Monday, December 3, 2012

How A Legal Technicality Could Unravel Obamacare!

Business Insider ^ | Dec 3 2012 | Lucas Kawa

Obamacare supporters rejoiced in June when the Supreme Court ruled the U.S. could use its taxing authority to mandate that most people buy health insurance.

But their celebrations may have been a bit premature.

The Affordable Care Act faces other legal hurdles—including a challenge that only could have been made after the Supreme Court’s ruling.

The right-leaning Pacific Legal Foundation amended its challenge to the ACA after the Supreme Court upheld the insurance mandate under Congress’ taxing powers.

The group's challenge turns on the Origination Clause in the U.S. Constitution, which requires that bills for raising revenue start in the House of Representatives.

Problem is, the group argues, Obamacare started in the Senate.

(Excerpt) Read more at businessinsider.com ...

IF


Rudyard Kipling

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or, being lied about, don't deal in lies,
Or being hated don't give way to hating,
And yet don't look too good, nor talk too wise;
If you can dream---and not make dreams your master;
If you can think---and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:.
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build'em up with worn-out tools;
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings,
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on!"
If you can talk with crowds and keep your virtue,
Or walk with Kings---nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And---which is more---you'll be a Man, my son!

House GOP makes a $2.2 trillion debt counteroffer to Obama on cliff

The Hill ^ | December 3, 2012 | Russell Berman

House Republican leaders have made a counteroffer to President Obama in the fiscal cliff negotiations, proposing to cut $2.2 trillion with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.

The leaders delivered the offer to the White House on Monday with a three-page letter signed by Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), and four other senior Republicans, including Rep. Paul Ryan (R-Wis.), the party’s just-defeated vice presidential nominee.
House Republican leaders have made a counteroffer to President Obama in the fiscal cliff negotiations, proposing to cut $2.2 trillion with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.

The leaders delivered the offer to the White House on Monday with a three-page letter signed by Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), and four other senior Republicans, including Rep. Paul Ryan (R-Wis.), the party’s just-defeated vice presidential nominee.

