Trash Talking

That’s some sure valuable trash. Here’s a stat that will blow you away. At least it did me. In the United States, we dispose of several million cellphones a year. One million cellphones contain more than 35,000 pounds of copper, 770 pounds of gold, 75 pounds of silver and 33 pounds of palladium. By the way, a computer’s circuit board contains four times as much gold and twice as much copper as a cellphone.

Someone should thank the guy. Eric Fehrnstrom, Mitt Romney’s top adviser, sure caught a lot of flak for his Etch A Sketch comment. Personally, I didn’t see much reason for the Twitter-fueled media frenzy over the remark. But one group of people should thank him for it: investors who own shares in the Ohio Art Co. The stock price more than doubled, thanks to all the publicity the comment got.

This is an “affordable” light bulb? Last year, the Federal government awarded a $10 million prize for the production of a new, energy-efficient light bulb. Energy Secretary Steven Chu said that the prize would spur industry to make LED lights that are “affordable for American families.” The winning light bulbs cost a not-so-reasonable $50 each.

And speaking of Washington wasting money. The Bureau of Labor Statistics reports that unemployment in Washington, D.C., has increased by 8 percent since 2009, despite a ton of new Federal grants, loans, contracts, tax benefits and entitlements. In fact, despite receiving $900 million in stimulus money in the past three years, Washington, D.C., can’t account for a single new job that has been produced as a result. Your tax dollars at work, folks.

–Chip Wood

The Joke’s On Us

This gives new meaning to April Fools’ Day. On the first of next month, Japan cuts its tax rate on corporate profits from 39.5 percent to 36.8 percent. So what, you ask? When that happens, it means that the United States will have the world’s highest corporate tax rate. Our combined Federal and State levies of 39.2 percent will be higher than taxes charged in Russia, China, Sweden and Denmark. Oh, and Japan plans to cut those taxes by another 2.3 percent in three years. Hey, aren’t we supposed to be the pro-capitalist country?

How many times did you use it? The 244-year-old Encyclopaedia Britannica is abandoning its print edition. Those gold-lettered reference books that were sold by thousands of door-to-door salesmen will be no more. The company pointed out that its Web edition contains more information than its 32-volume print edition. And, besides, it is continuously updated.

A millionaire food stamp recipient. When Amanda Clayton, an unemployed 24-year-old in Lincoln Park, Mich., won $1 million in the State lottery, she promptly went out and bought a house and new car. She also continued to collect $200 a month in food stamps. When a local reporter asked her if she thought that was right, she replied, “I feel that it’s okay because, I mean, I have no income and I have bills to pay.”

Food stamps buy drugs and guns. Phyllis Fong, the inspector general of the Department of Agriculture, told the House Oversight and Government Reform Committee that some welfare recipients are selling their food stamps for cash and buying drugs with the money. “By giving a recipient $50 in cash for $100 in benefits, an unscrupulous retailer can make a significant profit; recipients, of course, are then able to spend the cash however they like,” she said. “In some cases, recipients have exchanged benefits for drugs, weapons, and other contraband.” Your taxes at work, folks.

Chip Wood

How To Buy Gasoline For 20 Cents A Gallon

Has the price of gas hit $4 a gallon yet where you live? As I mentioned in last week’s column, several analysts predict that price will seem cheap before the year is out. Are you ready to pay $5 a gallon?

Some neighbors and I were reminiscing recently about how cheap things were back in “the good old days.” I mentioned that the very first credit card I got was for one of the gas-station chains. Back then, gasoline cost less than 25 cents a gallon.

Then I said something that stopped them cold. “Do you know that you can still buy gasoline for about 20 cents a gallon?” They were all positive there was a trick to my question… and there is.

My claim is absolutely, totally, 100 percent true — if you pay with dimes that were minted before 1965.

Back then, dimes, quarters, half dollars and silver dollars were 90 percent pure silver. Today, those coins are commonly referred to as “junk silver.” But believe me, there is nothing junky about them.

These genuine silver coins are typically sold in bags with a face value of $1,000.  If they were all dimes, that would be 10,000 of them. Each bag contains about 712 ounces of silver. A pre-1965 silver dime has about 1/14 of an ounce of silver in it. With silver now around $32 an ounce, one of those “junk silver” dimes is worth about $2.29. Selling two of them would buy you a gallon of gas anywhere in the country.

Remember when a loaf of bread cost 10 cents? Well, one of those silver dimes will still get you one of the fancy fresh-baked loaves in the bakery section of your local grocery store. One of the mass-produced marvels with more air than nutrients will cost half that amount.

My point is simply this: The value of the goods we buy every day hasn’t changed. A loaf of bread is still a loaf of bread — ditto a quart of milk, a gallon of gas or a suit of clothes.

The reason things cost 10 or 20 or 50 times more than they used to isn’t that they are that much more valuable today. It’s that our measuring stick, the U.S. dollar, is worth so much less. Back in our grandparents’ day, the dollar was not only backed by gold, but for most of this country’s existence the U.S. government promised that it could be exchanged for gold at any bank in the Federal system.

The Treasury also produced something called “silver certificates” that operated the same way, except that they could be exchanged for silver. And our government promised to keep enough gold and silver in its reserves to honor all of those commitments.

But that was then. Today, the U.S. dollar is an “I.O.U. nothing,” as a friend of mine likes to put it. Oh, it says it is backed by the “full faith and credit of the United States.” But let me ask you: When you look at the disaster that Washington has made of the budget process and our economy, how much full faith and credit do you have in the people running the show today?

And how much “full faith and credit” do you have in the pieces of fiat currency called the U.S. dollar that they are producing by the trillions? I hope the answer to both of my rhetorical questions is “very little” and “not much.”

Our Founding Fathers knew that gold and silver were real money. That’s why they put into our Constitution that only gold and silver could be used to create our coinage.

Sadly, we’ve allowed the powers that be to create “money” out of thin air, with absolutely nothing to back it. That is why the value of our currency has plummeted more than 95 percent in past 100 years.

But more and more Americans are learning not to put their “full faith and credit” in our politicians or the currency that they manipulate. Want to protect the purchasing power of your savings? Then I’d suggest putting them into things of real value. And for the past 5,000 years, nothing has preserved value better than the Midas metal and its less-expensive sister, silver.

Exchanging dollars for gold and silver could be the best investment you make this year. It certainly has been for the past decade.

Until next time, keep some powder — and some gold and silver — on hand.

–Chip Wood

Dismantle Fannie Mae, Freddie Mac

Cutting back at Fannie and Freddie. In a well-publicized effort to slam the barn door a few years too late, the Administration of President Barack Obama proudly announced that it is capping the pay of Fannie Mae and Freddie Mac bosses at half-a-million bucks a year. That’s an improvement over the past few years, when Fannie and Freddie chief execs pocketed several million dollars a year. But it’s a far cry from what Congress should do: Dismantle both unConstitutional boondoggles.

Phooey on Daylight Savings Time. I’ve ranted before on the absurdity of our annual “spring forward, fall back” exercise. Among other things, I think it’s a terrible idea to send our kiddies off to school in the dark. But a report from the Sleep Program at Loyola University Health System indicates it can actually be dangerous. There is a sharp spike in traffic accidents and workplace injuries on the first Monday of daylight savings — probably because many people are even more sleep-deprived than usual.

Sort of a sad finale. I was sorry to learn that that the cruise ship that inspired a million romantic fantasies — and several hundred TV parts for Hollywood B-list actors — has been sold for scrap. The “Love Boat” was actually the Pacific Princess, which joined Princess Cruises in 1974. After languishing at a dock in Italy for more than year, the 19,903-ton vessel (tiny by today’s standards) was sold to a Turkish demolition company. I trust that Captain Stubing (Gavin MacLeod) and Gopher (Fred Grandy) will shed a tear at its passing.

Bad karma for the Karma. The Consumer Reports test of the hugely subsidized, fancy new hybrid automobile the Fisker Karma was put on hold temporarily. It seems the $107,850 car broke down during speedometer calibration runs. The magazine said, “We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it has finished our check-in process.” Fisker mechanics looked into the problem, replaced the battery pack and returned it to Consumer Reports. Testing is once again under way.

–Chip Wood

The North Dakota Oil Boom

The average prices of a gallon of gas and a barrel of oil are near 150-year highs. Most pundits expect them to go higher. Are you ready for $5-per-gallon gasoline?

In a recent speech, President Barack Obama said: “We’re not going to be able to just drill our way out of the problem of high gas prices.” Actually, to a large extent, we can. For proof, let’s compare what’s been happening in California to the extraordinary accomplishments in North Dakota.

