Then there’s federal election law.  The First Amendment to the US Constitution says, “Congress shall make no law…abridging the freedom of speech, or of the press.”  It’s simple and easily understood.  Yet, somehow  Congress has manifestly abridged both freedoms with a bewildering system of laws and regulations that control who may pay for campaigns, how much may be spent and who is permitted to advocate for or against candidates.

The Obama Administration’s IRS scandal is a collision at the intersection of impenetrable tax law and byzantine election law.

While businesses are taxed on their profits, not-for-profit activities and organizations are tax exempt. But in most cases one can’t simply engage in a tax exempt, not-for-profit activity unless one’s “tax-exempt status” has first been applied for and approved by the IRS bureaucracy.

The current scandal is over applications from conservative groups to the IRS seeking officially recognized tax exempt status as 501(c)(3) or 501(c)(4) organizations.  The numbers are chapter and verse of the tax code.

An understanding of the scandal requires a brief lesson in bureaucratic vocabulary:

Campaign Intervention is IRS speak for activities that support or oppose candidates for public office.  Tax exempt organizations may support causes but support of or opposition to candidates is either forbidden or limited, depending on the 501 category.   The rules are completely arbitrary and thus make no sense, but that much is is not the fault of the IRS, nor within it’s power to change.  Congress enacted and Presidents signed the nonsensical laws.  The job of the IRS is to interpret and enforce them, evenly, without prejudice, treating everyone the same.

The Determinations Unit of the IRS Exempt Organizations Office is charged with reviewing tax-exempt applications to ensure compliance with restrictions on “campaign intervention.”

The 25 to 40 pages of IRS application forms include scores of questions, demanding lots of meticulously detailed information on the organization’s leaders, employees, mission, operating plans and finances.  Many organizations find they must hire attorneys and/or accountants with specialized expertise just to complete the forms.

After several years of Complaints from Conservative groups and their representatives in Congress The Treasury Department Inspector General for Tax Administration launched an “audit” of the IRS Exempt Organizations Office to investigate allegations that the Determinations Unit, in the passionless prose of the Inspector General:

1) targeted specific groups applying for tax-exempt status, 2) delayed the processing of targeted groups’ applications for tax-exempt status, and 3) requested unnecessary information from targeted organizations.

The criteria the Determinations Unit applied to identify “specific groups” who were targeted was overtly biased against the administration’s ideological adversaries.  Applications that evidenced any of the following were flagged:

• Buzzwords such as “Tea Party,” or “Patriots” or “9-12 project:
• Opposition to government spending, deficits or tax increases
• Education of the public by advocacy/lobbying to “make America a better place to live”
• Criticism of how the country is being run
• References to the Constitution
• References to the Bill of Rights

Inside the Exempt Organizations Office the flagged applications were all called “tea party cases” until mid-2011 when someone apparently decided it might look less biased if they were called “advocacy cases.” 

The Inspector General notes that criteria for selecting applications for further investigation “should focus on the activities of the organizations and whether they fulfill the requirements of the law.  Using the names or policy positions of the organizations is not a appropriate basis for identifying applications for review…”  Yet, Every application with “Tea Party” or “Patriots” or “9/12″ in the organization’s name was flagged.

Rather than approve or disapprove the tea party applications The Determinations Unit would forward them to “a team of specialists” who would investigate the possibility that the group might, in the future, engage in forbidden acts of “campaign intervention.”  The team of specialists turned out to be a black hole.  the Inspector General found that many applicants had not received either approval or denial for more than two years.   In fact, the specialists simply stopped working on what they called “political cases” from October 2010 through November 2011!

After delays of a year or more the team of specialists would send letters to applicants demanding that additional information be provided within three weeks.  The IG report lists these examples:

• Identity of donors.  The tax code states that applications are confidential until tax exempt status is approved by the IRS.  After approval the applications are public information.  The tax code does not require public disclosure of the names of donors to approved 501(C)(3) and (C)(4) organizations.  But because the identities of donors would become part of the organization’s application they would eventually become public information.
• A list of all issues that are important to the applicant organization, and it’s position on those issues.
• List of any organization’s leaders who had ever or would ever in the future run for public office.
• Party affiliation of the organizations leaders, speakers, and candidates they supported.
• Information on the organization’s leaders employment and hours worked;
• Information on the activities of another organization not affiliated with the applicant.
• Roles of the organization’s leaders, members and non-members in activities;
• Types of conversations and discussions that took place among members and non-member participants in the organization’s activities.

Congressmen and Senators report that constituents were asked for even more offensive information than is in the above list, including paper copies of all Facebook articles and tweets they had ever posted.  One of Senator Grassley’s Iowa constituents complained that his pro-life organization was told it’s application would be approved only if leaders signed a letter under oath that they would never demonstrate in front of a Planned Parenthood abortion clinic.

When asked by a reporter President Obama reacted with a show of sanctimonious indignation and claimed, preposterously, that he knew nothing about IRS persecution of Conservative groups until media reports appeared on May 10.  In a just completed Senate Finance Committee hearing the last two IRS Commissioners testified that they knew almost nothing and could not say who had developed the criteria that flagged Conservative organizations for further investigation and delay, or who developed the invasive, intimidating questions.

Predictably, the White House and the President’s supporters in the media say “there is no evidence” that anyone in the Obama Administration directed, suggested or encouraged the IRS Exempt Organizations Office to undertake said targeting.  That would be true if one excludes from “evidence” the facts that:

• Obama’s agenda and reelection campaign benefited because opposition was muted;
• Obama’s political adversaries suffered delays, and unnecessary expense, while some were intimidated into withdrawing their applications;
• IRS staff, like all Americans, heard the speeches and media appearances wherein the President and his top appointees aggressively demonized tea party and patriot groups, portraying them as sinister agents of dark special interests;
• The IG report notes that after the buzzwords and other criteria listed above had been operational for about a year they were discovered by the Director of the Exempt Organizations office who ordered them to be changed to criteria that legitimately focused on activities rather than applicants’ beliefs or positions.  But after only six months someone yet to be identified changed them again, back to targeting beliefs and policy positions.