The GOP’s Redheaded Stepchildren

redstate.com ^ | November 29th, 2012 | Brookhaven

Every party has its wings–different sub-groups that are part of the larger organization. The Republican party has three wings that the Republican leadership believes is so dangerous to the future of the party, that they tried to suppress their influence in the last election, and pointed fingers at them as the reason for the GOP’s poor showing in the 2012 election cycle.
The Tea Party
It originally sprung up in opposition to out of control government spending. It has become a grass-roots movement centered around government fiscal responsibility. It has a tendancy to work outside the Republican party machinery, which has engendered the wrath of the GOP establishment.
It’s not unusual for a primary candidate to be scorned by the GOP establishment, simply because the candidate is considered a tea partier. Tea partiers felt like they were locked out of the 2012 convention. The GOP is highly critical of any tea party slip ups and magnifies them into major failures. Conversely, the GOP establishment seems to conveniently fail to give the tea party credit for its successes (Marco Rubio for example). It seems as if the GOP establishment now wishes the tea party would just go away.
Social Conservatives
They are concerned about government using its influence to push the country socially to the left. While they get pigeon-holed as the pro-life/pro-traditional-marriage group, in the larger sense they are concerned about government policies that undermine family integrity (such as the welfare state) and an activist judiciary that (1) creates new rights out of thin air that push the country socially to the left, and (2) thwarts any attempt to reign in government social activism.
And, the GOP establishment hates them. They want their votes, but they don’t want them to speak. The aftermath of the 2012 election produced another flood GOP consultants blaming the loss on social conservatives.
Libertarians
You sometimes forget there is a libertarian wing of the Republican party (because it is so loosely tied to the party), but it’s there. When a libertarian leaning candidate emerges (as Paul did in the last primary), you realize how sizeable (and vocal) this group really is. Unfortunately, this group tends to pack up its toys and go home when it doesn’t get its way. Which, is exactly what the GOP establishment wants. If a group can’t be controlled, they would rather it not be part of the GOP. Libertarians (because they are so focused on individual liberty) are the least controllable of all. This is why they (like tea party activists) were shut out of the 2012 convention.
The core philosophy of libertarians is (1) the government should be limited to its constitutional functions, and (2) individual rights trump government and group “rights.” Not that far out there at all, really. Unfortunately, it’s easy to confuse the libertarian messenge with the libertarian messager. Both Ron Paul and the actual Libertarian party are much farther out onto the edge on a host of issues than the typical libertarian leaning Republican, giving many people the impression that libertarian is a code word for wacko. It’s not. It is though, the only wing of the GOP that attracts large numbers of college students and young voters (something conservatives of all stripes should be very aware of; if you can’t pull in young people, your movement will grow old and die).
The GOP establishment sees all three groups as more trouble than they are worth. Hence its constant maneuvering to silence, shut-out, and shut-down all three. But, without these groups, what would the Republican party be left with? Without tea partiers (fiscal conservatives), without social conservatives (family values and judicial restraint), and without libertarians (individual liberty and adherence to the Constitution) what would be left; what would the Republican party become?
The party of business and defense.
Is that enough? Can the GOP survive (much less flourish) emphasizing business and defense, while deemphasizing everything else? Obviously not, but that would seem to be the path the GOP establishment is taking the party down, as it continues to attempt to suppress the influence of the tea party movement, social conservatives, and libertarians.
Maybe it’s time the red-headed stepchildren focus on working with each other, instead or working with the GOP establishment. I’m not sure if this would take the form of another party, or a redheaded coalition within the GOP, but whatever form, it would certainly be more effective than the current situation.
Don’t think the three groups can work together? Social conservatives tend to be fiscal conservatives, which lines up the the tea party. Tea partiers want government to stay within its constitutional bounds, and so do libertarians. Libertarians are concerned about judges who legislate from the bench, as are social conservatives. When you lay it out, the three groups’ goals, they mesh nicely. Not perfectly, but there is a lot of overlap. Enough, certainly, to form a coalition.
Perhaps it’s time the redheaded stepchildren get together and quit being children.
PS
And, for those that think libertarians are inherently pro-abortion, consider that Ron Paul (the libertarian wing’s poster boy from 2012) is pro-life, Bob Barr (the 2008 Libertarian party nominee) is pro-life, and Michal Bardnarik (the 2004 Libertarian party nominee) is pro-life. Support for abortion does not seem to be a litmus test for libertarian thought. Most libertarians believe that Roe v. Wade should be overturned and the matter returned to the state level. A position a significant number of social conservatives also agree with.

Iraqi Refugee Bombs AZ Social Security Office, MSM Remains Silent

Breitbart ^ | 12/3/12 | AWR Hawkins

On Friday morning, an Iraqi refugee used an improvised explosive device (IED) to bomb a Social Security office in Casa Grande AZ -- the mainstream media remains silent.

The explosion took place before the office opened for the morning, so one was hurt. But reports indicate the explosion "was heard and felt all over the area."

The suspect in the bombing, Abdullatif Aldosary is an Iraqi refugee who lives in Coolidge, AZ. He is in police custody.

For reasons unreported, Aldosary had raised the Department of Homeland Security's attention a number of times throughout the last two years, and he served 8 months in prison for harassment at some point.

(Excerpt) Read more at breitbart.com ...

Are Democratic lawmakers are invested in doing NOTHING?

12/3/12 | Republicanprofessor

Are Democratic lawmakers are invested in doing NOTHING about the fiscal cliff?

This is a frightening idea, especially when Democrats are only calling for tax increases and not facing escalating entitlement costs.

