Saturday, April 30, 2011

Why oil company profits are good news

$11 billion in profits at Exxon! Grab your torches and pitchforks, arrest them evil executives and string 'em up! A private, for-profit company making a profit? Why that is criminal, that is immoral, that is downright un-American!

So Exxon reported a huge profit last quarter. Great! Guess who owns Exxon? In large part, most of us do! Exxon stock is 44% held by institutional investors, i.e. mutual funds and pensions primarily. Guess who owns those? You probably do in your 401k and your pension plan. Over the last year, the Vanguard 500 Index fund, a commonly held fund in many, many 401k plans, is up 15.49%. Those results show up in your retirement plan statements, the same ones you were crabbing about a few years ago. Guess what the number one holding in the Vanguard 500 Index fund is?

Exxon Mobil

Oh. So that nice increase you have seen over the last year in your retirement plan comes from companies like Exxon making profits. We have recovered from the huge downturn quite nicely, a downturn caused in large part by government tinkering with the mortgage market.

So what I am telling you is that in spite of the overheated rhetoric that is inflamed by President Obama and his lackeys in the media, many regular Americans like me and probably like you benefit greatly when private sector companies make profits.

Now should the Federal government be giving oil companies special tax breaks? No, I think any sort of special tax breaks like that are bad policy. Not so we can raise more tax revenue but because the government has no business tinkering in the private sector like that. I think we should eliminate those special breaks and lower Federal corporate taxes because more profits=more jobs and higher stock prices. Will some rich people get richer? Yes and they should. Will more Americans be employed and enjoy comfortable retirements because their retirement portfolios are doing well? Absolutely.

Here is another dirty little secret. Raising taxes on oil companies, which makes them less profitable, is not going to lower your price at the pump. Not one nickle. It is nothing more than class warfare rhetoric. Obama can't be bothered to lower spending one red cent but never misses an opportunity to call for higher taxes. Drilling for oil here and making use of our rich natural resources? Now that would lower gas prices but our President is too concerned with his own reelection campaign and trying to score political points to worry about how the policies of his administration are hurting Americans at the pump. Well, that an his half-baked adventure in Libya which has managed to turn that whole thing into a stalemate and that is having a direct impact on oil prices because of the ongoing instability in the Middle East.

A privately held company making a large profit that benefits its shareholders is not criminal or immoral, it is good business. A Federal government that is running up trillion dollar deficits annually and that stands in the way of the private sector drilling for oil that would lower gas prices? Now that is immoral.

Tuesday, April 26, 2011

2012

The presidential field is starting to shape up for the GOP although there still are a lot of question marks. In the space of a day, Haley Barbour has decided he is not going to run (and had no chance anyway) and Ron Paul is expected to announce an exploratory committee ahead of a probable run. Romney and Pawlenty are definitely in but Romney has all sorts of problems and Pawlenty is kind of unknown and boring. Donald Trump is getting the most press which is ridiculous but that is the celebrity culture we live in today, a culture where a guy who donated $50,000 to Rahm Emmanuel is getting all of the buzz in the GOP field. Still waiting on Palin and Bachmann, neither of whom is a decent candidate for different reasons and neither of whom I think will end up running. Bachmann might make a decent VP candidate but really anyone would look good compared to the Human Gaffe-A-Tron Joe Biden. My governor Mitch Daniels keeps getting mentioned and would be a serious and sober adult candidate but he needs to quit flirting and get in or get out fairly soon.

I am far more sympathetic to Ron Paul then I have been in the past. His fiscal ideas are the sort of medicine that we need to swallow. His big challenge in the GOP primaries comes from those who want a President to be willing to engage U.S. forces around the world without hesitation and Paul is more concerned with getting our own house in order rather than playing policeman to the world. Iraq is finally drawing to a close, Afghanistan is a mess and not much better than it was years ago and we have stepped in a giant mess in Libya with no plan and no stomach to either pull out or get in completely. Libya is exactly the sort of misadventure that anyone paying attention could see was coming when you have someone as unqualified to be Commander-In-Chief as President Obama calling the shots. We need a different direction for our foreign policy, not more of the same. The biggest threat to American freedom and prosperity is not radical Islam, it is the national debt and we need to treat the debt as the great challenge of our generation.

