Political Truth and Fact

G. Norman “Buddy” Bishop

G. Norman “Buddy” Bishop
 
March 2, 1935 – February 4, 2011 
  
Thank you all for your thoughts and prayers during the past few weeks.  The calls and cards of sympathy and support have been comforting in a whirlwind of emotions.  Buddy’s entire family and I will always hold dear the kind words and hugs of those who were able to attend the services in Athens.
 
We have also been touched by the emails received from so many of Buddy’s internet friends.  Frankly, I did not quite realize or appreciate the amount of impact Buddy’s “Political Truth and Fact” daily web postings, and ongoing communications with Father Kim, Father Politzer, Nancy VonKlemperer, Jan Mahood and other faithful Episcopalians still fighting to save their beloved Church had continued to make.
 
Over the years, I worked side by side with Buddy in efforts to bring democracy and economic development to the wonderful country of Belize, bring awareness of POWs left behind in Laos and too many conservative causes and campaigns to mention.  We took great pride in the documentaries produced for Young Life, the US Capitol Historical Society, the Prayer Book Society, as well as a series of videos on the Mayans of Belize.   Over the past several years, Buddy’s “pet project” was honoring our “Greatest Generation in which we videoed hundreds of vets who served in World War II.
 
Buddy never took on a client or campaign that he did not believe in, and gave 150% of his energy, talent and passion to each cause; his principles never waned.  And of course, he never lost faith or enthusiasm for his beloved Georgia Bulldogs!  It is only fitting his final rest is in the shadows of Sanford Stadium!
 
Buddy was very proud of his  daughters – Anne and Carolyn, 8 grandchildren and 3 great-grandchildren from his first family.  What a perfect weekend we all had in September with all 5 of his children and numerous family members together at Panama City Beach…  a Georgia football game included in the fun!  Of course, he also took the opportunity to pass on a few more of his notorious culinary skills and recipes!
 
Years ago, a dear friend of ours lovingly labeled him “Peter Pan”.  Being married to him, working daily with him and raising our 3 children – Norman “Tho”, Tyler and Tiffany, I can only smile and agree with the comparison.  Like Peter Pan, Buddy never truly grew up as he never lost the innocence of youth in having faith in the goodness and kindness of people around him, he never gave up on his conviction that he could make a difference.  Buddy battled “Captain Hook” each and every day of our relationship – taking on liberal causes and candidates which he truly believed were harmful to a country he so loved.  While Peter Pan enjoyed listening to stories told by the Darling family, Buddy loved telling stories…  anyone that knew Buddy has heard him say on more than one occasion “if I’ve told you this story before, don’t interrupt me because I want to hear it again myself!".
 
And, like Peter Pan, Buddy will live forever as his actions and wisdom will be passed on through all those he touched during his life.
 
Happy Birthday Buddy!
Love,
Debbie

NOTE: This will be the final post for Political Truth and Fact

An Introduction Into The Free Market Divide: Austrian and Chicagoan

            The economic climate of the present has pushed Americans to bolster their understanding of the “dismal science”. Those on the right tend to turn to one of three men: Milton Friedman, F.A. Hayek and Ludwig von Mises. The three have many similarities: they were all highly respected intellectuals, prolific writers, all rejected the label of “conservative” in favor of classical liberal or libertarian, and were champions of free trade and free markets. If looking for arguments against government intervention into the economy, one would do well to quote from one or all of the three titans. This being said, there are some stark differences between them. Before I address those, perhaps it would be best to introduce these men.

 

Mises and Hayek and the Austrians

 

            Ludwig von Mises (1881-1973) attended the University of Vienna.  During this time, Mises learned and befriended the prominent Austrian economists Carl Menger and Eugen von Böhm-Bawerk. Mises would go on to surpass his mentors as the greatest mind of the Austrian School. An economist as well as a social philosopher, Mises demonstrated that socialism was economically disastrous, that mankind would best flourish in a free lassiez-faire economy and that government interventionist measures were counter productive. In 1929 Mises was offered a lucrative position with the Austrian Kreditanstalt bank. He turned it down. When asked by his wife why, he replied: “A great crash is coming, and I don’t want my name in any way connected with it.”

 

            Mises economic philosophy would force him to flee to America from threat of Nazi imprisonment. Mises position on lassiez-faire and the gold standard would increasingly alienate him from academia both in Austria and, as he would learn upon arrival, America. The man, who as chief economic advisor to the Austrian government in the 20’s was able to successful combat inflation, found himself unable to find a University willing to pay him to teach. Mises would end up at NYU, his salary paid by the pro-free market Volker Fund. In America Mises would inspire a new generation of Austrian Economists (most notably Murray Rothbard) and, as such, the majority of Austrian Scholarship has come from this country.

 

            Before fleeing Austria, however, Mises would change the life of a one collegiate socialist named Friedrich August von Hayek (1899-1992). A student of law, political science, psychology and philosophy along with economics, F.A. Hayek began attending a scholarly group hosted by Mises after he read his treatise Socialism before joining the London School of Economics. Armed with an understand of Austrian Economics, Hayek would become a rival of British economist John Maynard Keynes, among the most prominent advocates of government economic intervention in the world.

 

            It was in Britain that Hayek wrote the book he is most remembered for today, the Road to Serfdom. Though initially intended specifically for a British audience, the book became tremendously successful in the United States, in part due to a consolidated version published by the Readers Digest. Hayek would follow Mises to America and wind up at the University of Chicago, his salary also provided by the Volker Fund. Relied upon by Old Right opponents of FDR’s New Deal, Hayek would go on to become the best known Austrian Economist in the world, culminating in his receiving the Nobel Prize in Economics in 1974. Hayek would spend most of his career after Serfdom writing on Social and Political Philosophy. Margaret Thatcher, it is said, slammed down Hayek’s book the Constitution of Liberty proclaiming, “This is what we believe!”

 

            Though Mises was Hayek’s mentor and both came from Austria, the two have differences between them. Though both believed economic liberalism was the natural state of man, Mises’s passion for lassiez-faire was guided by his individualist morality; Hayek, on the other hand, more viewed lassiez-faire for it’s benefits to society. Some have noted that The Road to Serfdom is less an advocate of lassiez-faire economics and more a condemnation of economic planning. In fact Hayek would reject a “pure” hands off role of government, advocating a modest degree of labor laws. Such views would lead Ayn Rand, an admirer of Mises, to become a harsh critic.

 

            In spite of their differences, Mises and Hayek worked together on developing many of the key tenants to Austrian Economics. Most notably is the Austrian Business Cycle, which contends that periods of “boom” and “bust” that seemed to hamper a capitalist economy were not the result of natural market failures but government monetary policy. The logic goes that moves by the Federal Reserve to encourage investment (be it by artificially lowering interest rates or increasing the money supply) served to promote malinvestment. A key tenant to Austrian Economics is an understanding of Time Preference – which understands individuals decide whether to consumer wealth now or in the future. In a complex market economy it was a natural interest rate that most effectively guided development in either consumption or investment areas of the economy. The more savings (demonstrating a later time preference), the more money goes into banks, the more money banks have to lend. Interest rates drop which leads to an emphasis on long-term projects (housing construction, plant construction, development of capital.) Alternatively, more consumption (an immediate time preference), the less money flowing into banks, the higher the interest rate and money is developed on producing goods rather than expanding capital. The Great Depression, as written by Rothbard in his book on the event, was caused by inflationary policy of the new Federal Reserve.