Are our lawmakers, particularly Democrats, so invested in certain issues that they have no reason to solve the problems? One brave Hispanic Republican noted this on NPR yesterday: the Democrats have no reason to solve the immigration problem because the issue keeps getting them re-elected. When re-elected, they get outstanding perks and privileges, far beyond the reach of most voters, and our fair representatives naturally resist reducing those benefits for themselves.
It’s the same with education. Democrats have controlled education through the unions for decades, and we have seen no improvement, instead only whining about “teaching to the test” when Republicans try to act to improve school districts by getting rid of the worst schools. (We need a new way to evaluate schools, but don’t look to the unions to approve fresh ideas.)
Is it the same with the fiscal cliff? I’ve been wondering why Democrats don’t offer a reasonable plan with cuts, but then that would countermand their pandering to the seniors and the poor. Why offer a plan when it is easier to blame the mean, evil Republicans for making cuts to Democratic constituents, thus ensuring their Democratic re-election?
What kind of a country is it when the party that procrastinates, plays politics and demonizes the other party is the one that keeps winning and making the situation worse by the hour?
What kind of electorate is the one that votes for the liars and cheats: the kind of electorate that has been taught by politically correct Democrats.
We need a revolution of change and attitude to cope with the problems. We need outspoken and articulate Republicans who can explain complex issues to the masses, and we need an unbiased media to rely and debate these issues. We need politicians who call a spade a spade and stick to their guns.
Good luck.

Fiscal Cliff Notes: Part II

Creators Syndicate ^ | December 4, 2012 | Thomas Sowell

One of the big advantages that President Obama has, as he plays "chicken" with the Congressional Republicans along the "fiscal cliff," is that Obama is a master of the plausible lie, which will never be exposed by the mainstream media— nor, apparently, by the Republicans.
A key lie that has been repeated over and over, largely unanswered, is that President Bush's "tax cuts for the rich" cost the government so much lost tax revenue that this added to the budget deficit— so that the government cannot afford to allow the cost of letting the Bush tax rates continue for "the rich."
It sounds very plausible, and constant repetition without a challenge may well be enough to convince the voting public that, if the Republican-controlled House of Representatives does not go along with Barack Obama's demands for more spending and higher tax rates on the top 2 percent, it just shows that they care more for "the rich" than for the other 98 percent.
What is remarkable is how easy it is to show how completely false Obama's argument is. That also makes it completely inexplicable why the Republicans have not done so.
The official statistics which show plainly how wrong Barack Obama is can be found in his own "Economic Report of the President" for 2012, on page 411. You can look it up.
You may be able to find a copy of the "Economic Report of the President" for 2012 at your local public library. Or you can buy a hard copy from the Government Printing Office or download an electronic version from the Internet.
For those who find that "a picture is worth a thousand words," they need only see the graphs published in the November 30th issue of Investor's Business Daily.
(Excerpt) Read more at creators.com ...

Fiscal Cliff Notes

Creators Syndicate ^ | December 4, 2012 | Thomas Sowell

Amid all the political and media hoopla about the "fiscal cliff" crisis, there are a few facts that are worth noting.

First of all, despite all the melodrama about raising taxes on "the rich," even if that is done it will scarcely make a dent in the government's financial problems. Raising the tax rates on everybody in the top two percent will not get enough additional tax revenue to run the government for ten days.
And what will the government do to pay for the other 355 days in the year?

All the political angst and moral melodrama about getting "the rich" to pay "their fair share" is part of a big charade. This is not about economics, it is about politics. Taxing "the rich" will produce a drop in the bucket when compared to the staggering and unprecedented deficits of the Obama administration.
No previous administration in the entire history of the nation ever finished the year with a trillion dollar deficit. The Obama administration has done so every single year. Yet political and media discussions of the financial crisis have been focussed overwhelmingly on how to get more tax revenue to pay for past and future spending.
The very catchwords and phrases used by the Obama administration betray how phony this all is. For example, "We are just asking the rich to pay a little more."
This is an insult to our intelligence. The government doesn't "ask" anybody to pay anything. It orders you to pay the taxes they impose and you can go to prison if you don't.
Then there are all the fancy substitute words for plain old spending— words like "stimulus" or "investing in the industries of the future."
(Excerpt) Read more at creators.com ...