2012 looks like a golden opportunity for conservatives if we can just get it together. The longer we talk about Donald Trump and Sarah Palin, the harder it becomes to put together a coherent message. Don’t think for a second that the media doesn’t know this and isn’t exploiting this to weaken the GOP position. Obama has thus far: put us further in debt in a shorter time for less effect than any of his predecessors, enacted a horrible and unpopular health care bill, gotten us involved in a no-win situation in Libya, failed to take a single concrete step to reduce the debt, shown zero leadership on energy issues, made lots of promises that he has failed to keep regarding unemployment and generally squandered all of his hopey-changey goodwill in record time. He is vulnerable and by rights should be a one term President but to make that a reality is going to require a unified party and a unified message, one that pounds Democrats and the Left in general and President Obama in particular relentlessly about the $14 trillion national debt and trillion dollar deficits as far as the eye can see.

The longer we dink around with clowns like Trump, the longer we delay going after Obama and that only helps him. 2013 should roll in with a Republican President, an even more solid majority in the House and a GOP majority in the Senate (given all of the seats the Democrats have to defend in a year when they are on the ticket with a vulnerable President). We need a Pawlenty, Paul or Daniels to lead the party and send Obama back to community organizing. This country cannot afford to lose another election to the party of bigger government, more spending and endless debt.

Sunday, April 17, 2011

Why the attack on Libya was unconstitutional

Great presentation from the Cato Institute that should end the notion that Obama attacking Libya without congressional authorization is hunky dory under the "War Powers Act"

Thursday, April 14, 2011

My letter to my Congressman

I sent the following message to my Congressman, Marlin Stutzman, this morning to urge him to oppose the budget "compromise" that cuts all of $352 million rather than the much touted and already inadequate $38 billion we were told. This deal is an empty gesture and gives President Obama and Congressional liberals cover by allowing them to claim concern for out of control spending while actually not cutting much more than $1 per American.

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Dear Representative Stutzman,


I am writing as a constituent to urge you to oppose the budget deal struck last week between Congressional leaders and President Obama. As more details come out, it is apparent that this compromise does little to address the out of control spending that is plaguing our nation. I am asking you to lead in rejecting this empty compromise and push for substantive deficit reduction before any budgets are passed and certainly before the Congress votes to extend our already massive national debt. The people of Indiana and especially the people of your district understand that when we borrow $.40 of every dollar that the Federal government spends, modest cuts are not what is needed. We need drastic and real deficit cuts and we need them today, not at some unspecified point in the future.


Representative Stutzman, thank you for your time and attention. I will be eagerly watching this process unfold.


Sincerely,

Arthur Sido

Friday, April 1, 2011

A nation of takers, not makers

If you want to know why America is messed up, just read this essay from Stephen Moore, We've Become a Nation of Takers, Not Makers. Moore points out that in the last few decades we have become a nation where people are taking from the economy in government jobs instead of making things that drive the economy.

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?


Staggering numbers. We have too many people who rely on tax dollars to pay for their jobs and benefits and not enough private sector workers to pay those tax dollars. He also points out that while we need fewer farmers because they have become so much more efficient, there are no corresponding efficiency improvements in the public sector.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

Schools are full of extra people. Teacher's aides, staffers, various and sundry other people. We keep adding staff and cost and delivering a mediocre product. But woe to the politician who tries to rein in the runaway public school spending train! Any private sector industry that ran that way would either be dependent on government subsidies or out of business.

As we turn into a nation of people who work for the government, we lose our risk-taking, entrepreunerial spirit, drive to succeed and replace it with mindless bureaucracy, job preservation and security. You can't compete in a global economy against nations with billions of people hungry and willing to work hard and take risks with a nation full of bureaucratic paper pushers who don't make anything and don't seem to mind.