Tag Archives: Barack Obama

Wichita businesses dying faster than they’re being born

What do you get when you combine Sam Brownback, Carl Brewer, and Barack Obama?

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American economy is more competitive and carbon-efficient, says economist

Stephen Moore. Credit: Willis Bretz/Heritage Foundation
Stephen Moore. Credit: Willis Bretz/Heritage Foundation

The oil and gas boom in America boosts our competitiveness in the world economy while at the same time reducing carbon emissions, says economist Stephen Moore.

Moore recently left the Wall Street Journal to accept a position at Heritage Foundation as chief economist. He presented to an audience at a conference titled “The Tax & Regulatory Impact on Industry, Jobs & The Economy, and Consumers” produced by the Franklin Center for Government and Public Integrity.

A large portion of his presentation was on energy and its important role in the economy, and how radical environmentalists — the “green” movement — are harming our economy and people. An irony, he said, is that while President Barack Obama is in the “hip pocket” of radical environmentalists, he is presiding over the greatest oil and gas boom in American history. This boom is proceeding in spite of government, not because of it.

Moore emphasized the importance of energy costs to low-income people. Rising energy costs are like taxes on them, he said, while the wealthy can more easily absorb higher energy costs. “To be green is to be against capitalism, against progress, against poor people, against jobs.”

The boom in oil and gas production in America, made possible by horizontal drilling and fracking, is ahead of the rest of the world. While European countries have in the past embraced green energy technologies, these policies have failed, and the countries are retreating from them. Now, European countries want to use American drilling technologies, he said.

The lower electricity prices in America are a competitive advantage over Europe and China. German auto manufacturers are shutting plants in Europe and moving them to the United States, he said.

Of radical environmentalist groups. Moore said: “They don’t even care about global warming. If they really cared about global warming, they would be cheerleading fracking. Because fracking is making natural gas the new fuel for America. And guess what? Natural gas emits less carbon. It’s a great antidote to global warming.”

(According to the U.S. Energy information Administration, when generating electricity, coal emits from 2.08 to 2.18 pounds of carbon dioxide per kilowatt-hour electricity generated. Natural gas emits 1.22 pounds, or about 43 percent less carbon dioxide.)

Moore went on to tell the attendees that it is the United States that has reduced its carbon emissions the greatest amount in the last five years. He said this is remarkable in light of the fact that the U.S. didn’t sign the Kyoto Treaty, the U.S. didn’t implement cap-and-trade, and didn’t implement a carbon tax. “You would think these environmental groups would be applauding natural gas. Now these environmentalist groups have a new campaign called ‘beyond natural gas,’” he said.

Moore explained that at first, environmentalists said they could accept natural gas as a “bridge fuel” to solar power and wind. They were in favor of natural gas, he said, up until the time it became cheap and plentiful. Now, they are against gas. “My point is, the left and environmentalists are against any energy source that works.”

Over the past six years the U.S. has spent $100 billion promoting wind and solar power, but these two sources together account for just 2.2 percent of electricity generation. Even if the country were to quadruple the portion of electricity generated by these two renewable sources over the next 10 to 20 years, the nation would still need to get 90 percent of its electricity from other sources. Moore was doubtful that the country could quadruple the output from wind and solar.

Trends in carbon emissions

To further investigate the topics Moore raised, I gathered data from Global Carbon Atlas and prepared interactive visualizations using Tableau Public. You may access and use the visualizations by clicking here. Following are static excerpts from the visualizations. Click on each image for a larger version.

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Click image for larger version.

Looking at the amount of total carbon emissions, we see two important facts. First, after rising slowly, carbon emissions by the United States have declined in recent years. Second, carbon emissions by China are soaring. China surpassed the U.S. around 2005, and the gap between the two countries is increasing.

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Click image for larger version.

Note also that carbon emissions in India are rising. Emissions in most advanced economies are steady or falling. These trends are emphasized in the chart that shows carbon emissions for each country indexed from a common starting point. Emissions from China and India are rapidly rising, while emissions from countries with advanced economies have risen slowly or have declined.

Click image for larger version.
Click image for larger version.

A chart that shows the carbon emissions efficiency of countries, that is, the carbon emitted per unit of GDP, shows that in general, countries are becoming more efficient. Advanced economies such as the U.S., Japan, and Germany have an advantage in this metric. These countries emit about one-fourth as much carbon per unit GDP as does China.

Click image for larger version.
Click image for larger version.

The chart of carbon emissions per person in each country show that the United States leads in this measure. In 2011, the U.S. emitted about 17 tons of carbon dioxide per person. China was at 6.6, and India at 1.7. But, the trend in the U.S. is downward, that is, less carbon emitted per person. In China and India, the trend is up, and rising rapidly in China.

Kansas jobs: Who do we believe?

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Earlier this week we saw that candidates for Kansas governor have released statements on recent job figures in Kansas. The news releases from Sam Brownback and Paul Davis appear to contain conflicting views of Kansas employment.

But we saw that the Bureau of Labor Statistics has two monthly surveys that measure employment levels and trends. There’s the Current Population Survey (CPS), also known as the household survey, and there is also the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey. BLS explains: “These estimates differ because the surveys have distinct definitions of employment and distinct survey and estimation methods.”

cps-ces-jobs-compared-2013-12Both the Davis and Brownback campaign appear to cite the data correctly. So which is the better measure to use? Which gives the best indication of the performance of the Kansas economy in creating jobs?

Here’s something to consider. On the national level, a widely-watched number each month is the count of new jobs created. This number, which is universally considered to be important, comes from the CES survey. That’s the number that shows quite a bit of job growth in Kansas. But in order to belittle the Brownback effort, the Davis campaign cites the other data series.

So let’s be fair. The next time Davis and Democrats praise good job creation figures at the national level as evidence of the goodness of Barack Obama, let’s ask them to give the same credit to Sam Brownback.

WichitaLiberty Podcast, episode 1

Voice for Liberty logo with microphone 150In this first episode of WichitaLiberty Podcasts: A Kansas City Star editorial makes a case for higher school spending in Kansas, but is based on a premise that doesn’t exist in fact. There’s a new episode of WichitaLiberty.TV. Eureka! Tea partiers know science. The John J. Ingalls Spirit of Freedom Award. Cronyism and other problems in Wichita. Is the City of Wichita concerned that its contracts contain language that seems to be violated even before the contract is signed? Obama’s debt speech, not really a speech. Episode 1, October 20, 2013.

Shownotes

Kansas schools do not have rigorous standards, despite newspaper editorials. A Kansas City Star editorial makes a case for higher school spending in Kansas, but is based on a premise that doesn’t exist in fact.
WichitaLiberty.TV October 20, 2013
Eureka! Tea partiers know science
John J. Ingalls Spirit of Freedom Award
Cronyism and other problems in Wichita
Wichita contracts, their meaning (or not). Is the City of Wichita concerned that its contracts contain language that seems to be violated even before the contract is signed?
Obama’s debt speech, not really a speech

Obama’s debt speech, not really a speech

united-states-senate-seal

In 2006, then-Senator Barack Obama was critical of raising the debt ceiling in order to allow the U.S. to borrow additional funds, a contentious issue that we are facing again. I present his full remarks here, and they are often excerpted thusly:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

So where can we go to view the future president’s speech on this topic?

The answer is: Nowhere.

Senator Obama never spoke these words on the floor of the United States Senate. Instead, he just mailed it in, submitting his text to be inserted in the Congressional Record.

But you’d never know that by reading the Congressional Record alone. If you’d like to follow along, here’s a link to page of the Congressional Record where Obama’s remarks appear. Note where Senator McConnell says “Congratulations, Senator Sarbanes.”

In the printed Congressional Record, the next item is Obama starting his “speech” with “Mr. President, I rise today to talk about America’s debt problem.”

But in the video from the C-SPAN video library (see below), Obama doesn’t appear. That’s because he never spoke these words on the Senate floor.

The Senate’s explanation of the Congressional Record states: “The Congressional Record is a substantially verbatim account of the remarks made by senators and representatives while they are on the floor of the Senate and the House of Representatives.”

While members may insert written material in the record — that’s what Obama did — it would be nice if there was a way to distinguish between actual floor proceedings and written material submitted for inclusion.

By the way, Snopes gets this wrong. It explains: “In 2006, then a freshman senator from Illinois, Barack Obama made the remarks attributed to him above during discussion in the U.S. Senate prior to the call for votes on raising the debt limit. … The shortened quote now attributed to him is a verbatim capture of the opening and closing paragraphs of his remarks of 16 March 2006.”

Snopes bills itself as “The definitive Internet reference source for urban legends, folklore, myths, rumors, and misinformation.”

The Washington Post Fact Checker thought it was a speech too, in its article Annotating Obama’s 2006 speech against boosting the debt limit.

ObamaCare chart updated

obamacare-chart

Republicans of the Joint Economic Committee of the U.S. Congress have released an update of a chart to help us navigate ObamaCare. (Click on it for a larger version.) From the July 2010 press release accompanying the original chart: “Four months after U.S. House Speaker Nancy Pelosi famously declared ‘We have to pass the bill so you can find out what’s in it,’ a congressional panel has released the first chart illustrating the 2,801 page health care law President Obama signed into law in March. Developed by the Joint Economic Committee minority, led by U.S Senator Sam Brownback of Kansas and Rep. Kevin Brady of Texas, the detailed organization chart displays a bewildering array of new government agencies, regulations and mandates.”

Read all about it at Health Care Chart — Updated Chart Shows Obamacare’s Bewildering Complexity.

ObamaCare employer mandate delayed, start of train wreck?

aspirin-bottleScheduled to take effect on January 1, the employer mandate portion of the Affordable Care Act (ObamaCare) has been delayed for one year.

Curiously, this announcement was made on an obscure Treasury Department blog, along with articles titled “Meeting, and Exceeding, Our Small Business Procurement Goals in FY 2012″ and “In Case You Missed It: Top Executives Say U.S. Is #1 for Foreign Direct Investment.”

The employer mandate requires those who employ more than 50 full time-equivalent employees to provide insurance or pay a penalty. Cato Institute’s Michael D. Tanner notes the general problem, and a specific problem based on the decision to delay the employer mandate:

In postponing the implementation of the Affordable Care Act’s employer mandate until after the 2014 mid-term elections, the Obama administration has tacitly admitted what critics of the law have long contended: that Obamacare is unworkable and would be a significant burden for American business and the economy at large. Stay tuned for further dominoes falling.

Actually, the Administration’s decision to postpone the employer mandate may make a bad situation worse. Because the individual mandate remains in place, workers may now face a situation where they must purchase their own insurance or pay a penalty because their employers don’t provide coverage. In effect, the administration’s decision shifts the cost from employers to workers. This hardly seems fair, and may force the administration to rethink the individual mandate as well. (And So the Obamacare Train Wreck Begins … )

Will the implementation of other parts of ObamaCare be delayed? I think it seems likely. But: Section 1513 AVC states, regarding the employer mandate: “The amendments made by this section shall apply to months beginning after December 31, 2013.” So does the administration have the legal authority to make changes like this?

uninsured-estimates-2013-05

Also: For all the wrenching debate and changes, there will still be many uninsured people. Here’s a chart based on the Congressional Budget Office May 2013 estimate of the effects of the Affordable Care Act on health insurance coverage.

This is just the start of discovery of pathologies built into ObamaCare. Here’s Avik Roy explaining an incentive contained within the employer mandate:

The strong penalty vs. the weak penalty

The employer mandate actually consists of two different penalties, based on two different categories of employer behavior. These originate from Section 4980H of the Affordable Care Act. Subsection (a) requires steep penalties for employers who offer no coverage at all. Subection (b) requires modest penalties for employers who offer “minimum essential coverage under an eligible employer-sponsored plan.” This difference — between the strong penalty in 4980H(a) and the weak penalty in 4980H(b) — is crucial to understanding how things will play out in the future.

Under the strong penalty, in which an employer “fails to offer to its full-time employees…the opportunity to enroll in minimum essential coverage,” and “at least one full-time employee” enrolls in an exchange, the employer has to pay a fine of $2,000 times the total number of full-time-equivalent employees at the firm, minus 30. (The employer mandate only applies to firms with 50 or more full-time-equivalent workers.) So if you employ 50 workers, that’s a fine of 20 * $2,000 = $40,000. And the fine isn’t tax-deductible, adding to the pain.