According to the Fraser Institute’s 2011 Global Petroleum Survey, California is the worst State in the Nation for its hostility to drilling. In fact, measured against the rest of the world, California ranks 91st.

Thanks to years of placating environmental extremists, California’s anti-drilling regulations make it almost impossible to drill for new oil anywhere in the State, onshore or off. As a result, its production of oil has fallen by nearly one-third in the past 20 years. As oil production has declined, so has tax revenue. Even with several gigantic tax increases during that period, oil revenues in the State are down.

That’s too bad, because California needs every penny of income it can get. It has one of the highest State sales taxes and personal income taxes in the country. Still, it’s not enough. The budget deficit for the coming fiscal year will top $9 billion — the fifth year in a row of billion-dollar deficits. Governor Jerry Brown’s proposed solution? Raise taxes even higher.

So you won’t be surprised to learn that wealthy Californians are fleeing the State as fast as they can. According to census data, almost one-third of its wealthiest residents — those earning $500,000 a year or more — fled the State between 2007 and 2009. On our Left Coast, they won’t drill for oil. And pretty soon, they won’t be able to drill many millionaires, either.

Let’s contrast the near-bankruptcy of the People’s Republic of California with what’s been happening in one of the most independent and entrepreneurial States in the union: North Dakota.

In 1995, the U.S. Geological Survey estimated that there were 150 million “technically recoverable barrels of oil” in an area of North Dakota known as the Bakken Shale. In 2008, the number had climbed to 4 billion barrels. Two years later, it had doubled to 8 billion barrels.

Today, thanks to vast improvements in recovery technology as well as the discovery of vast new oceans of underground oil, estimates of “recoverable” oil in the Bakken Shale have tripled to 24 billion barrels. That is more oil than is being produced anywhere else in the United States, including Alaska’s famed Prudhoe Bay. But it’s a small fraction of what is possible.

Experts say that current technology can extract only about 6 percent of the oil they know is underground in North Dakota. Total estimated oil reserves are thus around 500 billion barrels. And new discoveries are happening all of the time.

Let me include an interesting footnote on the subject of “reserves.” In 1980, the oil reserves in the United States were estimated at 30 billion barrels. Yet in the intervening 32 years, this country actually produced 77 billion barrels of oil. In other words, we produced more than 2.5 times more oil than the leading experts said there was 32 years earlier.

Today, the numbers are even more staggering. The amount of “technically recoverable” oil in the United States is estimated at 1.4 trillion barrels. (Please note that is “trillion,” with a “T.”) Unfortunately for us, most of that oil is located in areas Obama says we can’t search for it: in portions of Alaska and in waters off our shores.

Combined with known resources in Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels. How much is that?  Let me put it in perspective: It is more than all the oil the world has used since the first oil well was drilled in Titusville, Penn., 150 years ago.

So far, all I’ve discussed is oil. When natural gas and coal are added to the total, the numbers are clear: We have enough energy reserves in the United States to fuel all of our needs for 100 years, even if we never made another discovery.

Back to North Dakota for a moment. The effect of the bonanza there has been extraordinary. Stephen Moore, my favorite Wall Street Journal writer, says that what is happening in Williston, N.D., “is what the Gold Rush might have looked like had it happened in the time of McDonald’s, Wal-Mart and Home Depot.”

The State has the lowest unemployment rate in the Nation, at just 3.3 percent. California’s, by contrast, is 11.1 percent. That doesn’t even count the unemployed people who have simply stopped looking for work. The true unemployment number is probably closer to 20 percent.

According to the Census Bureau, North Dakota led the Nation in job and income growth in 2011. While California is losing millionaires every day, North Dakota is creating them faster than anyplace else in the country. But even entry-level positions are benefiting. For example, a job flipping burgers at McDonald’s pays $18 an hour plus a “signing bonus” for new employees.

And while the State of California can’t begin to pay all of its bills — it even issued IOUs last year in place of tax refunds — the biggest argument in North Dakota’s State Capitol is how to spend all of the money that’s pouring in. Legislators in Bismarck have approved hundreds of “shovel ready” infrastructure projects, including roads, bridges, railroads and pipelines. But even while spending more on worthwhile projects, legislators also agreed to cut the State income tax.

What’s happening in North Dakota is a classic example of the one thing that would solve our energy problems everywhere — and most other problems in the economy, too. Unfortunately, it’s the one thing Obama and his team won’t even consider.

The solution is simple: Let the market work.

In his State of the Union address in January, Obama declared that “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy.”

Like so much that comes out of our President’s mouth, the sentence was as misleading as his skilled staff of speechwriters could make it. What he meant was that his Administration would continue pouring billions of dollars into every wasteful alternative energy pipe dream they could think up, while continuing to slap higher taxes and more regulatory handcuffs on the businesses that can actually solve our energy needs and make money (and pay taxes) doing it.

Rather than foster energy independence, Obama wants to make us all dependent. Dependent on government, that is.

Want to reduce unemployment? Increase tax revenues? Get the economy humming again? Truly foster energy independence?

The answer to all of them is the same: Get government off our backs. Let the market work. The results will be amazing. Maybe next year we’ll have a government that’s willing to give it a try.

Until next time, keep some powder dry.


Pro Football’s Bounty System

Remember in the classic movie “Casablanca” how Captain Louis Renault pretended to be amazed when he was informed that gambling took place at Rick’s Café Américain? With a wink and a smirk, Captain Renault said he was “shocked, shocked” at the revelation.

That’s how I felt when I first heard the news that professional football players were paid a bonus if they hurt an opposing player so badly that he had to be taken out of the game.

An NFL investigation revealed that as many as 27 New Orleans Saints players and former defensive coordinator Gregg Williams were part of a “bounty” system that awarded cash bonuses: $1,000 if a player had to be carried off the field and $1,500 if one was knocked unconscious. Payouts increased dramatically during the playoffs.

The New York Times reported that defensive captain Jonathan Vilma (No. 51) offered a $10,000 cash award for knocking Minnesota Vikings quarterback Brett Favre out of the National Football Conference championship in January 2010. Despite taking several hard hits during the contest, Favre finished the game. So, presumably, no one collected that particular payoff.

The NFL said the total amount of money in the pool might have reached $50,000 or more during the 2009 playoffs. If you’ll recall, that was when the Saints marched all the way to a Super Bowl victory.

Is anyone surprised by all of this? Really?

Professional football is the closest thing we have in this country to the gladiator battles of ancient Rome. Of course, we’re a lot more civilized than fans were 2,000 years ago. Our combatants aren’t allowed to battle to the death. But you can’t persuade me that the players and their fans are emotionally much different from the screaming throngs back then.

Rome’s rulers knew all about how to use “bread and circuses” to keep the masses happy. Is what we have in America today really all that much different? I don’t think so.

According to the NFL, neither coach Sean Payton nor general manager Mickey Loomis did anything to stop the bounties when they were made aware of them. In fact, The Times reported that Loomis did nothing even when ordered to by team owner Tom Benson.

It appears that the bounty system was administered by Williams, who subsequently was hired by the St. Louis Rams. When the accusations were made public, Williams said he had made a “terrible mistake.”

Peyton and Loomis issued a joint statement that read:

We acknowledge that the violations disclosed by the NFL during their investigation of our club happened under our watch. We take full responsibility.

This has brought undue hardship on Mr. Benson, who had nothing to do with this activity. He has been nothing but supportive and for that we both apologize to him.

These are serious violations and we understand the negative impact it has had on our game. Both of us have made it clear within our organization that this will never happen again, and make that same promise to the NFL and most importantly to all of our fans.

Peyton and Loomis didn’t exactly fall on their swords, did they? If that’s the most contrite apology these coaches and their highly paid PR flacks can devise, somebody should encourage them to look for a new line of work.

In 2008, Williams spent one season with the professional football team in the town I now call home. He was the defensive coordinator for the Jacksonville Jaguars.

OK, maybe I should have said “semi-professional” football team.

Anyway, the controversy over the bounty program at the football program in New Orleans generated a ton of discussion in Jacksonville. Guess what? Nobody here ever did any of that bad stuff — not even Williams, when he was the defensive coordinator here.

So far, only two players who played for Williams have agreed to speak on the record. But both of them — former linebacker Clint Ingram and former defensive end Reggie Hayward — say that while Williams encouraged a “very aggressive” defensive style of play, nobody was ever promised a reward for injuring an opposing player.

As it happens, I have a big problem with all that talk of rewards. Am I really supposed to believe that a professional football player who is making close to a million bucks a year (many of them get a lot more than that) would really be motivated to cream an opponent for a measly thousand bucks or so?

Let’s see. I’m making more than 50 grand for playing an hour of football. And for 1/50th of that amount, I’m going to jeopardize my career and my reputation? I don’t think so.