 

Friedman and the Chicago School

 

            Hayek would start a classical liberal intellectual group, the Mont Pelerin Society. Though, like Hayek, the group was formed around a philosophy of liberalism, the group’s tolerance for a role of government in certain aspects of the economy infuriated Mises and his followers. One member would recalled: “The story I remember best happened at the initial Mont Pelerin meeting when he got up and said, ‘You're all a bunch of socialists.’ We were discussing the distribution of income, and whether you should have progressive income taxes. Some of the people there were expressing the view that there could be a justification for it.“ That man was Milton Friedman (1912-2006.)

 

            Though Hayek is often described as an Austrian Economist, he also has roots in its largest free market rival, the Chicago School of Economics popularized by Friedman. Friedman began his economic career as a Keynesian, though came to reject the approach during the 50’s as he began his own original economic analysis. Friedman would come to reject interventionalist fiscal policy and became perhaps the most respected libertarian scholar. Friedman championed deregulation of industry, repeal of prohibition and ending conscription (he achieved this as a consultant for Nixon and believed this to be his greatest accomplishment). Friedman later in his career focused on school choice and voucher programs. His greatest regret became his work on income tax withholding, which he developed in the 40’s.

 

            Perhaps more than anything, though, Friedman became renown for Monetarism. Monetarism is a macroeconomic philosophy that emphasizes the role of the money supply on domestic output and price. The role of a central bank for a monetarist (though Friedman opposed it in theory) is to manage the money supply. Freidman advocated increasing the money supply during times of economic stagnation and decreasing it during times of economic growth – the goal being to maintain equilibrium between the supply and demand of money. Friedman viewed the Great Depression as a failure of the Federal Reserve in not providing enough liquidity to banks.

 

            This view differs dramatically from the Austrians. Where the Austrians believed that the government should only concern itself with stabilizing the money supply (by maintaining a gold standard), the Chicago School works from a similar foundation as Keynes in it’s view of the business cycle. Where Austrians see the market economy as naturally occuring and the science of economic a priori (independent of experience, stemming from reasoned deduction), in nature Chicagoans view economics as a man-made positive science (one requiring testing to be proven true or false). Capitalism, to the Chicago School, is not the natural state of man, but merely the most efficient means to create wealth. Where the Chicago School relies upon Keynesian notions of calculable “perfect competition” and a calculable “equilibrium”, Austrians dismissed these hypothetical notions entirely, preferring to focus on real individual human action and the consequences of artificial manipulation of natural markets.

 

The Practical Difference

 

            All of the above is fine and dandy, but what does it really mean? If one has not deduced as such from the above, Alan Greenspan’s Federal Reserve policy was monetarist. Facing the recession brought on by the dot-com bubble bursting, Greenspan sought to spur economic growth by lowering interest rates and promoting industries like the housing market. This increased the investment sector of the economy. The problem is that consumption remained the same. Consumers time preference hadn’t changed, only their access to inflated currency did. Money was going into projects with no demand to support them. Though this was coupled with Federal policy encouraging home ownership, placing individuals in homes that could not afford them, it was the actions of the Federal Reserve that caused the economic meltdown, not the failure of Fannie and Freddie.

The website has been inconsistent during the month of February, this is because the site's founder and editor passed away on February 4th. Here is his obituary:

G. Norman “Buddy” Bishop, Jr. passed away on February 4th, 2011 at Bay Medical Center in Panama City, Florida. He was 75 years old. Buddy was the son of the late George Norman Bishop and Louie Johnson Bishop of Athens.

He is survived by his wife, Debbie Wood and their children Norman Ray “Tho” Bishop, Tyler Johnson Bishop and Tiffany Jem Bishop of Panama City, FL.

Buddy is also survived by his loving daughters Anne Bishop Gay (Edward) and Carolyn Bishop Miller (Craig) and their mother, Kathleen Bishop; Grandchildren: Kate May (Robert), Amber Miller, Megan Miller Low (Tad), Ben Miller, Hamilton Miller, Mallory Miller, Alex Miller, Carson Miller; Great-Grandchildren: Anne Elizabeth, Lucy and Carolyn May.



Buddy’s illustrious life began in Elizabethton, Tennessee, but his heart was always in Athens with his “brother”, Col. Merritt Pound, where he graduated from the University of Georgia with a degree in Journalism. The former U.S. Air Force pilot covered the Civil Rights movement for NBC before entering into politics, working on Bo Callaway’s 1964 Congressional Campaign. Buddy would go on to become Communications Chairman for the GOP in 1972. His most recent position was as Consultant for Congressman Spencer Bachus, Chairman for the Committee on Financial Services.

Pursuits outside of politics included a devotion to the Episcopalian Church in which he waged a 3 decade campaign in support of the 1928 Book of Common Prayer. With his passion for causes such as attempting to rescue POWs left behind in Vietnam, bringing democracy to the Central American country of Belize, fundraising efforts for medical research to eliminate Alzheimer’s, honoring our “Greatest Generation” – World War II veterans, his life personified a quote from Virgil: "Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it".

Of Right and Left

Some concepts are so commonplace that we rarely spend any time evaluating them, taking them for granted. Human beings spent centuries converting carbon dioxide into oxygen without ever understanding the complexities of their respiratory system. How many apples were seen falling from trees before Sir Isaac Newton discovered gravity? Why is water unquestionably more important than diamonds, yet unquestionably less expensive (if you are curious it’s because of the economic law of diminishing marginal utility.)

An example of this phenomenon in political science is the concept of a political “right” and a political “left”. Fascism, we are told, is a “far-right ideology” while socialism and communism are “far-left”. George W. Bush is “right-wing” while Barack Obama is “left wing”. If Sarah Palin is a “far right” politician, what does that make Ron Paul? Is prohibition “left-wing” or “right-wing”? What is the “right-wing” position on civil rights? The clarity of definition is needed. 

Where did the notion of a political right and left come from? The French Revolution. It was first during the National Assembly where those in favor of conserving the monarchy arranged themselves on the physical right while those in favor of revolution were moved to the left. This division would remain as the Legislative Assembly replaced the National Assembly in 1791.  This alignment of French politicians established the political spectrum: reactionaries on the right, revolutionaries on the left, moderates in the center.

While France and her European neighbors were countries founded upon monarchy, state-religion and nationalism, America was founded on liberalism (of the classical variety, today referred to as libertarianism) - it is important to understand the consequences of this difference. By changing the political foundation of a country, you change the political spectrum of the country. George Washington is a revolutionary figure in Europe, but a reactionary figure in American history.  Therefore an American conservative and a European conservative are of two very different ideologies.

While the French Right would go on to support the reactionary causes such as a return to monarchy and re-establishment of the Roman Catholic Church, it would be nonsensical to connect these beliefs to the American Right. Likewise it would be similarly nonsensical to arbitrarily connect the position of a certain modern political party to a side on this timeless political spectrum; it is the position an individual or party takes that places them to the left or right. If the Republican Party tomorrow advocated the establishment of Christianity as a state religion, this would be a revolutionary act and a violent rejection of the wishes of America’s Founders.