Some on the Left say the targeting was justified as legitimate extra scrutiny of nefarious “far right” groups.  President Obama may eventually wish he had chosen this defense rather than pleading ignorance, but since he has so vehemently denounced the targeting activities it’s now too late for him to “pivot.”

Some of the President’s supporters have adopted the incompetence defense: misdeeds were done by low level, apparently stupid, IRS employees with no direction from above.  Indeed Steven Miller, the acting IRS Commissioner said in both House and Senate hearings:

I think that what happened here is that foolish mistakes were made by people trying to be more efficient in their workload selection.  The [criteria] described in the report while intolerable was a mistake and not an act of partisanship.

The incompetence defense may seem to protect the President from being convicted in the public mind of what he appears to be, a ruthless, Chicago-way politician who would use the government’s most feared agency to punish and intimidate political adversaries. 

But dismissing the targeting as incompetence doesn’t serve Obama’s agenda of rapidly expanding government and concentrating power in Washington D.C.  One of the legitimate fears of Big Government is the effects on hapless individuals, businesses and organizations that get caught in the gears of indifferent, unresponsive bureaucracy charged with enforcing a regulatory behemoth so complicated and vast that it’s unmanageable, even by those who work within it every day.

ObamaCare, implementation has already produced some ten thousand pages of new regulations that no doctor or patient will ever be able to read and comprehend.  ObamaCare will be managed in part, by the IRS.  Pollsters tell us the Public is already skeptical and a majority supports repeal of of the health care leviathan.  Washington elites who dismiss outrageous offenses against freedoms of speech and the press as insignificant because they were acts of incompetence don’t help the effort to sell ObamaCare.

We don’t yet have all the answers but the Inspector General continues to investigate and more Congressional hearings are scheduled. 

The Labor Department’s Jobs report for the month of April once again called attention to the alarming drop in what statisticians call the “labor force participation rate.”

Labor force participation is the percentage of the working age population that is “in the labor force.” They are either employed or qualify to be counted as “unemployed.”  Not everyone who is out of work and wants a job is officially classified as unemployed. When people have been out of work for a long time they tend to become discouraged and don’t engage in job seeking activities often enough to meet government criteria and are thus no longer included in the labor force or counted as unemployed.

The recent, steep decline in the Labor Force Participation Rate has meant that fewer jobless people are being counted in computing the official unemployment rate which was 7.5% in April.  If the Labor force participation rate had been the same in April as it was at the end of 2008, the April unemployment rate would have been 11%.

For years President Obama’s supporters and most of the media simply ignored the falling participation rate and hailed each incremental drop in the unemployment rate as “proof” that his policies of maximum government borrowing, spending and regulation “worked.”  But in recent months they’ve been forced to acknowledge the elephant in the labor statistics room, and have responded with a contrived explanation.  Now they tell us it reflects not discouraged workers but retiring baby boomers.  Thus, they say, it is not the bad news it appears to be, it’s a predictable demographic trend.

But an examination of the available data debunks this explanation.  The emerging “millennial generation” is larger than the boomer generation.  So for every boomer who reaches retirement age there is one – actually a fraction more than one – young person reaching working age who should be seeking a job and thus, should be counted as “in the labor force.”

The monthly jobs statistics have contradicted the baby boomer retirement story for four years.As the chart above shows the only age group whose labor force participation has increased since the end of the recession in 2009 is the oldest group, those over 55, which includes about half of the baby boom generation.  The total populations of the younger groups have grown by several million.  Yet their labor force participation is the same or less than it was when the recession ended.

The statistical comparison of those over 65 with the prime working age population between 20 and 64 is even more dramatic:

The data in this chart show that reality is the opposite of what the President’s supporters tell us.  The overall labor force participation rate has fallen not because of senior baby boomer retirements, but because younger people in the prime working ages between 20 and 64 have quit looking for work and have been reclassified as out of the labor force. 

Meanwhile more and more people who have reached the traditional retirement age continue to work.  Since the recession, labor force participation among those over 65 has increased from 21.7% to 24%.  And an unprecedented 52% of those who reached the age of 65 since the end of 2011 are still working.

These data contradict assertions that retiring baby boomers are the reason for falling labor force participation.  It turns out that the oldest groups are the only ones bucking the trend with increasing participation rates.

The Commerce Department published its quarterly GDP report Friday, confirming again that history’s largest and most aggressive experiment has proven Keynesian economic theory to be a hoax.

GDP grew at an anemic 2.5% during the first quarter, an improvement over less than 1% in the previous quarter and a bit above average for the four years since the technical end of the recession in 2009.  The White House provided positive spin to be echoed by the President’s media fans:

Today’s report indicates that the economy posted its fifteenth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.5 percent annual rate in the first quarter of this year…

Their hope is you will think fifteen quarters of growth is impressive.  The chart provides perspective, showing that compared to every previous post-recession recovery on record the past four years have been emphatically unimpressive.

President Obama’s early political successes were several legislative initiatives that would add up to a staggering increase in government spending and debt.  His economic team of academics confidently predicted that his nearly trillion dollar “stimulus” program would cut the recession short, and pump up GDP.  The enthusiastic media hailed brilliant economics that would “put America back to work.”  The President himself promised that his stimulus would, in his words, “immediately jumpstart job creation and long term growth.”

So far, the “jumpstart” has been limited to an unsustainable rate of increase in government debt, about $4.2 billion every day.

The supposed justification for spending like drunken sailors is the old Keynesian theory of “counter-cyclical” government intervention to “increase aggregate demand” during recessionary periods.  Keynesian economic theory is especially attractive to politicians of the liberal/progressive persuasion because it provides the illusion of scholarly research and scientific validation for what they always want to do anyway, spend more and expand government.

