Landslide on the horizon.

Landslide on the horizon.

I lived through the 1980 election, the fall of the Berlin Wall, and the collapse of the Soviet Union, and I was struck at the time by the fact that next to no one among the political scientists who made a living out of studying presidential elections, communism in eastern Europe, and Sovietology saw any of these upheavals coming. Virtually all of them were caught flat-footed.

This is, in fact, what you would expect. They were all expert in the ordinary operations of a particular system, and within that framework they were pretty good at prognostication. But the apparent stability of the system had lured them into a species of false confidence – not unlike the false confidence that fairly often besets students of the stock market.

There were others, less expert in the particulars of these systems, who had a bit more distance and a bit more historical perspective and who saw it coming. The Soviet dissident Andrei Amalrik wrote a prescient book entitled Can the Soviet Union Survive 1984? Aleksandr Solzhenitsyn predicted communism’s imminent collapse, and Daniel Patrick Moynihan suspected that the Soviet Union would soon face a fatal crisis. They were aware that institutions and outlooks that are highly dysfunctional will eventually and unexpectedly dissolve.

In my opinion, none of the psephologists mentioned above has reflected on the degree to which the administrative entitlements state – envisaged by Woodrow Wilson and the Progressives, instituted by Franklin Delano Roosevelt, and expanded by their successors – has entered a crisis, and none of them is sensitive to the manner in which Barack Obama, in his audacity, has unmasked that state’s tyrannical propensities and its bankruptcy. In consequence, none of these psephologists has reflected adequately on the significance of the emergence of the Tea-Party Movement, on the meaning of Scott Brown’s election and the particular context within which he was elected, on the election of Chris Christie as Governor of New Jersey and of Bob McDonnell as Governor of Virginia, and on the political earthquake that took place in November, 2010. That earthquake, which gave the Republicans a strength at the state and local level that they have not enjoyed since 1928, is a harbinger of what we will see this November.

I agree. However, the author misses one point. There is no guarantee that the American public will vote rationally. Obama might still win. However, the big government welfare state that he and the left believe in is still bankrupt and about to fall apart, no matter what happens in November. The only real question is whether we will honestly face the disaster brewing before us and begin the process of fixing it now, or we will make believe it isn’t there and allow it to overwhelm us in its collapse.

Either way, the federal government is about to go bankrupt, and if we don’t do something about it that bankruptcy will take everything else down with it.

The scramble in Congress to head the House committee on Space, Science, and Technology after November’s election has begun.

The scramble in Congress to head the House committee on space after November’s election has begun.

Rep. Dana Rohrabacher (R-CA) and Rep. Lamar Smith (R-TX) have begun to quietly campaign to replace Rep. Ralph Hall as chairman of the House Committee on Science, Space and Technology next year, according to Stu Witt, General Manager and CEO of the Mojave Air and Space Port.

If Rohrabacher gets the chairmanship it will be very be good news for commercial space, and bad news for the NASA-built and very expensive Space Launch System (SLS). He has been a strong supporter of private space, and will likely want to funnel money to it from SLS.

I’m not sure giving private space more cash is necessarily a good thing, as that will encourage these new companies to be less efficient, more expensive, and more dependent on the government. However, getting SLS shut down will certainly help the federal budget deficit.

“Washington may have the healthiest economy of any major metropolitan area in the country.”

I wonder why? “Washington [DC] may have the healthiest economy of any major metropolitan area in the country.”

The New York Times article has one explanation:

The main lesson the rest of the country should take from the capital’s prosperity is, per Leonhardt, that “education matters.” D.C.’s “high-skill” economy boasts more college degrees than any other major metropolitan area in America. “If you wanted to imagine what the economy might look like if the country were much better educated,” Leonhardt writes, “you can look at Washington.”

The fact that the federal government is spending trillions of dollars, mostly in Washington, DC, is apparently only a side show to this New York Times reporter.

The Democrats in the Senate have passed their tax plan.

The Democrats in the Senate have passed their tax plan, extending the Bush tax rates for families making under $250,000 for one year while allowing the rates for families earning above $250,000 to expire.

The big Democratic claim has been that in order to balance the budget richer people have to pay more of their fair share. Okay, so now they’ve made their point by law. If I were the Republicans I’d accept it, since we all know that this tax increase on higher income taxpayers will do nothing to lower the deficit. We could raise the tax rate for anyone earning more than $250K to 100 percent and we would still have a gigantic yearly deficit.

What will the Democrats next claim when this tax increase fails? It won’t matter. The problem is spending, and the failure of this tax plan will further demonstrate that point. The federal government has to learn to live within its means.

