The Democrats’ Vision Problem

By Jonah Goldberg

Head to the local big-box electronics store and buy yourself: a Panasonic home theater system ($500), an Insignia 50-inch plasma HDTV ($700), an Apple 8GB iPod Touch ($175), a Sony 3-D Blu-ray disc player ($219), a Sony 300-CD changer ($209), a Garmin portable GPS ($139), a Sony 14.1-megapixel digital camera ($200), a Dell Inspiron laptop computer ($450), and a TiVo high-definition digital video recorder ($300).

This is not an endorsement of any of these products. I don’t own any of them (though if the manufacturers are keen to find out my opinion, they can send me some non-returnable demos). But you can fill your shopping cart with these items for less than $3,000. The average American worker needs to work 152 hours to earn that much money.

In 1964, however, the average American worker could buy one pricey stereo from Radio Shack after working 152 hours. My colleague at the American Enterprise Institute, Mark Perry, a University of Michigan economist, crunched the numbers.

What’s the point? Well, there’s a big one. We are constantly told that the American working man is so much worse off than he used to be. And if you measure income one way, you can make that case.

Indeed, the Democratic party in recent years has become obsessed in looking at the economy only in that one negative way to justify its avocation: giving more stuff to the poor and middle class because they are “falling behind.”

The wealth of nations, according to Adam Smith, the founding father of the market economy, is not measured in GDP or cash reserves. Rather, it “consists in the cheapness of provision and all other necessaries and conveniences of life.”

By that standard, American wealth in general, and the wealth of poor Americans, has skyrocketed in the last half-century, and the government had relatively little – though certainly not nothing – to do with it. And it’s not just that consumer items are cheaper than ever; they’re also better than ever. An iPhone today isn’t just better than yesterday’s phones, it’s better than yesterday’s cameras, calculators, portable stereos, and computers. Many of the standard features on a 2010 Honda Accord were considered luxury items ten years ago and almost unimaginable 20 years ago.

Now, you might argue that while, say, TiVo might be a great convenience, it’s not a necessity. Given the divergent TV tastes in the Goldberg household, I might disagree. But fair enough: The real necessities are food, clothing, shelter, and medical care, according to most people.

Well, food has gotten steadily cheaper – for everybody – over the last century. For instance, Perry calculates that eggs cost about one-tenth as much as they did at the beginning of the century. Moreover, Americans, with their allegedly stingy government, pay about half as much for food as Europeans do.

So, what has gotten more expensive? According to St. Lawrence University economist Steven Horwitz, there are only four areas that have become more expensive over the last century as measured in their “labor price”: housing, cars, higher education, and medical care. With the arguable exception of a college degree, all are marked with wildly improved quality. And the main reason for rising medical and college costs (and to a lesser degree housing costs) is that the government has distorted the market by “helping.”

For example, Rep. Paul Ryan (R., Wis.) underwent Lasik eye surgery in 2000. He paid cash, and it cost $2,000 an eye. “Since then,” he told the Washington Post, “it’s been revolutionized three times and now costs $800 an eye. This sector isn’t immune from free-market principles.”

No, but it is protected from them.

Even so, the costs of housing, food, and clothing combined have dropped over the last century from about 75 percent of the average family’s expenditures to around 35 percent, largely thanks to the ability of the market to democratize innovation and decrease the cost of necessities and conveniences.

None of this is to say that the middle class and the poor aren’t facing tough times, or that our government policies are perfectly suited to their needs.

But ever since the dawn of the Obama presidency, millennia ago, the air has been thick with claims that government needs to get much more deeply involved in the private sector. According to Obama and Co., only government can provide what the working people in America need, and “doing nothing” is the only unacceptable suggestion. “The one thing I don’t want to hear,” as Obama likes to say, is that more government isn’t the answer.

Maybe he should get his hearing checked by the same guy who did Ryan’s eyes.

Gun Rights Must Be Honored by States, Cities, High Court Rules in 5-4 Vote

By Greg Stohr

A divided U.S. Supreme Court extended the reach of the constitutional right to bear arms by saying it binds state and local governments as well as federal officials.

