December 19, 2012

Media Mislabeling? I Think So

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 6:32 pm

If there’s anything “conservative” about Japan’s new government, I’m certainly not seeing it yet (bolds are mine):

Japan’s incoming conservative government said on Wednesday it would launch a huge spending package worth about 10 trillion yen aimed at injecting life into the nation’s limp economy.

The Liberal Democratic Party led by Shinzo Abe will ditch the current spending limit so it can pay for the whopping stimulus, reports said, even as ratings agencies have warned Tokyo over its spending.

“We must work out a supplementary budget urgently,” the party’s deputy head Masahiko Komura told reporters in the Japanese capital.

“From a macroeconomic viewpoint, some 10 trillion yen will probably be needed.”

In his election campaign, Abe vowed to boost infrastructure spending and pressure the Bank of Japan to boost its economic offensive with aggressive stimulus.

The country’s total debt stands at more than twice its gross domestic product, the worst in the industrialised world and a debt burden that has seen global agencies downgrade Japan’s credit rating.

More of the same path the country has been on for what must be close to two decades now isn’t going to solve anything. The country’s Zombie Economy is almost certain to continue.

WSJ: ‘A Bad Budget Deal’ (Update: Erickson — ‘Excuse Me While I Go Vomit’)

Filed under: Economy,Taxes & Government — Tom @ 8:38 am

Looking at the bright side (this is gallows humor, for those who don’t catch it): Unlike last year’s debt-limit battle, those of use who don’t like what John Boehner is doing won’t get called “Hobbitts” by the Wall Street Journal’s editorial board.

That’s about the only positive thing one can say about what John Boehner is trying to push on the Republicans and conservatives. An editorial in the Journal today calls out the pathetic GOP fiscal cliff proposal quite nicely:

It’s clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend.

Consider the tax increase now being touted as a sign of “compromise.” Speaker John Boehner has moved from opposing higher tax rates to offering higher rates for incomes above $1 million a year. While that’s better than the scheduled increase on incomes above $200,000 a year (for singles), it would still put the GOP on record as endorsing a tax increase, in particular on small businesses that file individual returns.

President Obama has countered with a ceiling of $400,000. If they compromise at $500,000, we are all supposed to thank the two sides for their reasonableness. Yet both parties will have declared that raising tax rates is no big economic deal. This will hurt the economy, and it further advances Mr. Obama’s political goal of separating the middle class from the affluent on tax policy.

What about tax reform next year? A final judgment on this prospect depends on the fine print, but it’s already looking grim. The GOP has prepared the ground for a genuine tax reform, on the Simpson-Bowles model, that lowers rates in return for fewer deductions. In what is shaping up as this budget deal’s prototype, tax reform looks like it means both higher rates and fewer deductions.

This isn’t reform. It’s another tax increase next year disguised as reform. The Fortune 500 CEOs who are lobbying Republicans don’t mind because they hope to get a cut in the corporate tax rate. But small businesses will be stuck with a huge immediate tax increase, at least until their owners can scramble to reorganize as corporations instead of Subchapter S companies or LLCs.

As for spending cuts or entitlement reform, these look notional at best. The only tangible agreement that has been leaked so far is to calculate future tax brackets and entitlement benefits based on “chain-weighted CPI.” This is a more accurate measure of inflation than is currently used and we support it, but it is a small change worth perhaps $270 billion over 10 years.

… None of this is anywhere close to the reforms that might slow the pace of health-care spending, which everyone agrees is the biggest fiscal problem. Look for Mr. Obama to pocket the immediate tax increases, then next year demand another tax increase in return for token entitlement reforms.

The biggest insult to the public’s intelligence is Mr. Obama’s demand for more spending now. We thought this exercise was about deficit reduction.

Thinking micro for the moment — Tax brackets should be indexed to inflation. Entitlement benefits should be indexed to CPI.

The reason should be obvious. While you’re working, you are among other things trying to get your living standard, which in a decent economy (if one ever arrives again) would gradually rise over time. Indexing the tax brackets to inflation effectively keeps the tax system from automatically taking more as a percentage of the median living standard.