The Wall Street Journal agrees with me. The newspaper conducted an extensive “review of every regular- and postseason Saints game since 2009.” Guess what? The newspaper concluded: “Seldom did a Saints-inflicted injury force an opponent to leave the field.”

Right. The bounty program — if it even existed — was an almost total flop. “In 48 regular-season and six postseason games,” the newspaper reported, “such incidents occurred only 18 times.”

In other words, when more than two dozen big, burly professional football players were offered a bounty to put an opposing player out of commission and had a few dozen opportunities to do so per game, they were able to disable someone only once in every three games.

By the way, according to the WSJ review, the Saints player with the most lethal hits was safety Roman Harper. He had four game-ending tackles in 54 games, fewer than one of 10. For this he was allegedly paid $1,000 per hit — or $1,500 if the poor victim had to be carried off the field.

So all in all, havoc-wreaking Harper could have earned an extra $6,000 over those three years. But Harper’s salary at the time was $7 million a year. Do you really think that six grand would have meant anything to a guy making more than one thousand times that much money?

Despite all the anger and indignation in the media, I think this whole “bribe ’em to hurt someone” story is a bunch of baloney. There simply wasn’t enough money involved.

Do I believe that some of our professional gladiators would be willing, even eager, to “play dirty,” if that’s what it took to win? You bet. And it’s nothing new. My first football hero, Otto Graham, said that eye-gouging, foot-kicking and finger-twisting happened all the time when he was playing. And that was 50 years ago.

Has the game gotten cleaner and more sportsmanlike since then? There are millions of dollars at stake every day. I don’t think so.

But why blame the players for giving the public what it wants? It isn’t the gladiators fault; the fans are to blame. If we’re willing to howl for blood, the guys with on the field will give it to us.

Until next time, keep some powder dry.

–Chip Wood 

Courting The Enemy

Democrats for Santorum. Mitt Romney’s supporters are still smarting over appeals by Rick Santorum’s team to get Democrats to vote for their guy in the Republican primary in Michigan. Their efforts, which included robocalls to Democratic voters, were only partially successful. USA Today reported that 9 percent of Michigan voters identified themselves as Democrats. “More than half of those voters, or 53%, said they voted for Santorum,” the newspaper reported. But it wasn’t enough to give Santorum the win.

Guess we didn’t mail enough Christmas cards. The U.S. Postal Service ended 2011 with its worst three months in history. Fourth quarter losses came to $3.3 billion, the Postal Service revealed. It is losing so much money that some analysts predict it will have to declare bankruptcy by the end of the year. Maybe it’s time to consider a proposal I first advanced 30 years ago: Let’s give the Postal Service to FedEx and UPS Inc. and insist they pay taxes on all the grounds, buildings and vehicles they acquire.

Your stimulus money at work. The Omaha Public Schools used more than $130,000 in Federal stimulus dollars to purchase “diversity manuals” for every teacher, administrator and staff member. Reported the Omaha World-Herald: “The book says that teachers should acknowledge historical systemic oppression in schools, including racism, sexism, homophobia and ‘ableism.’” In case the last one is new to you, it means discrimination or prejudice against people with disabilities.

Wish Hillary would listen to Bill. Speaking at an energy conference recently, former President Bill Clinton said that this country should “embrace” the Keystone XL pipeline, which would transport oil from Canada to refineries in Texas. The State Department, where his wife Hillary serves as Secretary, has refused to grant permits for the pipeline to be built across our border with Canada. Maybe Bill should have a chat with his wife.

–Chip Wood 

When Spoiled-Rotten Children Grow Up

Riot police had to be called to an Orlando mall on Feb. 23. Why? Because an unruly crowd of would-be shoppers couldn’t wait to get their hands on the new Foamposite One Galaxy by Nike.

In case you’ve never heard of it (I hadn’t either), this is a special-edition basketball shoe that Nike introduced just days before the NBA All-Star Game. The House of Hoops by Foot Locker at Florida Mall had ordered a bunch of the shoes and announced that they would be sold (at $220 a pair) on a first-come, first-served basis at midnight.

Hundreds of people showed up long before the sale was to begin. Police were called to maintain some semblance of order. But well before the sale began, several hundred people rushed the door.

Law enforcement officers in riot gear pushed back the crowd. The store decided not to open that night at all. By Friday morning, Foot Locker announced that it was canceling the All-Star weekend shoe release at six other malls because of “safety concerns.”

So a near-riot broke out because some spoiled brats couldn’t wait to get their hands on a $220 pair of tennis shoes. Isn’t that ridiculous?

Frankly, we shouldn’t be surprised. This is just one more consequence of the entitlement philosophy our children have been taught. It’s been going for several generations.

Let me begin the litany of who’s to blame with these kids’ teachers. What sort of messages have they been sending their young wards? How much of our history have they been teaching them? What kind of character have they been building?

Nationally, teachers’ unions collect hundreds of millions of dollars every year from mandatory dues. They spend a ton of it lobbying for laws they want passed. Or, as they’ve proven in dozens of States, battling legislation they oppose. They are an almost perfect example of the “I want mine, and I want it now” philosophy — no matter the cost to the overburdened taxpayers who must foot the bills.

The teachers’ unions defend a status quo that produces 1 million high-school dropouts a year and a graduation rate of less than 50 percent for black and Hispanic students. What sort of education do the kids who do graduate have? How much of this country’s history have they learned? You don’t want to ask. Heck, half of them can’t write a literate sentence or give the correct change for a $20 bill.

But let’s not let the parents off the hook. How many of them are delighted to let the schools take all responsibility for training and teaching their young? How many try to give their kids everything they want, from the latest cell phone and video game to $150 jeans and $200 tennis shoes?

In fact, how many of those same parents bought more house than they could afford, then decided that somebody else had to pay for their mistake? Five of our largest banks have been pressured into creating a $26 billion kitty to help bail them out. Of course, this won’t begin to paper over the problems. So you can expect a lot more hands to be out, demanding that someone come to their rescue.

And let’s not forget about one of the most feared and powerful voting blocs in this country: our senior citizens. Any politician with the temerity to try to change some of the entitlement programs that are bankrupting this country is sure to face some of the most vicious and dishonest advertising campaigns this country has ever seen. Remember the Democrats’ response to Paul Ryan’s efforts to reform Medicare? Their “throw grandma off the cliff” TV ad was a classic of the type.

The demagogues on the left learned long ago that if they can portray an opponent as wanting to “eliminate Social Security” or “slash Medicare,” they are almost certain of victory. So what if they are creating obligations this country can’t afford to keep? They want political power now — no matter the obligations that will be passed down to our children and grandchildren.

The “Age of Entitlement” isn’t limited to a bunch of spoiled teenagers threatening to riot if they can’t get the brand-new basketball shoes they want. You’ll find plenty of members in every age group in this country.

How much of a stake do these people have in preserving and protecting the system, when they pay almost nothing into it? Nearly half of the adults in America don’t pay a penny in income taxes. What do they care how much your taxes have to go up to provide them with the goodies they are certain they deserve?

To quote an old phrase, anyone who promises to rob Peter to pay Paul can always count on the vote of Paul. And my friends, there are an awful lot of Pauls and Paulines in this country now.

And there are a lot of people willing to promise them almost anything in exchange for their votes.

We’ll find out in November who will win the next round in this ongoing struggle.

Until next time, keep some powder dry.

–Chip Wood

Greedy Obama

Even worse than I said. My Straight Talk column last week on Obama’s budget baloney actually understated his new tax and tax, spend and spend proposals. I said he wanted to raise the tax on dividends for “the rich” to 39.6 percent — more than double where it is now. But I forgot to include the investment tax surcharge included in Obamacare and the phase-out of deductions and exemptions. Add it all together and, if Obama gets his way, the dividend tax rate in 2013 will be 44.8 percent — nearly three times what it is today.

Make these bureaucrats pay up. Figures released by the Internal Revenue Service indicate that one of the biggest bunches of tax shirkers can be found on the government payroll. The Associated Press reported that more than 279,000 Federal workers and retirees owed $3.4 billion in back income taxes as of Sept. 30, 2010. White House employees owed Uncle Sam almost $1 million. Staffers on Capitol Hill owed more than $10.5 million. I suggest a new policy: Pay up or lose your job.

Poverty is disappearing. The number of people living in absolute poverty has been cut in half since the 1950s. Moreover, 95 percent of Americans living below the poverty line not only have electricity and running water, but a color TV, a refrigerator, and Internet access — things a millionaire couldn’t have purchased a century ago.

