Saturday, September 3, 2011

Obama’s Enron

Bush was flayed for Enron. Where does that put Obama and his green-energy pet?

We have seen the future, and it went bankrupt.

If the praises of high-ranking Obama-administration officials were a viable business plan, the solar-panel maker Solyndra would be an industrial juggernaut. Vice President Biden insisted that the jobs created by the California-based firm would “allow America to compete and to lead like we did in the 20th century.”

In a visit to Solyndra in May 2010, President Obama called it “a testament to American ingenuity and dynamism.” He all but redefined the traditional statement of Americanness to encompass motherhood, apple pie, and the conversion of sunlight into electricity through cylindrical thin-film solar cells, the specialty of Solyndra.

Obama and Biden were literally invested in Solyndra’s success. The company got a half-billion-dollar federal loan guarantee, the first in a highly vaunted Department of Energy green-jobs program, as part of the stimulus. This was supposed to be the new economic model: government and its favored industries cooperating to lead the country into a green, politically approved recovery.

The showcase firm is now filing for Chapter 11 in an embarrassing blow to the premises of Obamanomics. At least the Obama administration can’t be accused of practicing industrial policy the old-fashioned way and picking winners. It is evidently quite ready to pick losers, too.

A Department of Energy spokesman explained wanly, “The company was considered extraordinarily innovative as recently as 2010.” Innovative, maybe; profitable, no. It had never turned a profit since its founding in 2005. In the still “extraordinarily innovative” year of 2010, it canceled an attempted IPO and axed its CEO.

Plenty of venture capitalists made foolish bets on Solyndra, but the federal government was the most reckless. The Obama administration wanted to throw money at the likes of Solyndra without due diligence, or much diligence at all. In 2008, the Government Accountability Office warned that the Energy Department loan program — created in a 2005 energy bill — had inadequate safeguards.

Nonetheless, within 60 days of becoming energy secretary, Steven Chu put Uncle Sam on the hook for Solyndra. According to the Wall Street Journal, $527 million of the $535 million federal loan has been drawn down, with a bankruptcy court set to determine how much the feds will recover. Chu is fortunate that taxpayers can’t bring shareholder lawsuits against the federal government.

President Bush was flayed for the Enron bankruptcy, based on his tenuous ties to the firm. If the same media rules applied, Solyndra would be Obama’s Enron, given his active promotion of the company and his lavish funding of it. A prodigious Obama-Biden fundraiser is a major backer of the failed concern.

Solyndra’s crash comes during a wave of solar bankruptcies. The government’s enthusiasm for solar power far outstripped that of consumers. Spain provided something of a precursor. It massively subsidized a solar-power industry that collapsed when the government realized its generosity was unsustainable and cut back. One Spanish newspaper had a headline, “Spain admits that the green economy sold to Obama is a ruin.”

China is picking up the pieces. Not only does China coddle solar firms, it inherently is a lower-cost manufacturing environment. Its cheap, simple solar panels are more marketable than the more sophisticated version attempted by Solyndra. Our subsidies for the purchase of solar panels are often used to buy Chinese products. Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol — subsidizing its production, mandating its use, and barring its foreign competitors.

The stakes in the battle to manufacture solar panels are exceedingly small. Solar power accounts for less than 1 percent of the electricity generated in the United States. The Obama administration’s fervency for it has more to do with the romance of its clean, postindustrial image than with economics. Obama said last year, “The true engine of economic growth will always be companies like Solyndra.” If that were so, it never would have needed half a billion of our dollars in the first place.

Investigators Probe White House Role in Massive Energy Loan

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Canadian Idiot

Green Day frontman kicked off flight over saggy pants
Friday, September 02, 2011

OAKLAND, Calif. -- Green Day frontman Billie Joe Armstrong says he was kicked off of a Southwest Airlines flight Thursday night for wearing his pants too low.

The Bay Area rock musician was traveling from Oakland to Burbank when the incident occurred. "Just got kicked off a southwest flight because my pants sagged too low! What the f**k? No joke!" Armstrong tweeted Thursday night.

7Live Associate Producer Cindy Qiu was on the flight and witnessed the incident.

"Basically, all the passengers were already seated, we were ready to go, they had already told us to start to turn our cellphones off," she said.

Qiu said that Armstrong was approached by a flight attendant and told to pull his pants up. Armstrong initially dismissed the request, asking, "Don't you have better things to do then worry about that?" When the flight attendant repeated the request and threatened to have Armstrong removed from the plane, Armstrong relied "I'm just trying to get to my f**king seat."

Armstrong and the person he was traveling with were then removed from the flight.

Southwest responded to Armstrong's gripe soon after with a tweet of their own. "Very sorry for your experience tonight, someone from our Customer Relations Team will reach out to you to get more details."

This comes on the heels of an incident on June 12 when a University of New Mexico football player was booted from a U.S. Airways flight bound for Albuquerque from San Francisco over his saggy pants. Deshon Marman is now suing the airline over the incident.

ABC7 News contacted Southwest, which declined to comment at this time.

Stay with ABC7NEWS.COM for more on this developing story.

(Copyright ©2011 KGO-TV/DT. All Rights Reserved.)

‘Community Organizing’ Properly Understood: Political Organized Crime

Posted on | September 2, 2011

There are two ways to get money: Honestly by hard work, or dishonestly through thievery and fraud. If you vote for politicians because they promise to give you money taken from taxpayers, you are practicing the politics of thievery.

We call it “corruption” or “bribery” when businesses give money to politicians in return for their support of legislative favoritism, but we call it “social justice” when Democrats promote programs that give money to voters who support Democrats:

Why are left-wing activist groups so keen on registering the poor to vote?
Because they know the poor can be counted on to vote themselves more benefits by electing redistributionist politicians. Welfare recipients are particularly open to demagoguery and bribery.
Registering them to vote is like handing out burglary tools to criminals. It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country — which is precisely why Barack Obama zealously supports registering welfare recipients to vote.

That startling passage by my buddy Matthew Vadum in The American Thinker has provoked head-exploding outrage from liberals, who are sure what he has written is evil, although they cannot deny it is true.

Vadum is the nation’s leading authority on ACORN, the Alinsky-inspired group that helped advance the career of our Community Organizer in Chief. His book is Subversion, Inc.: How Obama’s ACORN Red Shirts are Still Terrorizing and Ripping Off American Taxpayers.

Troubling Trend: Libyan Rebels Are Rounding Up Black Africans

Rebecca Greenfield
Sep 01, 2011

As Libyan rebels gain on Qaddafi and setup a temporary government, they've begun imposing their rule on Libya's people, including rounding up thousands of black Libyans and migrants from sub-Saharan Africa, reports the Associated Press. The rebels have accused the detainees of fighting for Qaddafi. The prisoners claim innocence, "But that is not stopping the rebels from placing the men in facilities like the Gate of the Sea sports club, where about 200 detainees--all black--clustered on a soccer field this week, bunching against a high wall to avoid the scorching sun." While officials concede that many of the detainees are probably just migrant workers, prison director Ibrahim al-Rais insists that a "large percentage" are fighting on behalf of Qaddafi. "These people were fighting against our people." There's no hard evidence, but al-Rais pointed to what he claimed were faux Libyan ID cards. "He said Gadhafi gave many mercenaries Libyan IDs so they could fight. He also said many had been carrying dollars or euros--which al-Rais said were mercenary wages."

Justice Minister Mohammed al-Alagi told reporters that the conditions in the prison centers were "up to international standards. We are building a Libya of tolerance and freedom, not of revenge," he said. The handling of these prisoners offer a first glimpse into how the rebels take to governing the liberated country.

Did Obama Make It Worse?

James Pethokoukis — September 2011

What if the president of the United States hadn’t proposed an $800 billion stimulus plan back in 2009—but one twice as large? That is the question haunting the intellectual left, led by the economist and columnist Paul Krugman, especially since the economy is mired in what might charitably be considered the doldrums. It slowed to a near-total halt in the first quarter of 2011 with a growth rate of 0.4 percent before climbing to a comatose 1.3 percent rate in the second.

For Krugman’s opposite numbers, the question is the reverse: Might the U.S. economy actually be stronger today if Uncle Sam had done nothing and just let the business cycle play out? And what might have been different had John McCain been elected the 44th president instead of Barack Obama? Would he have acted differently? Would the result have been different?

The what-if debate is not merely an intellectual exercise. It will have some effect on American policy going forward. The American Recovery and Reinvestment Act was Barack Obama’s signature achievement in dealing with the most worrisome set of economic conditions since the Great Depression. It was how Obama, to use a pair of his now seemingly abandoned metaphors, sought to drag the economy out of the ditch while the Republicans were standing around sipping Slurpees.

As Obama said on the first anniversary of signing the bill, “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.” Economic analysis from the White House credits the Recovery Act with having saved or created between 2.4 million and 3.6 million jobs by the end of March, 2011.

In short: without Obamanomics, it would have been worse. Much worse. You’re welcome, America. Four more years, please.

But Republicans have a competing argument. Instead of saving us from a Greater Depression, the Obama stimulus (together with his health-care plan and financial reforms) was a two-year waste of precious time and money that may actually have impeded economic growth. The evidence for their proposition comes in part from the White House itself; its own economists predicted the stimulus would prevent the unemployment rate from hitting 8 percent. But the rate actually rose as high as 10.1 percent, has settled in above 9 percent now, and even Obama’s own team currently hopes for a rate of, at best, 8.25 percent by the end of 2012—if nothing else goes wrong.