How Susan Rice Covered Up the Kenya Embassy Bombings 14 Years Before Benghazigate

Front Page Mag ^ | 12/2.12 | Daniel Greenfield

Before you read this, keep in mind that all this is just unjustified racism because Susan Rice had nothing to do with any of it. Except for the parts that she had to do with.

In the spring of 1998, Prudence Bushnell, the U.S. ambassador to Kenya, sent an emotional letter to Secretary of State Madeleine Albright begging for a more secure embassy in the face of mounting terrorist threats and a warning that she was the target of an assassination plot.

The State Department had repeatedly denied her request, citing a lack of money. But that kind of response, she wrote Albright, was “endangering the lives of embassy personnel.”

(Excerpt) Read more at frontpagemag.com ...

The Pigeon Movement – A rallying cry for French start ups!

The Rude Baguette ^ | 01 October 2012 | LiamBoogar

60% Capital Gains tax – the real innovation killer!

Forget taxing the wealthy, forget big government, the French government is eliminating the one tangible reward for building new companies, creating innovation, and providing the French government with a few hundred new employees. This come at a time where France’s big companies are beginning to show their anti-global competitiveness roots - Peugeot is laying off thousands, Bouygues is laying off thousands, and this is just the beginning. For the record, the current Capital Gains tax is set at 32.5%, an 84.6% tax hike.

The Pigeon Movement – France’s Last Hope for Start ups.

In the wake of all this built up tension & disappointment from the startup community, a group of entrepreneurs put together a group called “Les Pigeons.” The group grew to over 3,800 members during the weekend alone - a gathering is scheduled to be held Sunday October 7th at 3:00PM in front of the National Assembly, and French startupers across the web have been changing their profile pictures to the pigeon seen to the right in order to spread the word.
According to Ruben Nataf, CM for Whoozer and allegedly the CM for @DefensePigeons, the group was started by Bluekiwi(Acquired by Atos | 04/12 for €20M) & Kwarter founder Carlos Diaz (currently based in SF), along with Whoozer CEO Fabien Cohen.
In French, the term “pigeon” is used to call someone a sucker – and it seems fitting here. Hollande has gone back on his promise to lower taxes paid by SMEs so that they will be less than big companies after tax breaks.

Psoriasis drug may halt or reverse Alzheimer's disease!

SmelLASlime ^ | November 27, 2012 | Melissa Healy

A biological medication already widely used to treat plaque psoriasis may be able to slow the accumulation of amyloid plaques in the brain that are the hallmark of Alzheimer's disease, a new study has found. The same study found that in older mice with established Alzheimer's, this treatment approach, which suppresses the brain's immune reaction to beta amyloid, brought a marked improvement in cognitive function and may even halt or reverse early signs of Alzheimer's.

The new study was published this week in the journal Nature Medicine.

Conducted by researchers in Switzerland and Germany, the study offers a glimmer of hope in the thus-far discouraging search for a therapy that could halt or reverse the inexorable process of neuronal loss and mental decline that affects some 35-million people worldwide. It also strengthens evidence for the long-suspected role of inflammation in the development of Alzheimer's disease.

(Excerpt) Read more at latimes.com ...

AAA SAYS CERTAIN ETHANOL FUEL (E15) CAN DAMAGE CARS, ASKS EPA TO REMOVE FROM PUMPS!