–Chip Wood 

Let The Buyer Beware

Another warning about the dollar’s decline. Warren Buffett writes: “Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire [Hathaway]. It takes no less than $7 today to buy what $1 did at that time.” This “invisible inflation tax” is devastating the value of bonds. In fact, he warns, “Right now bonds should come with a warning label.” I agree. Caveat emptor.

Right-to-work wins big in Indiana. Congratulations to voters and workers in the Hoosier State. Last month, Indiana became the 23rd state to enact right-to-work legislation, freeing employees from any requirements to join a union or pay union dues as a condition of employment. The unions are furious, of course. The International Union of Operating Engineers Local 150 filed a lawsuit Wednesday in U.S. District Court, asking a judge to block Indiana’s new right-to-work law from being enforced. Time will tell if the courts give them a victory that the Legislature wouldn’t.

This Fed president likes gold. Richard Fisher, the president of the Federal Reserve Bank of Dallas, has warned in the past that Ben Bernanke’s low-interest rate policies will fuel inflation. Now, it turns out that his investments confirm his concerns about the dollar’s decline. Fortune reports that Fisher has more than $1 million invested in a fund that tracks the price of gold. He is also heavily invested in real estate and other commodities, including $250,000 worth of uranium.

Pat Buchanan gets the ax. The powers-that-be at MSNBC finally decided to part ways with conservative commentator Pat Buchanan. The only surprise is that Buchanan lasted so long, but his 10-year run on the very liberal network is now over. Apparently, his latest book, Suicide of a Superpower, was the final straw. It contained a chapter titled “The End of White America.” MSNBC president Phil Griffin said he didn’t believe the book “should be part of the national dialogue, much less part of the dialogue on MSNBC.”

–Chip Wood

Obama’s Budget-Busting Baloney

That wasn’t a budget Barack Obama delivered to Congress. It was a campaign document.

It was full of promises of “fairness,” which to our President and his cronies means taking more money from those who earn it and giving it to those whom they think deserve it. “From each according to his ability, to each according to his need.” Karl Marx said it first.

Obama’s budget for the 2013 fiscal year, which begins Oct. 1, calls for total Federal expenditures of $3.8 trillion. That’s a 0.2 percent increase in spending, but somehow the number crunchers claim it includes a ton of reductions.

Of course all those “savings” are just a mirage. You have to understand that in Washington, if you agree to slow the rate of growth of some bureaucracy, you can claim all sorts of credit for reducing the budget.

Funny, but somehow we taxpayers always end up paying more.

For the past four years, the Obama Administration has run a deficit of more than $1 trillion. That’s more than $4 trillion added to the deficit in just one term — something that has never happened before in our history.

But there’s good news for next year — that is, if you accept all of the rosy assumptions the Obama budget contains. If revenues don’t go any higher than projected and tax receipts rise as much as predicted, the deficit for Fiscal 2013 will be a mere $901 billion. Isn’t that wonderful?

Of course, the Obama budget calls for higher taxes on “the rich.” That’s any individual making more than $200,000 a year (or any family making more than $250,000). Obama says it’s not “fair” that multimillionaires like Mitt Romney pay only 15 percent in taxes. He conveniently ignores that businesses pay 35 percent of their profits in taxes.

But Obama and his supporters echo the old canard, “Don’t confuse me with facts, my mind’s already made up.” They want to raise the tax of dividend income for “the rich” to 39.6 percent.

Whenever our greedy, grasping government has tried to raise taxes this much, tax revenues have gone down. You don’t need a Ph.D. in economics to predict that it will happen again.

Two other proposals in the Obama budget are probably worth a mention. One is the demand that Congress not extend the Bush tax cuts, which are scheduled to expire at the end of this year. The November elections will decide what happens here. If Republicans gain control of the Senate and the White House, they are almost sure to be renewed. If not, color them gone. This would be a win-win for the Democrats, who would get a tax increase without actually having to vote for one.

The other proposal in the Obama budget getting a lot of publicity is the much ballyhooed “Buffett Rule.” This would require that anyone earning more than $1 million a year, regardless of the source of the money or the amount of deductions he is entitled to, pay a minimum effective tax rate of 30 percent.

If the Buffett Rule had been in effect last year, Romney’s tax burden would have doubled. So would Warren Buffett’s, I assume. But in Buffett’s case, so what? Consider how much money he’s already made from government intervention in the marketplace, another $7 million in taxes would seem like a very cheap price to pay.

Remember Buffett’s investment in Goldman Sachs? His holding company, Berkshire Hathaway, has already pocketed about $1 billion from that one deal. And it was all made possible thanks to a government-financed bailout. Not exactly free enterprise at work.

Interestingly enough, it looks as though Buffett’s next acquisition may also be found dining at the government trough. Here are three companies he expressed an interest in last year:

  • Energy producer Exelon Corp., which has numerous ties to the Obama Administration.
  • General Dynamics Corp., which is the world’s fifth-largest defense company, thanks almost entirely to its deals with Uncle Sam.
  • Archer Daniel Midland Co., the giant agriculture concern, which profits enormously from government subsidies for ethanol, corn syrup and many of its exports.

Take away the sweetheart deals all of these companies have with Uncle Sam, and their stock prices would collapse overnight. They would disappear from Buffett’s buy list in the blink of an eye.

Those are some of the things that are wrong with the budget Obama submitted. Can I say anything good about it?

Yes. There isn’t a hope in Hades that it will be approved.

Last year, when the Senate finally agreed to vote on Obama’s budget for fiscal year 2012, not a single Senator voted in favor of it. The $1.3 trillion measure was rejected 0-97. This year’s campaign document — I mean budget — won’t fare much better.

If the Senate won’t pass Obama’s budget, what are the chances they will come up with one of their own? After all, they’re required by law to do so, aren’t they?

Well, the Senate hasn’t passed a budget resolution for the past three years. Why should this year be any different? After all, if the Senate actually puts something down in writing, the Senators will have to defend it in the fall elections. Who can blame them for wanting to avoid that?

Senate Majority Leader Harry Reid said last year, “It would be foolish for us to do a budget at this stage.” We’ll soon find out if he feels any differently this year.

It seems like the plan continues to be “spend and spend, tax and tax, elect and elect.” That’s been the strategy of the big spenders in Washington since it was first enunciated by Harry Hopkins, back in the early days of Franklin Delano Roosevelt’s reign. I’m sure Obama sees no reason to change it now.

If we can’t change the plan, then we’ve got to change the planners.  What are you doing to make that happen?

Until next time, keep some powder dry.

–Chip Wood

Obama Shafts Responsible Homeowners

Hey, look, it’s manna from heaven! If you lost your home to foreclosure, Barack Obama is going to see that you get a check for some 2,000 bucks. Free!

And not only that. If you still own your home but it’s worth a lot less than you owe on it, he’s got even better news for you. The President, in league with the Nation’s attorneys general, has gotten the banks to agree to reduce what you owe.

Isn’t that wonderful?!? Why, it’s almost like getting free money. What a wonderful deal our leaders have arranged.

Of course, it’s only wonderful for people who bought more house than they could afford, got over their heads in debt and are looking for someone to rescue them from their mistakes. And it’s also a pretty good deal for the five huge financial institutions that are participating, as I’ll explain in a moment. They’ll get bailed out of their mistakes, too.

That’s who benefits. Now, let me tell you who loses. For the most thrifty and responsible among us, the deal stinks.

My friend Gary Bauer of Campaign for Working Families used an analogy that makes what happened crystal clear. Consider the case of two families who both bought a home on the same street several years ago. Both homes cost $200,000.  Couple No. 1 saved for years and denied themselves many extras so they would have $40,000 for a down payment. And over the years, they faithfully made every mortgage payment on time, even though the value of their home fell below what they paid for it.

Couple No. 2 had no savings and couldn’t put anything down. But they were able to get a no-money-down mortgage with an adjustable interest rate. As the economy tanked and their interest rate rose, they found it impossible to make their mortgage payments. They listened to the liberal rhetoric telling them it wasn’t their fault and stopped making mortgage payments altogether.

Now comes the “fairness” President, announcing that the couple that sacrificed and made all their payments on time will get nothing. While the couple that wasn’t as prudent or responsible will have the size of their mortgage and their interest rate on it reduced. If they have been evicted already, they will get a check for $2,000.

So the thrifty and responsible homeowner gets nothing. But in fact he gets worse than nothing. Because when the dust settles, his home will have fallen in value just as much as the other guy’s.

No wonder financial analyst Dick Bove told CNBC viewers that this is “the mortgage deal from hell.” He said that the biggest lesson to learn from all of this is that “only fools meet their financial commitments.” He further said, “If you’re going to do something which is going to reduce the value of existing homes where people are making their payments, every American should stop making his payments on his mortgages, send a letter to the Attorney General in his state and say ‘I qualify to have my principal reduced because I’m not going to make any more payments on my house.’”