To be sure, the economic disaster that led to the longest recession the United States has ever suffered was something Obama inherited, but there is no question everyone (on all sides of the aisle) believed that natural cyclical forces would have led to recovery long before now. Natural cyclical forces were not given a chance to work themselves out. Far from it. In addition, Republicans can argue that regulatory uncertainty and fear over the rising national debt—debt that Obama’s Recovery Act helped intensify—have chilled American business.

In short: Obama blew it. That accounts for the slogan Wall Street Journal columnist Peggy Noonan proposed for the GOP going into 2012: “He made it worse.”

Did he? Who’s right? Let us examine several potential policy paths not traveled and speculate how the economy might look different if they had been.


What if the stimulus had been larger?

More Americans think the stimulus hurt the economy than helped, just as they think—in percentages that look increasingly like an oncologist’s fatal diagnosis—the economy is on the wrong track. So it should come as no surprise that Obama would rather talk about “winning the future” than make reference to a nearly trillion-dollar plan the public seems to think lost the present. In his State of the Union address earlier this year, Obama obliquely referred to “steps we’ve taken over the last two years [that have] broken the back of this recession,” before immediately pivoting to Sputnik and bullet trains. The president even recently joked at a meeting of his jobs council that “shovel-ready was not as shovel-ready as we expected.”

You will not find any White House policymaker, either current or former, who thinks the stimulus was fundamentally flawed. The only error Obama economists such as Larry Summers or Christina Romer—or Obama himself—will concede is that the stimulus should have been bigger than the dollar figure ($860 billion) that the political reality of 2009 would allow. But would more spending and larger temporary tax cuts have produced a significantly different result?

Before trying to figure that out, we must understand the actual impact of the Recovery Act. We cannot determine that through the White House’s models, which presume that a dollar of government spending produces more than a dollar of economic output—a presumption that is highly controversial, to say the least. But it’s useful for the White House, because even if the economy had completely collapsed after the stimulus kicked in, the White House could still have released report after report showing that GDP and job growth would have been even worse without the Recovery Act.

Better to see what actually happened as gleaned from government statistics. In a recent paper, the Stanford University economist John B. Taylor simply looked at whether, as a result of the stimulus, consumers actually consumed and whether government actually spent in a way that produced real growth and jobs.1 Turns out, they didn’t:

Individuals and families largely saved the transfers and tax rebates. The federal government increased purchases, but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing (largely by acquiring more financial assets) rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers. Some argue that the economy would have been worse off without these stimulus packages, but the results do not support that view.

Some economists on the left acknowledge the truth of Taylor’s analysis. “Taylor actually has a pretty good point: It’s far from clear that the ARRA actually led to much of a rise in government spending, while the tax cuts that made up much of the stimulus were probably largely saved,” Paul Krugman has written. But Krugman and others of his ilk then use Taylor’s analysis to argue that this proves the stimulus should have been larger, with far more of the money spent on government purchases and infrastructure and far less on temporary tax cuts.

Taylor is skeptical of such reasoning. He questions whether such massive spending could happen quickly or efficiently. Summers, who ran Obama’s National Economic Council, harbors such doubts, too. As he told the Washington Post: “So-called shovel-ready projects often were not in fact ready to go. Almost everyone close to the process feels that Joe Biden and his team did a very good job of moving the stimulus money through the system, and as a consequence, money moved more or less on the schedule we projected in 2009. They would be the first to say that it would not have been possible to move vastly more money into quick trigger infrastructure projects.”

So cranking up the stimulus machine to 11 would have been difficult, if not impossible. But that is not the only argument to be made against the effectiveness of the stimulus. We also know that high levels of government spending crowd out private consumption. And as we learned from the permanent-income hypothesis that won Milton Friedman his Nobel Prize, some Americans realize all the massive deficit-financed spending of today will ultimately require raising their taxes tomorrow. So short-term changes in income tend to have little impact on how people spend. “New Keynesian” models, like one used by the European Central Bank, sought to incorporate such factors and predicted that the Obama stimulus would have just a fraction of the impact estimated by Romer and other White House economists. Instead of creating 3 million jobs, perhaps the actual total was 600,000, or about $1 million a job (assuming approximately 80 percent of the stimulus has been distributed.) That would mean the job growth that has occurred has been mostly a result of the natural recovery of the economy.

Such estimates sure seem to better reflect the miserable reality of the past two and a half years than what the White House is selling. The anti-stimulus models also imply that for the Recovery Act to have had the impact Obama sought, it would have needed to be six times larger, or roughly $5 trillion in borrowed money.


What if the economy had been left alone?

The 2009 Obama stimulus wasn’t the only effort to juice the economy. There was Cash for Clunkers in the summer of that year, offering a one-time subsidy for turning in an old car and buying a new one. Democrats and Republicans agreed on a round of temporary tax cuts and extended jobless benefits in December 2010. And don’t forget, President George W. Bush got his own mini-stimulus passed back in 2008. All that stimuli, not counting interest expense on the borrowed money, amounted to well over $1 trillion (some say as high as $2 trillion) in economic steroid injections.

Of course, it would have been politically difficult for Obama and Bush to sit on their hands, even though the data certainly suggests the economy might be not a whit worse off if they had. But what if a libertarian politician like Ron Paul had been sworn in as 44th president? Imagine his first State of the Union address, the one in which he tells the American public that Washington won’t be coming to their rescue and that the moribund economy will, in time, bloom again and grow strong all on its own:

My fellow Americans, I know times are tough and almost certainly about to get tougher. Yet isn’t it odd how we all welcome the inevitable changing seasons of nature, but we’re upset by the seasons of our economy? You see, in the garden of our economy, growth has its seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again. As long as the roots are not severed, all is well. And all will be well in the garden. So be patient. God bless America.

Those were the words, more or less, of Chance, the simpleton gardener who becomes a presidential adviser in the 1979 political satire, Being There. But in fact, President Warren Harding pretty much adopted that organic approach during the mini-depression of 1920–21. That nasty little downturn has been blamed on a variety of culprits, including rapid demobilization after World War I and overly tight monetary policy by the nascent Federal Reserve. Unemployment surged to nearly 12 percent as the economy shrank by about 3 percent.

Rather than enact a major spending program, Harding responded by slashing government outlays by a fifth during 1921 and 1922, which is just what he had told voters he would do during the 1920 campaign. At the Republican convention that year, he promised to “strike at government borrowing…[and] attack the high cost of government with every energy and facility which attend Republican capacity.”

Mission accomplished. About that period, economist Benjamin Anderson wrote, “We took our losses, we readjusted our financial structure, we endured our depression, and in August 1921, we started up again.” And then we raced right into the Roaring Twenties.

But how would such an approach have worked the past few years? Economist Brian Wesbury of First Trust Portfolios thinks the huge increase in government spending under the Obama and Bush administrations has hurt the economy. Cutting it back would boost growth. His economic model suggests that without the large increase in government spending that occurred in recent years, “real GDP would be 3.2 percent larger today than it is, the unemployment rate would be 7.6 percent, the U.S. would have 2.5 million more jobs, and the stock market would be 24 percent higher.”

The big difference between the White House model and the Wesbury model is that the latter incorporates academic research suggesting long-term increases in government spending hinder growth. If Wesbury and these studies are correct, not only would the economy be on a stronger growth track, it wouldn’t be pulling extra trillions of debt behind it.


What if it had all been tax cuts?

Ron Paul could never have become president. John McCain could have. And while McCain has a reputation as a debt hawk, there’s little doubt he would have taken an active approach to rescuing the sinking economy, even it if would have greatly increased the deficit. He almost certainly would have implemented some sort of stimulus.

The conservative economist Martin Feldstein, for instance, suggested his own version of the Obama spending plan. Instead of trying to prop up spendthrift state governments and boosting “clean energy” investment, Feldstein would have directed dollars at restocking depleted U.S. military hardware after five years of fighting in Iraq and Afghanistan. And whereas shovel-ready infrastructure projects turned out to be more White House spin than substance, “the military can increase its level of procurement very rapidly,” Feldstein said back in 2009.

But that sort of suggestion was the exception rather than the rule on the right. Mostly there were calls for tax cuts, such as reducing the levy on corporations or capital gains. Perhaps the most popular idea was a massive payroll tax cut, reducing the burden on workers of their Social Security and Medicare premium payments. As it so happens, the cost of Obama’s stimulus plan almost exactly matched all the revenue the government takes in each year from payroll taxes. So perhaps McCain would have suggested a one-year payroll tax holiday, reducing both the cost of labor (good for hiring) and giving employees a $1,500 check (good for consumer spending or repairing personal balance sheets).

But tax cuts work best when they are put in place as long-term measures, not temporary fixes of the sort Obama preferred. So for maximum impact back in 2009, any payroll tax cuts would have needed to be permanent. And replacement revenue sources to fund Social Security and Medicare would have been necessary pretty quickly. And so we would have found ourselves in exactly the same kind of debt crisis that consumed Washington throughout the past summer.


These what-ifs suggest a few things. First, that the Obama stimulus does not deserve credit for what little economic growth we’ve seen. Second, that while a more libertarian approach to the crisis might have had a better result, there was no way such an approach would or could have be enacted. Finally, the preferred Republican solution—a temporary payroll tax cut—might have been beneficial in the short term and wildly problematic in the long term.

Did Obama make it worse? It is certainly the case that he only deepened a long-term trend that threatens American prosperity more than any other. The events of 2008–2009 exposed a truth about the U.S. economy from which we had shielded ourselves: economic growth has been slowing in a worrisome way throughout the decade. The nation’s GDP has averaged 3.3 percent annual growth for the past half century. But from 2001 to 2007—before the recession hit—it averaged only 2.6 percent. Going forward, growth might be even slower due to the aftermath of the financial crisis and the aging of the population. The Congressional Budget Office, for instance, pegs long-term growth at just 2 percent or so.

