Wednesday, February 23, 2011

Indiana Dems Run

So Democrats from Wisconsin are cowardly hiding in Illinois from their jobs and constituents still and now legislators from Indiana said, “Hmm . . . this sounds like an amazing idea, lets skip out on our job too and visit sunny Illinois.”  Yesterday, a house committee advanced a bill that would make Indiana a Right-to-Work state.  In what seems to be a trend, Democrats then left to caucus and didn’t return, fearing the bill would pass and the union thugs that help them get re-elected wouldn’t be there to hold their hand.  This either means that democrats are gutless cowards or are trying to invent a hit new dance move, the Democrat two-step-outta-the-state.  Here’s an idea, lets get all of the democrats from across the country to flee to Illinois and then build a wall around the state to keep their liberal, union-loving, free market-hating selves away from the rest of the country.  We can call it homeland security.

Monday, February 21, 2011

The Neo-Con Disease

In today’s conservative movement, one particular sect of the movement is plaguing the entire movement, neo-conservatism.  While many think this “new” ideology is just a foreign policy, I am sad to say that it is much more than that.  Neo-conservatism has become a complete ideology that pushes conservative ideals through big government.  Many believe that this movement of conservatism started with Irving Kristol and then spread to Richard Nixon where it became viral and spread throughout the conservative movement.  The problem with this analogy is that neo-conservatism has a much longer history; it in fact began with the policies of Theodore Roosevelt and the progressive movement.

President Theodore “Teddy” Roosevelt, a man who many neo-cons idolize (including William and Irving Kristol) was not a conservative that some say he was.  Roosevelt dramatically changed America’s foreign policy from what the founders had envisioned.  Roosevelt advocated for an imperialist America that would no longer continue the policy of commercial relations with all nations and entangling alliances with none.  Roosevelt also had a profound impact on economic policy by “trust-busting,” in other words; Roosevelt intervened into a high-functioning free-market economy to break up companies that provided needed competition.  Roosevelt imposed price controls on the railroads, supported hyper-protectionist tariff policies, and drummed up a fake food crisis to create new regulations that only protected the large food corporations and not the consumers.  Roosevelt was also seen by neo-cons and liberals alike (hmm . . . could there be a similarity between the two) as the first “green” politician and conversationalist.  He was in fact, very much not.  Roosevelt’s “green” policies included wasting massive amounts of tax dollars on damns that flooded canyons and rivers, national foresting policies contributing to overgrazing and massive forest fires and a his policies to oppose the privatization of government land.  But perhaps Roosevelt’s worst policy implication was his revival the income tax, an idea he advocated for strongly and was passed under Roosevelt’s progressive successors.

Although Roosevelt did not start the neo-conservative movement, he was the father of the movement.  The neo-conservative ideology wouldn’t be official until Richard Nixon and Henry Kissinger took office in the late sixties.  Nixon fully developed the neo-conservative foreign policy with the Vietnam War and his D├ętente strategy that called for more government and a beginning of the neo-conservative nation building policies.  Nixon also tried Keynesian economic policies that included price controls on oil among other goods and also ended the link between the dollar and gold which permanently took the U.S. off any reminisce of the gold standard it once held.  Nixon is also the president responsible for the EPA, OSHA, federal affirmative action, national drug laws, and piles of graft and federal interventions in every direction.  These are policies that Richard Nixon handed down to his new breed of statist conservatives (wait a minute, can those two words exist in the same sentence?).

Neo-conservatism would continue to grow under men like Bill and William Kristol of the Weekly Standard (the neo-conservative powerhouse magazine), Democratic New York Senator Daniel Patrick Moynihan, ‘Conservative’ talk show host Sean Hannity and the culmination of the neo-conservative ideology – George W. Bush. 

Bush completed the link between the neo-conservative foreign policy and domestic policy.  Bush’s foreign policy (The Bush Doctrine) consisted of high defense spending along with spreading democracy across the globe came together with “big government conservatism” such as Medicare part B, the formation of the Department of Homeland Security, No Child Left Behind, and Faith-Based initiatives.  All of these policies push conservative causes through the expansion of federal powers and more government spending.  What made it worse was Bush’s continual talk of himself as a constitutional conservative; all the while he uses the constitution as toilet paper.  Acts such as the PATRIOT Act, quite possibly the most unconstitutional act ever passed by Congress, highlight Bush’s (and neo-conservatives) disregard for both the constitution and the conservative ideology. 

