The Pitfalls Of Accepting Government Money

Byron York has posted an article at the Washington Examiner today about the House Financial Services Committee, led by chairman Barney Frank, approving a measure called the “Pay for Performance Act of 2009”.  This bill would impose government salary controls on alll employees of any company receiving financial help from the government.  The government will determine what compensation is reasonable and “prohibit unreasonable and excessive compensation and compensation not based on performance standards”.  The government will be setting performance standards for any company they have given money to (in any industry involved).  What are the chances of the government knowing enough about every company it deals with to do this right?

According to the article:

“The legislation is expected to come before the full House for a vote this week, and, just like the AIG bill, its scope and retroactivity trouble a number of Republicans. “It’s just a bad reaction to what has been going on with AIG,” Rep. Scott Garrett of New Jersey, a committee member, told me. Garrett is particularly concerned with the new powers that would be given to the Treasury Secretary, who just last week proposed giving the government extensive new regulatory authority. “This is a growing concern, that the powers of the Treasury in this area, along with what Geithner was looking for last week, are mind boggling,” Garrett said.”

This bill is retroactive, meaning it will override prior contracts.  This is not the way the government in a Democracy (or a representative republic) should act.  This is not healthy for our country.

Everyone Has An Angle

Power Line has a post this morning on the posturing that is going on at the G-20 summit as the world leaders try to decide how to handle the current financial crisis.  The article points out that Europe is taking the position that America is responsible for the global meltdown and therefore American should fix it.  The European countries are not really interested in inacting expensive stimulus plans–their governments have had massive social spending for decades. 

It is interesting, however, to look at the facts surrounding the worldwide meltdown.  According to the article:

“Consider the banks. Bromund and Markheim point to a survey by the Centre for European Policy Studies which found that the average leverage ratio of Europe’s twelve largest banks as of September 2008 was 35 to 1, compared to less than 20 to 1 in the U.S. The survey described Europe’s ratios as “a disaster in waiting.”

Or consider real estate. The IMF has noted out that, in the run-up to the crisis, “credit aggregates grew extremely fast in the United Kingdom, Spain, Iceland, and several Eastern European countries,” fueling real estate booms. As Bromund and Markheim explain, “the bubbles in Europe were as unsustainable as those in the U.S.””

One of the main issues that the European countries will take up is the elimination of ‘tax havens’.  Basically, Europeans have learned that if there is a country with low tax rates, the world corporations will move there–we saw that with the growth of the Irish economy when Ireland cut its corporate tax rate.  People vote with their feet, and there is a group of people in the world who are trying to prevent that from happening. 

I Am Posting This Link, Draw Your Own Conclusions

This is a link to an article in Newsweek that was published about two weeks ago.  It’s a fairly long article, and I’m not even going to try to summarize it, but I suggest that everyone read it carefully.  In the United States (and in England) we seem somehow not affected by what is happening in Afghanistan (unless you have a family member in the military), and it’s easy to forget what is going on in South Asia.  This article shows what is happening in England below the surface.

How To Legally Avoid Being Overtaxed

The problem with this solution to being overtaxed is that most of us do not have the money or the job portability to carry it out, but with the age of computers, that may change.  As you may have read, New York State is discussing the idea of a 31 per cent tax hike on anyone making over $500,000 a year.  I realized that a lot of us don’t have to be concerned about paying that tax (myself included), but that’s not the only aspect of the proposal that will affect us.  Generally speaking, people who make over $500,000 a year hire people, they provide jobs.  If they have less money, they hire fewer people and spend less money.  So let’s look at a specific example.

According to National Review Online, Rush Limbaugh is ready to move his New York operation (he pays state income taxes on his income for every day he works in the state and also pays income taxes on his staff that works in New York) if these tax increases go through.  He will move the operation to a state that does not have a state income tax.  New York State in that instance not only does not collect more taxes from Rush Limbaugh, it loses the revenue it is now getting.  Unfortunately, Rush will probably not be the only entrepreneur who will move to a more tax-friendly location.

It is because of decisions like this that Texas is now home to more Fortune 500 headquarters than New York.  Our state of federal governments have long enjoyed increasing spending at a rate that is far greateer than inflation.  It’s time that they tightened their belts instead of expecting everyone else to pay for their spending habits. 