But that downshift isn’t fated. The McKinsey Global Institute thinks a higher retirement age and smarter immigration policy could make the labor force grow more quickly, while smarter tax and regulatory policy could boost worker productivity. Replacing the income tax with a consumption tax, for instance, would likely make the economy grow faster over the long run by increasing investment.

These are the sorts of ideas that are likely to be a central part of the political discussion going forward in a way they never have been. The two-party debacle that was the debt-ceiling debate and the disgusted national reaction to it suggest that the American public is likely to be more open to new remedies for the nation’s ills—remedies that have not been stained by their association with the failed policies of the past four years.

We’re stuck for now with an anemic and debt-laden economy that may muddle along for years. But it didn’t have to be this way. The one thing we can all say for certain is that we could have made it better.

1 Jim Lehrer, Tension City: Inside the Presidential Debates, from Kennedy-Nixon to Obama-McCain (Random House, 2011)

HUD Launches Initiative To Help Illegal Immigrants

Last Updated: Fri, 09/02/2011 - 4:24pm

Besides the Department of Justice (DOJ), other federal agencies are quietly working behind the scenes and dedicating extensive resources to fighting local laws aimed at curbing illegal immigration.

For instance, this week the U.S. Department of Housing and Urban Development (HUD) revealed that a “spate of state and local immigration related laws” has forced it to launch an “initiative to build a stronger network of community organization partners who serve the Hispanic population.” In the coming months the agency will hold a series of regional conferences to meet with organizations that work directly with the country’s Hispanic population.

The new taxpayer-financed project to combat immigration control measures nationwide was buried in HUD’s annual report to Congress, which failed to provide further details about its work on behalf of illegal aliens. The document is supposed to describe for lawmakers how the agency is addressing discrimination and promoting fair housing. It’s been a “groundbreaking” year because HUD is resolving individual housing discrimination complaints faster and focusing on complaints that affect multiple people, according to the report.

Of particular interest is that the agency is launching more investigations using its “authority to initiate cases on behalf of discrimination victims where no one has filed a complaint.” Reading between the lines, this seems to refer to illegal immigrants. Besides the DOJ, which has challenged laws in Arizona and Alabama and created a secret group to monitor immigration control measures, other government agencies, such as the Department of Labor, have dedicated taxpayer dollars to help illegal aliens. So why shouldn’t HUD join the bandwagon?

The agency proudly admits that it caved into the “concerns” of “Latino advocacy groups” (specifically the National Council of La Raza) by intervening when Arizona passed its strict law last year. HUD forced the state to publish an “advisory opinion” that federal “housing obligations” prohibit “discrimination against protected class members.” HUD also deployed its assistant secretary to Fremont Nebraska after it passed an ordinance banning “undocumented immigrants” from renting in the area.

A Hell-of-a-Loophole: Buffet's Berkshire Hathaway,Owes $1 Billion In Back Taxes

The spokesman for the I want to pay more taxes campaign has a perfect opportunity to make himself very happy. Apparently his company Berkshire Hathaway is fighting the IRS over payment of back taxes totaling around $1,000,000,000 (that's one billion dollars for people who don't like to count zeros).

Just a few weeks ago the Billionaire friend of Obama, wrote an op-ed in the NY Times urging our government to stop coddling the super-rich and support Obama's position that the rich should pay more taxes. At the time many people urged Buffett to start with himself and pay some extra-taxes on his own. Before he adds from his personal account he can urge Berkshire Hathaway to stop fighting the IRS and pay the billion.

Americans for Limited Government (ALG) found out about the protracted fight in Berkshire Hathaway’s own annual report, embedded below see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.

According to the report, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”

Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.

McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004. The IRS examination team caught Berkshire Hathaway on at least some issues. Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”

He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to. Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is again threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”
McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years. One would expect they will find yet more issues.”
To be fair Buffet does not own all of Berkshire Hathaway, just a heck of a lot of it.
As of July 1, 2009, Warren Buffett owns directly and beneficially 350,000 shares of Class A and 1,501,532 shares of Class B common stocks, which are 33.10% of the outstanding shares of Class A Common Stock, and 10.12% of the outstanding shares of Class B Common Stock, respectively. Buffett has 31.60% of the aggregate voting power of the outstanding shares of Class A Common Stock and Class B Common Stock, and 25.78% of the economic interest of the outstanding shares of Class A Common Stock and Class B Common Stock.
According to Newsmax, using only publicly-available documents, a certified public accountant (a CPA but not my wife) detailed Berkshire Hathaway’s tax problems to ALG.
“Unrecognized tax benefits represent the company’s potential future obligation to the IRS and other taxing authorities,” ALG explained in its report. “They have to be recorded in the company’s financial statements.”

“The notation means that Berkshire Hathaway’s own auditors have probably said that $1 billion is more likely than not owed to the government,” the ALG report explained.

That $1 billion represents about 0.2 percent of the company’s $372 billion in total assets, according to ALG.
Come on Warren, why give all that money to lawyers? The company's own auditors say you probably owe the money. Give the IRS the dough, according to your op ed its the right thing to do.

Now, I don't have a few extra billion to spare, but if an IRS agent decided to visit just to tell me I owed them money, the first thing I would do is change my newly soiled shorts, but after that , I would work out the numbers with the agent, come to a deal and pay the piper. The Berkshire board has been just saying no.

Perhaps Mr. Buffett should read his own annual report before he tells rich people to pay more, since he looks a bit foolish when his own company is not paying enough.

If you would like to read the key parts of the Berkshire Hathaway Annual Report it is embedded below.


U.S. Taxpayers Subsidizing Education Costs for China

Friday, September 02, 2011
By Susan Jones

( – Rep. Mike Coffman (R-Colo.) is asking President Obama to immediately suspend the U.S. Peace Corps program in China, where American volunteers are restricted to teaching English in Chinese universities.

Coffman said he was “shocked” to learn on a recent trip to China that millions of U.S. taxpayer dollars are being used to defray China’s higher-education costs, at a time when the U.S. government is short of money to fund its own higher education system.

“Education in China is under a state-run system; our contribution of teachers to the university systems means we are subsidizing the cost of the system for the Chinese government and borrowing the money from them to do it,” Coffman wrote in a recent letter to his colleagues, urging them to join him in cutting unnecessary and wasteful government spending.

Coffman says the Obama administration is spending $2.9 million in fiscal year 2011 to fund the Peace Corps program in China, and it has requested an increase to $4.7 million to fund Peace Corps operations in China for FY 2012.

“No doubt, this is certainly a small amount of money given the context of our deficit, but it is symbolic of the arrogance and carelessness in how our tax dollars have been handled by Congress and the Obama administration,” he said.

If the Obama administration does not suspend the Peace Corps program in China, “I will be offering an amendment to the Department of State, Foreign Operations and Related Programs appropriations bill that will eliminate funding for it,” Coffman said.

The congressman noted that Vice President Joe Biden recently visited China, partly to convince the Chinese to continue holding U.S. debt. “We are literally borrowing money from China so we can fund a Peace Corps program in their country,” he said. “This is an insult to the taxpayers of the United States and to so many of our manufacturing workers who lost their jobs to the Chinese.”

According to the Peace Corps Web site, volunteers in China “work in the area of education, focusing on teaching English to university-level students.”

Charting Two Centuries Of Business Booms And Depressions: From 1775 To 1944

Submitted by Tyler Durden on 09/02/2011 21:24 -0400

Because this time is never different...

Business Booms and Depressions Since 1775


In His Activist Days Obama Sued Banks to Ease Lending Practices… Now He's Suing Banks For Risky Mortgages

Posted by Jim Hoft on Friday, September 2, 2011, 3:59 PM

In his early activist days, Barack Obama the community organizer sued banks to ease their lending practices. Now his administration is suing banks for issuing risky mortgages.

Breaking on FOX News…
The Federal Housing Finance Agency announced late this afternoon that it had sued 17 large banks for risky mortgages.
The Street reported:

The Federal Housing Finance Agency announced Friday afternoon that it had sued 17 large banks, alleging violations of federal securities laws in the sale of mortgage-backed securities to government-sponsored enterprises, including Fannie Mae (FNMA), Freddie Mac (FMCC).

According to a Reuters report, the FHFA’s suit was related to $41 billion in mortgage-backed securities issued by the 17 banks.

Bloomberg reported that the FHFA sued to recover losses on $6 billion in mortgage-backed securities packaged by Bank of America (BAC), $24.8 billion in securities originally packaged by Merrill Lynch, and $3.5 billion originally packaged by Citigroup (C).

Clearing the Browser Tabs – Health Insurance Meddling Friday Edition

Something happened yesterday to your health insurance company that you might not know about. A provision inside Obamacare kicked in that gives the federal government the power to investigate any company that raises their premiums “in the individual and small group marketplace” ten percent or more, for any reason. So let’s say that Blue Cross sees that its costs have risen dramatically because of other provisions of Obamacare and they want to adjust their prices to keep pace. Well, your state or the Department of Health and Human Services can compel them to explain themselves and to post that explanation on their web site.

Sounds fairly innocent, doesn’t it? Except for this question: What right does the government have to compel any company to explain itself? That is our job as consumers. We put pressure on companies to do business the way we wish or we take our business elsewhere.

