McCain's Impotence on Tax Policy

Somewhat Republican (meaning RINO) nominee for the Office of President of the United States Senator John McCain (R - Arizona) has a tax plan that needs help from a little blue pill. Read a summary of the Candidates' intentions on page 5 of this document.

Rather than try to reform the tax code to achieve specific policy objectives, the Senior Senator from Arizona has put forward a lukewarm tax proposal that reflects his years in the Senate. His policy is to doodle around the edge with incremental changes or, in his most questionable policy moves, no changes at all.

The centerpiece of Senator McCain's proposal is keeping the status quo. He would sign legislation to make permanent the 2001/2003 tax cuts approved by the Republican majority in Congress and signed by President Bush. One wonders why they were made temporary anyway... but that is fodder for another article. He would also make permanent changes to the death tax and changes to the AMT (Alternative Minimum Tax) exemption. Other than that, his proposals mostly involve corporate taxation including a reduction of the corporate rate from 35% down to 25%.

As a policy this lacks coherence, particularly in as much as Principle and Policy believed the 2001/2003 tax cuts lacked coherence. The great issue in the wake of the internet bubble burst and the despicable events of 9-11-01 was capital formation. That is, there was great concern that the capital markets would be underfunded in the wave of defaults and bankruptcies in the tech sector. Reducing taxes on capital therefore made sense. But what about the $1000 per child tax credit that is "refundable" (refundable being Beltway speak for welfare payments to those with no tax liability)? Was baby formation a large problem after 9-11? What possible rationale is there for continuing such a policy?

Principle and Policy strongly supports reduction to corporate tax rates because 1) the U.S. rates are now among the highest in the world and 2) corporations don't pay taxes, people do. But other than that, there doesn't seem to be a solid reason for McCain's proposals other than he doesn't want tax increases. Senator Obama on the other hand seems to have such a guiding philosophy. He would continue to build in special breaks for the blessed groups at the expense of the others. He would turn the tax code into the welfare state that existed under President Carter.

The best tax proposals are those that see the tax code as a coherent whole and reform the code to achieve specific objects. Certain flat tax proposals probably meet this criteria. Senator McCain would implement an optional flat tax system with no deductions. Principle and Policy wonders why not continue to protect IRA/401k/HSA contributions to encourage these important savings vehicles? The U.S. has the lowest savings rate of all developed economies and capital formation continues to be in the long term interest of the country. Principle and Policy also questions why we should implement an optional flat tax when the AMT is a flat tax and already exists?

In the short-run McCain's resistance to raise taxes is likely preferable to Obama's tinkering. But Principle and Policy longs for a visionary tax reform plan that would dramatically alter incentives to encourage capital formation, investment, and wider stock ownership by the population.

Not Non-Partisan Tax Policy Studies

This past Friday news services were reporting with glee a "preliminary" study comparing the tax plans of Presidential candidates Senator Barrack Obama (D - Illinios) and Senator McCain (R - Illinois). One reason this report was so widely reported (or should I say celebrated) is the sponsoring think tank.

The report was issued by the Tax Policy Center. According to the tank's website

The Tax Policy Center is a joint venture of the Urban Institute and Brookings Institution. The Center is made up of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government.

.

The report was widely acclaimed as being from a "non-partisan" think tank. See the report on CNN for as an example.

But voters really want to know one thing: How would the presidential candidates' views trickle down to their tax bills? A report released Wednesday by a nonpartisan policy group in Washington, D.C., takes a big first step toward answering that question.

It is true that these two think tanks label themselves as "non-partisan". But the only just description of these two think tanks is "left-leaning". The Brookings Institute has been a vociferous critic of the war in Iraq. The urban institute demonstates its bias with statements such as:

An even larger fallacy in the President's claim is that it rests on the assumption that the tax cuts are a costless gift from a beneficent government. In fact, deficit-financed tax cuts eventually have to be paid for.

Apparently the Tax Policy Center is taking after its joint venture parents. This report on the candidates tax policies tries to be even-handed but cannot contain its wholesale adoption of left-leaning dogma. For example, the report states:

It should be noted that both the Republican Study Committee and the presidential campaign of Senator Fred Thompson have proposed optional alternative taxes. We estimated that those plans would result in dramatically reduced revenues—by as much as $6–7 trillion over the next decade compared with current law (Burman, Leiserson, and Rohaly 2008). Those proposals would have disproportionately benefited those with very high incomes, making the tax system less progressive.

and

Given the large pending increases in public spending on senior citizens due to the forthcoming retirement of the baby boomers, it seems inappropriate to target special income tax breaks to this group.

Thus, the authors of the report fail to recognize that tax cuts stimulate growth and adopt wholesale that progressive tax codes (and class warfare) are preferred over other tax codes.

Most egregious is the author's total failure to comment on the Obama effective average tax rates for those earning $20K or less. They do manage to comment that:

But his plan would drastically alter the distribution of tax burdens and make the tax system significantly more progressive. Households in the bottom quintile of the cash income distribution (the 20 percent of the population with the lowest incomes) would receive an average tax cut of 5.5 percent of income ($567) and those in the middle fifth of the income distribution would receive an average cut equal to 2.4 percent of income ($1,042). In contrast, taxes would rise by an average of 2.0 percent of income ($4,092) for households in the top quintile. And the increases would be even more dramatic within the top quintile. Taxpayers in the top 1 percent would see their taxes rise by an average of 8.7 percent of income or about $116,000. The top 0.1 percent—the richest 1 in 1,000—would face an average tax increase of more than $700,000, or 11.5 percent of income.

and

Taxpayers at the very top of the income distribution would be hit hard by the increase in the top two tax rates from 33 and 35 percent to 36 and 39.6 percent as well as the increase in the top tax rate on capital gains and qualified dividends to 25 percent.