While Marxist socialism has failed when implemented, Karl Marx is still arguably the most influential philosopher of modern academia. This point is made quite clear whenever one finds an intellectual who views political or economic matters in terms of “class”. Sociologist Robert Maclver in his book The Web of Government wrote:

The right is always the party sector associated with the interests of the upper or dominant classes, the left the sector expressive of the lower economic or social classes, and the center that of the middle classes. Historically this criterion seems acceptable. The conservative right has defended entrenched prerogatives, privileges and powers; the left has attacked them. The right has been more favorable to the aristocratic position, to the hierarchy of birth or of wealth; the left has fought for the equalization of advantage or of opportunity, for the claims of the less advantaged.

It is quite easy to point out the failure of this position. Constitutionalist Ron Paul, for example, has been the most vocal critic of the Federal Reserve in modern American politics; one of his major criticisms of the reserve was its providing unchecked power to bankers and politicians in American fiscal policy. Deregulation of industry, considered a “far-right” position, empowers consumers at the expense of politicians, bureaucrats and corporations. Unless one wishes to attempt to label the Tea Party as a “far-left movement”, this is an indefensible definition of the spectrum.

So is President Bush, a man who bailed out the banks, advocated for an increased Federal role in education, and a large advocate of international welfare a right-wing President? Is fascism a right-wing ideology, in the American sense? (National Socialism was a return to the policies of Otto von Bismark, which is why it was even considered right-wing in a German sense.)  Is it reactionary to kill abortion doctors?

I think the issue of Gay Marriage provides an interesting view of the right-left spectrum. Are progressives, who are advocating against a Christian bias in government, on the right of this issue? No. Progressives don’t simply want equal treatment, but want to use government to elevate a homosexual relationship to the same level as a heterosexual relationship – an attempt at social engineering. Conservatives (and I use the term in it’s modern usage), similarly want to use government to keep homosexual relationships lower than their heterosexual counterparts, typically grounded on a religious position. This too, I contend, is not a right-wing approach.

The problem, a true American classical liberal would say, is the role of the State in the process.

The reactionary position would be for the government to get out of the institution of marriage entirely. Instead of marriages, which should be between a couple and God, a civil union would be a contract between two sovereign individuals and their government. What’s the difference? To illustrate I will point to the Golden Girls. The sit-com placed three widows and a divorce into a house that became a pseudo-family. The relationships were all platonic, and neither of them would have had interest in marrying another. What they would have had interest in, however, is securing similar familiar rights for occasions such as hospital visitation and financial matters. Blanche should have been able to have a civil union with Rose, with all the benefits and liabilities a contract like that would secure. A civil union would be a documented mutual legal agreement between two sovereign individuals.

This solution retains the philosophy of self-governance advocated by the Fathers, is religiously value-free, and serves to eliminate any attempt (be it progressive or Christian) at social engineering.

I have come to consider the 20^th Century to be a Dark Age of Western Civilization; a return to the statist collectivism champions of liberty thought the Enlightenment destroyed. The 1900’s saw the perversion of such key concepts as liberalism and individual rights, best demonstrated with FDR’s Second Bill of Rights. The irony of today’s divide between conservatives and liberals is that neither side is conservative or liberal - it is only a libertarian (not to be confused with a Libertarian) that can intellectually claim to be either an American conservative or a classical liberal. For most of the 20^th Century, America has had the choice, not between right and left, but of a traditionalist progressive or a secular progressive. Let’s not allow the same to be said of this century.

Saturday's Web

I was golfing the other day with my brother-in-law Ed, a University Professor and proud FDR-liberal, discussing a variety of subjects from Alexander Hamilton to Oklahoma Sooner football when the subject of the role of government as the disciplinarian of Big Business came about. Ed was of the opinion that without the mighty force of the Federal Government laying down large fines to reckless corporations like BP, there is no disincentive to prevent corporate tragedies like the 2010 oil spill - a line of reasoning I have frequently encountered.

Of course, as I attempted to explain to Ed, the market itself has its own ways of punishing business malpractice. I asked Ed if he ever saw a BP commercial before the oil spill, of course he had, and then asked him why BP paid for the commercial. “PR”, he replied. I responded by asking him what comes to mind now when he thinks of BP, those commercials or the oil spill? The oil spill, over night, eliminated the value of billions of dollars of investment in public relations, and that's not considering the time. During the summer it seemed never a day went by without an invitation to a Facebook group encouraging a boycott of BP – a market driven punishment to the spill (if not a misplaced one).

Then there was the cost of cleaning up the oil itself. Growing up in Panama City Beach for most of my life, I was quick to volunteer my services in cleaning up its beaches. BP paid the cost of my and my fellow technician's HAZWOPER Certificate (valued over $300), allowing us to work with tarballs with OSHA's blessing. We received a starting salary of $12 an hour, a guarantee of 80 hours a week (meaning $18 an hour with overtime) and our contractor received a nice profit for every head they hired. I was taking home over $1000 dollars a week. At one point we had 1,000 workers at my base camp in Port St. Joe, and we didn't even have oil. BP paid for our meals. BP supplied our hard hats, our gloves, our neon safety vests, our medical personnel, our work trucks, our work ATV's. BP rented out entire marinas and fisheries and dirt lots to set up camps. We enjoyed air conditioned work tents (necessitated by working in 110 degree heat) and all the water and Gator-Aid we could drink. BP rented the services of private fishing boats. BP deployed almost 4 million feet of boom in the water. All of this at a cost.

And then there were the settlements. Though I did not apply for a “BP Check” as it is referred to locally, most everyone else I know did. It is normal to hear stories of people receiving $12,000 check for being fired due to laziness and then blaming it on the oil spill. A former co-worker of mine has received a total of $7,000 dollars, in spite of the fact her tax receipts showed she made more money in 2010 than 2009. Recently BP has offered $5,000 to anyone who filed a claim and agrees not to sue. Local businesses are getting even more. And this in Panama City Beach, where we never saw our beaches covered in oil.

When I bring up these naturally occurring costs, I typically hear a few standard replies. My favorite is “but BP is so large that they will still end up making billions in profits this year.” That may be true, but wouldn't they have made billions more by not filling the gulf with oil? (I typically choose not to bring up the opportunity costs associated with BP not being able to sell the spilled oil.) Ed asked me whether I believed BP would have paid the cost of recovery if not for the Federal Government, I asked whether he would ever buy BP gas again if they didn't. And then there is the legal system, which obviously wouldn't even be eliminated in Murray Rothbard's state of anarchism, that would supply an avenue for victims to be compensated for their losses. Even with the government imposed escrow fund, a coffee shop owner I know, who opened his business nearly three months after the spill, is using the court system (or threat of it) to receive his own BP check after being denied through the typical claims process.

Of course BP is not the only example of the morality of free markets. When a fast food chain allows tainted food to be sold, even if isolated to one specific store, nation-wide demand for their food goes down, along with their profit margin. When a pharmaceutical company puts out a bad drug, they have to deal with similar legal and liability costs that BP endures. When Toyota makes a car whose breaks don't work, they have to pay for the nation-wide recall while at the same time suffering from the resulting decrease in demand. When a coffee shop sells a lukewarm cup of coffee, they suffer the opportunity cost of never enjoying the business of the dissatisfied consumer.

It's easy to develop a near spiritual celebration of the market when you come to understand how the natural morality of the markets is applicable to the individual as well. If you realize that the income an individual enjoys is the direct reward for their labor (be it from selling it to another or applying it to their own enterprise) then one can understand the significance of their budget. The person who spends $50 dollars every two days on a bottle of Jack Daniels experiences the fiscal price of their vice. The person who spends $60 dollars on bag of marijuana, they experience not only a fiscal price for the vice of the drug, but the price of breaking the law (the illegality being directly reflected in the price.)