But once you’re receiving entitlement benefits paid for by everyone else — at least the retirement-related ones, where the big momney is — your living standard should be considered to be set right where it is for the rest of your life. If you want to improve it, you can always work more, but if you can’t, you’re not being denied anything to which you have any kind of moral claim.

Thinking macro, let’s get back to the editorial:

We think they (Republicans) have more leverage than they believe if they are willing to fight on taxes into next year. But if they’re not, at least they shouldn’t associate themselves with a deal that increases spending and taxes with little or nothing tangible in return.

Let Mr. Obama own the tax increase and its measly 7.5% annual reduction in a $1.1 trillion deficit. Let the sequester take effect as planned, which at least means some spending restraint. Then engage Mr. Obama next year in trench warfare over spending and the debt limit as voters figure out that soaking the rich doesn’t begin to solve the problem. A bad budget deal is worse than no deal at all.

I’m not optimistic that there’s any fight left in the Romneyesque remains of the GOP leadership.

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UPDATE: Erick Erickson

The spin from Speaker Boehner’s Office on the plan shows you every single reason why this plan is embarrassing and Republicans should be ashamed to support it.

The first bullet point is that “Plan B” “does not raise taxes.” Really? How then does that reconcile with the second bullet point that notes, “Plan B” “permanently extends income tax rate cuts for Americans making less than $1 million, which protects 99.81 percent of all taxpayers”?

Only among the mendacious cast of clowns in Washington can those two bullet points be reconciled together. John Boehner’s plan does raise taxes. But it only does so on people who earn one million dollars or more. He obfuscates this because taxes are set to automatically go up in January. Therefore, by preventing taxes from going up on 99.81% of Americans and letting a tax increase happen anyway, he can claim his plan “does not raise taxes.”

That type of mendacity got us to this point.

The most significant thing John Boehner’s plan does is absolutely nothing on spending. Republicans will raise taxes and lie to the American public about it while doing absolutely nothing on entitlements, spending, or anything else. Oh, but John Boehner notes his plan:

Does not include anything on the debt limit or other non-tax policy items. Remember, Speaker Boehner’s rule on the debt limit still applies: spending cuts must exceed any debt limit increase.

Excuse me while I go vomit.

I hope you have a barf bag, Erick, because the line to use the bathroom is really long.

Cory Booker’s Food Stamp Falsehoods

Filed under: Economy,Taxes & Government — Tom @ 6:59 am

Cynical political opportunism.

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This column went up at PJ Media and was teased here at BizzyBlog on Monday.

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Newark Mayor Cory Booker, who once appeared to be a different kind of leftist politician, is instead demonstrating that there really is no such thing as a different kind of leftist politician — at least when ambition takes over.

That’s too bad. In May, his fellow Democrats, especially including President Barack Obama, made the savaging of GOP challenger Mitt Romney’s successful career heading up private-equity firm Bain Capital a centerpiece of their campaign strategy. At first, Booker pointedly rejected the critique, observing that “I live in a state where pension funds, unions and other people invest in companies like Bain Capital,” and that “they’ve done a lot to support businesses [and] to grow businesses.”

But in the first sign that his aspirations reach far beyond New Jersey’s largest city and that he won’t let little things like his own personal convictions and proven facts intervene, Booker backed away from his remarks in the face of withering criticism, saying that it was “reasonable” for the Obama campaign to go after Romney’s business record. In practical terms, this meant that Cory was copasetic with Obama, his surrogates and fellow party members lying shamelessly about that record to win an election.

Booker’s latest stunt, one which has enabled him to gain nearly instant national prominence, is his participation in the bogus “Food Stamp Challenge.”