But, the report fails to discuss that for individuals in the lowest quintile (those making less that $18,981) the average tax rate would by -.7%. It might seem trivial but for 2005 tax data (the latest available on the irs.gov website) this would represent a $50 billion net transfer of money from the rest of the U.S. to this low earning income group. The negative sign indicates that those in this group would receive welfare payments amounting to $7 billion the first year. You may have thought the welfare era was over here in the U.S., but not if Obama has his way.

Agree or disagree with the incorporation of welfare into the U.S. tax code, agree or disagree with Obama's various schemes to transfer funds to the lowest income quintile, it must be obvious that this is a topic that should be discussed in a truly non-partisan tax policy analysis.

This report has bias, it is left-leaning, and the intelligent observer should examine the candidates tax policy positions and this report, then reach their own conclusions. My analysis of Obama's tax plan can be read here.

Supreme's Battle Congress

The recent Supreme Court decision in Boumediene et al. V. George W. Bush represents another turn in an ongoing pissing contest between the Congress and the Supreme Court, or at least the liberal wing of the Supreme Court.

What the majority refer to as a conversation between the branches, is in reality a contest with respect to the separation of the branches. In this decision, the majority are dead set on declaring unconstitutional an act of Congress declaring that the judiciary may not entertain habeas corpus petitions from detainees at Guantanamo Bay Cuba. The prime motivation is transparent: that Congress shall not tell the Judicial Branch what it can and cannot do.

This is the fourth major decision with respect to detainees. In all four cases, the prime motivation of the majority appears to be to reject Congressional intrusion into the prerogatives of the judicial branch. Previous cases were Hamdi v. Rumsfeld, Hamdan v. Rumsfeld, and Rasul v. Bush.

The problem with this "conversation" is that the result is poor law and poor policy.

This outcome is not restricted to the actions of the Court either. Congress' actions are just as weak.

These are unique circumstances brought on by the unique times in which we live and the unique status of the Guantanamo Naval Station in Cuba. It is precisely in these circumstances that we need our various branches of Government to develop policy based on principle. But that principle ought not to be "stay out of our business" separation of powers arguments. Instead the principles that should be honored, and developed if needed, are those that most important. What policy furthers the cause of liberty and freedom? What policy furthers the ability of the Executive to transform warfare into lasting peace?

Principle and Policy doubts that entertaining habeas pleas from the detained in the U.S. court system is the optimal policy. The dissent of the Chief Justice is persuasive on this point. If results in the detained being released to take up arms against our forces or our citizens, then it clearly is suboptimal. The Principal now visible is this:

Peace isn't just the absence of conflict it is the presence of Justice, but arguments over the separation of powers bring neither Peace nor Justice.

Obama the Tardy Leader

This morning word broke that Senator Barrack Obama (D - Illinois), the Democratic nominee for President, finally met with Senator Hillary Clinton (D - New York) to try to achieve party unity.

Too bad this happened 5 days too late.

Interestingly, national radio correspondent Jamie Dupree recognized today in his appearance on the Neal Boortz show that Sen. Clinton has been driving Sen. Obama since the Texas primaries. Further testimony to the lack of leadership skills in the junior Senator from Illinois.

Obama's First Leadership Failure

Congratulations may be in order to Senator Barrack Obama (D - Illinois) for apparently securing the Democratic Party's nomination for the Office of President of the United States. Condolences are probably in order for the wider Democratic Party.

Amidst the hubhub of the final primaries, Senator Hillary Clinton's speech set off alarms across the punditry landscape. These know-it-alls claim that Hillary should have conceded; should have urged people to unite behind Obama.

But what of the junior senator from Illinois? This was his first leadership test... how to unite a divided party behind him on the most important, and final, day of the primary season. He failed miserably.

Rather than spend the past few days huddled with Hillary's people to work out a scenario that all could support going forward, Senator Obama apparently awaited regally for the court to curtsy to his glory. As a result, his campaign missed a significant opportunity.

This indecisive leadership, marked by a lack of foresight, does not bode well for the candidates chances in November. Ask former Senator Fred Thompson (R - Tennessee), whose apparent difficulty in pulling the trigger to get in the GOP race made him look indecisive and ruined any momentum he might have had. Actions often speak louder than words. The electorate does not elect weak leaders.

UPDATE: As of about 11:20pm EDT, CNN and other news networks started reporting that Senator Obama had begun to reach out to the Clinton campaign. Too little, too late... we'll see.

W's Big Mistake and the Republican Brand

As the primary season comes to end, there is much discussion about the state of the Republican brand and the apparent hopelessness of the GOP in the November general elections. For examples read the articles here, here, and here.

The basic premise behind the "stale brand" argument is that: 1) Through President George W. Bush's incompetence, Vice-President Dick Cheney's lust for power, and Karl Rove's tactical brilliance but strategic incompetence, the republican's are no longer trusted by the public and 2) that current republicans are married at the hip to a failed war policy and have no leader to unite the factions and no ideas to inspire the masses. In view of this argument, it is worthwhile to assess what President Bush's real mistake has been.

Briefly, it has been his failure to realize that modern warfare is always a two front war. One front in the field, the other in the media of back home. A little historical perspective:

The lead up to the 2004 general election set the stage for all that transpired politically since. The Democrats decided to rhetorically attack the war in Iraq as a mistake. To do so, they needed to separate the Iraq from the wider global war on terror. Senator John Kerry (D - Massachusetts), the Democrat's nominee was a major cog in the wheel. Consider the following from his acceptance speech at the 2994 convention:

I will be a commander in chief who will never mislead us into war. I will have a vice president who will not conduct secret meetings with polluters to rewrite our environmental laws. I will have a secretary of defense who will listen to the best advice of the military leaders. And I will appoint an attorney general who will uphold the Constitution of the United States. ...