But then we run into a fundamental problem with health care insurance. We are not customers. Most of us who have health insurance through our employers do not choose the company that insures us. Our employer makes that choice for us and the insurance companies woo the employers and not us. However, thanks to government meddling that restricted our choices and turned is into liabilities instead of customers, we bring no economic pressure to bear. And now the government is meddling even more and you bet that we will not see a benefit from it.

And now, links!
I like Jamie Radtke. I think she’d make a fine Senator for the people of Virginia. I’m sorry that she’s had to endure what from my point of view is ridiculous political gamesmanship.
I agree with this TIME article. Before we’re through with the year, the drought in Texas is going to be a far bigger story than the Virginia earthquake of Hurriance Irene (via memeorandum).
The story of how Labor Secretary Hilda Solis believes she’s helping the American economy by driving around in a car built and assembled in Canada bought with money taken from American taxpayers and given to a company bailed out by the American taxpayers would be funny if she wasn’t actually in charge of a good chunk of our economy right now.
Clean, safe energy is our future, right? Solar power that uses batteries made in part from lead? Don’t bet on it.
Andrew Price nailed the reason that most superhero movies don’t do well. It’s not the subject matter but (as happens with so many failed movies) the story that is the problem. What’s frustrating is that superhero movies are relatively easy stories to tell. Hollywood just tells them wrong.
I’m okay if alien life develops on desert planets so long as there’s no Fremen crusade later.
I did not know that Waffle House was actually one of the indicators FEMA uses to tell how bad an area has been hit by a natural disaster.
I love this idea for how to find inspiration in ordinary places. I may just try it myself.
Hmmm…a quarterly magazine all about space travel? I could be interested in that.
Today is a momentous day in sports history. On September 1, 1980, ESPN went to 24-hour programming. All sport, around the clock.

Feds to clean up Valerie Jarrett’s mess

John Ruberry has the details:

Valerie Jarrett, a close friend of the Barack and Michelle Obama is the former CEO of Habitat Company, which managed Grove Parc, a federally subsidized apartment complex on Chicago’s South Side that can be accurately described as a slum. Jarrett is now a senior adviser to the president.

On Wednesday with great fanfare the awarding of a $30.5 million federal grant to revitalize Grove Parc–by tearing
it down–was announced.

The irony is thick here. Jarrett’s Habitat runs Grove Parc into the ground, and now the federal government funding its demolition and the building of its replacement.

Mayor Rahm Emanuel, Housing and Urban Development Secretary Shaun Donovan, Sen. Dick Durbin, and US
Rep. Bobby Rush attended the Grove Parc ceremony. Jarret was not there. In fact, no mention of her role in mismanaging the unhappy homes was mentioned by the Chicago Sun-Times or the Chicago Tribune.

More at Backyard Conservative.

Obama Administration Abandons Stricter Air-Quality Rules until "2013"

Lets here it for a president who put over 300 new regulations on businesses, and postpones one!

Published: September 2, 2011

WASHINGTON — President Obama abandoned a contentious new air pollution rule on Friday, buoying business interests that had lobbied heavily against it, angering environmentalists who called the move a betrayal and unnerving his own top environmental regulators.

The president rejected a proposed rule from the Environmental Protection Agency that would have significantly reduced emissions of smog-causing chemicals, saying that it would impose too severe a burden on industry and local governments at a time of economic distress.

Business groups and Republicans in Congress had complained that meeting the new standard, which governs emissions of so-called ground-level ozone, would cost billions of dollars and hundreds of thousands of jobs.

The White House announcement came barely an hour after another weak jobs report from the Labor Department and in the midst of an intensifying political debate over the impact of federal regulations on job creation that is already a major focus of the presidential campaign.

The president is planning a major address next week on new measures to stimulate employment. Republicans in Congress and on the campaign trail have harshly criticized a number of the administration’s environmental and health regulations, which they say are depressing hiring and forcing the export of jobs.

The E.P.A., following the recommendation of its scientific advisers, had proposed lowering the so-called ozone standard of 75 parts per billion, set at the end of the Bush administration, to a stricter standard of 60 to 70 parts per billion. The change would have thrown hundreds of American counties out of compliance with the Clean Air Act and required a major enforcement effort by state and local officials, as well as new emissions controls at industries across the country.

The administration will try to follow the more lenient Bush administration standard set in 2008 until a scheduled reconsideration of acceptable pollution limits in 2013. Environmental advocates vowed on Friday to challenge that standard in court, saying it is too weak to protect public health adequately.

Ozone, when combined with other compounds to form smog, contributes to a variety of ailments, including heart problems, asthma and other lung disorders.

Lisa P. Jackson, the E.P.A. administrator, has pushed hard for a tougher ozone standard, telling associates that it was one of the most important regulatory initiatives she would handle during her tenure. But she found herself on the losing end of a fight with top White House economic and political advisers, who were persuaded by industry arguments that the 2008 ozone rule was due to be reviewed in two years anyway and who were concerned about the impact on state, local and tribal governments that would bear much of the burden of compliance.

The impact would have been felt heavily in a band of Midwest and Great Plains states that are not themselves major sources of ozone pollution and that will be critical 2012 electoral battlegrounds.

In a statement, the president reiterated his commitment to environmental concerns, but added: “At the same time, I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.”

In words of reassurance directed at Ms. Jackson and the agency she heads, the president said that his commitment to the work of the agency was “unwavering.”

“And my administration will continue to vigorously oppose efforts to weaken E.P.A.’s authority under the Clean Air Act or dismantle the progress we have made,” he said.

Ms. Jackson accepted the White House decision with a terse statement: “We will revisit the ozone standard, in compliance with the Clean Air Act.”

She pointed with pride to the administration’s record of establishing a range of other air quality safeguards for power plants, manufacturing facilities and vehicles that will also help to reduce ozone pollution across the country.

Ms. Jackson had made clear her intention to follow her scientific advisers and set a new standard within the more restrictive range by the end of this year. She has told associates that her success in addressing this problem would be a reflection of her ability to perform her job. The agency sent the now-rejected standards to the White House in July with the expectation that they would be issued by Aug. 31.

While some senior agency officials expressed disappointment with the decision, they also said they understood that it was their job to offer their best technical advice to the White House and that the ultimate decision rested with the president, who has to stand for re-election and consider other factors.

Reaction from environmental advocates ranged from disappointment to fury, with several noting that in just the past month the administration had tentatively approved drilling in the Arctic, given an environmental green light to the 1,700-mile Keystone XL oil pipeline from Alberta, Canada, to Texas and opened 20 million more acres of the Gulf of Mexico to drilling.

Daniel J. Weiss, senior fellow at the Center for American Progress, said, “Today’s announcement from the White House that they will retreat from implementing the much-needed — and long-overdue — ozone pollution standard is deeply disappointing and grants an item on Big Oil’s wish list at the expense of the health of children, seniors and the infirm.” The center is a liberal research group with close ties to the White House.

Bill McKibben, an activist leading a two-week White House protest against the pipeline project which has resulted in more than 1,000 arrests, said that the latest move was “flabbergasting.”

“Somehow we need to get back the president we thought we elected in 2008,” he said.

Cass R. Sunstein, who leads the White House office that reviews all major regulations, said he was carefully scrutinizing proposed rules across the government to ensure that they are cost efficient and based on the best current science. He said in a letter to Ms. Jackson that the studies on which the E.P.A.’s proposed rule is based were completed in 2006 and that new assessments were already under way.

The issue had become a flashpoint between the administration and Republicans in Congress, who held up the proposed ozone rule as a test of the White House’s commitment to regulatory reform and job creation. Imposing the new rule before the 2012 election would have created political problems for the administration and for Democrats nationwide seeking election in a brittle economy.

Leaders of major business groups — including the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Petroleum Institute and the Business Roundtable — met with Ms. Jackson and with top White House officials this summer seeking to moderate, delay or kill the rule. They told William M. Daley, the White House chief of staff, that the rule would be very costly to industry and would hurt Mr. Obama’s chances for a second term.

John Engler, a former governor of Michigan and chairman of the Business Roundtable, said Friday in a statement: “Creating U.S. jobs and providing more economic certainty for all Americans, especially on the heels of today’s news that the U.S. unemployment rate remains persistently high, is our greatest challenge. If President Obama’s speech next week is as positive as this decision was today, it will be a success.”

Representative Eric Cantor, the majority leader, said this week that the House would review the ozone rule, which he called the most onerous of all proposed regulations.

“This effective ban or restriction on construction and industrial growth for much of America is possibly the most harmful of all the currently anticipated Obama administration regulations,” Mr. Cantor wrote. He said that the impact would be felt across the economy and cost as much as $1 trillion and millions of jobs over the next decade.

Friday, September 2, 2011

The Great Recession and Government Failure

When comparing the performance of markets to government, markets look pretty darn good. - By GARY S. BECKER

The origins of the financial crisis and the Great Recession are widely attributed to "market failure." This refers primarily to the bad loans and excessive risks taken on by banks in the quest to expand their profits. The "Chicago School of Economics" came under sustained attacks from the media and the academy for its analysis of the efficacy of competitive markets. Capitalism itself as a way to organize an economy was widely criticized and said to be in need of radical alteration.

Although many banks did perform poorly, government behavior also contributed to and prolonged the crisis. The Federal Reserve kept interest rates artificially low in the years leading up to the crisis. Fannie Mae and Freddie Mac, two quasi-government institutions, used strong backing from influential members of Congress to encourage irresponsible mortgages that required little down payment, as well as low interest rates for households with poor credit and low and erratic incomes. Regulators who could have reined in banks instead became cheerleaders for the banks.