Boy, won’t that make America a better place?

But if this is such a bad deal, why were five big banks so eager to join it? You will not be surprised to learn that this is as much a bank bailout deal as it is a help-the-homeowner deal.

David Stockman, Ronald Reagan’s budget director, put it succinctly. “This is ultimately at the end of the day a bailout for JP Morgan and Wells Fargo” and other big underwriters of second mortgages and home-equity loans.

When a foreclosure takes place, these obligations become worthless. With refinancing, they won’t. It’s that simple.

Where is the money for this $25 billion bailout coming from? Ally/GMAC, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo will each put up $5 billion. The President’s plan, Stockman says rightly, is “the worst kind of crony socialism.”

Pacific Investment Management Company, better known as Pimco, owns a ton of mortgage debt. Scott Simon, the head of mortgage investments there, says of the $250 billion in their Total Return Fund, about half is in mortgage debt.

“A lot of the principal reductions would have happened on their loans anyway,” Simon says. “And they’re using other people’s money to pay for a ton of this.  Pension funds, 401(k)s and mutual funds are going to pick up a lot of the load.”

Simon didn’t mince any words about the morality, or lack of it, with the deal. “You tell your kid, ‘you did something bad, so I’m going to fine you $10. But if you can steal $22 from your mom, you can pay me with that.’” That’s the sort of deal our “fairness” President has foisted on us.

While I’m on the subject of rotten deals, let me say a few words about Obama’s budget for the coming year. It’s a lulu. Forget about the reduction in Federal spending that the overwhelming majority of Americans wants to see. Obama’s budget calls for a 0.2 percent increase in Federal spending, for a total of $3.8 trillion. Our gross domestic product is $13.3 trillion.

Obama wants to spend almost one-fourth of all the money made by all of the production in this country. Every time a dollar changes hands for anything, Washington wants to take a quarter of it. (And if ObamaCare ever gets fully implemented, that ratio is sure to go higher. Pray that never happens. Or better yet, work like blazes to make sure we get a House and Senate this November that will make sure it doesn’t.)

Federal revenues, according to the estimates of Obama’s budget boys, won’t begin to pay for all the money they want to spend. The estimated deficit for the year will hit be $1.33 trillion. That would make four years in a row of annual deficits over $1 trillion.

I don’t plan to write much more about Obama’s budget proposals, because there’s little or no chance Congress will approve them.

While the President’s budget is dead on arrival, that’s not the case with his class-warfare, politics-of-envy, tax-the-rich rhetoric. You can expect a flood of the latter in the coming months. I’m very afraid it might be enough to get that “crony socialist” re-elected this fall.

Until next time, keep some powder dry.

–Chip Wood

What A Payday!

A fantastic payday for this artist. The much ballyhooed IPO for Facebook will add to founder Mark Zuckerberg’s fortune. A ton of other supporters and employees will become instant millionaires. But no story will top that of muralist David Choe. When he painted the first Facebook office in 2005, Choe was offered $60,000 in cash for the job — or stock in the company. He chose stock and went on to make an estimated $250 million in the Facebook IPO. That’s quite a payday, isn’t it?

Fox cancels Freedom Watch. I was shocked to hear that Fox Business has decided to cancel Judge Andrew Napolitano’s wonderful program, Freedom Watch. It was arguably the most hard-hitting, least compromising commentary on national TV.

Stanley Cup winner declines White House invitation. It’s traditional for the national champs in most sports to be invited to visit the White House. But when the Boston Bruins won the Stanley Cup this year, MVP goalie Tim Thomas declined to come along. An ardent conservative, Thomas said in a statement on Facebook, that he believes “the Federal government has grown out of control, threatening the Rights, Liberties and Property of the People.” Because of that, Thomas said, “I exercised my right as a Free Citizen. … This was not about politics or party, as in my opinion both parties are responsible for the situation we are in as a country.”

–Chip Wood

‘Printing Money Like Gangbusters’

Bond guru expects much more inflation. Pimco founder and co-Chief Investment Officer Bill Gross warns that central banks are “printing money like gangbusters.” Our own Federal Reserve is leading the way. The Federal Reserve balance sheet, which stood at $869 billion in August 2008, passed $2.9 trillion at the end of 2011. The manager of the world’s largest bond fund points out that money printing increases the risk of reflation. “That’s why we’re seeing the pop in oil and gold etc.,” Gross said.

Consumers reduce credit card debt. Although today’s Straight Talk column talks about the astronomical debts Americans owe (both private and public), there was one piece of good news last year: The average amount owed on personal credit cards dropped by 11 percent in 2011, according to one tracking firm. The average amount owed fell from $7,404 to $6,576. With some cards charging upward of 15 percent interest, that’s still a hefty amount in debt service; but at least it’s getting better.

Do we really need a leap second? Because it takes our planet slightly longer than a year to circle the sun, we add one day to our calendar every four years to compensate. Thus, a friend of mine who’s been around for 64 years gets to celebrate her “Sweet Sixteen” birthday this Feb. 29. But I didn’t know that in the interest of even greater accuracy, scientists have also been adding a leap second to atomic clocks every so often. The next one is due to be added this June 30. Do not bother to adjust your watch.

I don’t think MIA meant No. 1. The most exciting Super Bowl in many a year is now history. Congratulations to Eli Manning and the New York Giants for an extraordinary victory over Tom Brady and the New England Patriots. The only thing I found disappointing were the ads, which weren’t nearly as captivating as they’ve been in the past. I chose to miss the halftime show, so I didn’t see Madonna cavorting like a teenager or British singer MIA with her rude lyrics and crude gesture — none of which would have added to my enjoyment of a great game.

–Chip Wood

Warren Buffett: Obama Tax Shill

Well, he didn’t make Time magazine’s “Person of the Year.” But Warren Buffett did make the cover of the magazine last month. The picture showed him smiling an impish grin. The article inside explained why.

It seems the Sage of Omaha has issued a dramatic challenge to Republicans in Congress to help pay down the national debt. Here’s the deal: Buffett said that for every dollar they will contribute to help reduce the national debt, he’ll match them.

And not just dollar for dollar. If Senator Mitch McConnell (R-Ky.) kicks in some funds, Buffett added, “I’ll even go 3 for 1 for McConnell.” Why the preferential treatment for the Senate Minority Leader? It seems Buffett is still smarting over a remark McConnell made last year, that if Buffett was truly feeling guilty about paying too little in taxes, he could always “send in a check” to Uncle Sam.

As of this writing, McConnell hasn’t said whether he’ll agree to contribute. A spokesman for the Senator did say that Congressional Democrats should also be included in the challenge, as well as President Obama and members of the Democratic National Committee. Fat chance.

The quickest response came from Representative Scott Rigell (R-Va.), who said he had been doing this long before Buffett suggested it. When he was elected, the conservative Republican promised to send the Treasury 15 percent of his Congressional salary for just such a purpose. That amounted to about $23,000 last year. Rigell estimates this year’s contribution will be about $26,100.

Interestingly, Buffett’s father did something similar when he was a member of Congress in the 1940s. While he was in office, Congress voted to raise its pay from $10,000 a year to $12,500. Declaring that the raise was unseemly, Representative Howard Buffett refused to take it.

And here’s another interesting historical footnote. Once he left office and returned to private life in Omaha, Neb., the elder Buffett became so concerned about the direction our country was moving that he joined and publicly supported the John Birch Society. I guess sometimes the apple does fall far from the tree. From outspoken conservative to tax shill for President Barack Obama isn’t what I’d call progress.

Buffett congratulated Rigell and said he would be delighted to match his contribution for both years. So that’s about $49,100 more your grateful government will receive.

To put all of this in perspective, let me point out that it will take Buffett’s accountant longer to write and mail the check than it will for the government to spend it. Our admitted Federal debt is now well over $15 trillion. That does not include any of our contingent liabilities — that is, the promises to pay that are already written into law, but aren’t counted in the debt figures. There aren’t enough fingers and toes in the country to count that high.

With interest payments on the national debt coming to about $250 billion annually, that means we are spending $685 million on them every single day. Or $28.5 million an hour. Or $475,000 a second.

Thanks, Buffett, for helping to pay this bill for one-tenth of one second. That’s really going to make a difference.

By the way, have you ever written a check to anyone for $49,000? What seems like an enormous contribution is just pocket change for Buffett. I mean that literally: When you’re worth $21 billion, that $49,000 check is about the same as 49 cents to us.

