In the wake of the BP oil spill in the Gulf of Mexico and now the hottest August on record, the calls come anew for some form of tax on emissions of so-called “greenhouse gases.” Whether a direct tax on carbon or a more convoluted system such as “cap and trade,” or simple government incentives for “green energy”, the politicians are conspiring to obtain more of our tax money and to exert more control over the economy.

In seeking to divert resources into favored technologies and sectors that otherwise would flow elsewhere in the economy, the politicians – Republican and Democrat alike (although they typically have different shopping lists) – claim to be “creating jobs,” promoting sustainability, and protecting the environment. Yet they continue to ignore a simple concept of economics: what is seen versus what is not seen. In diverting tax dollars and promoting investment in, say, wind energy, the direct effects are tangible: construction workers on the job building windmills and laying cables for transmission, for example. But if the windmills were really such a good investment, there would be no need for the government to incentivize their construction. If building windmills were an efficient use of resources, funding would come voluntarily from venture capitalists rather than forcibly from taxpayers.

Harder to see, however, is where the money the government uses to promote windmills would be otherwise spent. Perhaps the land would be used for agriculture, providing cheaper fruits and vegetables to consumers, who themselves might use their extra money to save for college, purchase health insurance, or invest in a small business. Perhaps the investors in the windmill farm would instead invest in a more efficient – if less favored by the government – power plant, using natural gas, providing consumers with cheaper electricity and leaving the utility company with more money to invest in other pursuits or perhaps to provide better salaries and benefits to its employees – or even on research and development for future innovations in power production and supply.

Another seemingly important question goes unanswered in the discussion on global warming and carbon taxation proposals: what is the cost/benefit ratio? Politicians and researchers consistently provide alarming predictions of the impacts of global warming, and cite these deleterious effects as evidence of the need to “do something”. Yet while the cost of a tax increase can be straightforward to estimate, and while it stands to reason that increasing costs on energy providers will lead directly to higher costs to consumers for goods and services, the benefits of various proposals is rarely defined. If cap and trade were to be enacted, how much would it lower global temperatures? (Assuming, of course, that the models are correct – a pretty major assumption, one would think.) What if we could spend half as much and achieve 75% of that reduction – what would the impact be on the climate? Even if one accepts at face value that the current warming trend is the result of greenhouse gas emissions, and that it is in our best interest as a society to reduce those emissions, it would still make sense to measure the amount of “bang for the buck” a specific proposal provides. With the various programs that have been proposed, I am yet to see one such analysis.

The economy is a vibrant, robust, dynamic entity. Unfortunately, politicians tend to treat it as a static object to be pushed, prodded, and manipulated at their direction – to be, as the common term goes in the media, “managed”. It is impossible, however, to manage something successfully and efficiently without taking into account unseen impacts and without examining relative benefit achieved for a particular cost. Nowhere does this seem more true than in the field of energy policy and global warming. Until the advocates of carbon taxes and green subsidies can provide concrete justification for their proposals, there would seem to be little reason to sacrifice money and freedom on their behalf.

        

In response to this (typical) column by Paul Krugman in the Chronicle , I sent the following letter:

re:  "Austerians" holding sway over US economic policy

In predictable form, Paul Krugman is again advocating forcefully in favor of more government spending in the name of "creating jobs" and criticizing those who dare suggest that government spending not only isn't the answer to our economic woes, but that massive deficits and burgeoning national debt could actually inhibit prosperity.  This time, however, he adds a new twist:  he brands those calling for fiscal discipline as "priests of some ancient cult" and likens spending restraint to "human sacrifice".

It's an interesting comparison, since Dr. Krugman himself seeks to venerate an approach — increases in government spending and regulation of the economy coupled with tax increases on job producers — that would seem to be based solely on faith.  Such an approach was attempted by Herbert Hoover and Franklin Roosevelt in response to the Great Depression, Japan in the 1990s, and, most recently, Greece.  That's not a track record of success, would seem to give little reason to expect different results from the same approach by President Obama.

So Dr. Krugman is putting his faith in policies that have not worked in the past, but he's convinced they would be successful now... and he's accusing others of acting like a cult?