My fellow Americans, the world tonight is very different from the world of four years ago. But I believe the American people are more than equal to the challenge. Remember the hours after September 11th when we came together as one to answer the attack against our homeland. We drew strength when our firefighters ran up stairs and risked their lives so that others might live; when rescuers rushed into smoke and fire at the Pentagon; when the men and women of Flight 93 sacrificed themselves to save our nation's Capitol; when flags were hanging from front porches all across America, and strangers became friends. It was the worst day we have ever seen, but it brought out the best in all of us. I am proud that after September 11th all our people rallied to President Bush's call for unity to meet the danger.
There were no Democrats. There were no Republicans. There were only Americans. And how we wish it had stayed that way. Saying there are weapons of mass destruction in Iraq doesn't make it so. Saying we can fight a war on the cheap doesn't make it so. And proclaiming "Mission accomplished" certainly doesn't make it so.

As president, I will ask the hard questions and demand hard evidence. I will immediately reform the intelligence system, so policy is guided by facts and facts are never distorted by politics.

And as president, I will bring back this nation's time-honored tradition: The United States of America never goes to war because we want to; we only go to war because we have to. That is the standard of our nation. Let there be no mistake: I will never hesitate to use force when it is required. Any attack will be met with a swift and a certain response.

I will never give any nation or any institution a veto over our national security.
And I will build a stronger military. We will add 40,000 active duty troops, not in Iraq, but to strengthen American forces that are now overstretched, overextended and under pressure. We will double our Special Forces to conduct terrorist operations, anti-terrorist operations, and we will provide our troops with the newest weapons and technology to save their lives and win the battle. And we will end the backdoor draft of the National Guard and reservists. To all who serve in our armed forces today, I say: Help is on the way.

As president, I will fight a smarter, more effective war on terror. We will deploy every tool in our arsenal: our economic as well as our military might, our principles as well as our firepower. In these dangerous days, there is a right way and a wrong way to be strong. Strength is more than tough words.

It is interesting the Senator Kerry never uttered the word Afghanistan. But, his meaning was clear. We were all united in the war on terror until the incompetent President (mis)led us into this mistaken adventure in Iraq. Senator's Kerry value proposition: vote Kerry and I'll fix this mistake, I'll get us out of Iraq, add 40K troops, and kick serious terrorists forces using our newly doubled special forces units.

In fact, I deduced at the time, and still firmly believe, that the 2004 Democratic Party convention was a four day argument that Iraq was both not part of, and a distraction from, the wider war on terror. After the Junior Senator from Massachusetts was sent back to the Senate, the Democrats did not cease the argument. They ramped it up and kept hammering the public with the same ideas over and over. It is I suppose always easier to criticize than to cook.

President Bushes reelection campaign was never able to forcefully parry this rhetoric to the detriment of the GOP in the 2006 midterms and the current concern over the state of the GOP's brand. The GOP convention in 2004 was largely off-point. The only effective rebuttal of the Democratic Party theme was given by Rudy Giuliani (R = New York). Read the speech here
The President's re-election campaign made only the most feeble attempts to deal with the war issue. Rather, under the leadership of Karl Rove the re-election campaign focused on "the ground war" and raising questions about Senator Kerry's suitability to be serve as Commander-in-chief. That these were effective is not a defense of the inattention paid to the importance of influencing public opinion during a time of war.
Of course, the only popular wars are 1) the one just about to start or 2) the one just ending with the patriotic forces victorious. Lincoln, of course, faced the same situation during the Civil War. At the time, Lincoln deduced that the only course that would save his Presidency and policies was a victory over the Confederate forces. In Lincoln's time, battles were fought on a rather discrete basis over a period of a few days.

President Bush seems to have tried to follow Lincoln's precedent. Regrettably, the current war is asymmetric. There are no real battles, save for the large thrusts to clean out Ramadi and Fallujah, only skirmishes. Winning a skirmish doesn't exactly thrill the people at home. Instead, the public was treated to an incessant stream of daily obituaries for the troops who gave the last measure of devotion for their country. But, amidst this death there were few victories reported by the media, nor even a hint of it. In this type of warfare the executive cannot rely on battlefield exploits to influence public opinion. That must be done directly, constantly, and personally by the executive. Whenever President Bush spoke about the war he was effective, but his speeches were far too few.

In this vacuum, the public only heard the voice of the left. The war in Iraq began to be perceived as one in which are troops were serving only as targets.

So the Republican brand is left with the remains. A war that a large majority of the population were for, the Congress voted in favor of, that was successful in ending the regime of a principal sponsor of terror and eliminating the uncertainty surrounding that sponsor's WMD programs, has been cast as a failure.

But I expect that most Republicans who seek election will be too timid to face public opinion on this issue. Senator McCain seems willing to try. It is not too late for the President to engage public opinion on the war on terror and Iraq specifically. But, I doubt he has the intention to do so. Instead, we are all held hostage to President Bush's big mistake... and the only option is to pray for immediate and ultimate victory in Iraq.

McCain's Impotence on the Global War on Terror.

A good preface to this is to read my earlier posts on the global war on terror (see this, this, and this too!)

This past week's dust=up between Senator Barack Obama (D - Illinois), Senator John McCain (R - Arizona), and President George Bush has brought to the forefront the main issue in the 2008 campaign for the Office of the President of the United States: the global war on terror. In an earlier post, I argued that Senator Obama was not an appeaser, but that his policies would produce dire consequences for the United States, including a probable loss in the global was on terror. But what of Senator McCain's plans should he become President? Let's go straight to his website's verbiage:

John McCain believes that economic progress is essential to sustaining security gains in Iraq.... The Iraqi government can jump-start this process by using a portion of its budget surplus to employ Iraqis in infrastructure projects and in restoring basic services.... The international community should bolster proven microfinance programs to spur local-level entrepreneurship throughout the country. Iraq's Arab neighbors, in particular, should promote regional stability by directly investing the fruits of their oil exports in Iraq. ...