It is, of course, the government that does its best to destroy this natural morality. When we are told that all food carries with it the endorsement of the FDA, it is only natural for consumers to worry less about the reputation of its producer and to instead focus on cost. When the Southern Pacific Railroad was granted by government a monopoly in California, the resulting corruption was blamed on the railroad industry as a whole, not the politicians who granted the special favor. When criminalizing a relatively harmless drug like marijuana forces its consumers to interact with drug dealers on a black market, it is the plant that is blamed as a gateway drug. I remembered watching in amazement when the aftermath of the oil spill brought about discussion of raising the liability cap for BP, why should any corporation receive protection from the results of their recklessness?

The more I understand the true nature of the markets, the most enthusiastic I become about the economic freedom of capitalism and the more passionate I become about seeing its return to this country. As Mises sagaciously stated “The alcoholic and the drug addict harm only themselves by their behavior; the person who violates the rules of morality governing mans life in society harms not only himself, but everyone.”

- Tho

Thursday's Web

“Thoughts and ideas are not phantoms. They are real things. Although intangible and immaterial, they are factors in bringing about changes in the realm of tangible and material things.” - Ludwig von Mises

Ideas, we are often reminded, have consequences. Television, space travel, Disneyland – these were the results of good ideas, as are any advancement that results in innovation and progress. Mankind has nothing to fear from good ideas.

But what about bad ones?

Lets take a second to turn back time and arrive in 17th Century France under the reign of Louis XVI, the Sun King. Though he famously proclaimed that “I am the State”, his economic policy was handled by his Minster of Finance, Jean-Baptiste Colbert. Colbert believed that it was his duty as the nations leading economist to guide Frances economy in order to meet his desired ends, mainly the development of a French glasswork, French industry and the promotion of national glory. His plan? High taxes on foreign imports (making imports more expensive than they should be in order to encourage French citizens to buy domestically), the Manufacture Royale de Glaces de Miroirs (a government subsidized glass and mirror manufacturer which enjoyed a state mandated monopoly of glasswork) and control of the French money supply.

The results? By artificially increasing the costs of foreign goods, the prices of goods went up. The Manufacture Royale was never profitable during the 23 years it enjoyed it's state granted privileges and resulted in rising the cost of timber (the 17th Century equivalent to oil). By controlling the money supply, France was able to wage war without considering the costs. Though Louis XVI benefited from Colbert's policy, the French economy did not. Colbertism failed.

Now lets look at 19th Century Britain. Influenced by Adam Smith's magnaum opus The Wealth of Nations, post-American Revolution Britain moved from mercantilism reminiscent of Colbertism to Free Trade as advocated by economic liberalism. Smith saw the creations of colonies as primitive and inefficient and instead understood that the unique qualities of nations, like the unique qualities of human beings, gave each country natural economic strengths and weaknesses. For example, Britain climate made it ideal for sheep herding, but poor for sugar cane. Smith understood that instead of raising the prices of Caribbean sugar in hopes that it will encourage a British sugar industry, it was more efficient to exchange wool for sugar.

Instead of believing that he could manage the economy himself, Adam Smith believed in the “Invisible Hand” of the market. Instead of looking at economics on a national level, Smith understood that every economic decision came down to the actions of individuals, acting in their own self interest. Adam Smith would have told Jean-Baptiste Colbert that it takes more than national pride to develop an industry, it requires capital, natural resources and knowledge of the craft. France's lack of glass industry was the result of French entrepreneurs understanding it's inability to be profitable at the time. Putting Smith's philosophy into action, the British Empire rose from the humiliation of American Independence and succeeded in rising to new heights.

The lesson? Government regulation of the economy is a bad idea. Economic freedom is a good idea.

Unfortunately one American disagreed. Alexander Hamilton was a Revolutionary war hero, America's first treasury secretary and founder of what is referred to as the American School of Economics. Though it is often understood that America was founded upon the idea of individual liberty, the American School advocated a return to pre-Enlightenment mercantilism. In spite of fierce opposition from Thomas Jefferson and James Madison, Hamilton fought for the American Federal government to impose protective tariffs, the subsidization of domestic industry and control of the money supply through the creation of a national bank. The results? A failed attempt to cultivate a government subsidized industrial town in New Jersey, tension between the agrarian South and the industrial North due to the tariffs and massive inflation (prices from 1791 to 1796 went up 76%).

The election of 1800 led to the removal of Hamilton's Federalist Party in favor of Jefferson's Republican Party. Jefferson adhered to the philosophy of individual liberty in all areas, especially economics. Where Hamilton favored taxes, Jefferson sought to eradicate them. Where Hamilton saw benefits in a national debt, Jefferson sought to eliminate it. Where Hamilton wanted the government to control the currency, Jefferson wanted it made stable. Where Hamilton wanted to protect manufactures at the expense of consumers, Jefferson wanted free trade for all. Jeffersonian Liberalism was so successful that the Federalist Party was eliminated completely.

Unfortunately Jefferson wasn't an economist (as shown with his imposition of the disastrous Embargo of 1807) and his economic policy was a product of his passion for individual liberty, not a comprehensive understanding of the market. Though this did not falsify Jefferson's economic logic, it did allow for future American leaders to adopt Alexander Hamilton as the true economist of the Revolution. Abraham Lincoln, Teddy Roosevelt, Woodrow Wilson, FDR, LBJ, George W. Bush and Barack Obama, just to name a few, would all endorse economic policy that advocated protectionism, manipulation of the money supply and the subsidization of industry. The American School of Economics defeated Jeffersonian Liberalism. Hamiltonianism wouldn't be limited simply to America. German Economist Frederich List became a devout Hamiltonian during a visit to America in the 19th Century. List would inspire the German Historical School as well as such prominent German leaders as Otto von Bismark and Adolf Hitler.

Though the 20th Century saw Hamiltonianism come to dominate Western Civilization (culminating the economic distress we all suffer from today), it would give rise to the greatest Jeffersonian intellectual since the man himself: Ludwig von Mises. Mises understood what Jefferson and Smith did before him, that economics relied upon the interaction of individuals and, as such, any economic system that did not take individual human action into account would be fundamentally flawed.

Where as the most prominent 20th Century economist, John Maynard Keynes, believed that governments could regulate the economy more efficiently than individuals, Mises understood that markets were naturally occurring and that any manipulation would result in unforeseen consequences. Armed with a knowledge of the science of praxeology, Mises recognized that a government bureaucrat spending someone else's money would never be as efficient as individuals risking their own capital in search of profit. Keynes saw savings as a destruction of wealth, Mises understood savings was the only way to accumulate wealth. Keynesian economics increased the power of politicians and economists (who would be relied upon to guide his regulated economy), Mises advocated empowering the consumer. Is it any surprise that Keynes became the favorite of those in power?

Economics today continues to pit Keynesians v. Misesians, Hamiltonians v. Jeffersonians. While Keynesians like Paul Krugman advocated the artificially low interest rates that created the Housing Bubble, Misesians were warning of it's dangers. As the Federal Reserve continues to increase the money supply, Misesians warn of it's inflationary consequences. As Barack Obama advocated subsidizing green jobs and car sales, Misesians advocate allowing consumers to decide which industries succeed. 