Human Events ^ | 11/30/2012 | Audrey Hudson

The recently approved use of E15 fuel made from blending gasoline and ethanol could damage vehicles and void warranties says the American Automobile Association (AAA), which is urging the federal government to ban it from the market.
The Environmental Protection Agency (EPA) approved the fuel earlier this summer, but AAA says only five percent of vehicles on the road are approved by the manufacturers to use the special blend they say causes significant problems such as accelerated engine wear and failure, fuel-system damage and false “check engine” warning lights.
The auto club conducted a recent survey it says identifies confusion among consumers as to which vehicles can use the fuel — 95 percent of those surveyed had never heard of E15, which contains 15 percent ethanol.
“It is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many motorists may improperly fill up using this gasoline and damage their vehicle,” said Robert Darbelnet, AAA president. “Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.”
Rep. Jim Sensenbrenner (R-Wis.), former chairman of the House Science Committee, said the findings confirm concerns on Capitol Hill that the fuel can damage cars.
Gasoline blended with 10 percent ethanol is readily available at most gas stations nationwide, but E15 is only sold at a few stations in Kansas, Iowa and Nebraska.
“Concerns about E15 are not diminishing, they are increasing. That is telling,” Sensenbrenner said. “When an organization like AAA, a nationally trusted source for motorists, calls out the EPA, you would think the administration would listen.”
The EPA has not yet responded to the AAA’s request.
Several manufactures including BMW, Chrysler, Nissan, Toyota and Volkswagon are refusing to cover vehicle warranties for damage caused by E15. More are signaling they will follow suit, including General Motors, Ford, Honda, Hyundai, Kia, Mazda, Mercedes-Benz and Volvo, according to AAA.
The only vehicles currently approved by automakers to use E15 are flex-fuel models manufactured in 2001 and after, including some Porsches, General Motors and Ford. The use of E15 is expressly prohibited in heavy-duty vehicles including boats, motorcycles, power equipment, lawn mowers and off-road vehicles.
“The sale and use of E15 should be suspended until additional gas pump labeling and consumer education efforts are implemented to mitigate problems for motorists and their vehicles,” Darbelnet said. ”Consumers should carefully read pump labels and know their auto manufacturer’s recommendations to help prevent any problems from E15.”

Balanced Approach

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Get to work...bitches!

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Spending

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LUCK!

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The Physics

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More Gridlock

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Sewer Logic

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Hobby Lobby

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Powerball

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Don't Jingle My Bells!

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Provocation

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Star Wars

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Hemp fuel

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Airport Insurance!

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Metaphorical Cliff

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IRONY!

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Pay more?

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Stand-Up Guy

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His Plan

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Far from Electrifying: Electric car hopes never die — but electric realities keep intervening.

