WSJ.com - The Unhappy Paradox of Santa-Statism

WSJ.com - Opinion: The Unhappy Paradox of Santa-Statism

 

The real problem [with budget cutting] is that cutting almost anything is impossible when what passes for governing philosophy is little more than a bromide such as, "The government should do nice things for people."

The president is hardly alone in this Santa-Statism. And to be sure, polls about the government doing generic good things for people elicit positive responses, even in these times of antigovernment fervor.

So it might seem like a winner for a politician to lard up every policy and speech with government kindness. But this leads to a terrible paradox for policy makers. While Americans favor "nice things" in theory, the resulting government—a kind of adlibocracy, if you will—ends up looking wasteful at best and predatory at worst.

The "doing good" philosophy cannot accommodate difficult but necessary budget decisions. It will always devolve into a drunken spending binge largely directed toward rewarding political friends like public-sector unions (witness the current mayhem in Wisconsin), engaging in social engineering (see the new health-care mandates), socializing losses (emergency loans and grants to failing businesses), and doling out pork (look almost anywhere in the stimulus).

So citizens say they want government to help them, politicians oblige, but citizens loathe the result. How do we cut this Gordian Knot? The solution is a real philosophy that outlines what the government should do—and, just as importantly, not do.

What is that governing philosophy? Here is an answer from the great economist and Nobel laureate Friedrich Hayek: As regards the economy, the government should provide a minimum basic standard of living for citizens, and address market failures in cases where government action can do so cost effectively. That's all.

 

 

 

 

 

 

WSJ.com - Public Unions Get Too 'Friendly'

WSJ.com - Opinion: Public Unions Get Too 'Friendly'

 

In what might be called an expression of the new spirit of transparency that is sweeping the globe, two documentaries came out in 2010, "The Lottery" and "Waiting for Superman." Both were made by and featured people who are largely liberal in their sympathies, and both said the same brave thing: The single biggest impediment to better schools in our country is the teachers unions, which look to their own interests and not those of the kids.

In both films, as in real life, the problem is the unions themselves, not individual teachers. They present teachers who are heroic, who are creative and idealistic. But they too, in the films, are victims of union rules.

Unions have been respected in America forever, and public-employee unions have reaped that respect. There are two great reasons for this. One is that unions always stood for the little guy. The other is that Americans like balance. We have management over here and the union over here, they'll talk and find balance, it'll turn out fine.

But with the public-employee unions, the balance has been off for decades. And when they lost their balance they fell off their pedestal.

When union leaders negotiate with a politician, they're negotiating with someone they can hire and fire. Public unions have numbers and money, and politicians need both. When governors negotiate with unions, it's not collective bargaining, it's more like collusion. Someone said last week the taxpayers aren't at the table. The taxpayers aren't even in the room.

 

 

 

 

WSJ.com - The Truth About U.S. Manufacturing

WSJ.com - Opinion: The Truth About U.S. Manufacturing

 

Is American manufacturing dead? You might think so reading most of the nation's editorial pages or watching the endless laments in the news that "nothing is made in America anymore," and that our manufacturing jobs have vanished to China, Mexico and South Korea.

Yet the empirical evidence tells a different story—of a thriving and growing U.S. manufacturing sector, and a country that remains by far the world's largest manufacturer.

In every year since 2004, manufacturing output has exceeded $2 trillion (in constant 2005 dollars), twice the output produced in America's factories in the early 1970s.

The truth is that America still makes a lot of stuff, and we're making more of it than ever before. We're merely able to do it with a fraction of the workers needed in the past.

Critics view the production of more with less as a net negative—fewer auto plant jobs mean fewer paychecks, they reason. Yet technological improvement is one of the main ingredients of economic growth. It means increasing wages and a higher standard of living for workers and consumers. Displaced workers learn new skill sets, and a new generation of workers finds its skills are put to more productive use.

