by Chris Gacek
October 6, 2009
Today, the Washington Times published a very good editorial on Fridays unemployment data.
Today, the Washington Times published a very good editorial on Fridays unemployment data.
Last weekend, I had the opportunity to attend the Americans for Prosperity Defending the American Dream Summit. While at this event, I had the opportunity to meet with Leslie Carbone, who used to serve as the Director of Tax Policy at FRC. Leslie just published a book, Slaying Leviathan: The Moral Case For Tax Reform, and it is a great examination of tax policy from a moral perspective. Below is the interview:
KW: Could you tell me why you decided to write Slaying Leviathan?
I wrote my book to help people understand why progressive taxation, and the wealth redistribution that it supports, are morally, as well as economically, hazardous.
KW: What do you think is the number one problem with the current tax code?
There are so many problems with the tax code, and they all feed on each other so much, that I find it impossible to pinpoint one primary problem, one single bullet. I think that what’s wrong with progressive income taxation can be summed up in three, overlapping, problems: It’s unwise, unjust, and immoral. It’s unwise because it actually diminishes prosperity, rather than enhancing it. It’s unjust because it perverts the function of the government it supports; as our Declaration of Independence asserts, civil government is established to secure our rights, but progressive taxation, and redistributionary spending, actually violate our rights. Finally, it’s immoral: It’s immoral because it discourages the virtuous behavior that creates wealth while it sanctions vices like resentment, because it diminishes economic—and thus moral—freedom, because it fosters immoral social behavior (such as cohabitation and divorce) and their attendant social pathologies, and because it inserts the government into the family’s or the individual’s moral decision-making process, giving the government a moral power it shouldn’t have.
KW: In the book, you mentioned that there is a moral reason for tax reform. Since there seems to be zero transparency at the government level about where our taxes directly go, do you think that this lays out the case for full transparency by the government?
I’m all in favor of government transparency, and part of the problem with our leviathan state is that it’s so big, and spends so much money, that nobody can keep track of it all. So I’d say that restoring the federal government to its proper, limited functions, as enumerated in Article I, Section 8, of our Constitution (that ingenious document) and reducing taxes to what’s necessary to pay for those functions would go a long way toward making it easier for us to fulfill our duty as citizens of a republic to watch what our government is doing.
KW: Would you favor a flat tax or the fair tax?
Either would be an enormous improvement over the byzantine mess we have now, and I’m looking forward to the day when we have a robust public debate about which kind of fundamental tax reform we want. My book lays out and analyzes the various options for tax reform, but it doesn’t take a firm position in favor of any particular plan. I did that on purpose. My book is intended to help make the case for fundamental tax reform, and to inform a coming debate over what that reform should look like. We’ve seen recently, with the bank bail-out and the “stimulus” package (to pick just a couple of examples) what happens when we rush a “solution” through without adequate public debate. So rather than say, “Here’s the problem, and here’s the solution,” I’m trying in my book to say, “Here’s the problem; let’s talk about and make sure we fully understand it, and next let’s talk about how we want to come together as Americans to solve it.”
KW: Do you feel the tax code punishes families and if so, could you elaborate on the ways our current government can fix this?
Sure, there are the specifics, like the marriage penalty, which actually punish some people for getting and staying married. But, to pick just a couple of examples, our current tax code hurts families by suppressing prosperity, making it harder to support a family, and by steering families into government-sanctioned choices (e.g. home ownership through borrowing, via the mortgage deduction) rather than leaving them properly free to decide on their own financial priorities. We really need fundamental tax reform to address these problems; piecemeal fixes just don’t work.
KW: I read another tax reform book two months ago by two experts at Cato Institute entitled, Global Tax Revolution, and the authors recommended abolishing the corporate and income taxes. Do you think that this will keep more businesses in the United States?
Absolutely, taxes discourage whatever is taxed; that includes maintaining a business.
KW: Lastly, there seems to be more corruption in Congress, and recently, Congress has voted for pay increases, giving the Architect of the Capitol a pay raise, and providing more money to fix the House buildings. Do you feel that there needs to be more reform within our government to help make them more accountable to the taxpayer?
Our Founders understood the corrupting tendency of power, and we as citizens of the republic they created must try to understand it too. I fear that it’s a little naive to expect government to reform itself. We are responsible for our government; we’re they’re boss, and we need to hold them accountable to us. “Eternal vigilance is the price of liberty.”
Todays economic news was not good. This from Reuters via Yahoo! Finance:
U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine economic recovery.
The consensus was for a loss of 180,000 jobs. Furthermore, highly respected banking analyst, Meredith Whitney, wrote in yesterdays Wall Street Journal that credit available for small business, the job creator in the American economy is non-existent:
Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.