The justices, voting 5-4 in a case involving Chicago’s handgun ban, said an individual right to bear arms was among the fundamental guarantees protected against state interference through a constitutional amendment after the Civil War.

“A provision in the Bill of Rights that protects a right that is fundamental from an American perspective applies equally to the federal government and the states,” Justice Samuel Alito wrote for the court.

The ruling broadens the sweep of the court’s 2008 ruling interpreting the Constitution’s Second Amendment as protecting the rights of individuals, rather than just those of state-run militias. It’s a victory for the National Rifle Association, which joined a group of Chicago residents in challenging the city’s laws.

It will open a new front in the fight over gun rights, setting the stage for courtroom battles over the constitutionality of weapons restrictions around the country.

The high court’s 2008 decision said the right to bear arms “is not unlimited.” The majority said the ruling didn’t cast doubt on laws barring handgun possession by convicted felons and the mentally ill or restrictions on bringing guns into schools or government buildings.

Second Amendment

Like the rest of the Bill of Rights, the Second Amendment was originally aimed only at the federal government. The Supreme Court in the 19th century refused to apply the Second Amendment to the states.

More recently, the court has said that some, though not all, of the rights in the first eight amendments are so fundamental that they are “incorporated” into the 14th Amendment’s due process clause, which binds the states.

Chicago has been the only major U.S. city with a blanket prohibition on handguns. The ban was challenged by four Chicago residents, including Otis McDonald, a 76-year-old homeowner in the Morgan Park neighborhood on the city’s South Side.

McDonald, who says his home has been broken into at least three times, says he wants to keep a handgun by his bed for protection.

The Supreme Court’s 2008 decision invalidated the handgun ban in the District of Columbia, a federal enclave.

The case is McDonald v. City of Chicago, 08-1521.

I’M VOTING SMARTASS IN 2010

Obama is a taxing machine. He’s raised taxes on the middle class. He’s raising taxes on businesses. In Obama’s world if it moves, you tax it .. and if it stands still you get a union worker to paint it and call it a stimulus project.

Now there are some people, of course, who aren’t all that happy at having their taxes increased. Is the Obama administration ready to listen to them? Is there any option open to Obama other than increasing taxes? Yeah, right.

Obama has two reasons for raising taxes. One, of course, is to obtain the revenue needed to expand government. America, to Obama, IS government. The other reason for Obama’s tax increases is wealth seizure and redistribution. Barack Obama is dedicated to the concept of transferring as much wealth from high-achievers (the evil rich) to the traditional Democrat support base as possible. Remember Joe the Plumber?

So .. .how do the ObamaBots react to people who aren’t happy with the taxes they’re paying, and have the courage to speak out? Now we know:

Joe Biden is touring the country this summer, trying to sell the stimulus package and convince Americans that it has worked. You know things are bad when you still have to get out there and sell a piece of legislation that was passed over a year ago. Sadly, Joe isn’t that great as a salesman. He tells a crowd, “there’s no possibility to restore 8 million jobs lost in the Great Recession.” He then blamed “this godawful mess” on George Bush. Well of course. But here’s another little fact that Joe Biden failed to tell the crowd. Since the beginning of the recession, some 7.9 million jobs were lost in the private sector while 590,000 jobs were gained in the government sector. And since the passage of the stimulus bill (February 2009), over 2.6 million private jobs were lost, but the government workforce grew by 400,000. Obama’s stimulus bill isn’t working. Period. It was just a conglomeration of long-time Democrat pork projects stuffed into one horrendous piece of legislation.

But back to Biden’s recovery tour: Biden shows up to a custard shop in Greenfield, Wisconsin. This is where he encounters the owner of Kopp’s Custard and we get the following exchange:

Biden: What do we owe you?

Manager: Don’t worry. It’s on us. … (inaudible) … Lower our taxes and we’ll call it even.