Again, I strongly suggest that you visit the website to see what you can do to turn this excessive taxation and excessive spending around.

I Have No Idea Who Wrote This, But I Love It!

This showed up in my email this morning.  I have no idea who wrote it, but I can totally relate!!
You have to be old enough to remember Abbott and Costello , and too old to REALLY understand computers, to fully appreciate this. For those of us who sometimes get flustered by our computers, please read on…

If Bud Abbott and Lou Costello were alive today, their infamous sketch, ‘Who’s on First?’ might have turned out something like this:


ABBOTT: Super Duper computer store. Can I help you?

COSTELLO : Thanks. I’m setting up an office in my den and I’m thinking aboutbuying a computer.


COSTELLO : No, the name’s Lou .

ABBOTT : Your computer?

COSTELLO : I don’t own a computer. I want to buy one.


COSTELLO: I told you, my name’s Lou .

ABBOTT : What about Windows?

COSTELLO : Why? Will it get stuffy in here?

ABBOTT : Do you want a computer with Windows?

COSTELLO : I don’t know. What will I see when I look at the Windows?

ABBOTT : Wallpaper.

COSTELLO : Never mind the windows. I need a computer and software.

ABBOTT : Software for Windows?

COSTELLO : No. On the computer! I need something I can use to write proposals, track expenses and run my business. What do you have?

ABBOTT : Office.

COSTELLO: Yeah, for my office. Can you recommend anything?

ABBOTT : I just did.

COSTELLO : You just did what?

ABBOTT : Recommend something.

COSTELLO : You recommended something ?


COSTELLO : For my office?


COSTELLO : OK, what did you recommend for my office?

ABBOTT : Office.

COSTELLO : Yes, for my office!

ABBOTT : I recommend Office with Windows.

COSTELLO : I already have an office with windows! OK, let’s just say I’m sitting at my computer and I want to type a proposal. What do I need?

ABBOTT : Word.

COSTELLO : What word?

ABBOTT : Word in Office.

COSTELLO : The only word in office is office.

ABBOTT : The Word in Office for Windows.

COSTELLO : Which word in office for windows?

ABBOTT : The Word you get when you click the blue ‘W’.

COSTELLO : I’m going to click your blue ‘w’ if you don’t start with some straight answers. What about financial bookkeeping? You have anything I can track my money with?

ABBOTT: Money.

COSTELLO : That’s right. What do you have?

ABBOTT : Money.

COSTELLO : I need money to track my money?

ABBOTT : It comes bundled with your computer.

COSTELLO : What’s bundled with my computer?

ABBOTT : Money.

COSTELLO : Money comes with my computer?

ABBOTT : Yes. No extra charge.

COSTELLO : I get a bundle of money with my computer? How much?

ABBOTT : One copy.

COSTELLO : Isn’t it illegal to copy money?

ABBOTT : Microsoft gave us a license to copy Money.

COSTELLO : They can give you a license to copy money?


(A few days later)

ABBOTT : Super Duper computer store. Can I help you?

COSTELLO : How do I turn my computer off?

ABBOTT : Click on ‘START’………….

Another Entry In The Law Of Unintended Consequences

According to the St. Louis Business Journal, Don Davis, who resigned this week as President of Centrue Bank in St. Louis is raising capital to buy a bank.  Mr. Davis resigned because Centrue Bank couldn’t find a way to honor Davis’ contract under new pay restrictions imposed by Congress on banks such as Centrue that took loans under the Troubled Asset Relief Program (TARP).  Centrue accepted $32.7 million, before the pay limits were imposed, because the Federal Deposit Insurance Corporation was encouraging banks to take TARP money to increase capital.

There are a lot of things going on here.  The bank was encouraged to take the TARP money even though they were not in trouble.  After the banks took the money, the pay limits were imposed.  Centrue Bank now has to find a new bank president when Mr. Davis was obviously doing a good job.  Mr. Davis will be fine.  He and his partners will buy a small bank not tainted with TARP money and avoid the heavy-handed regulations that come with TARP, but this whole situation is totally unnecessary.  How many people will have to fill out paperwork to make this work when the previous situation was perfectly fine?

