The Forgotten Man

At the heart of the socialist policies is "The Forgotten Man:"

The "forgotten man" was a term coined by a great conservative pro-market, pro-growth professor named William Graham Sumner. In an 1883 essay, he asserted: "As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine . . . what A, B, and C shall do for X."

Sumner wanted to know about C, the one he called "the forgotten man." As Shlaes explains, "[t]here was nothing wrong with A and B helping X. What was wrong was the law, and the indenturing of C, his forgotten man, to the cause." Sumner wrote of the forgotten man: "He works, he votes, generally he prays -- but he always pays -- yes, above all, he pays."

People see injustice: there are those out there who cannot afford one thing or another. So people come up with some grand idea of how you can get everyone paid for. All the As and Bs out there think that those who can afford things should give up some of their money to pay for those who cannot.

That's all well and fine with me.

The problem arises when one suggests that we use government to force one person's compassion onto others.

If it is the generally accepted moral thing to help others out, then why is it necessary to force others to do this; would they not give of their money freely?

Compassion isn't manufactured by government force. And looking out for person X by exploiting person C, the forgotten man, via government into serving A or B's moral ideals isn't compassion either: its coercion.

Still More Tax Increases

Voters in Kalamazoo County have been repeatedly hit by demands for tax increases over the last few years. Hikes for a juvenile home, bus system, KRESA, and KPS were approved, while hikes for a jail, Croyden school, and Portage schools were rejected.

Still more tax increases are in the pipeline.

The Portage School Board wants a huge tax increase. For the board, it seems the only question is whether the increase should be for $110 million or $125 million. Voters shot down a $145 million tax hike in February.

Voters aren't nearly as thrilled. A survey conducted by the board shows a plurality of voters opposed to either proposal.

Meanwhile, the school officials want to renew the "temporary" KRESA tax increase passed in 2005. The Kalamazoo County Taxpayers Association has the story.

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KRESA tax: they lied

In 2005, public school officials in Kalamazoo County placed a 1.5-mill “enhancement” millage on the ballot, which covered the entire KRESA taxing district. At the time, those officials promised that the tax was only “temporary,” and would last only three years.

It now is clear that those officials lied to the voters. School officials are planning to ask for a renewal of the KRESA “enhancement” millage next year, despite their promise that the tax would expire.

If the KRESA “enhancement” millage is placed on the ballot next year, it would be a profound betrayal of trust. Does the word of public officials in Kalamazoo County mean anything? Can they blatantly lie to the voters, and then turn around and ask them for even more money?

School officials are crying poverty, claiming their budget are squeezed and they need the money from the “enhancement” millage. Tough luck. Welcome to the club. The budgets of working families and businesses in Kalamazoo County have been squeezed and cut for several years now due to Michigan’s poor economy.

In fact, school spending habits prove that they have plenty of money in their budgets. A recent Kalamazoo Gazette article (June 3, 2007) shows that public schools in our region are overpaying health care benefits by thousands of dollars per employee, because school districts have a sweetheart contracting deal with MESSA, the teachers’ union insurance provider. By competitively bidding out health insurance, schools could save hundreds of thousands of dollars in their annual budgets.

The Taxpayers Association has one simple message for school officials thinking about renewing the KRESA “enhancement” millage—just say “NO.”

Understanding Government: Force

The institution central to politics is government. Understanding the nature, actions, and limitations of this institution is essential to understanding our world.

The first question to consider is exactly what is government? Having a sound definition is essential to any further analysis.

A government is an organization that has a near monopoly on the use of force in a given geographical region.

It need not have a complete monopoly, since most government recognize a right to self-defence against private criminals. However, it must be able to effectively resist any potential challengers.

To do this, a government must have some sort of armed body, whether it be police or military. This body will need to be funded. Thus there must be taxes, which are money taken from the people of the geographical region by force to fund the government.

Most governments also spend money on programs and enact various laws and regulations. These are all based on the threat of the use of force. Anyone who does not participate in or abide by these programs or regulations is threatened with a fine or jail time. This can only be enforced by the use of violence. The same is true of taxes. Anyone who attempts to resist this violence, as they would a private criminal, risks being killed by the government.

Compliance with government decisions is not based on force if it is voluntary. This happens when it is seen as having authority. Authority is the belief that a given decision-maker is legitimate. However, no government is based entirely on consent, because otherwise there would be no need for legal penalties. Indeed, it is likely that if government did not punish those who did not abide by its decisions, it would lose its authority in the eyes of many people. Governments usually depend on widespread popular support for their existence.

What lesson can be taken from this? The fact that all government programs and regulations are ultimately based on the threat of violence does not imply that no government actions are ever legitimate. What it does mean is that when considering a proposed government action, it is not enough to determine that the goal of the program is desirable. In addition, it must be determined that the use or threat of force is justified to achieve that goal.

Having a more realistic view of the nature of government is essential to determining the morality of government policies.

POLITICAL UPDATE--Family

This update focuses on the family. The family is the bedrock of society, but cultural liberalism and government policies threaten it.

Gregory Hession: This is Child Protection?
Gregory Hession: Families Separated by the State
Phyllis Schlafly: A Child's Right To A Father And Mother
Linda Chavez: Quit Complaining
Thomas Sowell: Cultural Heritages
Ericka Andersen: If Abortion Were Illegal
John Lott: Abortion Brings on Illegitimacy Too
Allan Carlson: The World Congress of Families
Pat Buchanan: Gen. Pace vs. Parson Warner

For more on the family, see Focus on the Family.

French in a Coma

From the Gazette:

Kalamazoo County Drain Commissioner William French has suffered a stroke and is hospitalized in Miami in a coma, said a local attorney who has represented French.

Attorney Jim Boerigter said French suffered the stroke last Friday. It apparently occurred when he was scuba diving.

"He's been hospitalized for a few days,'' Boerigter said. ``He was in a coma, and the last we know, he was still in a coma.''

The Inner Ring

That Hideous Strength is a novel by CS Lewis. It is the third and final novel in his space trilogy. The novels are fantasies with science fiction themes. They can be read independently. That Hideous Strength is the longest and best of the three.

While the novel is fantastic, it deals with a serious subject. Lewis calls it "the inner ring". Organizations typically have groups of people who are more powerful or influential than others. These rings admit some people and exclude others. There may be rings inside rings.

The desire to be inside, to gain acceptance and approval, can be a powerful motivation for some people. This desire can be used by those on the inside to manipulate those seeking admission. This is a major theme of the novel, as a main character struggles between his desire to be inside and his qualms about the nature of the conspiracy in which he has become enmeshed.

Lewis elaborated on these themes in a classic essay entitled The Inner Ring. The best line in the essay is the following:

Of all the passions, the passion for the Inner Ring is most skillful in making a man who is not yet a very bad man do very bad things.

While the danger of the inner ring may occur in many settings, it is particularly relevant in politics. Most people get involved in politics because they want to do good. But once there, some fall to the allure of power. They seek power first and abandon principle. Most of them, though, are simply being manipulated by those higher up.

Those starting out in politics would do well to take Lewis' advice. Abandon the desire to be inside. Then you will no longer be a slave to the desires of others, but can do good with a clear conscience.

Democrats versus illegals?

From Mlive:

LANSING, Mich. (AP) — State House Democrats on Monday said they want to crack down on companies that hire illegal immigrants and give tax incentive preferences to businesses that hire only Michigan workers.

Companies that hire illegal immigrants could get their state contracts canceled and be barred from getting future state work. Companies that hire illegal immigrants also could lose the tax incentives they've been awarded for creating jobs.

"Michigan tax dollars should not fund grants or tax incentives for businesses that hire people from other states and countries when Michigan residents have the training and expertise and need those jobs," Rep. Fred Miller, D-Mount Clemens, said in a statement.

The Democratic proposal would require businesses with contracts for construction of state buildings to hire 100 percent of their workers from Michigan. The current requirement is 50 percent, House Democrats said.

This effort to restrict the hiring of illegal aliens, if true, is very good news. Have the Democrats finally gotten the message on illegal immigration?

Restricting contracts to only Michigan employers seems like a bad idea. In doing so, the state may reject lower bids that will save taxpayers money. The difference between hiring out-of-state Americans and illegals is that illegals impose costs on society through crime and government spending that out-of-staters don't.

Perhaps next the Democrats can pass Jack Hoogendyk's bill to make English the official language of Michigan.

