Taxes undo Mass. Guv & other Dems

(Wellfleet, MA - July 20) This is a small Cape Cod community –about 500 people when I was growing up- now part of Massachusetts’ National Seashore Park. It's also home to a few hardy souls with whom I shared the experience of a one-room school house presided over by a septuagenarian female teacher whose reproving glances struck abject fear in our young hearts. One of the advantages of encountering such old friends is that it is possible to discuss current events without hitting the high wall that these flinty New Englanders usually erect between themselves and nosy “outsiders”. Thus of a recent morning I enjoyed some illuminating conversation concerning Massachusetts politics- usually a good source of light entertainment if not moral uplift.

It’s been a tough week for the state’s Democratic governor, Deval Patrick. On Monday the Democratic State Treasurer Tim Cahill announced he was quitting the party and signaled pretty clearly that he would run against Patrick as an Independent. On Wednesday Charles Baker, a prominent Republican businessman with deep pockets, announced that he too would challenge the incumbent.

Illustrating a key reason for Patrick’s vulnerability was the discovery on Tuesday that the state’s budget gap- already 3.2 billion dollars- had worsened by an additional 200 million dollars owing to dismal June revenues.

The basic cause of Patrick’s plummeting approval ratings and the consequent electoral challenges is no mystery: Taxes. With the concurrence of the Democrat controlled legislature Patrick has recently done the following: a. increased highway tolls by 25 %; b. increased Metropolitan bus and subway fares by 30 %; c. imposed a first ever tax on retail alcohol sales (two dollars on a fifth of Scotch. Ouch!); and d. –causing the most outrage- raised the already high sales tax by 25%.

The use of weasel terms like “fee adjustments”, or “revenue enhancements”, or Patrick’s gem-“state income improvement measures” does not fool but does further infuriate a public that knows a tax increase when it sees one.

Also significant is that all of those taxes are regressive in nature falling most heavily on those lower income groups that have traditionally been the foundation of the Democrats’ electoral base.

All of this however is not just a Massachusetts story, but rather a template for states across the nation where Democrats are running things. The recession has put the Democratic Party under a harsh spotlight that has simultaneously exposed their deeply flawed approach to governance and their fundamental incapacity to preside over difficult economic times like the present.

The recession undermines and ultimately makes counter-productive the Democrats favorite activity: Spending. It also impels them toward the only remedy tolerated by their ruling elites: The political Kool-Aid of Tax Increases.

At the heart of the Democrats’ dilemma are three inherent defects that have long plagued their party: 1.They are constitutionally incapable of grasping the concept that lower tax rates can generate higher tax revenues (See Reagan,R., 1981); 2. They are politically incapable of any budget or policy initiative opposed by their union allies; and 3. Ideology makes them utterly blind to the fact that creating a “business friendly” climate is essential to any sustained economic recovery.

Historically, political change in the U.S. begins at the state level before going national. An excellent example is Proposition 13- California’s 1978 tax revolt that prefigured the triumph of Ronald Reagan.

A major reason for this pattern is that economically speaking reality bites earlier and harder at the state level. Economic make-believe can be sustained longer at the Federal level because it is a remote and artificial environment that prints its own money- a luxury unavailable to states where budgets must be balanced in real time.

Accordingly political retribution is swifter at the state level. Gubernatorial approval ratings nosedive faster than the Presidential variety, but in the end both are reflective of economic malfeasance, and the populist backlash it generates.

In 2006 Deval Patrick was an attractive, articulate outsider who preached a gospel of “Hope and Change”. His good friend Barack Obama even admitted in 2008 to plagiarizing a few of Patrick’s speeches.

No doubt friend Obama has noticed that Patrick’s “Hope and Change” bandwagon has collided head-on with “Reality and Disillusion”.

An increasingly restless nation waits to see what if any lessons our new President will learn. William Moloney’s columns have appeared in the Wall St. Journal, USA Today, Washington Post, Washington Times, Philadephia Inquirer, Baltimore Sun, Denver Post, and Rocky Mountain News.

New polls: "Obamacare" is not inevitable!

We should all hope and pray that Karl Rove is right in his opinion piece today in the Wall Street Journal ("Obama Care in Trouble"). Rove argues that both the polls and the political calendar are working against Obama's attempt to socialize health care in this country: On Monday, the Washington Post/ABC poll reported that 49% of Americans approve of his handling of health care while 44% disapprove. What many people missed is that those who strongly disapprove of the president’s approach on health care now outnumber those who strongly approve by 33% to 25%. That presages further decline. Already, 49% of independents disapprove of the president’s approach, up from 30% in April, a staggering shift in 11 weeks.

As I have written previously ("Are American voters finally catching on"?), this echoes general polling that shows independents and conservative Democrats -- the key swing vote that elected Obama in the first place -- turning away from Obama as well.

According to Rove, Obama's support is crumbling because of a flood of bad news about Mr. Obama’s health-care proposals.