The American ^ | November 26, 2012 | Vaclav Smil



Exactly two years ago, in November 2010, the Renault-Nissan CEO Carlos Ghosn assured reporters that his auto alliance would sell half a million electric vehicles a year by the end of 2013. In 2011, it sold just short of 10,000 electrics, but in April 2012 Ghosn still claimed that the 2012 sales would double to 20,000. On November 15, he had to give up and admit that, after selling less than 7,000 vehicles, the 2012 target cannot be reached. That is just the latest in a less than electrifying saga of modern electric vehicles (this qualification is needed because more than a century ago, before the 1908 Model T, there was a similarly misplaced euphoria).
In contrast, General Motor’s (GM) Volt had a record month this October, with 2,961 vehicles sold, but that is only relatively good news. Chevrolet’s plan was to build 10,000 Volts in 2011, but actual sales that year were 7,671; in March 2012, poor sales forced the company to idle Volt production for five weeks. Sales then picked up and reached a record of 2,500 units in August (a strong month for all car sales), but by September 17 weak sales forced the company to shut down its Volt assembly plant in Detroit-Hamtramck for the second time in 2012 (for four weeks). After a strong October, the total for 2012 will surpass 20,000 vehicles — less than half of the targeted total of 45,000 cars set by GM and still only about 0.15 percent of the total estimated12.8 million vehicles sold in 2012.
And it is all rather expensive — energy consultants estimate that GM’s costs for designing, tooling, and production (but excluding all marketing) are about $80,000 for a vehicle that sells, after a rebate of $7,500, for about $32,000. Costs per vehicle will fall as the production volume goes up, but GM may face years of losses before it starts making any money on a car that was to be a game-changer. And, of course, Volt is not a true electric car; it is merely an extended-range electric vehicle with a standard gasoline engine.
And another extended-range electric vehicle, the high-end Fisker Karma, has fared much worse. Consumer Reports found the $107,000 car, developed with a $529 million loan from the U.S. government and built in Finland, is full of design flaws and did not recommend its purchase. The car’s battery failed during the Consumer Reports test drive and Fisker subsequently replaced all of its 2012 Karma batteries. Then, on October 16, the manufacturer of the substandard lithium-ion battery used in the Karma, A123 Systems, (recipient of a U.S. federal grant worth $249 million in 2009) filed for bankruptcy. And another American true electric car has not done any better: Tesla’s deliveries for 2012 were cut from 5,000 to 2,700–3,250, due to production problems.
I do not see how other major competitors can succeed where Toyota refuses to even tread.
Perhaps most tellingly, in September, just a few days before Toyota’s mini-electric eQ city car was to make its debut at the Paris Motor Show, the company announced that it was cancelling its plans to mass produce the vehicle. According to Takeshi Uchiyamada, the company’s vice-chairman, “The current capabilities of electric vehicles do not meet society's needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge.” If a company that has been in the forefront of innovative design, high-quality production, and consumer satisfaction and that in 2012 reclaimed its title as the world’s largest carmaker (lost in the wake of the March 2011 Tohoku earthquake) comes to such a conclusion, I do not see how other major competitors can succeed where Toyota refuses to even tread. Toyota said it will concentrate instead on hybrid models, but even that has not been going well: Toyota planned to sell 40,000 plug-in hybrids in Japan this year, but fewer than 9,000 were sold by October.
Technical success of electrics comes down, most fundamentally, to batteries. The lithium-ion battery, with its many flaws, is still the only relatively lightweight commercial option and Edison’s dream of a perfect car battery is now more than a century old. Bold plans come and go: a 1980 report on the introduction of electric vehicles in the United States predicted 1–2 million units in sales by 1985 and as many 11–13 million fully electric cars by the year 2000. But by the end of 2012, the United States had about 50,000 electrics on the road, no more than 0.03 percent of all light-duty vehicles licensed to operate in the country. Undaunted, a campaigning President Obama did not repeal his 2011 State of the Union goal of putting 1 million electric cars on the road by 2015.
Clearly, electric hopes never die — but electric realities keep intervening. Motor Trend’s 2013 car of the year is the Tesla Model S, which sells (depending on performance options and after a $7,500 rebate) for between $49,900 and $97,900. Ready to forecast sales of 50,000 units for next year?
Vaclav Smil does interdisciplinary research in the fields of energy, environmental and population change, food production and nutrition, technical innovation, risk assessment, and public policy.
FURTHER READING: Smil also writes “A Son of Europe Reflects on the EU’s Nobel Prize,” “Anticipating the World’s Most Expensive Natural Disaster,” and “Placing the American Gas Boom in Perspective.” Kenneth P. Green discusses “Subsidy-Powered Vehicles” and says “Put the Pedal to the Metal!” Mark J. Perry argues “Unplug Electric Car Subsidies.”

Image by Darren Wamboldt / Bergman Group

White House Data Debunk Myth Bush Cuts Built Deficit

Investor's Business Daily ^ | November 30, 2012 | Staff



While President Obama insists the Bush tax cuts caused the recession and record deficits, his own economists say otherwise.

He might want to consult their data for the truth.

Kicking off fiscal cliff negotiations last month, Obama said: "What I'm not going to do is extend Bush tax cuts for the wealthiest 2% that we can't afford and, according to economists, will have the least positive impact on our economy."


(Excerpt) Read more at news.investors.com ...

Stuff like this rolls off Obama's back like water on a duck. Don't you get it? The more proof you show that he is a sociopath, a liar, not even born in this country, that he's nothing but an arrogant empty suit, the more he delights in having gotten away with it all, the more he gets a kick out of it.
Facts don't faze him. Never did.