(A few minutes after the Kopp’s manager’s comment on “Lower our taxes,” there’s another exchange.)

Biden: Why don’t you say something nice instead of being a smartass all the time? Say something nice.

Being a smartass? Just what is it that made this small businessman a smartass? He actually told the high and exalted Vice President to “lower our taxes.” That’s all it took, and suddenly not only is he a smartass, but he’s a smartass “all the time.”

This level of arrogance is not only unforgivable, but it’s dangerous as well. We’ve lost jobs in the private sector since Obama was crowned. We’ve lost jobs in spite of his so-called stimulus bill. The people we will depend on in the private sector to create jobs are people like the owner of this custard shop in Wisconsin. He sends a message to Obama and the Democrats through Joe Biden .. and he’s called a smartass. Instead of entering a dialog with this man – perhaps asking him if his tax burden is standing in the way of a business expansion – Biden just pops off with his smartass line.

Well, my friends? I guess that’s what Obama and the Democrats think of those of us who think that taxes are too high .. and that perhaps lowering those taxes (or at least not raising them any further) might spur some economic activity.

Maybe the tea party movement needs to consider a name change … Smartass Tea Party or something more clever … much more clever.

RBS tells clients to prepare for ‘monster’ money-printing by the Federal Reserve

As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

By Ambrose Evans-Pritchard,

Entitled “Deflation: Making Sure It Doesn’t Happen Here”, it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

The speech is best known for its irreverent one-liner: “The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.”

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Investors basking in Wall Street’s V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.

The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7pc in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40pc in a month. This is a volatile index that can be distorted by the supply of new ships, but those who watch it as an early warning signal for China and commodities are nervous.

Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on “monster” quantitative easing (QE)”.

“We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable,” he said in a note to investors.

Roberts said the Fed will shift tack, resorting to the 1940s strategy of capping bond yields around 2pc by force majeure said this is the option “which I personally prefer”.

A recent paper by the San Francisco Fed argues that interest rates should now be minus 5pc under the bank’s “rule of thumb” measure of capacity use and unemployment. The rate is currently minus 2pc when QE is factored in. You could conclude, very crudely, that the Fed must therefore buy another $2 trillion of bonds, and even more if Europe’s EMU debacle goes from bad to worse. I suspect that this hints at the Bernanke view, but it is anathema to hardliners at the Kansas, Richmond, Philadephia, and Dallas Feds.

Societe Generale’s uber-bear Albert Edwards said the Fed and other central banks will be forced to print more money whatever they now say, given the “stinking fiscal mess” across the developed world. “The response to the coming deflationary maelstrom will be additional money printing that will make the recent QE seem insignificant,” he said.

Despite the apparent rift with Europe, the US is arguably tightening fiscal policy just as hard. Congress has cut off benefits for those unemployed beyond six months, leaving 1.3m without support. California has to slash $19bn in spending this year, as much as Greece, Portugal, Ireland, Hungary, and Romania combined. The states together must cut $112bn to comply with state laws.

The Congressional Budget Office said federal stimulus from the Obama package peaked in the first quarter. The effect will turn sharply negative by next year as tax rises automatically kick in, a net swing of 4pc of GDP. This is happening as the US housing market tips into a double-dip. New homes sales crashed 33pc to a record low of 300,000 in May after subsidies expired.

It is sobering that zero rates, QE a l’outrance, and an $800bn fiscal blitz should should have delivered so little. Just as it is sobering that Club Med bond purchases by the European Central Bank and the creation of the EU’s €750bn rescue “shield” have failed to stabilize Europe’s debt markets. Greek default contracts reached an all-time high of 1,125 on Friday even though the €110bn EU-IMF rescue is up and running. Are investors questioning EU solvency itself, or making a judgment on German willingness to back pledges with real money?

Clearly we are nearing the end of the “Phoney War”, that phase of the global crisis when it seemed as if governments could conjure away the Great Debt. The trauma has merely been displaced from banks, auto makers, and homeowners onto the taxpayer, lifting public debt in the OECD bloc from 70pc of GDP to 100pc by next year. As the Bank for International Settlements warns, sovereign debt crises are nearing “boiling point” in half the world economy.