Perhaps the worst policy of the neo-conservative ideology is that of nation building.  The policy is to build democracies in areas where there wasn’t one before.  Although some traditional conservatives may think this is a good idea, it is actually a deeply flawed one both in the terms of the conservative agenda and in the terms of government spending.  The basis for nation building is to free the people in totalitarian states.  The problem with it is that people must choose on their own to form a free society.  They must set up a social contract with each other and choose freedom, something that must be chosen by a free people or it simply isn’t freedom.  Freedom without a choice is not freedom at all, but just another form of enslavement.  Nation building also created an enormous amount of government spending, spending that has to be paid for in one form or another.  The current form of paying for this policy is that printing fake money.  The simple truth is not only is nation building a bad policy for conservatives, and it’s a bad policy for America.  The Iraq/Afghanistan war has cost a minimum of $1.5 trillion with some estimations in the $3 trillion range.

Nation Building is only one consequence of neo-conservatism, but so far it is the most costly effect.  Other neo-conservative policies such as the EPA and No Child Left Behind have also been costly, although nowhere in the range of the Iraq War.  Now the question is what to do about this plague.  Fortunately for conservatives there is a cure; it comes in the form of a document that was written over 200 years ago, the Constitution.  Conservatives must educate not only society, but members of its own movement (especially those who follow the neo-conservative ideology) what the Constitution stands for: a truly limited government, a non-interventionalist foreign policy, spending within its means, individual liberty and enforcing the rights of states.  If the conservative movement is to survive, we must return to true conservatism. What I am calling for is an alliance of Libertarians, Economic Conservatives, Social Conservatives and Traditional Conservatives to take back the conservative movement.  We must look back at our heritage and remember the polices of men like Thomas Jefferson, Grover Cleveland, Calvin Coolidge, Robert Taft, Barry Goldwater and Ronald Reagan and condemn the polices of Theodore Roosevelt, Richard Nixon, George W. Bush and Mitt Romney.  This last election showed us that the American people are ready to embrace true conservative ideals.  The time to act is now, for liberty, for the constitution, for America.

Friday, February 18, 2011

Snyder Budget Grades (from Americans For Prosperity Michigan)


DATE:      February 17, 2011

TO:           Americans For Prosperity-Michigan members

FROM:    Scott Hagerstrom, State Director, Americans For Prosperity-Michigan

RE:           Initial analysis of Governor Snyder's proposed budget

Michigan Governor Rick Snyder presented his proposed budget today for the 2012 Fiscal year that begins Oct. 1, 2011. The total proposed spending for 2012 is $45.9 billion according to his documents. How does this compare to past years:

2011 - $47.04 billion
2010 - $45.6 billion
2007 - $41.87 billion

Governor Snyder’s budget does contain real cuts. He represents the 2012 budget as having a $1.26 billion gap “due to the end of federal recovery assistance, Medicaid and Family Independence Program caseload growth and other unavoidable spending pressures.”

The budget is $1.1 billion smaller than current year spending and $300 million more than 2010.

Tax Restructuring
The centerpiece of Gov. Snyder’s plan is the elimination of the MBT and replacement with a 6% tax on C Corporations.  All other business entities (LLC, Partnerships, S Corps) will not have to pay any business tax but will pay the 4.25 percent income tax. It will eliminate 95,000 businesses from having to file for any Michigan business tax.

This is a $1.8 billion tax cut. 

The Governor does propose tax increases -- what he calls "eliminating tax expenditures" -- that will make his budget “essentially revenue neutral” in 2013 after a net tax cut of $254 million for 2012 (Snyder’s actual numbers show a tax increase of $32 million in 2013).

The Governor’s income tax changes will net $820.9 million in 2012 and $1.86 billion in 2013.  The proposal is only scored for 2 years out so we do not know the net increase or decrease in tax revenues from this change beyond 2013.

Income tax changes include the taxing of private and public pensions; the elimination of a majority of tax credits and deductions; freezing the scheduled income tax reduction to 3.9 percent at 4.25 percent; and the phase out of personal deductions at the $75,000 and $150,000 level.

In 2009 the state income tax brought in approximately $6 billion.  With a net increase of $1.86 billion, Governor Snyder’s proposal will increase state income tax collections by about 28 percent.

The primary increase in income tax comes from taxing public and private pension income.  It has been settled law in Michigan that the state constitution prohibits the taxation of public pensions.  Because of this in 1994 Gov. Engler signed into law a $45,000 and $90,000 exemption on private pension income.

Notable Budget Changes
  • Eliminates statutory revenue sharing and puts in its place a $200 million fund that rewards local governments that adopt best management practices
  • Creates a $5 million fund to promote Information Technology internal incentives
  • Holds community colleges harmless from cuts
  • Cuts Higher Education by 15 percent
  • Places Universities and Community College funding in the School Aid Fund for the first time
  • Cuts K-12 per pupil grant by $470 per pupil
  • Cuts Intermediate School District (ISDs) operations by $5 million
  • Yet to be determined state employee concessions of $180 million
  • $200 million payment towards the states $14.5 billion unfunded retiree health care benefits
  • Eliminates $300 million annual Earned Income Tax Credit
Missed Opportunities?
The Mackinac Center and other organizations have suggested reforms and cuts that would save hundreds, if not, billions of dollars that did not make it into this proposal.  If some of these were to be adopted no income tax increases would be necessary.