A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

DeMint, Graham and Johnson want their House GOP counterparts to act before the August recess to fund the government through early next year. That would avoid the threat of a government shutdown before Sept. 30 and leave it in the hands of a new Congress and, perhaps, a new president.

What a concept! A proposal that the present Congress do its job now, rather than wait.

At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

This story illustrates two things. First, the House Republican leadership has been timid about using its power to block the implementation of Obamacare, even though the public clearly wants it blocked. Second, that about a third of the House Republican membership has already signed the letter, with more signatures expected, suggests that the bulk of the Republican Party is not as timid as their leadership. Moreover, I expect the November election to significantly strengthen this fiscally conservative trend.

Thus, it will not surprise me if we see some very radical budget cuts in the next Congress.

Vice President Paul Ryan?

Vice President Paul Ryan?

I say “Please!” and I say it loudly. Picking Ryan for number two would reverse Ronald Reagan’s biggest mistake, picking moderate George Bush Sr. as his VP. The result of that bad choice was 12 years of Bush rule in the late 1980s and in the 2000s, during which there was little effort to rein in the power or size of government. In fact, the Bushes did a lot to increase government’s power and size.

Picking Ryan as VP would place a competent fiscal conservative into the limelight and make such a person a leading contender for the Presidency in future years. It would also help demonstrate again that the 2010 election was a trend, not a fluke.

Another dismal jobs report.

Another dismal jobs report.

Job growth amounted to a disappointing 80,000, below analyst expectations of 90-100K, while the jobless rate remained the same at 8.2%:

Read the whole article. There’s a lot more, all of its depressing and trending downward.

While no President should be blamed entirely for the unemployment numbers, the policies of any President do have a direct influence on those numbers, and should bear some responsibility, especially in this era where we have ceded so much power to the federal government. Consider this graph (below the fold), which shows the “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” The steep upward swing, beginning in 2008, sadly corresponds too closely with the beginnings of the Obama administration. And it is with this administration that we have seen the worst deficits, the most regulation, and the biggest increase in the power of government in our lifetimes. It is thus no surprise the economy has crumbled.
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A Tea Party event today in Tucson

Last week I received an email from the local Tucson tea party, asking if I would be willing to attend a demonstration today in response to last week’s Supreme Court decision on Obamacare. To quote the email,

We would like to stage two simultaneous protests against the train wreck they call ObamaCare, at two separate locations Monday July 2nd, 4:00pm-5:45pm. 75 people at both locations are needed to make the necessary impact. They say the Tea Party is dead. What say ye? We need your commitment.

Today those protests took place at two different prominent street corners in the Tucson area. At each location there were about fifty people lining the sidewalk and holding signs and American flags out to passing motorists. My wife Diane and I went to one of those protests. Here are my impressions:
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NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

Today’s unveiling was essentially a PR event designed to boost political support for the Space Launch System (SLS) and the Orion capsule program. And though we should definitely give kudos to Lockheed Martin for its progress on Orion, it is also important to note that the building of this capsule took 8 years and about $6.5 billion. And it won’t go into space for still another two years at best. Compare that to SpaceX’s Dragon, which took about four years from concept to launch, with a cost of about $1 billion.

It is this contrast that is worrying the political supporters of SLS and Orion. Consider for example this quote from the above article:

But the Orion schedule assumes steady funding by Congress, which is an open question given the current debate over federal budget deficits, taxes and a general push to reduce federal spending. “We have to be concerned about that because we are in an era of government spending where you have to do more with a limited amount,” Nelson said. “That, of course, is going to be one of the main things we’re going to have to look at in the future.” [emphasis mine]

Nelson has been a big backer of SLS from the moment Congress decided to force it down NASA’s throat. It is very clear from his comments above however that he recognizes the political difficulties that this very expensive program faces.

As I’ve said before, I expect SLS to die sometime in the next three years. Faced with a ungodly federal deficit, the next Congress is going to look for ways to save money and — assuming the commercial space companies like SpaceX continue to have success — Congress will see this program as one of those ways.

The Dodd-Frank downgrade.

The Dodd-Frank downgrade.

What comes through in the Moody’s assessment [the credit-rating downgrade of 15 banks] and in any review of their returns on equity is that banks have lost significant ability to generate earnings to offset the inevitable losses. The lost earnings power is surely due in part to reduced leverage, which helps protects taxpayers.

But 2,300 pages of Dodd-Frank and countless other federal efforts to put sand in the financial gears are also taking their toll. The Obama tax and regulatory frenzy, of which Dodd-Frank is a part, weighs on economic growth. Those are our words, not Moody’s, but the rating agency does note that the abysmal economic environment is a drag on ratings for everyone.

The Social Security Trust Fund will start losing value in 2013.

