December 3, 2005

Margaret Beckett of Great Britain Deserves a Major Promotion

Filed under: Economy,Environment,Taxes & Government — Tom @ 6:01 pm

British Prime Minister, perhaps? UN Secretary-General (if she promises to move it from New York to, say, Geneva)?

Anyone, especially as Britain’s Environment Secretary, who can say this at a “climate change” conference deserves a major step up:

Ms. Beckett this week showed the level of governmental expectation by describing those expecting new Kyoto-style targets to be agreed as “living in cloud-cuckoo-land”.

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Previous related posts:
- Nov. 29–Canadian Crocodile Tears for the Never-in-Effect Kyoto Treaty
- Nov. 22–The Kyoto Treaty Is Dead–I Knew That
- Sept. 21–The Enviro “Coalition of the Seething” Won’t Be Pleased
- Sept. 17–Kyoto Treaty, RIP: Blair Delivers the Blow

Open E-Mail to Human Events Online (Re 2nd District Primary Results & Events, and Possible McEwen 2006 Candidacy)

Filed under: OH-02 US House — Tom @ 11:45 am

Note: Minor edits and additions were made to the text of this post after the e-mail was sent to HEO, and an update e-mail was sent to HEO for the correction noted within the post.
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In The Human Events Online post, “Will McEwen Challenge Schmidt?” (HT OH-02), HEO Blogger John Gizzi makes factual errors about the both the results and the events of the Second District congressional primary that took place in June. The HEO post also speculates about a potential 2006 McEwen candidacy in the 2nd District against now-incumbent Jean Schmidt.

I e-mailed HEO about these errors, and indicated how the items they failed to report relating to what really happened in the June primary will, in my opinion, impact McEwen’s campaign should he run again.

Results Error

In my e-mail to HEO, I informed Mr. Gizzi that Jean Schmidt won the primary by 2,667 votes, not the 700 he claimed. Gizzi must not have been aware of the Clermont County submission glitch that was not corrected and included in the totals until the day after the election.

Errors in Recounting How Primary Events Unfolded

Gizzi writes the following in assessing the results:

McEwen’s backers believe his loss to Schmidt was due in large part to a TV blitz on behalf of fellow conservative (Tom) Brinkman that was funded by the conservative Club for Growth. (Following the race, in which Brinkman placed third, a club spokesman told me his group supported Brinkman but “had nothing against Bob McEwen,” and did not want a victory by Schmidt–who voted for a sales tax increase requested by Republican Gov. Robert Taft). In addition, McEwen’s fund-raising was hampered by the candidacy of fourth-place finisher DeWine, who had the backing of many reliable GOP donors out of respect for his senator-father. Neither Brinkman nor (Pat) DeWine are considered likely to run for the seat again.

This is where I’ll begin quoting my e-mail through to the end:

Mr. Gizzi should have tried to talk to someone besides McEwen’s backers, because that paragraph is a howler.

There were two Club for Growth (CFG) ad blitzes, and both were as I recall more radio-oriented than TV. Regardless:

  • The first, about 2-1/2 weeks before Primary Election Day, strongly criticized Schmidt and praised Brinkman and McEwen. (correction: the ad only referred to Schmidt, and the CFG web site praised Brinkman, DeWine and McEwen–see third item at this link). I phoned CFG after the first blitz and informed David Keating, their Executive Director, that Brinkman’s record on taxes was stellar, but that McEwen, first, had no track record because of being out of elective office for 12 years, and second, when he was in office, had a reputation as being in favor of “pork for me and not for thee.”
  • The second CFG campaign during the week before the election did single out Brinkman for praise, and Schmidt again for criticism. I do not know why CFG did not mention McEwen in the second blitz, but hope that it was because they did research showing that my contention about his past was accurate.