This is not a good sign for getting people back to work. This credit contraction in conjunction with the make-believe economy of zero percent interest rates, money printing, and too-big-too fail has to undermine ones confidence in any data about current economic relationships. That, in turn, will make a recovery far more difficult due to the increased level of risk and uncertainty. Its going to take a long time for things to work themselves out I am afraid.
A good man leaves an inheritance to his childrens children. That bit of insight is from the wisest man who ever lived Solomon, the author if the Book of Proverbs.
Notice that Solomon is not calling for us to just hold back of little of our savings to leave something for your kids, but rather that it is prudent foresight that leads to investment in future generations.
Such advice would be considered radical in America today, especially in Washington where the nations debt is currently $11.5 trillion, with another trillion projected to be added this year. In fact, for every dollar that the federal government is currently spending, 47 cents is borrowed. When federal, state and local government debt is combined the average familys burden of that debt is almost one million dollars.
As a nation, weve not only lost the biblical ideal that one generation should pave the way for the next by investing in its future, but we have decided by our fiscal irresponsibility to live on Easy Street and let our grand kids and great-grand kids pay the mortgage.
Thats not right, and its got to change. To learn more about how federal tax policy affects your family, click here.
As the health care debate heats up it is hard to get straightforward, understandable information on the nuts and bolts of how Obamacare will operate. Big picture, no trees, no weeds. Thats what we need. Well, there was an extremely powerful eight minute interview on Mark Levins radio show last Friday (July 17, 2009) that you must listen to. (We make it easy to do so below.)
Mark Levin interviewed Betsy McCaughey, adjunct fellow at the Hudson Institute and the chairman and founder of the Committee to Reduce Infection Deaths, about the Obama Administrations health care plan. She clearly and frighteningly describes provisions of the current House bill that will reduce care for the elderly and compel all programs to provide regimented, HMO-style care for the rest of us. (FYI, McCaughey served also as the Lt. Governor of New York from Jan. 1995 to Dec. 1998.)
If you would like to listen we are going to provide two ways to do so. First, you can click here and listen or listen below to the eight minute interview using the Family Research Council website:
We want to heartily thank The Mark Levin Show for most graciously giving FRC permission to play the audio from our website.
You can listen or download the entire Friday, July 17, 2009 program from Mark Levins website this is his Audio webpage. Once on the Audio page, do the following: 1) click on 07/17 The Mark Levin Show; and, 2) start the player at 8 minutes, 45 seconds.
I believe this audio will sharpen your focus on the key features of the health bill.
For weeks the FRC Blog has been commenting on the growing prominence of CNBC as a national news outlet. We have also commented on the liberal counter-reaction against the network. Our point has been that even though the Left dominates the mainstream media (MSM), in a time of financial and economic crisis the MSM news organs are structurally ill-equipped to deal with stories of such complexity. CNBC has on-air staff with the smarts and the career training to discuss these matters at a sophisticated level. The MSM does not have people like this on their programs with a few exceptions (e.g., Lou Dobbs at CNN (who is not MSM)). Consequently, there has been a tremendous power shift toward CNBC.
CNBC is more conservative than the MSM, but it might be fairer to say CNBC is more libertarian and market-oriented. That being said there has always been a good mixture of liberals and conservatives on CNBC, and many Wall Street players were Obama supporters.
Well, the Left noticed the increasing prominence of CNBC and a campaign of mau mauing began quickly once Barack Obama became president. First, Rick Santelli was attacked; this effort was assisted by NBC’s Today Show. Jim Cramer was next, and his assault by Jon Stewart soon followed. However, it appears that a larger effort to compromise CNBC is underway, and it may be working. There is now an entire Leftist-“progressive” website devoted to serving up ideological attacks on CNBC: it is called “Fix CNBC.” (Go to the website and look at the long list of liberal big-wigs who have signed on. Amazing. This is quite an effort. I wonder who is paying for it?) Interestingly, Media Matters also presents an online petition at “Change CNBC,” and the language looks pretty similar to Fix CNBC’s petition.
(Please note: I am not saying we should be unconcerned about conflicts of interest in financial reporting. See Dan Gifford’s excellent article (“Big Hollywood” website; March 22nd) discussing “Fix CNBC” and the journalistic integrity of business reporting. However, the house cleaning being called for by these “progressive” groups seems suspiciously timed to protect the Obama political agenda from rigorous analysis and criticism.)
Within the past two weeks, former Vermont governor and former Democratic National Committee head, Howard Dean, was given a two-hour guest role on CNBC’s morning show, “Squawk Box.” Similarly, on March 31st, doyenne of the Left, Arianna Huffington (founder “Huffington Post” website), was similarly ensconced on the “Squawk Box” for two-hours. There are reports that Dean will be a regular CNBC contributor. To the best of my knowledge, neither person has a substantial background in financial or economic matters.