Under the weak penalty, in which an employer does offer “the opportunity to enroll in minimum essential coverage,” but that coverage doesn’t meet Obamacare’s requirements for affordability or actuarial value, and at least one worker enrolls on an exchange instead, the fine is $3,000 times the number of workers who enroll on the exchanges. So, if you employ 50 workers, and three of them get coverage on the exchange instead, the fine is a much lower 3 * $3,000, or $9,000. (Technically, in subsection (b), employers pay the lesser of the weak penalty or the strong penalty, but this in most cases should be the weak penalty.)

So: Employers avoid the strong penalty and gain eligibility for the weak penalty by offering “minimum essential coverage.”

Roy goes on to explain that “minimum essential coverage” means coverage my any insurance plan that can legally be sod in a state, including plans that provide limited coverage or services. Roy writes that companies may offer these bare-bones plans to their employees and escape the penalties.

This behavior, which federal officials have confirmed is allowed, evidently wasn’t considered by officials, writes Roy: “Nonetheless, Obamacare’s designers expressed surprise that employers would do such a thing. ‘Our expectation was that employers would offer high quality insurance,’ said Robert Kocher, a former Obama health care adviser. It wouldn’t be the first time that the law’s authors didn’t recognize how economic incentives actually work.”

Economic incentives are what makes the world work. They’re based on human behavior, and that isn’t easily changed, even to suit Barack Obama’s desires.

Internal Revenue Service IRS logo

An IRS political timeline

Internal Revenue Service IRS logo

In the summer of 2010 President Barack Obama and his allies warned of conservative groups with “harmless-sounding names like Americans for Prosperity.” At the time, supporters of AFP like myself were concerned, but AFP saw the president’s attacks as evidence of the group’s influence.

This week Kim Strassel of the Wall Street Journal looks back at the summer three years ago in light of what we’re just starting to learn about the Internal Revenue Service under the Obama Administration. Strassel writes: “We know that it was August 2010 when the IRS issued its first ‘Be On the Lookout’ list, flagging applications containing key conservative words and issues.”

Strassel presents a timeline of events from that time. Here’s an entry that should concern everyone:

Aug. 27: White House economist Austan Goolsbee, in a background briefing with reporters, accuses Koch industries of being a pass-through entity that does “not pay corporate income tax.” The Treasury inspector general investigates how it is that Mr. Goolsbee might have confidential tax information. The report has never been released.

This same week, the Democratic Party files a complaint with the IRS claiming the Americans for Prosperity Foundation is violating its tax-exempt status.

Somehow, I’m not surprised that the Obama-controlled Treasury Department is slow in investigating allegations of misdeeds by an Obama economic adviser, even though Goolsbee hasn’t worked for Obama for some time.

In conclusion, Strassel ties it all together and links the current IRS scandal to Washington:

These were not off-the-cuff remarks. They were repeated by the White House and echoed by its allies in campaign events, emails, social media and TV ads. The president of the United States spent months warning the country that “shadowy,” conservative “front” groups — “posing” as tax-exempt entities and illegally controlled by “foreign” players — were engaged in “unsupervised” spending that posed a “threat” to democracy. Yet we are to believe that a few rogue IRS employees just happened during that time to begin systematically targeting conservative groups? A mere coincidence that among the things the IRS demanded of these groups were “copies of any contracts with and training materials provided by Americans for Prosperity”?

This newspaper reported Thursday that Cincinnati IRS employees are now telling investigators that they took their orders from Washington. For anyone with a memory of 2010 politics, that was obvious from the start.

It’s evident that we’re just starting to uncover what’s been happening to freedom and liberty under the Obama Administration (and past presidents, too). We don’t know where this will lead, but we need to be thankful for organizations like Americans for Prosperity and others that haven’t backed down.

An IRS Political Timeline

President Obama spent months in 2010 warning Americans about the ‘threat’ to democracy posed by conservative groups, right at the time the IRS began targeting these groups.

By Kimberly A. Strassel

Perhaps the only useful part of the inspector general’s audit of the IRS was its timeline. We know that it was August 2010 when the IRS issued its first “Be On the Lookout” list, flagging applications containing key conservative words and issues. The criteria would expand in the months to come.

What else was happening in the summer and fall of 2010? The Obama administration and its allies continue to suggest the IRS was working in some political vacuum. What they’d rather everyone forget is that the IRS’s first BOLO list coincided with their own attack against “shadowy” or “front” conservative groups that they claimed were rigging the electoral system.

Below is a more relevant timeline, a political one, which seeks to remind readers of the context in which the IRS targeting happened.

Continue reading at the Wall Street Journal (subscription not required).

Without government, there would be no change: Wichita Mayor

It’s worse than President Obama saying “You didn’t build that.” Wichita Mayor Carl Brewer tells us you can’t build that — not without government guidance and intervention, anyway.

City of Wichita logoWhen President Barack Obama told business owners “You didn’t build that,” it set off a bit of a revolt. Those who worked hard to build businesses didn’t like to hear the president dismiss their efforts.

Underlying this episode is a serious question: What should be the role of government in the economy? Should government’s role be strictly limited, according to the Constitution? Or should government take an activist role in managing, regulating, subsidizing, and penalizing in order to get the results politicians and bureaucrats desire?

Historian Burton W. Folsom has concluded that it is the private sector — free people, not government — that drives innovation: “Time and again, experience has shown that while private enterprise, carried on in an environment of open competition, delivers the best products and services at the best price, government intervention stifles initiative, subsidizes inefficiency, and raises costs.”

But some don’t agree. They promote government management and intervention into the economy. Whatever their motivation might be, however it was they formed their belief, they believe that without government oversight of the economy, things won’t happen.

But in Wichita, it’s even worse. Without government, it is claimed that not only would we stop growing, economic progress would revert to a previous century.

Mayor Carl Brewer made these claims in a 2008 meeting of the Wichita City Council.

In his remarks (transcript and video below), Brewer said “if government had not played some kind of role in guiding and identifying how the city was going to grow, how any city was going to grow, I’d be afraid of what that would be. Because we would still be in covered wagons and horses. There would be no change.”

When I heard him say that, I thought he’s just using rhetorical flair to emphasize a point. But later on he said this about those who advocate for economic freedom instead of government planning and control: “… then tomorrow we’ll be saying we don’t want more technology, and then the following day we’ll be saying we don’t want public safety, and it won’t take us very long to get back to where we were at back when the city first settled.”

Brewer’s remarks are worse than “You didn’t build that.” The mayor of Wichita is telling us you can’t build that — not without government guidance and intervention, anyway.

Many people in Wichita, including the mayor and most on the city council and county commission, believe that the public-private partnership is the way to drive innovation and get things done. It’s really a shame that this attitude is taking hold in Wichita, a city which has such a proud tradition of entrepreneurship. The names that Wichitans are rightly proud of — Lloyd Stearman, Walter Beech, Clyde Cessna, W.C. Coleman, Albert Alexander Hyde, Dan and Frank Carney, and Fred C. Koch — these people worked and built businesses without the benefit of public-private partnerships and government subsidy.

This tradition of entrepreneurship is disappearing, replaced by the public-private partnership and programs like Visioneering Wichita, sustainable communities, Greater Wichita Economic Development Coalition, Regional Economic Area Partnership (REAP), and rampant cronyism. Although when given a chance, voters are rejecting cronyism.

We don’t have long before the entrepreneurial spirit in Wichita is totally subservient to government. What can we do to return power to the people instead of surrendering it to government?

Wichita Mayor Carl Brewer, August 12, 2008:

“You know, I think that a lot of individuals have a lot of views and opinions about philosophy as to, whether or not, what role the city government should play inside of a community or city. But it’s always interesting to hear various different individuals’ philosophy or their view as to what that role is, and whether or not government or policy makers should have any type of input whatsoever.

“I would be afraid, because I’ve had an opportunity to hear some of the views, and under the models of what individuals’ logic and thinking is, if government had not played some kind of role in guiding and identifying how the city was going to grow, how any city was going to grow, I’d be afraid of what that would be. Because we would still be in covered wagons and horses. There would be no change.

“Because the stance is let’s not do anything. Just don’t do anything. Hands off. Just let it happen. So if society, if technology, and everything just goes off and leaves you behind, that’s okay. Just don’t do anything. I just thank God we have individuals that have enough gumption to step forward and say I’m willing to make a change, I’m willing to make a difference, I’m willing to improve the community. Because they don’t want to acknowledge the fact that improving the quality of life, improving the various different things, improving bringing in businesses, cleaning up street, cleaning up neighborhoods, doing those things, helping individuals feel good about themselves: they don’t want to acknowledge that those types of things are important, and those types of things, there’s no way you can assess or put a a dollar amount to it.

“Not everyone has the luxury to live around a lake, or be able to walk out in their backyard or have someone come over and manicure their yard for them, not everyone has that opportunity. Most have to do that themselves.

“But they want an environment, sometimes you have to have individuals to come in and to help you, and I think that this is one of those things that going to provide that.

“This community was a healthy thriving community when I was a kid in high school. I used to go in and eat pizza after football games, and all the high school students would go and celebrate.

“But, just like anything else, things become old, individuals move on, they’re forgotten in time, maybe the city didn’t make the investments that they should have back then, and they walk off and leave it.

“But new we have someone whose interested in trying to revive it. In trying to do something a little different. In trying to instill pride in the neighborhood, trying to create an environment where it’s enticing for individuals to want to come back there, or enticing for individuals to want to live there.

“So I must commend those individuals for doing that. But if we say we start today and say that we don’t want to start taking care of communities, then tomorrow we’ll be saying we don’t want more technology, and then the following day we’ll be saying we don’t want public safety, and it won’t take us very long to get back to where we were at back when the city first settled.

“So I think this is something that’s a good venture, it’s a good thing for the community, we’ve heard from the community, we’ve seen the actions of the community, we saw it on the news what these communities are doing because they know there’s that light at the end of the tunnel. We’ve seen it on the news. They’ve been reporting it in the media, what this particular community has been doing, and what others around it.

“And you know what? The city partnered with them, to help them generate this kind of energy and this type of excitement and this type of pride.

“So I think this is something that’s good. And I know that there’s always going to be people who are naysayers, that they’re just not going to be happy. And I don’t want you to let let this to discourage you, and I don’t want the comments that have been heard today to discourage the citizens of those neighborhoods. And to continue to doing the great work that they’re doing, and to continue to have faith, and to continue that there is light at the end of the tunnel, and that there is a value that just can’t be measured of having pride in your community and pride in your neighborhood, and yes we do have a role to be able to help those individuals trying to help themselves.”

To boost jobs and prosperity, Kansas should cut spending

In order to increase jobs and prosperity in Kansas, we should seek to reduce state spending as much as possible, thereby leaving more resources in the productive private sector.

Kansas Capitol

In the debate over reducing and eventually eliminating the income tax in Kansas, those who oppose income tax reduction say it will simply shift the burden of taxation to others, in the form of sales and property taxes. This is true only if we decide to keep spending at the same level. We could cut spending in response to reduced revenue, but it is argued that state spending is a good thing, a source of wealth that Kansas should continue to rely on.

The idea that government spending is a generator of wealth and prosperity is true only beyond a certain minimal level of spending. We benefit from government provision of things like national defense, public safety, and a court system. (There are those who believe that even these could be provided by the private sector rather than markets.) But once government grows beyond these minimal core functions, it is virtually certain that markets — that is, free people trading in the private sector — can produce a wider variety of better goods and services at lower cost.

We also have to realize that government spending has a cost that must be paid. Advocates of government spending point to the salary paid to a government worker and how that money gets spent in the economy, producing jobs. These advocates, however, do not recognize the source of the worker’s salary, which is money taken from someone through taxation (or through borrowing and inflation at the federal government level). The loss of that money to government has a cost in the form of the reduced economic activity of those who paid the taxes.

If this loss was economically equivalent to the gain, we might be unconcerned. But there is a huge cost in taxation and government inefficiency that makes government spending a negative-sum proposition.

Another fundamental problem with government taxation and spending is that it is not voluntary. In markets, people voluntarily trade with each other because they feel it will make them better off. That’s not the case with government. I do not pay my taxes because I feel doing so makes me better off, other than for that small part that goes to the basic core functions. Instead, I pay my taxes so that I can stay out of jail. This fundamentally coercive nature of government spending gets it off to a bad start.