As I’ve written before, Buffett’s comments about the unfairness of our tax system have been misleadingly unfair. Sure, his tax rate of 17 percent is no doubt lower than that of his secretary. That’s because almost all of his income comes from dividends and interest. But what he carefully fails to mention is that the corporations that earned those profits had to pay upwards of 35 percent on that money before he received a penny of it. So the true tax rate for “the rich” is about 50 percent. In fact, when State, local and various user taxes are included, the real number is undoubtedly over 60 percent.

The God of the Old Testament asked His people to tithe 10 percent. In our world today, it is considered normal and natural that government should take six times that much from us. And half of the country wants to make it more.

Even these numbers don’t tell the whole story. When all government spending — Federal, State and local — is added up, it comes to $7 trillion a year. Total interest paid in the U.S. on debt — public and private, including business — comes to another $3.7 trillion per year.

But our gross domestic product comes to only $15 trillion a year. This means we are currently spending two out of every three dollars made in this country on government and debt.

And while it’s great to bash government for its profligate spending, individuals are equally guilty. Our credit card debt amounts to an estimated $798 billion. Student loan debt exceeds $1 trillion. In fact, personal debt in this country is even higher than our Federal debt, since estimates are it stands at $15.9 trillion.

To help put these numbers in perspective, it means that every single taxpayer in this Nation owes more than $1 million as his or her share of the obligations. What a burden we’ve agreed to pass on to our children and grandchildren!

These numbers are, of course, unsustainable. As an analyst friend of mine says, “If something can’t continue, it won’t.”

While we watch the crisis becoming worse, what should you do? For one, continue to count on Personal Liberty Digest™ to keep you informed and energized. Forward the best items you see to family and friends. And use the comments section at the bottom of the daily columns to share your own ideas and recommendations.

Second, do everything you can to get out of debt. Do as much as possible and do it as soon as possible.

Third, start accumulating some real wealth. By that I mean gold and silver. Yes, both precious metals have gotten expensive. Their price has climbed every year for the past 11 years.

But it’s because the U.S. dollar is losing value — that is, its purchasing power — year after year, thanks to our profligate government and our inflating Federal Reserve.

I believe the best way to preserve your assets is to convert them into things with intrinsic and enduring value. For more than 5,000 years, nothing has done that better than gold and silver. Our Founding Fathers knew this; it is why, when our country was founded, they insisted that gold and silver be the only currency.

What a pity that we’ve fallen so far from the legacy they left us.

Until next time, keep some powder dry.

–Chip Wood

Should We Try To Kill Castro?

Newt Gingrich is the self-proclaimed candidate of “grandiose ideas.” One of the most grandiose is his proposal that U.S. taxpayers spend untold trillions of dollars to establish a permanent base on the moon. Oh, and not only put a base there, but someday have it join our union as the 51st State.

Yes, that one is a lulu. But at least it’s relatively harmless, since there’s not a chance it will actually happen in our lifetime. Some of Gingrich’s other schemes aren’t nearly as benign. One that really worries me is his proposal that the United States government use any means necessary overt or covert to topple the Castro regime, because I suspect he would have the support of a majority of his countrymen for such a quest.

I yield to no one in my desire to see that unhappy nation, just 90 miles from our shores, overthrow the communist regime that has enslaved it for more than 50 years. Some of you may recall that my family was in Cuba when Fidel Castro and his bearded ones marched into Havana on Jan. 1, 1959. The experience turned me into a lifelong anti-communist. It led my mother to write a book about her experiences; I wrote a column about her last year that included a link to her story. Click here if you’d like to read her book.

I am still a passionate anti-communist. I believe that the heart of man yearns to be free, but I don’t believe it is our government’s job to decide which rulers deserve to stay in office and which ones should be overthrown. And neither should you, if you believe that this country is (or should be) a Constitutional Republic.

We have meddled in the affairs of other countries far too much and for far too long. We have troops stationed in more countries than you can name. I can’t recite them all, either, because the exact number and locations are a State secret. But it’s a bunch.

More than 60 years after the end of World War II, we still have tens of thousands of troops and dozens of bases in Germany and Japan. Why? The Korean “police action” ended more than 50 years ago, but we still have enough troops and bases in South Korea to fight it all over again. Again, why? Does anyone believe that all these forces are keeping our country safer or making attacks on us less likely?

Of course I would like to see Cuba become free. It would be wonderful if the Cuban people could experience the incredible prosperity that freedom and free enterprise would produce. It is amazing what free people will do when they are allowed to keep the fruits of their labors, instead of suffering under the poverty and rationing of an all-powerful state.

Nothing is more destructive of peace or prosperity than the Marxist version of government that tries to enforce its vision of “from each according to his ability, to each according to his need.” I could even argue that the right to own property and to dispose of it as you wish is even more important than the right to vote.

But with all of that said, is it our job to determine which governments are “good enough” to remain in power and which ones deserve to be toppled? If we start to make such a list, I suspect that more than half of the governments around the world would get a failing grade. Many of them have committed some truly heinous crimes against their people. But is it our job to bring them to justice or to set their people free?

This is an incredibly slippery slope that Gingrich would take America down. We’ve tried it many times before, from an aborted invasion of Cuba at the Bay of Pigs to overthrowing the Shah in Iran and President Ngo Dinh Diem of SouthVietnam. All of those experiments in nation building and many more I could name ended in utter disaster not just for us, but also for the hapless citizens of those countries.

If it’s not our job to “free Cuba” or any other country, what should we do?

We should set an example that other countries could honor and emulate. By that, I mean we should mind our own business and not interfere with theirs. That’s the policy that made us the hope, the inspiration and the envy of the world. It worked for more than 100 years. It will work again now.

If we really want to help some countries, let’s send them copies of our Constitution, the Declaration of Independence, The Federalist Papers and a bunch of other books that could teach and inspire them. What a great project for some private patriotic charities to undertake.

Let’s send them our ideas, but not our interference. Let’s lead by example, not by arms or coercion.

Let’s once again follow a policy of non-intervention in the affairs of other nations. And let’s leave it to others to see some of those “presidents for life” get the justice they deserve.

Is there any candidate out there who feels the same way I do about this? Yes. His name is Ron Paul. And seeing the growing numbers of his supporters (including an enormous number of enthusiastic and dedicated young people) is one of the most encouraging things I’ve seen in many years.

Not only do I think Gingrich is wrong, but I think his ideas of nation building are downright dangerous. I don’t want to see him become anyone’s policeman or nanny.

Until next time, keep some powder dry.

Chip Wood

Romney v. Obama? You Betcha!

Betting on politics. Hey, guess what? It turns out that when people put their money where their mouths are, they’re more accurate than a polling company. Intrade, an online website based in Ireland, lets people bet on who will win one of our elections. In the 2004 Presidential election, its bettors correctly guessed the winner in every single State. In 2008, they got all but two States right. Now, Intrade clients are betting that Mitt Romney will win the Republican nomination, but that Barack Obama will beat him in November. They’re betting cold, hard cash that they’re right. We’ll see.

The big bucks support Democrats most of the time. The mainstream media love to write about the hefty donations that go to Republicans. But when the Center for Responsible Politics looked at political donations from 1989 to 2012, it found that the really big bucks went mostly to Democrats. Would you be shocked to learn that three of the top six givers were unions?

The high cost of Obamacare. Thanks to Andrew Puzder, CEO of CKE Restaurants, which owns Carl’s Jr. and Hardee’s, for warning what Obamacare will do to his company’s ability to create jobs. A healthcare consultant “estimated that when the law is fully implemented,” he wrote in an opinion piece for Bloomberg, “our health-care costs will increase about $18 million a year.” Unless Obamacare is repealed, Puzder warned: “Our ability to create new jobs could vanish.”

Quote of the week. This one comes from Senator Jeff Sessions (R-Ala.), who denounced efforts by Democrats to move military spending to Medicare. He said, “Only in Washington can you increase spending and call it a cut. This is the kind of fraudulent accounting that has caused Americans to lose faith in Washington.” Right on, Senator.

–Chip Wood





How The Republicans Will Re-Elect Obama

Now, the gloves are off. But Republican challengers for the White House aren’t throwing their hardest punches at Barack Obama. No, they’re flailing away at each other.

Monday’s debate in Tampa, Fla., was particularly nasty, with Mitt Romney making his strongest attack to date against Newt Gingrich. And no wonder. Until recently, the former Massachusetts Governor’s dream of finally capturing the Republican nomination looked like a sure thing. But that was before the gods of the recount took away his victory in Iowa.

And Gingrich found a new enemy to attack in two debates in South Carolina: the liberal media. The crowd ate it up, and a huge number of undecided voters made a last-minute decision to vote for the former House speaker.

So after three State contests, we have three winners: Rick Santorum won the Iowa caucuses by 34 votes; Mitt Romney was an easy (and expected) winner in New Hampshire; and Newt Gingrich came from behind to win a decisive victory in the Palmetto State.

