All the News That's Fit to be Tied

I have an axe to grind, but unlike the New York Times, I freely admit it.

Wednesday, January 26, 2011

The Entitlement Trap

Reducing the number of federal employees is the surest way to reduce the cost of government. In a previous column we said that Republicans must begin the process of paring government by reducing the number of employees by attrition as a way of reducing the most expensive part of any budget: personnel. As the House approaches dealing with the CR and the 2012 budget it must avoid getting dragged into the “entitlement trap,” which Democrats hope to use to beat the Republicans in the next election. While we think that everyone agrees entitlements are a long-range problem, it does not mean that non-entitlement cuts or cuts in personnel are meaningless. In fact if you combine non-entitlement cuts with personnel attrition in entitlement programs you can reduce the deficit in a meaningful way and at the same time reform entitlement programs in way that can reduce their cost by privatizing some of the programs. Republicans must avoid the characterizations used by the Democrats against the Gingrich Congress in order to enact meaningful budget cuts and assure their reelection.

Monday, January 24, 2011

Why Tomorrow's Cuts Never Happen

This little item is in preparation for two things: One is the President's SOTU message where he will propose spending cuts in future budgets, but spending increases in the upcoming budget. The other is to expose the dirty little secret about Congressional spending authority. No current Congress can commit a future Congress to spending cuts. Therefore the current Congress can only cut spending in the budget currently under consideration. Future cuts are merely tools to justify increases in current spending. So when the Republicans say they are going to cut spending, they must do it in the budgets under consideration this year; The new Continuing Resolution, which is the second half of the current year budget and the upcoming budget, which has not yet been proposed. Any future cuts must be rejected and exposed for what they are: empty promises. If your Representative or Senator tries to get your support for future cuts, tell him or her you wants cuts now, not later or the budget hole will never be closed and spending will never be reduced.

Sunday, January 23, 2011

The Elementary Science of Junk Food

Generally speaking I have little interest in discussing food, but the new bevy of sin taxes on so-called junk food and soda caught my attention because the argument is being made that this will encourage people to make healthier eating choices which will supposedly help people lead healthier lives. This is simply not true. In other words it’s a lie and all that is required is a little refresher course in elementary school biology to illustrate the point. You would not think that most American would need such a refresher, but the simple fact is that we have forgotten and now ignore the most basic scientific facts to suit our own political points of view. There are those that believe that “junk” food and “processed” food is what makes people fat. This is not true. It is simply the amount of food that makes you fat or not fat. The basic biology of food consumption is that whatever you eat is transformed into starches, sugars, and proteins. If it cannot be transformed into one of those things it is excreted and with some small exceptions stored in your cells. If a person is overweight it simply means they eat too much. If they are too thin they don’t eat enough. Your body does not distinguish whether or not food is “healthy” or “junk.” It either digests food or it doesn’t. I don’t expect this little piece of writing will change anybody’s mind, but it is useful to know the truth about food.

Saturday, January 22, 2011

A Rational Plan for Moving Forward

Few would disagree that our nation is in financial trouble. The amount of debt and unfunded mandates is an insurmountable, but not impossible, sum of money to deal with. What we need is a rational plan for moving forward. This must be a plan that is free of sacred cows, budget gimmicks and special interest politics. It must include both short-term and long-term fixes and must account for political change over the long term so that the prize, which is a stable and manageable budgeting system, can be achieved regardless of the party in power. Achieving this goal requires recognition of two basic realities. One is that any plan that covers more than single budget cycle is doomed to failure and explains why the multi-year plans never work. For example, the Congress may agree to cut spending over the next ten years by $2.5 Trillion and then put all the cuts in future budgets, while increasing spending in the current year. The dirty little secret is that the next Congress may ignore the plan is the next budget cycle so the projected savings are never realized (sound familiar?). The second reality is that the major parties just disagree about the role of government. Given these realities a rational plan must feature budget cutting in the current year budget. The Congress must no longer put off cuts to future budgets. The second ingredient must be cuts by personnel attrition. Since personnel costs represent the biggest part of any budget, the government must operate in the mode of not replacing people who retire unless they are essential. Although it is difficult to quantify, approximately a million people enter the Medicare system every year and since all people reaching 65 must sign up for it, it probably represents a fair estimate of those retiring. If more than a million retire, or people retire earlier, the outlook is even better in the long-term. A plan of this type achieves two objectives. The first is to cut the current level of spending in a way that only affects the current budget and the second is to reduce the number of government employees, the most expensive part of any budget. This would permit cuts to be modest on a yearly basis and at the same time reduce the long-term cost of government by reducing the number of employees. A plan like this is far from perfect but the CBO could score it and predict the result. On the surface it seems like a better alternative to the Democratic plan, which is to continue to increase the size and spending habits of government, and the Republican plan, which is to cut the size and spending habits of government. If we combine some yearly spending reductions and some long-term personnel attrition we may be surprised at the result.

