Category: Economy

The Government Is Killing Buses All Over Again

Statists never learn.

According to Reason TV, in the early part of the 20th century the government began heavily regulating a new industry in the midst of its unprecedented expansion. That industry was busing. And the regulations overreached to include setting fares, schedules, and even outlawing competition in some areas.

The bureaucratic mess created by the government ended up crushing the industry.

The industry remained in a slump until President Reagan removed many of the devastating and unnecessary regulations from the industry and some dynamic entrepreneurs brought the industry back from the brink. Now, many new bus lines are popping up and becoming popular. The revival of the industry is nothing short of amazing.

Unfortunately the bureaucrats have taken notice they want what they always want: more control and more regulations. They’ve already shut down several bus lines over seemingly exaggerated safety concerns. In fact, they shut down one bus line despite the fact that none of its buses had ever been involved in a fatal crash.

All those who enjoy cheap and convenient bus service ought to be leery of any new regulations on the industry. People should be especially cautious of those regulations that seem to have no basis in reality. Otherwise we may end up with the bus industry in disarray once again.

Politifact Lies About Paul Ryan and the Janesville GM Plant

Last night Politifact Wisconsin issued one of the least factual and most skewed “fact checks” I’ve ever seen. Not only do they bend over backwards to provide cover to one of the most impotent promises President Obama ever made, they also simply lie about the key facts they use to label Paul Ryan’s claim false. Here is Politifact’s ruling:

Continue reading Politifact Lies About Paul Ryan and the Janesville GM Plant

Repealing the Bush Tax Cuts Would Lead to Lower Tax Revenues

Since many liberals are calling for new massive tax increases as a part of the debt ceiling deal congress is fighting over right now I figured it might be a good time to review some of the results of the last major attempt at tax reform. The Bush tax cuts that is.

So, what exactly does the data show us about how they performed?

First off we need to understand that the revenues resulting from tax structures are completely dependent on the state of the economy. Of course the opposite is viewed by everybody from across the political spectrum to be true as well. To make things fair I’ll be comparing the best year in terms of (inflation adjusted to 2005 dollars) tax revenues from the pre-Bush tax cuts era and our current era.

Following this rule the best pre-Bush tax cuts year on record for (inflation adjusted) tax revenues was under Clinton in 2000. The best year on record for (inflation adjusted) tax revenues under the Bush tax cuts was 2007.

Now one of the most common standards used by liberals (and even some conservatives) for how well a tax structure is doing is how much money it brings in as a percentage of GDP. In other words many judge a tax structure by how much of the economy it eats up.

This. Is. Absurd.

A tax structure ought to be judged by how many (inflation adjusted) dollars it can bring in. Ideally you could even go a bit further and say the best tax structure brings in the most revenue with the smallest burden on the economy. After all shouldn’t the goal of an efficient tax system be to get the most money with the least affect on the economy?

By either of these standards 2007 bests 2000. In 2007 tax receipts (in 2005 dollars) totaled $2.414 trillion where as 2000 tax receipts (in 2005 dollars) only totaled $2.310 trillion. Additionally in 2007 taxes were only 18.5% of GDP but in 2000 they were 20.6% In other words the best year after the Bush tax cuts was better than the best year before them.

The fact is in 2007, under the Bush tax cuts, we had a larger economy AND greater tax revenue than at any time since at least 1940 which is as far back as the Tax Policy Center keeps score.

We could certainly go around in circles forever debating the pros and cons of theoretical tax systems and I certainly wouldn’t say that our current tax structure, even post Bush tax cuts, is the ideal. However, it is extremely important to take a look at how real world reforms have performed and exactly what that means. This time around the facts clearly show us that a real world conservative supply side tax reform has produced a better, more efficient, and more effective tax system.

UPDATE: For a slightly revised and expanded version of this theory check out my op ed over at Human Events!

White House Insists Short Term Deal Would Mean Credit Disaster

As Rory Cooper at The Foundry has noted I had a conversation with White House deputy press secretary Dan Pfeiffer through his official twitter account earlier today. Rory outlines the part of our back and forth that dealt with whether or not the President would sign any deal that made its way to his desk. Pfeiffer said yes but only because he seems to believe that Senate Democrats would never pass a short term deal.

Why does the White House believe Senate Democrats would never pass a short term deal? Well, according to Pfeiffer, a short term deal, despite raising the debt ceiling and staving off any possibility of default, would still likely lead to a downgrading of our national credit rating. Pfeiffer claims that this is what the credit agencies have said.

