Hot Time

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Whew, it's hot. Too hot for the normal topics, so courtesy of Bob Byers, a list of ways you know you're in Texas during Summer:

[] The trees are whistling for the dogs to come on over

[] The birds have to use potholders to pull worms out of the ground

[] The best parking space is determined by shade instead of distance

[] Hot water now comes out of both taps

[] You learn that a sealt-belt buckle makes a pretty good branding iron

[] If the temperature drops below 95, you feel like you need to go put a sweater on

[] You discover it only takes 2 fingers to steer the steering wheel

[] You notice that asphalt has a liquid state.

Tax Talk

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Steve Forbes was on the radio again last week, pushing his ‘Flat Tax ' proposal, which had the benefit of sparking debate on reforming the IRS and Income Tax, but had the distinct weakness of tossing out an old half-considered plan in the guise of a complete product. What Mr. Forbes fails to realize now is precisely what he has failed to see before; the Flat Tax, at least he describes it, is a non-starter.

I certainly agree that the Internal Revenue Service needs a refit, and the entire Tax Code must be replaced with something that most people will agree is acceptable. Not fair, not perfect, not some impractical nirvana where nothing is ever bad for anyone, but at least an acceptable system where the average taxpayer has reason to believe he is being treated with a modicum of respect and a general attempt at objective balance has at least been made. But there are a number of ways to get there, and part of the matter begins with accepting that with hundreds of millions of taxpayers, there is a minimum level of complexity which must exist. That complexity has three legs on which any plan stands; organization, income, and audit.

Without going overboard into the somnorific qualities of tax codes, there are three basic contenders for tax reform; a Flat Tax, like the 17% rate proposed by Forces, a tax on Consumption, like the proposed National Sales Tax, and a reformed Progressive-Rate Income Tax. All have their advantages and disadvantages. And all are based on the need to develop a functional system which pays for the government without crating a general resentment of itself. This is why the most principal quality of a tax code is proper organization. You will need a means to collect revenue, a means to report it and file the necessary paperwork, and you need a means to enforce your code. The present organization suffers, because the system of collecting revenue is punitive towards the average wage-earner, while it allows corporations and the wealthy to believe they can play with the works. Not many do, but the impression is enough to cause a great deal of trouble. The Flat Tax and the Progressive-Rate Tax both suffer from this condition, while the Consumption Tax is better-suited to acquire the revenue smoothly and with an appearance of balance.

The second leg is Income. The United States 2006 Federal Budget is an estimated $2.6 Trillion , against an expected $2.2 Trillion in revenue, representing an outlay of 19.9% of the GDP. Obviously that’s a lot of pork, but for here it is important to note that it explains the effective average paid of $17,368 per taxpayer. And yes, that’s just for your federal taxes. Whatever system you use, it has to produce approximately $334 a week in federal tax revenue from each and every taxpayer. This is the problem for the Consumption Tax; you’d have to calculate accurately just how much to charge, and whether or not to exempt staples besides the existing basics. And the bottom line, is that unless and until the Federal Government gets really serious about taking a chainsaw to spending, there’s not really going to be such a thing as a serious tax cut; a large chunk of the voting public is not going to like whatever system is chosen, and the Congress will take a hit from the unhappy voters, but in a way that by definition cannot be predicted. Just in case you were wondering why so many Congressmen are happy to say the Tax Code needs reform, but most refuse to go into specifics about what plan they support.