The CFG’s failure to mention McEwen in its second ad blitz did not hurt McEwen. What hurt him were attack ads funded from ultimate fourth-place finisher Pat DeWine’s million-dollar treasure chest. While these ads succeeded in driving both candidates’ numbers down, they raised legitimate questions about McEwen’s past votes for tax increases; his 12-year absence from the district at the time of the primary (I understand he has lived in the district, or at least has had a residence in it, for perhaps 8 months now); his involvement in the early 1990s House Bank Scandal (5th paragraph) that not only led to his first election loss, but also launched the career of Ohio Democratic gubernatorial candidate Ted Strickland; and his comical, probably illegal (according to Ohio election laws), and still-current insistence on calling himself “Congressman McEwen” despite not holding elective office since January 1993.

Others raised issues concerning the nature of McEwen’s many years of activity as a Washington lobbyist representing foreign governments and entities (which he would not discuss, even in general terms), and wondered how district voters could be assured that he would really keep the interests of the 2nd District, and yes, perhaps even the country as a whole, paramount.

I was, and still remain, concerned about the extent of McEwen’s involvement with Amway/Quixtar as an Independent Business Owner (IBO–people who in the past were called “distributors”), highly-paid motivational speaker, and provider of motivational materials to other IBOs, and was disappointed that, after a 12-year absence (and though he technically was not required to), he did not choose to release his Personal Financial Disclosure forms before Primary Election Day so the voters could have some idea of what he had been doing all these years (the submission deadline was the day after Primary Election Day).

All of these factors contributed to McEwen’s defeat in the June primary at the hands of Jean Schmidt, whom most observers had initially given little chance of winning.

As to McEwen’s primary election fundraising, he was not lacking for resources. He had well over a hundred contributions from Amway/Quixtar IBOs and others totaling several hundred thousand dollars. He had a radio-ad endorsement that included the voice of national values leader James Dobson (who, not knowing the other candidates, dishonestly pretended (second item at link) to somehow know that McEwen was the best candidate in the field, despite the strong values positions of Schmidt, Brinkman, and several other GOP candidates). McEwen had a similar endorsement voiced by local pro football legend and family-values conservative Anthony Munoz. He had numerous written testimonials and district campaign visits from other national values leaders and Reagan-era conservatives. With all of this help, the kind that most politicians can only dream of, he garnered less than 26% of the vote.

McEwen’s Potential 2nd District 2006 Candidacy

Most of the shortcomings and concerns about Bob McEwen described above still exist. But his ability to pull in the values-based outside support he had last time is limited by the reality that James Dobson and other values gurus cannot credibly claim that now-incumbent Jean Schmidt, a former Cincinnati Right to Life President, is weak on values issues. Additionally, there are several other Ohio races in 2006, including the one for governor, that values conservatives are giving very high priority.

During the past week, Congresswoman Schmidt has received strong support from your own Ann Coulter in her latest column. In a CNN interview with Howard Kurtz, Glenn Reynolds of Instapundit alluded to Schmidt’s “political courage.” Serendipitously for Schmidt, the complete meltdown of Congressman John Murtha continues. He has not only called for us to cut and run from Iraq, but in the past day he has slandered The Pentagon and the military, and arguably given aid and comfort to our terrorist enemies, by calling the US Army in Iraq “broken, worn out,” and “living hand to mouth.” Congresswoman Schmidt, in the meantime, has accepted an invitation to go to Iraq with a congressional delegation in mid-January, an indication that the administration may be proactively getting behind her.

Like it or not, all of these factors are bolstering Congresswoman Schmidt’s strong-on-defense credentials with voters. If Bob McEwen had one advantage heading into June’s primary, it was his outspoken and out-front support of the Reagan policies that led to our triumph in The Cold War, and his very visible and vocal support of The First Gulf War during his last term in Congress, both of which positioned him as presumptively strong in pursuing the War on Terror. Thanks to Schmidt’s House floor speech, and more than a little luck after that (Murtha’s excursion into no-man’s land and the actions of her over-the-top leftist critics have built up a “she’s our gal” effect in The District), any advantage McEwen might have had over her on defense and the War on Terror has evaporated.

That leaves tax and fiscal policy, particularly her association with Ohio’s GOP tax-raisers when she was a representative in Columbus, as Jean Schmidt’s only certain vulnerability. After what is now 13 years out of office, what can Bob McEwen say about what he could or would do differently or better in this area that would have more credibility than any inexperienced first-time candidate for office?