The day of reckoning looms: The Social Security Trust Fund will start losing value in 2013, not 2020 as claimed.

In 2010, Social Security’s Office of the Chief Actuary projected that this interest income would keep the trust fund growing in real value through 2020. The 2011 projections moved this date to 2018, and the recently released 2012 projections pushed the date to 2012, meaning that the trust fund will start declining in real value next year. After 2013, the trust fund is projected to decline by greater amounts each year until becoming exhausted in 2033.

The empty bench of the Democratic Party.

The empty bench of the Democratic Party.

In comparing the potential Presidential candidates from both the Democrat and Republican parties, this article leaves one with the impression that the future is definitely not with the Democratic Party. As admitted by its own membership, its leadership is old, it has very few candidates with national stature, and the depth of the party is shallower than a pond in Tucson in summer. Meanwhile, the Republicans have many young new faces that already have national standing.

Though the article likes to blame this situation on internal forces within the parties, I see it as the result of actual elections and the circumstances of the time. The Democrats have increasingly appeared bankrupt when it comes to dealing with today’s fundamental problems, especially the out-of-control spending of government at all levels. Meanwhile, Republican candidates, especially those associated with the tea party movement, have come forward with some fresh, reasonable, and thoughtful ideas for dealing with these problems.

Faced with such a choice, it is not surprising that the Republicans have a deep bench compared to the Democrats.

The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

Progress: The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

Considering the federal debt, this is a reasonable cut, as a $7 billion budget would be comparable to the EPA’s budget numbers in the early 2000s, and would hardly cripple that agency.

On a more depressing note, the Senate is moving forward on a bi-partisan deal to pass a massive farm bill, loaded with pork that would spend almost a trillion dollars over the next decade.

Spending money on silliness at the NSF and NIH

Your tax dollars at work: Spending money on silliness at the NSF and NIH.

Coburn’s report identified a number of projects that will make most Americans—scientists and nonscientists alike—shake their heads. They include studies of: how to ride a bike; when dogs became man’s best friend; whether political views are genetically predetermined; whether parents choose trendy baby names; and when the best time is to buy a ticket to a sold-out sporting event. And it noted that “only politicians appear to benefit from other NSF studies, such as research on what motivates individuals to make political donations, how politicians can benefit from Internet town halls…and how politicians use the Internet.”

Read the whole thing, as it gives a scientist’s perspective of this waste, which is sometimes not as obvious as the examples above.

The debt of the federal government is projected to be nearly twice the size of the U.S. economy by 2037, the Congressional Budget Office (CBO) announced Tuesday.

The day of reckoning looms: The debt of the federal government is projected to be nearly twice the size of the U.S. economy by 2037, the Congressional Budget Office announced Tuesday.

This CBO report actually supposed to be encouraging, as it indicates that the day of doom has been pushed back a whopping two years! Yowza! Let’s pop the corks on the champagne bottles and start celebrating!

Sadly, the article also has this ridiculous quote:

CBO’s latest prediction is similar to its 2011 report despite the $2.1 trillion in budget cuts enacted in last August’s debt-ceiling deal between the White House and Congress.

Nothing was cut by that deal. All they did was trim the rate of growth. For any journalist to continue to participate in this fraud is sickening.

An economy built to stall

“An economy built to stall.”

In his first two years in office, Democrats gave Mr. Obama everything he wanted, save for cap and trade and union card-check, which would have done even more harm to job creation. They passed stimulus, ObamaCare, multiple housing bailouts, Dodd-Frank and more.

Even after Republicans took the House, they gave Mr. Obama the payroll tax holiday he demanded first for 2011 and again for 2012. Far from some new fiscal “austerity,” overall federal spending hasn’t declined. Meanwhile, the Federal Reserve has delivered monetary stimulus after stimulus—QE I, QE II, Operation Twist, and 42 months of near-zero interest rates with the promise of 30 months more.

Mr. Obama has had the freest run of policy of any President since LBJ. So maybe the problem is the policies.

Maybe Milton Friedman was right that “temporary, targeted” tax cuts don’t change the incentives to invest or hire because people aren’t stupid. Maybe each $1 of new federal spending doesn’t produce a “multiplier” of 1.5 times that in added output. Maybe the historic burst of regulation of the last three years has harmed business confidence and job creation. And maybe the uncertainty that comes from helter-skelter fiscal and monetary policy has dampened the animal spirits needed for a durable expansion.

As I said yesterday, though no president or Congress is entirely to blame for the state of the economy, they both can do great harm if they make decisions that interfere with the freedom of the market. And sadly, having the government interfere with the freedom of the market has been Obama’s mantra since the day he took office.

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