But it turns out that a massive spending increase is not a proven economic strategy that has been used successfully in the past.  The last time it was tried in the US was in the early 1930s and it utterly failed to shorten the Great Depression. 

Obama’s counter cyclical spending surge is the largest ever attempted.  But the promised economic growth, prosperity and jobs have not materialized.  Instead, as the chart above shows this halting, faltering recovery from recession has significantly underperformed every previous post-recession economy since the Commerce Department began publishing quarterly GDP reports in 1947.

The Bottom Line

The Keynesian fallacy is based in part on the assumption that economic activity that is visible and readily quantifiable, especially government spending, is the only activity that matters.  What are not visible and quantifiable are the losses to the economy when government uses its taxing and borrowing power to divert resources from investments that would have been chosen by entrepreneurs, small businesses and corporations to government projects chosen by the political elite.  There is no way to identify or quantify the business start-ups and expansions that would have occurred if the trillions Obama borrowed for extra government spending had instead been invested by the private sector.

The current recovery is hobbled by more invisible, non-quantifiable barriers than diversion of  resources  from the private to the public sector.  In anticipation of yet to be clarified ObamaCare costs and regulations small businesses (fewer than fifty employees) are reluctant to expand even if they have the capital.  No government agency tracks and counts private decisions to not invest or expand.  But that doesn’t mean those decisions aren’t being made.  In fact the chart above proves they have been made for four years.

Keynesians continue to preach their gospel of borrowing and spending.  Astoundingly, many on the left, including progressive hero Paul Krugman, hold that the economy is weak because Obama’s record-shattering escalation in borrowing and spending wasn’t enough!  They simply ignore the experience of previous recessions when, without massive government intervention, the private sector economy recovered, creating jobs and spreading prosperity.

The Labor Department just published another new normal – miserable – jobs report.  The headline, that in March unemployment ticked down from 7.7%, to 7.6%, was, once again, an illusion that masked the real news.  In fact, the bad news, as shown in the chart below is now so stark that even the media are beginning to be skeptical of the declining unemployment rate. 

The labor force participation rate is the percentage of working age adults who are classified as in the labor force either because they have a job or because they qualify by government criteria to be counted as “unemployed.”  Jobless people who don’t meet the criteria by seeking work often are reclassified from “unemployed” to “out of the labor force,” so they no longer count in computing the unemployment rate.  In March there were 496,000 fewer people in the labor force than in February.  If they were still counted in the labor force the unemployment rate would gone up instead of down.

The difference between the labor force participation rate of 66% when the recession started in 2008, and the current 63.3% is 6.6 million jobless people who have become discouraged and don’t look for work often enough to be included in the labor force or counted in the official unemployment rate.

The next chart tracks the unemployment rate and the labor force participation rate over the 41 months since unemployment peaked at 10% in 2009.  As it shows the drop in the unemployment rate since then is due entirely to shrinking the labor force.

The parallel decline in both rates is unprecedented.  In every previous post-recession job market, the labor force participation rate was flat or increased as the unemployment rate declined.  The next chart tracks the first 41 months of job market recovery after the deep recession of the 1980s
In the 1980s President Reagan worked with Congress to reduce rather than increase tax rates on income, investment and capital gains.  He increased economic liberty by scaling back regulations.

So far President Obama’s “transformation” has included tax hikes on business owners and investors and an explosion in new regulations that serve as barriers to business innovation and expansion that leads to job creation.  His bureaucrats are now in the process of implementing ObamaCare, making job creation more risky and expensive. 

The route to prosperity is the same as it has always been, more liberty.  What can government do to help employers create more jobs?  Stop being a barrier!  Cut taxes, repeal ObamaCare, and reduce regulation.

The Commerce Department just published its final revision of the 4th quarter 2012 GDP growth rate.  From October through December the US economy grew at a rate of .4% – that’s 4 tenths of one percent.  The first chart compares the current post recession economy with the post recession economy of the 1980s.

Like President Obama, President Reagan inherited a deep recession when he took office in 1981.  But his strategy of expanding liberty by removing regulatory barriers and implementing across-the-board tax cuts to empower investors and entrepreneurs was a sparkling success.

Rather than repeat Reagan’s proven strategies President Obama went with the unproven Keynesian economic theory that a spike in government borrowing and spending could “stimulate” growth.  Instead of expanding liberty he expanded government.  His massive borrowing and spending, grants and loans to “green” energy schemes run by political cronies, ObamaCare, expanding federal regulations, and continuous threats of tax hikes on businesses and investors have yielded tragic results.

A major pillar of the progressive philosophy Obama represents is the belief that an interventionist government, advised by “experts” can achieve better economic results than we’ll experience if liberty and free enterprise are allowed to function, without supervision.  Obama thundered into office, vowing to use government power to “fundamentally transform” America.  He and his team of economic “experts” promised to “stimulate” the economy and bring forth prosperity for all.

Those experts now say their economic failure results not from too much government borrowing and spending but from too little!  The opinion columns regale us with pseud0-academic harangues that actually label Obama’s record shattering deficits “austerity” and insist that even more borrowing will fix what ails us. 

So is this a valid idea?  Were all the previous recoveries more prosperous because government borrowed more?  No. Obama’s spike in borrowing and spending is unprecedented.  Not since mobilization for World War II has government spending increased by so much in such a short time.

If your gut tells you we’ve already borrowed too much and gotten too little for it, history, as shown in the chart above agrees with you gut.  

Jesus did not accept the cultural norm of his time on earth, that women were less than men and treated like the property of men.  It’s fitting then that the good news was first revealed to women.

The Following excerpt is from the Gospel of Matthew.  It’s Friday, the day before the Jewish Sabbath.  Jesus has been hung on the cross to die.

We begin quoting at Chapter 27, verse 45:

At noon, darkness fell across the whole land until three o’clock. ⁴⁶ At about three o’clock, Jesus called out with a loud voice, “Eli, Eli, lema sabachthani?” which means “My God, my God, why have you abandoned me?”