Then, ask how that money is spent: Who decides, and how? Jeffrey A. Miron explains: “The political process, alas, does not lend itself to objective balancing of costs and benefits. Most programs benefit well-defined interest groups (the elderly, teachers unions, environmentalists, defense contractors) while imposing relatively small costs per person on everyone else. Thus the winners from excess spending fight harder than the losers, and spending far exceeds the level suggested by cost-benefit considerations.” (Slash Expenditure to Balance the Budget)

An example in Kansas is the special interest group that benefits from highway construction. They formed a group called Economic Lifelines. The group says it was formed to “provide the grassroots support for Comprehensive Transportation Programs in Kansas.” Its motto is “Stimulating economic vitality through leadership in infrastructure development.”

A look at the membership role, however, lets us know whose economic roots are being stimulated. Membership is stocked with names like AFL-CIO, Foley Equipment Company, Heavy Constructors Association of Greater Kansas City, Kansas Aggregate & Concrete Associations, Kansas Asphalt Pavement Association, Kansas Contractors Association, Kansas Society of Professional Engineers, and PCA South Central Cement Promotion Association. Groups and companies like these have an economic interest in building more roads and highways, whether or not the state actually needs them. They would happily build a highway to nowhere.

As Miron explained, groups like this will spend almost unlimited money in order to receive appropriations from the government. It’s easier than competing in markets, and that’s a big problem with government spending — decision are made by the centralized few, not the many dispersed actors in markets.

Some argue that without government spending, certain types of goods and services will not be provided. A commonly cited example is education, which accounts for about half of Kansas general fund spending. Would there be schools if not for government? Of course there would be. There are many non-government schools now, even though those who patronize them must first pay for the government schools before paying for their own schools. And there were many schools and educated, literate Americans before government decided it need to monopolize education.

Still, it is argued that government spending on education is needed because everyone benefits from an educated citizenry. Tom G. Palmer explains: “Thus, widespread education generates public benefits beyond the benefits to the persons who are educated, allegedly justifying state provision and financing through general tax revenues. But despite the benefits to others, which may be great or small, the benefits to the persons educated are so great for them that they induce sufficient investment in education. Public benefits don’t always generate the defection of free-riders.”

Those who still argue that government spending in education is for the good of everyone will also need to defend the sagging and declining performance of public schools, persuading us that government schools are producing an educated citizenry. They also need to defend the capture of Kansas spending on schools by special interest groups that benefit from this spending.

Back to the basics: Government spending as economic booster is the theory of the Keynesians, including the administration of Barack Obama. Miron, from the same article cited above, explains the problems with this:

That brings us to the second argument for higher spending: the Keynesian claim that spending stimulates the economy. If this is accurate, it might seem the U.S. should continue its high-spending ways until the recession is over.

But the Keynesian argument for spending is also problematic. To begin with, the Keynesian view implies that any spending — whether for vital infrastructure or bridges to nowhere — is equally good at stimulating the economy. This might be true in the short term (emphasis on might), but it cannot be true over the long haul, and many “temporary” programs last for decades. So stimulus spending should be for good projects, not “digging ditches,” yet the number of good projects is small given how much is already being spent.

More broadly, the Keynesian model of the economy relies on strong assumptions, so we should not embrace it without empirical confirmation. In fact, economists find weak or contradictory evidence that higher government spending spurs the economy.

Substantial research, however, does find that tax cuts stimulate the economy and that fiscal adjustments — attempts to reduce deficits by raising taxes or lowering expenditure — work better when they focus on tax cuts. This does not fit the Keynesian view, but it makes perfect sense given that high taxes and ill-justified spending make the economy less productive.

The implication is that the U.S. may not face a tradeoff between shrinking the deficit and fighting the recession: it can do both by cutting wasteful spending (Medicare, Social Security, and the wars in Iraq and Afghanistan, for starters) and by cutting taxes.

The reduced spending will make the economy more productive by scaling government back to appropriate levels. Lower tax rates will stimulate in the short run by improving consumer and firm liquidity, and they will enhance economic growth in the long run by improving the incentives to work, save, and invest.

Deficits will therefore shrink and the economy will boom. The rest of the world will gladly hold our debt. The U.S. will re-emerge as a beacon of small government and robust capitalism, so foreign investment (and talented people, if immigration policy allows) will come flooding in.

In Kansas, we need to scale back government to appropriate levels, as Miron recommends. That means cutting spending, as that is the measure of the size of government. That will allow us to cut tax rates, starting with the income tax. Then we in Kansas can start to correct the long record of sub-par economic performance compared to other states and bring prosperity and jobs here.

Obama will need more economic growth

To pay for the Obama taxing and spending agenda, the country will need much more economic growth. Unfortunately, the rate of growth is slowing just when we need greater rates of growth.

It’s commonly thought that annual real (after-inflation) growth of three percent is required just to keep up with population. More than that is needed to restore the loss in middle-class income during Obama’s first term. But here’s what has happened to the rate of growth.

Gross Domestic Product, Real, Annual Change

The direction of change in economic growth is moving in the wrong direction, and it’s far below what is needed. Darkening the horizon are the planned increases in spending, in particular ObamaCare, will be a further drag on the economy. Other Obama policies are distinctly anti-growth. It’s difficult to have an optimistic outlook.

Stephen Moore and Arthur Laffer told the story last summer in the Wall Street Journal:

The first is how much government spending fell during President Bill Clinton’s eight years in office and how low it was when he left office. When he became president in 1992, government spending was 23.5% of GDP, and when he left in 2001 it was 19.5% of GDP. President Clinton, in conjunction with a solid Republican Congress, cut government spending by more than any other president in modern times, and oversaw one of the greatest periods of economic growth and prosperity in U.S. history.

Sadly for fiscal conservatives, the biggest surge in government spending came during the last two years of President George W. Bush’s eight years in office (2007-2008). A weakened Republican president dealing with a strident Democratic Congress, led by then-House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, resulted in an orgy of spending.

Mr. Bush and Republicans in Congress capitulated to and even promoted each and every government bailout and populist redistribution canard put before them. It’s a long list, starting with the 2003 trillion-dollar Medicare prescription drug benefit and culminating with the actions taken to stem the 2008 financial meltdown — the $700 billion Troubled Asset Relief Program, the bailout of insurance giant AIG and government-sponsored lenders Fannie Mae and Freddie Mac, the ill-advised 2008 $600-per-person tax rebate, the stimulus add-ons to 2007′s housing and farm bills, etc. The script had it that greedy right-wingers were the cause of our collapse, and deficit spending and easy money the answer.

The numbers are mind boggling. From the second quarter of 2007, i.e., the first full quarter of a Pelosi-Reid dominated Congress and a politically weakened President Bush, to the second quarter of 2009 when President Obama assumed office, government spending skyrocketed to 27.3% of GDP from 21.4%. It was the largest peacetime expansion of government spending in U.S. history.

Following is an interactive visualization of federal revenues, expenditures, and the deficit as a percentage of gross domestic product that illustrates these trends. Use the visualization below, or click here to open it in a new window.

Obama’s debt speech just mailed in

In 2006, then-Senator Barack Obama was critical of raising the debt ceiling in order to allow the U.S. to borrow additional funds, a contentious issue that we are facing again. I present his full remarks here, and they are often excerpted thusly:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

So where can we go to view the future president’s speech on this topic?

The answer is: Nowhere.

Senator Obama never spoke these words on the floor of the United States Senate. Instead, he just mailed it in, submitting his text to be inserted in the Congressional Record.

But you’d never know that by reading the Congressional Record alone. If you’d like to follow along, here’s a link to page of the Congressional Record where Obama’s remarks appear. Note where Senator McConnell says “Congratulations, Senator Sarbanes.”

In the printed Congressional Record, the next item is Obama starting his “speech” with “Mr. President, I rise today to talk about America’s debt problem.”

But in the video from the C-SPAN video library (see below), Obama doesn’t appear. That’s because he never spoke these words on the Senate floor.

The Senate’s explanation of the Congressional Record states: “The Congressional Record is a substantially verbatim account of the remarks made by senators and representatives while they are on the floor of the Senate and the House of Representatives.”

While members may insert written material in the record — that’s what Obama did — it would be nice if there was a way to distinguish between actual floor proceedings and written material submitted for inclusion.

By the way, Snopes gets this wrong. It explains: “In 2006, then a freshman senator from Illinois, Barack Obama made the remarks attributed to him above during discussion in the U.S. Senate prior to the call for votes on raising the debt limit. … The shortened quote now attributed to him is a verbatim capture of the opening and closing paragraphs of his remarks of 16 March 2006.”

Snopes bills itself as “The definitive Internet reference source for urban legends, folklore, myths, rumors, and misinformation.”

The Washington Post Fact Checker thought it was a speech too, in its article Annotating Obama’s 2006 speech against boosting the debt limit.

Progressives shaping the future of America. It’s a good thing.

Mother Jones approvingly reports on a secretive meeting of progressive activists.

When conservatives do this, it’s branded as evil. Mother Jones told us so. But it’s a good thing for liberals and progressives to meet, raise funds, and conspire, according to the magazine.

The progressive groups that attended the meeting (mentioned below) support policies (with a few exceptions) that reduce economic freedom and liberty. They’re obviously emboldened by a second Obama term. We’ll have to watch closely to protect ourselves.

A month after President Barack Obama won reelection, top brass from three dozen of the most powerful groups in liberal politics met at the headquarters of the National Education Association (NEA), a few blocks north of the White House. Brought together by the Sierra Club, Greenpeace, Communication Workers of America (CWA), and the NAACP, the meeting was invite-only and off-the-record. Despite all the Democratic wins in November, a sense of outrage filled the room as labor officials, environmentalists, civil rights activists, immigration reformers, and a panoply of other progressive leaders discussed the challenges facing the left and what to do to beat back the deep-pocketed conservative movement.

At the end of the day, many of the attendees closed with a pledge of money and staff resources to build a national, coordinated campaign around three goals: getting big money out of politics, expanding the voting rolls while fighting voter ID laws, and rewriting Senate rules to curb the use of the filibuster to block legislation. The groups in attendance pledged a total of millions of dollars and dozens of organizers to form a united front on these issues — potentially, a coalition of a kind rarely seen in liberal politics, where squabbling is common and a stay-in-your-lane attitude often prevails. “It was so exciting,” says Michael Brune, the Sierra Club’s executive director. “We weren’t just wringing our hands about the Koch brothers. We were saying, ‘I’ll put in this amount of dollars and this many organizers.’”

Obama on debt ceiling, then and now

Not long ago Barack Obama said that needing to raise America’s debt limit “is a sign of leadership failure.” Now he wants the power to raise the debt ceiling on his own, without Congressional approval.

Senator Barack Obama, March 16, 2006 Congressional Record, page S2237:

Mr. OBAMA. Mr. President, I rise today to talk about America’s debt problem.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies. But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.

As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.

The Obama tax hike, compared to deficits

President Barack Obama is going to ask Congress for more tax revenue. But the president’s request, as large as it is, will do little to rein in our budgetary problem.

According to the Wall Street Journal: “President Barack Obama will begin budget negotiations with congressional leaders Friday by calling for $1.6 trillion in additional tax revenue over the next decade, far more than Republicans are likely to accept and double the $800 billion discussed in talks with GOP leaders during the summer of 2011.”

The stage is being set for a showdown, one that both sides will surely cast as determining the future viability of America. But placing these numbers in context shows us that we’re really arguing over nothing — when compared to the size of the problems facing the budget.

For context, the president’s most recent budget — which received zero votes when submitted to Congress — calls for cumulative deficits totaling an additional $6,684 billion from 2013 through 2022. Obama’s request for additional revenue of $1,600 billion over those years is 23.9 percent of that projected deficit. This is not what I’d call “solving the problem.”

Further, the president’s budget may be based on unrealistically optimistic projections. One of the most important variables, the rate of growth of gross domestic product, was assumed to be 3.0 percent in 2012. But through the first three quarters, GDP growth has been at the rate of 2.0 percent, and the recent trend has been for that rate to decrease, not improve.

The rich don’t have enough money

Even if President Barack Obama gets his way in upcoming tax negotiations, we’ll still be a long way from tackling the deficit.