 

 

 

WSJ.com - Let's Begin Obama's 'Conversation' on Entitlements

WSJ.com - Opinion: Let's Begin Obama's 'Conversation' on Entitlements

 

Nobody should be surprised that public-sector workers in Wisconsin and elsewhere are fighting to preserve every penny of their promised benefits.

Nobody should be surprised that state governors—and it doesn't matter which party—are trying to trim those privileges and benefits.

This fight was penciled in long ago, when politicians and union leaders made the strategic decision to negotiate benefits without negotiating for the funding to make good on them. The mock shock and horror is all the more laughable given that events in Wisconsin are a perfect microcosm of the battle that every sentient American knows, and has known for a generation, awaits Medicare and Social Security.

Medicare is the real killer. An average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.

Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.

By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean.

 

 

 

WSJ.com - Goldman Sachsonomics

I’ve been hearing this argument – that reducing federal spending will reduce jobs.  This article shows a simple refutation of that line of thought. 

 

WSJ.com - Opinion: Goldman Sachsonomics

 

Washington's spending fight heats up next week as Democrats try to derail House Republican attempts to shave $61 billion from the federal budget. Believe it or not, their favorite argument seems to be that cutting government spending reduces economic growth. Seriously.

Chris Van Hollen, the budget leader for House Democrats, declared on CBS's "Face the Nation" last Sunday that the GOP budget cuts—a 2% reduction out of $3.6 trillion in fiscal 2011 spending—would cost 800,000 jobs.  This is nothing more than the old Keynesian "multiplier" back for another political run.

As our readers k now, this notion assumes that government spending is free to the economy, and that all government expenditures have only stimulative benefits. It also assumes that there are no economic costs to deficit spending, although such spending must be financed by borrowing or higher taxes. Thus if the federal budget were to increase by, say, $1 trillion, then we could magically lower the unemployment rate to 5% or 6%. It's plug and play economics: Plug in spending and multiplier numbers and, presto, you get the job creation or destruction numbers you need for a political talking point.

House Republicans are finally acknowledging that there is no Keynesian tooth fairy, that our $3.6 trillion government with its $1.6 trillion deficit has got to get smaller and start paying its bills, and the time to start doing so is now.

 

 

 

WSJ.com - The Showdown Over Public Union Power

WSJ.com - Opinion: The Showdown Over Public Union Power

 

Government workers have taken to the streets in Madison, Wis., to battle a series of reforms proposed by Gov. Scott Walker that include allowing workers to opt out of paying dues to unions. Everywhere that this "opt out" idea has been proposed, unions have battled it vigorously because the money they collect from dues is at the heart of their power.

Unions use that money not only to run their daily operations but to wage political campaigns in state capitals and city halls. Indeed, public-sector unions especially have become the nation's most aggressive advocates for higher taxes and spending. They sponsor tax-raising ballot initiatives and pay for advertising and lobbying campaigns to pressure politicians into voting for them. And they mount multimillion dollar campaigns to defeat efforts by governors and taxpayer groups to roll back taxes.

Unlike businesses and industry groups that are also big [campaign] givers but tend to split their donations between the parties, some 95% of government workers' donations has gone to the Democratic Party, whose members are far more likely to favor raising taxes and boosting spending than are members of the Republican Party.

 

 

 

WSJ.com - Athens in Mad Town

WSJ.com - Opinion: Athens in Mad Town

 

For Americans who don't think the welfare state riots of France or Greece can happen here, we recommend a look at the union and Democratic Party spectacle now unfolding in Wisconsin. Over the past few days, thousands have swarmed the state capital and airwaves to intimidate lawmakers and disrupt Governor Scott Walker's plan to level the playing field between taxpayers and government unions.

Mr. Walker's very modest proposal would take away the ability of most government employees to collectively bargain for benefits. The bill would also require union members to contribute 5.8% of salary toward their pensions and chip in 12.6% of the cost of their health insurance premiums.