⁴⁷ Some of the bystanders misunderstood and thought he was calling for the prophet Elijah. ⁴⁸ One of them ran and filled a sponge with sour wine, holding it up to him on a reed stick so he could drink. ⁴⁹ But the rest said, “Wait! Let’s see whether Elijah comes to save him.”

⁵⁰ Then Jesus shouted out again, and he released his spirit. ⁵¹ At that moment the curtain in the sanctuary of the Temple was torn in two,  from top to bottom. The earth shook, rocks split apart, ⁵² and tombs opened. The bodies of many godly men and women who had died were raised from the dead. ⁵³ They left the cemetery after Jesus’ resurrection, went into the holy city of Jerusalem, and appeared to many people.

⁵⁴ The Roman officer and the other soldiers at the crucifixion were terrified by the earthquake and all that had happened. They said, “This man truly was the Son of God!”

⁵⁵ And many women who had come from Galilee with Jesus to care for him were watching from a distance. ⁵⁶ Among them were Mary Magdalene, Mary (the mother of James and Joseph), and the mother of James and John, the sons of Zebedee.

The Burial of Jesus

⁵⁷ As evening approached, Joseph, a rich man from Arimathea who had become a follower of Jesus, ⁵⁸ went to Pilate and asked for Jesus’ body.  And Pilate issued an order to release it to him. ⁵⁹ Joseph took the body and wrapped it in a long sheet of clean linen cloth. ⁶⁰ He placed it in his own new tomb, which had been carved out of the rock. Then he rolled a great stone across the entrance and left. ⁶¹ Both Mary Magdalene and the other Mary were sitting across from the tomb and watching.

The Guard at the Tomb

⁶² The next day, on the Sabbath, the leading priests and Pharisees went to see Pilate. ⁶³ They told him, “Sir, we remember what that deceiver once said while he was still alive: ‘After three days I will rise from the dead.’ ⁶⁴ So we request that you seal the tomb until the third day. This will prevent his disciples from coming and stealing his body and then telling everyone he was raised from the dead! If that happens, we’ll be worse off than we were at first.”

⁶⁵ Pilate replied, “Take guards and secure it the best you can.” ⁶⁶ So they sealed the tomb and posted guards to protect it.

Matthew 28

The Resurrection

¹ Early on Sunday morning, as the new day was dawning, Mary Magdalene and the other Mary went out to visit the tomb.

² Suddenly there was a great earthquake! For an angel of the Lord came down from heaven, rolled aside the stone, and sat on it. ³ His face shone like lightning, and his clothing was as white as snow. ⁴ The guards shook with fear when they saw him, and they fell into a dead faint.

⁵ Then the angel spoke to the women. “Don’t be afraid!” he said. “I know you are looking for Jesus, who was crucified. ⁶ He isn’t here! He is risen from the dead, just as he said would happen. Come, see where his body was lying. ⁷ And now, go quickly and tell his disciples that he has risen from the dead, and he is going ahead of you to Galilee. You will see him there. Remember what I have told you.”

⁸ The women ran quickly from the tomb. They were very frightened but also filled with great joy, and they rushed to give the disciples the angel’s message. ⁹ And as they went, Jesus met them and greeted them. And they ran to him, grasped his feet, and worshiped him. ¹⁰ Then Jesus said to them, “Don’t be afraid! Go tell my brothers to leave for Galilee, and they will see me there.”

The White House and President Obama’s media groupies we’re popping Champagne corks when the Labor Department released its monthly jobs report showing that the unemployment rate had fallen to 7.7% in February, from 7.9% in January.  Employers created 236,000 jobs the fifth best month of the Obama years.

Now that we’re past the phony euphoria let’s get real.  The latest jobs report is “good” only within the grim, New Normal, that doesn’t put Americans in a partying mood.  Even those who have not experienced any interruption in employment don’t feel prosperous or secure.  They are likely to be earning less after adjusting for inflation, and virtually everyone has seen family or friends suffer long term unemployment, and/or forced to work below their skill level for less than they’re worth.

The public mood is anxious, not celebratory. The People do not understand how the government unemployment rate could have come down from its 2010 high of 10% when so many around them are still jobless.

The statistic that explains this gap between the official unemployment rate and reality on Main Street is the Labor Force Participation Rate, defined as the percentage of working age adults that is “in the labor force.” To be included in the labor force one must either have a job or qualify to be counted as “unemployed” by meeting certain criteria.  

Not everyone without a job is counted as “unemployed.”  Obviously we don’t want to make the situation look worse than it is by counting stay-at-home parents or college students or other adults who don’t want or need a job as “unemployed.”  So government statisticians include only those who are actively seeking a job in the official count of unemployed.

When people have been unemployed for a long time they tend to become discouraged and spend less time on job search activities and thus don’t qualify by government standards as “unemployed.”  Labor Department statisticians reclassify them out of the labor force, lowering the labor force participation rate.  The unemployment rate also goes down because these jobless people aren’t counted.  But they still need and want jobs, and their family and friends still consider them unemployed.

The chart to the left shows the recent, sharp drop in the labor force participation rate from old normal to the new normal.  We designated 66% as “old normal” not because it was the highest ever, but because it was the average, with very little variation for five years before, and the first year of, the 2008-09 recession.

We designated an unemployment rate of 4.8% as old normal because it has been the average rate between recession years since the 1950s.

The Obama Administration hopes we will all accept a lower unemployment rate as progress toward the goal.  But Americans will not believe that things are back to “normal” as long as almost everyone knows people who are still suffering, even if the government doesn’t count all the sufferers in the official, monthly, unemployment statistic. 

The first chart at the top shows just how far we have come and how long it will take to create enough jobs to bring both the unemployment rate and the labor force participation rate back to Old Normal.  If job creation were to continue at the February rate it would take almost eight more years!  If the average rate of job creation over the past six months were to continue it would take an astounding fourteen more years!