Government kills

No, I’m not speaking on the 100+ million people that governments have killed outside of wars in about the past century, but rather the hidden deaths that nefariously are often not linked directly to government policy and action.

Recently, the supreme court ruled in favor of denying terminally ill patients who have exhausted all available treatments the right to access experimental treatments not yet approved by the FDA. The drug, Erbitux, that the plaintiff, Abigail Burroughs, was attempting to gain access to was approved by the FDA in 2006. Unfortunately for Abigail, she succumbed to head and neck cancer and passed in 2001.

Indeed, Abigail's story is not unique. Thousands die every year waiting for FDA approvals of drugs that may have saved them.

A popular cry is then, "But if not for the FDA and other agencies, who will protect the consumer?" Milton Friedman correctly explains that the market protects consumers. John Stossel explains how the FDA could play a useful role as a consumer advocate, but that its monopoly status and the ban on non-approved treatments leave consumers far worse off.

There is a new protectionist waive filling media buzz as a result of the recent recalls on Chinese products. Pundits and everyday folks are sounding off on the need for further regulation of foreign products. Edward Snyder explains how the free market is still the best regulator and defender the consumer has.

Government regulation destroys the competitiveness that brings about innovation and progress for the consumer. It also destroys our individual autonomy to do actions that do not negatively affect others, making us less free and worse off. If government action should be designed to make us more free, this would seem irrational. Why shouldn't an individual have the right to take a non-approved drug when all other possibilities are exhausted? The negative consequences of an unapproved drug fall directly upon the user, who, without additional options, is likely doomed regardless. FDA regulation kills many for every few that are saved, made worse by the fact that the FDA need not have monopoly status. Businesses use regulation from consumer protection agencies to stifle competition, doing the consumer more harm than good through regulation.

It’s simply another example of the unintended consequences of government, where agencies devoted to helping consumers end up ultimately hurting.

New Blogs

Rep. Tim Walberg: http://walberg.house.gov/blog/

Tyler Whitney: http://deviantlibertarian.blogspot.com/

Happy reading!

POLITICAL UPDATE--News from Abroad

This update focuses on hews from abroad. Russia, China, and Iran continue to cause trouble on the international scene.

Anthony LoBaido: From Rhodesia to Zimbabwe
Michael Telzrow: The New Chinese Take-Out
Ilan Berman: Signs of Iranian Troublemaking are Everywhere
Jed Babbin: Let’s Undo the Concessions to Iran
Monica Crowley: The New/Old Cold War
Susan Easton: Tempest in a Radioactive Teapot
Thomas Sowell: After Iraq: Part II
Terry Jeffrey: A Congress of Fools
Aryeh Spero: Has the Sun Set on the British Isle?

POLITICAL UPDATES are archived here.

Across America

Notes from across the United States:

Southwest Minnesota is covered with windmills. Ten years ago, there weren't any. Several other states have "wind farms" scattered about. It is important to remember that most, if not all, of these windmills would not exist without government subsidies.

Most Western states have a maximum speed of 75 mph on freeways and speeds up to that on rural roads. Republicans in Congress eliminated the 55 mph speed limit in the mid-90's.

Some overhead freeway signs in Los Angeles are surrounded by coils of barbed wire. Is this to fend off graffiti?

Roughly half the television and radio stations in Los Angeles are in foreign languages. Spanish is the most common, but far from the only such language.

Most houses in the Los Angeles area are surrounded by high walls. There are many 'gated communities' complete with walls, gates, and sometimes guards. This is in the suburbs, not the city itself.

Highway exits in Texas for roads that head to Mexican have 'no guns' signs similar to the ones around the entrances to WMU.

The Border Patrol stops cars heading out of El Paso to check for illegal immigrants.

Carlsbad Caverns is pretty awesome.

POLITICAL UPDATE--Health Care

This update focuses on health care. Liberals continue to advocate socialist medicine. Michael Moore's new movie promotes socialism and communism. The free market is the solution to America's health care problems.

Walter Williams: Health Care: Government vs. Private
Marsha Blackburn: SCHIPing Away at Seniors' Medicare Benefits
WorldNetDaily: MANIA: The shocking link between psychiatric drugs, suicide, violence and mass murder
Humberto Fontova: Moore’s Pro-Castro Propaganda Hides Cuban Suffering
Deroy Murdock: 'SKiPO': Michael Moore's 'SiCKO' Skips Over Facts on Road to Government Medicine
Ericka Andersen: 'Sicko': A Universal Nightmare
Stuart Browning: Socialized Medicine is Sicko

POLITICAL UPDATES are archived here.

POLITICAL UPDATE--Constitutional Rights

This update focuses on Constitutional Rights. Many government policies threaten freedom and civil liberties. Limiting government power is necessary to protect freedom.

Ron Paul: Signing Statements Erode Constitutional Balance
David Calderwood: OSHA Visits Wonderland
Dennis Bereandt: Pushing National IDs
Jacob Hornberger: Tyranny and the Military Commissions Act
Kevin Gutzman: Ex-Constitution
Vin Suprynowicz: ‘No-Knock’ Searches Get People Killed

POLITICAL UPDATES are archived here.

Moore, Dems wrong on medicine

I have blogged on the failures of Michael Moore's logic with regard to socialized medicine in the past, however due to nearly every Democrat jumping on the bandwagon of socialized, anti-free market plans for health care which will leave Americans worse off, the issue needs further coverage.

A main problem with socialized medicine is the issue of scarcity. When something has no direct cost to consume (not free, a spin the left wishes you'd buy), it leads to overconsumption. It decrases incentives to produce superior care, because after all, people can't pay more for better service. It also leads to massive shortages. This may seem like a benign issue, but as many people in places with socialized medicine know, its deadly.

Moore paints a utopian image of socialized health care that is painfully detached from reality. Nonetheless, the Democrats are jumping on the bandwagon of socialized medicine despite the fact that government simply cannot fund these programs. Edwards recently unveiled his plans to hose Americans with new taxes at the same time that countries around the world are lowering taxes. The simple fact is, socialized medicine is a system that not only cannot work, but is fiscally infeasible.

The health system we have currently is broken, but not because it is private; rather, because of the backwards regulatory and tax system we have that distorts incentives and feeds bureaucracies. The way to solve the health care crisis is by changing the tax code to stop employer health insurance and push toward health savings accounts. Insurance is a terrible way to pay for anything as it destroys incentives for consumers to respond to price. Getting one's health coverage through an employer has shortfalls because it leaves the unemployed at a severe disadvantage. The solution is health savings accounts and free market solutions that are self-sustaining.

Democrats shake down Wall St

Here's an exerpt of a good editorial from The Sun:

This morning, in the Cash Room of the Treasury Department, the Goldman Sachs chief executive-turned-Treasury secretary, Henry Paulson, will convene a conference on "Business Taxation and Global Competitiveness." Alan Greenspan will be there, as will some of the nation's top economists, including Martin Feldstein of Harvard and Michael Boskin of Stanford. Missing from the announced program are Senators Grassley, Schumer, and Baucus, and Congressmen Rangel and Levin. It's too bad, because were they to swing by they might get a glimpse of a Bush administration that is trying to help American business as opposed to a Congress that is determined to hamper it.

It's already the talk of Washington how Mr. Paulson tried earnestly to convince Mr. Baucus, chairman of the finance committee, that raising taxes on hedge fund and private equity managers was, in respect of tax policy, a bad idea on the merits. Mr. Baucus is said to have shrugged and said, never mind the merits, my leadership told me they need me to find $10 billion. No wonder the president of the Partnership for New York City, Kathryn Wylde, is, she told us yesterday, concerned that Washington is looking at this as an issue of revenue, where it should be a matter of international competitiveness. " Washington is not as sensitive to the fact that we now have to defend our jobs, business operations, and investments; this isn't just a matter of offshore call centers, we are talking about front office jobs," she said.

Democrats want to change the way private equity partnerships are taxed. Currently, they are taxed as capital gains, at the 15% rate. If the Taxocrats get their way, however, this will change for financial service partnerships to the corporate rate of about 35%.

Why are Democrats just now attacking private equity? The taxation of these partnerships has been the same for decades. The answer to politicians' behavior can best be identified by studying the incentives at play. What is the primary goal of a politician? To get re-elected, of course. And how does one get re-elected? By amassing gobs of money from lobbyists and donations!