Continue reading White House Insists Short Term Deal Would Mean Credit Disaster

Obama’s Broken Promises

Back before the election, President Obama made promises about what he would do as President. Since his obamaInauguration, the President has broken many of these pledges. Who could have seen this coming? Remember the promise of no lobbyists in the Obama Administration? He broke that, as seen in the list of lobbyists in top jobs.

Then there was the promise of no earmarks. When he addressed Congress in February after the “Stimulus Bill”, President Obama said that “we passed the recovery plan free of earmarks”. However, even Speaker Nancy Pelosi, who was popping up behind the President with thunderous applause, received $30M for her district to protect a mouse. Then there was the budget to fund the government for the rest of the year. In it there were an estimated 9,000 earmarks, totaling more than $5B. Another promise broken.

Finally, there was the no tax increases for “families making less than $250,000”. Well, Mr. President. How do you explain supporting a tax on energy, health care benefits, and all items? If the White House supported American Clean Energy and Security Act passes the Senate (which will be difficult), President Obama will place an outrageous tax on all those who drive a car or flip on a light switch, which is to say, nearly every single American. Rep. Paul Broun (R-GA) estimates that this legislation would amount to be a $2 trillion tax increase to businesses and consumers. Continue reading Obama’s Broken Promises

Shocker: Chrysler Won’t Repay Bailout Money

chrysler

There goes that cash… straight down the money pit.

But, hey, what’s $7 Billion among friends. Especially nowadays:

Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler’s bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company’s key financial advisors in the bankruptcy case.

Now, a pessimist might say that the bailout money has gone down the black hole that these failing companies are and we will never see any of it repaid (even if the companies want to repay it).  Unfortunately I am a pessimist. After all the government would much rather own or control these companies than get money back from them:

An Obama administration official confirmed Tuesday that Chrysler won’t be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

“The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process,” said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company’s reorganization is meant to compensate taxpayers for the lost money.

Like I said… shocking.

Fox Business Wins Suit Against Treasury

fox business

Looks like the Treasury will actually how to tell us all how they’re wasting our money. That’s the end result of Fox Business Network’s Freedom of Information Act lawsuit against them:

FOX Business Network has won a victory against the Treasury Department in its Freedom of Information Act request for details about the government’s bailout plan.

Judge Richard J. Holwell of the U.S. District Court for the Southern District of New York said in a decision Friday that the government is directed to comply with FOX Business’s request under the FOIA “within 30 days and to produce a Vaughn index with 45 days.”

That means Treasury must comply with FOX Business’s request by Monday, April 23, and must produce a Vaughn index by Monday, April 6.

A Vaughn index details which documents have been withheld and why.

This is great news for those of us who, for some crazy reason, don’t blindly trust the government to spend our money in a wise or responsible way. Here’s exactly what FBN was looking for in this suit:

FBN asked the Treasury Department to identify, among other issues, the troubled assets purchased, any collateral extended, and any restrictions placed on these financial institutions for their participation in this program.

Not exactly unreasonable. Definitely important.

Good work FBN.

Chrysler Expected to Fail Despite Bailout

Well, there’s absolutely no way anybody could have ever seen this coming. There was no way to ever predict anything like this. No posible way to figure out that the massive bailout madness would backfire and leave the tax payers holding the tab. Who would’ve thought that the brilliant thinking behind all of this could have turned out to be idiotic?

But none the less most analysts now expect Chrysler to fail despite the massive amount of cash the government has thrown their way. These hideous numbers, reported by the Associated Press, tell the story of the idiocy that is the automakers bailout:

Even by the standards of battered automakers, Chrysler is in dire shape. Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won’t survive the year as an independent company — despite $4 billion in government loans and the possibility of more.

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC’s passenger cars.

It gets worse: Continue reading Chrysler Expected to Fail Despite Bailout

Porn Industry Wants 5 Billion Dollar Bailout

larry flint

In a move that has the potential to be the most egregious story of this entire massive bailout madness the porn industry will ask for a 5 billion dollar bailout.

CNN reports:

Another major American industry is asking for assistance as the global financial crisis continues: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis said Wednesday they will request that Congress allocate $5 billion for a bailout of the adult entertainment industry.

So, this request has created the potential for the government to not only prop up a dying industry and one of the most dispicable and disgusting industries to ever grace the face of our fair planet. If this passes, and anything seems possible in this climate, it will represent just how far we have fallen and just how hard conservatives will have to fight to gain back any ground.

But wait, is the porn industry dying at all? Does it even need free money to stay profitable? Well, according to the reject making the request for money, no: Continue reading Porn Industry Wants 5 Billion Dollar Bailout