One batch of such news came from a July 17 study by the Lewin Group that was commissioned by the Heritage Foundation. It projects that if the House bill becomes law, 83.4 million people—nearly half of those with private coverage—will lose private insurance as employers drop their plans. Mr. Obama’s promise that you can keep your plan is being left on the cutting room floor with nary a peep from the president.

Not a surprise, of course, since Obama's true goal is to provide an American version of Britain's National Health Service. Nevermind, of course, that the NHS led to substandard care, rationing and long waits for basic procedures. In the true hubris that only an American president can muster, Obama thinks "we can do it better". That same kind of thinking, by the way, has led us to ignore the disaster that befell the Japanese economy in the 1990s when it undertook government stimulus to right its massive recession -- more than 15 years of stagnation and anemic growth. But nevermind. The left has its ideological orthodoxy and let's not get bogged down in details or facts.

We should be thankful that at least somebody in Washington has the courage to tell the truth, even if he was called on the carpet afterward by the President for deigning to provide an honest evaluation of Obama's plan. Douglas Elmendorf, the Director of the Congressional Budget Office, testified last week that

"...the White House’s health-care proposals would not “reduce the trajectory of federal health spending by a significant amount.” This shattered the central claim Mr. Obama has been making: that his health-care plan controls costs. In a July 17 letter, Mr. Elmendorf added that the House’s health-care bill would result in a “net increase in the federal budget deficit of $239 billion” over 10 years. That’s likely a low-ball estimate because it assumes that Congress will increase taxes by $583 billion over the next decade."

Ahh, but of course -- new taxes. In the end, this is the heart of the Obama mission -- to tax the productive into submission so that the poor (Democrat voters, all) will have their free lunch. This is no surprise (or shouldn't be, anyhow), since Obama told "Joe the Plumber" that his ultimate goal is to "spread the wealth around". He wasn't lying about that, my friends.

I do sense that a tide is turning. Yesterday I attended a meeting of the local GOP club here in Colorado. It was a packed house on a Wednesday afternoon, and the energy in the room was palpable. Several of those who were there were Democrats who apparently have seen and heard enough of Obama, and who are now committed to seeing the defeat of his big government plans.

It's encouraging. But we must keep up the pressure. Show up at meetings. Go to protests. Write and/or call your Representatives. The time to fight is now -- before its too late.

California kicks the can (again)

You have to love the politicians in Sacramento -- maybe not as embarrassing as those in Congress but pretty darn close! As I've written previously, the state has been in a fiscal mess of its own making, issuing high-interest IOUs in lieu of cash. Its just the latest annual budget fiasco in a state that spends more than it takes in -- in part because it gets over half its tax base from a tiny percentage of its richest residents whose incomes don't stay steady. Add to that an annual "cost of living increase" baked into the state's huge employee and pension contracts (regardless of annual revenue) and you have the kind of deficit spending that government is so good at. Now news comes tonight that the state has -- at least according to the questionable standards of the  San Jose Mercury News -- made a Budget Breakthrough solves California's long fiscal nightmare. Only it hasn't "solved" anything -- other than the current fiscal problems. What it didn't do is come to any kind of structural or long-term solution:

The deal would include Democratic concessions of more than $14 billion in program cuts — hitting the poor, children, the elderly and disabled while avoiding outright elimination of the state's welfare-to-work CalWORKS program and the Healthy Families health insurance program for children.Though they failed to get permanent reductions in welfare programs, Schwarzenegger and Republican legislators were able to uphold their vow of no new taxes with a series of accounting shifts and an enforced "loan" of nearly $4 billion from local governments.

Those accounting tricks include accelerating income tax withholdings from residents' paychecks by 10 percent,effectively shifting millions of next year's revenues into this year's budget, and delaying state workers' June 30, 2010 paychecks by one day — and thus, into next fiscal year.

From the beginning, Democrats had little hope that they could win approval of tax increases, though they proposed popular measures such as $2 billion in taxes on oil companies, alcohol and tobacco sales and the closing of numerous corporate loopholes.

Although they represent barely more than one-third of either the Senate or the Assembly, Republicans have near-veto power over the proceedings, thanks to the constitutional requirement of a two-thirds vote for budgets and taxes.

Despite an ardent lobbying effort, cities and counties likely will take a major hit, with the state poised to borrow nearly $4 billion in revenues from property taxes and gas taxes. Critics say that will result in a devastating impact on local services.

Only in California, then, can you fail to make any headway on the longer-term issue of out-of-control spending and a shrinking revenue base while solving the problem with accounting gimmicks -- and call it a "success".  What the state has done is simply to kick the can down the road yet again, so that next year it will have to go through this all over again. Now that's what I call inspired political leadership!

What do you expect from a legislature that is bought and paid for by the unions and special interests, and a governor who talks tough but doesn't really have the stomach (or principle) for the kind of show down that might have really fixed this problem once and for all?  Creative accounting followed by a huge passing of the buck to local governments, which will now have to make the tough choices that Sacramento didn't have the courage to make.

And we now are going to give health care to Washington? Are we completely nuts?

Are voters finally turning against the Obama power grab?