So in addition to merely speculating about whether Bob McEwen is running again, Human Events and Mr. Gizzi should be asking why this three-time loser (November 1992, March 1993, and June 2005, by roughly 6% of the vote in the 2nd and 3rd losses) insists on attempting a Hail-Mary campaign against a somewhat flawed incumbent, when there are several more credible challengers and true conservatives, including Tom Brinkman (yes, I voted for him in June’s primary), who, if the field were cleared of Bob “me-first” McEwen, could not only give Jean Schmidt a much tougher campaign, but could force her further to the right in the fight to survive the challenge.

Regards,
Tom Blumer

Jim Glassman Has the Language Down Right (“Huge Automatic Tax Increases”)–and the Impact

Filed under: Economy,Taxes & Government — Tom @ 11:17 am

The language–”Three huge automatic tax increases.”

The impact of dithering on preventing them from taking effect could end the current prosperity:

The increases — 133 percent for the rate on dividend income, 33 percent for the rate on capital gains and what amounts to an infinite increase in the coming rate on what you pass on to your heirs — comprise a ticking time bomb.

The dividend and capital gains rates were reduced to 15 percent in 2003. The estate (also called death or inheritance) tax got an overhaul in 2001, with gradual reductions over 10 years and complete elimination set for 2010.

But the dividend and capital gains cuts turn into pumpkins (reverting to their old top rates of 35 and 20 percent, respectively) at the end of 2008. And in 2011, the pre-2001 estate tax reappears. Since backers lacked 60 Senate votes, all three of the cuts were only temporary.

The estate-tax cut can wait a bit for an extension, but the dividend and capital gains tax cuts can’t. My guess is that, early in 2006, the prospect of the big increases will weigh on markets. Investors will start selling stocks and other assets to take advantage of the expiring 15 percent capital gains rate, driving down prices.

Academic research has found that the dividend cut, by increasing what America’s 57 million investing families can keep after taxes, boosted stock prices considerably. A paper for the prestigious National Bureau of Economic Research by Alan Auerbach and Kevin Hassett concluded that the cuts “had a significant impact on equity markets” — a broadly positive impact. Take the cuts away, and stocks will almost certainly head in the opposite direction.

As for the estate tax: It’s hard to say if the tiny changes so far have had an effect, but the elimination of all taxes at death certainly will. Surveys show the estate tax is the most broadly despised federal tax, hated even more than the income tax. Americans of both parties think it’s unfair to tax income once on receipt and again at death.

Heading off the automatic tax increases on dividends and capital gains is especially urgent. I believe the economy’s growth will fall back to 2% in the latter half of 2006 if Congress does not choose to extend the rates currently in effect–preferably indefinitely.

Positivity: Delhi (India) blast hero dreams of driving a bus again

Filed under: Positivity — Tom @ 7:11 am

A national hero struggling towards recovery has lots of people rooting for him:

(more…)

This Weekend’s Unanswered Questions (120305)

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4) this inquiring mind would like to have answers for (some links included may require free registration):

QUESTION 1: Why is the FCC fighting yesterday’s war with the cable companies?

They want the cable companies to offer a la carte services:

In a sharp reversal, the chairman of the Federal Communications Commission said Tuesday that the agency now thinks cable companies should stop forcing people to subscribe to bundles of channels and give them the option of choosing individual channels. (Related items: TVs turn into vending machines for programs | A la carte cable could be a tough sell)

Kevin Martin, FCC chairman since March 16, asserted that a la carte pricing could both allow parents to block offensive programming and lower their surging cable bills. His stance might push Congress to require cable and satellite companies to offer the option.

Meanwhile, a la carte appears on the imminent horizon–on mobile media:

The market for television and other media on mobile phones is poised for an explosion and could be a hot area for investment, advertising and media executives at the Reuters Advertising and Media Summit said on Wednesday.

“If I had to make one prediction I would say that’s going to explode, mobile media ” said Charles Rutman, media buying agency MPG’s chief executive for North America, adding that people are more dependent on their cell phones than ever before.

I would add computers (mobile and desktop) to the potential alternative media mix.