Next, no matter what sort of plan is implemented, taxpayers will need audits. For one thing, there are people who will try to cheat no matter how fair a system is, and also, there will be many people who will not like the new system, whatever is chosen. Also, despite the complex nature of modern life, there are an amazing number of people able to miss basic facts of life, and doing your taxes properly is generally considered an aberration, and will be viewed with prejudice no matter how simple a method of reporting is designed. The notion of ‘doing your taxes on a postcard’, or not having to file at all, is as naïve as the initial claim that an Income Tax would never claim more than four or five percent of a taxpayer’s income. Obviously, any system which allows for deductions means paperwork and mistakes and cheating to some degree, but so does a system which bases revenue on the merchants turning in the money – a merchant can increase his profit margin by cheating on what he pays to the government, so the Consumption Tax would also need a close eye. And as for the Fair Tax? Without deductions, it would come down to people honestly reporting income. It would drive a new resentment of class, because the lower-middle class lives pretty much on paychecks, while the lowest classes and professional classes are able to work “off the books”; the poorest because their employer wants to avoid government checks on his conditions, the professional because he can arrange such terms. This cannot be anything but a problem in convincing the average taxpayer to accept radical change.

Also, there needs to be considered the most likely effect of each system. For example, I used to be a referee in high school sports, which was difficult, took long hours and was expensive. The only thing which made it workable, was that I could file Schedule C on the officiating fees I received, balancing the money I got against the costs of my equipment and my travel to clinics, scrimmages, and games. If a tax system which allowed deductions was to be replaced with something else, the sports official would either be penalized for his income without a chance to claim his necessary expenses, or else buying the materials needed to do the job would increase in cost through the Consumption tax. In either case, no official would be willing to work at the same rates as before; the change in tax conditions would require a few increase. Or, to put it another way, no matter what system is put into place, some of the workforce will suffer under it and demand compensation, while those who gain from the new system will demand to keep their gains as a right. Any new system will necessarily be inflationary and also damage consumer confidence in the short term. In many ways, reforming the Tax Code will be a bit like adopting several teenagers into your family; expensive, noisy, full of surprises and things that wreck your plans.

After all this, I am not saying that a Consumption Tax or a Flat Tax cannot work, simply that their proponents have not thought things through even half so far as they need, and until that happens, the only changes we may expect will be timid, incremental, and politically rewarding for their sponsor.

New York Propaganda Review

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Well, the New York Times is at it again. Courtesy of Real Clear Politics, the NYT has published an editorial attacking “Congressional China bashers”, for their decision not to hand over a strategic prize to Red China. The problem in doing an autopsy on anything from the Times, is deciding where to begin. The ubiquitous abandonment of facts is a given, but the way in which rational analysis is savaged and ripped from the piece by the various editors makes it difficult to identify the victim. Which provides the first point of reference, actually: I noticed as I began to look at the corpse, that the Times has not bothered to sign a name to their work. As an aside, it occurs to me that one reason blogs carry at least a minimal level of credibility, is that the blog author has his/her name attached to the work; none of this anonymous presentation of a piece which everyone can claim they had no connection with, should it bomb in public opinion. Weasel Journalism, that.

Next is the title: “No Way to Treat a Dragon”. My, what a choice. First off, dragons are mythical, which is to say fictitious, creatures – they are not real. Rather like China’s long-term capability of making and keeping business contracts. There is not, for example, a single privately-owned business of a billion dollars’ worth or greater which has done business with China to its profit for even one decade yet. That is a big red flag, if you’ll pardon the imagery, to any investor capable of comprehending a financial statement, which admittedly is a skill beyond the abilities of the NYT editors.

But just that title creates the air that the United States somehow owes the People’s Republic of China deference, in the manner of a humble man addressing the majesty of a celestial creature. Leaving aside other comparisons between the United States and China, to imply (as the Times does here) that the USA’s business climate and conditions are such that we are obliged to treat China as an equal, let alone a superior financial power, is to display an appalling ignorance of how finance, trade, and strategic resources operate.

Here’s how the Times summarized the attempt by China to take over Unocal: “Facing crippling delays imposed by Congress, Cnooc, a state-controlled Chinese oil company, has now withdrawn its $18.5 billion bid for Unocal, conceding the prize to Chevron”. That is, having found the foreign offer unsuitable, the United States Congress acted responsibly, and took actions which worked in favor of the American-held oil company remaining in the control and ownership of Americans. The technical terms for keeping a strategic interest out of foreign hands would include “wise”, “sound”, even “smart”. To the Times, however, it was “a loss for the United States' global interests, and it sets a dangerous precedent of dealing with China by demonizing the Chinese”. Sorry, but that doesn’t come close to being accurate. Serious and competent businessmen do not throw a tantrum, just because they do not get what they want, and denying a strategic resource to a nation likely to use it to America’s disadvantage does not 'demonize' China, anymore than anyone who voted for Bush last year was automatically questioning Kerry’s patriotism.