Now it’s on to Florida, where there are more delegates up for grabs than in three previous States combined. Florida is a winner-take-all State where only registered Republicans can vote in the primary.

The Sunshine State is huge: twice the size of any other State east of the Mississippi. To reach all Florida voters, a candidate has to saturate the airways in five different media centers. For a while, it looked like Romney’s large war chest and massive preparation gave him an unbeatable advantage. But that was before Gingrich’s impressive victory in South Carolina, which encouraged a ton of new supporters to flock to him — many with their checkbooks open. Now, pollsters say the race is virtually tied.

Who is writing the script for this year’s Presidential contest? It’s become a cross between the Three Stooges and Monty Python. It’s an ugly “least ugly” contest.

Is there any candidate who can electrify his supporters and unite the conservative base while appealing to independents? I don’t see one. The closest is Ron Paul, who has a wildly passionate group of base supporters. But, as much as I admire the guy and his principled stand on some vital issues (principles that haven’t changed an iota during his long career in office, unlike all of his opponents), I don’t see him garnering enough support to win the nomination.

Nor will his support switch to either of the likely nominees. Gingrich was stupid enough to denounce Paul’s views as “outside the mainstream of virtually every decent American.” That’s sure not going to win him the support of many Paul followers.

More and more, I think we need to start thinking the unthinkable: Come November, Barack Obama will be re-elected to a second term.

There, I’ve said it. I know this idea will give many of you apoplexy. Believe me, I resisted coming to this conclusion for as long as I could.

What will Obama’s re-election mean for our country? In some ways, I think an Obama victory could help in the struggle for freedom. Bear with me while I explain why.

It’s a sad fact of nature that many of us will work much harder to defeat something we passionately oppose than to support something we like. I can’t think of anything that would unite and inspire the conservative opposition more than Obama’s re-election. The membership rolls of the various Tea Party groups would explode.

With an aroused and determined opposition, Obama’s entire legislative program would come to a grinding halt. We would not just slow our country’s slide into socialism; with enough good guys (and gals) elected to Congress, we could actually begin to reverse it.

Remember, the Administration can’t spend a penny on anything if Congress doesn’t appropriate it. The Constitution clearly specifies that every spending bill must originate in the House of Representatives. If enough Tea Party favorites retain their seats and enough new ones join them, the House can refuse to give the Democrats any of the money they want.

If enough conservative Republicans also win Senate seats to gain a majority there, at the very worst we’ll have four years of gridlock. At the best, we could actually see some important bills passed — possibly with enough of a majority to overcome a Presidential veto.

Audit the Fed, anyone? Defund foreign aid? Put the brakes on irresponsible loans, outrageous subsidies and absurd earmarks? How about slashing some budgets by 10 or 20 percent or taking away every penny from some of the worst violators of the Constitution? It could happen.

Faced with the pathetic choices for the Republican nomination, I can tell you what I’m going to do. I’m going to give my money to the best candidates for the House and Senate I can find, because that’s where the future of liberty will be decided. And I hope you’ll do the same.

How did we end up with such a sorry group of candidates running for our Nation’s highest office this year? I don’t know. Where were candidates like Paul Ryan, Chris Christie, Jeb Bush, Mitch Daniels, Haley Barbour and a bunch of others I could name? I said last year that my dream ticket was Chris Christie and Marco Rubio. Maybe I’ll get to see it — in 2016.

In the meantime, here’s a suggestion for my stalwart Republican friends out there: If you don’t want to lose an election, don’t nominate losers.

Until next time, keep some powder dry.

–Chip Wood


Imagine There’s No Internet

Motivated citizens block new law. Well, what do you know? Two bills aimed at stopping online piracy were supposed to sail through Congress. But Internet giants Google and Wikipedia and others protested that the measures would turn them into “police officers for the Justice Department.” Wikipedia even went dark for a day. So many people contacted their Congressmen that the Stop Online Piracy Act and the Protect IP Act are dead in the water — at least for now.

College conservatives “too patriotic.” A group of students at Marietta College in Ohio wanted to hold an American flag memorial and candlelight vigil to commemorate 9/11. They received approval, but then the approval for the vigil was rescinded and they were told that the flag garden had to include flags from the more than 90 other countries that experienced a loss on 9/11. A Student Life representative said, “We have a global outlook at this school and we cannot ignore the Chinese and Muslim students who also suffered losses.” Ultimately, the college allowed the students to host the event and it funded the purchase of the other countries’ flags.

One reason California is going broke. When Berkeley city manager Phil Kamlarz retired from his $242,580 a year job on Nov. 30, he immediately became eligible for an annual pension of $249,420 a year. He also got $147,439 in unused sick and vacation time. The city’s pensions are underfunded. Covering future retirees will cost the city some $400 million. That’s a lot of taxpayer money!

Moody’s downgrades Illinois’ debt. Moody’s downgraded Illinois State debt from A2 to A1 — the lowest among the 50 States. Remember when Illinois raised personal income taxes by 67 percent and corporate income taxes by 46 percent a year ago? Those tax increases were supposed to solve all of the State’s financial problems. Despite the increases, Governor Pat Quinn’s budget office predicts a $507 million deficit this year.

Supreme Court Tells Obama ‘No!’

Well, what do you know? The Supreme Court not only rebuffed another attack on our Constitution by Barack Obama’s minions, it did so in a unanimous decision.

Here’s what happened in Hosanna-Tabor Evangelical Lutheran Church And School v. EEOC. The Hosanna-Tabor Evangelical Lutheran Church and School hired Cheryl Perich as a teacher. Perich had completed religious training and was considered a minister by the school. Perich taught secular subjects and a religion class, led prayers and devotions, and attended chapel with her class.

In 2004, Perich became ill and began the school year on disability leave. Hosanna-Tabor hired someone else to teach her classes. When Perich said she was ready to return to work a month later, the principal in effect said “thanks, but no thanks.” The church tried to persuade her to resign and even offered her some benefits if she’d do so, but she refused and threatened legal action. When the two parties couldn’t reach an agreement, Hosanna-Tabor fired Perich.

Rather than accept the decision, Perich claimed she had been discriminated against and sued for reinstatement and all of the pay she had missed. Rather than cave to her demands, Hosanna-Tabor refused.

That’s when one of the most nefarious agencies of our Big Nanny government got involved. Perich filed a claim with the Equal Employment Opportunity Commission, saying her firing was in violation of the Americans With Disabilities Act. The EEOC filed suit against Hosanna-Tabor, alleging that Perich was fired for threatening legal action.

Had this happened in the regular workplace, I have no doubt what would have happened next. The employer would have caved. In fact, Hosanna-Tabor’s lawyers and insurance company probably would have insisted on reaching a settlement, no matter the cost — in money or in principle.

But Hosanna-Tabor was made of sterner stuff. It contested the case all the way up to the Supreme Court. That’s when the Court surprised many of us by ruling unanimously in favor of Hosanna-Tabor.

In the decision, Chief Justice John Roberts wrote:

Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the free exercise clause, which protects a religious group’s right to shape its own faith and mission through its appointments. According the state the power to determine which individuals will minister to the faithful also violates the establishment clause, which prohibits government involvement in such ecclesiastical decisions.

Roberts labeled as “extreme” the Obama Administration’s argument that the First Amendment does not protect a religious organization’s right to choose its own leaders.

Hooray for the Court! In years past, Justices haven’t always done a very good job of defending the Constitution’s limitation of government. But they got it right this time.

Who knows? Maybe a new day is dawning. We’ll soon find out; in one of the biggest issues to come before it in decades, the Court is expected to rule this term on the Constitutionality of Obamacare. When it does, let’s hope it uses the U.S. Constitution to decide the issue. Wouldn’t that be a refreshing change?

There are other issues I’d like to see the Court rule on, such as the unConstitutional “czars” Obama has appointed. The czars are making and enforcing important national policy without ever facing a Congressional hearing. No “advise and consent” here, no matter what the clear intention of our Founding Fathers was.

I’d also like to see the Court address those “recess” appointments I wrote about last week. There is no question that Obama was openly defiant of the rules, traditions and his own position on the issue when he was a Senator. As William McGurn pointed out in a Wall Street Journal column, “Mr. Obama’s aggressive disregard for any constitutional limit on what he wants to do has come to define his approach across the board.”

Indeed. But even more disgusting are all the liberal hypocrites who lambasted George W. Bush for “shredding” the Constitution when he was President, but pointedly refuse to issue a single word of concern or condemnation when Obama does the very same thing — or worse. Quoting McGurn again:

We now know that the professed concern for the Constitution was fake. We know it was fake because the same Bush claims of executive authority in war that provoked such apoplexy in our pundits, professors and politicos have for the most part been embraced by Mr. Obama—all to the distinct sound of silence.

