Monday, August 29, 2011

Perry vs Romney

It is amazing how many "experts," who make their living prognosticating on political events, are clueless.  A year ago they said it is near impossible to beat a sitting President. Well, simply put, that is nonsense. In my lifetime 5 sitting Presidents were re elected, Eisenhower, Nixon, Reagan, Clinton and Bush II, three lost, Ford, Carter and Bush I, and two didn't run because they knew they would lose, Truman and Johnson.

Now the accepted wisdom is that Mitt Romney would do better against Obama than Rick Perry. Rich Lowry and Pat Buchanan both expressed this on Sunday and with certainty. The logic they apply is that since Romney is closer to the center politically, he will garner more support from independents. I believe they are wrong on this point alone, and very wrong on the conclusion they draw even if they are right here.

The "independent" voters are made up of Republican and Democratic independents, and independent independents. I choose to ignore the former group because they consistently vote 80% to 90% with the party they identify with. Given that independents average around 28% of the electorate, a swing of 10% one way or another among that subgroup becomes inconsequential. However, the independent independents can all go either way and therefore do count. I believe they will be attracted to a consistent, principled politician over one who has been on both sides of far too many issues.

But suppose I am wrong. Suppose Romney does attract more of them. Before concluding he is the more viable candidate, we also must look at a much larger voting bloc, evangelical and born again Christians (about 26% of the electorate.) How will they vote? I doubt there is a lot of negativity about Romney's being a Mormon, but there will be some. More important is the fact that evangelicals love, absolutely love Perry, and this will bring him far more votes than he could ever lose among independents.

Evangelicals vote primarily for Republicans, but enough vote Democratic that they can hardly be taken for granted. To illustrate how important their vote is think about this. In 1992 when Bush the elder lost the election, he was up against Bill Clinton, arguably the best politician in our lifetimes. He was coming out of an economic downturn that was being felt by most of the electorate. Ross Perot ran as a third party candidate taking 19% of the popular vote, most of it consisting of Republicans. With all this going against him, if Bush had gotten the same percentage of evangelical voters he got in 1988, he would have won the election.  Breaking his "No new taxes" pledge so offended them, many either switched parties or sat home on election day.

Ronald Reagan taught a lesson to politicians that most today seem to have missed. The principled is also the political. Every time Reagan did something significant the press went apoplectic. When he fired the Air Traffic Controllers, when he called the Soviet Union the evil empire, when he said "Mr. Gorbachev, tear down this wall," and when he walked out of the Strategic Arms Limitation Treaty talks the press was aghast, calling him stupid, a cowboy, and the worst President in American history. Of course after the hysteria died down the public loved him for it, and proved so with their votes. I don't want to suggest Romney is unprincipled, but if being consistent is the measure of integrity we apply, Perry beats him hands down.

Monday, August 22, 2011

Perry: A Palin Who Can Win

The chattering classes are at it again wringing their hands over the possibility of Rick Perry getting the nomination. All the usual suspects are working against him. Karl Rove, Peggy Noonan, Dana Perino and others suffering from delusional myopia suggest we need a more centrist candidate. Sure we do....perhaps like McCain or Romney, or maybe Bob Dole. Guys like these are less likely to win than a real conservative, and if they do win they would govern like Obama lite. Romney has been on both sides of abortion, both sides of gay marriage, defends his disastrous Romney care, and has supported carbon controls. McCain voted against the Bush tax cuts 3 times, opposed Guantanamo and enhanced interrogation, and championed Campaign Finance Reform. Newt Gingrich once called Bob Dole the "tax collector for the welfare state." The only reason George W Bush won was he presented himself as a true conservative. Of course, steel tariffs, No Child Left Behind, Campaign Finance Reform, the Prescription Drug Benefit and unbridled spending and regulation put that notion to rest. In fairness he did appoint two excellent Supreme Court justices, defended the homeland with distinction, and lowered taxes getting at least one boot heel off the neck of the economy. But anyone who believes in conservative ideas and values can not possibly support a political/ policy dyslexic like Romney.