It Depends On What You Mean By ‘Insignificant”

The Washington Post headline reads “Detainee’s Harsh Treatment Foiled No Plots”, but when you read the article, that may not be the conclusion you reach.  The lawyers at Power Line have a few observations on this artcle.  The article states that no ‘significant’ plots were foiled.  Does this mean that ‘insignificant’ plots were foiled?  What is the definition of an ‘insignificant’ plot? 

Paul Mirengoff at Power Line notes:

“One of Thiessen’s main points is that Abu Zubaida provided information that led to the arrest of Jose Padilla. The Post acknowledges this, but argues that Padilla was never charged in connection with the “dirty bomb” plot which he was accused of heading. But Thiessen explains that Padilla had agreed to undertake a different, more realistic attack — a mission to blow up apartment buildings in the United States using natural gas. Is this the plot that the Washington Post dismisses as insignificant?

Thiessen reminds us that, when Padilla was apprehended at Chicago’s O’Hare airport — thanks to iinformation provided by Abu Zubaydah — he was carrying $10,000 given him by his al Qaeda handlers, along with the email address for Ammar al Baluchi, Khalid Sheikh Mohammad’s right-hand man. According to former Deputy Attorney General James Comey, the night before his departure, Padilla had been feted at a dinner by KSM, al Baluchi, and 9/11 plotter Ramzi bin al Shibh. Apparently, they did not consider Padilla’s mission insignificant.”

Any plot engineered by terrorists to kill American civilians is significant.  Talking down the ‘War on Terror” and the threat it is to Americans will not make it go away.

Secret Military Meetings?

Secrecy is not new to the millitary, and there are a lot on instances where it is absolutely necessary, but it doesn’t need to be used to hide important information from the public.  The San Francisco Examiner reports that secrecy is the word of the day:

Compare that to what is now transpiring within the Department of Defense (DOD). There, uniformed military officers and civilian government employees have been forced to sign a secrecy oath while they meet privately, behind closed doors, to decide the fate of nation’s defense budget.”

The rationale for the secrecy is that it will allow the entire budget to be presented at once, allowing better anaylsis (rather than have people react to leaked bits and pieces).  Remember the vote on the stimulus package?  It was given to the Senators less than twelve hours before the vote and was over seven hundred pages long.  Very few Senators had a chance to read it before they voted.  I have a feeling we are about to see that trick tried again.

It is interesting to me that the only serious budget cutting is going to be done in the area of defense.  There should not be a ‘peace dividend’ at this time.  In case President Obama has not noticed–there is no peace.

The article ends with this statement:

“But whether Gates is right or wrong is irrelevant. Defense Department budgetary decisions should not be made in secret; they should be made in public. America is not the Soviet Union or China; America is a democratic republic. Here the people rule.

What makes the secret deliberations even more unconscionable is that the Joint Chiefs of Staff and other senior military leaders will be forced to pledge allegiance to Gates’ ultimate decisions. The American people, consequently, will never know whether and why senior military leaders disagreed with specific defense cuts.

But unless we understand, in all its rich detail and complexity, the reasoning and thought process that undergirded this process, we the people cannot make wise and informed decisions about our defense budget.

Congress needs to intervene and demand an end to these secret proceedings and the secret oaths. Congress also must subpoena and swear under oath all key participants in these deliberations, including but not limited to, the Joint Chiefs of Staff and senior three- and four-star Generals and Admirals.

We need to learn the truth about how defense budgetary decisions were reached and decided. This is America. Here the people rule.”

The Proper Perspective

Ed Morrissey at has posted the definitive comments on a New York Post article abount a certain politician’s daughter photographed using cocaine.  The bottom line is, “Leave the daughter alone.  She is responsibile for her choices.  Her actions have nothing to do with her father.  His daughter is 27, please respect her privacy.”   It is unfortunate that recreational drug use is not unusual in this country, but it is a fact of life.  The fact that someone would try to make serious money out of someone else’s drug use is disturbing.

Ed Morrissey points out that the woman’s identity on the tape is not confirmed and then sums up the situation as follows:

“If the woman’s identity was confirmed and she was a public official, then that would be news.  The person alleged to be in this tape is not a public official, but the adult daughter of a public official.  Does this inform us of public policy, competence or integrity in office, or corruption or abuse of power?  Not at all.  So what’s the point, except to take a cheap shot at a public official we may not like?”

