science. On the contrary, it is common sense. The rocket science is this: Nobody can know how badly the Obama administration will damage the US economy with its prosperity killing policies.

But usually, in spite of the government, the economy manages to struggle through.

A Pact with the Devil?

Irving Kristol was important enough that he got to be the obituary in The Economist last week. You'd expect The Economist to damn him with faint praise, and you wouldn't be disappointed.

But there is one egregious swipe that needs careful analysis.

[Neoconservatism had given conservatism an impulse,] a moral and philosophical dimension (expressed, in the early 1980s, in an alarming Faustian alliance with evangelicals), for conservatism without religion was “thin gruel”.

The writer is saying here that the inclusion of the Christian Right into the Republican tent is a pact with the Devil. Let us be clear here. Liberals really believe this.

If liberals believe this then they profoundly misunderstand the relationship between the more secular parts of the conservative movement and the more religious parts. Nobody is making a pact here, unless the compromises in any political party are necessarily demonic. The secular Rush Limbaugh, for instance, seems to regard God-fearing conservatives as people to be honored for their moral witness, especially since liberals go out of their way to insult them. The enemy of my enemy is my friend.

When the economic conservatives joined up with the social conservatives in the 1970s it was not because anyone was trying to sell their soul for political, but because both sides were thrown together by the aggressive secular agenda of liberals. Liberals had written all conservatives out of respectable society, so they really can't be shocked that the folks they revile got to like each other.

Then there's the Kissinger Effect. Henry Kissinger was an expert of foreign policy had had original things to say about it. But the rest of his political opinions were off-the-shelf, basically Rockefeller Republican. This applies to political parties. People bring an agenda into the party, and after a time, the rest of the party takes it up. Thus economic conservatives start to pick up the opinions of their religious conservative allies, and the religious conservatives start to see the point of supply-side economics. There's nothing diabolical about this. It arises out of the nature of humans as social animals.

In a way liberals do us a favor by misunderstanding the relations within the conservative movement. There's nothing better in war than when your opponents don't take the trouble to understand you and your culture.

And with the Obama administration it looks like liberals have failed to understand about 60 percent of the American people. They will pay for this in the only coin they know: political power.

If there is a Faustian bargain in the modern era, it can only be the disastrous bargain that the working class made with the socialists. They sold their soul to the liberals, and for what? They got piddling pensions and benefits, but lost their families and their robust working-class culture and their self-respect.

Briffa in the Chipper

Regular readers will know that the infamous Michael Mann Hockey Stick went into the chipper years ago.

The reason was simple. Michael Mann, the climate professor from Kent State, had developed a dataset of climate proxies that demonstrated a Hockey Stick shape. It showed that global temperature had been pretty constant over the last 1,000 years (the shaft), but then suddenly shot up in the last century (the blade). But it turned out that there was a catch. Only a few proxies showed the Hockey Stick signal.

Steve McIntyre of Climate Audit showed, again and again, that if you remove the few proxies with the Hockey Stick signal then you are back to the status quo ante, that the Medieval Warming Period was probably warmer than today.

The Hockey Stick signal was contained in a limited set of bristlecone pines in North America assembled by Donald Graybill and his team. There was also a Tiljander record that the Mannites got upside down (i.e., it showed cooling in the 20th century). Then there was Yamal, worked up by Keith Briffa at the British Climatic Research Unit (CRU).

For years, Steve McIntyre has been trying to get the raw data on the Yamal series, but Keith Briffa wouldn't release it. But he accidentally published his results in a journal (Phil Trans B, Philosophical Transactions of the Royal Society B: Biological Sciences) that required public archiving of data, so McIntyre and others put pressure on the journal to enforce their publication policies. On some day in September 2009, Briffa archived the Yamal data, the tree ring data from Siberia.

And it is a scandal. Briffa cherry-picked about 10 tree-ring cores, and boosted it up with data from 400 km away.

But hey Keith, there's plenty of data near by. Why not use that? Because the data is completely different from the cores that Briffa used and published. If you add that data, the Hockey Stick signal for Yamal disappears.

Go to Climate Audit and take a look. It's breathtaking.

We understand that Keith Briffa is presently ill. We extend our best wishes to him and his family for a swift recovery.

G-20 Protests: Racist, Sexist, Classist

It was only a couple of weeks ago that Democrats, liberals, and MSMers were describing the convivial, peaceful 9/12 protests as racist. Not that you could tell, directly, but these experts knew what was really in the hearts of Americans protesting big government and high taxes.

There's no difficulty in describing the violent protesters at the Pittsburgh G-20 summit on Thursday. They are racists, sexists, and classists. And unlike the anti-establishment 9/12ers, the G-20 protestors are echoing ideas and ideologies they were taught at their government schools. They play-act being anarchists and underdogs, but really they act with the encouragement of the progressive educated elite. Here's how.

Everyone knows that evil bankers are rich white capitalists, bent upon paying themselves gigantic bonuses while the poor and the disadvantaged, disproportionately women and minorities, are losing their homes to foreclosure.

So the protestors are racists. They hate and fear white bankers.

So the protestors are sexists. They hate and fear white men.

So the protestors are classists. They hate and fear the rich.