This situation is unprecedented since government began its current employment reporting system in 1947.  Before that, the great depression of the 1930s was the longest economic downturn in US history.  It lasted roughly ten years.  We’re starting year six of the current slump, and if government policies don’t change it will take another 12 to 14 years to get back to a normal job market.

But it doesn’t have to be this way. 

History gives us a clear road map to prosperity if only our political leaders would give up their dreams of a society and economy dominated by government and allow liberty and free enterprise flourish

First the (muted) criticism: 

The hypothetical Senator Paul railed against, a President ordering up a drone fired missile to kill an American citizen, eating in a cafe or sleeping in his bed – in America – because he was “suspected” of terrorist associations, was too far fetched to take seriously.  Even if such an order came from a psychotic future President (we don’t like President Obama but we don’t think he’s a psycho) it would be an unlawful order and nobody in the military or the clandestine services would obey it.

Senator Paul may have discredited himself, the Republicans, and the Conservative/tea party movement in the minds of some voters who might otherwise have been persuadable if his issue had been more realistic.

BUT…

Now the enthusiastic praise:

The President’s representatives including his Attorney General had been asked about a hypothetical drone execution several times.  They had been unwilling to simply say that no, the Constitution doesn’t permit the President to deny a citizen his right to a trial and summarily execute him, on American soil, when he is not actively engaged in violence.

The attention drawn by the Filibuster forced Attorney General Holder to do something he, Obama, and those on The Left vigorously avoid, issue a concise, unambiguous answer to a Constitutional question.  The Left’s relentless expansion of federal power is possible only with ambiguous, long-winded interpretations of their version of the Constitution, a so-called “living” or “evolving,” or we would say, meaningless document.  Their ideas clearly violate the plain meaning of the text in the real Constitution.  Any time they have to demonstrate that ordinary people without law degrees can understand the Constitution and determine what violates it, they’ve lost a round.

Unfortunately, too many Republicans, including Mitt Romney, fail to do what should come naturally to the party of liberty and free enterprise, evoke the powerful language of the Constitution to develop compelling campaign themes.  But Paul used the Constitution to great effect during his 13 hours of Filibuster.  Consider this excerpt:

Your government was given [by the Constitution] a few defined powers, enumerated powers. There are 17-19, depending on what how you count them. They’re few and defined. But your liberties are many, basically unlimited and undefined. When you read the ninth and tenth amendment, it says that those rights not explicitly given to government are left to the states and the people. They’re yours, not to be disparaged. These are important debates we’re having.

This language could be the beginning of an argument against almost any big government plan to spend vast sums on politically motivated schemes that are not authorized by the Constitution.

Now consider excerpts from Mitt Romney’s standard, stump speech repeated countless times on the campaign trail. He usually began with stirring references to the Constitution and Declaration of Independence.  Here’s a sample:

Now is the time to reaffirm what it means to be Conservative.  The very heart of American Conservatism is the conviction that the principles embodied in the Constitution and the Declaration of Independence are uniquely powerful foundational and defining…

Good start.  While public education abandoned serious instruction in the Constitution and Declaration of Independence decades ago, millions of Americans have recently begun reading them and, inevitably, found themselves shocked by the gulf separating the limited government chartered by the Constitution and the government of nearly unlimited power wielded by Barack Obama.

Today we borrow 40 of every dollar we spend.  This is unconscionable, immoral, and it will end in my Presidency.  I will approach every spending decision, every budget item with these questions: Can we afford it and if not is it really worth borrowing money from China to pay for it.

Wait!  What about the Constitution?  It should provide the criteria for what is and is not worthy of government spending!  Romney hoped to appeal to our emotions with what seemed like decisive criteria. Unfortunately his criteria was meaningless.

Every dollar of spending is affordable and “worth borrowing from China” to whomever it benefits.

President Obama continuously insists that we can’t afford not to “invest” in all his myriad programs.  Indeed, we’ve just endured weeks of his hysterical warnings of calamities from merely shaving a couple of percentage points from the rate of spending growth!

As election statistics show millions of potential Conservative voters perceived too little difference between Obama and Romeny to bother turning out.  Obama won 3.5 million fewer votes than he won in 2008.  But Romney won only about 1 million, or 1.6% more votes than McCain won in 2008, even though he spent at least three times as much money as McCain.

The Romney campaign ignored the Constitution and became a sort of mirror image of the Obama strategy.  Obama, like all Leftist candidates, segments the electorate into ethnic, age, and gender identity groups and then feeds them customized, emotion-driven messages designed to assure each group that the candidate understands and will command government power to address its specific fears and concerns.

Romney’s offensive “47%” remarks were actually intended to inform high-end donors that he would not develop Constitutional themes to try to persuade anyone who happened to be, by accident of birth rather than choice, in one of Obama’s targeted groups.  Rather he would mirror Obama’s tactics but with different groups.

Rand Paul’s Filibuster was a stunning political and public relations success.  As the hours wore on the Twitter reaction measured in millions of enthusiastic and supportive tweets was dramatic evidence of broad acceptance.

Sadly, some in the Republican establishment still don’t get it.  While criticism of Paul from the left was weak and cautious, GOP Senators McCain and Graham proved they had no idea what he was doing when they angrily denounced him the next day, speaking from the Senate floor to ensure maximum TV coverage.

But McCain and Graham were outnumbered by scores of Republicans from the House and Senate who did get it, and will emphasize the Constitution in their campaign messages and governing agendas.

President Obama’s weekly address was about the sequester and was typical of his strident rhetoric. Acting as if he had no role in enacting the sequester law he repeated claims that tiny incremental reductions in the rate of government spending growth would “inflict pain on communities,” hurt the economy, rob the middle class and cost 750,000 jobs,  a claim that contradicts economic history.  He concluded with:

And let’s be clear. None of this is necessary. It’s happening because of a choice that Republicans in Congress have made. They’ve allowed these [spending] cuts to happen because they refuse to budge on closing a single wasteful [tax] loophole to help reduce the deficit.  They decided to protect special interest tax breaks for the well-off and well-connected…

An impartial observer would say the President is the one who refuses to budge.  He refused to consider any alternative to the sequester except additional tax hikes, even though the top bracket tax rate increases he demanded during the election campaign have already been enacted into law.