The point is that if the cable companies see their audience dwindling, they may begin to offer a a la carte options to customers to keep up with the competition, or decide to get into the mobile business lines too. The FCC should generally let the market sort things out.

Another part of the answer is to allow multiple cable companies to serve market areas, as is the case in Columbus, Ohio, where (no surprise) rates are lower than in cities with only one provider. If there is a viable market for a la carte cable, then one of the players in a truly competitive situation will eventually give it a try.

QUESTION 2: Why is it so difficult to get 911 service univerally available on VOIP?

The FCC’s reactions seems a bit heavy-handed in the circumstances, but the telecom industry doesn’t seem to understand that a customer has the right to expect to dial into emergency services when needed, and the industry has a moral obligation to make sure it happens:

Vonage Holdings Corp., the nation’s largest provider of Internet phone service, could be barred from signing up new customers in many markets because it failed to meet the deadline to provide reliable emergency 911 service to all subscribers.
The Federal Communications Commission gave Vonage and other companies that sell Internet-based phone service 120 days to comply with its order requiring enhanced 911, or E911, in all their service areas.
The deadline to show the government where E911 is available was Monday. House and Senate lawmakers had urged FCC Chairman Kevin Martin to give companies more time and more tools to speed deployment, but no extension was granted.
In its compliance report to the FCC, Vonage said only 26 percent of its customer base had full E911 services. The company – which has more than 1 million subscribers – said it was capable of transmitting a call back number and location for 100 percent of its subscribers, but that it still was waiting for cooperation from competitors that control the 911 network.

VOIP providers and their competitors had better get their cooperative act together before someone dies due to lack of adequate 911 service and brings on the Mother of All Lawsuits.

QUESTION 3: Will California voters pass the Meathead Tax?

Ignoring recent history, Rob Reiner, who played Michael Stivic (“Meathead”) in the 1970s series “All in the Family,” wants to soak the rich (HT Club for Growth blog), and may get his way:

Actor/director Rob Reiner has gathered enough signatures to place a tax increase on the June ballot to fund government-controlled preschool programs. It would raise the top state income-tax rate to 12 percent, from 10.3 percent.

Voters should be aware that this tax bucks not only national but also worldwide trends. If the income tax passes, the new 12 percent top rate would be the highest in the nation. And it goes on top of the highest federal rate of 35 percent, for a total of 47 percent.

….. The Reiner tax would be paid only by individuals with taxable income above $400,000 a year or couples making above $800,000 a year. The average tax paid would be $8,700. Mr. Reiner claims the increase hardly would be felt, given that the “Bush tax cut gave $77,000 a year to everybody in that bracket.”

That’s an amusing point. Because Mr. Reiner, effectively, is acknowledging that tax rates do affect people’s behavior; and that without the Bush tax cuts, Californians would be worse off than before.

But he doesn’t see that, if people leave California for a state with no income tax, such as neighboring Nevada, they avoid not only his potential tax increase, but all our hefty taxes. And if they leave for a flat-tax country, their rates can be one-third their current levels.

California needs to get with the global flat-tax revolution and cut rates, not raise them.

Reiner is guilty not only of pushing a Meatheaded idea, but of bad math. The Bush tax cuts took the highest federal marginal rate from 39.6% to 33%. That 6.6% difference times the $400,000 kick-in level for singles is about $26,000, and times the $800,000 kick-in level for marrieds is about $53,000. Both are a lot less than the $77,000 cited by Reiner. Perhaps $77,000 was the average Bush tax reduction for Californians earning above the kick-in thresholds, but that’s not what Reiner said.

The Meathead tax increase is especially outrageous because it targets an extremely small group, probably less than 3% of Californians, very few of whom even have kids in pre-school, to fund programs for the entire population. I can’t verify this without further research, but I would not be surprised if the very rich may even be prevented by income eligibility rules from using the programs themselves for free (anyone with info on this, e-mail me). Even Robin Hood might have blushed at this level of government-sanctioned larceny.

The first point at this post noted that 40,000 millionaires “voted with their feet” and left California during the Gray Davis era in response to tax increases. If The Meathand Tax passes, prepare for a re-run.