CNBC is flirting with danger here. I am sure that there have been GOP political figures on the show. For example, Dick Armey appears on occasion. However, I have never seen Matt Drudge on “Squawk Box.” The real test will be if we see the CNBC management interfering with Larry Kudlow’s program at 7:00 p.m.
Only time will tell whether CNBC fights to maintain its political and intellectual independence. CNBC may not be perfect, but it does provide analysis of our economic problems that lies outside the MSM groupthink and political agendas. We should all hope that CNBC survives.
You can’t say the FRC blog isn’t timely. Over the past two weeks my colleague Michael Fragoso and I have written on this blog about the emerging position of CNBC as a major, national news source and the adverse impact of that development on the Obama administration.
This state of affairs escalated enormously over the weekend after CNBC’s Jim Cramer was slapped silly on Jon Stewart’s Comedy Central program last Thursday. Stewart is part of the Democrat-Left-Borg collective that hurtles through space attempting to bludgeon those who oppose their agenda into abject submission. (For an excellent analysis of Stewart’s completely dishonest attack on CNBC’s Rick Santelli read this post by Dan Gifford on the Big Hollywood blog.)
Stewart has been on television for years, but I don’t recall that he ever attacked the integrity of CNBC before. Of course, CNBC never before pointed out that the Obama economic program was failing miserably. Therein lies the difference. When was the last time Stewart viciously sandbagged a Lefty guest while declaring his righteous outrage? Answer: [Hear crickets chirping] Never happened.
In short, we have entered an unparalleled time in which the Hollywood-media-“news”-industrial-complex makes little or no attempt to pretend that it is not advancing the socialist, anti-family, anti-church agenda of the Left. Where will Barack Obama be tonight? On the Jay Leno show, I believe. The alliance begun during the presidential campaign appears to grow stronger daily.
In the last couple weeks The Politico (www.politico.com) has published a series of extraordinary stories describing planned attacks originating from the White House and Leftist activist groups targeting political enemies. Read this piece as an example. As such, it was not surprising that Tony Blankley observed here in today’s Washington Times that the atmosphere in Washington has become incredibly poisonous and ugly.
Well, folks, about two months down and forty-six to go. It’s going to get interesting.
A U.S. Senator talks of honorable suicide for well-heeled executives who have received company bonuses and then benefited from bailout money from the taxpayers. Armed guards are posted outside the insurance giant AIG to protect its employees from an angry public. The President declares himself outraged at corporate excess. Larry Summers, the Obama Administration’s top economic adviser, says the same. Thus our national economy is fast transforming into a giant kabuki play, or more precisely a sewa-mono, a domestic drama in which theft and suicide are classic themes.
What is becoming of this nation if it is not the puppeteering of what should be an economy of risk and reward where, with reasonable regulation for health, consumer disclosure, and mitigation of monopolies, the government steps back and allows customers and investors to act on opportunity and react to failure? The greed of some private sector actors is real enough, but the umbrage of many political actors rings hollow. Can we recover the bonuses paid to executives who could not keep their businesses profitable? Why, government has made unprofitability the test of whether certain businesses, like certain mortgagees, get aid.
Here is a simpler idea: anyone who receives government bailout aid, direct or indirect, or benefits from a no-bid government contract of any kind, forfeits their right as individuals to donate to federal political campaigns for a period of five years. That would have some genuine impact on this Kabuki cycle
Watching Chris Wallace interviewing President Obama’s economics advisor, Austan Goolsbee, yesterday, I was struck by a curious phrase Goolsbee used: “the commanding heights of our economy.” Gosh, that phrase sounded familiar. Goolsbee was responding to Wallace’s question about the President’s 2010 budget message. That document is grandly titled: “An Era of Responsibility.” Actually, “an era” is too modest for this President. His budget proposals will impose crushing debts not simply on the living, but on millions yet unborn, on generations yet to come, if they come. We should be thinking at least in terms of epoch, even perhaps an Obaman Age.
Wallace quoted from the President’s budget message. “While middle class families have been playing by the rules…those at the commanding heights have not…” Goolsbee defended the use of that term: “The President is saying those at the commanding heights have not played by the rules.” Clear enough. Rep. Barney Frank was next up. “I would go back to your conversation with Mr. Goolsbee,” the chairman of the Financial Services Committee replied as Wallace pressed him for specifics. “This is an example of people at the commanding heights of the economy misbehaving, abusing the system,” Frank said.