Dislodging Obamacare

LA Times ^ | November 30, 2012 | Michaek F. Cannon (Cato Institute)

Republicans believed a Mitt Romney win would seal Obamacare's fate. Democrats - or rather, the lonely two-fifths of Americans who support the president's beleaguered healthcare law - believed an Obama win would secure its future. Both sides were kidding themselves.

Romney may have pledged to repeal the law, but his positions on Obamacare had the life span of a rainbow. He supported an identical law when he got the credit for signing it as governor of Massachusetts. He then opposed Obamacare when that's what GOP primary voters wanted to hear, and later endorsed parts of it when he thought that's what moderate voters wanted to hear. Anyone who put stock in Romney's pledge to fight for repeal simply wasn't paying attention.

Democrats are likewise deluding themselves if they think the law is safe because Obama wields the veto pen. The greatest threat to Obamacare was never a Romney presidency but Obamacare itself.

The law remains vulnerable because of its unpopularity, the compromises that unpopularity forced on its authors and the Supreme Court's ruling that part of it is unconstitutional. These factors guarantee repeal will remain a viable issue, and - I predict - that the president will ultimately sign a bill making major changes, at the very least.

In its ruling on the healthcare law, the Supreme Court gave states the freedom to decline Obamacare's costly Medicaid expansion. ..... The fact that many states have said they won't implement the expansion will lead to those groups putting pressure on Congress to reopen the law. < snip >
..... Obamacare is unpopular, unsustainable and vulnerable for the same reasons it always has been. It imposes too many costs on too many people and makes healthcare more costly and scarce, not less. It needs to go. That can still happen. .....

(Excerpt) Read more at mobile.latimes.com ...

The takeaways:

** More than 30 states either have refused to establish the exchanges or are on the way to do so, because there is no benefit in state-created exchange since all exchanges will be controlled by Washington, and there is no constitutionally legal penalty for state not creating the exchange and leaving it to Washington spending the money on more expensive one.
** Also, the IRS cannot legally impose the "penalty tax" in states that didn't "create" the exchanges - this will be litigated and go to SCOTUS again, and if any of the "enforcement mechanisms" fails, the program will be dead of its own weight because enough employers will leave the "Obamacare states" to make it impossible for states to finance. The incentives and subsidies are there only to hide the true costs of the program, but they will be self-evident and subject to "unequal treatment under the law" lawsuits.

** Congress cannot demand that states must create and implement federal program, relying on incentives instead - which may be unconstitutional and don't really offset the costs of the program, with premiums rising significantly, even with subsidies (which are unfunded).


A great companion piece is a must-read author's earlier work, posted in NRO: Obamacare Is Still Vulnerable - NRO, by Michael F. Cannon, 2012 November 09


Selection of Mitt Romney by GOPe as an "electable and credible" Republican "leader" was the obvious "loser pick" in this election cycle and one of the worst ever, and it only served to stop the discussion of and campaigning against the multitude of problems in the still very unpopular ObamaCare - since Romney was the owner of the near-identical RomneyCare in MA, his only objection could be that it was "good for Massachusets" but "not good enough" for the federal government - how is that for a loser argument!


Now, if Republicans are finally ready to ditch Romney as a costly mistake (whose only chance to win was the dreadful record and politics of Obama, because he himself had nothing to offer) and stop making excuses for his "rich white uncaring do-nothing Republicans" campaign "legacy," they can get down to business of dismantling ObamaCare and with it the Democratic machine, piece by piece.

Dems lost in 2004, with John F. Kerry (near-exact Massachusetts clone of Romney, only with "D" after his name) and had nothing to show, not even having control of the House or Senate, yet they learned their mistakes and in 2006 they controlled both and were on the way to greatly expanding it in 2008.

It's a mess Obama and Democrats created on their own, so let's make sure they own it.

Buffett Math (Hey Warren, "you didn't build that.")

The Grumpy Economist ^ | November 30, 2012 | John Cochrane's blog


Warren Buffett, New York Times on November 25th 2012:
Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
MBA final exam question: Explain the mistake in this paragraph.

