Month: May 2009

George W. Bush, on being thanked for his AIDS initiatives in Africa: “Don’t thank me, thank the taxpayers of the United States of America.”

The Wall Street Journal looks at the severe falloff in tax revenues from millionaires in Maryland after the state socked them with a new, higher tax rate for the purpose of closing a budget gap, a move hailed at the time by supposedly big-thinking liberals. Somehow, Maryland liberals were surprised that this didn’t work out:

One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a “substantial decline.” On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

The easy partisan divide on this issue is over how much of the decline in revenues is attributable to millionaires leaving the state or voluntarily reducing their taxable income (by working less or hiding money in tax shelters) as opposed to the effects of the recession, which the WSJ notes as an obvious contributing factor. But that’s only one problem with sharply progressive tax rates; the Journal notes a structural problem that is at least equally serious in times of recession, as New York and California in particular are discovering to their grief. Specifically, the surplus annual income and investment returns of the wealthy tend to be much more volatile year-to-year than the great mass of incomes earned by average citizens.
Let’s consider an illustration: in a boom year, the stock market rises 20%, and housing prices rise 30%. Lots of people (proportionately to the number of millionaires) make big gushing spigots of money from this, not just capital gains from sales but commissions, year-end bonuses, the whole gamut of ways people profit in eye-popping amounts from a boom. The average guy sees some extra money too, but he’s less likely to see a dramatic percentage increase in compensation. Despite some variations across different boom era, by and large, this has always been true.
When booms turn to busts, though, the high-end incomes are the hardest hit in percentage terms. We think of down times as being harder on the average worker because in human terms they are: it’s a lot worse to lose your job than to go from making $10 million a year to $800,000. But when unemployment goes from 5% to 10%, the dropoff in the tax rolls isn’t that dramatic, especially given that a lot of those lost jobs were people paying little or no income or capital gains taxes to start with, and so the state budget literally does not feel their pain. Whereas collections from high-end incomes can and do drop off far more than 5% in a year, as the Maryland example illustrates. Here in New York, investment banker bonuses that were once the core of the state and city tax bases evaporated overnight. Put simply, taxing the rich is the least recession-proof revenue-raising strategy you could design.
This would be problematic enough if the federal and state governments were trying to sustain a stable income and socking away the extra money for a rainy day (Gov. Palin in Alaska did something like this with the revenue from oil boom years, but Alaska too is subject to the laws of political gravity). Instead, Congress and the states tend to create new permanent claims on temporary income in the best of times, creating long-term self-perpetuating entitlement and spending programs and hiring more unionized workers. (The Obama ‘stimulus’ bill combined the worst of both worlds, giving states temporary revenues while demanding that they use them to permanently increase funding obligations, and doing so during a recession). This tax-on-the-boom, spend-through-the-bust philosophy is designed for certain failure; it’s not possible it could ever succeed.
Yet, that’s exactly how all tax-the-rich systems are designed. And no amount of failure will ever teach their proponents anything.

I have previously catalogued Harry Reid’s penchant for petty insults of political opponents, and that was before he started complaining about the voters smelling bad. Well, Reid has a new one: quoting himself in his book calling Barbara Bush a “bitch.”
UPDATE: Oops, read too quickly before posting, Reid is quoting Bentsen. So, not on the level of some of his prior insults.
Stay classy, Harry.

The Obama Administration in a nutshell:

H/T

Anthony Wiener has dropped out of the Democratic primary to face Mike Bloomberg. H/T That leaves two relatively weak candidates against the Bloomberg juggernaut…if you’re outside NY, you can’t really grasp the massive scale of Bloomberg’s ad campaign six months from Election Day when he has no opponent yet and won’t for some time. I have to believe his election will be a formality.

What is the essential element of conservatism?
I have had a number of conversations and arguments on this question in recent months, as befits a movement doing its time in the wilderness. The responses by Beldar, Prof. Bainbridge and arch-libertarian Brink Lindsey to Judge Richard Posner’s provocative blog post on the subject of conservative intellectualism is only the latest installment in this debate, but a good excuse to weigh in on my own.

Continue reading Conservatism’s Essential Element

I missed this one in my post the other day on Rubio and Crist – watch this clip of Marco Rubio in action and you can see why people have been excited about him for some time. Note – as becomes obvious when he pulls out a crumpled roll of paper to read the Kennedy quote – the absence of a TelePrompter.

H/T. John McCormack offers some samples of Crist speaking for contrast. Crist’s not terrible, and of course he’s won a couple of statewide races as Governor and AG, but he’s a pretty unexciting politician with no identifiable principles. I’m guessing he’ll focus on ignoring Rubio as hard as he can.

Stay classy, Joe Klein.