If those numbers don't sound outrageous, you probably work in the private economy. The comparable nationwide employee health-care contribution is 20% for private industry. The average employee contribution from take-home pay for retirement was 7.5% in 2009.

Unions are treating these reforms as Armageddon because they've owned the Wisconsin legislature for years and the changes would reduce their dominance.

Public unions have a monopoly position that gives them undue bargaining power. Their campaign cash—collected via mandatory dues—also helps to elect the politicians who are then supposed to represent taxpayers in negotiations with those same unions. The unions sit, in effect, on both sides of the bargaining table.

 

 

 

Why are you booing the first guy who came in here and told you the truth?"

I loved this anecdote about Chris Christie, Governor of New Jersey:

 

He introduced pension and benefit reforms on a Tuesday in September, and that Friday he went to the state firefighters convention in Wildwood. It was 2 p.m., and "I think you know what they had for lunch." Mr. Christie had proposed raising their retirement age, eliminating the cost-of-living adjustment, increasing employee pension contributions, and rolling back a 9% pay increase approved years before "by a Republican governor and a Republican Legislature."

As Mr. Christie recounted it: "You can imagine how that was received by 7,500 firefighters. As I walked into the room and was introduced. I was booed lustily. I made my way up to the stage, they booed some more. . . . So I said, 'Come on, you can do better than that,' and they did!"

He crumpled up his prepared remarks and threw them on the floor. He told them, "Here's the deal: I understand you're angry, and I understand you're frustrated, and I understand you feel deceived and betrayed." And, he said, they were right: "For 20 years, governors have come into this room and lied to you, promised you benefits that they had no way of paying for, making promises they knew they couldn't keep, and just hoping that they wouldn't be the man or women left holding the bag. I understand why you feel angry and betrayed and deceived by those people. Here's what I don't understand. Why are you booing the first guy who came in here and told you the truth?"

He told them there was no political advantage in being truthful: "The way we used to think about politics and, unfortunately, the way I fear they're thinking about politics still in Washington" involves "the old playbook [which] says, "lie, deceive, obfuscate and make it to the next election." He'd seen a study that said New Jersey's pensions may go bankrupt by 2020. A friend told him not to worry, he won't be governor then. "That's the way politics has been practiced in our country for too long. . . . So I said to those firefighters, 'You may hate me now, but 15 years from now, when you have a pension to collect because of what I did, you'll be looking for my address on the Internet so you can send me a thank-you note.'"

 

WSJ.com - Opinion: Where the Leaders Are

 

 

 

WSJ.com - Reaganomics: What We Learned

WSJ.com - Opinion: Reaganomics: What We Learned

 

For 16 years prior to Ronald Reagan's presidency, the U.S. economy was in a tailspin—a result of bipartisan ignorance that resulted in tax increases, dollar devaluations, wage and price controls, minimum-wage hikes, misguided spending, pandering to unions, protectionist measures and other policy mistakes.

What the Reagan Revolution did was to move America toward lower, flatter tax rates, sound money, freer trade and less regulation. The key to Reaganomics was to change people's behavior with respect to working, investing and producing.

The results of the Reagan era? From December 1982 to June 1990, Reaganomics created over 21 million jobs—more jobs than have been added since.  The stock market went through the roof. From July 1982 through August 2000, the S&P 500 stock price index grew at an average annual real rate of over 12%.

The true lesson to be learned from the Reagan presidency is that good economics isn't Republican or Democrat, right-wing or left-wing, liberal or conservative. It's simply good economics.

 

 

 

 

 

WSJ.com - How to Tax the Rich

I found these ideas amusing and intriguing. 

 

WSJ.com - How to Tax the Rich

 

Try giving them perks and privileges (an extra vote?) in return, says 'Dilbert' creator Scott Adams.