This recession might well have been a deep one even with good government policies, but "government failure" added greatly to its length and severity, including its continuation to the present. In the U.S., these government actions include an almost $1 trillion in federal spending that was supposed to stimulate the economy. Leading government economists, backed up by essentially no evidence, argued that this spending would stimulate the economy by enough to reduce unemployment rates to under 8%.

Such predictions have been so far off the mark as to be embarrassing. Although definitive studies are not yet available about the stimulus package's overall effects on the American economy, most everyone agrees that it was badly designed and executed. What the stimulus did produce is a sizable expansion of the federal deficit and debt.

The misdiagnosis of widespread market failure led congressional leaders, after the 2008 election, to propose radical changes in financial institutions and, more generally, much wider regulation and government control of companies and consumer behavior. They proposed higher taxes on upper-income families and businesses, and extensive controls over executive pay, as they bashed "billionaire" businessmen with private planes and expensive lifestyles. These political leaders wanted to reformulate antitrust policies away from efficiency, slow the movement by the U.S. toward freer trade, add many additional regulations in the medical-care sector, levy big taxes on energy emissions, and cut opportunities to drill for oil and other fossil fuels.

Congress did manage to pass badly designed laws concerning financial markets, consumer protection and medical care. Although regulatory discretion failed leading up to the crisis, Congress nevertheless added to the number and diversity of federal regulations as well as to the discretion of regulators. These laws and the continuing calls for additional regulations and taxes have broadened the uncertainty about the economic environment facing businesses and consumers. This uncertainty decreased the incentives to invest in long-lived producer and consumer goods. Particularly discouraged was the creation of small businesses, which are a major source of new hires.

The expansion of government resulting from the stimulus and other government programs contributed to rising deficits and growing public debt just when the U.S. faced the prospect of big increases in future debt due to built-in commitments to raise government spending on entitlements. Social Security, Medicaid and Medicare already account for about 40% of total federal government spending, and this share will grow rapidly during the next couple of decades unless major reforms are adopted.

A reasonably well-functioning government would try to sharply curtail the expected growth in entitlements, but such reform is not part of the budget deal between Congress and President Obama that led to a higher debt ceiling. Nor, given the looming 2012 elections, is such reform likely to be addressed seriously by the congressional panel set up to produce further reductions in federal spending.

It is a commentary on the extent of government failure that despite the improvements during the past few decades in the mental and physical health of older men and women, no political agreement seems possible on delaying access to Medicare beyond age 65. No means testing (as in Rep. Paul Ryan's budget roadmap) will be introduced to determine eligibility for full Medicare benefits, and most Social Security benefits will continue to start for individuals at age 65 or younger.

In a nutshell, there is little political will to reduce spending on entitlements by limiting them mainly to persons in need.

State and local governments also greatly increased their spending as tax revenues rolled in during the good economic times that preceded the collapse in 2008. This spending included extensive commitments to deferred benefits that could not be easily reduced after the recession hit, especially pensions and health-care benefits to retired government workers.

Unless states like California and Illinois, and cities like Chicago, take drastic steps to reduce their deferred spending, their problems will multiply as this spending grows over time. A few newly elected governors, such as Scott Walker in Wisconsin, have pushed through reforms to curtail the power of unionized state employees. But most other governors have been afraid to take on the unions and their political supporters.

Numerous examples illustrate government failure in other countries as well. Highly publicized are the troubles facing Greece, Portugal, Ireland, Italy and Spain that are mainly due to the growth in spending and debt of their governments prior to the 2008 crisis. Perhaps the governments of these countries, and the banks that bought their debt, expected Germany and other rich members of the European Union to bail them out if they got into trouble. Whatever the explanation, the reckless behavior by these governments will greatly harm businesses and consumers in their countries along with taxpayers of countries coming to their rescue.

The traditional case for private competitive markets goes back to Adam Smith (and even earlier writers). It is mainly based on abundant evidence that most of the time competitive markets work quite well, usually much better than government alternatives. The main reason is not that individuals in the private sector are intrinsically better than government bureaucrats and politicians, but rather that competitive pressures discipline market behavior much more effectively than government actions.

The lesson is that it is crucial to consider whether government regulations and laws are likely to improve rather than worsen the performance of private markets. In an article "Competition and Democracy" published more than 50 years ago, I said "monopoly and other imperfections are at least as important, and perhaps substantially more so, in the political sector as in the marketplace. . . . Does the existence of market imperfections justify government intervention? The answer would be no, if the imperfections in government behavior were greater than those in the market."

The widespread demand after the financial crisis for radical modifications to capitalism typically paid little attention to whether in fact proposed government substitutes would do better, rather than worse, than markets.

Government regulations and laws are obviously essential to any well-functioning economy. Still, when the performance of markets is compared systematically to government alternatives, markets usually come out looking pretty darn good.

Lieberman: "Administration Refuses to Call Our Enemy in This War By Its Proper Name'

Thursday, September 01, 2011
By Matt Cover

( - Senate Homeland Security Chairman Joe Lieberman (I.-Conn.) said today that the Obama administration is refusing to call America's enemy in the war on terror by its proper name: "violent Islamist extremism.”

Speaking at a University of Maryland-sponsored event on counter-terrorism on Thursday, Lieberman said that one of the “significant weaknesses” of the Obama administration’s approach to homegrown terrorism was not calling Islamic extremists by name.

“The administration’s plan for dealing with that reality [homegrown terrorism] I think suffers from several significant weaknesses,” said Lieberman. “The first is that the administration still refuses to call our enemy in this war by its proper name: violent Islamist extremism.”

Lieberman said that the administration’s preferred nomenclature – violent extremism – obscured the fact that while there are many types of violent extremism in America, the country is only at war with one type: violent Islamist extremism.

“You can find names that are comparable to that, but not the ones that the administration continues to use, which are 'violent extremism,'” he said. “It is not just violent [extremism].”

Lieberman noted that there are many types of violent extremism in America and around the world, arguing though that only violent Islamist extremists are at war with America.

“There are many forms of violent extremism,” he said. “There’s white racist extremism, there’s been some eco-extremism, there’s been animal rights extremism, you can go on and on. There’s skinhead extremism. But we’re not in a global war with those. We’re in a global war that affects our homeland security with Islamist extremists.”

Lieberman charged that to put all types of violent extremism in the same category as Islamist extremism confused the issue and made the term meaningless.

“To call our enemy violent extremism is so general and vague that it ultimately has no meaning,” said the senator.

Lieberman added that the other term the administration uses – al Qaeda and its allies – was still too vague because it took the focus off of the violent ideology he said America is battling.

“The other term used sometimes is ‘al Qaeda and its allies,’” said Lieberman. “Now that’s better but it still is too narrow and focuses us on groups as opposed to what I would call an ideology, which is what we’re really fighting.”

Obama's Creepy Agency Creep

By Keith Riler
September 2, 2011

President Obama has enlarged and shaped the missions of agencies across the federal government to his own purposes, in pursuit of the "fundamental change" he promised voters. The resulting agency creep is creeping me out.

Totalitarians have a history of recasting representative governments into reflections of their own personal madness. Whether in the case of Communists, Fascists, or modern liberals, day-to-day government is retooled into an incarnation of their dear leader's obsessions and justified by a vain and unsupportable assertion of higher intelligence.

This time is no different, as is demonstrated by the multiple cases of agency creep we are witnessing in the executive branch. We have recently been treated to internationalist game wardens, eco-warrior accountants, interfaith astronauts, and politicking professors. These contradictions indicate the disjointed fit between the nation and President Obama. Why is the US Wildlife and Fisheries raiding Gibson Guitar, the SEC examining hydraulic fracturing fluids, NASA seeking to build bridges with Muslims, and the Department of Education attacking Rick Perry?

Executive branch agencies are created by Congress and governed by commissions or charters. Agency activities should reflect the purpose enunciated at creation and as explicitly and logically amended from time to time. This representative process, whereby an elected Congress creates an agency with a focus and expertise, appears under attack by an Obama administration bent on molding longstanding agencies into the enforcement bureau for the nutty left and its clichéd causes.

For example, the US Fish and Wildlife Service traces its origins to the U.S. Commission on Fish and Fisheries, which was "created by Congress and charged with studying and recommending solutions to the decline in food fishes and to promote fish culture." The Service's strategy was amended and expanded by the Lacey Act, "the first Federal law protecting game, prohibiting the interstate shipment of illegally taken wildlife and importation of species." Under President Obama, Wildlife and Fisheries is now zealously conducting raids on Gibson Guitar, searching for ebony from Madagascar and misapplying laws from India.

Likewise, the Securities and Exchange Commission was established by Congress in 1934 to "regulate the stock market and prevent corporate abuses relating to the offering and sale of securities." Basically, widows and orphans gained a regulatory advocate focused on full and accurate disclosure by companies selling stocks and bonds. Under President Obama, the SEC has gained a task far removed from its experience, competency, or reason for existence. SEC examiners are now fully deputized marshals in the war on hydrocarbons. Despite that hydraulic fracturing is safe, represents a huge advancement in accessing domestic energy sources, and is an obvious font of new jobs, the SEC is targeting oil and gas companies by slowing access to capital through regulatory roadblock.

In a much-reported event, the National Aeronautics and Space Administration revealed that its "foremost" mission is to improve relations with the Muslim world. Note the complete and obvious lack of intersection between the words "aeronautics/space" and "Islam/outreach." Nonetheless, President Obama decided that such outreach logically followed the space shuttle, Hubble, Rover, and space station successes. In a more recent drift from core competencies, NASA chief Charles Bolden played politics by steering the shuttle museum decision away from Republican-dominated Houston, home of the shuttle program and most of its astronauts.