We all know that common sense is in short supply these days. I blame in large part the insidious cancer of political correctness -- a scourge that seems to make it impossible for people to speak (and act) in pursuit of the truth anymore. Its a shame, but the combination of political correctness, the liberal media and the over-active tort bar has made wimps of almost everyone in any position of power -- from local school boards to town councils. And, of course, this goes double for those in Washington DC -- who will always put politics and their insatiable thirst for power above doing the right thing for the American people. Fortunately, it appears that the American people may be catching on. As Michael Barone reports, recent polls seem to show that the public is starting to wake up to the big government power grab going on with Obama and his minions:

Last month's Washington Post-ABC poll reported that Americans favor smaller government with fewer services to larger government with more services by a 54 percent to 41 percent margin -- a slight uptick since 2004. The percentage of independents favoring small government rose to 61 percent from 52 percent in 2008. The June NBC-Wall Street Journal poll reported that, even amid recession, 58 percent worry more about keeping the budget deficit down versus 35 percent worried more about boosting the economy. A similar question in the June CBS-New York Times poll showed a 52 percent to 41 percent split.

Other polls show a resistance to specific Democratic proposals. Pollster Whit Ayres reports that 58 percent of voters agree that reforming health care, while important, should be done without raising taxes or increasing the deficit. Pollster Scott Rasmussen reports that 56 percent of Americans are unwilling to pay more in taxes or utility rates to generate cleaner energy and fight global warming.

This is consistent with the most recent Rasmussen poll that shows Obama's approval rating now hovering just above 50% -- in fact, below the percentage of vote he got in the 2008 election. Polls now consistently show that Obama and the Democrats are starting to steadily lose support among the all-important Independent swing voters -- the very same voters who were the difference in the 2008 election. As Ben Smith at Politico notes:

In a potentially alarming trend for the White House, independent voters are deserting President Barack Obama nationally and especially in key swing states, recent polls suggest.

“This is a huge sea change that is playing itself out in American politics,” said Democratic pollster Doug Schoen. “Independents who had become effectively operational Democrats in 2006 and 2008 are now up for grabs and are trending Republican.

“They’re saying, ‘Costing too much, no results, see the downside, not sure of the upside,’” he said.

Predictably, of course, the White House is dismissing any shift in independent support as inconsequential -- the typical hubris of a party that thinks it won a realigning election in 2008.

I have consistently argued that Obama ignores these kinds of polls at his own peril -- for the 2008 election did not reflect a fundamental shift in the American polity from a center-right to center-left orientation.

Increasingly it seems now that people are starting to wake up to the fact that the power grab going on in Washington has come without much thought -- and without any debate. This is an argument that the Republicans seem to be effectively making now, and it is resonating with Independents. Take a look at this very powerful video that Republican Senatorial Committee put out: here

This video -- as well as others up on Youtube and now circulating the net are starting to make A pretty strong case that I think many voters will respond to. The fact is that the Obama Administration has made an unprecedented grab for power in the form of big government programs with almost no debate -- spending trillions of tax payer dollars far into the future, and committing America to a future of higher taxes, onerous environmental regulation with no purpose, and ultimately to sub-standard government-run health care.

Any American without an ideological stick to beat knows there is no common sense in what is going on in Washington. My guess is that this will become crystal clear in 2010, and a huge backlash is coming.

Junk politics, backed by junk science

So the House of Representatives, that august body led by union-backed leftists and intellectual dwarfs, has managed to narrowly pass a Climate change bill that will put a major burden on our fragile economy by taxing every source of energy at our disposal. Its unfathomable to me how we can spend billions of taxpayer dollars in bailouts and then make it even more difficult for the economy to recover. Worse, we are unilaterally disarming -- as other nations that have attempted "cap and trade" schemes are abandoning them left and right. As Kim Strassel at the WSJ shows today, the "climate" around climate change is, well, changing: Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as "deniers." The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.

The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)

So it turns out that the whole climate change movement is based on science that is far from certain. In fact, the science may be junk: the earth has been cooling for the past decade, and it turns out that the hottest year on record was in the 1930s -- not the recent result of all the greenhouse gasses we've been polluting the atmosphere with. As Strassel shows, much of the world is wising up to the farce.

But not the U.S., which appears to be lagging behind the rest of the world, intent on repeating the mistakes of others. The truth, of course, is that the science has never mattered -- it was only a pretext to get people on a bandwagon that is really about social engineering.  The left wants us to live differently, and the only way that they can enforce their social agenda is to play fast and loose with the facts to convince people we are on a slippery slope to self destruction. The goal is deprivation, driven by a "consumption guilt" that regrets the plenty we have because others have so little. Never mind that the most egregious offenders of CO2 emissions are the less developed nations that are clear cutting forests with reckless abandon with no limits on carbon output. But that's another inconvenient truth that Nancy Pelosi, Al Gore and the other true believers don't want to talk about.

The madness of all this is that this is bad policy -- even if it is good politics for a public that has been brainwashed into believing that "green jobs" can save the world. We will figure this out eventually -- as Australia and others have. But it won't be before we take a costly trip down a path paved with good intentions.