Call for international pressure on Syria and Iran

Syria and Iran have aided and abetted the violence in Iraq for too long. Syria has refused to crack down on Iraqi insurgents and foreign terrorists operating within its territory. Iran has been providing the most extreme and violent Shia militias with training, weapons, and technology that kill American and Iraqi troops. American military spokesmen have also said there is evidence that Iran has provided aid to Sunni insurgents. The answer is not unconditional dialogue with these two dictatorships from a position of weakness. The answer is for the international community to apply real pressure to Syria and Iran to change their behavior. The United States must also bolster its regional military posture to make clear to Iran our determination to protect our forces and deter Iranian intervention.

Level with the American people

John McCain believes it is essential to be honest with the American people about the opportunities and risks that lie ahead. The American people deserve the truth from their leaders. They deserve a candid assessment of the progress made in the last year, of the serious difficulties that remain, and of the grave consequences of a reckless and irresponsible withdrawal.

Senator McCain's position is more helpful, but still short sighted. As principle and policy has argued previously, Iran and Syria must be treated like the petulant children they seem to be. When Iran misbehaves, it must be immediately and directly punished. A full engagement on every level, international organizations, diplomatic channels, covert action against the Iranian intelligence services, overt action against Iranian military assets, and a continual information campaign to inform, remind, and persuade the World to the dastardly acts of these two sponsors of terror.

But, the over-arching goal must be to end all state sponsorship of terror. And this is where the senior Senator from Arizona falls short. His main goal isn't to win the global war on terror by eliminating state sponsorship, it is to achieve a stable Iraq by holding Iran in check. If the Senator cannot lead us to the end of Iranian and Syrian support for Hezbollah, Hamas, etc. Then the war on terror will have severely damaged Sunni-based Islamic terror, leaving Shia sponsored terror unchecked, undisciplined, and a very real threat.

Come on Senator McCain, give us the straight talk on this one...

Is Barack an Appeaser or Just a Loser?

Hint: Barack Obama is not an appeaser.

Senator Barack Obama (D - Illinois), the presumptive but not yet Democrat nominee for the Office of President has chose to get into an exchange with current President George Bush (R - Texas) and the GOP nominee for the Office of President, John McCain (R - Arizona). The stink is that Obama thinks he has been called an appeaser, although I didn't get that from the President's remarks. Both McCain and the President have responded with something on the order of "If the shoe fits, wear it"

Does the shoe fit? Well, according to Wikipedia:

Most commonly, appeasement is used for the policy of accepting the imposed conditions of an aggressor in lieu of armed resistance, usually at the sacrifice of principle.

So let's look at Obama's intentions per his campaign website:

Obama will immediately begin to remove our troops from Iraq. He will remove one to two combat brigades each month, and have all of our combat brigades out of Iraq within 16 months. Obama will make it clear that we will not build any permanent bases in Iraq.

Obama will launch the most aggressive diplomatic effort in recent American history to reach a new compact on the stability of Iraq and the Middle East. This effort will include all of Iraq’s neighbors — including Iran and Syria

Obama believes that America has a moral and security responsibility to confront Iraq’s humanitarian crisis — two million Iraqis are refugees; two million more are displaced inside their own country. Obama will form an international working group to address this crisis. He will provide at least $2 billion to expand services to Iraqi refugees in neighboring countries, and ensure that Iraqis inside their own country can find a safe-haven.

This is probably not appeasement, because Obama is not intentionally trading acceptance of imposed conditions for agreements to peace. But, that doesn't mean Obama has the correct policy. Obama's intention is to unilaterally withdraw from Iraq and then try to negotiate conditions for peace. This is a recipe for disaster. As principle and policy has long maintained (see this, this, and this too!) the presence of our armed forces in Iraq is our foremost strategic advantage, and thus, is our foremost negotiating chip. Removing it without gaining concessions gives the game away to the Iranians and the Syrians. This would be a large mistake.

What I found more interesting, is that the War on Terror isn't even an issue on the Senator's campaign website. Neither is Afghanistan or Pakistan, Iran or Syria. The words "state sponsor of terror" do not appear there either. When it comes to terror the only issue Obama's campaign recognizes is homeland security. The Illinois' junior Senator apparently intends to hunker down and wait out the next terrorist attach. Read his plan here

I'll address McCain's stance on this issue in the next post. As for now, if someone asks if you think Obama is an appeaser reply "No, he's just going to lose the war on terror!"

Operation Chaos Goes Too Far?

Operation Chaos is the name given by Conservative Radio Personality Rush Limbaugh to efforts by non-democrats to keep the Democratic Party's Presidential Nomination Race going as long as possible.

The theory is that by keeping the Democrats fighting each other, they will not be fighting McCain, they will bleed money, and ultimately they will show that neither is capable of winning.

principleandpolicy.blogspot.com has doubts about this strategy. Generally, I believe that competition makes the competitors stronger not weaker. Note that while Operation Chaos is ongoing it is Senators Clinton and Obama competing. Senator McCain is sitting on the sidelines. (a counter-thesis might be that everyone's favorite quarterback is the second stringer...). Think of it this way, the primary beneficiary of Senator Obama's Wright problem has been Senator Clinton not Senator McCain.

On realclearpolitics.com, average poll numbers show Senator McCain trending down against both Obama and Clinton. Sunday morning talk shows are being dominated by Democrats, often with no conservative present at all. Nightly news shows are pre-occupied with super-delegates and end-game strategies. It is notable, however, that the Iowa Electronic Markets, have not followed the opinion polls.

In politics, as in other venues, nature abhors a vacuum. We now have a vacuum in which the bulk of the American electorate are being carpet bombed with Democratic Party talking points almost exclusively. This is not healthy for republican democracy, for the United States, and especially not for the Senior Senator from Arizona.