But where did these young people pick up these ideas? Not from down-market rabble-rousers spawned in the agony of defeat in war. They get it from their government university professors. There is scarcely a university in the land that does not have its Womens Studies center, which teaches sexism. There is scarcely a university in the land that does not have its African American Studies center, which teaches racism. And every university has a labor history department that teaches class hatred.

That's the real problem in America. Our leaders and our thinkers are teaching and spewing out the most vile hate, and they are spewing it from the universities that once provided a counterweight against the power of government. And these haters are feted and honored. Paid for by the taxpayers.

That is something that is really scary.

Liberals' Tin Ear

In the roar of Obama administration initiatives crashing to earth, let us just look at one little flap: the effort by the Obama administration to stop Humana from communicating to its customers.

You know the story. Humana sent a mailing to its Medicare Advantage customers warning them that under the administration's plans their benefits would be cut.

Can't have that! So Senator Baucus (D-MT), Chairman of the Senate Finance Committee, asked the Department of Health and Human Services to take action. Here's Sen. Mitch McConnell's (R-KY) version of what happened:

Let's review: at the instigation of the Chairman of the Finance Committee, the author of the health care legislation now working its way through Congress, the Executive Branch, through the Centers for Medicare and Medicaid Services, has launched an investigation into Humana for explaining to seniors how this legislation might affect their coverage.

One more time: a private health care provider told its elderly clients how health care legislation might affect their lives. And now the federal government is putting its full weight into investigating that company at the request of the senator who wrote the legislation in question.

Of course, it turns out that Humana was right. The Congressional Budget Office has confirmed that the administration plan would implement cuts to Medicare Advantage. So Sen. Baucus was wrong on the facts.

But the bigger thing is the hypocrisy. Liberals get up in the morning worrying about "chilling effects" to free speech. And woe betide anyone who even lowers an eyebrow at a liberal exercising their right to free speech.

But when it comes to other peoples' free speech, particularly the rights of corporate entities, liberals have a tin ear. They think nothing of gagging and regulating commercial speech. They think nothing of using government power to win policy arguments. They think nothing of persecuting conservatives and Christians in the university.

There's just a chance that non-liberal Americans are getting to the point where they are not going to take it any more. There are signs all over the place of rustling in the grass roots. I am thinking Free Enterprise Nation, Smart Girls Politics, Tea Parties, Town Halls, etc.

Maybe it won't amount to anything. Or maybe it will combine into a perfect storm.

Palin: What's not to like?

Governor Palin made her first speech since resigning as governor of Alaska to bankers in Hong Kong recently. The speech wasn't open to reporters, but it was reported by the Wall Street Journal.

Here's what Palin told the bankers:

• She blamed the financial crisis on government excesses.
• She said China makes a lot of people nervous.
• She asked whether the change that Americans voted for was really for more government.
• She criticized redistributive government policies.
• She criticized the Federal Reserve's low interest policies for setting up the financial crisis.
• "She called for tax cuts as well as the elimination of the capital gains and estate tax."
• She mentioned "death panels" and called for market-based health care reforms.
• She criticized Nancy Pelosi on Afghanistan.

Really. What's not to like? Palin is positioning herself as a strong free-enterprise conservative. That should look amazingly fresh and comforting to Americans by 2012 after four years of feverish left-wing activism.

Obama's Keystone Kops Presidency

Don't say you haven't been warned. When liberals were falling all over themselves laughing about Sarah Palin's lack of qualifications for Vice President, conservatives responded by pointing out that Palin had a lot more government executive experience than Candidate Obama.

And that's how it turned out. What we see, from top to bottom of the Obama administration, is lack of experience and lack of seasoning.

At the laughable level we have the bumbling White House czars, who are not really czars but glorified community activists trying to organize "communities" out of the White House. Van Jones, the former green jobs czar was obviously not ready for prime time. Now we have the NEA flap, with junior White House aides like Buffy Wicks trying to get NEA grantees mobilized to make art for Obama.

We have President Obama, who has a 20 year history with ACORN, making like he didn't know nothing about ACORN and its federal funding. Come now Mr President. Pretty soon you will be telling us that a penalty on people who don't buy health insurance isn't a tax.

Now we have the rather clumsy effort by the Department of Health and Human Services to muzzle health care giant Humana. Naturally the folks at the Huffington Post are outraged--at Humana. Dissent for me but not for thee, insist our liberal friends, especially if the "thee" is an eevil corporation.

Of course this is all just surface effect. The real rot is much deeper. It is the fundamental error in the liberal world view that informs the Obama administration and the liberal project.

• It is not true that politicizing the economy, as the Obamites want to do, will make any improvement in the lives of Americans. All it will do is create conflict as people fight for the government goodies.
• It is not true that making nice with thug dictators will help the cause of world peace. Your Putins, your Ahmadinejads, your Castros, your Assads, your Chavezs are all alike. They live and die with power. And power must be met with power.

These fundamental errors in world view are going to cost the American people plenty, in treasure and in lives.

But the chances are that the American people will start taking their country back next year. And not a moment too soon.

Democrats thought, last January, that it was 1933 all over again. Probably, it was 1977, and time for another bumbling Carter administration.