But it gets even sillier. The Times then goes on to opine that keeping strategic resources in American hands “risks turning China, an emerging Superpower, into an aggressive opponent rather than simply a global competitor.” Bull patties. First off, in no substantive way is China a “superpower”; they enjoy regional hegemony in certain areas, but for their size surprisingly small influence or real power. Second, until China allows for a true Free Market, there is no way that real businessmen can trust their statements, which amount to allowing the Chinese government to audit itself, and present the numbers with nothing remotely like due diligence. You wouldn’t buy a used car for five thousand without expecting an independent confirmation of its condition; only a complete moron would suggest a multi-billion dollar deal with a nation which refuses to allow independent audits.

Ever the self-convinced, the Times pushes on: “So the way has been paved for tit-for-tat retaliation. That could be a precursor to escalation, which, in turn, could be the catalyst for a serious economic clash. Congress has already spent the summer considering half a dozen proposals for across-the-board tariffs against Chinese imports. The Bush administration is also trying to forcibly stem the flow of Chinese textiles into the United States.” In English, that simply means that the United States, a true First-World nation, is being very careful to make sure it is not bound by unreasonable requirements from China, a Second-World nation. I’m sure the Chinese government would like more contracts on the level as they received from LORAL during the Clinton Administration, but Dubya is the kind of man to check the door before he opens it, much less let you date his family. Keeping an eye on companies and capacities the U.S. cannot afford to lose, is not “tit-for-tat retaliation”, it’s good sense. But then, good sense has been missing from the Times for quite a while.

The Law of Ko

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There's an old saying; What comes around, goes around. For some reason, it never seems to occur to people, that this applies to politics as well.

The Republicans sat on their hands during the 1920s, and so they lost power for a generation.

Eisenhower did nothing about the USSR, and so JFK came into the White House.

Richard Nixon abused his power, and so we had to endure 2 terms of Bubba.

But the other way works, too...

FDR changed the government to his liking, and now W gets his chance to set things right, especially in the courts.

Harry Truman fired a general for not putting politics ahead of the war, and wver since then Democrats have had trouble supporting troops, who for their part have had no trouble supporting Republicans.

Lyndon Johnson proved a single President could undermine a nation, so now Dubya is proving a single President can help new nations stand on their own.

We still have yet to see the rebound from 40 years of Socialist domination in Academia and Congress, but it will come, it will come.

Ko.

Barbarians Judging The Faithful

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On his radio show, host and author Hugh Hewitt (who has also applied to become the next President of the University of Colorado, along with an assortment of fancies and whimsical posts) often likes to match wits with various guests and opponents. Sometimes with respect, sometimes otherwise.

A little while back, Tom Tancredo opined that the United States should make known a simple policy, in the event a nuclear weapon is discharged in the territorial United States; if a nuke goes off anywhere in the U.S., the United States would destroy Mecca with a nuclear strike. Tancredo believes that such a warning/threat/malicious fantasy would act as a deterrent against a nuclear attack on the United States, while Hewitt believes it would only set off a new recruiting drive by the terrorists, as if they would lay low and play nice if we only said good things about their faith. I find serious problems with both contentions.