Operation Chaos has gone on long enough, the big question is: Has it gone too far?

Obama's Racial Spin: Don't Believe it!

In the wake of ABC's publication of extremist remarks by Senator Barack Obama's "former" Minister, the Reverend Dr. Jeremiah A. Wright, the junior Senator from Illinois attempted to distance himself from the Reverend, condemn the remarks, and repair his political positioning as the so-called "post-Racial" candidate. But, the Senator's speech is pure political spin. Here's why:

To refresh, the Reverend Wright made extremist anti-american comments during sermons at various points in time. See the wikipedia page here. The main thrust of the remarks is that United States acts like god, treats people as sub-human, and is responsible for various crimes that directly led to 9-11 terrorist attacks. The pinnacle is when the Reverend urges his flock not sing God Bless America, but "God Damn America."

Senator Obama's response is to cast the remarks in racial terms. In his speech of March 18th, Obama stated inpart:

These people are a part of me. And they are a part of America, this country that I love.

Some will see this as an attempt to justify or excuse comments that are simply inexcusable. I can assure you it is not. I suppose the politically safe thing would be to move on from this episode and just hope that it fades into the woodwork. We can dismiss Reverend Wright as a crank or a demagogue, just as some have dismissed Geraldine Ferraro, in the aftermath of her recent statements, as harboring some deep-seated racial bias.

But race is an issue that I believe this nation cannot afford to ignore right now. We would be making the same mistake that Reverend Wright made in his offending sermons about America – to simplify and stereotype and amplify the negative to the point that it distorts reality.

The fact is that the comments that have been made and the issues that have surfaced over the last few weeks reflect the complexities of race in this country that we’ve never really worked through – a part of our union that we have yet to perfect. And if we walk away now, if we simply retreat into our respective corners, we will never be able to come together and solve challenges like health care, or education, or the need to find good jobs for every American.

Understanding this reality requires a reminder of how we arrived at this point. As William Faulkner once wrote, “The past isn’t dead and buried. In fact, it isn’t even past.” We do not need to recite here the history of racial injustice in this country. But we do need to remind ourselves that so many of the disparities that exist in the African-American community today can be directly traced to inequalities passed on from an earlier generation that suffered under the brutal legacy of slavery and Jim Crow.

See the complete text of the speech here among other places.
Thus, Obama's argument is that the Reverend's comments must be viewed as part of a racial commentary on the government and the racial history of the U.S.
But, this almost totally false. In reality this is part of the standard progressive right (liberal) critique of the U.S.'s capitalist economic system and Republican form of government. The evidence of this is contained in comments, contemporaneous with those of the Reverend's, by other progressive and socialist ideologues.

Consider the following:

No doubt this is the result of injustice the U.S. practices against the weak in the world.
Sheik Ahmed Yassin, Leader of Hamas, published in the October 15th, 2001 edition of the New York Times.

During my lifetime, America has been constantly waging war against much of humanity: impoverished people mostly, in stricken places. Moreover, far from being the main perpetrators of terrorism, Islamic peoples have been its victims -- more often than not of an American fundamentalism and its proxies.
Editorial in British newspaper The Guardian as quoted in The New Republic, Oct 12, 2001 edition.

Chomsky, himself an American, refers to the United States as a "leading terrorist state," using as an example the Reagan administration's invasion of Nicaragua in the 1980s and the subsequent "devastating economic war" in that country. Though the invasion was condemned by the World Court, the United States responded by ignoring the ruling and escalating its attack on the country, killing thousands of people in the process. A review of Noam Chomsky's 9-11. As quoted in
The Daily Yomiuri (Tokyo) January 27, 2002 Sunday

And please read the column by Walter Williams of October 29, 2001 published in the Washington Times on Nov 4, 2001. Read the complete text here.

In fact, the Reverend attributes his post 9-11 comments to former Ambassador Edward Peck (see the wikipedia entry).

Yassin isn't black, neither is Chomsky, neither is Peck. This IS NOT A racial issue, it is a political ideological issue, a progessive left viewpoint writ large. Senator Obama claims to not agree with it but also claims to be a progressive. Make your own judgements of the Senator's ideological beliefs, but do not for minute buy this spin that Reverend's Wright anti-americanism is reflective of a black critique of the American experience.

How Obama Plans to Increase Unemployment

Senator Obama (D - Illinois) likes to call it Tax Relief for Working Families/The Middle Class. Let's explore:

Making Work Pay - The kind Senator from Illinois will institute a new tax credit of $500 per person/$1000 per 'working family'. The intent is to offset the FICA (social security tax) on the first $8,100 of income by eliminating income taxes. Obama claims this will eliminate the income tax for 10 million Americans. Obama would make the credit refundable if it resulted in a negative tax due.

The Junior Senator from Illinois has heard of the Earned Income Tax Credit, because he also plans to increase it. Here is what the IRS page says about the EITC:

The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

Hmmm.... sounds a lot like the Obama Making Work Pay plan....
Except it is a lot larger... The EITC is little complicated (hey, it is part of the United States Tax Code) but currently the max is $428 for a single/married with no children; $2833 for single with one child, and $4716 for a single/married with two children. The EITC is on a sliding scale, the max is in the range of approx. $10K to $17.4K of income. It slides toward zero as the income moves toward zero or towards the cap AGI of $39,783 for the married/single with two children. So Obama's plan would add on a kicker...

The result of this is that the marginal tax rate on the lowest income earners will increase. That is, Obama will build into the tax code an incentive to not make more money. Don't take that second job.... if you do your income will go down not up.

Obama will create a whole new group of income non-earners to fill those open 'second jobs' by unemploying millions of tax preparers/accountants. You see Obama will have the IRS send you the completed the tax form, you just need to check their work then send it back. Of course, they can't get my birthday correct (two years in a row now) so they will be able to figure my taxes correctly... no problem there....