So when private equity partnership Blackstone went public recently, the sharks started swimming. By threatening to more than double the taxation on these firms, these politicians would ensure that they got in on the buyout bonanza taking place on Wall St. Like naive companies before them, few private equity firms had lobbyists. Microsoft and Google were famous victims of forgetting to yield to the Washington extortion machine. They learned the hard way, after anti-trust suits and regulation threats, that if you make a lot of money and don't kick back to politicians in the form of donations and lobbyists, you get nailed.

It appears now, however, that upon paying their dues to their political masters, private equity firms may be safe from unfair regulation, for the time being.

Rest assured, the fundamental argument behind increasing the taxes on private partnerships is deeply flawed. Private equity partnerships invest in businesses, usually by buying all or most of an entire business. Some well-known companies that are majority (>50%) owned by private equity firms are Chrystler, Toys R Us, The Limited, Hilton Hotels, Burger King, Clear Channel, and my current employer, GMAC. Private equity partnerships invest by buying interests in these companies.

The companies owned by private equity are taxed on their profits at the corporate tax rate of ~35%. The profits are then taxed again on the private equity level at the capital gains rate of 15%. If the owners of the company choose to withdraw their profits in the form of dividends, they are taxed again at the dividend rate. Congress wants to increase the tax rate the partnerships pay on their capital gains from the carried interest from their investments. The Democrats claim that it is unfair that private equity firms pay "only" 15% cap gains while other companies pay the 35% corporate tax rate. While one can certainly argue the merits of axing the corporate tax, which is paid almost entirely by labor, the deceitfulness of Democrats is obvious. The private equity partnerships already do pay the corporate tax when the businesses they own pay their taxes. They then pay 15% capital gains tax on top of that, and, in order to see any of their profits, another dividends tax. This amounts to triple taxation! The Democrats think these private equity firms should be taxed even more, and in the name of "fairness."

Give me a break. What's fair about getting taxed three times on the same dollar?

Private equity buyouts play a critical role in our economy. Gaining heavy steam in the 1980s, leveraged buyouts allow smaller companies to purchase large, underperforming companies in order to maximize their assets. Their role is critical in that it doesn't just force businesses to out-perform their competition, but to fully maximize every opportunity lest they face a buyout from someone who can. Private equity firms oust bad management which sends an indirect threat to all other managers to perform lest they be next.

Furthermore, if the Democrats continue their over zealousness in attacking private equity, the firms are likely to simply set up shop offshore leaving nothing left to tax.

Clearly, putting additional burdens on these partnerships is not only bad tax policy, but reduces the competitiveness of American companies. One can see the greed displayed by the Democrat extortionists hungry to illegitimately get in on the profits of these partnerships.

Western's "Edge" holds tuition increase at 6.4%

From the Gazette:

In an effort to position Western Michigan University as the best place in the state to receive a good-quality, affordable education, the university's board of trustees is unveiling a cost-saving program that will begin with this year's freshmen.

The program, called The Western Edge, has several components:

• Room-and-board rates will be frozen for new students for up to four years.

• Freshmen who complete 30 credit hours by next fall and maintain at least a 3.0 grade-point average will be eligible for financial incentives they will be able to use in a variety of ways, such as to buy textbooks, for their sophomore year. The amounts of the incentives have yet to be determined.

• Entering students will be asked to submit four- or five-year plans for their studies, and ``part of our commitment under the Edge is that we will make sure those courses are available when the students need them'' so they can complete their degrees in a timely manner, WMU President John Dunn said Monday. ``If students make their commitment, we offer our commitment.''

• The Edge will include ``enhanced advising,'' Dunn said, to ensure students stay on track toward degree completion.

Dunn expected the board to approve The Western Edge today during a special meeting at 10 a.m.

The board also was expected to approve a tuition increase of 6.4 percent.

Meanwhile, tuition increases across the state were much higher.

The new edge programs also seem to create additional incentives for retention.

Regulation Woes

A surprisingly good article from The Western Herald defending private property rights:

Growing up in a small town, I learned early on that the front porch is the meeting place for friends, family and neighbors. Some were elaborate; literally extensions of the home itself, welcoming and homey. Wicker chairs, porch swings and plants only added to the purpose. Others were used more for storage, with snow shovels, tools and garbage cans littering the area. Still, no matter what the aesthetic, porches were always used as a place to gather.

Recently, in Zeeland, Michigan, about an hour away from here, city officials have introduced new legislation that would regulate what is allowed on porches in the small town. In an effort to keep porches strictly as meeting places and less as a means for storage, the legislation would regulate exactly what is and is not allowed on people's porches. So far, the legislation calls for no more than one grill, two bicycles and one snow shovel. Also, any furniture on the porch has to be arranged in such a way that it is conducive to social interaction.

The fine for violating this ordinance would be $400.

The legislation also places restrictions on what is allowed in enclosed porches. According to this proposed legislation, nothing may be higher than the bottom of a window and any books or "knick-knacks" must not be placed directly in front of the window.

This legislation is not the first of its kind. Earlier this month, a 70-year-old woman in Utah was arrested for failing to comply with a city ordinance that stated she must water her lawn. The woman hadn't watered her lawn in over a year, and wouldn't have been able to afford the water bill. She spent the morning in jail before it was decided that she should be released.

A man in White Cloud, Michigan also spent a weekend in jail because his lawn didn't have grass on it. The judge gave him two weeks to make the lawn presentable before anymore jail time would have been necessary. He has been fighting the court system, to no avail.

One of the great things about America is the right to own private property and do whatever one wishes as long as one is not breaking the law. However, these ordinances do not allow for that. Before we know it, there will be ordinances regulating what colors we can paint our houses and what kind of flowers we're allowed to plant.

I can understand an ordinance for those who pile up their porch with clutter and trash of no redeeming value. I would not agree with it, but I could understand it. But, regulating porch clutter? Regulating grass? Seems a bit ridiculous to me.

While it is a great ideal to have every single home (and yard) look neat, clean and orderly, it is not a requirement for living. When one buys a home, he or she is buying not only the house, but the right to do with that property as he or she wishes. One can plant gardens, fix up cars, or simply trash the place if one so desires. The neighbors might not necessarily like it, but it does not mean that the people in question do not have the right to do exactly what they want in terms of their homes.

The part of these stories that repulses me the most is probably the fact that the court system is backing them up. There is no need to have to pay a fine or even go to jail simply because one chooses not to waste water on a lawn. There is no need to have to pay $400 simply for having three bikes on a porch instead of two. These people are not criminals and the fact that they are being treated as such is abhorrent to me. Go after the murderers, the rapists, the burglars. But, going after the townspeople simply for not watering their lawn or for not keeping their porch "clutter-free"? That is where it crosses the line.

A public hearing for the Zeeland ordinance will be held August 6. Let us hope that the people of Zeeland will stand up for their personal property rights and not allow this ordinance to pass. If this does pass, just imagine what other absurd ordinances people will come up with.

This is typical of bored city officials with nothing better to do than ponder the great crises of our times: how many bikes should be allowed on the front porches of their constituents? It is absurd that government takes it upon itself to arbitrarily limit and impose sanctions on what individuals choose to do with their private property.

Even if the porches were being cluttered to the extreme and destroying property values for neighbors (although placing books on a window doesn't appear to fit that bill), government still need not intervene as the situation is handled better by individuals.

Government regulations on our lives and property not only fail virtually always to make us better off, but they restrict our freedoms. Regulations on the composition and arrangement of one's porch may seem to be fairly low on the list when compared to other resections our government has imposed on our lives and property, however when we allow the first domino of our freedoms to fall we can be assured that many more are to follow. A slippery slope greased with trans fat bans will push us further down the road to serfdom. Never mind your porch; government can steal your house! The government already kills thousands per year through FDA restrictions. Unintended consequences of government regulations leave us less safe. Many leading Democrats even want government to take away our freedom over health coverage through socialized health care.

The complacency of allowing government to run our lives and restrict our freedoms must end. Freedoms are freedoms; just because it is something seemingly inconsequential such as a ban on trans fatty acids is fundamentally no different than a ban on health care choice. I am of the opinion that it is government’s sole purpose to enhance our freedoms. Former Attorney General John Ashcroft spoke of this during his visit to Western’s campus last year. It would seem that this singular fundamental purpose has been lost on many of the politicians of today. Let it not be forgotten.

POLITICAL UPDATE--Money

This update focuses on money. Government control of money can lead to inflation, recessions, and other problems.