 

If we accept that the rich can be taxed at a different rate than everyone else, we can also imagine that there could be other differences in how the rich are taxed. That's the part we can tinker with, and that's where the bad version comes in. In a minute, I'll float some bad ideas about how the rich can feel good while the rest of society is rifling through their pockets.

I can think of five benefits that the country could offer to the rich in return for higher taxes: time , gratitude, incentives, shared pain and power.

 

 

 

WSJ.com - 'It Makes No Sense'

I’ve long advocated that students who graduate from our universities should be able to stay and work in the U.S.  We want the best and brightest from abroad to stay and help build our country and our economy.

 

WSJ.com - Opinion: 'It Makes No Sense'

 

President Obama didn't have much to say about immigration reform in his State of the Union address last week, which is surprising given his focus on "winning the future." But what the President did say was well put and well timed.

"Others come here from abroad to study in our colleges and universities," said Mr. Obama. "But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense."

Employers hire skilled foreign nat ionals based on merit, not because they can pay them less. Immigrants are also some 30% more likely than non-immigrants to start businesses.

Winning the future is that much more difficult if our laws limit U.S. access to foreign-born human capital. The new Congress has a chance to help the U.S. economy by working with the White House to make it easier for the world's young and talented to stay in America after they've earned their Ph.Ds.

 

 

 

 

 

WSJ.com - The State Against Blacks

WSJ.com - Opinion: The State Against Blacks

'The welfare state has done to black Americans what slavery couldn't do. . . . And that is to destroy the black family.'

 

 

WSJ.com - The Great Misallocators

WSJ.com - Opinion: The Great Misallocators

 

Step back for a minute from the day to day policy fights and consider how an economy can grow faster. One way is to get people to work harder or longer. The government can contribute here with policies that reward work and investment, such as lower taxes.

A second route to faster growth is innovation, which means inventions or new processes that increase productivity.

The third way is through the more efficient use of capital, both human and monetary. These resources are scarce in any economy, and growth will be fastest if they are allowed to find their highest return. If resources are allocated to less productive uses or create asset bubbles due to bad policy, then overall growth will be slower than it should be.

Government "investments"—Mr. Obama's favorite word last night—are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices.

The path back to faster growth, more jobs and a more competitive U.S. economy does not travel through more political mediation. Nor does it lie in endlessly easy Fed policy in a misguided attempt to refloat the housing bubble or revive the financial boom. A better economy requires policies that reward work and innovation, while letting capital flow to the companies and individuals with the best ideas.

 

 

WSJ.com - BYU Is Now the Duke of the West

I rarely send out sports related emails, but I had to give props to my team.

 

WSJ.com - BYU Is Now the Duke of the West

 

It's a prestigious school that propels its graduates to desirable jobs. Wherever the team travels, especially in its conference, the opposing fans make it exceedingly clear that they would like to see them mashed into a pulpy sauce. And its team colors are blue and white.

In other words, BYU has become the Duke of the West.

 

WSJ.com - What Congress Should Cut

WSJ.com - Opinion: What Congress Should Cut

 

The primary economic challenge today is that our government spends too much money it doesn't have, and it is involved in too many things it cannot do well and shouldn't do at all. This burden is manifested by a $1.3 trillion annual def icit and a $14 trillion national debt. The more pernicious effects of this fiscal drag are unseen: a debased dollar, massive (and hidden) unfunded liabilities, and a crushing burden on would-be job creators.

Milton Friedman correctly argued in 1999 that the "real cost of government—the total tax burden—equals what government spends plus the cost to the public of complying with government mandates and regulations and of calculating, paying, and taking measures to avoid taxes." He added, "Anything that reduces that real cost—lower government spending, elimination of costly regulations on individuals or businesses, simplification of explicit taxes—is a tax reform."