The reasons for wanting Chris Dodd gone from the Senate are too numerous to recount here; briefly speaking, Dodd has been wrong on basically every national security issue for the past three decades, he’s got ethical problems out the wazoo, and while he was in bed with anyone and everyone connected with the financial crisis, he spent a year living in Iowa on a delusional presidential campaign instead of doing his job overseeing the Senate Banking Commitee. Rob Simmons, a moderate former GOP Congressman, is the leading candidate to replace Dodd, and is doing a drive to get past 400 online donations (he’s pretty close already) by close of business today. So, I’ll do my part here:

Continue reading Dumping Dodd

Deval Patrick’s HopeChange 1.0 act is running to its logical conclusion of broken promises and tax hikes. Don’t miss clicking the graphic on the left.

Nancy Pelosi has had a very bad stretch over the issue of what she knew, and when, about waterboarding and other “enhanced interrogation techniques.” She still seems not to have learned that it’s a bad idea to get in a public spat with people who collect secrets for a living. Her ever-shifting explanations of what she was briefed on and when, culminating in Thursday’s press conference (in which a visibly shaken Speaker repeatedly re-read her prepared statement in answer to questions by a suddenly skeptical press corps) have left her credibility in tatters and her story wholly incoherent. The latest blow came today as Leon Panetta, her former House colleague and now Obama’s CIA director, produced a memo today disputing Pelosi’s contention that the CIA lied to her.Nancy Pelosi has had a very bad stretch over the issue of what she knew, and when, about waterboarding and other “enhanced interrogation techniques.” She still seems not to have learned that it’s a bad idea to get in a public spat with people who collect secrets for a living. Her ever-shifting explanations of what she was briefed on and when, culminating in yesterday’s press conference (in which a visibly shaken Speaker repeatedly re-read her prepared statement in answer to questions by a suddenly skeptical press corps) have left her credibility in tatters and her story wholly incoherent. The latest blow came today as Leon Panetta, her former House colleague and now Obama’s CIA director, produced a memo today disputing Pelosi’s contention that the CIA lied to her: “CIA officers briefed truthfully on the interrogation of Abu Zubaydah, describing ‘the enhanced techniques that had been employed.'”
Just as bad for the Left, her flagrant hypocrisy on this issue has badly undermined their core argument for prosecuting members of the Bush Administration. Recall that the theory behind such prosecutions is that waterboarding is so obviously “torture” that no reasonable person could conclude otherwise – yet here is the leader of their lawmakers in the House declaring that she very reasonably assumed that if Bush Administration lawyers had cleared the practice, it must be legal. (Charles Krauthammer makes this point as to the moral argument). That’s an impossible circle to square, and it means the cries of “war criminal” now have to be seriously muted and nuanced if the most left-wing Speaker in memory is not to be sacrificed to a left-wing crusade.
It’s too soon to tell what sort of lasting damage will be done to Pelosi as Speaker. I’m not generally one to declare a politician dead the minute a bad story breaks. More likely, as happened to Newt Gingrich and Tom DeLay, it will take multiple blows to bring down Pelosi, and the impetus will have to come from the rank and file of her own caucus, which seems disinclined to toss her under the bus just yet (even if the heir apparent, her longtime rival Steny Hoyer, has been fairly unsubtly measuring the drapes in the meantime).
That said, there’s a school of thought among Republicans that because Pelosi is a polarizing figure with obvious weaknesses, we should fear pushing too hard because the Democrats will be weaker for having her around their necks next fall than if she’s gone (one hears similar sentiments about Chris Dodd, David Paterson, and Deval Patrick, among others). Let her twist in the wind, these voices say. But even aside from the legitimate interest in exposing dishonesty and hypocrisy on the part of a sitting Congressional leader, the hard calculus of political hardball says otherwise. Of course, in any debate there are arguments that work and those that don’t, and in this particular debate there are punches that may need to be pulled for legitimate national security reasons. But Republicans serious about winning political battles going forward should not ease the pressure on Speaker Pelosi out of some misguided hope that leaving her wounded is better than finishing her off.

Continue reading The Case For Not Letting Up On Speaker Pelosi

WaPo looks at the race to the June 2 New Jersey GOP Gubernatorial primary, as corruption-busting former US Attorney Chris Christie faces off against conservative Mayor Steve Lonegan for the chance to go after the unpopular Jon Corzine. In contrast to some of the other races this year, I happen to think the GOP should go with the more moderate Christie in this one, especially since a guy who made his name indicting scores of corrupt New Jersey politicians (the bulk of them Democrats, of course, but by no means all of them) is the right choice to clean up Trenton.
It’s noteworthy that despite obituaries for the GOP in the Northeast, there are GOP Governors in Connecticut, Vermont and Rhode Island and a significant shot at the statehouse in New York and New Hampshire (in Massachusetts Deval Patrick’s in dire trouble but more likely to lose a primary), as well as a fighting chance to pick up Senate seats in New York, Connecticut, Pennsylvania, maybe even Delaware. Most all of those races will turn largely on the national mood in 2010 (or in Corzine’s case, this fall), and it’s wildly unlikely that Republicans will sweep them, but the obituaries may yet prove premature.