Terry Easton: Government-Controlled Markets Destroy Them
Gary North: Why Most Voters Accept Inflation
David Saied: Panama Has No Central Bank
Gary North: Trading Bank Runs for a Systemic Bank Failure
Ron Paul: The Federal Reserve Monopoly over Money
Ron Paul: Don't Blame the Market for Housing Bubble

POLITICAL UPDATES are archived here.

Sander is puppet for Big Labor

From Townhall:

How Labor Rules
By Robert D. Novak

WASHINGTON -- Ignoring pleas from outraged South American governments, Democratic leadership of the House this week was adamant about Congress going into its August recess without taking action on free trade agreements with Peru and Panama as promised. Instead, two senior Democratic House members appear determined to travel to those two rare Latin American friends of the United States, to hector them into passing domestic legislation as a prerequisite for approving already negotiated bilateral trade pacts.

Why did House Speaker Nancy Pelosi renege on her previous commitment? She dances to the tune of AFL-CIO President John Sweeney, who preaches outright protectionism. Hostility toward not only the Peru and Panama pacts but also a vital agreement with Colombia can be traced to influence on U.S. unions by South America's leftist labor leaders, originating in Hugo Chavez's Venezuela.

Beyond U.S. unpopularity in the Western Hemisphere, this exposes deeper problems for the new Democratic majority in Congress. While the AFL-CIO's authority is diminished in the labor movement and among the nation's workers, its chief rules in Congress. Democrats bowed to Sweeney's wishes in voting to end secret ballots in union recognition elections, but the more audacious demonstration of labor's influence on Capitol Hill was getting the House leadership to renege on a bipartisan deal affecting world trade.

That deal seemed too good to be true May 10 when it was unveiled. On that date, House Ways and Means Committee Chairman Charles Rangel and his trade subcommittee chairman, Rep. Sander Levin, announced approval of labor and environmental provisions in the Peru and Panama trade pacts. Their statement also opened the door to possible future approval of the Colombian trade agreement.

Organized labor did not wait long to be heard from. On the next day, May 11, Sweeney issued a statement indicating that the labor and environmental guarantees agreed to by Rangel were not adequate. He contended "the agreement fails to adequately address issues related to the outsourcing of U.S. jobs and the ability of foreign corporations to challenge U.S. laws." Sweeney dismissed the negotiated agreement with Colombia, this country's best ally in South America, as "a flawed agreement with a gross human rights violator."

Sweeney makes life difficult for Rangel, who seeks a record of achievement in the chairmanship for which he waited so many years. But when labor commands, Sandy Levin obeys. When I met him in the 1970s, Levin was a high-minded liberal as a party and legislative leader and candidate for governor of Michigan. In Congress, he is an errand boy for organized labor who on June 18 withdrew previous support for trade agreements.

The shocker came June 29 as Congress cleared out of Washington for the Fourth of July holiday. Pelosi announced that Rangel and presumably Levin would be off to Peru and Panama to demand new changes in their labor laws as payment for the negotiated trade agreements. She rejected the Colombian pact out of hand.

U.S. Trade Representative Susan Schwab, a former Senate staffer, usually treats Congress with care -- but not in a July 6 letter to Pelosi: "Unilaterally requiring another sovereign country to change its domestic laws before the U.S. approves a trade agreement would be a fundamental break with U.S. laws, policy and practice. No past administration or Congress -- Democratic or Republican -- has taken such a step. Nor would the United States agree to such a procedure if demanded by another nation."

Schwab's strong words had no effect. Nor did protests from Peru's President Alan Garcia and Colombia's President Alvaro Uribe. Democratic leaders are impervious to the reality that Colombia, Peru and Panama now enjoy one-way trade access to the United States, whereas the agreements would open their markets to U.S. goods. Nor do the Democrats show concern about alienating Uribe and Garcia as Hugo Chavez's menace spreads through the hemisphere.

Sweeney's marching orders are not limited to Latin America. He dismisses the negotiated agreement that finally would open South Korea to U.S. autos as "a losing, one-sided agreement." Obediently, House Democratic leaders declared the Korean pact dead on arrival. At least, Charlie Rangel and Sandy Levin are not headed off to scold in Seoul -- not yet, anyway.

CRNC Convention

A big congratulations is in order from the WMU GOP to Chairman Dan Carlson for being elected Secretary of the College Republican National Committee this past week in Washington, DC. Dan has been a long time friend of our group and we can be certain he will lead the national College Republicans with the same dedication and commitment he has shown to the College Republicans in Michigan.

I also find it worth mentioning that the Michigan delegation to the convention received the award of "Best Partiers" from CR Nation.

"Best partiers (tie): To the state delegations of Maine and Michigan... The Michigan CRs lived it up at every party. Chairman Dan Carlson leads by example."

We remain the best party on campus (and in the country!)

POLITICAL UPDATE--Immigration

This update focuses on immigration. The Bush-Kennedy amnesty has been defeated, but America wtill faces serious immigration problems. Government refusal to enforce immigration laws and subsidization of illegal immigration exacerbate these problems.

Phyllis Schlafly: The voters roared and the Senate listened
Marcus Epstein: Now That The Amnesty/Immigration Surge Bill Is Dead, What's Next?
Pat Buchanan: In Defeat, a Bush Opportunity
Gary Bauer: Lessons From the Immigration Debacle

Martha Zoller: Whose Side Is Michael Chertoff On?
Walter Williams: Illegal Immigration
Marcus Epstein: Silent Amnesty
Steve Sailer: How Carlos Slim, World’s Richest Monopolist, Provokes And Profits From The Mexodus
Michelle Malkin: The Forgotten "A" Word: Assimilation

For more on immigration, see VDARE.com.

Alternative Energy Inanity

Absurdity abounds in the debate over many political issues, and energy is no exception. Many people blame "price gouging" oil companies for increasing gas prices, when government regulations are the real culprit.

But the nonsense doesn't end there. Another aspect of the energy issue badly in need of some critical thought is the concept of "alternative energy".

Politicians of all stripes have embraced alternative energy. They call for government spending and subsidies. But why should alternative energy be supported over more traditional sources?

Traditional sources of energy are carbon-based fuels such as coal, oil, and natural gas, as well as nuclear power. Carbon-based fuels are often called fossil fuels, although this theory of their origins is disputed. Alternatives include solar, wind, and ethanol.

The ideal energy source would be cheap and plentiful. Its use would not cause any pollution or result in any harmful waste. It would not have to be purchased from any unpleasant people.

The ideal energy source does not exist. We have only imperfect choices.

How can we know which choice is best? To be more objective, suppose we have energy source A and energy source B. There will be different amounts of A and B available, they will be produced in different ways, refined in different ways, and have different energy output per unit. How can we decide which one to use?

Economic calculations such as this are only possible through the use of prices. Prices provide information that makes possible the coordination of supply and demand. The best energy source will be the one that has the lowest cost per unit of energy produced. In other words, we should use whatever is cheapest in the free market.

Of course, specific conditions may restrict our choices. You can't have a nuclear power plant in your car.

The predominance of carbon-based fuels and nuclear energy is not some accident of history or chance occurrence. These are the best sources because they are the cheapest. Alternative energy sources have serious drawbacks. This is why they are not widely in use.

Ethanol is one of the most touted alternatives. But some studies have shown that it takes more than a gallon of gasoline to produce a gallon of ethanol. It is expensive to transport because it can't be shipped by pipeline. The only reason that it is used is because of a 51 cent per gallon federal subsidy. This has increased corn prices at home and abroad and increased other food prices due to higher demand for farmland and higher feed prices for animals.

Biofuels have many of the same problems as ethanol. Windmills don't produce much energy, but they do kill lots of birds. Solar power also doesn't produce much energy. Both wind and sun don't always produce energy, take significant amounts of land, and exist only due to federal subsidies.

Perhaps the biggest red herring is hydrogen power. It is true, of course, that burning hydrogen produces energy (just look at the Hindenburg). But to burn hydrogen, you need to have hydrogen. But isn't there hydrogen in water? Yes, but to separate it from the oxygen in water, you need... energy. Perhaps we could get that energy from perpetual motion machines.

The only form of alternative energy that exists in any substantial quantities is hydroelectric power. But this is pretty much tapped out, since there are only so many rivers to dam.

Most alternative energy exists only due to government subsidies. Some defenders of alternative energy admit that it isn't efficient now, but defend subsidies by saying that we should "invest" in alternative energy so that it will become efficient in the future. But what justification is there for believing this? Why, despite all the evidence, do people continue to insist that government can allocate resources more efficiently than the free market? Besides, subsidies may make efficiency less likely by making innovation unnecessary to achieving profits. Also, innovation continues in the production of traditional sources of energy.