Repealing ObamaCare is another obvious source of reduced spending. The absurd claim that this government takeover of health care produces budget savings is based on budget gimmickry—such as assumed Medicare cuts that, according to estimates by the Centers for Medicare and Medicaid Services, would put 15% of our hospitals out of business, and thus will never happen. The claim also ignores the historically explosive growth in other similar programs. Medicare grew nine-fold larger than was projected during its first 25 years. In its first 10 years alone, the program experienced a 700% cost overrun.

Entitlements—56% of the annual budget and growing—are the most difficult but also the most important programs to reform, because the total unfunded liability tops $100 trillion for Social Security and Medicare alone. The federal government does not put these liab ilities on the books, but serious budgeting requires that we deal with this ominous long-term burden now.

None of this will be easy. Many will likely demagogue any reduction in the rate of growth of spending as a devastating "cut." But the politics of spending has changed, and there is an expectation among fiscally conservative voters—Republicans, independents, tea partiers and even Democrats—that the government tighten its belt, just as American families have been forced to do.

 

 

 

 

WSJ.com - The Congressional Accountability Act

WSJ.com - Opinion: The Congressional Accountability Act

A proposal to ban regulation without representation.

 

One of the most important political stories of 2011 will be regulation, as the backwash of the outgoing Congress hits the federal agencies and the White House drives its agenda via rule-making rather than democratic consent. Republicans are vowing to thwart these maneuvers, but the coming hostilities might also provide an opening to reform the modern administrative state.

The basic problem is that Congress delegates far too much power to regulators, passing ambiguous laws that convert the agencies into quasi-legislative bodies that aren't politically accountable. Even if President Obama is exploiting this trend like never before, it is hardly new, nor unique to either party. Most politicians support the status quo because, being politicians, they can take credit for popular goals and then blame the bureaucracy for the costs and problems they create.

Yet the Constitution vested Congress with the duty to make laws, not to make vague suggestions about what it might be good for the law to be. And now there is a growing movement to force Members to take responsibility for the laws they pass, and to force Administrations to be accountable for the laws they create through regulation.

 

 

 

 

WSJ.com - Why Chinese Mothers Are Superior

I’m not quite ready to adopt all the “Chinese Mother” parenting techniques, but I think there are valuable lessons that western parents, myself included, could learn.

 

WSJ.com - Why Chinese Mothers Are Superior

 

Despite our squeamishness about cultural stereotypes, there are tons of studies out there showing marked and quantifiable differences between Chinese and Westerners when it comes to parenting. In one study of 50 Western American mothers and 48 Chinese immigrant mothers, almost 70% of the Western mothers said either that "stressing academic success is not good for children" or that "parents need to foster the idea that learning is fun." By contrast, roughly 0% of the Chinese mothers felt the same way. Instead, the vast majority of the Chinese mothers said that they believe their children can be "the best" students, that "academic achievement reflects successful parenting," and that if children did not excel at school then there was "a problem" and parents "were not doing their job." Other studies indicate that compared to Western parents, Chinese parents spend approximately 10 times as long every day drilling academic activities with their children. By contrast, Western kids are more likely to participate in sports teams.

What Chinese parents understand is that nothing is fun until you're good at it. To get good at anything you have to work, and children on their own never want to work, which is why it is crucial to override their preferences. This often requires fortitude on the part of the parents because the child will resist; things are always hardest at the beginning, which is where Western parents tend to give up. But if done properly, the Chinese strategy produces a virtuous circle. Tenacious practice, practice, practice is crucial for excellence; rote repetition is underrated in America. Once a child starts to excel at something—whether it's math, piano, pitching or ballet—he or she gets praise, admiration and satisfaction. This builds confidence and makes the once not-fun activity fun. This in turn makes it easier for the parent to get the child to work even more.

 

 

 

WSJ.com - Congress Rediscovers the Constitution

WSJ.com - Opinion: Congress Rediscovers the Constitution

 

If the new Congress to be sworn in on Wednesday is the tea party's cardinal achievement so far, its most symbolic achievement will come on Thursday, when the first order of business in the House will be a reading, aloud, of the Constitution. That event alone will not bring us any closer to limited government. But it will help get a debate going that for too long has been dormant.