In case the low income earner/former tax preparers do not know what to do with their free time, Obama has that covered too... a $4K college tuition tax credit. That will add to your refund and, get this, is available prior to you actually enrolling in courses.

Of course while you are busy (not?) taking classes and working 20 hours a week, your children will need to be cared for. The kindly Senator from Illinois has thought of that too. He will increase the Child Care Tax credit from 35% of eligible expenses to 50% and make the credit... you already know the answer... REFUNDABLE.

So, a married couple with two children each adult working 20 hours a week at minimum wage and taking courses at the local college will make around... $13,000 per year gross (not counting Obama's plan to raise the minimum wage). They will have pay about $975 in FICA. Their income tax withholdings will be completely refunded, they will receive tax credits of $2000 for the child tax credit, $4716 for the EITC, $1000 for Making Work Pay, $8K for tuition credit, and 50% of their Child care expenses. An expected refund of $15,716 + half the day care bill.

Thus, these individuals will suffer a net loss of income from full employment unless they find a job that pays them an after tax net of nearly $30,000. Which means finding a job that pays at least $50K.

Yeah, that's gonna happen. So Obama will increase unemployment by reducing the number of people working multiple jobs to reach full employment and by eliminating millions of jobs in the tax preparation business.

Senator, you are not the change we seek.

Honestly, this blog would fully support setting tax preparers and IRS agents free to pursue other career options by, say, implementing a flat tax with no deductions and no tax credits. This a much simpler and more straight forward approach than Obama's nightmarish web of tax credits. Obama would make the tax form so complex that the working poor, who tend to be under-educated, will need someone else to fill out for them. A flat tax would completely eliminate the need for them to perform a calculation... just send in the year-end paystub showing you made less than bar (what ever number that is... most ideas peg it around $65K) and no tax is owed.

That would be a change you could believe in.... Too Bad Obama doesn't see it that way.

Obama's Outsized Rate of Return: No Wonder He's So Popular

In a previous post here on principle and policy, I referred to Senator Obama (D _ Illinois) as a market manager. It turns out he is also a financial wizard. Read on...

First we have a quote from the Senator's speech on the Economy given in Ohio on Febraruy 24th 2008.

We can also invest in American jobs by investing in America, and rebuilding our roads and bridges. I've proposed a National Infrastructure Reinvestment Bank that will invest $60 billion over ten years. This will multiply into almost half a trillion dollars of additional infrastructure spending and generate nearly two million new jobs - many of them in the construction industry that's been hard hit by the housing crisis we're facing.

What kind of financial magic is this? If Senator Obama (D - Illinois) put $6 billion in every year for 10 years at 6%; the investment would grow to approximately $78.5 billion at the end of ten years. If Senator Obama (D - Illinois) put in $60 billion in year one at 6%, the total at the end of ten years would be around $101 billion. Even if Senator Obama (D - Illinois) invested in an index fund that earned the market's long term average return of 10% the thing would slightly more than double to $141.5 billion.
How is the Senator planning to achieve an out-sized financial bonanza wherein the Taxpayers can yield 26.57% return necessary to turn $60 billion in year one to 500 billion in year 10? More research is necessary.
This blogger found that the alleged Bank is a now a key element of Senator Obama's economic plan:

New Jobs Through a New National Infrastructure Investment: Barack Obama believes that it is critically important for the United States to rebuild its national transportation infrastructure – its highways, bridges, roads, ports, air, and train systems – to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow. Investing in national infrastructure is especially important in our efforts to bolster our homeland security to meet international terrorism and natural disaster threats. Additionally, a robust federal
infrastructure investment program today will help strengthen the U.S. economy and provide at least one million more U.S. jobs at a time when the housing and construction industries are slowing. Barack Obama will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation’s most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will create up to two million new direct and indirect jobs per year and stimulate approximately $35 billion per year in new economic activity.

Read the entire plan here

It turns out that this is based on proposed legislation by Senator Chris Dodd (D - Connecticut). While you can read the full text of the proposed bill here. I summarize it as follows:

An independent agency of the Federal government administratively similar to the Federal Deposit Insurance Corporation (FDIC). The "Bank" would have some strange banking powers: the ability to conduct hearings, issue subpoenas, obtain information from any other federal agency simply by asking (other agencies are required to comply), accept for funding any infrastructure project with a Federal price tag of $75 million or more (the list of possibilities goes on for two pages), unilateral authority to determine the appropriate Federal share of spending for every project accepted, to act as a centralized entity to provide financing for qualified infrastructure projects; to issue general purpose infrastructure bonds, and to provide direct subsidies to qualified infrastructure projects from amounts made available from the issuance of such bonds; to issue project-based infrastructure bonds for the financing of specific qualified infrastructure projects; to provide loan guarantees to State or local governments issuing debt to finance qualified infra
structure projects, under rules prescribed by the Board, in a manner similar to that described in chapter 6 of title 23, United States Code; to issue loans, at varying interest rates, including very low interest rates, to qualified project sponsors for qualified projects; to leverage resources and stimulate public and private investment in infrastructure; and to encourage States to create additional opportunities for the financing of infrastructure projects.

WOW! Don't see too many Banks with subpoena power! The borrowing authority of this "Bank" is capped at $60 billion outstanding (the number Senator Obama used as his investment amount); one percent of which is used to fund the bank operations. Thus, this new government agency could cost $600 million the first year.

In my first examination of the bill's text I saw not one word on how the billions of new debt will be paid for. It appears to operate under the premise that the U.S. Government need not use tax money to pay for things. We can just borrow it, and when the debt comes due, we will borrow more, and when that comes due we will borrow more.

I wonder how much of the proceeds will go to fund Amtrak, the sacred of cow of the bill's sponsor Senator Chris Dodd (D - Connecticut).