I agree.

Meddling As A Way Of Life

I guess this should not really come as a surprise to anyone, but according to, the CEO and chairman of General Motors has agreed to step down after pressure from President Obama.  According to the article:

“Wagoner’s resignation was one of the remarkable strings attached to the new aid package the administration is offering GM, based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.”

Since when has the Treasury Department run anything well?

On Monday, President Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler.

The article further states:

“The administration calls the task force “a cabinet-level group that includes the secretaries of Transportation, Commerce, Labor and Energy. It will also include the chairman of the President’s Council of Economic Advisers, the director of the Office of Management and Budget, the EPA administrator, and the director of the White House Office of Energy and Climate Change. The Task Force will be led by Treasury Secretary [Tim] Geithner and [National Economic Council] Director Larry Summers.” “

Maybe I’m just cynical, but it will be interesting to see if in this very obviously pro-union administration, the auto unions are asked to make any concessions in this deal.  Stay tuned.

CoOperation Is Not Always A Positive Thing

According to Timesonline, North Korea is getting some help with its impending missle launch.  Fifteen scientists and missle experts from Tehran has been in the country advising the North Koreans since the beginning of March.  According to the article:

“Japanese media claimed that spy satellites have photographed the nose cone of a long-range North Korean rocket on its launch pad. Envoys from South Korea, Japan and the US met in Washington during the weekend to discuss counter-measures to be taken against North Korea.

The three allies have warned that a rocket launch would be in violation of a UN Security Council resolution banning the communist state from carrying out ballistic missile activities.

Pyongyang has resisted pressure to call off the launch and warned that any attempt to shoot down the rocket would be regarded as an act of war.”

Unfortunately, this is another example of what happens when America has a President who is considered ‘weak’ by the unsavory elements in the world.  The political left around the world did not like the image of President Bush as a swaggering cowboy quick on the trigger, but it made the bad guys think twice about getting into mischief.  Unfortunately, President Obama’s idea of making nice to everyone may result in our talking sweetly to people as they reign down missles on our heads.  Keep in mind that the missle North Korea is launching is capable of reaching either Alaska or Hawaii.  It does not seem that we are making any effort to stop that launch.

Stating The Obvious

According to Rick Moran at the, Senator John McCain has stated that public campaign financing is now a dead issue.  No kidding.  It was the McCain-Feingold Act passed in 2002 that limited the amount of money a candidate who accepted public funds for his campaign could spend.  Aside from the fact that this is an abridgment of political free speech (unconstitutional), it has not been successful as law.  Because Barack Obama reneged on his promise of accepting public money for his campaign, he had almost unlimited funds to spend.  Because John McCain accepted public funds, he was limited in the amount of money he could legally spend.  I don’t think the limits on John McCain actually changed the results of the election, but they highlighted the fact that if both candidates do not accept public funding and its limits, there will be financial imbalance in the campaign.

John McCain is an American hero.  He was a rotten Presidential candidate.  He has been a thorn in the side of Republicans in the Senate for a long time.  Anytime the Republicans were in danger of showing some backbone and taking a stand on some issue, McCain stepped in and went ‘squishy’ and started attacking his fellow Republicans.  If Arizona wants to continue to re-elect him, they are welcome to him. but please don’t let the man pass legislation–he doesn’t seem to understand the Constitution!

Poetic Justice

 According to, an Afghan suicide bomber accidentally blew himself and six other militants up on Thursday bidding them farewell to leave for his intended target.                    

There is also an article about this incident at the website  The article at that website uses language that is a little more colorful than is used on this website, but if you would like to read the article, the link is above.  To me, this is the perfect end for a suicide bomber.


The name Mark Levin is not a household word, but it’s familiar to New Yorkers and to conservatives.  Mark is the President of the Landmark Legal Foundation in Leesburg, Virginia.  He is a lawyer who has practiced law in the private sector as well as working as a advisor to several member of President Reagan’s staff.  He has written a book entitled LIBERTY AND TYRANNY which is currently Number 1 on’s bestseller list.

Last week, Dr. Levin was at a book store in Huntington, New York, to sign his book.  Six thousand people showed up.  This week, according to Power Line, there was a book signing at Tyson’s Corner, Virginia, for the book.  According to the blog:

“30 minutes before the event starts at Tysons Corner, Virginia, folks standing at the back of the line were warned of 5 hour wait and the probability that they would not get a book or autograph. But the line continues to grow!”