Bill Kristol, who was one of the first pundits to suggest Sarah Palin as McCain's vice presidential running mate, has echoed the same dissatisfaction with Perry by suggesting that Paul Ryan run. Ryan is a great young man. He has acquitted himself well in the budget debate and with entitlement reform. But that is it. He is an unproven campaigner, fundraiser, with a very small list of legislative accomplishments. He may someday be ready, but now is certainly not the time.  The strange thing is that Perry is philosophically like Sarah Palin (she has all the right ideas too) but one that can win. Why are Kristol and the others so distressed?

Rick Perry has a list of conservative accomplishments a mile long. He believes what he says. He believes in America, free enterprise (he has a copy of Hayek's "The Road to Serfdom" on his desk), individual rights and responsibilities, small government and God. We are known by our friends and our enemies (too bad no one looked at Obama's radical friends before they voted for him.) Rick Perry has a list of enemies any conservative would be proud of. The Trial Lawyers because he  passed tort reform in Texas, and it is working like a charm. Texas is a right to work state so the unions are in high gear. His other enemies are in a dither and confused trying to decide just how to attack him. They say his spectacular jobs record is meaningless because most are low paying jobs. Others say credit for his success belongs to Obama's stimulus and an increase in government jobs. Are there low paying government jobs? Still others say it is because of energy sector growth. Obama has been a real help with energy jobs. He pretends to create green jobs, and kills real oil and gas jobs. Of course much of the criticism is mutually exclusive, but if I know the left they will see which charge resonates and then all get in line repeating it.  There will be the most massive attacks on him since Reagan, and for good reason. He is cut from the same cloth as Reagan. Certainly this guy must be doing something right if he so offends so many liberals.

This is for all the fallen Democrats who realize that liberalism really is a mental disorder, but can't quite get behind some of the conservative ideas and policies because they have been successfully demonized by the Left. For example the charge that Perry is some kind of Bible pounding born again lunatic. First, I find it commendable that he is a man of faith (would you rather live next door to or vote for an atheist?) Politically, the support of evangelicals is an absolute necessity for any Republican to win. They represent 26% of the voting public, and they love Rick Perry. For those independents and Jews who might see evangelicals from the perspective of the Main Stream Media, suggesting they are something to be feared, I can only say that they support the same values you do. A very few might work to convert you (the doctrine of most faiths proscribe the same thing), but unlike the Muslim faith, using force (including the force of law) is not even a consideration. Jews in particular should remember; there are no greater supporters of religious freedom and no greater supporters of the state of Israel on this earth than evangelicals.

Please...get with it. We are lucky enough to have someone running who represents in whole or in part all the things we have dreamed of since Reagan left office, and even better, he has an excellent chance of winning. In fact, I believe he will win. I promise. No conservative, no one believing in freedom or in American exceptionalism, will be disappointed.         

Saturday, August 20, 2011

Rick Perry's Answer

Rick Perry was asked to explain his skeptical position on global warming by a new Hampshire Democrat yesterday. The political requirement that all answers be brief created an obstacle he navigated poorly, even though his skepticism is well founded. Here is my suggestion on what he should say if asked again.

The test of any scientific theory is how accurately it predicts future events. Global warming theorists have been off by large margins with every prediction they ever made. They predicted rise in temperatures, sea levels and other "catastrophic" events, all of which have been dramatically scaled back (by 90%) as each one failed to materialize. This alone is enough to discard the theory. But add to that the continuing deception by its advocates, and one wonders why we discuss this any more than we do the Lost City of Atlantis.. For years the "hockey stick" was offered as proof of temperature increases, until it was peer reviewed and it was learned the analysis and data werer simply incorrect. East Anglican University, the source of the data used in modeling climate change, had emails revealed where they were sharing information on how to fudge data, and how to avoid giving out the data on which their work was based. This hardly serves the scientific peer review process. Now we find the highly publicized report predicting the death of the polar bear population was a fiction (its authors are being investigated by their peers). Most recently data was aquired showing heat loss from the atmosphere into space is so much higher than the assumption used in climate change modeling that it renders every prediction they ever made useless. GIGO... garbage in garbage out.