Finally, we come to Arne Duncan, the secretary of education. He runs the Department of Education, which was established by Congress in 1980 and formed to "promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access." Under President Obama, Secretary Duncan has had his focus redirected from the kids to the president's political opponents. Mr. Duncan recently attacked the Texas school system under governor Rick Perry, claiming it "has really struggled" and "far too few of their high school graduates are actually prepared to go on to college" -- this despite facts and test results that contradict the claim. It is unclear how an unsubstantiated smear campaign comports with promoting student achievement, fostering excellence, or ensuring access, but amply clear how such a smear might benefit Mr. Obama in 2012.

These new activities are irrelevant to each agency's stated goals, mismatched to each agency's core competencies, and completely disconnected with each agency's reason to be. The activities are also arguably a breach of the separation of powers, with the president undoing, or at least diluting, the intent of Congress. Wildlife and Fisheries, the SEC, NASA, and the Department of Education are engaged in simultaneous, intentional, and serious cases of strategy creep that can only divert resources and focus away from their legitimate mandates.

These are just a few examples. Others abound. Consider that the EPA has strayed into map-remaking with its new "navigable waters" standard, the IRS is Obamacare's bouncer, the formerly domestic ATF now has the ability to instigate hostilities on foreign soil through operations like Fast and Furious, and Health and Human Services is funding abortions.

These agencies are operating under the direction of the president. Ashe, Shapiro, Bolden, and Duncan did not just randomly and simultaneously decide to veer off course. Such career-limiting moves are unheard of from lifelong bureaucrats, absent direction. These seemingly random datapoints clearly represent Obama, the man and the ideology, and are planned. When one considers the forethought and effort required to identify each agency's available means to execute Obama madness, the president's ideological intensity and extreme ambition come into frightening focus.

Multipronged ideological assaults of this sort are nothing new. Mussolini's "Battle of the Grain" subsidized grain program and "Battle for Land" land reclamation program were both seemingly necessary and random, but in hindsight were a deliberate corporative phase targeting control of employment. Il Duce then formed the Industrial Reconstruction Institute to take control of bank holding companies, giving the state the largest industrial sector in Europe.

Germans called this smothering by bureaucracy gleichschaltung, which translates literally as coordination but more precisely means subordinating independent institutions to state authority. The targets of such gleichschaltung can be ranked by value and likely resistance, meaning the totalitarian seeks out cash flow and intransigents.

Like il Duce and der Führer before, the One has embraced gleichschaltung. The president's version seems to repeatedly affect successful businesses, serious Christians, oil and gas companies, coal companies, and Texas.

The mandates of Wildlife and Fisheries, the SEC, NASA, the Department of Education, the EPA, the IRS, the ATF, and HHS are mandates that elected representatives deemed societally worthy. As such, these agencies' new Obama-instigated activities represent a trade of the democratically chosen common goal for the Obama personal goal. Such a trade is selfish and characteristic of one who elevates his personal mania above the interests of those he should represent.

The president's now ample comments already indicate that he represents some of us more than others, and the mere fact that these new initiatives would not survive a legislative hearing is a sufficient indicator of their lack of representative merit. Such hyper-personal backroom governance is the antithesis of democracy. It is installment plan dictatorship by way of bureaucracy, one crazy misdirected program at a time.

Ralph Nader proposes new model to challenge Obama, threatens to throw primary process into chaos

By Steven Nelson

Consumer advocate Ralph Nader, whose third-party presidential candidacy some Democrats credited with handing the 2000 election to George W. Bush, has a new model for challenging President Obama from the left in 2012.

Nader proposes to assemble a large group of Democratic candidates to take Obama to task on a variety of issues.

The press would ignore one lesser-known candidate, Nader told The Daily Caller, but an unorthodox “slate” of candidates would attract more attention.

“So you have to have several people of distinguished backgrounds — different distinguished backgrounds — run as a slate in various primaries so that he can’t ignore someone who has a military-foreign policy background, environmental background, poverty-labor background. See what I mean?” Nader explained.

Multiple candidates would also be more powerful, he declared.

Nader said he was hesitant to support the candidacy of former Alaska Sen. Mike Gravel, who told TheDC in early August that he would enter the primary if supporters raised $1 million. (RELATED: Gravel names his price: $1 million to challenge Obama)

“I had good things to say about him in ’08, but right now I’m focusing on this slate idea,” Nader said. “He could run against Obama and the press completely ignores him and he doesn’t get any debate with him.”

He continued: “It doesn’t work because he can be completely marginalized. We’re not interested in just having someone on the ballot who doesn’t get a paragraph in the press. And he knows what that’s all about. He’s experienced it.”

In July, Vermont independent Sen. Bernie Sanders said during a radio interview that “I think it would be a good idea if President Obama faced some primary opposition.” Nader then took up the challenge of finding a candidate.

Sanders’ office has repeatedly declined TheDC’s requests for comment on specific primary candidates, including Gravel, and the senator has publicly acknowledged that he doesn’t know who would run.

Nader, an environmental advocate who ran as a Green Party candidate for president in 2000, offered high praise for protesters holding a daily vigil outside the White House against the Keystone XL “tar sands” pipeline from Canada.

“It’s going to become a historic marker in the history of environmental activities,” he proclaimed.

He’ll be joining the protests soon, Nader said, but he won’t join the growing list of well-known Americans arrested for a sit-in.

“No. I’m a writer, like you,” he said.

JW Uncovers Documents from DHS Detailing Obama Plan to Impose DREAM Act by Suspending Illegal Alien Deportations

Records Show Obama Administration Began to Implement Provisions of the DREAM Act Rejected by Congress; DHS Official: “And we wonder why ppl [people] FOIA us.”

Contact Information:
Press Office 202-646-5172, ext 305

Washington, DC -- September 1, 2011

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has obtained documents from the Obama Department of Homeland Security (DHS) detailing behind-the-scenes efforts by the Obama administration to bypass Congress and grant amnesty at least one million illegal aliens by suspending immigration deportation proceedings against “DREAM (Development, Relief, and Education for Alien Minors) Act kids” and other illegal aliens. The records include internal DHS strategic documents, as well as extensive email communications within the DHS and with the Obama White House. The documents were obtained by Judicial Watch as a result of two Freedom of Information Act (FOIA) lawsuits filed on March 29, 2011.

The records include emails from press outlets investigating the Obama administration’s efforts to suspend the deportations of students who would be covered under The DREAM Act, which was under consideration by Congress. The DREAM Act would have permitted certain immigrant students who have grown up in the U.S. to apply for temporary legal status, eventually obtain permanent legal status, and become eligible for U.S. citizenship if they go to college or serve in the U.S. military. The DREAM Act has failed repeatedly to pass Congress. The DREAM Act initially could provide amnesty for over one million illegal immigrants and would have cost over $6 billion a year.

Highlights from the newly disclosed documents include the following:
In an April 20, 2010, email from Melissa Crow, former DHS Acting Deputy Assistant Secretary for Policy in the Office of Immigration and Border Security, to Roxana Bacon, Chief Counsel for the U.S. Citizenship and Immigration Services (USCIS), Crow states: “Since we met, I’ve done my best to encourage ICE to grant deferred action in the DREAM Act cases…brought to my attention.”
In an email chain about “one of the DREAM [Act] kids” who was being detained by authorities suggests confusion at DHS regarding how to handle requests for “deferred action” from illegal alien students. In the email chain, ICE (U.S. Immigration and Customs Enforcement) Chief of Staff Suzanne Barr writes to DHS Deputy Press Secretary Matthew Chandler, “we r f’ed up,” to which Chandler responds, “Yep. And we wonder why pp’l FOIA us.” The student was granted a stay of removal for six months.
In response to a USA Today inquiry into whether aliens are required to carry identification, DHS General Counsel John R. Sandweg writes, “Ugh. Yes. Fed law does require aliens to carry their paperwork. I don’t know if it is a criminal offense, but this provision has gone relatively unnoticed by media and [redacted].” “…I think some groups of aliens are exempted from this requirement as they don’t really have paperwork (folks who were issued deferred action). Either way, it is not routinely enforced.”
In a memo from Mariela Melero, Chief of the Office of Public Engagement of U.S. Citizenship and Immigration Services (USCIS) to USCIS Director Alejandro Mayorkas, entitled “Stakeholder Input of Administrative Reforms,” Melero sets forth suggested reforms “outside of Comprehensive Immigration Reform,” which includes the opinion that the director – unless otherwise required by law – has the authority to judge if the evidence presented for deferred action is “probably true.” Another reform would allow a 501(c)3 organization in “good standing… to design and implement voter registration programs at USCIS offices across the country.”

The Obama administration’s campaign to suspend the deportations of illegal aliens has been subject to intense scrutiny since 2010, when the press uncovered a USCIS memo that contemplated various “administrative alternatives” to bypass Congress and implement stealth amnesty for illegal aliens. A subsequent Houston Chronicle story exposed an effort by the administration to suspend the deportations of illegal aliens who supposedly have not been convicted of any “serious” crimes. Documents uncovered by Judicial Watch show that DHS officials misled Congress and the public about the scope of the immigration enforcement policy change, which gave wide latitude to local immigration officials to dismiss illegal alien deportation cases – including the dismissal of charges against illegal alien criminals convicted of violent crimes. The Obama administration announced last week that it would effectively halt any enforcement actions (on an alleged “case-by-case” basis) against any illegal alien who hasn’t committed any other serious crimes. The administration denied that this was a blanket or categorical amnesty, but these new documents show otherwise.