Why do so many people demand alternative energy? One argument is the need for "energy independence". The stated need for energy independence is in turn justified in several different ways. One is the problem of high or suddenly increasing gas prices. But energy independence, which presumably means producing enough energy in a country to supply its own needs, won't stop this. This is because markets are global, so a factor that increases prices somewhere will increase them everywhere.

Another justification is that a terrorist attack or rouge nation might disrupt energy supplies. This is a stronger justification, but it doesn't change the fact that proposed alternative sources are impractical.

A third argument for energy independence is that buying energy from foreign countries funds terrorism. While there is an element of truth to this, it isn't likely to change no matter what we do. Even if we completely stopped buying oil from the Middle East, China and Europe would simply pick up the slack. As long as Middle East oil is the cheapest, this isn't going to change. Also, terrorism just isn't that costly to fund. Besides, destroying the economies of Middle Eastern countries isn't likely to win us lots of friends. Punishing the people who fund terrorism is the best way to prevent it.

The only way to achieve greater energy independence is to produce more traditional energy. But environmentalists fight this tooth and nail.

Another argument for alternative energy is the supposed threat of global warming. This notion has been promoted heavily by environmentalists. There is good reason to believe that this threat is a chimera. But suppose for the sake of argument that it is real. Shouldn't environmentalists advocate increased use of nuclear energy?

Nuclear energy is a significant, proven source of energy that does not produce any "greenhouse gases". But with a handful of exceptions, environmentalists have fought bitterly against it. Numerous myths have spread that discourage its use.

Some environmentalists also fight hydroelectric energy, the only significant alternative source. They want to tear down dams to liberate salmon runs, or something like that.

The real goals of environmentalists are not difficult to discern. They are not opposed to particular forms of energy; they are against any significant energy use. Many leading environmentalists have admitted that they seek to eliminate most of humanity, destroy civilization, and massively increase poverty. They advocate alternative energy sources because they produce little energy.

Instead of wasting time and money on alternative sources, America should use the energy sources that work best. What these are can best be determined in the free market. Government restrictions on energy production and consumption should be eliminated.

A Complete "Moore-on"

From Real Clear Politics:

Freedom and Benevolence Go Together
By John Stossel

I interviewed Michael Moore recently for an upcoming "20/20" special on health care. It's refreshing to interview a leftist who proudly admits he's a leftist. He told me that government should provide "food care" as well as health care and that big government would work if only the right people were in charge.

Moore added, "I watch your show and I know where you are coming from. ... "

He knows I defend limited government, so he tried to explain why I was wrong. He began in a revealing way:

"I gotta believe that, even though I know you're very much for the individual determining his own destiny, you also have a heart."

Notice his smuggled premise in the words "even though." In Moore's mind, someone who favors individual freedom doesn't care about his fellow human beings. If I have a heart, it's in spite of my belief in freedom and autonomy for everyone.

Doesn't it stand to reason that someone who wants everyone to be free of tyranny does so partly because he cares about others? Wishing freedom to one's fellow human beings strikes me as a sign of benevolence. But Moore and the left don't see it that way.

Moore thinks respecting others' freedom means refusing to help the less fortunate. But where's the connection? All it means is that the libertarian refuses to sanction the use of physical force (which is what government is) to help others. Peaceful methods -- like voluntary charity -- are the only morally consistent methods. I give about a quarter of my income to charities because I've seen that private charity helps the needy far better than government does.

Moore followed up with a religious lesson. "What the nuns told me is true: We will be judged by how we treat the least among us. And that in order to be accepted into heaven, we're gonna be asked a series of questions. When I was hungry, did you feed me? When I was homeless, did you give me shelter? And when I was sick, did you take care of me?"

I'm not a theologian, but I do know that when people are ordered by the government to be charitable, it's not virtuous; it's compelled. Why would anyone get into heaven because he pays taxes under threat of imprisonment? Moral action is freely chosen action.

If Moore's goal is to help the less fortunate, he should preach voluntary charity instead of government action.

Surprisingly, he did show an understanding of the importance of the libertarian philosophy to America. "John, your way of thinking actually was great for this country. I mean it; it helped to found the country. It helped build us into one of the greatest nations, perhaps the greatest nation, that the earth has ever seen. Limited government, pull yourself up by your bootstraps, every man for himself, forward movement, pioneer spirit. That's why a lot of people in these other countries really admire us, because there's this American get up and go."

I interrupt here to point out another smuggled premise. Did you catch that "every man for himself" line? America was never about every man for himself. A free society is about voluntary communities cooperating through the division of labor. Libertarianism is far from "every man for himself."

After acknowledging that limited government helped make America great, Moore went on to say, "But I don't think that what you believe is what's going to allow us to survive."

He means that if government does not assure people health care and food, our society will disintegrate.

But why would a philosophy that was good enough to build a successful society be unsuited to sustaining that society? Individual freedom, with minimal government, made it possible for masses of people to cooperate for mutual advantage. As a result, society could be rich and peaceful. As the great economist Ludwig von Mises wrote, "What makes friendly relations between human beings possible is the higher productivity of the division of labor. . . . A preeminent common interest, the preservation and further intensification of social cooperation, becomes paramount and obliterates all essential collisions."

Freedom and benevolence go hand in hand.

Attacking the Rich

From National Review:

Tax the Rich More, Reduce Inequality?
It doesn’t work like that.

By John Tamny

David Wessel recently wrote in the Wall Street Journal of a new policy proposal from the “pro-globalization crowd” that is meant to soften the blow of globalization. The plan — backed by former Bush administration official Matthew Slaughter on the right, and former Clinton Treasury secretary Lawrence Summers on the left — is to raise taxes on the rich in order to “thwart an economically crippling political backlash against trade prompted by workers who see themselves — with some justification — as losers from globalization.”

Summers argues that “It is best not to address salient concerns about inequality by interfering with trade.” So his solution is to use the tax code to penalize high earners as a way of reducing some of the inequality allegedly wrought by free trade. Specifically, he would return tax rates on incomes above $200,000 to the higher rates seen under President Clinton. Carried to its absurd extreme, Google — if its Internet search engine ultimately vanquishes those offered by Yahoo and Microsoft — would pay higher taxes to make the competitors it leaves behind feel better.

Despite the historical truth that income inequality is a major force behind innovative new ideas that regularly shift the mix and makeup of top earners, what Summers and Slaughter are proposing is at the core an attack on private property. The globalization they laud and decry at the same time represents progress. Income inequality is something separate, and barring inheritance it usually results from unequal levels of work, parsimony, perseverance, talent, and sometimes luck. To raise taxes for no other reason than to reduce inequality is to implicitly endorse expropriating the property of the rich just because they’re rich.

Slaughter and Summers might argue that the taxes raised in their scheme could fund education and training for displaced workers, but is there much evidence suggesting programs of that sort have had much success? And is it fair to penalize the most productive members of society in order to fund these utopian schemes?

Notably, Summers acknowledges that due to globalization, there’s a risk involved in taxing the highest earners, since they have the ability to “pick up their marbles and go somewhere else.” Indeed, as supply-siders have long noted, high incomes often disappear when the penalty for economic success rises. But rising tax rates also impact the willingness of the best and brightest to commit both work effort and capital. If the most productive among us do go elsewhere, or, cease working altogether, it would be quite a reach to assume that displaced workers will find their economic situations much improved.

Policymakers defy basic economics when they bemoan the plight of workers while at the same time advocating higher taxes on the rich. The two work at cross-purposes for the simple reason that job availability is a function of capital being available to fund the aforementioned jobs. High tax rates by definition erode the capital base, and in so doing, reduce the amount of capital that accrues to jobs and wages.

Summers and Slaughter make a good point that rising protectionism among the electorate is a major economic risk, since it may lead to contractionary protectionist legislation. But tax hikes on the rich will only serve to make workers even more uneasy when a smaller capital base negatively impacts both job availability and wages.

Mr. Tamney hits the nail on the head: the path to prosperity has never been through redistribution, it has been through maintaining the system that creates incentives to both make individuals more productive and to maximize scarce resources. This is done through the profit motive. The needs of society for different forms of labor and different products is expressed through prices. We can think of an individual's income as the price of labor.