But the most stunning hypocrisy was Obama presuming to blame others for…

special interest tax breaks for the well-off and well-connected…

To the right is a list of taxpayers and financial activities that will benefit from special interest tax breaks included in the fiscal cliff bill that President Obama signed into law on January 2.

The fiscal cliff bill was hailed by Democrats and the media as a Presidential triumph.  House Republicans were maneuvered into a no-win, position, and were forced to accept a bill written by Senate Democrats, with advice from the White House, that increased top bracket tax rates, and enabled the President to renege on his “balanced approach” promise of spending cuts.

Also included in the fiscal cliff bill were some 26 tax breaks specifically demanded by the White House that easily qualify as, in Obama’s words, “special interest tax breaks for the well-off and well-connected.”

The only legitimate purpose of taxation is to fund government.  But politicians corrupt taxation by setting tax rates unreasonably high and then offering discounts to taxpayers who behave in politically approved ways.  Thus, they enhance their power, and they gain control over the deployment of more money than they collect in tax revenue.

Of course some, maybe most of the special tax provisions exist only to benefit “well-connected” businesses.  By paying politicians for tax breaks and/or tax punishment against competitors, “well-connected” companies harness the power of government to force better outcomes for themselves than they can earn legitimately, by competing in the free market.

Decades of these corrupt practices have built an incomprehensible federal tax code, a maze of special provisions that mete out carrots and sticks in ways that defy common sense.

What is “Tax Reform”?

The Conservative movement, recently represented by the populist Tea Party, has long advocated tax reform, or deleting special interest deductions and credits, coupled with a reduction in tax rates.  The result of such reform would be a more vibrant economy with more employment opportunity because businesses would pivot from lobbying Congress and the President for special favors to competing in the marketplace by offering better value to customers.

Reformers would set the new, lower tax rates at a level that would generate the same amount of tax revenue as the pre-reform combination of higher rates and myriad deductions and credits.  However, companies would eventually generate more total tax revenue at the lower rates because they would invest their resources in productive activities that would generate more taxable profits, rather than unproductive tax shelters.

But now President Obama has hijacked the term “reform” for his own purposes. Obama’s version of “reform” would not lower tax rates and thus would not spur economic growth or job creation.  He would delete only the tax breaks he calls “loopholes,” those that benefit taxpayers who are out of favor politically, like drug makers and oil drillers. 

He wouldn’t use the L word to describe the special interest tax breaks in the above list.  By insisting on their inclusion in the must-pass fiscal cliff bill he proved that the well-off taxpayers who benefit are indeed well-connected – to the White House and Senate Democrats!

The latest Obama budget crisis is the “sequester,” an idea he came up with in the summer of 2011 that was intended to delay action on the government’s ballooning debt until after the election.  He is now leading a political and media campaign to pressure Congress to resend it.

As the chart to the right shows, The sequester consists of tiny, incremental adjustment to the rate of government spending growth over the next nine years.

President Obama and his supporters believe – or they want us to believe -  that the health of the private sector economy depends on government continuing to expand at the same rapid rate we’ve seen since 2008.  Thus, the political-media establishment tells us allowing the sequester cuts to be implemented as current law requres will result in the loss of hundreds of thousands, even millions of private sector jobs.

To test the theory that government spending fosters private sector job growth, and a cut in spending would cause private sector unemployment we searched the data and found the the most abrupt, deepest government spending cut ever: 1945 – 1948.

To pay for World War II, total government spending had exploded from $9 billion in 1941 to $93 billion in 1945.  Thirteen million young men, 20% of America’s male population, became soldiers, sailors and Marines.  Women had a more limited role in the military than today but approximately 300 thousand served during World War II.  (Today, there are about 1.5 million men and women on active duty in military service, less than 1% of US population.)

Millions of civilian men and women, even teenagers were employed in war industries manufacturing guns, tanks, ships, aircraft, uniforms, boots, etc.

When the war was over the government immediately began dramatic cuts.  Government spending dropped 68% from 1945 to 1948.

By 1948 the military had discharged eleven million men and women.  Federal civilian employment had dropped from 2.7 million in 1945 to 1.4 million in 1948.

A 68% spending cut in 2013 would transform the projected trillion dollar deficit into a $300 billion surplus!

President Obama and most of today’s political-media “economists” cling slavishly to obsolete, discredited, Keynesian economic theories.   Had they been around in 1945 they would have warned that any spending cuts would spell disaster for the economy, that unemployment would skyrocket.  They would have been wrong. 

The war in Europe against the Nazis ended in May 1945.  The war in the Pacific against Japan ended in August 1945.  There was a brief reduction in private sector employment during the spring and summer of 1945 as government cut purchases of war material.  But companies began rehiring as soon as they were able to convert from military to civilian production.

The number of private sector jobs increased 21 % from September 1945 to September 1948, the best three year period in seven decades.

A 21% increase today would be almost 24 million new jobs!  Contrast that with 6 million jobs created in the most recent three years.  Today’s chronic unemployment would turn into a labor shortage.  Wages would soar.  Jobs would go begging.

Progressives like President Obama and the Democrats in Congress promote the economic theory that government, not the private sector is the source of jobs and prosperity because it helps them justify more spending.  But actual experience contradicts the notion that government, by gobbling up an ever larger share of the economy, and wielding ever more power  and control over the private sector, can create jobs and prosperity.

The deadline to prevent sequester or $85 billion in “cuts” which are actually reductions in the rate of spending growth, was March 1.  President Obama proposed the sequester in 2011.  It was a tactic to defer discussion of spending cuts until after the election.   For various reasons it hasn’t worked out the way he hoped and at the last minute he desperately tried to prevent it.  He has held several campaign style events, issuing ominous predictions of misery and mayhem if Republicans in Congress don’t submit to his demand for new legislation that would cancel the sequester cuts and impose tax increases.