Sincerely,
Dave Smith
Houston, TX

        

In response to this Paul Krugman column in the Chronicle , I sent the following letter:

re:  Lights are going out across America

In decrying cost-cutting measures by local governments, Paul Krugman seems either to lack understanding (doubtful) or willingly ignoring (more likely) a simple concept of the approach of many politicians to budget "cutting".  All too often, when politicians see shortfalls coming that require belt tightening, they don't tend to exhaust every effort to cut the non-essential costs.  Instead, they go straight for the things that should be cut last — like police, firefighters, and teachers. Why?  To drum up public support for raising taxes instead of cutting spending.

For example, look at the average salary for teachers in school districts that are cutting back on teachers and educational programs, then look at the average salary of administrators, and in particular, the salary and benefits of the superintendent.  Compare the total amount spent per pupil to the amount actually spent in the classroom.  But cutting back on the number of, or compensation for, administrators, cutting back on travel, and selling off unnecessary assets doesn't cause a public outrage. Cutting teachers, classes, and enrichment activities does, and thus helps facilitate requests for higher taxes and more revenue instead of belt-tightening.

Sincerely,
Dave Smith
Houston, TX  77002

        

When the health care "reform" bill — aka "ObamaCare" — was being debated in Congress, one of the (many) criticisms of it was the sheer size and complexity of the legislation.  The bill weighed in at over 2000 pages, and was filled with taxes, bureaucracies, mandates, prohibitions, regulations, and definitions to the point that no one — even its supporters — knew exactly what was in the bill.  House Speaker Nancy Pelosi's famous response was that "we have to pass the bill so that you can find out what is in it, away from the fog of the controversy".  Now that the "fog" is clearing, the hits just keep on coming — hits to the wallets of taxpayers, to the liberties of citizens, and to the bottom lines of employers.

The latest, courtesy of the Associated Press [emphases added]:

Tucked into the nation's massive new health care law is a requirement that could become a paperwork nightmare for nearly 40 million businesses.

The rule: They must file tax forms for every vendor that sells them more than $600 in goods.

Thegoal is to prevent vendors from underreporting their income to theInternal Revenue Service. The government must think vendors are omittinga lot, because the filing requirement is estimated to bring in $19billion over the next decade.

...Businesses already must file Form 1099s with the IRS when they purchasemore than $600 in services from a vendor in a year. The new provisionwould extend the requirement to the purchase of goods, starting in 2012.

The requirement would hit about 38 million businesses, charities andtax-exempt organizations, many of them small businesses already swampedby government paperwork, according to a recent report by the NationalTaxpayer Advocate. It would also create an avalanche of paperwork thatcould strain the IRS itself, wrote the advocate, an independent watchdogwithin the IRS.

Keeping in mind that the health care "reform" passed without a single Republican vote in either the House or Senate, the following sounds amazingly Orwellian:

For their part, Democrats blamed Republicans for Friday's failure to eliminate the provision.

"Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most," said Rep. Sander Levin, D-Mich., chairman of the tax-writing House Ways and Means Committee.

The reason?  Democrats proposed raising taxes on corporations and gifts to "pay for" removing the requirement.

The platform for the advocates of government-centric health insurance "reform" is this:  put higher taxes and more paperwork requirements on employers — the businesses that create jobs and economic growth.  It's little wonder that in spite of spending hundreds of billions on bailouts and "stimulus", even during the Administration-proclaimed "Summer of Recovery ", Treasury Secretary Timothy Geithner still expects the unemployment rate — already around 10% — to continue to remain high and possibly to rise.

Expect more onerous discoveries as the "fog of controversy" continues to clear away, and the "Summer of Recovery" becomes a November of discontent.

        

In response to this editorial in the Chronicle by Paul Krugman , I sent the following letter:

re:  "The 'new normal' for the economy"

Paul Krugman is rightly worried about the current unemployment rate(still hovering around 10% despite over $800 billion in "stimulus"spending) and the prospects for future job creation; however, he shouldn't be surprised.  Dr. Krugman is a vocal advocate for the establishment of European-style government in the United States:  higher taxes, more intrusive regulation, and costlier, more expansive social welfare programs.  He was a cheerleader for the recently-enacted "ObamaCare", financial regulation overhaul, and is a proponent of a "cap-and-trade" energy tax system.  The result of similar schemes in European countries like France, Germany, and the United Kingdom has been... unemployment rates hovering around 10% for several years.