If Americans wish for their government to continue a policy that gives politicians greater control over what happens with their money, then they should continue to allow Hamiltonianism mark its claim to the American School; but if Americans prefer economic freedom, then I propose a Misesian Revolution.

- Tho

Wednesday's Web: State of the Union

NOTE: Today's piece is by guest writer Tho Bishop, Economic Consultant, Bishop & Associates

During the State of the Union last night President Obama told America “We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper. That’s how we’ll win the future. And tonight, I’d like to talk about how we get there.” While a lot of people will be focused on attacking the President’s proposals from last night, and often rightfully so, I will instead focus on presenting my own proposal to “win the future”. 

The economic situation in America today is dire: unemployment remains around 10%, the stimulus failed and a series of failed government regulatory ventures has left the American public with a woeful distrust of the competency of government and, more unfortunately, distrust in the very system that created the unprecedented wealth America has enjoyed – capitalism.

It will require more, however, than expressing a love of capitalism to turnaround the economy. The key to boosting the private sector is not to allow the Federal Government to spend more of the wealth generated by Americans, as the President proposed, but instead by getting the government out of the way so they can create more. In the following I will address the two most vital steps the government can take: Tax Reform and Currency Stabilization.

There is no greater source of tyranny in American today than the Internal Revenue Service and no greater source of confusion than attempting to comprehend the American tax code. As Will Rodgers said, “The income tax has made more liars out of the American people than golf has.  Even when you make a tax form out on the level, you don't know when it's through if you are a crook or a martyr.” While it is unnecessary for these purposes to go into the long dark history of the American income tax, it is appropriate to identify it as an inherently Progressive reform and one of the greatest burdens on our economy.

    The Tax Foundation estimates that in 2005 Americans spent over 6 billion hours, and over $265.1 billion dollars complying with the tax code . This is the equivalent to a 22 cent surcharge for every dollar of tax collected. Of that $265.1 billion, $148 billion is paid for by business – 56% of the total cost of compliance! And these figures only take into account the time and money spent on tax record keeping, completing tax forms and filing for returns without figuring the time businesses and individuals spend looking for ways to limit their tax burden or the costs involved with tax auditing and litigation. The number becomes greater still if you factor in opportunity costs involved through the withholding process.

    These are the burdens caused by an overcomplicated, overbearing tax system. The practical result is jobs being outsourced overseas, increases in prices and decreases in real income. 

    The system I would propose to replace the IRS would be the National Sales Tax proposal called “The FairTax”. Since I acknowledge the process of replacing the IRS would be even more difficult and convoluted than removing it in the first place, I will spend little time here going into great detail involving this system and instead point out what I believe to be the three most important aspects of it:

•    Removal of Corporate Taxes
•    Simplifying the tax code
•    Increase the number of tax payers

The most important benefit to moving to a FairTax would be the repeal of all corporate taxes, turning America into the most attractive country in the world to build a business. As the number one economic issue before the inadequately labeled “Great Recession” was Job Outsourcing, this simple concept reverses one of the greatest economic burdens America has faced this decade. More businesses in America means more jobs for America and more jobs for America means more revenue for the government, greater stability for the economy and more power for whatever political party responsible.

“We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them. Our predecessors have endeavored by intricacies of system and shuffling the investigation over from one office to another, to cover everything from detection. I hope we shall go in the contrary direction, and that, by our honest and judicious reformation, we may be able…to bring things back to that simple and intelligible system on which they should have been organized at first.”

These were the words written by Thomas Jefferson to his Treasury Secretary Albert Gallatin in 1802 in regards to the finical programs of Alexander Hamilton and his Federalist Party.  The words are remarkable relevant today in regards to taxation. Thanks to accounting tricks like withholding, most Americans have a vague idea on how much they should be taxed and how much they actually pay in taxes. This, in many ways, is an immoral form of governance.

The FairTax fixes this moral system using the simplification of the sales tax. Just as every state and local sales tax figure is noted on your average receipt, so would the FairTax – as such every citizen would be able to see how much of his money went to government simply by recording the number printed black and white on his receipt. No muss, no fuss.

Perhaps the greatest benefactor from such reform is the American worker. With the end of the income tax comes the end of income tax withholding, leading to every American receiving 100% of their paycheck instead of the depleted one he receives now on payday. A reform in government that would positively impact almost every working American man and woman.

Another important advantage of the FairTax that other proposed reforms, such as a Flat Tax, lack is the increase in taxpayer base. Since taxes are extracted on sales and not on government accounting of income, individuals who currently don’t pay federal taxes would do so; people like: illegal immigrants, tourists and those who deal in black markets. While, for example, your average dope dealer avoids paying much in taxes while making significant income in today’s America, in the one I am proposing he will be doing his “patriotic” duty every time he buys a Mountain Dew or Doritos. More tax payers mean less of the burden is placed on the backs of Middle Class and Lower Income Americans.

While these are three of the most important revelations the FairTax would bring, the benefits are not limited to the above. Since I cannot do due diligence to a proposed piece of legislation years in the making with simply a few paragraphs let me finish this point with identifying the benefits of the FairTax as figured by The Beacon Hill Institute which figured that implementation of the FairTax would, in five years, increase Real GDP by over 10%, domestic investment (a crucial factor in ensuring economic stability) by over 86%, capital stock by 9.3%, employment by almost 10%, consumption by 1.8% and real wages by 10.2%.

I give you Economic Stimulus. And a reduction in government. And a return to Constitutional principles.

While I believe that Tax Reform must be the all important trunk of the tree of economic growth, there are other efforts that should be undertaken in Washington in order to strengthen both economic and political gains.

The benefits of tax reform will be undermined, however, if we allow the government to destroy the worth of the dollar. Ever since FDR has taken America off the gold standard, America has faced ever-increasing inflation. Since 2008 this problem has only been exacerbated with the trillions of dollars in government spending stemming from taxpayer bailouts and other ill-advised measures. Without the ability to generate wealth itself, the Federal Government relies upon one of its most dangerous powers: the ability to legally counterfeit. Every dollar the Federal Reserve generates out of thin air is another dollar that dilutes the purchasing power of American savings.

We must have current stabilization. For this I would point to Nobel Economist James Buchanan’s solution of Constitutionalizing the Currency. While this is historically connected with the Gold Standard, it does not necessarily have to be so as the theory does not stress basing the dollar on Gold – only the depoliticization of the dollar. As Buchanan explains: “In application to money, the requirement is that the value of the monetary unit be made one of the rules of the game, within which economic interaction takes place, rather than being used as a counter in the strategy of play within the rules. In Hayekian parlance, the value of money must be part of the ‘higher law,’ as opposed to ordinary legislation that takes place within such law.”

Money Constitutionalization would prevent the Federal Reserve to use the printing press to rob average Americans the value of their hard earned American dollar. Buchanan goes on to point out that this goes hand in hand with the basic principles the Constitution placed for us, noting that the power to coin and regulate currency was provided in the same sentence that provided Congress with the ability to establish other units of measure. Just as it would be chaos for Congress to be able to manipulate the length of a yard for political purposes, we have chaos with the Fed’s ability to manipulate the value of the dollar with every new one printed.

By placing the value of the dollar in this “higher law”, we would necessarily have currency stabilization. As anyone with ears to the global financial situation can recognize growing international fears about our dollar, it should be easy to recognize the benefits of a more sound and secure currency.