There it was again. I knew I’d heard that phrase before. Fortunately, we have Google so I didn’t have to go rummaging through my cluttered basement—talk about torture—among my old Russian history books.
“The commanding heights” is a phrase first used by Lenin. He used it in 1922. It’s when he introduced his NEP—the New Economic Policy—in the newborn and struggling Soviet Union. Under that policy, the severity of Communism’s seizure of the land was relaxed somewhat. Lenin had little choice. “Collectivizing” the land had brought massive famine. Millions were dying.
But Lenin reassured worried Marxists all over the world that he would not betray the world’s first successful Communist revolution. His Bolshevik regime retained control over the commanding heights of the economy—the big industries.
Does this suggest some dark, secretive, Leninist plot by the new Obama administration?
No, that’s not what I’m suggesting. I do say that we are now governed by a group that is not itself fully aware of the source of their ideas.
In a free economy, there really are no commanding heights. Businesses and economic sectors rise and fall with the vicissitudes of the market. Railroads, once dominant, give way to highway trucking (and perhaps back again). An information economy supersedes smokestack industries—and the cleanup of our rivers, lakes, and skies offers testimony to the changes.
Now we are entering a period in which the majority in government view themselves-consciously or not—as occupying the commanding heights of the economy. It’s an experiment that is bound to fail. It has failed wherever it has been tried.
One simple way I tell friends to judge whether Russia is moving toward or away from liberty is to note whether they are seriously discussing burying the mostly paraffin mortal remains of Vladimir Illyich Lenin. For a time in the 1990s, removing Lenin’s body from the mausoleum in Red Square was high on the freedom agenda in the newly liberated Russian Republic. Since our current Vladimir—Putin—took power, however, Lenin’s body is firmly anchored and ritually honored in the heart of Moscow.
We can still strike a blow for liberty over here: Let’s bury Lenin’s language. Let’s bury all of Lenin’s talk of “the commanding heights.” And let’s resist those like Barney Frank who would ascend those heights the better to command the rest of us.
Jim Cramer went on The Daily Show last night to be grilled by Jon Stewart. Liberals everywhere are singing the praises of Stewart, who went in loaded for bear. (See video here-Stewart’s language is saucy: you’ve been warned.) Stewart deftly illustrated the multitudes contained within Cramer-both a loudmouth performer, and a cool, savvy Wall Street operator-and excoriated CNBC, Cramer, and market capitalism in his characteristically self-righteous and crypto-Marxist way (“When are we going to realize in this country that our wealth is work? That we’re workers…”). Apparently finance is serious business and Cramer’s goofy “Mad Money” persona makes Stewart mad. Mad enough that he felt the need to embarrass Cramer for 3 segments in front of his audience of clapping New York sycophants.
And yet, Cramer has been at this for years (I recall watching Mad Money with my friends in college because Cramer’s histrionics and questionable stock advice could be quite entertaining). Why did Jon Stewart decide to take Cramer to the woodshed on March 12, 2009? Why not a month ago-or six months ago, or a year ago, or four years ago? It turns out that Cramer and Stewart have been feuding ever since Stewart began taking shots at Rick Santelli for his “Chicago Tea Party” outburst. This feud, like Stewart’s previous one with Tucker Carlson, is predicated on his infuriating bait-and-switch routine: 1.) Sanctimoniously deliver a sucker punch about a serious political or cultural matter in which there is substantive disagreement; 2.) Respond to counter attack by saying “I’m just a comedian, don’t hold me to high standards! I make jokes! I’m no expert!” 3.) Behave like a smug expert and deliver more substantive criticism. 4.) Respond to next counter attack by saying “I’m just a clown! Watch me make funny faces!” 5.) Repeat until plaudits pour in from Gawker, Huffington Post, and other snark-mongers.
The fact is that Cramer’s shtick has not changed, and yet it is now that Stewart decides to declare Sicilian vendetta. Since Mad Money premiered, and in many ways going back to his stint on Kudlow & Cramer, Cramer has been a clown for the masses and a savant for the privileged-and Whitman-like in his ability to embrace the contradiction. What has changed is this: Cramer, like Santelli before him, went after the “wealth-destroyer,” President Obama. When the self-described liberal Jim Cramer was jumping around, biting the heads off toy bulls, yelling, “BUY! BUY! BUY!” and supporting Barack Obama, Stewart was nowhere to be found. When the self-described liberal Jim Cramer does all the same things but now dares to criticize the patently horrendous fiscal policies of the new President, that’s when Jon Stewart gets mad. Stewart insists it’s “not political,” and yet the timing is anything but.
Perhaps this explains why Obama tolerates the constant bumbling of Robert Gibbs: who needs a Press Secretary when your cult of personality is enough to turn a late-night comedy show into a camera stellata?