So now you know how Senator Obama can turn $60 billion into a $.5 trillion using Senator Dodd's new Bank. No wonder Senator Dodd has endorsed the candidacy of Senator Obama.

McCain Missing Opportunity

Presumptive GOP Presidential candidate Senator John McCain (R - Arizona) is missing, or at least is slow moving, on the tactical opportunity presented him to define his potential opponent, Senator Barack Obama (D - Illinois).

The GOP frontrunner has all but locked up the nomination, and will likely go over the top on March 4th. Meanwhile Sen. Obama continues to fight a close battle with Senator Hillary Clinton (D - New York).

Senator McCain should use this time to define Obama. Here is why. Clinton is already well-defined by the right. Her negatives are constantly above 50%. Sen. Obama on the other hand is a relatively less well known politician on the national scene. His negatives are not high and likely soft. While he is focused on winning the Democrat nomination, McCain should begin to define him for the general election.

The popular critique of Senator Obama, one initiated, at least in part, by Sen. Clinton's campaign is that he is an empty suit. All fancy rhetoric with no content. Senator McCain should resist the urge to use this line. It ultimately complements Sen. Obama on his rhetorical skills. He doesn't need any more reinforcement, judging from the crowds at his campaign events.

Senator McCain's campaign should take an opposite line of attack. I would use something like this:

I am not going to call Senator Obama an empty suit. But I do question why a candidate would so passionately argue for unity and bipartisanship and then in the next breath advocate radical positions that most Americans strongly disagree with. For example....

As pointed out by a friend of Uncommon Sense, this line is a two-fer. First, it calls him an empty suit while pretending not to. Second, it positions him, if skilfully done, as far left of center of the electorate.

The opportunity to define the opponent in a Presidential campaign is the critical point. Senator McCain should not let this opportunity pass.

The NIE and Iran: Continuing the Stupidity

The recent NIE that concludes that Iran halted its nuclear weapons program in 2003, adn the response to it by the Administration, the presidential candidates, the Congress, and the media pundits, has precisely missed the point.

Our issues with Iran are not solely about nukes. Rather, the issues with Iran derive from its long-term support, training, financing, and direction of terrorist organizations, especially the Hezbollah.

President Bush's policy has been the leading problem in that has focused on the nuke issue to the exclusion of all else. The nuke issue is a BIG issue, but not the ONLY issue. Read here
The United States now faces an opportunity to redefine the Iran problem as being a multi-attribute issue tightly integrated into the global war on terror. Regretably, the President's speeches and White House Spin reveal they do not possess the broad range view needed for dealing with this problem.

The question now is: Do any of the candidates have it?

More Edwards Double Speak

During Wednesday's Democratic Debate, former Senator John Edwards (D - North Carolina) responded to a question on health care. Here is his opening comment:

I listen to this discussion and this is what I hear -- a bunch of people who have been in Washington a long time who think that everything needs to be done there. It's like the rest of America doesn't exist. They're going to have a bunch of Washington insiders who sit around tables... and figure out... what should be done about health care.

He then said something that should make the hair on your neck stand on end:

And the thing that I have committed to do is the first day that I am President, I will say to Congress, to myself, to the vice president, to the members of the cabinet, if you have not passed universal health care by July of this year.... you lose your health care because there is no excuse for politicians in Washington to have health care coverage when America has no health care coverage.

Way to take the time to listen to the American people Senator.

P.S. Unless you plan on appointing yourself dictator you cannot fulfill this commitment. I hope the American people are not fooled by your demagoguery on this issue.

Senator Joe Biden: In his Own Words

During Wednesday's Democratic Debate, Senator Joe Biden (D - Delaware) responded (in part) to a question from NBC's Tim Russert on health care with the following:

But the fact of the matter is, it's much more difficult to go out and convince a group of Republicans, I would argue, getting something done that is of a major consequence. I have experience doing that.

Thanks Joe.

I found the following sturied buried on page 11 of my local newspaper under the headline "Plant Explosion", I had to hunt for it at FoxNews.com where it, interestingly enough, is not on the "most read" stories list. Here is the link and here is the big news buried in the story:

But Jane's cited Syrian defense sources as saying the explosion took place during a test to fit a "Scud C" missile with a mustard-gas warhead. It quoted the sources as saying the explosion occurred when fuel caught fire in the missile production laboratory. .... Jane's, based in southern England, said the chemical weapons program was part of a strategic co-operation accord signed between Syria and Iran in November 2005.

Obviously, this is very disturbing news. It underscores the one of the basic themes of this blog: the United States must stop its lethargy in the face of these provocative actions by Iran and Syria. Such instances must be met with strong signals of escalating tension coupled with diplomatic efforts that demand these provocateurs cease and desist in these type of activities.

John Edwards' Terrifying Counterterrorism Strategy

In a speech given this week (Sept. 7th) at Pace University in New York, former Senator John Edwards (D - North Carolina) laid out his counterism policy ideas in a speech entitled "A New Strategy Against Terrorism." Read the entire speech here.

Senator Edwards ideas are both mystifying and terrifying. Here is the meat of the plan :

Instead of Cold War institutions designed to win traditional wars and protect traditional borders, we need new institutions designed to share intelligence, cooperate across borders, and take out small, hostile groups. ... As president, I will launch a comprehensive new counterterrorism policy that will be defined by two principles—strength and cooperation. The centerpiece of this policy will be a new multilateral organization called the Counterterrorism and Intelligence Treaty Organization (CITO). Every nation has an interest in shutting down terrorism. CITO will create connections between a wide range of nations on terrorism and intelligence, including countries on all continents, including Asia, Africa, Latin America, and Europe. New connections between previously separate nations will be forged, creating new possibilities.
CITO will allow members to voluntarily share financial, police, customs and immigration intelligence. Together, nations will be able to track the way terrorists travel, communicate, recruit, train, and finance their operations. And they will be able to take action, through international teams of intelligence and national security professionals who will launch targeted missions to root out and shut down terrorist cells.