It would appear that what Dr. Krugman fears could become the "new normal" in the US economy is simply "normal" in countries that implement the policies he advocates here in America.  While he may be brilliant in studying "the effects of economies of scale on trade patterns and on the location of economic activity" (for which he won his Nobel Prize), he appears to engage in cognitive dissonance when discussing political economics.

Sincerely,
Dave Smith
Houston, TX

        

In response to this editorial in the Chronicle , I sent the following letter:

re:  Approval deficit:  It's ironic that the more good bills Obama signs into law, the lower his job ratings sink

The Chronicle editorialists seem perplexed by public approval of President Obama following passage of the economic "stimulus" bill, health care "reform", and now the new financial regulation overhaul, asking the public is having "such negative reactions to measures aimed at improving Americans' lives" and exhorting the President as knowing "the right thing to do for America".

It would seem obvious that President Obama's ratings are sinking because people are disagreeing with his vision of what's right for America — one of a federal government even more expansive and expensive than that left to him by his predecessor.  Neither a President nor any other politician should be judged on what his measures are "aimed" at doing, they should be judged on what they actually do.  Even the editorial writers admit the facts:  despite President Obama having "made unemployment a priority" and enacting measures "aimed" at improving the economy, the unemployment rate continues to soar.  Results, not intentions, are what count.

I have no doubt that Mr. Obama truly believes that his dramatic expansion of government intrusion on the marketplace and forthcoming tax increases are steps in the right direction; however, history and experience show otherwise.  It isn't ironic that the public finds his performance lacking as he continues to pursue well-intentioned but ineffective policies — it's simple common sense.

Sincerely,
Dave Smith
Houston, TX

        

In response to this editorial in the USA Today , I sent the following letter:

re:  Our view on death and taxes: Loopy estate tax policy highlights D.C. dysfunction

Regarding the estate tax, the editorialists of the USA Today assert that "It makes sense to tax inherited wealth, derived simply by having the right parents, at a higher rate than money acquired through hard work or investment" and that it doesn't impose on the deceased person because "heirs are the ones still alive to feel its effects."

This attitude ignores the property rights of the person leaving behind an estate.  Whether it is a farm, business, property, or cold hard cash, a person spends his lifetime accumulating property — after paying taxes on profits, income, property, transactions, dividends, and interest.  To not allow a person to leave behind his property to the person of his choosing without government confiscation is nothing more than legalized plunder.  Property does not belong to the government, it belongs to individuals who should be allowed to leave it to whomever they want without government interference.

It is laughable for advocates of the estate tax to throw up the smokescreen of "lost revenue".  President Obama's proposed 2011 budget is $3.69 trillion; the amount brought in by the estate tax is only approximately $15 billion — less than half a percent, enough to run the federal government for about a day and a half.  Finding that money without raising taxes on anyone — rich or poor — should not be a problem.

The editorial board does get one thing right:  rich and poor alike  "are entitled to a rational, predictable tax system"; add to that one that is fair, reasonable, and just.  Ending the estate tax permanently would meet all of those criteria.

Sincerely,
Dave Smith
Houston, TX

        

In response to this article in the Chronicle , I sent the following letter:

re:  Houston police to motorists:  Give us space or pay a fine

As a regular commuter to and from work on I-10, I have witnessed several "tight" lanes when police have motorists pulled over for various offenses (see "Houston police to motorists:  Give us space or pay a fine, July 12).

Rather than pulling over even more motorists to write citations as per the "Move Over or Slow Down" law, perhaps more forethought should be put into when and where Houston police officers are pulling over drivers.  Often, speed traps are purposefully setup in areas where the officers are hard to see — around corners, over rises, etc.; however, this also makes it more difficult for other drivers to see the vehicles that have been pulled over until right on the scene, which in turn can make it extremely difficult to slow down or switch lanes in a safe manner.  Of course, pulling even more people over for not changing lanes or slowing down sufficiently would mean even more cars along the shoulder and in potential harm's way.

Choosing locations where speeding motorists can be pulled over more safely, for example, on service roads instead of the main highway, or on areas where the shoulder is wider or visibility greater, might result in fewer overall citations and, by extension, less revenue into city government coffers.  However, the stated purpose of the traffic patrol — enhancing public safety — would be met more completely.