For example, Obama claimed that as a result of sequester “thousands of teachers and educators will be laid off.”

Because voters tell pollsters that Education is one of their higher priorities, the President talks about education in virtually every public appearance.  However Education is not a federal government function.  It’s a local government service and is paid for almost entirely by state and local taxes, not federal money.  Here’s the math:

• In 2012 States and local governments spent $778 billion on Education. 
• The federal government added $29 billion in various subsidies and grants for a total of $808 billion.
• According to a report published by the White House sequester will cut the federal share of education funding by $2 billion, reducing the total from $808 to $806 billion or 2 tenths of one percent.
• Even that incremental reduction overstates the impact of the cuts because most federal money funds ancillary programs, not the salaries of classroom teachers.  Mr. Obama uses the Education establishment’s term “educator” in place of of the word “bureaucrat,” to describe the people who supposedly help children learn by working in office buildings far from any classroom.
• After the sequester cut federal primary and secondary education spending will still be 28% more than in 2008, the year before the Obama spending surge began.

The President warned that sequester cuts to the National Institutes of Health would “set back medical science for a generation.”

Wow!  That’s sounds awful.  But most medical research is done by the private sector, not the federal government.  And according to the White House Sequester report Mr. Obama’s doomsday warning is absurd. The National Institutes of Health are scheduled to spend $34.3 billion in 2013.  Their share of  sequester cuts would be $2.5 billion, leaving $31.7 billion.  That’s 3% less than in 2012 but 9% more than 2008.

In a campaign style event on Tuesday Mr. Obama described the sequester as arbitrary, brutal, meat cleaver,  and issued several more threats including,

• “Emergency responders ability to help their communities through disasters will be degraded.”  But like teachers, police and fire departments are funded almost entirely by state and local government.
• “border patrol agents will see hours reduced”
• “Cutbacks to air traffic control and airport security”
• “Hundreds of thousands will lose access to primary care and preventive care like flu vaccinations and cancer screenings.”

Then he added what could be described as a veiled threat against The People if Republicans don’t pass legislation that cancels the sequester cuts and increases taxes:

• “FBI agents will be furloughed and Federal prosecutors will have to close cases and let criminals go”

Really Mr. President?  Are you threatening to turn criminals loose on our streets if you don’t win your political fight in Washington? 

In his State of the Union speech President Obama briefly assured us the deficit/debt problem was almost solved and then moved on.  He proposed lots of new government run programs and government spending that he called “investments,” including this:

Study after study shows that the sooner a child begins learning, the better he or she does down the road.  But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program.  Most middle-class parents can’t afford a few hundred bucks a week for a private preschool. So tonight, I propose working with states to make high-quality preschool available to every single child in America.

This is a familiar, progressive formulation.  Start with the usual “study after study” to support what in this case is obvious, that it’s better for children to begin learning early.  Then try to piggyback a not so obvious conclusion that Washington politicians and bureaucrats, with their volumes of regulations and piles of money can reach into preschool rooms in Fargo, Kansas City, Denver and Chicago and ensure that 4 year old kids from diverse backgrounds all learn their letters and colors.  And the bonus for progressives would be an ideal opportunity to begin indoctrinating a future generation of voters in progressive dogma.

But the federal government already operates a nation-wide preschool system called Head Start. Yet Obama chose not to mention it.  Why?

Perhaps the answer lies in a meticulous study of Head Start results completed just two years ago by the staff of Obama’s own Department of Health and Human Services.  They tracked the progress of 5,000 children from low income families who were eligible for Head Start over several years.  Half were enrolled Head Start program, and the other half were a control group that did not attend Head Start.  An extensive battery of tests was run on both groups of children just before Kindergarten, at the end of Kindergarten and at the end of first grade.  It turned out that the Head Start group did not perform any better in Kindergarten and first grade than the control group.  Here’s a summary, directly from the HHS study:

[I]t appears that access to Head Start has an impact on 4-year-olds’ language and literacy skills while they are in Head Start, but these early gains are not sustained as the children develop and move into the early school years. Furthermore, there is no evidence of impacts on children’s math ability, pre-writing skills, or teacher assessments at the end of Head Start, at the end of kindergarten, or at the end of 1st grade. In other words, the children in the Head Start group ended their Head Start year with moderately higher skills than their counterparts in the control group, but this advantage did not lead to longer term gains when they were in school. At the end of 1st grade, they end up at the same point as the children who were not given access to the program.  Although both groups of children are making progress over time, in most instances, the Head Start group scores are not statistically different from the control group scores in kindergarten and 1st grade.

For decades politicians have routinely called on Congress to expand Head Start.  But with this study documenting failure in mind, Obama presented the issue as parents’ inability to pay for private preschool.  But that’s exactly the rationale that President Lyndon Johnson used back in the 1960s to sell Congress and the nation on Head Start!

Obama’s most recent budget proudly proclaimed an annual cost of $8.1 billion for Head Start “to serve approximately 962,000 children and families, maintaining the historic expansion undertaken in 2009–2010.”  That works out to about $8,400 per year, per child, not as much as the elite preschools the children of Washington officials attend, but well above the average charged by private preschools across the country.  Yet, after five decades Head Start graduates are no better prepared for school than children who didn’t attend any preschool.

The Constitution’s Tenth Amendment commands the President and Congress to restrict government’s power and reach only to those functions authorized by the Constitution.  Everything else is to be left to the States or to The People.  Operating preschools is definitely not authorized by the Constitution.  So, the failing Head Start program shouldn’t even exist. And there certainly is no Constitutional authorization for a second national preschool system!