The document General Explanations of the
Administration’s Fiscal Year 2013 Revenue Proposals, Table of Revenue Estimates
holds the details:

Obama Administration projection of increased tax revenue

If Obama is successful in his plan to increase taxes on upper-income taxpayers, it will bring in — according to this estimate by the Treasury Department — $56 billion in 2013. If additional tax expenditures are eliminated, revenue could increase by $83 billion. Both of these numbers are projected to rise in future years.

To place these numbers in context: In fiscal year 2012, which ended just one month ago, the federal government spent an estimated $3,500 billion. The largest tax revenue increase Obama hopes for is 2.4 percent of this.

Considering only the deficit from 2012, estimated at $1,100 billion, the $83 billion tax hike is 7.54 percent. But that’s only the deficit, which is the amount we borrow, not the amount we spend.

These tax increases are not going to solve our problems with the federal budget. That’s assuming that the tax hikes will not cause economic harm.

The federal budget is so out of balance compared to the size of the economy that even the wildest dreams of liberals won’t balance the budget. The Tax Foundation has calculated from IRS data that if government taxed 100 percent of the income earned by those who earn over $1 million, it would raise $709 billion. That’s not really close to last year’s deficit of $1,100 billion.

And then, why would these people work?

You should be able to photograph your ballot

Kansas Secretary of State Kris Kobach wants to make it illegal to photograph your completed ballot, and he wants the power to enforce this law.

There’s a thorny question here: Who owns your ballot? You, or the state? If you, then can you be prohibited from photographing something that you own?

The usual argument for such a law is that it constrains the buying and selling of votes. A photo of your ballot, it is said, would be proof to a vote-buyer that you delivered the service you promised, if you were to sell your vote. With no ability to prove your vote, it’s thought that there would be fewer buyers.

I don’t think, however, that the state should start judging why people voted as they did. Those who voted for Democrats in Kansas: Did they do so because these candidates promised to take more money from others in order to spend more on schools for their children?

Those who voted for Barack Obama: Did they do so because he promised to take more taxes from high income earners to give everyone else more “stuff?”

When a political party transports someone to the polling place because they believe the voter will vote in their favor: Is that buying a vote? Or only providing free shipping and handling?

As H.L. Mencken wrote some years ago — before government got really big — “Every election is a sort of advance auction of stolen goods.” Whether the sale is implicit or explicit, it doesn’t change what’s happening. There’s no need to create new laws or enforcement powers.

If we’re really interested in reducing the market to buy and sell votes, let’s reduce the power of government to give away stuff that someone else has paid for.

Obama II, from New York Times

The New York Times lays out the agenda for the second term of President Barack Obama. It could be “invigorated,” the newspaper writes.

The Times editorialists write that now the president “can make real progress on issues neglected in the first.” I wonder: Why did he neglect these issues?

Then: Obama intends to “build on and improve the significant accomplishments of the last four years.” The problem is that these accomplishments are harmful to our country. They harm our economy, they extinguish liberty and freedom, they will lead to less prosperity for everyone.

Here’s what a second Obama term might attempt, according to the Times

“Address climate change with more vigor, going beyond auto-mileage standards and renewable-energy jobs to possibly advocating tougher carbon emissions standards.” I’d like to think that the Obama Administration learned from debacles like Solyndra, but there’s no evidence it has.

“Working with Republicans to fix the immigration system.” We’re long overdue for this, and I think I can support what the president is likely to propose. We’ll see.

“He also hinted that combating poverty might move higher on his priority list.” But Obama’s vision of fighting poverty is likely more of the same: direct payments, government job training, more spending on public schools, etc. None of this supports what is really needed: a vibrant economy.

“In coming months, after he persuades Congress to keep taxes from rising on the middle class, he should push to restore a fair estate tax and raise the low capital gains rate to the level of ordinary income.” A pro-growth policy, one that would create prosperity for everyone, would be to eliminate taxes on capital. Raising this tax means that there will be less investment in the United States as investors seek to find more attractive grounds for investment. This is so important. Ask yourself this: Who earns the higher wage — the man digging a ditch with a shovel, or the worker operating a power backhoe? The backhoe is capital. Someone had to defer current consumption in order to save to buy the backhoe. As taxes on capital rise, people have less incentive to save and invest.

The Times says Obama’s victory was decisive. At least they didn’t say it was a mandate, as some have said. We’ve suffered through a campaign, won by a man who showed that he would do anything to hold on to power.

We’ve heard President Obama tell Russia that he can be more “flexible” after the election. Some might interpret this — considering domestic policy — as meaning that Obama will govern more to the left, seeking to expand government spending even more than he did in his first term.

But there’s a possibility — small, I’m sad to reckon — that flexibility might mean that the president disregards the radical left and embraces principles of economic freedom and personal liberty. This is the way Barack Obama could rescue our economy and build a legacy that he and the country could be proud of.

Economic growth is slowing

While the United States economy started to grow after the recent recession, the trend in growth is slowing.

During the 80s and 90s the federal government spent at around the level of 19 percent of GNP. Now the federal government spends at the rate of 25 percent of the economy. Add in state and local governments, and we’re at 36 percent.

This is not trickle-down government, it’s suffocating government, where government threatens to overwhelm the private sector. As government intervenes in more areas of the economy, as Obama’s bureaucrats extend their span of control over the economy (think General Motors), we have a certain process taking place. Charles Koch in September in Wall Street Journal observed: “Put simply, cronyism is remaking American business to be more like government. It is taking our most productive sectors and making them some of our least.”

This didn’t start when Barack Obama assumed office. The process was already in place. But it has accelerated under the current president. Not by accident, but by design.

Most people worry about deficits and debt. But do you think President Obama is truly concerned about huge deficits year after year, with many more predicted? These huge deficits are not a bug in the program. They’re a feature. The point of the deficits is to create a crisis that makes it necessary to raise taxes. Government grows again.

Yes, President Obama inherited a tough economy when he took office nearly four years ago. But, according to the official record-keepers, the recession ended in the summer of 2009. Does it feel like the recession is over?

Do you remember “Recovery Summer?”

Here’s a news report: “Vice President Joe Biden today will kick off the Obama administration’s Recovery Summer, a six-week-long push designed to highlight the jobs accompanying a surge in stimulus-funded projects.”

What year was that? 2010. Does it seem like we’re in recovery?

Now David Axelrod denies that there was such a claim.

George Will accurately diagnosed the problem two years ago: “We can’t tolerate any more of the Obama cure.”

Cost of an Obama tire job: $900,000

It’s entirely predictable that trade sanctions are costly to the country that imposes them. Yet politicians can be persuaded to support them in the name of saving American jobs and getting “tough” with countries perceived to be a problem.

We see this in the case of President Barack Obama and the tariffs, or taxes, on tires imported from China. Here’s what The Peterson Institute for International Economics said in its report US Tire Tariffs: Saving Few Jobs at High Cost:

However, our analysis shows that, even on very generous assumptions about the effectiveness of the tariffs, the initiative saved a maximum of 1,200 jobs. Our analysis also shows that American buyers of car and light truck tires pay a hefty price for this exercise of trade protection. According to our calculations, explained in this policy brief, the total cost to American consumers from higher prices resulting from safeguard tariffs on Chinese tires was around $1.1 billion in 2011. The cost per job manufacturing saved (a maximum of 1,200 jobs by our calculations) was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home.

The additional money that US consumers spent on tires reduced their spending on other retail goods, indirectly lowering employment in the retail industry. On balance, it seems likely that tire protectionism cost the US economy around 2,531 jobs, when losses in the retail sector are off set against gains in tire manufacturing. Adding further to the loss column, China retaliated by imposing antidumping duties on US exports of chicken parts, costing that industry around $1 billion in sales.

It’s not like this hasn’t happened before. When President George W. Bush imposed tariffs on imported steel, the result was similar. The Consuming Industries Trade Action Coalition found that steel trade protectionism resulted in the loss of nearly 200,000 American jobs, and cost approximately $4 billion in lost wages over ten months. A further conclusion was that “more American workers lost their jobs in 2002 to higher steel costs than the total number employed by the U.S. steel industry.”

Instead of these presidents bowing to the very concentrated special interests that benefit from trade protectionism, we should embrace trade with other countries.

But it’s easy to beat up on certain countries when jobs are lost, blaming the problem on foreigners. Mitt Romney should take this advice, as the Wall Street Journal recently editorialized: “This China-bashing is especially odd for Mr. Romney, who professes elsewhere that he wants to expand trade because it will create jobs. So trade is good for America except when it is conducted by ‘cheaters’ who happen to sell more of some goods and services to us than we sell to them. This is called mercantilism, not free trade.”

Obama’s regulatory extremism

In the introduction to his book Democracy Denied, Phil Kerpen gives us a history lesson on the grab for executive power by presidents through the use of “signing statements.”

Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

Kerpen explains how the view from the oval office can make one forget campaign promises:

Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

Not that Obama alone takes criticism for exercising presidential power contrary to the actions of Congress, as he describes the auto industry bailout in the last days of the presidency of George W. Bush. A bill didn’t make it through Congress, but Bush “repurposed” TARP funds — intended for banks — and used them for an auto bailout in the amount of $17.4 billion.

It is this use of executive power and agencies to bypass the will of people — as expressed through Congress — that is detailed in a book authored by Phil Kerpen and published at this time last year: Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him.

Kerpen’s website is philkerpen.com, and it features excerpts from the book along with a theatrical trailer.

Kerpen explains the problem by describing a solution: The Regulations from the Executive in Need of Scrutiny Act, or REINS Act. This proposed law would require any major regulatory action to be approved by Congress and receive the president’s signature. Kerpen writes: “We have regulators who are effectively writing and executing their own laws. The major policy decisions that affect every aspect of our economic lives are moving forward without consent of the people’s legitimately elected legislative branch.”

The problem is that often Congress passes generic laws and leaves it to regulatory agencies to write the rules that implement the law. By requiring Congressional and Presidential approval of major regulations, agencies will be accountable to the current Congress, and lawmakers will have a chance to ensure that actual regulations are consistent with the intent of enabling legislation.

Cap-and-trade energy legislation provides an example of Kerpen’s thesis, which is “how the Obama administration was disregarding Congress and the American people to accomplish its objectives through regulatory backdoors.” The legislation passed the House, but couldn’t pass the Senate. So what happened next? Kerpen explains Obama’s detour around Congress:

Just to show you how unfazed the Obama administration was by the political defeat of cap-and-trade, consider what’s on page 146 of Obama’s 2012 budget: “The administration continues to support greenhouse gas emissions reductions in the United States in the range of 17 percent below 2005 levels by 2020 and 83% percent by 2050.” Those just happen to be the same levels required by the failed Waxman-Markey cap-and-trade bill. Obama is telling the EPA to just pretend that the bill passed and regulate away.

In fact Obama’s EPA was already moving full steam ahead to implement a global warming regulatory scheme that could even be more costly than cap and trade — without the approval of the American people and without so much as a vote in Congress.

The remainder of the chapter details some of the ways EPA is accomplishing this backdoor regulation.

The Patient Protection and Affordable Care Act, otherwise known as ObamaCare, is another topic Kerpen covers where regulation is replacing lawmaking by Congress:

Nancy Pelosi was right in more ways then she realized when she infamously said “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.” Not only was the more than 2,000-page bill negotiated in secret and so densely complex that few humans could understand it, it also deferred most of the really difficult and important decisions to the regulators, including dozens of brand-new boards, committees, councils, and working groups. So even after ObamaCare had been passed there was no way to know what was really in it until the bureaucracy was assembled and began issuing regulations.

Kerpen describes the bill that passed as not “finished legislation,” and is now being interpreted by bureaucrats, the most powerful being HHS Secretary Kathleen Sebelius. Her office is now, according to Kerpen, “issuing a whole string of official guidelines and regulations that attempt to ‘correct’ the draft law, often by asserting things that the law doesn’t actually say.”

Other chapters describe regulation of the internet (net neutrality), card check, the Dodd-Frank financial regulations, and energy regulation. All of these represent the Obama administration either ignoring Congress or creating vast new powers for itself. The chart Kerpen created shows the plays being made.

Obama regulatory extremismKerpen’s chart of Obama regulatory extremism. Click for larger version.

What about regulatory reform? Obama’s doing that. In January he wrote in the Wall Street Journal: “We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses.”