OK. So it wasn't short. But maybe Perry can figure a way to distill this into a couple of soundbites.     

Tuesday, August 16, 2011

Buffett Is At It Again

Warren Buffett, legendary stock investor, penned an op-ed in the New Your Times in August once again illustrating how brilliance in one field not only does not translate into another, but may actually be an obstacle to understanding anything else. Maybe the bubble created by the yes men surrounding wealthy individuals contributes to it, or possibly it is because of the blinding ego success often creates. Whatever it is, this guy is way out there.

Buffett's first notable "contribution" to tax reform ideas was during his short tenure as the top financial adviser to Arnold Schwarzenegger's first gubernatorial campaign. Buffet advocated raising property taxes in California, reasoning that his house in Malibu (worth 20 million dollars) had a much lower tax rate (as a percentage of the home's value) than his $500,000 home in Nebraska. Think about what he said. The disparity in tax rates should automatically be adjusted in favor of the higher one, not the lower. Why? I don't know. Secondly, if anyone cared to look at the overall tax burden in California versus Nebraska they would find California tremendously higher, even though this one particular tax was lower. Apparently he thinks the disparity should be greater. Of course that exchange with the press ended Buffets career as a political financial adviser. Let's hope his role with Obama ends just as abruptly.

Here he is weighing in on federal tax rates. He objects to the 15% capital gains and dividend tax rate, proposing high income people pay a higher rate. He has made silly arguments in the past about this (claiming his secretary pays a higher rate than he does.) To address this and his foolishness in the NYT  I will give you some simple facts and common sense. Most of the revenue paid to the government is redistributive, not productive, whereas most money invested by wealthy individuals is very productive (wealth creation and jobs.)  A zero capital gains rate would produce more wealth for every level of society than even the present 15% rate. Taxes generated from more jobs and increased economic activity would more than make up for the revenue "loss" from zeroing out cap gains, although that gives rise to the question of if more government revenue/ power is a good thing. These increases occurred every time capital gains taxes were lowered, even under Democratic presidents like Kennedy and Clinton. Capital formation and risk taking is an absolute necessity for wealth creation, and a zero cap gains tax rate would encourage more of it.

In the article Buffett says his blended average tax rate (total taxes paid divided by total income) was 17%, and that his employees paid tax rates of up to 33%. But he is comparing their top rate (much higher than their blended average) with his blended average. His 17% rate is because so much of his income comes from capital gains (15% rate,) but he ignores the fact that his gains had already paid a 35% corporate tax rate, so in effect he paid 50%. He also fails to point out that half of Americans pay no taxes, that the top 5% of American earners pay 38% of the taxes, the top 20% pay over 80% of the taxes, and far more important, every time taxes were lowered on the rich (and everyone), revenue to the government went up, and the rich paid a higher percentage of total revenue.

Successful investing promotes social benefits even more than charity. Capitalism is a purely democratic process. If a business does not provide you with what you want at a better value than it's competitors it ceases to exist. It can only survive by meeting your needs, and you get to vote daily with your dollars. We need a legal framework for business to operate freely, but we should not have government in the business of business. The social good that Buffett's business's have done is being undermined by his donations to the Gates Foundation, a leftist charity with all the wrong ideas. I am not suggesting that everything they do is bad, in fact most of it is very good. But if history is any guide, a charity like this, founded on failed ideas, eventually does tremendous harm to the social fabric (see Pew and Ford Foundations for details.)

There is one school of thought that says Buffet advocates only for Buffet. The cry for higher cap gain and dividend taxes would hardly affect him at all. He has about $500 million in a portfolio from which he draws money to live. Higher taxes would affect this, but this represents just two percent of his wealth. The other 98 percent, about $50 billion, is in Berkshire stock and he never sells a share of that. So with all his grandiose proclamations, he is volunteering yo increase his taxes by an infinitesimal amount.   