Happily, those of us who want to restore the Constitution aren’t being silent. There are more of us than ever before; some of us are even in Congress.

Thomas Jefferson had it right when he warned more than 200 years ago:

“In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

I think many of our opponents can actually hear those chains getting closer sort of like Ebenezer Scrooge when he faced Jacob Marley’s ghost in A Christmas Carol. But be warned: Many creatures are at their most dangerous when they think they’re being cornered.

Until next time, keep some powder dry.

–Chip Wood

Adding More Debt

Raising the debt ceiling… again. Barack Obama has notified Congress that the debt ceiling needs to be raised by another $1.2 trillion. Don’t expect a big tussle this time, however. The increase is permitted under the Budget Control Act. Lawmakers have the ability to vote against debt increases, but they cannot actually block them.

This would shake up Congress. Representative Timothy Johnson (R-Ill.) has introduced what he’s calling the Citizen Legislators Act. The measure would limit the days Congress is in session to five per month or 60 business days per session. It would also cut the salaries of Representatives and Senators by 50 percent — as well as office allowances and committee and leadership budgets by the same percentage. Don’t expect a vote on the measure anytime soon.

Who’s afraid of Friday the 13th? If you suffer from paraskevidekatriaphobics (a fear of Friday the 13th), this is going to be a bad year for you. In addition to the one we suffered a week ago, there will be two more this year: in April and June. Three Friday the 13ths happen every few years. But this year, for the first time since 1984, the three Friday the 13ths are exactly 13 weeks apart.

They must think we’re stupid. Did you see the cover of the current Newsweek magazine? It shows a photo of a very pensive President Barack Obama accompanied by the question: “Why are Obama’s critics so dumb?” I couldn’t bring myself to buy the rag, but you can find my colleague Ben Crystal’s analysis of the piece here.

–Chip Wood

Obama Shreds The Constitution Again

Guess what? Barack Obama has found an opponent whose approval ratings are even lower than his own. So to kick off his re-election campaign, he’s decided to run against Congress.

The campaign against the obstructionist, do-nothing Congress started in earnest last week, when Obama decided to ignore the U.S. Constitution, recent Presidential tradition and even his own vote when he was a U.S. Senator by making four “recess” appointments.

There was just one teeny tiny problem with the stratagem; Congress wasn’t in recess.

In case you missed the story — which was easy to do, because most Americans neither cared about it nor understood it — let me give you a condensed version of what happened. This is no mere tempest in a teapot, by the way. As I’ll explain below, this seemingly silly confrontation could have enormous legal implications for our country.

The brouhaha began last month. Rather than adjourn for the Christmas holidays, Republicans in Congress decided to do the absolute minimum to keep Congress in session, holding “pro-forma” meetings every three days. Basically, all it took was one Senator showing up, declaring the session open and then gaveling it closed a few seconds later.  Most times, the session lasted less than a minute.

The reason for doing this was to prevent the President from making “recess” appointments of some of his more controversial selections. Normally, the Constitution requires Senate confirmation of important nominations. But Presidents have been able to bypass the “advice and consent” requirements by making “temporary” appointments when Congress is in recess.

By the way, there is nothing new in this strategy. Democrats did it routinely during the last two years of George W. Bush’s Presidency. In fact, Obama was one of the most outspoken supporters of the ploy when he was a lowly senator from Illinois. Now that he’s our imperial President, the situation is different. Or so he says.

Clearly, what is perfectly OK for Democrats to do (stymieing a Republican President) becomes “obstructionist maneuvering” when the shoe is on the other foot. A week ago, Obama announced that he was making four “recess” appointments: Richard Cordray as head of the new Consumer Financial Protection Board and three other people to fill openings on the National Labor Relations Board.

The Wall Street Journal pointed out in the recent editorial “Contempt for Congress” what was wrong with the President’s strategy:

The last clause Section 5 of Article 1 of the Constitution says that “Neither House” of Congress can adjourn for more than three days “without the Consent of the other” house. In this case, the House of Representatives had not formally consented to Senate adjournment. It’s true the House did this to block the President from making recess appointments, but it is following the Constitution in doing so. [Emphasis added.]

Faced with this blatant disregard of both tradition and the Constitution, House Speaker John Boehner went ballistic. He denounced the White House power grab in no uncertain terms:

This is an extraordinary and entirely unprecedented power grab by President Obama that defies centuries of practice and the legal advice of his own Justice Department. The precedent that would be set by this cavalier action would have a devastating effect on the checks and balances that are enshrined in our Constitution.

Mitch McConnell, the Republican leader in the Senate, joined the chorus of condemnation. He blasted Obama for “arrogantly circumventing” the confirmation process.

What’s really going on here? Clearly, our national security wasn’t threatened by these four positions remaining open for a few more weeks.

No, as William Shakespeare observed in a different context, “the game is afoot.” In this case, the “game” is getting Obama re-elected. Since he can’t run on his record, he has to find an opponent who is even more unpopular than he is.

How about picking a fight with a “do-nothing” Congress? After all, Americans have an even lower opinion of Congress than they do of the President. Recently, the approval rating for Congress fell to a basement-dwelling 9 percent.

Now you know why the White House engaged in “a deliberate, and politically motivated, provocation,” as The Journal noted in its editorial on the subject. The Journal continued:

“Recall the stories over the New Year’s weekend, clearly planted by the White House, that Mr. Obama planned to make a campaign against Congress the core of his re-election drive. One way to do that is to run roughshod over the Senate’s advice and consent power and dare the Members to stop him.”

Obama deliberately threw down the gauntlet. Now let’s see what leaders on the Hill do about it. Frankly, except for some heated rhetoric, I suspect they won’t do much.

But the buck won’t stop here, no matter what the President says. Already, the U.S. Chamber of Commerce is considering challenging the legality of the appointments. If it does — and the courts support their position — it could mean that every ruling the National Labor Relations Board makes and every new regulation the Consumer Financial Protection Bureau issues will be void.

It won’t happen overnight. It could take years for lawsuits to be filed, hearings to be held, courts to rule and appeals to be heard. In the meantime, if you run a business that is affected by something the NLRB has decreed, what do you do? Do you spend (potentially) millions of dollars to obey a regulation you think will be overturned?

I suspect the President neither knows nor cares about the pandemonium his actions may create. Obama isn’t worried about what might happen a few years from now; his total focus is on what happens 10 months from now.

So what if he has to tear the Constitution to shreds to stay in office? After all, he has shown nothing but disdain for its limitations on his power up until now. Why should today be any different?

This fireworks show is far from over, folks. The eruptions will continue at least until the first Tuesday in November.

Until then, be sure to keep some powder dry.

–Chip Wood

Hillary For President 2016

The Hillary Clinton bandwagon. The New York Times seems determined to get Hillary Clinton back in the White House. The latest foray was a column by Bill Keller, The Times’ executive editor from 2003 until last September. In “Just the Ticket,” Keller says to forget about persuading Barack Obama to step aside; that won’t happen. Instead, he wants to move Joe Biden over to the State Department and make Hillary the Vice Presidential nominee. Keller says his proposal would do “more to guarantee Obama’s re-election than anything else the Democrats can do.”  Plus, “it makes Hillary the party’s heir apparent in 2016.” Oh, goodie.

How many dollars are at risk in Europe? Robert Lenzner, the national editor at Forbes and a former investment banker, says that European banks hold as much as $10 trillion in U.S. debt. The number includes money-market deposits from U.S. financial institutions, mortgage securities on U.S. properties and direct loans to U.S. businesses. “We are bloody well in this together,” Lenzner warns, with “our crummy banks holding tons of lousy mortgage loans — and Europe’s banks holding tons of lousy loans.” How much further will they be able to kick this can down the road?

“It’s the economy, stupid!” It isn’t the President’s fault that Federal spending has soared or deficits have skyrocketed, according to one Obama apologist. Austan Goolsbee, the former chairman of Obama’s Council on Economic Advisers (now a college professor), says the culprit isn’t government policy, but rather the economic downturn. With more people out of work, tax receipts have dropped, while spending on things like food stamps and unemployment insurance has gone up. Reducing Federal spending, he insists, will just make matters worse.

More Americans flee California and New York. Census Bureau data reveal that in 2010-2011, more and more Americans moved from high tax jurisdictions to low tax ones. The most popular move was from California, the State with the highest combined State and local tax rates in the Nation, to Texas, which has no State income tax. The second most common relocation was from New York (another high tax State) to Florida (which also has no State income tax).

–Chip Wood