We as Americans have always been a resilient group that has definitely overcome the hurdles fate has placed in front of us. In today’s world, that hurdle is often the unforeseen consequence of well-intentioned government policy. It is time for a change. We must end the failed policies of government economic intervention and advocate for America to be the easiest country in the world to start and operate a business. If we look for government to solve the problems of today, we will find ourselves facing only prolonged suffering. It is Americans, not our government, that makes us great – and it is time Washington remembers that.

Tuesday's Web

Political Truth and Fact.Com
Neither fair nor balanced, but absolutely factual

Union Political Power must be confronted by conservative grass root activism – beginning now.

Union mobs have found our neighborhoods and are engaged on new tactics that make them a battle field site for thuggish action.  The new union tactic has other implications given their connections with Democrat politics. 

Until recently, union demonstrations against what they claim to be corporate misconduct – real and imagined – were limited to streets and the immediate location of corporate headquarters.  This is no longer the case.  Led by the huge Service Employees International Union (SEIU), intimidation tactics have now led to massive threats surrounding the homes of business leaders.

For the record, in the town hall meetings of 2009 – many of which were the sites of  tea party activism – violence came uniquely from purple shirt-clad SEIU members.

Then, last May, a frightened (and innocent) teenager was trapped inside his home as a 500-man mob that was bussed in by SEIU demonstrated and chanted on his front lawn in an effort to intimidate his father who is a deputy general counsel with Bank of America.

Fortune magazine's Nina Easton – often a Fox News panelist – is a neighbor of the banker and saw what happened.

Easton says 14 busses, loaded with demonstrators from the SEIU and another political outfit poured into her neighborhood armed with bullhorns.  It was an obvious effort to intimidate a banking executive – at his home, not at the bank. After that, the buses took the raucous mob to a residence of a J.P. Morgan Chase executive.

Police accompanied the mob, but did nothing to inhibit their brutish actions.

Now, the SEIU is at it again, as union supporters target a Wal-Mart developer in Washington, distributing fliers showing a bull's-eye and revealing his home address.  The implications are obvious. The flier gives his name and home address and invites protesters to assemble on his front lawn.  

Wal-Mar has long been targeted because it is non-union. The Wal-Mart development would employ up to 1,200 people.

While the group claims no union affiliation, its website links are funded by the SEIU.  (Tracking the many connections of SEIU can be tricky – but they include ACORN – a group prosecuted in over a dozen states for vote fraud.)

SEIU also has direct connections to the Obama White House. Ito cite just one case, Anna Burger – a member of Obama’s Economic Recovery Advisory Board – is also Secretary Treasurer of SEIU.

Now, three local chapters of SEIU,.have received temporary waivers from provisions of Obamacare.  Proving again that it’s nice to have friends in high places – especially in politics.  SEIU does have political friends – Democrat ones. Its political action committee contributed  $27 million  to the Barack Obama 2008 presidential campaign.

The mainstream media, long ago signed on with liberal Democrats, has been hard at work undercuting conservatives in tea party groups.  They intend to interdict the political impact the spontaneous grass root movement generated.  Ordinary Americans became activists because of irresponsible spending and the far left policies of Obama and the Democrat majorities that followed him into office.

However, there is little honest reporting of SEIU and affiliated groups such as ACORN.  Especially in instances in which political misconduct is suspected, honest reporting should be mandatory for legitimate journalists.  However “legitimate journalist” is often an oxymoron in today’s America.

Lack of honest coverage of the SEIU et al, is a symptom.  The Internet has proven its ability to not only provide sources of factual information, but also its power in energizing ordinary Americans and marshal them to provide powerful political movements.

That power is crucially needed now as we head into the 2012 election. Polls are hinting conservative enthusiasm is waning – mistakenly thinking the 2010 GOP sweep has solved the crisis represented by the far left efforts from Democrats and the Obama administration.

Nothing could be farther from the truth.  Liberal politicians will be even more frantic to win and to protect Obama, than ever.  They are fighting to remain politically viable after suffering a “shellacking”. 

The outrageous actions of SEIU must be honestly reported.  Real American voters know huge mobs of union thugs invading neighborhoods is not only wrong, but downright outrageous.  That fact needs no explanation. These same voters must also be made fully aware of the political threat from SEIU and its associates.  Conservatives need to understand the reality of its threat,  Not only do unions such as SEIU have huge memberships, they also have an equally great potential for wielding political power…and a proven willingness to use it.

This is a call to action: Conservative Americans must effectively counter such far left groups.  It’s time to begin organizing and energizing for the fight that will consume the next 20 plus months. The issue is clear, and the enemy is powerful.  Conservatives cannot afford to be found wanting is clashes of a political Armageddon.

Buddy

The Day’s Top Political News:

Obama's State of the Union proposals will test whether parties can work together

WASHINGTON TIMES: Despite all the talk about civility and increased bipartisanship over the past two months, Democrats and Republicans have truly agreed on only one major legislative initiative since the November election: the relatively easy move to keep tax cuts in place for most Americans.

Now, the president is expected to offer a series of proposals that don't fall on sharp ideological lines as last year's health care bill did, but will still test the two parties' ability to work together. He is expected to tout deficit reduction, but the two sides don't agree on how to get there. Republicans largely favor spending cuts, Democrats a combination of cuts and tax increases.

House Speaker John A. Boehner (R-Ohio) is already saying any education reform bill, another issue the president will speak about, should include private school vouchers, anathema to many liberal Democrats.  Obama wants to increase spending on education and innovation, even as Republicans call for across-the-board cuts in government spending.

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/25/AR2011012501244.html?hpid=topnews

The Political Left laments Barack Obama's move to center

POLITICO: President Barack Obama plans to play up a bright future with congressional Republicans by channeling his 2008 campaign message of post-partisanship in his State of the Union address — but the liberal wing of his party isn’t quite seeing the light. As the president touts spending austerity, deficit reduction and extension of the Bush-era tax cuts, some Democrats worry Obama will pivot too hard away from the party’s core principles and concede too much to the new House GOP majority that campaigned on destroying his agenda.

A shift to the middle marks a key point in Obama’s presidency, just one year after a State of the Union in which he praised House Democrats above all else, hailing then-Speaker Nancy Pelosi for moving health care reform, financial regulatory reform, a jobs bill and climate change legislation. And it reveals how much Obama’s political reality has changed now that the 2012 campaign is imminent. At last year’s address, Obama also faced uncertainty — albeit on a smaller scale — with Republican Scott Brown’s upset victory to take the late Ted Kennedy’s Senate seat imperiling health care reform. Then, rather than backing away, Obama doubled down on his progressive agenda.

Some Democrats now wonder what the president will say and whether he will be willing to marginalize the left of the party to shore up his position among independents as his reelection operation gears up in Chicago.

http://www.politico.com/news/stories/0111/48095.html#ixzz1C3dvIE3W

Mortgage Giants Leave Legal Bills for Taxpayers to pay

NY TIMES: Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.

Randy Neugebauer of Texas wants to cut taxpayer exposure to Fannie and Freddie.

The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.

Documents indicate that taxpayers have paid $24.2 million to law firms defending three of Fannie’s former top executives: Franklin D. Raines, its former chief executive; Timothy Howard, its former chief financial officer; and Leanne Spencer, the former controller.

http://www.nytimes.com/2011/01/24/business/24fees.html?_r=2&scp=1&sq=fannie&st=cse

 

 

 

Monday's Web

Political Truth and Fact.Com
Neither fair nor balanced, but absolutely factual

Editor’s Note:

There was no Sunday Edition because I was in Birmingham, meeting with and interviewing Congressman Spencer Bachus, Chairman of the Congressional Financial Services Committee.   A major subject:

“Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud.