Sincerely,
Dave Smith
Houston, TX

        

Seemingly hearkening back to the days of the Cold War, the Associated Press is reporting that the 10 people charged with spying for Russia against the United States are being deported in a "spy swap".  Under the terms of the swap, Russia would send back to the US several convicted American spies currently imprisoned in Russia, while the ten "sleeper spies" who were arrested in the US and have now pleaded guilty to conspiracy not to register as an agent of a foreign country in America.

From several accounts, it would appear that the United States is getting the better end of the deal:  the Russian-jailed American spies were caught passing secrets, while reports are that the American-charged spies provided no actual information to Russian authorities.  But President Obama has a great opportunity to negotiate further.

According to Amnesty International , there are currently 71 "prisoners of conscience" being jailed in Cuba.  Their crime?  Dissent against the Castro regime.  Why not make the "spy swap" really count, and get the Russians to pressure Cuba to release some or all of those dissenters?  It would cost the Russians nothing, but would be a major public relations coup for Russian President Medvedev and Prime Minister Putin, as well as for President Obama.

In brokering such a deal, President Obama could show that he's a tough negotiator, and that he takes human rights and right of political dissent seriously.  How better to deflect claims that his Department of Justice is soft on political intimidation that have arisen with the voter intimidation case involving the New Black Panthers than to show a steely spine in getting political dissenters freed from Communist Cuba?  Human rights advocates on both the left and the right — from Human Rights Watch and Amnesty International to National Review — would hail Obama's act.

What would the Russians get?  For one, it would deflect away from Putin's own heavy-handedness at home, as well as provide a symbol of moving away from the Cold War mentality of Cuba as a Communist arm of the Soviet Union.  It would also draw attention away from the embarrassing nature of the spy-ring bust.

President Obama should grab this opportunity to make the "spy swap" really count — to improve the lives of political dissidents, and use his supposed personal magnetism to accomplish something great for human rights and individual liberty.

        

According to the online journal Politico , South Carolina Democrats are going on the attack against the Republican gubernatorial nominee, state legislator Nikki Haley.  Her crime?  The perceived chink in her armor?  She's too popular.

According to the report, the South Carolina Democratic Party has developed a web site devoted to criticizing Ms. Haley for appearing on national media outlets like Fox News, MSNBC, and CNN.  It also "shows the recent Newsweek cover story featuring Haley, 'Woman on the Verge,' with the word 'woman' scratched out and replaced with 'celebrity.'"  Who knew that being a celebrity had such a gender-sensitive effect?  The ad also features Ms. Haley in a picture with the blogger who claimed to have had an affair with her (a claim Haley denies, and one for which no corroborating evidence has surfaced) and disgraced current SC Governor Mark Sanford, himself a known adulterer.  So much for subtlety.

During the 2008 presidential campaign, Republican nominee John McCain tried a similar approach, producing an ad comparing Barack Obama to vacuous celebrities like Paris Hilton.  The ad was greeting with near unanimous criticism, and provided no traction for McCain in the campaign.  Then-Senator Obama had reached celebrity status, but it wasn't because he was vacuous or born rich, it was based on his soaring rhetoric and electoral success.  The effect of McCain's ad only served to turn people off to McCain's substantive message — that a vote for Obama was a vote for a bigger, more intrusive, more expensive government.  It also lent a sense of "is that the best you can do?" to the campaign — if the worst thing that one could say about Obama is that a lot of people liked him, that doesn't exactly make a great case to vote for his opponent.

In a similar manner, Nikki Haley has hardly achieved celebrity status for superficial reasons.  She is young (only 5 days older than this author), energetic, articulate, and intelligent.  An accountant, Ms. Haley worked in her family business, and has been a regular recipient of awards and honors since joining the South Carolina legislature.  Like Louisiana Gov. Bobby Jindal, she is of Indian heritage, and is one of a noteworthy number of Republican women candidates in this year's election cycle.  In short, she's no Paris Hilton; she's now a celebrity because of her intellect, her uniqueness, and the buzz that she's created.  Consider the story:  an Indian-American woman being elected governor of South Carolina.

On the playground, a common retort to an insult that has no real substantive comeback usually involves hurling pejoratives at the offenders mother, or some circular nonsense like "I know you are but what am I?"  "Woman Celebrity on the Verge" seems about equal in intellectual timber. 

If this is the best South Carolina Democrats can do, State Rep. Governor Haley seems a pretty sure bet.