In a chapter titled “The Back Door to the Back Door: Phony Regulation Reform” Kerpen explains that this promise or regulatory reform by the president is a sham. Kerpen describes the executive order that implements regulatory review this way: “The new executive order is the regulatory parallel to the Obama administration’s strategy on federal spending, which is to spend at astonishing, record rates and rack up trillions of dollars in deficits while paying lip service to fiscal responsibility by establishing a fiscal commission.”

And in a gesture of true public service, Kerpen introduces us to Cass Sunstein, the man who is heading the Office of Information and Regulatory Affairs (OIRA), the agency that will be conducting the purported review of regulations. A quote from Sunstein: “In what sense is the money in our pockets and bank accounts fully ‘ours’? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without the support of bank regulators? Could we spend it if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?”

Kerpen sums up Sunstein’s political philosophy of central planning:

The idea of Sunstein’s “nudge” philosophy is that the fatal conceit of central economic planning can somehow succeed if it is subtly hidden from view. Sunstein thinks that if he imposes regulations that steer our choices instead of outright forcing them, he can achieve desirable social objectives. … Given Suinstein’s views and the central role he will have in reshaping federal regulation to be “more effective,” we need to be deeply concerned that any changes that come out of the process may make regulation less apparent, but no less costly — and more effective at crushing genuine individual choice and responsibility and substituting the judgment (even if by a nudge instead of a shove) of a central planner.

The challenge, Kerpen writes in his conclusion to the book, “is to change the political calculus to elevate regulatory fights to the appropriate level in the public consciousness. We must make sure the American people understand that a disastrously bad idea becomes even worse when it’s implemented by backdoor, unaccountable, illegitimate means.”

Kerpen recommends passage of the REINS Act as a way to restore accountability over regulatory agencies to Congress. The two messages Congress needs, he writes, are: “You can delegate authority, but you can never delegate responsibility,” and “If you fail to stop out-of-control regulators, voters will hold you accountable.”

ObamaCare explained: What could go wrong?

An Illinois State Senate candidate who happens to be a physician diagnoses and explains the problems with the Affordable Care Act, also known as ObamaCare. Here’s a transcription of what Barbara Bellar said:

Let me get this straight: We’re going to be gifted with a healthcare plan we are forced to purchase,
and fined if we don’t,
which purportedly covers at least 10 million more people,
without adding a single new doctor,
but provides for 16,000 new IRS agents,
written by a committee whose chairman says he doesn’t understand it,
passed by a congress that didn’t read it but exempted themselves from it,
and signed by a president who smokes,
with funding administered by a treasury chief who didn’t pay his taxes,
for which we will be taxed for four years before any benefits take effect,
by a government which has already bankrupted Social Security and Medicare,
all to be overseen by a surgeon general who is obese,
and financed by a country that’s broke.

So, what the blank could possibly go wrong?

The Obama tax cuts

In the presidential debate last week, President Barack Obama spoke of his tax cuts: “So at the same time that my tax plan has already lowered taxes for 98 percent of families, I also lowered taxes for small businesses 18 times. And what I want to do is continue the tax rate — the tax cuts that we put into place for small businesses and families.”

Are these Obama tax cuts “real” cuts that will lead to economic growth, or just government spending programs in disguise? For tax cuts to be productive in growing the economy, they have to be associated with something positive, namely with work, saving, or investment. What many people positively respond to is a reduction in marginal tax rates, that is, the tax that must be paid on the next dollar earned.

Many of the Obama tax cuts were part of the stimulus bill passed in February 2009. Polls show that very people know of these tax cuts. Many were temporary.

The largest item that benefited most people was the Making Work Pay Tax Credit, a two-year program that rebates $400 per year to individual taxpayers, or $800 per year for married couples. The program was effective for tax years 2009 and 2010 only. This is not a reduction in marginal tax rates, although the program will reduce the average tax rate that people pay. It is simply a reduction in the overall amount of tax someone must pay.

This tax credit is not associated with any positive effort or activity by the recipients other than doing what they already do. The same criticism applies to the Bush tax rebate in 2008, too.

Besides the Making Work Pay Tax Credit, the Obama tax cuts consisted of other tax credits that apply not to everyone, but only to people who qualify.

For example, a child care tax credit pays up to $1,200 per year in child care expenses. Obviously, the only people who can claim this credit are working people with children who chose to place them in daycare. Beyond that, it is not a “tax cut” by any stretch of the imagination. Properly, it is a spending program implemented through the tax system. Sometimes called tax expenditures, these measures often escape the usual scrutiny and appropriations process that spending receives. Since they’re billed as a “tax cut,” they sound like a good thing to most people, as few like paying taxes.

If we need any more evidence that these programs are really spending disguised as tax cuts, consider the description of the child care tax credit as provided by the Internal Revenue Service: “It is a refundable credit, which means taxpayers may receive refunds even when they do not owe any tax.” That’s right. Even if you have no income tax liability, you can still get a tax credit — that is, a payment from the government.

As to the claim of 18 business tax cuts, a CNN analysis finds “If extensions or expansions aren’t double counted, the list comes out to 14 tax breaks — and only five are still around.”

In its analysis of the business tax cuts, a New York Times article concluded “As you can see, some of these aren’t tax cuts in the way many people would define them. Rather, they’re tax incentives — you’ve got to spend money (on health insurance, a new employee or new equipment) to save money.”

An example of one of the temporary business tax measures that were part of the ARRA stimulus bill was bonus depreciation. This measure allowed businesses to capture depreciation of assets more quickly than usual. This reduces taxable income, and therefore would act as an incentive for businesses to make capital investments.

Ironically, when business jets received a similar accelerated depreciation benefit, President Obama denounces this as a harmful tax break.

These measures, while reducing the amount of tax a business might pay, don’t change the marginal tax rate. Reducing marginal tax rates is what contributes to growth.

There has been the temporary payroll tax cut, which is a reduction in tax rates that pay for Social Security and Medicare. This tax, however, applies only to income up to $110,100, so after that level, the reduction no longer applies. Further, this is an example of reducing taxes, but not making corresponding reductions in spending. This means that government has to borrow more, which is a negative factor for economic growth.

Programs that reduce the average tax rate like Obama’s Making Work Pay Tax Credit and the Bush tax rebates of 2008 aren’t effective because they don’t affect the marginal rate — the rate paid on the next dollar earned. While anything that reduces the burden of taxes is welcome, we ought to implement the type of tax cuts that spur economic growth.

Who responds most positively to reductions in marginal tax rates? As Jeffrey A. Miron explains, it is the most economically productive members of society:

The Bush cuts provided lower taxes on ordinary income, especially for taxpayers at the high end of the income distribution. These are some of the most energetic and productive people in society; raising tax rates would discourage their effort and entrepreneurship. High-income taxpayers also have multiple ways of avoiding high tax rates, so any revenue gain from raising rates would be modest. The Bush cuts also lowered taxes on dividend and capital gains income; maintaining these lower rates is even more important for economic performance. Capital is mobile: when it is taxed heavily here, it flees somewhere else, meaning lower investment and employment in the United States. And because capital income taxes discourage investment or drive it overseas, they generate little if any tax revenue. (Jeffrey A. Miron, “Why the Bush Tax Cuts Worked”)

It is these “energetic and productive” people that are responsible for a great deal of business activity and job creation. When these people take steps to avoid taxes it means less productive economic activity and more unproductive tax shelters.

In Slaying Leviathan: The Moral Case for Tax Reform, author Leslie Carbone explains the harm of high marginal taxes, especially progressive taxes, where rates become higher as more income is earned:

The discouragement of earning money by working, saving, or investing inherent in any income tax is exacerbated by progressivity. While any high tax rates are economically destructive, high marginal rates are even worse, because high marginal rates particularly discourage productivity and inhibit economic growth. … By lowering potential pay off, high investment taxes especially discourage risky investment. Discouragement of risky investment squelches technological advancement, because new technologies are the most risky. This means our progressive tax system actually reduces progress and inhibits improve quality of life.

If the goal of the Obama Administration is to create private sector economic growth instead of growth in government, it needs to keep the Bush tax cuts in place and avoid increases in marginal tax rates for everyone, especially the most productive members of society. A better strategy would be to reduce these tax rates farther to create even more economic growth.

Barack Obama, the myth and the reality

The Washington Examiner has produced a lengthy report titled The Obama you don’t know. The reality of Obama is different from the myth, even the myth that First Lady Michelle Obama promoted at the recent Democratic National Convention.

In the introduction to the series, editor Mark Tapscott writes:

In an effort to get a clearer picture of Obama — his shaping influences, his core beliefs, his political ambitions and his accomplishments — The Washington Examiner conducted a four-month inquiry, interviewing dozens of his supporters and detractors in Chicago and elsewhere, and studying countless court transcripts, government reports and other official documents.

Over the years and in two autobiographies, Obama has presented himself to the world as many things, including radical community organizer, idealistic civil rights lawyer, dynamic reformer in the Illinois and U.S. senates, and, finally, the cool presidential voice of postpartisan hope and change.

With his air of reasonableness and moderation, he has projected a remarkably likable persona. Even in the midst of a historically dirty campaign for re-election, his likability numbers remain impressive, as seen in a recent AP-GFK Poll that found 53 percent of adults have a favorable view of him.

But beyond the spin and the polls, a starkly different picture emerges. It is a portrait of a man quite unlike his image, not a visionary reformer but rather a classic Chicago machine pol who thrives on rewarding himself and his friends with the spoils of public office, and who uses his position to punish his enemies.

Summarizing, Tapscott wrote “To paraphrase Tammany Hall’s George Washington Plunkitt, Obama has seen his opportunities and taken them, over and over.”

The series is available at the newspaper’s website at The Obama you don’t know. A report on the series from Fox News is available at 10-part report raises questions about narrative of Obama’s early life. Video is below.


Municipal stormwater regulation on White House agenda

Some scoff at those who raise warnings about overreaching federal regulation. But even though the national economy is suffering and we are drowning in debt, the administration of President Barack Obama can find time to meddle in the regulation of municipal stormwater.

Following is an email from NACo, the National Association of Counties, to county commissioners, presumably across the nation. The email, which presumes that “green” stormwater management practices are most desirable, asks for suggestions from commissioners to present at a national conference on the topic, hosted by the White House.

The agenda for the conference is White House Conference Municipal Stormwater Infrastructure: Going From Grey to Green. Following is the email commissioners received.

From: Julie Ufner [mailto:jufner@naco.org]
Subject: Green Infrastructure Information Request

Next week, I will be representing NACo at the White House’s Stormwater Infrastrucutre [sic] event. The White House asked participants to be prepared to discuss the questions below. If you have any comments or responses to the questions, please feel free to forward those responses no later than COB on Wednesday, September 19th.

1. What do you see as the most significant barriers to the wider use of green infrastructure practices to manage municipal stormwater?

2. What steps should federal agencies, communities, or others take to promote the use of green infrastructure practices in municipal stormwater management?

3. Are there specific infrastructure practices, or categories of practices, that you believe are most effective, provide the greatest benefits, or are most easily implemented?

4. Are there funding strategies for municipal green infrastructure that you have employed and would recommend?

Thank you in advance for any comments you may have.

Julie Ufner
Associate Legislative Director
Environment, Energy and Land Use
National Association of Counties
202-942-4269
jufner@naco.org

Wichita Mayor Carl Brewer on role of government

When President Barack Obama told business owners “You didn’t build that,” it set off a bit of a revolt. Those who worked hard to build businesses didn’t like to hear the president dismiss their efforts.

Underlying this episode is a serious question: What should be the role of government in the economy? Should government’s role be strictly limited, according to the Constitution? Or should government take an activist role in managing, regulating, subsidizing, and penalizing in order to get the results politicians and bureaucrats desire?

Historian Burton W. Folsom has concluded that it is the private sector — free people, not government — that drives innovation: “Time and again, experience has shown that while private enterprise, carried on in an environment of open competition, delivers the best products and services at the best price, government intervention stifles initiative, subsidizes inefficiency, and raises costs.”

But some don’t agree. They promote government management and intervention into the economy. Whatever their motivation might be, however it was they formed their belief, they believe that without government oversight of the economy, things won’t happen.

But in Wichita, it’s even worse. Without government, it is claimed that not only would we stop growing, economic progress would revert to a previous century.

Mayor Carl Brewer made these claims in a 2008 meeting of the Wichita City Council.

In his remarks (transcript and video below), Brewer said “if government had not played some kind of role in guiding and identifying how the city was going to grow, how any city was going to grow, I’d be afraid of what that would be. Because we would still be in covered wagons and horses. There would be no change.”