And thus, it seems that Senator Edwards is advocating a new international police force that will have the prerogative to violate national sovereignty at its own whim. It makes the hair on the back of your neck stand up, doesn't it? I wonder where are the principles that our nation was founded under? Principles like checks and balances, a government properly constituted and constitutionally limited, responsibility to the people, and on and on and on....

But, the kindly Senator from the Tar Heel state is not done yet. Read this:

There is no more urgent task than preventing terrorists from acquiring a nuclear weapon or another weapon of mass destruction. And we will all be better off when the world is free of nuclear weapons. Diplomacy is key to progress against nuclear weapons. The recent agreement with North Korea to shut down their nuclear programs in exchange for the release of frozen assets is long overdue, but encouraging. It is telling that the few successes of the Bush Administration come from the diplomacy it has derided.
As president, I will create a Global Nuclear Compact to strengthen the Non-Proliferation Treaty, which would support peaceful nuclear programs, improve security for existing stocks of nuclear materials, and ensure more frequent verification that materials are not being diverted and facilities are not being misused. And I will lead an international effort to rid the world of nuclear weapons.

Again unbelievable. Strengthen the NNPT? The Senator who sees two America's apparently cannot see the reality of the modern world. Korea has continually flaunted the NNPT and has violated its agreements whenever it needs economic assistance. The success Senator Edwards sees in Korea is the success of bribery and payola, not diplomacy. Iran is another country that continually flaunts the NNPT and the UN's IAEA. The so-called big three EU powers have failed to negotiate a diplomatic deal with Iran, even with the assistance and backing of both the U.S. and Russia. Re-writing treaties and discussing the issue in committee is not going to solve the problem, it is the equivalent of Nero fiddling while Rome burned.

Ready? Here is the payoff pitch:

And during my first year in office, I will establish a "Marshall Corps," patterned after the military reserves, that will include at least 10,000 civilian experts. Its members will be deployed abroad to serve on reconstruction, stabilization, and humanitarian missions.
Rethinking our approach to terrorism also means rethinking our approach country by country, cell by cell. And in each place where terrorism has taken root, there is a lot more we can do.
We must begin with one of the greatest generators of terrorism in the world today: Iraq.

So let me get this straight, we want to pull out 130,000+ troops from Iraq on the grounds it is failed and unconnected to terror... then send out TEN THOUSAND civilians to ???? deliver payola? Come on, Senator... this is ludicrous.

The Senator then lays out the tough talk:

As president, I will condition future American aid on progress by Pakistan, including strengthening the reach of police forces and working more effectively with tribal leaders and their members to ensure their acceptance of the government. But I want to be clear about one thing: if we have actionable intelligence about imminent terrorist activity and the Pakistan government refuses to act, we will.
And Saudi Arabia is a country we have given too much in return for too little. We must require the Saudis to do more to stop the flow of terrorists to Iraq. As president, I will condition future arms packages on Saudi Arabia's actions against terrorists.

But Senator, what happened to CITO?????

President; Democrats; Still Do Not Get It.

Amazingly, the President of the United States and the Congressional Leadership of the Democratic Party seem not to be reading principleandpolicy.blogspot.com.

What else explains the moronic, today is yesterday all over again, political dialogue regarding the war in Iraq?

The Democrats are insisting on sticking to their mind-numbingly stupid political and policy positions: the war was a mistake, it is a distraction from pursuing bin Laden and the Al Qaeda network, that the American people want our troops out of Iraq, etc, etc, etc.

As for the POTUS, he insists on maintaining that Iraq must be free and democratic in order to hold the line on terror. We must stand-by Iraqis who are fighting Al Qaeda elements until Iraqis can stand on their own.

Missing from this discussion is the strategy of the war on terror. The Democrats' rhetoric fails to recognize that the war on terror is larger than just Al-Qaeda and that Iraq is part of the war. POTUS has failed to lay out a clear strategy for the war on terror, which necessarily must address state sponsorship of terror.

In the age of terror, our only hope for lasting security is ending of state sponsorship of terror. Leaving Iraq now will empower Iran and Syria, the two major remaining state sponsors. It will also empower bin Laden by giving him a rhetorical victory with the Arab public. But, sticking it out in Iraq, however noble, is not the same as voicing a strategy that is designed to end state sponsorship and ultimately defeat the terrorist networks. Long time readers of this blog are familiar with this unavoidable logic.

The Drums of War: A Failure of Principled Policy

Fox has reported here that German opposition to further U.N. sanctions against Iran has led the U.S. to begin to develop attack plans against Iran's nuclear production facilities.

While some Democrats, and even Republicans like Congressman Ron Paul (R - Texas), may scream, it is clear that the World cannot allow the Iranian Theocracy to acquire nuclear weapons. In fact, given their long and inglorious history of supporting terrorist organizations like Hezbollah, it is dangerous for this regime to possess any type of radioactive material.

One cannot help but feel that feckless inaction {not} taken by the U.S.A. in the face of Iranian treachery over the last 30 years has lead to this point. I still believe that if the U.S. began responding to Iran in effective ways, that hostilities may be avoided. Note, this does not mean "diplomacy"... it means acting to increase tensions when the Iranians engage in provocative acts and acting to decrease tensions when the Iranians act in encouraging ways. It means sending clear and unmistakable signals of intent to the Iranians. Actions like increasing our military, forward deploying forces, capturing and detaining Iranian operatives, inspecting vessels bound for Iranian ports, etc. should all be on the table and under consideration whenever the Ayatollahs cross the line.

Regrettably, the current administration will likely deliver an ultimatum, then authorize weapons release. This may ultimately be necessary, but it is also a action that might produce an undesirable widening of the war in the middle east.