“These documents show the Obama administration is lying about its stealth amnesty activities and its alarming contempt for Congress and the rule of law. Frankly, these documents show that Obama immigration officials don’t even know what the law is! The Obama administration cannot simply pick and choose which federal immigration laws it will enforce. In its zeal to curry favor with the illegal alien lobby and secure Hispanic votes for a second term, the Obama administration is exercising raw executive power to change the law by granting illegal aliens amnesty in a way that strikes at the heart of our constitutional system and the rule of law. This is a festering constitutional crisis,” stated Judicial Watch President Tom Fitton.

Documents Uncovered
Part 1-10 (source)

Obama Department of Justice Deals Regulatory Blow to Economic Growth

DOJ's lawsuit to halt the AT&T and T-Mobile merger by regulatory fiat is unwarranted, ignores facts of wireless competition, and stifles economic growth.

Today, Americans for Tax Reform president Grover Norquist released the following statement on the Department of Justice’s announcement that it has filed a civil antitrust suit to block the proposed merger between AT&T and T-Mobile:

“The DOJ lawsuit constitutes another attempt by the Obama Administration to stifle economic growth through excessive government intervention and regulation. The lawsuit hinders investment, technological advancement, and job creation, while simultaneously creating more uncertainty in the market. This latest overreach continues the Obama Administration’s attempt to control private enterprise by executive fiat. The Department’s suit stands to impose onerous mandates and a capricious regulatory regime on the merged company, lest the DOJ halt the merger altogether.

“Hypothetical claims by the Department of Justice that the merger will lead to higher prices and fewer choices for consumers completely ignore recent history. The government’s own data show that over the past decade wireless bills were slashed in half, despite five major telecommunications mergers during that time. Today, 90 percent of Americans can choose between an average of 5 or more mobile voice carriers. The market also shows substantial competition with smaller wireless carriers on the regional level.

“Instead of political posturing and overregulating, the federal government should focus on alleviating the regulatory burden that has stalled recovery and handcuffed entrepreneurship and job creation in the American economy.”


Boom: Congressional Investigators Finds Evidence of a Gunwalker Coverup

You've got to give CBS credit on two fronts: they've doggedly pursued the biggest DC scandal since Watergate and they fired Dan Rather.

Congressional investigators tell CBS News there's evidence the U.S. Attorney's office in Arizona sought to cover up a link between their controversial gunwalking operation known as "Fast and Furious" and the death of Border Patrol Agent Brian Terry.

Terry was murdered in Arizona near the US border last December. Two assault rifles ATF had allegedly allowed onto the street without interdiction were found at the scene...

...the lead prosecutor on Fast and Furious, Assistant US Attorney Emory Hurley, learned almost immediately that guns allowed onto the street in his case, had been recovered at Terry's murder. "(I)n the hours after Agent Terry's death," says the letter from Grassley and Issa, Hurley apparently "contemplated the connection between the two cases and sought to prevent the connection from being disclosed." The Justice Department recently transferred Hurley out of the criminal division into the civil division...

...An internal ATF email dated the day after Terry's death reveals the quick decision to not disclose the source of the weapons found at the murder scene: "... this way we do not divulge our current case (Fast and Furious) or the Border Patrol shooting case."

Another ATF email indicates that the justification both offices used to not charge the suspect with crimes related to the murder scene "was to not 'complicate' the FBI's investigation."

ATF whistleblowers revealed the link between the two cases to Congressional investigators and CBS News, saying their supervisors were attempting to cover it up.

To their credit, Reps. Grassley and Issa have announced they are expanding the Gunrunner investigation. Particularly galling:

...a court filing by the Phoenix office seeking to deny Mr. Terry’s family rights under the Crime Victims’ Rights Act, and expressed concerns about conflicts of interest in prosecuting the Terry case. “Since your office directed and approved the daily tactical decisions in Operation Fast and Furious, it is hard to avoid the perception that a conflict of interest exists,” the two wrote.

What did Eric Holder know -- and when did he know it?

And just how high does the coverup go?

My Fellow Americans . . .

Jonah Goldberg
September 2, 2011 12:00 A.M.

If the president really cares about “what works,” here’s the speech he should give.

President Obama is going to give yet another Big Speech next week. Who among us can contain his excitement?

The White House insists this address will have nothing to do with partisan politics and everything to do with getting Americans back to work. Well, suspend your own disbelief as best you can. But one thing is certain: The president will enter the chamber “shovel ready,” as it were.

One can expect Obama to repeat certain verbal tics. He will quote himself a lot (“As I’ve said before . . . ”). He will insist that it’s time to put aside partisan differences, by which he means everyone should agree with his ideas.

And, he will insist he’s a pragmatist who only cares about “what works.”

This has been the rhetorical theme of his presidency from the beginning. In his inaugural address he proclaimed, “The question we ask today is not whether our government is too big or too small, but whether it works.”

Well, to that end, here is the speech — or a portion of it — I would like to hear from the president:

“My fellow Americans, when I came into office, I promised to discard the tired dogmas of the past. I vowed to put partisanship aside. I made a solemn pledge to focus single-mindedly on what works. As I’ve said before, what I admired most in Pres. Franklin Delano Roosevelt was his commitment to ‘bold, persistent experimentation.’

“In May of 1932, President Roosevelt proclaimed, ‘It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.’

“Well, we have tried many things. A few, I believe, have worked, but honesty and the national crisis both compel me to admit, too many have failed.

“I can blame the mistakes of my predecessor all day long, but the simple truth is that the stimulus effort did not do what I or my own economic advisers said it would.

“Worse, many of the programs and policies inherent to the stimulus were built on fictions. Indeed, much of the money we wasted — at the behest of the Democratic congressional leadership at the time — was never even intended to stimulate so much as bail out programs and local governments.

“Moreover, as I have already admitted, ‘shovel-ready jobs’ were a myth.

“Even more dismaying, much of our green-jobs program agenda has been an indefensible failure. In Seattle, we spent $20 million in the hope of creating 2,000 jobs and weatherizing 2,000 homes. We created 14 jobs and weatherized three houses. In Toledo, Kansas City, and Phoenix combined, we allocated $65 million and created 72 jobs. California got $186 million and created just over 500 jobs.

“I passionately believe we must transition to renewable energy, but it is clear the economy is simply not ready and government is ill-equipped to pick successful companies better than the market can.

“Taxpayers gave $58 million to Evergreen Solar in Massachusetts. It cut 800 jobs and is now bankrupt.

“Just last week, a company my administration touted as the crown jewel of the new green economy, Solyndra Inc., announced plans to file for bankruptcy, despite half a billion dollars in loan guarantees from the federal government.

“I’ve said many times that green jobs cannot be sent overseas. But that, it seems, is not true. We subsidize solar panels here in the U.S., and the Chinese build them at pennies on the dollar and sell them to us.

“However, you cannot drill for American oil in China, and you will never find American natural gas in the Middle East.

“No other country in the world refuses to exploit its natural wealth the way we do. This must end.

“We will take the tax-revenue windfall from new oil and gas exploration and invest it in basic energy and sound climate research in the hope of solving our problems through innovation instead of immiseration.

“Let me be clear: The reason there were no shovel-ready jobs is because government rules and regulations make it difficult to hire people. In California, we wasted seven months sorting out prevailing-wage rates before we could hire green workers. And even then, the relevant regulations were so onerous that the costs of weatherization weren’t worth the effort.

“My fellow Americans, I’ve said many times I believe that government can do amazing things. I still believe that. But after more than two years of bold, persistent experimentation, it has become clear that in this present crisis, government is not the solution to our problem; government is the problem.”

Dim Hope for Obama Housing Efforts

By Stacy Kaper
Updated: September 2, 2011 | 6:56 a.m.
September 2, 2011 | 6:00 a.m.

As President Obama grapples with how to jump start the sputtering housing market—which is expected to be part of his address on jobs before Congress next week—a senior Federal Reserve Board member, Elizabeth Duke, is pushing for easing qualifications for mortgage refinancing and converting blocks of bank-owned homes into rental units.

The administration is feeling pressure to improve the housing market to strengthen the economy, but a variety of housing policy experts said on Thursday that because the foreclosure and declining home valuation problem has gone on for so long and become so complicated, Obama is almost destined to disappoint, particularly since so many existing plans have failed to live up to their promises.

“Many Obama ideas are good conceptually. The problem is that they are not effectively implemented,” said Robert Gnaizda, a cofounder of the Berkeley, Calif.-based Greenlining Institute, which advocates fair lending to minorities.

Last month the administration asked for input on how to transition the glut of vacant properties on the market into rental units. Officials have since floated an idea to systematically allow borrowers who are current on their loans but owe more than their homes are worth, to refinance into lower-rate mortgages. This idea has reportedly hit snags since doing so would increase the losses absorbed by the government-sponsored enterprises, Fannie Mae and Freddie Mac, and acting director of the Federal Housing Finance Agency, Edward DeMarco, is said to be resistant to any plan that increases taxpayer burden. (FHFA would not comment.) The GSEs supply the majority of the nation’s mortgage credit, but were taken over by the government in a conservatorship during the height of the financial crisis in 2008.

Both the refinancing and rental ideas have kicked around for years with no administration action.

“Now it seems like what they are doing is coming back out to the field and saying OK, tell me again what were those ideas?” said Janis Bowdler, a housing expert with the National Council of La Raza. “Part of the challenge is the landscape has changed dramatically. We have no money and very little political will.… Touching the GSEs is going to be a lightning rod, that’s the real challenge.”