Why does a grocery clerk make less than an engineer? There are two factors at play: the supply of individuals willing and able to do the job and the price an employer is willing to pay for them to do it. The supply is affected by many factors including training necessary to do a job, how enjoyable a job is, the difficulty of a job, danger of a job, and more. The supply is directly proportional to price.

The employer will hire workers at prices so long as they are still profitable to the company. The value of the marginal product of labor, or the value added to the company from hiring an additional employee, is the primary metric in this decision. An employer will hire up as many workers as it can, so long as each new employee is able to be hired profitably. The demand is inversely proportional to price.

Where the supply and demand for employees cross is the price of that labor, or what income that employee will be compensated. This income is very important to the correct functioning of the market and distorting it has unintended consequences. The engineer gets paid more than the grocery clerk because there are both fewer people able to do the work of an engineer and because the engineer creates more value for her company than the grocery clerk does for his.

The wages these employees earn conveys information to the marketplace. It tells the market that the job of an engineer is in both short supply and high demand. It communicates that information in the form of an incentive: high wages. These higher wages tell an employee that it is worth studying hard, getting postsecondary education, and going through the effort to learn what is necessary to be an engineer because you could be rewarded through increased income. Hell, physics is no picnic and many would rather do without higher-level math (our Allan not included). Without a powerful incentive such as a greater wage, we would no doubt see fewer engineers. The wage communicates to individuals that it is worth the effort of study because there is a reward at the end. This is why we see few people majoring in Grocery Clerk Studies here at Western, while more and more join the crowds at Parkview. Is there a governmental decree that this should happen? No, the market does this automatically, with less friction, and more quickly than any other mechanism.

However, what happens when we hose the rich by attacking them with high taxes? When government takes a large chunk out of the incomes of those higher wage earners, we create less of an incentive for people to earn more. Continuing with our example, it reduces the benefit of becoming an engineer without changing the costs. This will lead to fewer engineers in the workforce than is most beneficial to society. Whenever something is taxed, a deadweight loss is incurred. This is expressed through a lower supply of labor willing to do a particular job.

Does it make sense as a society to be distorting our incentives to be more productive? Why would one want to punish those who create more value in a position that fewer can do? Why would we want government to create a disincentive to obtain the training necessary to do a higher value-added task, a task fewer are willing or able to do, or both? The simple answer to these questions is that, as a society, we would not want this.

The simple answer is to stop attacking the rich.

POLITICAL UPDATE--North American Union

This update focuses on the North American Union. Plans continue to diminish American sovereignty. Texas has seen resistance to the Trans-Texas Corridor. A new book, The Late Great USA, by Jerome Corsi, discusses the North American Union.

WorldNetDaily: Texas governor clears way for NAFTA superhighway
WorldNetDaily: NAFTA superhighway extends north
WorldNetDaily: North American union plan headed to Congress in fall
WorldNetDaily: Business visionary predicted North American union in '93
Jerome Corsi: Rudy Giuliani tied to 'superhighways'
Jerome Corsi: Anti-'superhighway' bill prompts backlash

More information:
North American Union: Eagle Forum Stop the NAU Stop SPP
Trans-Texas Corridor: Corridor Watch

Government to ban ammunition?

From the NRA:

-----------

Proposed “Safety” Regulations Would Dry Up Ammunition Sales

Tuesday, July 03, 2007

The Occupational Safety and Health Administration (OSHA) has proposed new rules that would have a dramatic effect on the storage and transportation of ammunition and handloading components such as primers or black and smokeless powder. The proposed rule indiscriminately treats ammunition, powder and primers as “explosives.” Among many other provisions, the proposed rule would:

Prohibit possession of firearms in commercial “facilities containing explosives”—an obvious problem for your local gun store.

Require evacuation of all “facilities containing explosives”—even your local Wal-Mart—during any electrical storm.

Prohibit smoking within 50 feet of “facilities containing explosives.”

It’s important to remember this is only a proposed rule right now, so there’s still time for concerned citizens to speak out before OSHA issues its final rule. The National Rifle Association, National Shooting Sports Foundation, and Sporting Arms and Ammunition Manufacturers’ Institute will all be commenting on these proposed regulations, based on the severe effect these regulations (if finalized) would have on the availability of ammunition and reloading supplies to safe and responsible shooters.

The public comment period ends July 12. To file your own comment, or to learn more about the OSHA proposal, click here or go to http://www.regulations.gov/and search for Docket Number OSHA-2007-0032”; you can read OSHA’s proposal and learn how to submit comments electronically, or by fax or mail.

Campus Conservatives

Young America's Foundation has ranked the top ten campus conservative activists. One student from Michigan made the list.

10. Jeff Wiggins -- Michigan State University
To begin the year, Jeff took part in Young America’s Foundation’s “9/11: Never Forget Project,” since the university had nothing planned. Jeff and his club also focused on the threat of illegal immigration and invited Colorado Congressman Tom Tancredo (R.) to speak. Jeff stood his ground in the face of violent protests targeting the congressman’s visit and was invited to talk about those incidents on the Fox News Channel.

Fred Thompson

Fred Thompson

Occupations
Actor in Law and Order and many movies
US Senator (1994-2002)
Attorney

Websites
Campaign: http://www.imwithfred.com/
National Review archive: http://author.nationalreview.com/?q=NDEyMg
Wikipedia: http://en.wikipedia.org/wiki/Fred_Dalton_Thompson

Abortion
Thompson was a moderately pro-choice federalist when he ran for Senate in 1994 and 1996. He opposed banning abortion, while allowing for some restrictions. In the Senate, he had a consistently pro-life voting record. He now takes a pro-life stance.

Foreign Policy
Thompson takes a hawkish line on foreign policy. He voted to authorize the war in Iraq.

Gun Rights
Thompson is generally pro-gun. He was rated 'B-' by Gun Owners of America. He generally voted pro-gun in the Senate, though with some exceptions such as the Lautenberg amendment.

Immigration
Thompson has a mixed record on immigration. He opposed the 2007 Bush-Kennedy immigration plan. He earlier expressed some skepticism about immigration restrictions. The Americans for Better Immigration analysis of his record shows it to be generally for more restrictions on immigration.

Marriage
Thompson opposes "gay marriage", but would leave "civil unions" to the states.

Regulation
Thompson was an enthusiastic supporter of the McCain-Feingold campaign finance reform act, which imposes significant restrictions on political speech.

Thompson supported drilling for oil in the Arctic National Wildlife Refuge (ANWR).

Sovereignty
Thompson has been critical of the United Nations. He supports free trade agreements like the North American Free Trade Agreement (NAFTA).

Spending
Thompson received decent ratings from the National Taxpayers Union. He voted for the No Child Left Behind Act, which significantly increased federal education spending. He voted for a version of the Medicare prescription drug benefit.

Taxes
Thompson supported the Bush tax cuts.

Character
Thompson divorced in 1985 and remarried in 2002.

Relevant Articles:
Fred Thompson On The Issues
Thompson Time?
Cheney With a Drawl
Fred Thompson: Globalist?
Fred Thompson Could Face Fire From the Right
Tennesseans For Choice Questionnaire
Fred Thompson: "Generally" Consistent
Fred Thompson: No Restrictionist Hero
Fred Thompson on Immigration
Fred Thompson's Idea of 'Reform'

2008 Presidential Candidates

Voters need solid information to decide which candidate to support for President in 2008. This series of profiles goes beyond the rhetoric to examine the records of the candidates throughout their careers. Voters can also research the candidates for themselves.

Barack Obama

Rudy Giuliani
John McCain
Mitt Romney
Ron Paul
Tom Tancredo
Duncan Hunter
Fred Thompson
Mike Huckabee
Sam Brownback

Previous:
Evaluating the Candidates
Who's Electable?

Sander's Folly, part 2

From the Wall St. Journal:

Trade Double-Cross
House Democrats go protectionist.

Thursday, July 5, 2007 12:01 a.m. EDT

Democrats are promising to improve America's image in the world if they retake the White House next year. Tell that to Peru and Colombia, which are watching Democrats in Congress renege on free-trade assurances that are barely a month old.

House Democrats pulled that fast one late last Friday, shortly before a holiday weekend when few were watching. They also announced their opposition to a free-trade pact with South Korea only a day before the deal was signed, and for good measure they announced that an extension of trade promotion authority (which expired June 30) is essentially dead as long as they run Congress. Ah, bipartisanship.