Fiscal largesse had its place last year. It arrested the downward spiral at a crucial moment, but that moment has passed. There is a time to love and a time to hate, a time for war and a time for peace. The Krugman doctrine of perma-deficits is ruinous – and has in fact ruined Japan. The only plausible escape route for the West is a decade of fiscal austerity offset by helicopter drops of printed money, for as long as it takes.

Some say that the Fed’s QE policies have failed. I profoundly disagree. The US property market – and therefore the banks – would have imploded if the Fed had not pulled down mortgage rates so aggressively, but you can never prove a counter-factual.

The case for fresh QE is not to inflate away the debt or default on Chinese creditors by stealth devaluation. It is to prevent deflation.

Bernanke warned in that speech eight years ago that “sustained deflation can be highly destructive to a modern economy” because it leads to slow death from a rising real burden of debt.

At the time, the broad money supply war growing at 6pc and the Dallas Fed’s `trimmed mean’ index of core inflation was 2.2pc.

We are much nearer the tipping today. The M3 money supply has contracted by 5.5pc over the last year, and the pace is accelerating: the ‘trimmed mean’ index is now 0.6pc on a six-month basis, the lowest ever. America is one twist shy of a debt-deflation trap.

There is no doubt that the Fed has the tools to stop this. “Sufficient injections of money will ultimately always reverse a deflation,” said Bernanke. The question is whether he can muster support for such action in the face of massive popular disgust, a Republican Fronde in Congress, and resistance from the liquidationsists at the Kansas, Philadelphia, and Richmond Feds. If he cannot, we are in grave trouble.

Gun Rights Among High Court’s Final Decisions

WASHINGTON — The Supreme Court is handing down eagerly awaited rulings on gun rights and three other remaining cases in its last meeting until the fall and the final day of Justice John Paul Stevens’ long service.

The court is meeting Monday morning just a couple of hours before high court nominee Elena Kagan goes before the Senate Judiciary Committee for her confirmation hearing.

The justices could decide that the Second Amendment’s right to “keep and bear arms” serves as a check on local and state gun control laws, as well as federal restrictions.

The court also could strike down part of a 2002 corporate reform law that was enacted in response to scandals at Enron Corp. and other companies. The other remaining cases involve patents and a Christian group that bars gay students and wants official recognition from a state university.

The 90-year-old Stevens announced his retirement in April, paving the way for President Barack Obama to nominate Kagan to replace him. Kagan’s hearing begins early afternoon in Washington, in a Senate hearing room a short walk from the court.

Stevens will retire as the second-oldest justice, after Oliver Wendell Holmes, and tied for second-longest tenure with Stephen Field, whose service began during the Civil War. Stevens’ retirement will take effect on Tuesday, after 34 years, six months and 11 days as a justice.

William Douglas has the record, with more than 36 years on the Supreme Court.

It’s the Media, Stupid!

By Lloyd Marcus

After being interviewed as a guest on two radio programs back-to-back, I was angry and frustrated. I had to endure radio talk show hosts and callers who have never attended a tea party tell me how racist the rallies are. Not only will this false accusation of racism not go away, it appears to be growing stronger.

Angry callers said they saw racist signs on TV and shared stories from black friends who claimed to have experienced racism at tea parties. I told one caller, “Ma’am, with all due respect, your friend is a liar.” I am a black man who has attended well over two hundred tea parties across America traveling on three Tea Party Express tours. I know the tone of the rallies and the types of people who attend them.

The tea party attendees are moms, dads, kids, grandparents, and yes, mostly white, but they are not racist. Many even voted for Obama. They are decent, hardworking Americans who love their country and do not want it “transformed” into Europe. For the gazillionth time, I will state this truth: The tea parties are not about race!