In 1794, for example, James Madison, the principal author of the Constitution, rose on the House floor to object to a bill appropriating $15,000 for the relief of French refugees... He could not, he said, "undertake to lay [his] finger on that article of the Federal Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." The bill failed.

Throughout the 19th century, members of Congress and presidents alike rejected legislation because they believed there was no constitutional authority to enact it. The bedrock presumption of our polity, they understood, was individual liberty. The Constitution gave the federal government the authority to pursue certain limited ends, like national security and ensuring free interstate commerce, but otherwise left us free to pursue our ends either through the states or as private individuals. It did not authorize the federal government to provide us with the vast array of goods and services that today reduce so many of us to government dependents.

Thus the first question the new Congress should ask of any proposed law is: Does the Constitution authorize us to pursue this end? If not, that ends the matter. If yes, the second question is: Are the means we employ "necessary and proper," as constrained by the principles of federalism and the rights retained by the people that are implied by a government of enumerated powers? In essence, the Constitution is no more complicated than that. It was written to be understood by ordinary citizens.

How, then, did modern constitutional law get so complicated and federal power so expansive? One reason is that several provisions in the Constitution were written broadly to allow for contingencies. But those provisions were never meant to open the floodgates to boundless congressional power. The presumption was that any political redress of unexpected problems would be done with due deference to the larger structure, aims and principles of the document. This brings us to the main reason Congress leapt its constitutional bounds: a fundamental shift in the climate of ideas.

Early 20th-century Progressives, inspired by European social democracies, rejected the Constitution's plan for limited government, advocating social engineering schemes instead. Rule by government experts was the order of the day.

The Supreme Court was wrong in allowing Congress to exercise power not granted it by the Constitution, and courts today are wrong when they uphold those precedents…

 

 

 

 

 

WSJ.com - The Mistaken Attack on Outsourcing

WSJ.com - Opinion: The Mistaken Attack on Outsourcing

 

Since his presidential campaign, Mr. Obama has repeatedly said that the global operations of U.S. companies harm the country because they drain the American economy of jobs. His rhetoric about "tax breaks for companies that ship our jobs overseas" has populist resonance at a time of economic uncertainty, but it is also at odds with the available evidence about how globalizing firms affect the American economy. Moreover, it harms the popular understanding of our opportunities and challenges.

When American firms grow abroad, they also grow domestically…

The data do not support the crude, fixed-pie intuition that firms either invest abroad or at home. Ten percent growth in American firms' foreign investment is associated with 3% growth in their domestic investment. And when firms grow abroad, their domestic exports and R&D activities grow especially, contrary to Mr. Obama's rhetoric.

Vilifying or penalizing American businesses for their global operations will only lead them to consider leaving the U.S.—or consider being bought by foreign companies. Such moves would hurt America by removing valuable headquarter jobs. Instead, Mr. Obama should emphasize how Americans succeed when our firms succeed world-wide. That formulation better captures reality and offers a more sensible way to engage businesses in a new spirit of cooperation.

 

 

 

 

 

WSJ.com - Tea Partiers and the Spirit of Giving

WSJ.com - Opinion: Tea Partiers and the Spirit of Giving

It is common to hear that the popular uprising against the growth of the welfare state, with rising taxes and deficits, is based on a lack of caring toward those who are suffering the most in the current crisis.

Few would disagree that free enterprise is grounded in one's self-interest. But self-interest is not the same thing as selfishness in the sense of unbounded consumption or disregard for the less fortunate. In fact, the millions of Americans who advocate for private entrepreneurship and limited government—whether they are rich or poor—may be stingy when it comes to giving away other people's money through state redistribution, but they are surprisingly generous when it comes to giving away their own money privately.