Monday, January 17, 2011

Astro Turfed in Tucson

Readers of The New Narrative know we have contended for a long time that Obama events often include built-in cheering sections near media cameras and microphones. The primary reason is there was always applause and sometimes it seemed to coincide with what are called "applause lines" in speeches. In some cases the cheering and applause took place in what seemed like inappropriate places or events like the recent civility speech in Tucson. If you look closely you will see the word "applause" in the lower corner of the jumbotron in Tucson. It confirms that much of the crowd reaction was manufactured. We are not shocked but certainly disappointed that the Obama team would use such devices at any event, much less a memorial to the deaths of innocent people. I apologize for failing to credit the taker of this photo. I will amend this column if I am able to identify him or her.

Sunday, January 16, 2011

Sunday Morning Acid Heads

If there was a more serious punditry in America I probably wouldn’t be writing this piece. But to listen to the Sunday Shows you would think that Barack Obama just became President and had nothing to do with the atmosphere that had developed over the past two years. It was like John McLaughlin, Chris Wallace, David Gregory and Christiane Amanpour had taken acid and were having hallucinations on television. Obama’s Tuscon speech and his subsequent peace offering to the Republicans is an admission of his failure to live up to the unifying campaign promises he made in 2008. His speech was filled with all the right words, but they were just words. A slurry of platitudes does not a great speech make. He was speaking, but he was not listening as the raucous crowd made it sound like a rally rather than a solemn moment. At any time he could have asked his adoring fans to show some decorum. At any time he could have said that cheering, shouting and whistling were inappropriate. He didn’t. I should like to single out Lynn Sweet of the Chicago Sun-Times who said in view of the incident the audience should be given some slack. I would only add that these were college students, not teeny boppers at a rock concert. Sweet also gave a pass to those who blamed Sara Palin for the shooting saying those that did were just “upset.” As far as Obama reaching out to the Republicans goes, the simple truth is he must if he hopes to accomplish anything. The Republicans control the one thing Obama wants the most: the purse strings of the U.S. budget. The speech in Tucson, his call for civility and a new tone does not change the fact that Obama and the policies he supports were soundly defeated in November. It does not change the fact that he has been one of the most partisan President's in recent history. I hope the Republicans do not forget it. Maybe the passage of time will help the effect of the LSD taken by the hosts of these shows to wear off.

Saturday, January 15, 2011

Are We Coming to Our Senses on Fossil Fuel?