All of this is particularly embarrassing for Charlie Rangel, the Ways and Means Chairman, who has tried to strike a trade compromise with President Bush. We've praised him for his efforts, and a month ago Republicans swallowed hard to give Mr. Rangel concessions on labor and the environment that he could bring to his fellow Democrats. The Administration even agreed to weaken drug-company intellectual property rights to make Democrats happy. Speaker Nancy Pelosi accepted the terms, and Ways and Means issued a rare bipartisan statement saying, "This new policy clears the way for broad, bipartisan Congressional support for the Peru and Panama FTAs." Mr. Rangel called it "truly an historic breakthrough," and Democrats hailed it as proof of their ability to govern.

But they lacked the nerve to stand up to the AFL-CIO, which frowned on the deal and proceeded to lobby the rank-and-file to revolt. Mr. Rangel soon admitted privately to Treasury Secretary Hank Paulson that he couldn't deliver on the bargain after all. And then came Friday's announcement that Democrats won't even take up the Peru trade bill until Peru first changes its labor and environmental laws. They also said Mr. Rangel will personally fly to Lima in August to instruct Peru's government on what Congress demands.

"The Constitution confers upon Congress the authority to regulate foreign commerce under Article I, Section, 8," the Democratic statement said to justify Mr. Rangel's Lima summit. So forget the Secretaries of State and Treasury and the U.S. Trade Representative; Congress is cutting out the diplomatic middlemen and renegotiating trade deals as it sees fit.

As we say, we think Mr. Rangel wants to do the right thing. The real power behind this Democratic trade backflip is Sander Levin, the Michigan protectionist who is the AFL-CIO's front man on Capitol Hill. He, too, praised the original trade deal. But once his union minders told him otherwise, he turned against it and lobbied Ms. Pelosi to demand that Mr. Rangel follow suit.

Mr. Rangel tells us we're overreacting, and that the Peru switcheroo is nothing more than a "protocol" misunderstanding. He says the Peruvians aren't upset, he and his mates will visit Lima, its government will change its laws, and all will turn out well in the end. But what choice does small Peru have except to smile and accept this humiliation if it wants Democrats to pass the deal?

Never in our memory has a U.S. trade partner been forced to change its laws before Congress ratifies the deal. As a sovereign nation, Peru has negotiated in good faith, even agreeing to keep open the deal's labor and environmental planks to accommodate Democrats after they won Congress. And for its trouble, Peru now gets to watch American Congressmen play gringo nannies to its domestic political process.

This unilateral high-handedness is even worse for the Colombia-U.S. trade pact, which Democrats seem prepared to kill outright. Colombia has been fighting the war on drugs for decades for the U.S., and suffering disproportionately for it. Popular President Àlvaro Uribe, now in his second term, has reduced violence by almost every measure, including murder, terrorist attacks, robbery and kidnapping. But Mr. Uribe knows law enforcement is not the only answer to his nation's ills. He wants to boost the economy through trade so Colombia's poor, who are the most vulnerable to terrorism, can participate in democratic capitalism.

Good idea, right? Not to Democrats, who said Friday that they'll oppose the pact on human rights grounds until they "see concrete evidence of sustained results on the ground in Colombia." What Colombians think about their president and his policies is apparently meaningless. Mr. Uribe replied that he isn't interested in "a relationship wherein the U.S. is master and Colombia a slave republic"; good for him.

House Democrats also declared the South Korea trade deal dead on arrival, based mainly on the issue of automobiles. South Korea has long been protectionist on cars, but the trade deal would gradually open its market. Tariffs would disappear, and Korea would level the playing field on non-tariff barriers such as its engine-size tax and "safety standards." The U.S. can also reimpose its 2.5% tariff on passenger cars if Seoul backslides. Some $1.6 billion in U.S. farm exports would become duty free immediately; services, where the U.S. has a clear advantage, would open substantially. But again, none of that is good enough for Democrats.

All of this suggests that the real goal of the Levin-Pelosi Democrats is to put an end to further trade expansion. The details don't matter; any excuse will do. If they succeed, they will do great harm to U.S. economic and political interests. Rejecting the Peru and Colombia deals would be a strategic disaster, playing into the hands of Hugo Chávez and others who want to turn Latin America against the U.S. And while America sits on the trade sidelines, the rest of the world will keep cutting its own bilateral and regional deals that leave U.S. workers and businesses at a disadvantage.

The Beltway's favorite theme these days is the decline of the Bush Administration, but the trade story is about Democratic protectionism and a political double-cross. The President and business community should stop taking punches and start warning about the damage that the Levin-Pelosi Democrats are doing to the economy and to America's image in the world.

Chestnut brings "Mustard Belt" back to USA

Stories like this always warm my heart. SIXTY SIX DOGS IN TWELVE MINUTES?! This has to qualify as a sport:

From AP:

Chestnut shows he's the world's top dog
By LARRY McSHANE

The Associated Press

NEW YORK — In a gut-busting showdown that combined drama, daring and indigestion, Joey Chestnut emerged Wednesday as the world's hot-dog-eating champion, knocking off six-time winner Takeru Kobayashi in a record-setting yet repulsive triumph.

Chestnut, 23, the great red, white and blue hope in the annual Nathan's Famous International July Fourth Hot Dog Eating Contest, broke his own world record by inhaling 66 hot dogs in 12 minutes, one every 10.9 seconds before a screaming crowd at Coney Island. Police said up to 50,000 spectators were on hand for the event.

"If I needed to eat another one right now, I could," the champion chomper from San Jose, Calif., who weighed in at 215 pounds, said after receiving the mustard-yellow belt emblematic of hot-dog-eating supremacy.

Chestnut also won $10,000, with $5,000, $2,500, $1,500 and $1,000 awarded to the rest of the top five hot-dog eaters.

Kobayashi, 29, the Japanese eating machine, recently had a wisdom tooth extracted and received chiropractic treatment because of a sore jaw.

But the winner of every Nathan's hot-dog competition from 2001 to 2006 showed no ill effects as he stayed with Chestnut frank for frank until the very end of the 12-minute competition.

Once the contest ended, the runner-up suffered a reversal — competitive eating-speak for barfing — leading to a deduction from his final total. Kobayashi finished with 63 HDBs (hot dogs and buns eaten) in his best performance.

Competitors receive credit for anything in their mouths at the 12-minute mark, provided they can swallow it.

"Obviously, the last bit exited his mouth quite dramatically," said Rich Shea, of the International Federation of Competitive Eating.

Kobayashi's gastric distress was the only sour note in the tube-steak tussle, broadcast nationally on ESPN.

Contestants tend to dunk the bread in water to make swallowing easier and eschew condiments such as ketchup or mustard.

Kobayashi, who weighed in at 154 pounds, said through an interpreter that all the eaters were getting better every year. "I lost but this was the most fun I had," he said. "I didn't feel pain but my jaw wasn't moving part way through," he said of his injury.

Kobayashi's previous best was 53 ½ in the competition that dates back to 1916. The record before Wednesday was Chestnut's 59 ½, set in June in the Phoenix suburb of Tempe.

The two gastric gladiators quickly distanced themselves from the rest of the 17 competitors, including two women, processing more meat than a slaughterhouse within the first few minutes. The two had each downed 60 hot dogs with 60 seconds to go when Chestnut put away the final franks to end Kobayashi's reign.

Kobayashi promised to return for the 2008 event.

Chestnut's victory ended Japan's long dominance of the contest. The only previous non-Japanese winner since 1996 was New Jersey's Steve Keiner in 1999. Third place this year went to another American, Patrick Bertoletti, of Chicago, with 49.

"This title's been held by Kobayashi for six years, so it's about time it came home," said Chestnut, holding an American flag in his arms.

"I knew going into this contest that Kobayashi was going to give 100 percent."

Chestnut said he probably won't eat a regular meal until tonight.

But normalcy will be short-lived. Next week, he's heading back to New York, where Pizza Hut is hosting an eating competition. Chestnut plans to be there.

Michigan Conservative Organizations

There are a number of good conservative organizations in Michigan.

Pro-life
Right to Life of Michigan
Pro-Life Federation of Michigan

Pro-gun
Michigan Coalition for Responsible Firearm Owners
Michigan Gun Owners
Shooters Alliance for Firearm Rights

Pro-family
American Family Association of Michigan
Citizens for Traditional Values
Student Statesmanship Institute

Immigration
Michigan Federation for Immigration Reform and Enforcement

Limited Government
Mackinac Center for Public Policy
Michigan Capitol Confidential
Michigan Taxpayers Alliance
Michigan FairTax
Michigan Conservative Union
Michigan Americans for Prosperity
Michigan Freedom to Work
Michigan Republican Liberty Caucus

Tea Party
Michigan Tea Party Alliance
Michigan Independence Caucus

Local Conservative Organizations

The Kalamazoo area has several good conservative organizations.