Something is brewing.  I think this is an indication of people searching for truth in a sound-bite world that is leaving them misinformed and taken advantage of by people in Washington who do not represent them!!!

Which Obama Do We Believe?

According to the Wall Street Journal today, Japan has responded to the North Korea statement that it will launch a rocket carrying a satellite between April 4 and April 8, also warning that fragments could fall into the Sea of Japan between the two countries as well as southeast of Japan in the Pacific Ocean.  In response, Japan prepared Friday to deploy missile interceptors to shoot down any debris that could fall on Japanese territory.  According to the article:

“Any action Japan takes would be restricted to shooting at material that threatens to fall on Japanese land or sea. Nevertheless, the move is a bold one for Japan, which has a pacifist constitution that strictly restricts its military to measures of national defense.”

Meanwhile, back home according to the archives at, President Obama has previously stated that “I will cut investments in unproven missile defense systems.”  See the link for a futher link to a video of President Obama making these statements.

The rocket that North Korea is ‘testing’ can reach either Hawaii or Alaska.  Obviously, this is the time to perfect missle defense–not cut its funding.  Let’s hope President Obama has changed his mind on this.

April 15 Tea Party Update

The wesite which tells you where to get information on your city’s tea party is  The April 15th tea parties are going to be covered on Fox News.  According to Power Line, Sean Hannity will be covering the tea party in Atlanta live and linking to the other ones.  This may force the regular news channels to actually cover the events or be obviously left out in the cold. 

John Hinderaker comments:

“I’m planning on participating in the April 15 event and, if all goes well, posting photos and videos. There will be another anti-tax increase demonstration here in Minnesota on May 2 as well. The movement continues to grow.”

I don’t know how much good sending a message to the President and Congress will do, but the entire House of Representatives is up for election every two years.  I do know that some of the Democrats are getting very nervous.  I also believe that there will be a Democrat party primary election for President if President Obama continues on the path he is on.  Watch for Senators who refuse to vote yes on his budget and spending proposals–such as Evan Bayh from Indiana.  It is also interesting that Arlen Specter came out against card check.

The Law Of Unintended Consequences At Work Again

According to, the Obama administration is examining the idea that some of the terrorists held at Guantanamo would be released into the United States and given financial assistance to help them get on their feet and back into society.  In January of this year, reported that Pentagon figures show that 61 of the prisoners released from Guantanamo so far have returned to terrorism.  We need to remember the training guide given to terrorists–tell any lie you need to in order to get out of prison, and say you were tortured, whether you were or not.  The prisoners at Guantanamo are there for a reason–any other country would have shot them on the battlefield.  We set up Guantanamo to lock them up until they were not longer a threat.  I’m not sure that day will ever come.  To release them into American society and give them money is to trivialize the threat of terrorism that hit home on September 11, 2001.  It is also totally unwise and makes us look like idiots in the eyes of the people who are currently planning to do us harm.

The Coming of “Green” Jobs

President Obama has promised that the increased development of ‘green’ energy will create jobs and help the economy.  That’s what Spain thought too.  According to Ed Morrissey at,, Spain lost two jobs for every job created when it tried to convert to solar and wind energy.  The figures come from Barcepundit (English Version).  Barcepundit explains:

“For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.

U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.”

This is more of change we can’t afford and should be stripped from the budget.

The New ‘Boston Tea Party’

Please see the end of this article for information on tea parties in other states.  Since I live in Massachusetts, I am publishing the information on the next great Boston Tea Party.  There will be a Boston Tea Party on April 15th from 10 am to 8 pm at the Massachusetts State House (NOT City Hall Plaza).  What you read below is taken directly from the website Boston Tea Party on Facebook.  To be honest, I don’t know if you have to be a member of facebook to access it, but joining facebook is free and very simple.  For this, if you are not already a member, it is worth it.  Anyway, here is the information:

***Details on the time are below, but note that you are encouraged to come between 11-2 and 4-7 specifically** (Stay tuned for more updates about speakers and special guests!)

Featuring Special Guests: Carla Howell (12:00 PM) with more to be confirming soon!