Providing an object lesson on the hazards of sharing secrets with a man who has no unexpressed thoughts, the undisclosed location is undisclosed no longer:

[W]hile recently attending the Gridiron Club dinner in Washington, an annual event where powerful politicians and media elite get a chance to cozy up to one another, Biden told his dinnermates about the existence of a secret bunker under the old U.S. Naval Observatory, which is now the home of the vice president.
The bunker is believed to be the secure, undisclosed location former Vice President Dick Cheney remained under protection in secret after the 9/11 attacks.

+++

According to [Eleanor] Clift’s report on the Newsweek blog, Biden “said a young naval officer giving him a tour of the residence showed him the hideaway, which is behind a massive steel door secured by an elaborate lock with a narrow connecting hallway lined with shelves filled with communications equipment.”
Clift continued: “The officer explained that when Cheney was in lock down, this was where his most trusted aides were stationed, an image that Biden conveyed in a way that suggested we shouldn’t be surprised that the policies that emerged were off the wall.”

It ain’t exactly the biggest story in the world, but it’s a symptom: Andrew Breitbart nails the difference between the Bush years, when comedians like Stephen Colbert came to the White House Correspondents’ Dinner to mock the president, and the Obama years, when they come to fawn over the president and wish harm to his enemies while he laughs. Even Mike Lupica recognized that Wanda Sykes’ jokes were over the line and, frankly, barely jokes at all – yet Obama laughed at them, because they were aimed at his enemies.

Over at RS we have a writeup of a blogger conference call with Gov. Mark Sanford of South Carolina. It was the first blogger call he’d done, and was a pretty informal 45-minute chat.

If the GOP is going to renew itself, Republican governors will need to play a major role. Fortunately, we have some good ones. Several of us from RedState participated in a blogger call with one of the best, South Carolina’s Mark Sanford.

Gov. Sanford, best known as a critic of excessive government spending, is leaving office in 2010 due to term limits, and there is plenty of speculation that the two-term Governor and former three-term Congressman will run for the presidency in 2012. Like all potential candidates, he’s been coy about the speculation. For now, he has his hands full governing; all eyes are on a budget battle that will come to a head with a vote in the legislature next week on his plan to use federal stimulus funds to pay down state debt (Newsweek has a look at Sanford’s view of this battle here).

My own summary of the call:

First of all, if you haven’t watched Gov. Sanford in action, I’d recommend you go back to this post from last summer, where I collected video clips of his appearances. On the call he was much the same as you’ll see him there: he exudes a sort of relaxed maturity, he knows his stuff (he endured a lengthy grilling by Francis about the state’s debt structure), he’s a great believer in frugal financial management and an apostle of competitiveness, and he’s unwavering on his conservative principles. He made specific reference to this Daniel Henninger piece and Dick Cheney’s comment that rebranding the GOP should not involve repositioning our principles. That said, he expressed interest in using calls like this as part of the process of outreach to new media and finding better ways to communicate our message.

Gov. Sanford has been facing serious opposition back home to his debt-service plan, and he’s realistic about the possibility that he may lose the initial vote in the legislature, but takes the view that it’s “inconceivable that somebody isn’t going to blink” – and the implicit message is, it won’t be him. He’s insistent that if the state doesn’t pay down debt, if it accepts the stimulus money and spends it, South Carolina will be in a $740 million hole two years from now. In his view, paying down debt and cutting back expenses is the responsible thing to do in tough times – he recounted a conversation with an editorial writer who assured him that the economy would be fine in two years, but admitted that if it isn’t “we’re toast.” He was incredulous that anybody with responsibility for the state’s finances could accept a plan that leaves that as an option. As he noted, quoting a book of the same title, “hope is not a method.”

But while he recognizes that “advertising works and matters,” he’s not backing down; he draws inspiration from the energy of the tea party movement, noting that he’s seeing energy out there he hasn’t seen in 15 years in politics. As he put it, sometimes you wonder if you are a “lonely island” – “Am I on my own? Am I a crazy man?” – and then you go to an event (he’s been to four) with 8,000 people in Greenville and see you are not alone, even if the taxpayer groups are “not as plaintive before government as some of the other advocacy groups out there.”

Gov. Sanford has some real challenges ahead. As he noted, South Carolina is unique among the 50 states in having many of the executive’s usual budgetary prerogatives in the hands of a legislative council, the Budget Control Board, a fact that explains a lot about the state’s debt burden and is why Sanford has had to resort to occasional publicity stunts like the famous one pictured above, where he brought pigs to the statehouse to protest pork-barrel spending. He explained to us that he’s faced legislative opposition to easy cost-cutting moves like trying to privatize a state golf course that loses $500,000 a year in a state overflowing with profitable golf courses. He noted rather ruefully that he’d had success getting the state to privatize a bait and tackle business, but that only “saved peanuts.”

This is just hilarious. Even the mildest of needling brings out this response from the Left. HuffPo describing Obama’s trip to a hamburger joint as “historic” is precious.