Is it possible that people like Buffet, New York Mayor Michael Bloomberg, General Electrics Jeffery Immelt, and other limousine liberals know that since conservatives respect private property,  none of their property is at risk from the right, but since liberals seem to thrive on confiscating other peoples wealth, these wealthy liberals are intimidated into supporting failed policy ideas? I can't believe they are so foolish as to believe what they advocate is good for anyone, and neither do I believe they are a party to some grand evil conspiracy. Perhaps I will just have to accept the mystery.


Friday, August 12, 2011

Question for Mitt

The test we should apply to any politician is whether philosophically, problems are better solved by the private sector or government. I believe Mitt Romney is a closet big government supporter. Here is one reason why.

Romney refuses to say Romney care was a mistake. He says that although there were things he wishes were different, for the most part it has been a success. Last night he said the individual mandate is consistent with the Massachusetts constitution, but not the federal constitution. The federal government has no right to impose its version of Romney care on the states, and as President he would do away with Obama care. If I were a moderator last night, I would have said, "The Massachusetts healthcare bill promised to insure the uninsured, yet after more than 5 years there are thousands of uninsured. It promised to reduce the lines and use at emergency rooms, yet there has been a dramatic increase in ER use with longer waiting periods for that and other medical services. It promised to bring costs down, but costs have skyrocketed far faster than the national average, requiring federal dollars to bail the state out. Mr. Romney, if this is success, what does failure look like?"

Tuesday, August 9, 2011

They Just Don't get It

I'm not sure why. Perhaps the liberal press has successfully infected the minds of conservatives, or perhaps those fallen Democrat conservatives can't quite give up some fictional liberal assumptions. Two days in a row on "The Five," a Fox News opinion program at 5 o'clock, 4 conservatives and one liberal agreed on the desirability of government programs which are in direct contradiction to conservative philosophy.

The first was a bill introduced in congress which would pay employers $2,400 to hire veterans. This was to "remedy" the fact that unemployment among returning veterans is 13%, versus 9% among all workers. The next day a "remedy" to the nations employment problems, proposed by one of the hosts and endorsed by all 5 of them, was to allow companies with money overseas (money they earned overseas and paid jurisdictional taxes there) to repatriate the money tax free, provided they spent 25% of it on job creation. Current tax law requires they pay a corporate tax (35% max) if they bring the money back.

So let me get it straight. Veteran employment can be controlled by government intervention. Ummm... I think we tried that and the results were not so good. Obviously everyone wants to find jobs for vets. Obviously all Americans owe them a huge debt of gratitude. But if they have not been rewarded enough (count me among those that think they have been vastly underpaid and under appreciated), then take that $2,400 and use it to pay them more. Don't interfere in the free market. Government should never be in that business. The results of such interference (aka targeted results) always has unintended consequences, most of which are bad. If it is OK to interfere with the market place when it benefits one of my causes, then it is OK when it promotes liberal ones.

The same applies with the corporate tax holiday. Let the companies bring the money back tax free, period. That is a tax reduction consistent with conservative philosophy. But to attach a requirement that the government mandate certain uses is right from the liberal playbook. The hubris that central planners can allocate resources better than the market is shocking, especially when advocated by conservatives. No battleground success will win the war until the troops understand what they are fighting for.    

Friday, August 5, 2011

A Question on Debt and The Press

Why haven't the pundits and press ascribed the market losses to congress's failure to cut spending? They said the five day losing streak the week before was because congress didn't raise the debt ceiling. They said the market would crash if it were not raised. So it was raised, and the market crashed anyway, leading to the conclusion that the failure to raise the debt ceiling had nothing to do with the earlier decline. Ahh, but what about our insane spending and the failure to address it? That continues. In spite of the lefts portrayal of the cuts as draconian, it appears the market is saying too little, and maybe too late. Another question; Is the press too stupid to understand this, or do they understand but have an agenda, as in re electing Obama?