Welcome to round two of the Nationwide Tea Party demonstrations – and the first for Boston since 1773!

Just bring yourself, a costume, signs, props, and energy to express your outrage and disgust in response to the passsge of TARP, the stimulus bill, and the bailouts!

Even of you can’t make it to the actual event you can still hold a sign in your town, call your elected representatives, and help create visibility for this event by calling talk radio and contacting the press. You may also feel free to come for anywhere from five minutes to the whole day! We realize that this is a work day for many people, so show up during your lunch or right after – either way, just show up if you can!

If you need ideas for signs, we’ll have pictures posted from prior demonstrations as well as discussions about good slogans below on our event wall. Please feel free to share your ideas!

Also, please take note of the fact that while this is an all day event in the sense that people are encouraged to come out at any time they can, you are asked specifically to come between the hours of 11 and 1 as well as 5 and 7 – those times, of course, being your lunch hour and commute. At that time, we’ll have the most visibility – and there is also a chance that a few well known local media personalities will be attending at that time – but more information on that when it is confirmed.

Also, please note that these two 4/15 events in Boston are merging – and that they will both be held at the State House:

For more information, please contact Corie Whalen –

Please share this information with as many people as you can.  Information on tea parties in other states can be found at  We need to let our Senators and Representatives (and President) know that we are not in favor of runaway spending!!! 

Budget A Or Budget B

According to, the Republicans has unveiled their alternative budget plan.  Just for the record, I have not been a big fan of the Republican Party in recent years.  The only good thing I can say about them at times is that they are the second worst political party in the country.  That having been said, they are making a few good moves lately.

Yesterday they introduced an alternative plan to deal with the housing crisis.  Today they have introduced an alternative to President Obama’s budget.  We desperately need an alternative–not just a ‘no’.

According to the article, these are the basics of the Republican budge plan:

“The principles in the Republican budget will sound familiar: “limits the federal budget from growing faster than the family budget, … provides universal access to health care and secures entitlements, … lowers taxes, … keeps energy and fuel costs low, … ends the bailouts and reforms the financial system, … keep the cost of living low.””

The burden of taxes that President Obama’s budget will put on present and future generations is irresponsible and will also put a drag on any economic growth.  Cap and trade will kill the American economy for years to come.  An alternative budget is definitely needed and I hope the proposals made will be considered carefully.  Meanwhile, get the name of the people who are organizing the ‘tea parties’ for April 15!

Are We Proud Of What We Have Done?

The anger stirred up by Congress and by the press over the AIG bonuses resulted in an unconstitutional law being passed in the House of Representatives and ACORN bussing people to homes of AIG executives in Connecticut to protest the fact that these people were successful.  What did it accomplish?  Is envy better than greed?

The New York Times has the resignation letter of resignation from Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

Follow the link and read the letter for yourself.  The bottom line is–this man was asked to work for $1 a year salary to help ‘fix’ the company’s financial problems with a promise of a large bonus at the end of that time.  The company assured him and the other people working twelve to fourteen hour days on this project (for $1 a year) that they would receive their bonuses at the end of that time.  The anger that was drummed up against them, resulting in their having to return their bonuses or face a 90 percent taxation rate is ignorant envy.  The government has not right to decide which employment contracts are valid and which are not.  If they wanted these contracts voided, AIG should have gone into Chapter 11, where a judge would have made these decisions based on bankruptcy law–not on the ‘villain of the moment.’  Before we start blaming people because they make more money than we think they should, we need to think about where that leads.  The less government intrusion into what people earn, the more successful we will be as a country.


Currency Changes

The US dollar has been the unofficial global currency since the mid 20th century.  Where are we going now in terms of global currency?  According to Ben Smith at Politico, Timothy Geithner has stated that he is ‘open’ to the idea of a new global currency to replace the dollar.  China has recently expressed this idea which was expressed by Russia a few months ago.  Let’s take a look at where we are and how we got here.

Because of the CRA (see previous articles and video on YouTube “Burning Down The House”), American banks made loans to people who could not pay them back.  Banks who were not willing to make these loans were pressured by groups such as ACORN and accused of being raciests.  I posted a story on March 20 about a local bank that did not make these loans, is doing very well, and was given a negative rating by the federal banking regulators.  Anyway, in order to protect themselves, the banks sold bad loan paper with good loan paper.  Some paper they kept.  That is the root of the mess we are in, and because many of our investments (including the bad paper) were sold overseas, our financial reputation at the moment is horrible.  Unfortunately, we are witnessing the end of America as a world-class economic power.  The debt that we are creating in the budget proposals will bring us into the status of a third-world country. 