Obama’s “reasoning” leaps from the truism that children should begin learning early to the conclusion that the federal government should provide and supervise that learning.  But there have always been successful sources of early childhood learning, from parents and grand parents, to siblings, to low cost and even free preschools, some organized by churches.  This is a textbook example of why we should accept the wisdom of the founders and not turn early education of precious little children over to the tender mercies of the federal bureaucracy.

During President Obama’s first four years the federal government ran deficits totaling $5.1 trillion, far and away the largest in history. 

Concern over the explosion in government debt caused by an apparent new normal of yawning deficits is a major barrier to the to the President’s agenda of dramatically expanded government power.  Thus, he opened his State of the Union speech with an attempt to minimize the significance of his deficits by claiming:

…we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.  

He has made this assertion several times in recent weeks as part of three, creative bookkeeping steps:

1. Simply assert that $4 trillion in “deficit reduction” over ten or more years, or a theoretical average of $400 billion per year is enough, even though it’s less than a third of the government’s average $1.3 trillion deficit.
2. Claim to be “more than halfway” to $4 trillion in part by counting as “cuts” a trillion the government won’t spend from 2013 to 2021 on the Iraq war that ended in 2011, and from 2015 to 2021 on the Afghanistan war he promises will end next year.
3. Count recent tax hikes on top bracket tax payers, most of whom are business owners as a net income tax revenue increase of $65 billion per year from 2013 through 2021.

After brushing deficits aside the President turned to what he really cares about and what always bring cheers from his progressive base and the sympathetic media, expanding government’s power and reach.  He prefaced his list of marvelous, new ideas with this assurance:

…nothing I’m proposing tonight should increase our deficit by a single dime.  It is not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.

Following is a partial list of his ideas and proposals that somehow won’t cost the government anything and thus won’t “increase our deficit by a single dime:”

• A “network of 15 manufacturing hubs” where somehow “businesses will partner with” various government agencies to turn whole regions into “centers of high tech jobs.” 
• Increased “investments in science and innovation” to “reach a level of research and development not seen since the height of the Space Race.”
• More “investments” in wind and solar energy.  Does he think we’ve already forgotten his previous “investments” in more than 30 companies, including Solyndra, SpectraWatt, Beacon Power, A123 Systems, Abound Solar, Mountain Plaza, Raser Technologies, and Stirling Energy Systems that went into bankruptcy, after squandering billions of taxpayer dollars?
• “I’m issuing a new goal for America: Let’s cut in half the energy wasted by our homes and businesses over the next 20 years.”  As we’ve seen for decades, this means subsidies, either in the form of direct cash payments or tax credits for installing insulation & retrofitting “green” stuff.
  
• A new jobs program that sounds an awful lot like the old “shovel ready” from 2009 “to put people to work on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country.”
• Funding preschool “for every single child in America”
• Redesign “all of America’s high schools so they better equip graduates for the demands of a high-tech economy.”  Does “redesign” also include rebuilding?
  
• Tax credits to businesses that hire and invest.
  

One wonders, why not simply give tax and regulatory relief to all businesses so they’ll all be in a better position to hire and invest?

If it strikes you as preposterous that government can accomplish even one item from the President’s fanciful wishlist and not “increase our deficit by a single dime” maybe you’re just too much of a slave to common sense.

The President wants to rescind the Sequester spending cuts he signed into law in 2011 but can’t without cooperation from House Republicans.  His way of inviting their support is to demand that they postpone the cuts while enacting more tax increases.  At his recent Sequester media event he said:

Economists and business leaders from across the spectrum have said that our economy is poised for progress in 2013 and we’ve seen signs of this over the last several weeks [...] we’ve created more than 6-million jobs in the last 35-months.

Whenever Obama’s ideas conflict with common sense he claims to have the blessing of unnamed experts, in this case “economists and business leaders.”  This is a textbook logical fallacy called “appeal to authority” used by those whose case is too weak to stand the reality test. 

Back in 2010 the President agreed with Republicans to postpone tax increases citing the weak economy.  Obama may see “signs” but the economy, as measured by quarterly GDP growth is clearly weaker now than it was in 2010.  In fact, it turned negative in the final quarter of 2012.  Yet he is determined to increase taxes again.

Upon examination of the data it turns out that Obama’s six million jobs in 35 months is the weakest post-recession labor market since the government began it’s monthly survey of employers in 1939.

The Sequester is a series of spending reductions scheduled for the next ten years that are considered draconian and unacceptable in Washington.  It’s openly stated purpose was to scare the President and Congress into negotiating different cuts that were not so draconian. Obama told the assembled reporters:

The proposals that I’ve put forward during the fiscal cliff negotiations, in discussions with Speaker Boehner and others, are still very much on the table.  I repeat; the deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table.

“Tax reform” is the President’s new euphemism for tax increases, which are beginning to lose their appeal to the public.  Congress and the President avoided the fiscal cliff with last minute legislation that postponed the sequester until March 1 and increased tax rates on high income taxpayers.  Democrats praised Obama as the fiscal cliff “winner” for cleverly forcing the Republicans to submit to his tax increase demand while stiffing them by reneging on his promise of “balance” via spending cuts. 

Obama now declares more tax increases and “cuts” are still “on the table.”  But nobody knows what his cuts are.  They exist only as smooth chatter for the TV cameras, not as written legislation with numbers that the House and Senate could debate and vote on. 

So we’ve been reminded that while it’s critical for us to cut wasteful spending, we can’t just cut our way to prosperity.

The converse of “we can’t cut our way to prosperity” would have to be we can spend our way to prosperity.  But if government spending were the source of prosperity Obama’s record shattering spending increase should have produced record shattering, or at least above average growth.  Instead we’ve seen the weakest post-recession economy ever recorded since the government began quarterly assessments of economic growth in 1948.

Under the law the President is required to submit his annual budget proposals to Congress by February 1.  This year he instead submitted notice that his budget would be delayed.  So the only Presidential spending proposals in writing are found in last year’s budget documents, displayed in the chart below.  Whatever is “on the table” is invisible.