Kalamazoo Tea Party advocates limited government, lower taxes, spending, and regulation, and following the Constitution.

Kalamazoo Right to Life engages in education and political activism to defend the right to life and oppose abortion and euthanasia.

Alternatives Women's Care Center is a crisis pregnancy center that offers counseling, pregnancy testing, support for pregnant women, and education.

Kalamazoo County Taxpayers Association is a group that advocates lower taxes and limited government. It opposes many ballot initiatives and watches for wasteful spending.

Southside Sportsman Club is a shooting range that offers concealed carry classes and supports gun rights.

Kalamazoo Area Home School Association is a support organization for homeschoolers. It organizes events and activities and supports education freedom.

Kalamazoo County Republican Party seeks to elect Republicans to office and advance conservative policies.

WMU College Republicans promote conservative policies and values on campus and seek to elect Republicans to office.

Sander's Folly

From National Review:

An All-Out Tax Assault on Capital Gains
The ramifications are dire for the U.S. economy, federal revenues, and ordinary investors.

By Phil Kerpen

When the Senate bill to raise taxes on publicly traded private-equity partnerships first appeared, I suggested that it could be the precursor of legislation to hike taxes on all investment partnerships. And so it was.

Rep. Sander Levin (D., Mich.) has introduced a bill that would raise taxes on all partnership performance fees from the capital-gains rate, currently 15 percent, to ordinary income-tax rates, currently as high as 35 percent. If successful, this measure could lead to the elimination of the capital-gains tax rate for everyone, replacing it with much higher personal rates. The ramifications of this are dire for the U.S. economy, federal revenues, and ordinary investors.

Blackstone LP’s initial public offering a week ago had raised the ire of senators who looked to score political points by increasing taxes on private-equity partnerships that go public. A bill introduced by senators Max Baucus (D., Mont.) and Chuck Grassley (R., Iowa) would have forced partnerships that go public to pay corporate tax. Putting aside the fact that the portfolio companies Blackstone owns already pay corporate tax, and that partners, including those who buy into the now-publicly traded partnership, pay individual taxes on partnership income, this misguided tax hike would do real damage to regular investors. In particular, it would give partnerships a strong incentive to stay private, sidelining many grassroots investors from the private-equity boom.

Baucus-Grassley is a real threat that should be taken seriously. But in truth it directly affects only a small number of partnerships that are publicly traded or wish to be publicly traded. That’s why, in order to satisfy their appetites for ever higher tax rates, legislators are turning to broader tax hikes on carried interest.

Carried interest refers to the performance fees that limited partners pay the general partner so that they can participate in the upside of their investments and have their incentives aligned. The most common arrangement for investment partnerships — including hedge, private-equity, and venture-capital funds — is the 2/20 structure. When limited partners (usually pension funds, university endowments, and wealthy individual investors) invest in a fund, they typically agree to pay the general partner who runs the fund an annual fee of 2 percent to cover management costs. They also agree to give the general partners a piece of the upside, the capital gain, if the investments are successful. That portion of the capital gain, typically 20 percent after the original investment and a specified rate of return is paid out, is known as the carry, or carried interest.

The management fee is earned income, and is taxed as such. But a capital-gains treatment for the carried interest is appropriate since it is capital income. And since the carry represents a portion of the fund’s capital gain, taxing it at the full individual rate would exacerbate the double-taxation of capital gains, since the portfolio companies already pay corporate tax.

Additionally, taxing carry as ordinary income would represent an enormous tax hike that would drive investment partnerships out of the U.S. and force limited partners to offer higher pre-tax participation to general partners, lowering returns for millions of Americans whose pensions are invested in private equity and removing critical support, via buyouts, from the stock market.

If all this is not bad enough, the trend is toward something even worse: The same people who think the capital-gains tax on carried interest is a loophole also believe the capital-gains tax for all investors is a loophole. Sen. Ron Wyden (D., Ore.) has already introduced a bill that would close that so-called loophole by taxing capital gains at ordinary income-tax rates.

The misguided rationale for this policy is that fairness requires taxing income, whether it comes from capital or labor, at the same rate. But capital income already is subject to the 35 percent corporate tax rate before being distributed to investors as capital gains or dividends, making even the current 15 percent cap-gains rate an unfair double tax. (If the corporate tax were repealed, as former Ways and Means chairman Bill Thomas has suggested, capital gains could be treated as ordinary income, although it still should be inflation-adjusted to avoid the taxation of phantom gains.) Since capital investment entails substantial risk-taking, it is desirable — and should not be discouraged by high taxes. Former Federal Reserve chairman Alan Greenspan repeatedly advised Congress that the correct capital-gains tax rate is zero.

But now we’re headed dangerously in the opposite direction.

Raising the capital-gains tax to 35 percent, or even 40 percent or more should the Democrats successfully raise income-tax rates, would dramatically reduce the after-tax return on stock investments, which would be a great impediment to stock markets. It would significantly raise the cost of capital, drying up investment in many innovative, entrepreneurial companies. It also would hit the U.S. Treasury hard, contrary to the conclusions of the static-revenue scorekeepers. History is an excellent guide here: Every capital-gains tax hike in the past thirty years has led to lower federal revenues, while every cap-gains tax cut has led to higher revenues.

Investors need to weigh-in against tax hikes on capital now, and hold the line on private equity. If private-equity partnerships take a hit from higher capital-gains tax rates, it won’t be long before regular investors feel the full force of the blow.

Thank You, Doctor Haenicke

July 1, 2007 marks the end of Diether Haenicke's term as interim President of Western Michigan University. Haenicke was an exceptional leader who took over at a difficult time and served Western well.

In August 2006, Judy Bailey was fired as President of Western. Bailey's tenure was marked by declining enrollment and discord on campus. She made a number of unwise decisions that wasted money and damaged academic standards. She also managed to antagonize nearly every group on campus.

After firing Bailey, the Board of Trustees appointed Haenicke to replace her. He had previously been President of Western from 1985 to 1998.

Haenicke made wise financial decisions that eliminated unnecessary expenditures. He canceled the purchase of a building from Pfizer that would have cost $2 million per year to operate. He also reversed Bailey's decision to give free room and board to Kalamazoo Promise students, who already get full ride scholarships.

At the same time, Haenicke also improved student services. He reopened the Ombudsman's office, which had been closed by Bailey. He also significantly increased library hours. His administration was responsive to the suggestions of the Western Student Association on that and other issues. He worked to improve services to students by requiring administrators to answer their phones.

Haenicke also was right on political issues relevant to education. He supported the Michigan Civil Rights Initiative to end racial preferences, and was virtually alone in the academic elite in doing so. He pledged to change Western's restrictive speech code, protecting freedom of speech. Finally, he cancelled the "First Steps Scholars" program to give in-state tuition to illegal immigrants.

Haenicke greatly improved morale and harmony on campus. At the same time, he did not indulge the sort of liberalism that is "offended" by everything.

Haenicke was a friend of the WMU College Republicans, and praised us in a 2006 article. While we will miss him, we wish him a great second retirement.

Thank you, Doctor Haenicke.

POLITICAL UPDATE--Energy and Environmentalism

This update focuses on energy and environmentalism. Government regulations increase energy prices. False solutions like ethanol are promoted while nuclear energy is discouraged. The environmental movement promotes the global warming scare as part of an anti-human ideology.

Michael Economides: Energy Bill in the Senate is Destructive
Tim Carney: Ethanol Hurts Consumers in Many Ways
Thomas Sowell: War of Words: Part II
Terry Easton: The Wacky World of Oil: Why Gasoline Will Hit $4.00 a Gallon this Summer.
Ed Hiserodt: Another Look at Nuclear Energy
Ed Hiserodt: Myths About Nuclear Energy

Vin Suprynowicz: The Only Cure for Global Warming
Mac Johnson: Ban Ki Moon: Super Genius
Ivan Osorio: Liberal ‘Scientists’ Lead Jihad Against Global-Warming Skeptics
John Stossel: How About Economic Progress Day?
Mac Johnson: You Da Man
John Berlau: The Don Imuses of the Greens