I am not optimistic about our future under the current leadership.  This is not totally due to the ‘greed’ of Wall Street.  It is due to the idea that giving everyone a mortgage and a home is a good idea whether they can pay the mortgage or not.  The greed was on the part of the people who bought bigger houses than they could afford because no one ever explained to them that markets sometimes go down.  The greed was also on the part of the people who lied about their income to get mortgages and the people who did not bother the check the numbers.  The greed was also on the part of mortgage brokers (not all of them) who knowingly gave mortgages to people who could not afford them and joyfully collected their commissions.

It will be at least a generation before America regains the respect she has lost in the mortgage melt-down.  Responsible spending and more reasonable tax policies would probably speed up the process a little bit, but at this moment, either seems highly unlikely.

Revamping The Tax Code

I don’t think there are too many people out there who would be willing to argue that the federal tax code needs to be changed–the question is how–and the other question is why is it the way it is.  According to, President Obama has asked former Federal Reserve Chairman Paul Volcker to  lead a tax- code review aimed at closing loopholes, streamlining the law and generating revenue.  Sounds like a great idea, but we are walking right into the law of unintended consequences.

The current tax code is so complex that very few people can understand it.  A study was done a year or two ago where a company had supposed ‘taxpayers’ call the IRS helpline for assistance with identical questions.  They got numerous answers–all different.  The reason for the complexity of the tax code is lobbying.  Every special interest group in the country wants a tax break for their group, and they lobby Congress for those breaks.  As long as there are Congressmen and lobbyists, we will not have coherent tax laws.  This is not news to anyone is Washington, so what does President Obama plan to do in overhauling the tax code?

One of the first priorities of the group will be to find a way to collect uncollected taxes.  That is a valid priority, but based on recent examples, if they are looking for people not paying their taxes, they might start with politicians.  The IRS has the means of collecting taxes owed, what needs to happen is a better way to find the people who owe taxes and are not paying them.  The IRS does not need to become more of a bully, it needs to become a better detective.

We need to be very careful of any tax code reform–the temptation will be (especially with one party in control) to make a more complex mess of things that will not be conducive to economic growth.  There is a lot of class warfare going on in Washingtoon these days aimed at people who make over $250,000 a year.  Increasing the taxes on those people will not help the economy–it will eventually destroy it.  Most of the people who make over $250,000 a year are either in sales or own their own businesses.  If you tax small business more, it hires fewer people because it cannot afford to expand.  If you tax salesmen more, they sell less because they know they cannot keep as much of their commissions, and economic growth slows.

The only truly effective way to grow the economy by using the tax code is to let everyone keep more  of the money they earn.  To use the tax code as a way of redistributing wealth is immoral, unAmerican, and just plain damaging to our country. 

Things We Need To Avoid

According to, Senator Benjamin Cardin introducted a bill in Washington today to allow newspaper companies to restructure as nonprofits with a variety of tax breaks.  According to the article:

“Cardin’s Newspaper Revitalization Act would allow newspapers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies.

Under this arrangement, newspapers would still be free to report on all issues, including political campaigns. But they would be prohibited from making political endorsements.

Advertising and subscription revenue would be tax exempt, and contributions to support news coverage or operations could be tax deductible.”

What are these people smoking?  Newspapers would be prohibited from making political endorsements!!!  The current media is biased toward liberalism, I understand that, but I do not want to see anyone’s free speech limited.  I think churches should be able to make political endorsements!  If any organization has a set of beliefs, values, or principles, they should be able to endorse the candidate that most closely resembles those beliefs, values or principles.  This is not rocket science.

Anyway, the reason the newspapers are in trouble is that they have lost credibility.  For example, most newspapers reported the hundred or so people driven around in ACORN-funded buses to AIG executives homes last weekend.  How many of you heard about the six thousand people who gathered in Orlando, Florida, for a tea party protesting the governments current fiscal problems?  If the newspapers did their job, people would buy them!