“The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.”

Expect details later.

Buddy

Obama as a shape shifter

Sci-fi fans are familiar with “shape shifters” – beings that can change their beings to fit whatever circumstance they may face.  Just such a character was featured in the “Terminator” movies of Arnold Schwarzenegger

Where the President is concerned, conservative writer, Ed Laskey, provides a chilling prediction:“We are about to watch the extreme makeover of Barack Obama in real time”

It has already begun.

Pollster Scott Rasmussen notes: “31% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Thirty-five percent (35%) Strongly Disapprove.” Says Rasmussen: “That’s the president’s best Approval Index rating since February 1, 2010, nearly a full year ago. Strong Disapproval among Republicans is down to 55%. Among all voters, Strong Disapproval of the president has been consistently lower since mid-December.”

A steady decline in the percentage of American voters who strongly disapprove of Obama seems to have begun shortly after the Republican sweep in November – indicating many such voters are concluding the political struggle for America has been won and is over and are going back to sleep.

How this may impact the activism generated by the “tea party” movement remains to be seen and needs early analysis.  Certainly the GOP has been moving rapidly to make good on its conservative campaign promises.

The GOP House has voted repeal of Obamacare, and GOP Senators are vowing a full scale effort to force a vote on the controversial issue in the upper chamber.  Meanwhile, Nancy Pelosi has been forced to fly commercial once more as Republican Speaker John Boehner now wields the gavel of power in the House.

However, the shooting in Tucson altered the political environment.  Incredibly, Democrats were successful into exploiting a memorial for the victims into a political rally – even using t-shirts emblazoned with a crass political slogan (“Together we Thrive”) left over from the 2008 Obama campaign.

Many Americans have been eagerly anticipating a defeat of Obama in the 2012 elections, but they fail to realize Obama is a “chameleon who can change the way people perceive him”.  He succeeded in doing precisely that through his Tucson speech.

Tomorrow, Obama gets a second shot.

The State of the Union address will provide Obama with an opportunity to proclaim his political visions in terms designed to lay a foundation for selling his plans for the nation’s future.

Obama is expected to proclaim plans for federal investments centered on efforts to spur job creation.  Think of such “investments” as being simply more federal spending.  Certainly the earlier massive “stimulus” scheme failed to solve the job problem. There is controversy regarding whether it had any impact at all. 

Serious controversy beyond jobs faces both sides.  Raising the national debt limit looms, and Republicans will be hard pressed to secure guarantees of meaningful spending cuts in exchange for their voting to raise the limit.

Illegal immigration will remain front and center for many voters, and not just in the border states.  The issue is emotional and Obama and Democrats are trapped in their refusal to effectively confront the issue.

Last year’s GOP victory resulted in massively changing local governments too. Republicans have taken control of state houses and governor’s mansioins, and that situation predicts controversies closer to home.  Entitlements for union members are on the table – states simply can no longer afford to honor many of the more extravagant provisions.

How this shift in the political environment impacts the national scene remains to be seen.  Obama may seems to be dashing to the political center, but such a maneuver may not bring him a real solution.  For example, Bush made a serious error in fumbling the illegal immigration issue, and, as a result, suffered serious erosion of his most critical base of support.  The 2006 election – a fiasco for Republicans – was the result.  If Obama shifts too far from the far left positions he took in his first two years, his base may desert him as Bush’s did in 2006.

But count on Obama and his handlers to shift anyway – reasoning very liberal voters have no other choice.  Of course many may sit out the campaign.  But Obama seems ready to gamble on that.  His changes in his White House staff provide a clue to the start of his political pirouette. One observer writes: “A clue to Obama's ability and willingness to adapt can be found in the words of his book Dreams from My Father.  There he mentioned only one book, Malcolm X's autobiography, and wrote that Malcolm X's "repeated acts of self-creation spoke to me."A man who can fake a Southern accent, the story of how his father came to America, and the story of his parents' being inspired by the Civil Rights march in Selma to conceive him has no problem morphing for political purposes.”

America gets a look at the 2012 model Obama tomorrow night.  Look closely and consider.

For better or for worse, it’s now “game on”.

Buddy

The Day’s Top Political News:

The ObamaCare debate continues

CHICAGO TRIBUNE:   Republicans swept to control of the U.S. House in November with a bold promise that resonated with voters: "We are here because we heard the American people in the last election," says Rep. Paul Ryan, R-Wis. "We said we'd do a straight up-or-down vote to repeal this health care law and that's what we're doing."

Last week, the House voted for repeal of the Democrat Healthcare bill – Obamacare -- with all 242 Republicans and three Democrats in favor. Now the spotlight shifts to the Senate. Or, it should shift to the Senate. Senate Majority Leader Harry Reid, however, says no. He won't allow a vote on the repeal measure. The bill wouldn't pass, Reid scoffs. Other Democrats brand the House vote as "symbolic" as if that were a synonym for "useless." It isn't. Symbols have power.

Reid may fear Democratic defectors, and he can't afford many with a 53-47 voting edge in the Senate and two dozen seats to defend in the 2012 election: Some red-state Dems might vote for repeal.The health care law is in trouble, in the courts and in Congress. Repeal is the first Republican strategy. But Republican lawmakers are also moving to cut its funding and peel away key parts of the law.

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-senate-20110122,0,4301338.story

GOP: State of the Union provides Obana political outline

LA TIMES: Tuesday's State of the Union address will be the first test of whether President Obama's post-election shift to a more centrist course is more than symbolic, Republicans said Sunday.

"We're going to find out beginning next week … how much of this he really means," Senate Minority Leader Mitch McConnell of Kentucky said on "Fox News Sunday." "It is kind of a trust-but-verify moment. Let's see if he's really willing to do it, and if he is, I think he'll find a lot of help among Republicans in Congress."

After his party was dealt an electoral blow in November, Obama embraced a compromise that extended the President George W. Bush-era tax cuts, retooled his West Wing to include more moderate voices — such as his new chief of staff, William Daley — and made new overtures to the business community.

His polls have rebounded on the eve of his second State of the Union address, passing the 50% threshold in a series of major surveys.

http://www.latimes.com/news/nationworld/nation/la-na-state-union-20110124,0,4402525.story

Social issues top GOP state agendas as new majorities revisit gun laws, abortion rights

WASHINGTON TIMES: Newly minted Republican lawmakers who stormed state legislatures with vows of fixing the economy and controlling spending also are tackling social issues, such as gun laws and immigration, with minimal Democratic resistance.

"This is the Republican high-water mark in terms of state legislatures since before the New Deal, in both the number of Republicans and the number of chambers they've taken over," said John Fortier, a political specialist with the American Enterprise Institute (AEI), a conservative-leaning Washington think tank.

"These are issues that are important to these new state majorities. They haven't had an opportunity to weigh in on them." Norm Ornstein, also of AEI, added that social issues are tempting subjects for conservative legislators because they're easier to tackle than economic and budget problems.

http://www.washingtontimes.com/news/2011/jan/23/social-issues-top-gop-state-agendas/

 

Saturday's Web

Political Truth and Fact.Com
Neither fair nor balanced, but absolutely factual

Illegal immigration – an issue Republicans must handle with care

Republican campaign strategists – those focusing on planning for the presidential election, should be careful not to make major mistakes in dealing with Hispanic voters.