These include:
  • Prevailing Wage adoption $269 million in 2007 dollars
  • Nolan Finley suggestion for the elimination of health care benefits for retired state employees - $982 million
  • Pension, health care, and fringe benefits of state employees equal private sector - $5.7 billion ($708 state government; $2.45 billion public schools; $844 million colleges & universities; and $1.73 billion in local governments)
  • Require schools to contract out transportation, food and custodial services at a savings of $300 million
  • End annual 21st  Century Fund appropriation - $75 million
  • Devolve state police road patrols to county sheriff departments - $65 million
  • Make incarceration rates equal to surrounding states - $400 million
  • Medicaid coverage restrictions and other cuts - $100 million
  • Move school elections to the fall ballot - $10 million
  • Eliminate legislator retirement healthcare - $3.5 million
  • Repeal PA 312 – Gov. Granholm 2006 panel said PA 312 raised cost of local govt. by 3 -5 percent
  • Take cap off charter schools – On average charter schools educate a child for $2,000 less than traditional public schools
Implement full on-line in real time checkbook transparency for state government and local unit including public schools, community colleges and universities.  This will enable a full review by the public of all current expenditures and assist with identification of inefficient or wasteful spending.

Bottom Line
Is this budget about state government or about returning Michigan to a position of economic prowess? In 1965 Michigan was 9th in per capita personal income; in 2009 MI was 37th; and as of the 2nd quarter of 2010 Michigan dropped to 39th.  Michigan lost 54,000 residents in the past 10 years and nearly 1 million jobs. Michigan is competing with seven states that have no income tax and 22 states that are Right to Work.

Grade of Budget Proposal
Budget Cuts – Incomplete
Business Tax Cut – A
Income Tax Changes – F

# # #

Click For More from Americans for Prosperity Michigan

Thursday, February 17, 2011

JobsOhio, Good Idea or Bad Idea?

Recently the Ohio Legislature sent a bill to Gov. John Kasich's desk that would privatize the Department of Development into the proposed JobsOhio.  The bill was passed because of Ohio's hemorrhaging of jobs that have left the state with a 9.6% unemployment rate.  Ohio has lost 613,000 private sector jobs since 2000, 2nd worse in the country.  The question is, is this JobsOhio bill the answer? Another question you may ask is why is someone from Michigan commenting on a proposal in Ohio?  The answer for both of these questions is that Ohio is only 2nd on that list because Michigan comes in first with 791,000 private sector job losses.

Currently in Michigan, we have the Michigan Economic Development Corporation (MEDC) that functions almost exactly like the proposed JobsOhio program.  The only problem is that the MEDC has been a colossal failure.  Since it's inception, Michigan has fallen from 16th to 41st among states in per capita GDP and is the only state with a negative GDP growth. Per capita personal income among the states has fallen from 16th to 34th and is now 11.2 percent below the national average, the lowest point it has been since the Great Depression.

One of the programs the MEDC oversaw was the Michigan Film Office, which gave subsidies to film makers in exchange for making movies in the state of Michigan.  This controversial and ultimately failed program had several flaws.  First, in order to pay for these subsidies, the government must rob Peter (the taxpayer) to pay Paul (Steven Spielberg).  Second, programs such as these lead to the problem of moral hazard, where tax credit recipients spend the credits unwisely and just end up asking for more and more money from the government without having to worry about their own losses since it isn't their money.  Lastly, programs such as the MEDC, the Michigan Film Office and JobsOhio redistributing tax revenues that costs taxpayers money (hmm... sounds kinda like redistributing wealth, huh). The officials who run these programs don't work for free. For example, Michigan Film Office Director Janet Lockwood alone makes more than $95,000 annually plus benefits, and members of the MEDC who work with the film program are well-compensated, too. One published report indicates that the Michigan Film Office also received $2 million for "marketing efforts." This is money taken first from Michigan employers who might otherwise use it to create jobs in the private sector.  There have also been several cases of fraud and abuse including one case that cost the state $9 million in taxpayer dollars

Instead of creating a quasi-government agency (even though the governor calls it private, it still gets taxpayer dollars) the governor needs to simply cut taxes, cut regulations and pass a Right-to-Work that would allow businesses to create jobs in their state without government bribing businesses from out of state to come in the state in exchange for tax credits.

UPDATE: Governor Kasich signs JobsOhio Bill