Americans in general are very charitable, by international standards. Study after study shows that we privately give multiples of what our Social Democratic friends in Europe donate, per capita. But not all Americans are equally generous. One characteristic of givers is especially important in the current debate: the opinion that the government should not redistribute income to achieve greater economic equality.

Contrary to the liberal stereotype of the hard-hearted right-winger, opposition to income-leveling is not evidence that one does not care about others. Quite the contrary. The millions of Americans who believe in limited government give disproportionately to others. This is in addition to—not instead of—their defense of our free-enterprise system, which gives the most people the most opportunities to earn their own success.

WSJ.com - Not Really 'Made in China'

WSJ.com - Not Really 'Made in China'

The iPhone's Complex Supply Chain Highlights Problems With Trade Statistics

 

"What we call 'Made in China' is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries," Pascal Lamy, the director-general of the World Trade Organization. "The concept of country of origin for manufactured goods has gradually become obsolete."

Mr. Lamy said if trade statistics were adjusted to reflect the actual value contributed to a product by different countries, the size of the U.S. trade deficit with China—$226.88 billion, according to U.S. figures—would be cut in half.

The value-added approach, in fact, shows that sales of the iPhone are adding to the U.S. economy—rather than subtracting from it, as the traditional approach would imply.

Based on U.S. sales of 11.3 million iPhones in 2009, the researchers estimate Chinese iPhone exports at $2.02 billion. After deducting $121.5 million in Chinese imports for parts produced by U.S. firms such as chip maker Broadcom Corp., they arrive at the figure of the $1.9 billion Chinese trade surplus—and U.S. trade deficit—in iPhones.

If China was credited with producing only its portion of the value of an iPhone, its exports to the U.S. for the same amount of iPhones would be a U.S. trade surplus of $48.1 million, after accounting for the parts U.S. firms contribute.

 

 

 

Al Gore's Ethanol Epiphany - WSJ.com

http://online.wsj.com/article/SB10001424052748703572404575634753486416076.html#mod=djempersonal

 

Anyone who opposes ethanol subsidies, as these columns have for decades, comes to appreciate the wisdom of St. Jude. But now that a modern-day patron saint—St. Al of Green—has come out against the fuel made from corn and your tax dollars, maybe this isn't such a lost cause.

Welcome to the college of converts, Mr. Vice President. "It is not a good policy to have these massive subsidies for first-generation ethanol," Al Gore told a gathering of clean energy financiers in Greece this week. The benefits of ethanol are "trivial," he added, but "It's hard once such a program is put in place to deal with the lobbies that keep it going."

At least on corn subsidies, we now have the makings of a left-right anti-boondoggle coalition. Major corn energy subsidies such as the 54-cent-per-gallon blenders credit expire at the end of the year, and Republican Senators Jim DeMint and Tom Coburn are encouraging the new Congress to prove its fiscal bona fides by letting them die.

 

 

 

 

 

This Lame Duck Session Should Be the Last - WSJ.com

Betsy McCaughey: This Lame Duck Session Should Be the Last - WSJ.com

Americans ought to make this lame duck session of Congress the last in history. Members who lose re-election have no moral authority to continue governing: They were fired by the voters, who should demand that they clean out their desks and go home.

 

On Nov. 2, the voters replaced the Democratic majority in the House of Representatives with at least 61 new Republican members who campaigned on lower spending and less government power. Allowing members who were not re-elected to legislate national policy or set the 2011 federal budget is like allowing a fired employee to run the office another two months, or letting your ex-spouse continue managing your checkbook.

 

Lame duck sessions were unavoidable before jet planes. The framers of the U.S. Constitution provided 17 weeks for newly elected members to travel to the capital and take their seats on March 3. That was the 18th century.

 

In 1933, Americans ratified the 20th Amendment to eliminate lame duck sessions. It set Jan. 3 as the day newly elected members would take their seats. That still left seven weeks after the election, but no one imagined that the old Congress would return to the capital during that time.