Hispanics are, after all, positioned to play pivotal roles in today’s politics.

Notable Republicans such as Jeb Bush, are hard at work trying to convince other Republicans to tone down their rhetoric and actions regarding opposition to illegal immigration.

The White House of George Bush, fumbled its own handling of the illegal immigration issue and that error played a major role in the GOP mid-term disaster in 2006.  It was probably fear of the growing Hispanic population that led the Bush Administration to join in supporting the infamous McCain-Kennedy immigration bill which many Americans considered a plan to grant amnesty for the estimated 14 million illegal immigrants already in this country.

In addition to Bush, that immigration bill had the enthusiastic support of the US Senate and a majority of what is called the “Mainstream Media”.  However, it did not have the support of the millions of ordinary Americans who had found their voice on the Internet.  Internet opposition to McCain-Kennedy reached such an intensity the bill was never called up for a vote.

This was a major victory for grass root America and the first sign of a new populist activism that would – in the recent mid terms – become known as the “tea party movement”.

A majority of Americans simply will not support, or even accept, proposals they view as granting amnesty to illegal aliens. Many see such a move as one likely to encourage more people to cross our borders illegally and sneak into the country.

In debate, liberal politicians charge Republicans are opposed to  immigration. That’s clearly a lie.  Nowhere in liberal rhetoric is there any factual delineation between immigration by those who follow the rules and those who sneak across the border, choosing to make themselves criminals the moment their feet hit US soil.

Republicans should consider some real and significant points:

A majority of American voters – especially those who awarded the GOP a huge mid-term victory – oppose illegal immigration and oppose it emotionally.

The Arizona immigration law has become the sine qua non of the immigration debate.  The real Arizona statistics should be heeded by Republicans tempted to move left on the issue.

70% of Arizona voters support the new immigration bill.  However just under 60% of Arizona’s population is Anglo (non-Hispanic whites).  Given that not all Anglo Arizonan’s support the law, a substantial number of Hispanic voter support the bill. Many Hispanic American citizens resent the illegals because they create a negative image of Latinos.

Hispanics voted Democrat in greater numbers in 2006 and 2008, but so did other groups.  That’s why Democrats won both elections.  This last election saw a significant drop in Hispanics who voted Democrat.  60% voted Democrat in 2010, down from a high of 69% in 2008. 

Republicans must take care in addressing the issue. Overreaching to attract Hispanic support, can alienate the GOP White base. 

Obama is making what is clearly a pandering move to enthuse his Hispanic vote through his court challenge of the Arizona law.  Meanwhile Other states are moving to adopt immigration laws similar to Arizona’s. GOP voters nationwide come down heavily on the side of confronting illegal immigration, and taking effective steps to secure the border in order to prevent or diminish the entry of more illegals.  Republican planners should keep that fact in mind.

Democrats have their own political problems. Despite their Hispanic numbers, they are doing increasingly worse among White Americans. 

It is significant to mention that not all illegal aliens are Latino. According to Border Patrol agents, larger and larger numbers of illegals are coming from the Middle East and Asia, and are paying up to $50,000 apiece to be smuggled in.  The price raises serious questions about motivations of such aliens, and about who is providing the funding.

Republicans are not opposed to legal immigration, but most are very opposed to illegal immigration and the huge costs these aliens are inflicting on local government.

The Los Angeles County Supervisor -- factoring in the cost of food stamps and welfare-style benefits through a state program known as CalWORKS. Combined with public safety costs and health care costs – estimates the “total cost for illegal immigrants to (LA) county taxpayers” was more than $1.6 billion in 2010.”

For a county facing huge financial disaster, such costs are unacceptable.  Other cities and counties face similar costs generated by illegals.

Make no mistake about it: Republicans should do all they can to craft campaign messages that attract Hispanic voters.  At the same time, they must take care to avoid alienating their base of support as happened I n 2006 when the Bush White House misplayed the issue.

In political strategy, the rules say, “work from strength toward weakness”.  This means the primary concentration should be on those voters who provide core support.  Outreach to other voters develops through priorities.

The Hispanic vote is not monolithic.  It should not be treated as such. 

Obama may win his challenge to the Arizona law in the courts.  But he will lose on that issue among the other 70% in Arizona and a like amount in other states.

At the moment, immigration is not the top issue, of course, but it is up near the top, and those who follow it are emotionally connected. 

It cannot be ignored and, like the deficit, must be effectively confronted in the near future.

Buddy

The Day’s Top Political News:

Tea party moves to recall Tucson Sheriff Dupnik group wants Dupnik out

WASINGTON TIMES: Pima County Sheriff Clarence Dupnik became famous nationwide for remarks assigning blame for the deadly Tucson, Ariz., shooting to political "vitriol" and calling Arizona "a mecca for prejudice and bigotry."

Dupnik now finds himself on a hot seat. A group opposed to illegal immigration has begun an effort to recall the sheriff in a special election. Meanwhile, a Pima County tea party group is planning on holding a "Dump Dupnik" rally next week outside his office.

Not that the sheriff should worry about turning in his badge just yet. Sheriff Dupnik has won election eight times, and he's a Democrat in a Democrat-majority county. While some constituents were appalled by his comments, others have applauded his forthright indictment of the state's political climate.

http://www.washingtontimes.com/news/2011/jan/20/outspoken-tucson-sheriff-faces-recall-bid/

Keith Olbermann gives abrupt goodbye to MSNBC show

YAHOO NEWS: MSNBC’s Keith Olbermann returned from one last commercial break on "Countdown" to tell viewers it was his last broadcast, and read a James Thurber short story in a three-minute exit statement. Simultaneously, MSNBC e-mailed a statement that "MSNBC and Keith Olbermann have ended their contract."

Neither MSNBC President Phil Griffin, Olbermann nor his manager responded to requests to explain an exit so abrupt that Olbermann's face was still being featured on an MSNBC promotional ad 30 minutes after he had said goodbye.

Olbermann was nearly fired in November, but instead was suspended two days without pay for violating an NBC News policy by donating to three political campaigns, including the congressional campaign of Arizona Rep. Gabrielle Giffords. He returned and apologized to his fans, but not the network.

http://news.yahoo.com/s/ap/20110122/ap_on_en_tv/us_tv_olbermann

Newt Gingrich tells Georgia Republicans he’ll be a candidate in 2012

ATLANTA JOURNAL CONSTITUTION: Former U.S. House speaker Newt Gingrich has touched base with several prominent Republicans in his former home state of Georgia, telling them that he intends to make a run for president in 2012 using Georgia as his base – and that he already has his eye on office space for a campaign headquarters.

The visits and conversations – some face-to-face, others on the phone — appear to be an attempt by Gingrich to revive his old campaign network and lock down as much support as possible in a state won by Republican Mike Huckabee in the 2008 presidential primary.

A spokeswoman for US Senator Johnny Isakson said Gingrich called senator earlier this month – adding that Gingrich was not definite about his plans in that conversation. Friday, U.S. Sen. Saxby Chambliss said he had not talked to Gingrich yet, but that the former U.S. House speaker had asked for an appointment in the near future.

http://blogs.ajc.com/political-insider-jim-galloway/2011/01/21/a-newt-gingrich-presidential-campaign-out-of-buckhead/