When I heard him say that, I thought he’s just using rhetorical flair to emphasize a point. But later on he said this about those who advocate for economic freedom instead of government planning and control: “… then tomorrow we’ll be saying we don’t want more technology, and then the following day we’ll be saying we don’t want public safety, and it won’t take us very long to get back to where we were at back when the city first settled.”

Brewer’s remarks are worse than “You didn’t build that.” The mayor of Wichita is telling us you can’t build that — not without government guidance and intervention, anyway.

Many people in Wichita, including the mayor and most on the city council and county commission, believe that the public-private partnership is the way to drive innovation and get things done. It’s really a shame that this attitude is taking hold in Wichita, a city which has such a proud tradition of entrepreneurship. The names that Wichitans are rightly proud of — Lloyd Stearman, Walter Beech, Clyde Cessna, W.C. Coleman, Albert Alexander Hyde, Dan and Frank Carney, and Fred C. Koch — these people worked and built businesses without the benefit of public-private partnerships and government subsidy.

This tradition of entrepreneurship is disappearing, replaced by the public-private partnership and programs like Visioneering Wichita, sustainable communities, Greater Wichita Economic Development Coalition, Regional Economic Area Partnership (REAP), and rampant cronyism. Although when given a chance, voters are rejecting cronyism.

We don’t have long before the entrepreneurial spirit in Wichita is totally subservient to government. What can we do to return power to the people instead of surrendering it to government?

Wichita Mayor Carl Brewer, August 12, 2008: You know, I think that a lot of individuals have a lot of views and opinions about philosophy as to, whether or not, what role the city government should play inside of a community or city. But it’s always interesting to hear various different individuals’ philosophy or their view as to what that role is, and whether or not government or policy makers should have any type of input whatsoever.

I would be afraid, because I’ve had an opportunity to hear some of the views, and under the models of what individuals’ logic and thinking is, if government had not played some kind of role in guiding and identifying how the city was going to grow, how any city was going to grow, I’d be afraid of what that would be. Because we would still be in covered wagons and horses. There would be no change.

Because the stance is let’s not do anything. Just don’t do anything. Hands off. Just let it happen. So if society, if technology, and everything just goes off and leaves you behind, that’s okay. Just don’t do anything. I just thank God we have individuals that have enough gumption to step forward and say I’m willing to make a change, I’m willing to make a difference, I’m willing to improve the community. Because they don’t want to acknowledge the fact that improving the quality of life, improving the various different things, improving bringing in businesses, cleaning up street, cleaning up neighborhoods, doing those things, helping individuals feel good about themselves: they don’t want to acknowledge that those types of things are important, and those types of things, there’s no way you can assess or put a a dollar amount to it.

Not everyone has the luxury to live around a lake, or be able to walk out in their backyard or have someone come over and manicure their yard for them, not everyone has that opportunity. Most have to do that themselves.

But they want an environment, sometimes you have to have individuals to come in and to help you, and I think that this is one of those things that going to provide that.

This community was a healthy thriving community when I was a kid in high school. I used to go in and eat pizza after football games, and all the high school students would go and celebrate.

But, just like anything else, things become old, individuals move on, they’re forgotten in time, maybe the city didn’t make the investments that they should have back then, and they walk off and leave it.

But new we have someone whose interested in trying to revive it. In trying to do something a little different. In trying to instill pride in the neighborhood, trying to create an environment where it’s enticing for individuals to want to come back there, or enticing for individuals to want to live there.

So I must commend those individuals for doing that. But if we say we start today and say that we don’t want to start taking care of communities, then tomorrow we’ll be saying we don’t want more technology, and then the following day we’ll be saying we don’t want public safety, and it won’t take us very long to get back to where we were at back when the city first settled.

So I think this is something that’s a good venture, it’s a good thing for the community, we’ve heard from the community, we’ve seen the actions of the community, we saw it on the news what these communities are doing because they know there’s that light at the end of the tunnel. We’ve seen it on the news. They’ve been reporting it in the media, what this particular community has been doing, and what others around it.

And you know what? The city partnered with them, to help them generate this kind of energy and this type of excitement and this type of pride.

So I think this is something that’s good. And I know that there’s always going to be people who are naysayers, that they’re just not going to be happy. And I don’t want you to let let this to discourage you, and I don’t want the comments that have been heard today to discourage the citizens of those neighborhoods. And to continue to doing the great work that they’re doing, and to continue to have faith, and to continue that there is light at the end of the tunnel, and that there is a value that just can’t be measured of having pride in your community and pride in your neighborhood, and yes we do have a role to be able to help those individuals trying to help themselves.

Obama: I inherited this crisis

23 million Americans can’t be wrong
By Rick Manning, Americans for Limited Government

The faces of Labor Day are different in 2012 than they have been in the past, all 23 million of them.

The traditional end of summer is greeted with cookouts, last splashes in the swimming pool, and final trips to the beach, but it is something much more in this election year.

Labor Day is a reminder of the unemployed, underemployed and those who don’t even bother looking for a job anymore because they don’t believe any are available.

Read more at NetRightDaily.com.

Governor Romney is right: End the wind production tax credit

U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, contributes the following article on the harm of government involvement in energy markets, wind power specifically. Pompeo has written extensively on energy; see Pompeo on energy tax simplification, Era of energy subsidies is over, and Free market energy solutions don’t jeopardize national security. He has also introduced legislation to end all tax credits for energy, H.R. 3308: Energy Freedom and Economic Prosperity Act.

There’s been a steady drumbeat from those seeking an extension of the wind production tax credit. For many reasons, including some that former Massachusetts Gov. Mitt Romney has carefully highlighted in his opposition, this is a bad idea.

First, an extension continues this unsettling policy trend in which citizens are asked to bear all the risks and gain none of the rewards. This socialization of risks and privatization of profits guarantees disasters, for corporate boards and even their federal overseers can become careless and, in some instances, reckless. This fact was clearly demonstrated by the Solyndra debacle — when a company with close ties to the Obama administration lost more than a half billion dollars of taxpayers’ money. At the heart of that fiasco was both the company and the administration’s indifference to the taxpayers.

Solyndra also revealed something else damaging about federal involvement in markets: the potential for political corruption. It’s clear that the Obama administration became emotionally, and inappropriately, invested in the fortunes of one company and one sector. When that happens, the system is compromised, cronyism flourishes and corruption is inevitable.

President Barack Obama talks about the need to “invest” in alternative energy sources. But the reality is that he is not investing his money — he’s spending yours. I’m not sure that too many Americans would choose the president to manage their retirement accounts. His record — a jobless and exceedingly shallow recovery — is not good.

With this production tax credit extension, the wisdom of the investment is especially dubious. Wind companies and their lobbyists have, for the last year, been telling all who would listen that the expiration of the tax credit could spell doom for their industry. Obama repeats this claim regularly on the campaign trail.

But what does that say about the industry? If you need a tax credit to compete, you are probably not that competitive.

Moreover, the tax credit is not de minimis for either taxpayers or companies that are lobbying for it. It will cost the taxpayers more than 12 billion dollars inside the budget window. Worse, the credit is set at 2.2 cents per kilowatt hour. Just to compare, the national average for produced power is around 6 cents per kilowatt hour. That means that the wind industry gets an almost 40 percent subsidy for each unit it produces. How many companies would like that?

You also have to remember that wind power enjoys a mandate in more than 30 states. That is, regardless of cost — or price to ratepayers — utilities must use wind or other renewables for specific amounts of power generation. So, the wind companies enjoy not only a tax credit, but a must-use mandate as well — regardless of cost.

It would be one thing if we were running out of natural gas and confronted a real national requirement to use alternative energy. But it’s the reverse. The United States has more traditional energy resources than anywhere else on Earth, according to the Congressional Research Service. With the surge in production from the shale formations, a new Barclays report just concluded, natural gas will likely dominate wind in the marketplace for the foreseeable future.

Even now, in places like Williston, N.D., companies are hiring everyone who can get there to work on rigs or in ancillary jobs. If the president is genuinely worried about jobs, maybe he should visit the Bakken in North Dakota, or the Marcellus in Pennsylvania or the Eagle Ford in Texas.

Using wind power to generate electricity is not a new idea. The first windmills used to generate electricity went up in the 19th Century. The production tax credit is also not a new idea. It is now about 20 years old.

Romney’s opposition to continuing the wind subsidy is absolutely correct. At some point, an industry has to either succeed or fail on its own merits.

For wind companies, we are at that point now.

Energy subsidies exposed

On the campaign trail, President Barack Obama calls for an end to energy subsidies for the fossil fuel industry. It turns out, however, that this industry receives relatively little subsidy, while the president’s favored forms of energy investment — wind and solar — receive much more. Additionally, coal, oil, and gas industries paid billions in taxes to the federal government, while electricity produced by solar and wind are a cost to taxpayers.

Saturday’s Wall Street Journal piece The Energy Subsidy Tally: Wind and solar get the most taxpayer help for the least production gathers the facts: “The nearby chart shows the assistance that each form of energy for electricity production received in 2010. The natural gas and oil industry received $2.8 billion in total subsidies, not the $4 billion Mr. Obama claims on the campaign trail, and $654 million for electric power. The biggest winner was wind, with $5 billion. Between 2007 and 2010, total energy subsidies rose 108%, but solar’s subsidies increased six-fold and wind’s were up 10-fold.”

When looking at subsidy received per unit of power produced, the Journal found that oil, gas, and coal received $0.64 per megawatt hour, hydropower $0.82, nuclear $3.14, wind $56.39, and solar $775.64. Commented the Journal: “So for every tax dollar that goes to coal, oil and natural gas, wind gets $88 and solar $1,212. After all the hype and dollars, in 2010 wind and solar combined for 2.3% of electric generation — 2.3% for wind and 0% and a rounding error for solar. Renewables contributed 10.3% overall, though 6.2% is hydro. Some ‘investment.’”

In Kansas, there is disagreement among elected officials over wind power. Kansas Governor Sam Brownback and U.S. Senator Jerry Moran favor the production tax credit that makes wind feasible. Together they penned an op-ed that tortures logic to defend the tax credits. Each has spoken out on his own on the national stage. See Brownback on wind, again and Wind energy split in Kansas.

Brownback has also supported, at both federal and state levels, renewable portfolio standards. These in effect mandate the production of wind power. Recently Kansas Policy Institute produced a report that details the harmful effect of this law: “Renewable energy is more expensive than conventional energy, so government mandates are necessary to ensure that more renewable energy is purchased. However, the unseen consequences of well-intended efforts to increase energy independence are rarely considered. The authors estimate that by 2020, the average household’s electricity bill will increase by $660, approximately 12,000 fewer jobs will have been created, and business investment in the state will be $191 million less than without the mandate.” See The Economic Impact of the Kansas Renewable Portfolio Standard.

In Wichita, Mayor Carl Brewer is recruiting wind power companies to come to Wichita. If he is successful, you can be sure it will be at great cost to Kansas and Wichita taxpayers.

Contrast with the position taken by U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, which includes the Wichita metropolitan area. Recently he wrote: “Supporters of Big Wind, like President Obama, defend these enormous, multi-decade subsidies by saying they are fighting for jobs, but the facts tell a different story. Can you say ‘stimulus’? The PTC’s logic is almost identical to the President’s failed stimulus spending of $750 billion — redistribute wealth from hard-working taxpayers to politically favored industries and then visit the site and tell the employees that ‘without me as your elected leader funneling taxpayer dollars to your company, you’d be out of work.’ I call this ‘photo-op economics.’ We know better. If the industry is viable, those jobs would likely be there even without the handout. Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.”

Pompeo has introduced legislation in Congress that would end tax credits for all forms of energy production. See H.R. 3308: Energy Freedom and Economic Prosperity Act.

The Energy Subsidy Tally
Wind and solar get the most taxpayer help for the least production.

President Obama traveled to Iowa Tuesday and touted wind energy subsidies as the path to economic recovery. Then he attacked Mitt Romney as a tool of the oil and gas industry. “So my attitude is let’s stop giving taxpayer subsidies to oil companies that don’t need them, and let’s invest in clean energy that will put people back to work right here in Iowa,” he said. “That’s a choice in this election.”