To be clear, such challenges, if properly designed, could be worthwhile exercises, potentially serving as vehicles for helping financially strapped Americans make wiser, more nutritious and thriftier food choices. Unfortunately, that’s not at all what the Food Stamp Challenge is about. Instead, the Food Research & Action Center (FRAC) promotes it to “help raise awareness of hunger in your community and the need to keep SNAP (Supplemental Nutrition Assistance Program, the government’s official name for food stamps) strong.” That translates in real life to “doing everything we can to keep food stamp benefits on their current expansionary, budget-busting path.” Proof that my assessment is correct is found in FRAC’s most recent research paper, which sets out to convince America, the worldwide leader in obesity, that the USDA’s “Thrifty Food Plan” framework for determining benefits, which has been in place for decades, is woefully inadequate, and that the government should therefore increase monthly food stamp benefits for a family of four by over 30%, or almost $200.

FRAC’s Food Stamp Challenge is supposed to prove “how difficult it is living on the average daily food stamp benefit” of “about $4 per person per day.” Booker used just under $30 as his full-week financial constraint, and predictably concluded his endeavor by calling for a “just and sustainable food system.” The Stanford- and Yale-educated Booker should know that the most just and sustainable food system ever devised goes by the name of Walmart. By totally revamping how groceries are distributed, sold, and tracked, forcing its competitors to imitate them or die, and constantly pushing the low-price envelope, the company has saved and continues to save American families untold billions of after-tax dollars — except in places like Newark, where self-appointed social activists are determined to prevent its appearance.

Both FRAC and  Booker conveniently ignore what the “S” in “SNAP” stands for: “Supplemental.” The USDA’s “Fact Sheet on Resources, Income, and Benefits” clearly explains why challenge participants limiting themselves to $28-$30 a week are being disingenuous:

The amount of benefits the household gets is called an allotment. The net monthly income of the household is multiplied by .3, and the result is subtracted from the maximum allotment for the household size to find the household’s allotment. This is because SNAP households are expected to spend about 30 percent of their resources on food.

As has been the case for the five-plus years I’ve been following the challenge, FRAC and other leftist advocates have deliberately ignored how the food stamp program really works. The following shows how much a household with no other available resources will receive in monthly benefits during the current fiscal year (converted to weekly by yours truly for comparative purposes), and what those levels were six years ago:

FoodStampTable2007and2013

Note that Maximum Monthly Allotments have increased by 29% in six years. During that time, according to the Bureau of Labor Statistics, food costs have risen roughly 20%.

The mayor’s “challenge” obviously should have been how to get by on $46.03 a week. That’s easy, especially for a vegeterian like Booker:

  • Seven 15-ounce cans of various generic or store-brand vegetables should cost no more than about 80¢ each, for a total of $6 (rounded). Each can supposedly has 3.5 servings, but since Booker is an ex-football player, I’ll assume that each can will only last him two meals. That’s 14 meals, or enough for a full week of lunches and dinners.
  • Seven 15-ounce or 20-ounce cans of generic or store-brand fruits averaging $1.25 each will cost $9 (rounded). That’s also enough for all required lunches and dinners.
  • A gallon of milk and a gallon of orange juice come in at a combined $7 or so, enough to provide a 12-ounce serving of one or the other for all 21 weekly meals.

That leaves $24, which is surely enough to provide for all breakfasts and anything else Booker wants to add to his lunches and dinners, including more generous servings of fruits and vegetables. Meat-eaters could spend about $7 for seven cans (14 servings) of heat-and-eat canned pasta and still have $17 left for all breakfasts.

Astute shoppers certainly recognize that my individual cost figures are far higher than one will pay if they shop aggressively. Additionally, I didn’t even look at substituting often cheaper fresh fruits and vegetables or at purchasing in bulk. I daresay that frugal Walmart shoppers could easily feed themselves adequately in most parts of the country on less than $35 a week, and far less than $200 a month.

If FRAC and others have specific problems with how the formulas reducing the Maximum Monthly Allotments work, they should tell us what they are. But they won’t. Instead, they want to make sure that everyone knows which states don’t even have an asset test any more — a loophole which allowed an Ohio couple with $80,000 in the bank and a paid-off house to collect benefits in 2009 — and which ones have stretched the program’s gross income test to up to 200% of the federal poverty level. Loosened program eligibility rules large explain why food stamp program participation continues to grow — up by over 870,000 participants in August and September alone — even as the still too high unemployment rate has been dropping. And of course, advocates fail to account for the fact that millions of households enrolled in the food stamp program have kids who double up on meal coverage by receiving free school breakfasts and lunches.