 

For a half-century, the 20th amendment worked. Except during World War II and the Korean War, Congress did not reconvene after November elections. But for the last two decades, lawmakers have hurried back to the capital after Election Day to deal with spending bills and controversial legislation they deliberately had avoided before the election.

 

The unrepresentative lame duck Congress should do as little as possible.

How Medicare Killed the Family Doctor - WSJ.com

Richard Hannon: How Medicare Killed the Family Doctor - WSJ.com

Remember Marcus Welby, M.D.? He defined the family doctor on TV in the 1970s, exemplifying the four Cs: caring, competent, confidant and counselor. In the mid-'60s, I remember my father-in-law, a real-life Dr. Welby, telling me the exciting news that the federal government was going to start paying him to see seniors—patients who before he had seen for the proverbial chicken (or nothing at all). That fabulous deal was Medicare.

Medicare introduced a whole new dynamic in the delivery of health care. Gone were the days when physicians were paid based on the value of their services. With payment coming directly from Medicare and the federal government, patients who used to pay the bill themselves no longer cared about the cost of services.

Eventually, that disconnect (and subsequent program expansions) resulted in significant strain on the federal budget. In 1966, the House Ways and Means Committee estimated that by 1990 the Medicare budget would quadruple to $12 billion from $3 billion. In fact, by 1990 it was $107 billion.

To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.

Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists—especially those who perform a lot of procedures—do extremely well. Primary-care doctors do not.

The primary-care doctor has become a piece-rate worker focused on the volume of patients seen every day. As Medicare and insurers focused on trimming the costs of the most common procedures, the income and job satisfaction of primary-care doctors eroded. So these doctors left, sold or changed their practices.

So who really killed primary care? The idea that a centrally planned system with the right formulas and lots of data could replace the art of practicing medicine; that the human dynamics of market demand and the patient-physician relationship could be ignored. Politicians and mathematicians in ivory towers have placed primary care last in line for respect, resources and prestige—and we all paid an enormous price.

A Vote Against Dems, Not for the GOP - WSJ.com

Even though I’d personally love it if the majority of Americans were on board with a true limited government philosophy, I recognize that many of tomorrow’s GOP voters are not, but are instead reacting to over-reach by the liberals who misread their 2008 electoral success.  I worry the GOP may make a similar mistake and over-reach on conservative policy issues not related to spending reductions, which could hurt the GOP in 2 years.

 

http://online.wsj.com/article/SB10001424052748703708404575586063725870380.html?mod=djemEditorialPage_h

 

Democrats face massive losses in tomorrow's midterm election. Based upon our generic ballot polling and an analysis of individual races, we project that Nancy Pelosi's party will likely lose 55 or more seats in the House, putting the GOP firmly in the majority. Republicans will also win at least 25 of the 37 Senate elections. While the most likely outcome is that Republicans end up with 48 or 49 Senate seats…

 

But none of this means that Republicans are winning. The reality is that voters in 2010 are doing the same thing they did in 2006 and 2008: They are voting against the party in power.

 

More precisely, it is a rejection of a bipartisan political elite that's lost touch with the people they are supposed to serve. Based on our polling, 51% now see Democrats as the party of big government and nearly as many see Republicans as the party of big business. That leaves no party left to represent the American people.

 

Voters today want hope and change every bit as much as in 2008. But most have come to recognize that if we have to rely on politicians for the change, there is no hope. At the same time, Americans instinctively understand that if we can unleash the collective wisdom and entrepreneurial spirit of the American people, there are no limits to what we can accomplish.

 

In this environment, it would be wise for all Republicans to remember that their team didn't win, the other team lost. Heading into 2012, voters will remain ready to vote against the party in power unless they are given a reason not to do so.

 

Elected politicians also should leave their ideological baggage behind because voters don't want to be governed from the left, the right, or even the center. They want someone in Washington who understands that the American people want to govern themselves.