There certainly is a subsidy choice in the election, but the facts are a lot different than Mr. Obama portrays them. What he isn’t telling voters is how many tax dollars his Administration has already steered to wind and solar power, and how much more subsidized they are than other forms of electricity generation.

Continue reading at the Wall Street Journal (subscription required)

Pompeo: Ending tax credits for energy doesn’t violate pledge

In a news conference last week, U.S. Representative Mike Pompeo of Wichita and two others criticized President Barack Obama for misunderstanding of the meaning of a taxpayer protection pledge that Pompeo has signed.

The pledge is the famous pledge advanced by Grover Norquist of Americans for Tax Reform, where signers pledge not to increase taxes. The “tax increase” the president refers to are various tax credits that benefit some forms of energy production, particularly wind and solar power. Norquist, along with Senator Jim DeMint of South Carolina, participated in the conference.

Pompeo said the president “called out” those who signed the ATR pledge, specifically arguing that allowing the wind production tax credit (PTC) to expire would be a violation of the pledge. The ATR taxpayer protection pledge is to “One, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and two, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

Pompeo has introduced legislation in the House of Representatives that would end tax credits on all forms of energy production. By itself, that might be a violation of the pledge. The bill, however, specifies that the savings from the elimination of the spending on tax credits would be used to lower the corporate income tax rate. The use of the savings to reduce tax rates is in agreement with the second plank of the ATR pledge.

Pompeo’s bill is H.R. 3308: Energy Freedom and Economic Prosperity Act. This bill is currently in committee. Sen. DeMint introduced an amendment to a Senate bill that would have accomplished the same, but the amendment received only 26 votes. Pompeo characterized this as an advance, as just a few years ago, he said such a bill or amendment would have received only a few votes. But this received the votes of a majority of Republican members of the Senate, including that of minority leader Mitch McConnell.

In his remarks, DeMint said that while the president talks about eliminating corporate loopholes, he is hypocritical in his criticism of this legislation. If Congress could eliminate the tax credits — loopholes — for big oil and all energy and lower tax rates for all, it would be “a model for what we could do across our whole tax code.”

Norquist emphasized the temporary nature of many loopholes or tax advantaged treatment added to the tax code. These are usually pitched as temporary measures, needed because the policy goal is good, the industry is in its infancy, and it needs temporary help. But as in the case of the wind PTC, these special advantages are often extended or made permanent.

The issue of special tax treatment for the oil and gas industry arose. Norquist said that these tax considerations almost always fall into the categories of depreciation and expensing, which are available to all industries. He said if these are available to General Electric and Wal-Mart, they should also be available to all industries, including oil and gas.

Not everyone, including all conservatives, agree that tax credits are a form of spending implemented through the tax code. Recently Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas made the case for extending the production tax credit for the production of electrical power by wind. See Wind tax credits are government spending in disguise.

In their op-ed, the Kansans argued the PTC is necessary to let the wind power industry “complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace.” As the PTC has been in effect is 1992, a period of 20 years, Norquist’s warning about the temporary nature of these programs is relevant.

The proper way to view the PTC is as a government spending program, recognizing the true economic effect of tax credits. Only recently are Americans coming to realize this, and as a result, the term “tax expenditures” is coming into use to accurately characterize the mechanism of tax credits. Canceling this spending is what would let tax rates be reduced, according to Pompeo’s proposed legislation.

Amazingly, Brownback and Moran do not realize this, at least if we take them at their written word when they write: “But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business.” (Emphasis added.)

Obama’s wasteful spending highlighted

A new video advertisement created by Americans for Prosperity highlights wasteful government spending in the administration of President Barack Obama.

The ad highlights billions of stimulus dollars that were given to foreign companies, mostly to subsidize their own green energy projects. AFP President Tim Phillips said “The Obama Administration continues to waste our tax dollars trying to pick winners and losers. This leads to overspending, no new job creation, and inevitably creates government cronyism. The President wasted some $530 million on Solyndra, but now we’re finding billions more given to ‘green energy’ companies overseas. The American people deserve to know the disturbing details of how their tax dollars are being wasted in pursuit of an ideological agenda.”

Kansas and Wichita quick takes: Friday March 30, 2012

Lee Fang: wrong again. “At 9 a.m. on Tuesday, March 27, 2012, when most civic-minded Americans were focused on the historic Supreme Court oral arguments about Obamacare, Lee Fang, a left-wing blogger for the liberal Republic Report blog, was posting yet another diatribe attacking Charles and David Koch. As usual, Fang’s piece stretches, distorts, ignores and misstates the facts.” So starts Cleta Mitchell writing in the Daily Caller piece Who’s paying Lee Fang and other left-wing bloggers to attack the Kochs? Readers should not be surprised that Fang is wrong again — it’s become his calling card. The political left doesn’t care, as long as Fang keeps up his attack on Charles and David Koch. Concludes Mitchell: “Fang, of course, gets away with making completely false statements because he sprinkles the Koch name as a negative modifier for every other noun in his blog, and the apparent rule is that there is no concern for facts or truth when a liberal attacks the Kochs. After reading Fang’s drivel, glancing at the Republic Report and United Republic websites and reading about their mission of getting money out of politics and exposing truth and corruption and all of that, here’s my question: Where do these sites get their money? And why don’t they publicly disclose their donors? Fang’s post and these projects are simply part of the massively well-funded liberal attack machine that is designed to vilify the Kochs and intimidate prospective conservative donors into staying on the sidelines. Indeed, Fang is hoping to intimidate all donors to conservative causes and organizations. … Whenever conservatives demonstrate the will and the resources to fight liberal orthodoxy, liberals become hysterical. The left tolerates diversity except when it comes to diversity of opinion. These ongoing attacks on the Kochs are outrageous and won’t stop until liberals have cut off conservative groups’ funding and silenced conservative voices. That isn’t likely to happen.”

Action on sustainability. Next week the Sedgwick County Commission takes up the issue of whether to participate in a HUD Sustainable Communities Regional Planning Grant. Coverage of the last discussion the commission had on this matter is at Sedgwick County considers a planning grant. So that citizens may be informed on this issue, Americans for Prosperity, Kansas is holding an informational event on Monday April 2, from 7:00 pm to 8:30 pm at Spangles Restaurant, corner of Kellogg and Broadway. (Uh-oh. If the Kansas Jayhawks make it to the NCAA basketball title game, the television broadcast starts at 8:00 pm.) The meeting is described as follows: “On April 4, 2012 at 9:00 am on the 3rd floor of the Sedgwick County Courthouse, the Sedgwick County Commission will be holding a public hearing to consider approval of Sedgwick County’s participation as the fiscal agent on behalf of the Regional Economic Area Partnership (REAP) Consortium with an ‘in-kind’ commitment of $120,707 to implement a Regional Plan for Sustainable Communities Grant for South Central Kansas. Public comment will be invited. Learn about the Sustainable Communities Plan for South Central Kansas. Find out how you can get involved in this issue as a citizen. Consider testifying before the County Commission. Consider attending the Commission meeting as an interested citizen.” … For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

Economic fascism. From Independent Institute: “On Friday, March 16, President Obama signed an executive order on national defense that amends and updates the executive branch’s sweeping powers over energy, transportation, human resources, and raw materials. ‘It shows plainly that private control of economic life in the United States, to the extent that it survives, exists solely at the president’s pleasure and sufferance,’ writes Independent Institute Senior Fellow Robert Higgs. ‘Whenever he chooses to put into effect a full-fledged operational fascist economy, controlled from his office, he has the statutory power to do so; all he has to do is to murmur the words ‘national defense’ and give the order.’ … Obama’s executive order sets no new precedent, Higgs notes. It’s just the latest in a string of edicts authorizing central economic planning that dates back at least to the Defense Production Act of 1950, a wartime statute that was never repealed after its passage during the Korean War. It’s also a classic example of how wars create new government powers that don’t go away after peace resumes.”

Immigration. From LearnLiberty.org, a project of Institute for Humane Studies: “Is it true that immigration raises the U.S. unemployment rate? Is it true that immigration affects U.S. income distribution? The conventional wisdom says that both of these things are true. However, economist Antony Davies says there is evidence to suggest that they are not. Looking at the data, there is no relationship between the rate of immigration and the unemployment rate, nor is there a relationship between the rate of immigration and income inequality. Further, there is evidence to suggest that immigrants actually create more American jobs.”

Kansas and Wichita quick takes: Friday March 23, 2012

Pompeo meeting tomorrow. From the congressman’s office: “Kansas Fourth District Congressman Mike Pompeo will host a town hall meeting at the WSU Hughes Metroplex in Wichita on Saturday, March 24 at 11:30 am. Congressman Pompeo will take questions from constituents and discuss issues related to Congress and the federal government. The public and members of the media are welcome and encouraged to attend.” The WSU Hughes Metroplex is located at 5015 East 29th Street North.

Obamacare anniversary. Listening to President Barack Obama you wouldn’t know it, but it’s the second anniversary of his signature legislative achievement. The problem? It’s very unpopular. A recent poll found “Two-thirds of Americans say the U.S. Supreme Court should throw out either the ‘individual mandate’ in the federal health care law or the law in its entirety — signaling the depth of public disagreement with that controversial element of health care reform.” Locally, two Congressmen are not happy with the law, either. In a statement Last week U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, wrote “Two years ago, President Obama began a terrible experiment in government-run health care. Even though we are still two years away from the full implementation of the law, the devastating harm is already coming to light. There is no shortage of new ‘unintended consequences,’ usually with taxpayers and patients paying the price — literally or figuratively. The universal rule of medicine is ‘Do No Harm,’ yet the only thing ObamaCare seems to do is damage. … Americans were assured we could keep our health insurance if we like it, but the Congressional Budget Office now estimates as many as 20 million Americans could lose their employer-based coverage because of ObamaCare.” … U.S. Representative Mike Pompeo of Wichita wrote “My conservative colleagues and I warned during the debate over Obamacare that having the government take over 1/6th of the U.S. economy would not reduce health care costs or improve access to health care, but Democrats rammed the bill down the throats of the American people anyway. At the time, then-Speaker Nancy Pelosi infamously declared that the Democrats needed to pass it in order to know what was in it. Now we know. Obamacare’s price tag has doubled and the newest projections show that up to 88 million Americans will not be able to ‘keep their plan if they like it,’ as President Obama so often promised in his sales pitch.”

Ambassador Hotel. The free-market organization Heartland Institute contributes coverage in the special election in Wichita regarding the Ambassador Hotel. Of special note is how some people just don’t get it. Writes the reporter: “Reflecting on the defeat of the rebate, [Wichita Downtown Development Corporation chair Tom] Docking said, ‘The anti-development, anti-tax populace out there are numerous and they’re well organized.’ Weeks objected to this characterization. ‘We’re not anti-development. I am a capitalist. . . Anti-tax, yes, we’re very much that. But ‘organized’ I don’t think applies to us at all. We beat it back this one little time.’” … Docking was also quoted as saying the election “was portrayed in a lot of circles in a way that was not accurate.” I should mention that WDDC and Docking were extended several invitations to appear at forums where the issues could be discussed. No one would agree, with Docking and others preferring to level their charges in forums where they knew they would not be challenged or held accountable.

Stossel on “what is fair?”

What is fair? It’s a timely question, as President Barack Obama has made this question a theme of his campaign for re-election. This week John Stossel took up this question in an episode of his weekly television show.

In his closing segment, Stossel summed up what was learned on the show:

The idea that government can make life more fair appeals to people. At least it does until they really think about it. So, I’ll try to help. The president says fairness requires higher taxes. But, is it fair that the richest ten percent of Americans already pay more of the nation’s income tax than the richest ten percent in every other industrial nation, even Sweden?

Is it fair, as Art Laffer said, that American corporations pay the highest corporate tax rate in the world?

And beyond taxes: the president says school vouchers aren’t fair because they’ll take money from government schools. But is it fair that the president sends his daughters to elite private schools, while denying other kids that opportunity? No, I would say.

Clearly the term “fair” can be spun lots of ways. Politicians, for example, like to compare peoples’ incomes. But do equal incomes make life fair?

Think about this. Who’s happier: this good-looking Florida surfer dude? He hangs out at the beach all day. I assume he’s popular with the ladies, but doesn’t make much money. Versus: This computer geek. This is Bill Gates when he was younger. He’s much richer, but he spent hours of his life hunched over a computer screen. I don’t presume to know whose life is better. …

It seems reasonable to want government to make life more fair. But when government takes your money and freedom to try to do that, government makes life worse. It makes everyone poor. And the biggest threat is not just that government makes us poor, it makes us less. As government gets bigger, individuals get smaller. What’s really fair is to have limited government. That means the same rules for everyone. No special favors, no handouts.