Cory Booker’s opportunistic Food Stamp Challenge participation was all about positioning himself to seek higher office, either as the Garden State’s next governor or U.S. Senator. It’s not unreasonable to believe that he has eyes on eventually seeking the presidency. The last thing the country needs is yet another unprincipled liberal wolf in moderate sheep’s clothing in the White House.

Wednesday Off-Topic (Moderated) Open Thread (121912)

Filed under: Lucid Links — Tom @ 6:05 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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Positivity: RIP, Frank Pastore

Filed under: Positivity — Tom @ 6:00 am

Former Cincinnati Reds pitcher and popular Christian talk-show host Frank Pastore died on December 17.

What follows is excerpted from the story of his conversion:

A Big-League Skeptic Finds Faith At The Cross
Written by Frank Pastore

For twenty-seven years I was a practical atheist, an evolutionist. I rejected Christianity because I had been convinced it was false. Very simply, if there is no God and no afterlife, then our existence is utterly meaningless. Since there is no meaning to life, all that is left is to create meaning in this life as you go. For me, it was in winning the “survival of the fittest,” and in our culture that translates to “He who dies with the most toys wins.” I thought I could create my own happiness, my own meaning, if I become rich and famous.

Funny thing was, although I became somewhat rich and sort of famous, I wasn’t any more content than I was on the day I signed with the Reds. Even living the American dream didn’t bring fulfillment. Playing life by the rules didn’t bring it either. The issue isn’t what is outside, the issue is what is inside.

Since the first grade I had been taught to doubt the existence of God: The universe had just popped into existence out of nothing, evolution was a “scientific” fact, miracles can’t happen, the Bible’s been changed, etc. During my whole life I had accepted the government’s humanistic propaganda that the teachings of Darwin, Marx, Freud, Hume, and Kant had all combined to make religion obsolete. As these thoughts raced through my mind, my heart was drawn to the quality of life I had observed in my Christian teammates. When I found myself wanting to yield to my emotions and pray, I had to remind myself that “God” wasn’t real. He was merely a crutch for intellectual weaklings, an excuse for mediocrity and failure, a placebo for psychologically imbalanced people – although also an effective and soothing pacifier for whining, injured professional athletes.

Although I may have all the external signs of success, internally there was something wrong. Something was missing.

… Then on June 4, 1984, in Dodger Stadium, all of that changed. … I was cruising to a 3-1 victory with two outs in the eighth inning, when I made the pitch that eternally changed by life. Dodger Steve Sax rocked a 2-2 fastball off my right elbow and my whole world-view shattered in one painful instant. Immediately, I knew my arm would never be the same again, and my career, as I had known it, had come to a tragic end.

… It was only about two months after making that pitch in Dodger Stadium that I gave my heart, my mind, and my life to Jesus Christ. Nine years earlier I had gone into pro ball to get rich and famous. Finally, I was rich – rich with the knowledge that my sins were forgiven and that I would spend eternity with Jesus Christ in glorious fellowship. And I was famous – I may not have been in Cooperstown, but I was in the Lamb’s Book of Life. Despite the injury and all the uncertainty of my career, I knew the void in my heart I had been trying to fill my whole life had finally been filled. My wife, Gina, came to Christ a short time later, and when our daughter was born in October of 1984, we named her Christina to commemorate our commitment to Him and to honor her.

Pastore’s conversion came about because a Bible study leader challenged him to refute the fundamental truths contained in three important books: Mere Christianity by C. S. Lewis; Scientific Creationism by Henry Morris; and Evidence That Demands a Verdict by Josh McDowell. Pastore thought doing so would be easy, but he ended up being the one convinced.

RIP, Frank.