I first ran this post in December, but thought it was worth reposting because of the sudden interest in energy reform by Larry Kudlow and Eric Bolling, as well as the new Republican majority in the House. It provides some background on how fossil fuel became the boogeyman and what we need to do to restore fossil fuel to its rightful place in our economy.
If America wants a recovering and expanding economy it must declare a moratorium on alternative energy and return to the cost efficiency of oil. The Oil Depletion crowd of the 1970’s was wrong. The world is not running out of oil and there will still be plenty left when we have moved on to a more efficient source of fuel. But for the near future oil is the most organic, diverse source of energy ever discovered by man. It is more useful than almost all other forms of organic material and is the residue of all organic life that ever lived on the Earth. Unlike coal whose versatility stops at burning and diamond making, or natural gas, which is a little more flexible, oil is the most versatile of all existing energy sources. The list of products derived from oil would fill a book merely by listing them without an accompanying text. Some of the basic categories include fuels, solvents, plastics, fabrics, resins and medicines. Within each of these categories are many of the things we use in everyday life that are cheap and widely available. It is the secret of the lifestyle to which we have become accustomed and the secret to the wealth of modern society. More expensive alternatives merely rob us of that future. Alternative sources of energy are still in the infantile stages and will remain that way for a long time. We should not abandon them, but we should be more realistic about what is good for our future and our country. Congress must lift the moratorium on oil drilling. The government must permit the refining of oil, oil shale and other oil-based alternatives on federal and private land. States must reduce the level of bureaucracy and increase the number of permits issued for oil exploration and production. America began its search for alternatives to oil when it was thought we were running out. The environmental movement began as a vehicle to support the move from oil to other fuels. It is now almost forty years later. We use more oil than ever and more is being discovered everyday. The world is not running out of oil and America should not suffer because some people think it may happen someday.

Friday, January 7, 2011

Mr. Speaker: Take off the Gloves

Mr. Speaker - It's time to take the kid gloves off and stop this President and our Democratic friends from kicking Republicans around like tin cans. Since the election the President is trying to appear as though he is veering to the center. All of a sudden he is about cooperation and bi-partisanship. It has only taken the Democrats two days to resort to ridiculing, belittling and arguing with Republicans on every little point. It is time to make the President and the Democrats eat crap every day. Why should Republicans give the President and the Democrats the chance they were never given. Where was the cooperation and bipartisanship in the previous two years? All of sudden the President cares about jobs and the economy. All of a sudden the President and the Democrats are concerned about the national debt. Republicans now have the opportunity to demonstrate for the American people that Obama's policies as put in place by a Democratic Congress are bad for the nation. For example an honest submission of the cost of ObamaCare to the Congressional Budget Office would show its actual cost to be much higher than reflected in the legislation. The so-called "Doctor Fix" alone adds over a $1 billion to the cost. This destructive legislation must be put in the spotlight and fairly analyzed so the America people know what kind of smoke and mirrors are at play. And ObamaCare is only one policy. What about the President's energy policy? What about the Justice Department or other Departments where unaccountable people make decisions every day to overcome the failure to legislate. They too should be put under the microscope. Obama and the Democrats should have to answer every day for their failure to legislate policies that create growth and jobs. The President and Democrats do not want the Republicans to be successful. They want you, Mr. Speaker, to fail. They hope to lay on you the terrible effect of the legislation they have passed. Unless you expose them you will pay the price. I hope you will bring the spirit of Mark Anthony to Washington with the goal of politically burying Obama and the Democrats.

Saturday, January 1, 2011

Three Things the New Congress Must Do

No one would try to argue that the Republicans will be able to do all the things required to put our budget in balance, create jobs and improve the economy in one budget cycle. But they must make some modest cuts ($100B is modest) in the second half of the 2011 budget and more serious cuts in the upcoming budget. In addition they must establish a ground game to create the conditions for economic recovery. Three areas include energy reform, housing reform and tax reform. We recently talked about energy reform ( America Must Have Energy Reform ) and we will continue to focus on the other two areas as well. Reform in these areas will do the following three things.
1) Increase the flow and reduce the cost of fossil fuels and establish an unsubsidized market for alternative energy.
2) End subsidies for Fannie Mae and Freddie Mac and sell off their assets and property portfolios to the banking system. This will permit the housing market to find bottom and we can begin a real recovery in the housing market.
3) Develop a tax reform that reduces taxes on activity that leads to growth and penalizes activity that is bad for the economy.
Each of these categories requires extensive analysis to reach the right mix of carrot and stick. But if America is to continue to be the greatest economy in the world and be a force for good throughout the world we must reform ourselves and lead the way.