Obama vs. the American Dream

By U.S. Representative Tim Huelskamp, who represents the Kansas first district.

Do politics reflect culture, or does culture reflect politics?

In a representative form of government, what happens in Washington should be a reflection of what happens in each of the communities and among the people of our country. Those elected to serve are to carry to Washington the views, ideas, and priorities of their constituents. Not the other way around.

But increasingly, President Obama is attempting to transform the culture of our nation using manipulative political means.

President Obama seeks to replace America’s culture of self-reliance with a culture of dependence, religious liberty with intolerance and compulsion, and the American Dream with more American debt. He relies on the politics of envy and the punishment of success to manipulate the American people into believing that without government they are missing something to which everyone is entitled regardless of effort or merit. He argues “fairness” means everyone has the same outcome, not the same opportunity.

By standing in the way of economic recovery, the Obama Administration has forced a record number of people on to food stamps. But, the President is just fine with that. It means more Americans depend on political elites like him who merely take resources rather than produce them.

By forcing Catholic employers to pay for or provide contraception and abortion drugs, demanding health care providers and medical students to take part in activities that violate their consciences, or censoring military chaplains to preach sermons or perform ceremonies contrary to the tenets of their faiths, the Obama Administration has signaled its willingness to trample on religious liberty. It means bureaucrats have a greater grip on the American people than churches, synagogues, and mosques. It turns an “appeal to a higher power” from a prayer to God to a call to a Washington theocracy.

By refusing to deal with $16 trillion in debt — an I.O.U. larger than the size of the entire American economy — the Obama Administration is comfortable with indebting our children and grandchildren for spending they neither made nor consented to. All the while, Obama has displayed its contempt for those who are already shouldering a disproportionate burden of current taxes. When one percent pays 37 percent of all income taxes, the Obama Administration has the nerve to argue that it is not enough. Never mind that close to half of all Americans pay nothing in federal income taxes.

Making acceptable a culture of dependence, intolerance for faith, and demonization and punishment of hard work and success will have profound negative consequences for our culture. But, perhaps this is why the Obama Administration is doing so.

While those with the bully pulpit should seek to inspire greatness in the American people, all President Obama seems to do is espouse resentment. He wants Americans to envy straw men. He wants them to believe that they are but mere victims of a grand conspiracy to rid them of any and all any recognition and reward for their hard work. Simultaneously, he wants them to believe that hard work should not be recognized and rewarded; that the fruits of their labor are to be handed over to the elite government for its “wise and prudent” redistribution.

Contrary to President Obama’s interpretation of American history and culture, America’s success story is and will continue to be the result of limited government answering the views, ideas, and priorities of its people, not the result of government telling the American people what they need. It is the result of individuals being allowed to thrive, success being rewarded, and the spirit of charity and community responding to the immediate needs of those around us. And, it is the result of generation after generation leaving things better than they found them for the next not because government says to do so, but because God so instructs.

Congressman Tim Huelskamp represents the First District of Kansas. He serves on the House Budget, Agriculture, and Veterans’ Affairs Committees. He can be found at huelskamp.house.gov.

Obama fundraising on anti-Koch obsession

Are Americans tired of hearing that this year’s election is all about an obsession with defeating President Barack Obama? For those who know that Obama took a bad economic situation and implemented policies that made it worse — yes, we want to defeat the current president. The president’s election campaign, however, turns that concern for the future of our country into “obsession” and uses it to raise money. As is often the case, the target of a recent fundraising letter is Charles G. Koch and David H. Koch, who are principals of Wichita-based Koch Industries. While the letter attacks the Kochs for “jacking up prices at the pump” the real reason why liberals don’t care for them is for their unwavering support for the causes of economic freedom, free markets, and limited government that Charles and David Koch have advocated for very many years.

By the way, I’ve never heard an answer to this question: If oil companies have the power to “jack up” gasoline prices, why do they let the price go down, as it often does? And why is the price not higher than it is?

Fortunately for America, the Koch brothers and Koch Industries do not back down from these attacks. Following, the company responds.

Mr. Jim Messina
Campaign Manager
Obama for America

Dear Mr. Messina:

Because every American has the right to take part in the public discourse on matters that affect the future of our country, I feel compelled to respond directly about a fundraising letter you sent out on February 24 denouncing Koch. It is both surprising and disappointing that the President would allow his re-election team to send such an irresponsible and misleading letter to his supporters.

For example, it is false that our “business model is to make millions by jacking up prices at the pump.” Our business vision begins and ends with value creation — real, long-term value for customers and for society. We own no gasoline stations and the part of our business you allude to, oil and gas refining, actually lowers the price of gasoline by increasing supply. Either you simply misunderstand the way commodities markets work or you are misleading your supporters and the rest of the American people.

Contrary to your assertion that we have “committed $200 million to try to destroy President Obama,” we havestated publicly and repeatedly since last November that we have never made any such claim or pledge. It is hard to imagine that the campaign is unaware of our publicly stated position on that point. Similarly, Americans for Prosperity is not simply “funded by the Koch brothers,” as you state — rather it has tens of thousands of members and contributors from across the country and from all walks of life. Further, our opposition to this President’s policies is not based on partisan politics but on principles. Charles Koch and David Koch have been outspoken advocates of the free-market for over 50 years and they have consistently opposed policies that frustrate or subvert free markets, regardless of whether a Democrat or a Republican was President.

f the President’s campaign has some principled disagreement with the arguments we are making publicly about the staggering debt the President and previous administrations have imposed on the country, the regulations that are stifling business growth and innovation, the increasing intrusion of government into nearly every aspect of American life, we would be eager to hear them. But it is an abuse of the President’s position and does a disservice to our nation for the President and his campaign to criticize private citizens simply for the act of engaging in their constitutional right of free speech about important matters of public policy. The implication in that sort of attack is obvious: dare to criticize the President’s policies and you will be singled out and personally maligned by the President and his campaign in an effort to chill free speech and squelch dissent.

This is not the first time that the President and his Administration have engaged in this sort of disturbing behavior. As far back as August, 2010, Austan Goolsbee, then the President’s chief economic advisor, made public comments concerning Koch’s tax status and falsely stated that the company did not pay income tax, which triggered a federal investigation into Mr. Goolsbee’s conduct that potentially implicated federal law against improper disclosure of taxpayer information. Last June, your colleagues sent fundraising letters disparaging us as “plotting oil men” bent on “misleading people” with “disinformation” in order to “smear” the President’s record. Those accusations were baseless and were made at the very same time the president was publicly calling for a more “civil conversation” in the country.

It is understandable that the President and his campaign may be “tired of hearing” that many Americans would rather not see the president re-elected. However, the inference is that you would prefer that citizens who disagree with the President and his policies refrain from voicing their own viewpoint. Clearly, that’s not the way a free society should operate.

We agree with the President that civil discourse is an American strength. That is why it is troubling to see a national political campaign apparently target individual citizens and private companies for some perceived political advantage. I also hope the President will reflect on how the approach the campaign is using is at odds with our national values and the constitutional right to free speech.

Sincerely,
Philip Ellender
President, Government & Public Affairs
Koch Companies Public Sector, LLC

This letter was originally published at KochFacts.com.

The Democrats continue unjustified attacks on taxpayers and job creators

The following article by U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, including the Wichita metropolitan area, explains — yet again — how ridiculous it is for President Barack Obama and others to attack Wichita-based Koch Industries on the Keystone XL pipeline issue. Pompeo explains that Koch has no financial interest in the pipeline, what “intervenor” status means, and who really stands to benefit if the pipeline is not built. Pompeo hints at who it is, but I’ll be more direct: Warren Buffet. A news article that explains how Warren will personally benefit from blocking the Keystone XL pipeline is Buffett’s Burlington Northern Among Pipeline Winners.

The Democrats continue unjustified attacks on taxpayers and job creators

By U.S. Representative Mike Pompeo

The President and his allies, including those in Congress, have shown what a nasty, personal, and abusive re-election campaign we are about to experience. A recent sideshow in my committee in Congress provides yet another clear and shocking example.

A recent letter from Representatives Henry Waxman and Bobby Rush, both Democrats, demanded a live witness and testimony from “a representative of Koch Industries” at a hearing on the Keystone XL pipeline, scheduled to be held just two days later. The frivolous nature of the request is proven by that plainly unreasonable deadline. But the partisan tactics go far beyond that.

Even if Koch Industries had a financial interest in the Keystone XL pipeline, what possibly could be wrong with that? Perhaps more importantly, under what circumstances would such an interest be worthy of a congressional inquisition? Charles Koch and David Koch, co-owners of Koch Industries, are citizens, taxpayers, entrepreneurs, and employers. Their companies employ nearly 50,000 people in the U.S. alone. The company maintains its headquarters in the district I represent, employing 2,600 great Kansans. The company and its employees are among the most hard-working and generous in our community. The company has never been bailed out by the American taxpayers. And given that Americans are desperate for jobs, we should be begging entrepreneurs to look for new opportunities, not attacking them simply because their companies might make a profit.

The facts are clear: Koch Industries does not have a financial stake in the pipeline — why, therefore, should its officials become part of the all-too-familiar congressional committee circus? The facts are straightforward and a matter of public record. Koch Industries has repeatedly stated that it does not have a financial stake in the pipeline: It does not own the pipeline, it has no role in the pipeline’s design, it is not one of the shippers who have signed contracts to use the pipeline, and it will not build the pipeline.

Democrats dug deep for some excuse to attempt to haul Koch officials in for a public flogging. What did they find? A 2009 attempt by a Koch subsidiary to obtain “intervenor” status in a Canadian legal proceeding, in order to track the approval process for the pipeline. Wishing to know the fate of the pipeline, and having an interest in whether or not the pipeline is built — as thousands of frustrated American workers and consumers do — obviously does not amount to a financial interest in the pipeline’s construction. Indeed, the Sierra Club of Canada applied to “intervene” in the same proceeding. Notably, no one has alleged that Congress should investigate the Sierra Club’s interest in the pipeline project. So the “intervenor” ploy is a patent sham, and provides no basis for harassing Koch Industries.

It is also difficult to believe that Members of Congress really think that a particular company’s asserted financial interest in a project is, or should be, relevant to the merits of that project. It becomes still harder to believe, given the decision to target only Koch Industries and the Kochs — and no other company or individual. Doubtless many companies and individuals stand to benefit, or to be harmed, depending on whether President Obama’s decision to delay the pipeline is allowed to stand. News accounts have mentioned a number of those who might reap financial windfalls from the pipeline’s demise, including at least one of President Obama’s most prominent supporters and donors. (Hint: His secretary was the President’s highly visible prop at the State of the Union address.) But two congressmen directed their attention exclusively toward the Kochs, who — as successful businessmen and outspoken critics of the President’s job-killing, statist programs — have been targets for the Administration and its allies for many months.

Indeed, the very first line of President Obama’s very first campaign advertisement for the 2012 election attacks the Koch brothers. And liberal blogs and publications have published countless slanted pieces on Koch Industries, heavy on innuendo and light on facts. The Obama Administration has long been criticized for maintaining a de facto “enemies list” of its perceived political opponents, whether they are respected Supreme Court Justices, disfavored reporters, or private citizens who just want to keep their own doctors. The Democrats’ obsession with the Kochs as a political target is, indeed, additional evidence of a truly Nixonian approach to politics. That the Obama Administration and its allies use private citizens as symbols to be attacked and vilified is both unfair and deeply threatening to our civic life and the rule of law.

America deserves better from its elected officials. To be sure, the serious challenges facing the country often generate heated discussion and disagreement. But there is no justification for Democrats who want to haul American citizens before Congress for the exclusive purpose of political abuse. Congressional hearings should not be hijacked by naked political opportunism; legitimate business creators should not be vilified; and Congress should focus on the many policy questions before it, rather than wasting time in an illegitimate pursuit of the Administration’s perceived “enemies.”

Mr. Pompeo represents the Fourth Congressional District of Kansas. He serves on the House Committee on Energy and Commerce, as well as the Subcommittee on Energy and Power. A version of this article appeared at Politico.