At a Fed housing conference on Thursday, Duke gave weight to both ideas and pushed for smaller, more specific plans, saying the policy focus has been too centralized around exhausting loan modifications as a way to spare struggling borrowers from foreclosure and more effort should go toward reducing the payment strain on borrowers who are underwater. She also called for swooping up the increasing inventory of housing stock, which is deteriorating in value and could be rental housing for borrowers who cannot afford to buy.

“There’s been an awful lot of attention paid to loan modifications and frankly less attention paid to what happens to the loans that for whatever reason can’t be modified, or won’t be modified and will go through the foreclosure process,” Duke said. “We are getting to the point where addressing that part of it is critically important.… It will take a number of small things, all of which will help and that complement each other in a strategic sense.”

She also pushed back against the notion that enabling greater refinancing would be unfair to investors of mortgage-backed securities.

“I don’t view changing that dynamic as being harmful to the markets,” she said. Enabling more refinancings “would likely provide some support to the economic recovery while improving the circumstances of homeowners and reducing the overall level of credit risk.”

Duke suggested changing the government’s Home Affordable Refinance Program, which allows borrowers who have loans backed by Fannie and Freddie, and who hold little or no equity, to refinance to take advantage of low interest rates. Tweaks like eliminating costly upfront fees for the borrower and eliminating the so-called “put back” risk where lenders who originated the loan and violated the GSEs’ underwriting standards would have to repurchase it, among other changes, could help some 4 million potential borrowers refinance into cheaper loans. (Currently, like the government’s Home Affordable Modification Program, HARP has helped fewer than 1 million borrowers.)

Some analysts said if Obama is serious about improving the housing situation, he is going to have to be realistic about what he can achieve.

“There seems to be some extraordinary outreach and some extraordinary listening going on. Whether that will actually translate into workable programs is yet to be seen,” said Jaret Seiberg, an analyst with MF Global. “If the president decides to unveil some massive new housing initiative, then it means it’s all political theater because there aren’t the votes to pass it or pay for any of it.”

Jay Brinkman, the chief economist for the Mortgage Bankers Association, said he did not know enough details about the refinancing idea but it did not appear to put a floor under sliding home prices or address the backlog of foreclosures where differing state laws and the courts have slowed the process.

His group has warned that such proposed refinancings could spur a rash of lawsuits. “If you do something that violates what existing contracts Fannie and Freddie have, you may end up getting sued by a lot of investors,” he said.

Other analysts panned the latest ideas as unlikely to make much of a dent in the economic outlook.

“Overall, both programs will give the appearance that the administration is doing something to help the housing market, but the impacts of these programs are not very likely to be significant,” said William Longbrake, an executive in residence at the University of Maryland and former vice chairman of Washington Mutual.

Chris Low, the chief economist with First Horizon National Corp.'s FTN Financial, estimated a mass refinancing program would put $80 billion a year in the pockets of homeowners, which would translate into a percentage point of economic growth.

What a second American Revolution may look like

The Next American Revolution Won't Be Like the First
Mises Daily: Wednesday, June 08, 2011 by Wendy McElroy

One of my friends believes that a second American revolution is imminent and will be sparked by the economic instability now rocking the continent. Frankly, I doubt it. Insurrections may occur, but I expect the US government to lumber along, dragging the world deeper into poverty and conflict for many years to come.

Upon hearing my friend out, however, my first thought was, "if a revolution erupts, it will resemble the French one of 1789 more closely than the American one of 1776." Then I sat back and tried to figure out why I had arrived at that sudden conclusion, and whether or not it had merit.

One of the reasons for thinking that America might be "going French" is that current American society resembles descriptions I've read of pre-Revolution France more closely than America now resembles its young self.

Consider the issue of a class structure. America became a magnet for the wretched of the world because it delivered on the promise of a classless society. My ancestors left Ireland because they were forced to work as serfs on land they once owned, and because bumper crops were shipped to England by absentee landlords while starvation claimed the serfs' own children.

Sick unto death of being arrested for such sins as speaking their own language, the Irish fled to North America even though they risked a 50 percent chance of dying in transit or in the initial hardships of the New World. They came here for one thing: a chance. They were willing to die for the chance to live on both feet without sinking to their knees before any man; more importantly, they wanted their children to stand tall. And so, when America called across the ocean to declare that hard work and merit are rewarded here because "all men are created equal," they came.

Differences in wealth existed, of course. Then, as now, those differences meant that a fortunate few had more and better access to the "goods" of society, including justice. Great wrongs, such as slavery, also existed and can never be dismissed. But, for the majority of immigrants, America delivered. Hard work was rewarded; social mobility meant that a family's status could rise or fall on merit from one generation to the next.

In 1831, when the aristocratic Frenchman Alexis de Tocqueville arrived in America, he began to record the impressions that would become the pivotal and acclaimed work Democracy in America. Tocqueville wrote, "Amongst the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of conditions." Everywhere, people shook hands with each other as though there were no social distinctions. He was especially amazed by the town meetings in New England, where everyone seemed to speak out on every topic.

A key difference between American and French society sprang from America's respect for the working man: the importance of voluntary associations rather than the state. Tocqueville wrote,

Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds — religious, moral, serious, futile, extensive or restricted, enormous or diminutive.

If a barn needed to be raised, a school roof repaired, or a social cause advanced, then people banded together — and the work was done. Tocqueville concluded, "Wherever, at the head of some new undertaking, you see the government in France … in the United States you will be sure to find an association."

The reward of merit and the absence of punitive laws led to an unprecedented prosperity and social equality; and this made for communities bursting at the seams with energy.

Today, America is a society of elites. Business elites claim subsidies, liability limits, and bailouts. Political elites enjoy the economic bounty of skimming off the sweat and blood of taxpayers: rich salaries, plush expense accounts (not counting bribes), platinum pensions and health insurance, etc. Bureaucratic elites (civil servants) "earn" much more than private-sector workers, even though they have greater job security and richer benefits, like plush pension plans that taxpayers can only dream about.

Economic privileges are accompanied by legal ones. In a recent commentary, Salon columnist Glenn Greenwald reports on how blatant the class society has become and how the mainstream media acts as a propaganda machine:

The Washington Post Editors work in a city and live in a nation in which huge numbers of poor and minority residents are consigned to cages for petty and trivial transgressions of the criminal law. … Post Editors virtually never speak out against that, if they ever have. But that all changes — that indifference disappears — when political elites are targeted for prosecution, even for serious crimes.

As the elites scramble to preserve their legal privileges, the productive middle class that defined early America is staggering under an ever-increasing burden of taxes, fees, and other legal disadvantages. More and more, productive people are driven into poverty and a despair that could easily turn into rage.

The parallels between pre-Revolution France and today's America are clear.

Under Louis XV (1715–1774) and Louis XVI (1774–1792) France was plagued by constant and ruinously expensive warfare accompanied by economic instability. A huge schism existed between the haves and the have-nots. The haves basically consisted of the nobility and the clergy, both of whom were exempt from taxes; they lived off the productivity of unprivileged people laboring in the private sector, most of whom were peasants.

The private sector rested upon agriculture, even though few citizens owned land. The nobility and clergy (some 600,000 in a population of roughly 25 million) held most property. For example, the church owned about one fifth of all land; in some provinces, it owned up to two thirds. Moreover, the church had feudal privileges that continued from the Middle Ages and bound close to 1 million people to the land as serfs.

France was a comparatively wealthy nation, but the peasants existed at near-starvation level because of taxation in its myriad forms. A direct tax ate as much as 50 percent of the earnings of the nonexempt. The collection process was particularly brutal because tax collectors were "entrepreneurs" who paid the king a flat amount for the privilege of collecting taxes; anything over that amount became profit.

There were a slew of other taxes as well, some of which were quite creative. For example, there was a salt monopoly tax by which everyone over the age of 7 was required to purchase several pounds of highly inferior government salt every year. The law also prescribed how the salt could be used and imposed heavy fines for misuse, such as in the preservation of meat. Many other commodities had their own separate taxes. Fees were levied at every stage of manufacture, upon transportation, at time of sale to retailers, and then again to customers. It has been estimated that these taxes doubled the cost of goods. The list of impositions scrolls on and on, and it includes many customs duties that were imposed not merely at national borders but also at the boundaries between different provinces within France.

And, of course, there was the constant bribery and other unofficial theft by authorities, for which France was notorious. Unfortunately, it is impossible to even estimate how much this corruption cost the average person.

Even without factoring in corruption, it has been estimated that the nobility and the church consumed about 75 percent of the wealth produced by peasants — many of whom lived on the margin to begin with. Overtaxed, sometimes homeless, unemployed, hungry, and deprived of any hope of justice, the vast majority of French citizens were not blind. They saw their own children starve while stolen riches bought velvet outfits for children of the elite. When their desperation erupted abruptly into unbridled rage, the French Revolution had arrived.

At least in the beginning, it was a grassroots revolution around which the disenfranchised rallied for justice. But it soon devolved into a scream for vengeance through which a totalitarian government exacted swift and bloody "justice" under a chilling banner that read "Committee of Public Safety."

A comparatively free and equal America called a constitutional convention after its revolution; France, in a backlash against elitism, erected a guillotine.

In short, the first American Revolution sprang from a relatively just and equal society; it was not rooted in a long-standing class structure that had embedded people into widely disparate and warring sectors. What would a second American revolution look like? No one can say for sure, but I fear it.