So how has the “tea parties are racist” lie become so solidly branded into the minds of many? Then, it hit me: “It’s the media, stupid.” Last year I appeared on CNN fielding accusations that the tea parties are racist gatherings. During my interview, CNN showed the same sign of Obama as a witch doctor several times. Meanwhile, 99.9% of the signs on display at the rallies expressed opposition to Obama’s policies only.

The liberal mainstream media attempts to put and keep us tea party patriots on the defensive. They scream, “You should denounce those people carrying racist signs!” Well, who died and made the “agenda-driven” liberal mainstream media the final authority on what is racist? According to them, anything short of fawning approval of Obama is racist.

The liberal mainstream media’s hypocrisy is stunning. While chiding us to denounce questionable racist signs, they clearly favor and hide real hatred and violence coming from the left. A few years ago, after performing at a troop support rally in Washington, D.C., I walked a few blocks away to witness a so-called “peace” rally by the left. At least 1,200 peace protesters marched down the street chanting, “F— George Bush, F— George Bush!” Their signs spewed hatred for Bush, our troops, and America. And yet, not one sign or any footage of the “peace rally” was featured in the liberal mainstream media.

More recently, signs at Arizona Immigration Law protest rallies which threatened to “shoot more police” and other hate-filled anti-America messages are ignored by the liberal mainstream media.

As I stated, I know the caliber of the patriots who attend the tea parties. If anyone displayed a truly racist sign or made a racist comment, that person would be verbally attacked by the crowd.

This is why I know the black Democrat senators who said they were called the “n” word while walking through a crowd of tea partiers were lying. Not to mention the fact that if the incident really happened, the video would be viral on YouTube.

Here are a few of my personal tea party experiences. Keep in mind I have performed at well over two hundred tea parties across America.

Before singing my “American Tea Party Anthem,” I say, “Hello, my fellow patriots! I am not an African-American! I am Lloyd Marcus, AMERICAN!” The crowds go wild. Many tearfully thank me. They say hyphenating divides us. Would racists make such a statement?

I’ve seen numerous signs in the crowds which read “Lloyd Marcus for President.” Why didn’t CNN show any of those signs on TV during my interview?

At a tea party in Texas, a white cowboy approached me pushing a stroller with two black babies. The proud new dad said he and his wife, who was also white, asked God to give them babies who needed their love. They felt blessed to adopt two babies from Africa. Could this couple be classified as redneck racists protesting Obama because he is black?

An incident happened at a tea party in Traverse City, Michigan which ripped my heart out. A white woman in a wheelchair saw me approaching. She yelled, “Oh my gosh, it is Lloyd Marcus. I listen to your music. I read your columns. I love you. May I have a picture with you?”

The woman’s adult daughter confided to one of our staff members, “My mom is dying. She said all she wanted to do is meet Lloyd Marcus.” Wow! Now, do you understand why I am so outraged when the liberal mainstream media and ill-informed radio talk show callers attempt to portray the tea party folks as a bunch of racists?

On numerous occasions, I have been approached at tea parties by patriots who have emotionally thanked me for my participation in the movement. Because we share values and principles, they call me “brother.”

The “racist” accusation is an evil lie designed to control and shut up decent people who simply disagree with our president’s agenda. White racist skinheads do not care if you call them racist. They probably wear it as a badge of honor. But the decent white folks who attend the tea parties are devastated by such charges.

Partners with the liberal mainstream media spreading the lie about the tea parties are Hollywood and the liberal Democrats.

Here is a shameful misrepresentation of the tea party patriots by NAACP President Ben Jealous: “A group of White males wealthier than their peers called the Tea Party has risen up in the land. They say that they want to take the country back. And take it back they surely will. They will take it back to 1963 if we let them.”

Folks, ask yourself: Would white people who one year ago voted in record numbers for a black man to lead our country suddenly have a desire to “take America back to 1963”? Ridiculous. Jealous’s comments are hate-inspiring, manipulative, and evil.

As long as God gives me strength, I will keep shouting from the rooftops, “the Tea Party Movement is not racist!” God bless.

– Lloyd Marcus, Proud Unhyphenated American!