[scroll down for suggested answers]



How do we decide whether to invest in a project? Discounted cash flow.

For example, suppose you’re thinking of building a factory (or starting a business). Once built, your best guess is that the factory will produce $10 profit every year. Discounting at a 5% required return, typical of stock market investments, the value of that profit stream is 1/.05=20 times the yearly profit, or $200. If the factory costs $150 to build, it’s a good deal and will return more than its costs. You build it. If the factory costs $250 to build, you walk away.

Did you forget to put in after-tax cash flows? Whoops, that's a B- now at best. For example, if the tax rate is 50%, then your after-tax profits are only $5 each year. Now the value of the profit stream is only $100. The factory still costs $150 to build however, so now you’d be a fool to do it. It truly is better to leave your money in the bank earning a quarter of a percent.

Mr. Buffett made an elementary accounting mistake. How did he get it wrong? Implicitly, he is thinking that he pays $100, then gets back $100 for sure, and only the profit is taxed. He's thinking that a 5% rate of return gets cut to 2.5%, which is still better than 0.025%. But when you build a factory or start a business, you are not guaranteed return of principal. You only get the profits, if any. If the government taxes half the profits, that’s like taking half the initial investment away.

This is perhaps an understandable mistake for a financial investor such as Mr. Buffett. In my example, the market value of the factory was $200, and falls to $100 when the tax is imposed. Mr. Buffett doesn't build factories or start businesses, he buys them. Now, Mr. Buffett -- ever the "value" investor -- can swoop in, buy the factory for $100, and a $5 per year after-tax cashflow generates the same 5% rate of return. But nobody will build new factories, and that’s the economic damage.

Ok, now you get an A. Let's go for the A+.

Mr Buffett ignored risk. If somebody offers you a 5% rate of return, risk free, when Treasury bills offer you a quarter of 1 percent, his name is Madoff, not Buffett-Buddy.

Mr. Buffett wants you to think his investments are arbitrage opportunities, and a 2.5% arbitrage is as attractive as a 5% arbitrage. That's false. Investments involve bearing risk, and taxes make those investments directly worse.

Now, the effect of taxes here is subtle. Yes, a 50% tax rate cuts a 5% expected return down to 2.5%. But it also cuts volatility too. Isn't this just like deleveraging? Answer: no, because unless you're investing in green energy boodoggles only available to Administration cronies, the government takes your profits, but does not reimburse your losses.

If the investment makes 10%, you get 5%. If it makes 5%, you get 2.5%. But if it loses 10%, you lose 10%. It's a strictly worse investment when taxed. (Yes, you might be able to sell the losses if the IRS doesn't notice what you're up to... but now you know why Buffett is a "master of tax avoidance.")

And there is always another margin: If rates of return on investment look lousy, just stop investing at all and go on a consumption binge. The estate tax is a big subsidy to the round-the-world cruise and private jet industries.

I am really amazed by how this argument has evolved. Only a few months ago, supporters of the Administration's plans for higher tax rates admitted the plain fact that higher tax rates on investment are bad for growth. But, they argued that higher taxes would be good for other goals, like "fairness," redistribution, or winning elections important for other policies they like such as ACA. (These taxes are not going to put a dent in the deficit.) And we had a sensible argument about how bad the growth effects would be, and how long it would take for them to kick in.

Now they're trying to argue that taxes aren't bad for the economy at all. Some are suggesting higher investment tax rates are actually good for the economy. All in the face of the natural experiment playing out in front of us across the Atlantic. The contortions needed to make this argument are just embarrassing. As above.

It seems clear to me that the Administration wants to raise the tax rate on high income people for political reasons, whether or not they raise tax revenues from such people; witness the deafening silence about reforming the chaotic tax code. The Buffetts of the world who can exploit the loopholes in the tax code and lobby for more will do fine in the new world. But they shouldn't stoop to such obvious silliness to try to fool the rest of us that pain don't hurt.

(Thanks to Cliff Asness who brought this to my attention and suggested some of the arguments.)