First, to Mr. Tancredo. Imagine an enemy of the United States, which wanted very badly for the U.S. to get caught up in a prolonged and bitter war, with no reasonable chance of a constructive result, which would allow this enemy to make significant gains in influence and power around the world, while the U.S. declined in money, power, and credibility. All that enemy would need to do in the Tancredo Scenario, is to arrange to set off a nuclear device inside the United States. When the U.S. destroyed Mecca in retaliation, the ensuing worldwide campaign against the United States by enraged Muslims would dwarf anything seen as a religious conflict before. The United States would be very unlikely to lose such a war because of its resources and caliber of military, but it would be even less likely to conclude that war in anything less than a generation, and the lasting hatred of America for such an act would do permanent damage to relations worldwide. In essence, if the United States used nuclear weapons on a religious center known to be free of any sort of strategic weapons, on anything less than complete and compelling forensic and empirical proof of direct involvement by leaders in that city, such an action would be to permanently abdicate any right to leadership in any moral or idealist sense. And who would be capable of such a provocation? China, India, even Pakistan or Iran under certain circumstances, are all capable and inclined to put just such a strategy to work if they knew the U.S. would strike Mecca instead of them. This alone completely discredits Tancredo’s suggestion, not that there is any situation where I would automatically advocate the use of nuclear weapons as the first and immediate course of action. Even the old Soviet Union understood that the cost of Nuclear Weapons outweighed their positive value, except in the case of Internal Security. Simply put, nations kept Nuclear Weapons as a deterrent against a foreign first strike, but this was on the assumption that such a strike would be massive and obvious in origin. The use of a nuclear device by a terrorist cell of uncertain origin would be another matter entirely, and the assumption that only one potential enemy must be at fault, and that a non-aggressor should be struck in retaliation, is simply not an acceptable course of action.

As for Mr. Hewitt, the problem of Muslim complicity in the Wahabist Jihad cannot be overlooked. The problem can be summed up by examining the numbers. Perhaps fifty to one hundred thousand Muslims are active participants in the militant Jihad of Fasict Islam, a small number indeed compared to the estimated 1.4 Billion Muslims in the world. Yet a far smaller portion of Muslims have spoken out against the Fascists, implying their consent and approval through their silence. This is especially true in the United States, where Muslims are well aware of the value and effectiveness of public statements, yet vicious attacks against Americans and Democracy go unchallenged by the so-called moderates. Muslims cannot claim to deserve respect for their faith, if they will not separate themselves from the monsters using the name of Allah as an excuse to murder innocent people. Islam must be considered part of the problem, unless and until it takes active steps to address its own cancer. We have to take the Mullahs and Imams to task, even here in the U.S., and make it clear they cannot evade their responsibility.

The Hillary Effect

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A few columnists have been trying to sound out the question of “Can Hillary Win?”, which to me is on the par with “Will Howard Dean Make Inappropriate Noises?”, or “Will Michael Moore Fib On Camera?”, but if you’re a Democrat, I guess you have to kick all the tires and look under the hood, even when you’re visiting the neighbors.

Anyway, take a look back at the 2000 and 2004 Presidential elections. Do either Al Gore or John Kerry look at all, like the kind of leadership America needs and wants? Yet each of them pulled in tens of millions of votes, and more than 47% of the Popular vote, no matter how you figure it. This means that the Democrats could (and to my mind already have) nominated an undead ghoul, and he would still collect enough votes to win under certain circumstances. Therefore, the Republicans not only have to be careful to stay unified in their support for the party nominee, the Democrats know that any kind of capable Democrat can be genuinely significant.

It may seem ironic, but the best opportunity to knock Hillary from the race will likely come in the Primaries. This happened, I believe, in 2000 and in 2004, as qualified and thoughtful Democrats failed to gain the respect and attention from the more rabid Democrats, and by the time the race was serious, only the clowns were left to run in it. This trait of self-annihilation explains why the Democrats cannot mount an effective policy campaign, nor present an effective candidate for the White House. They rally around the nominee, sure, but by that time the best-qualified talent has been chased away by character thugs and the votes of the most rabid activists. One does not employ reason with Jackals, especially when the Jackals run the political party. Republicans may worry about the possible effectiveness of a Hillary Administration, but leading Democrats resent the potential she carries even more, and so redouble their efforts to keep her locked out, at any cost.

It’s always dangerous to project an outcome so far in advance, but if I had to do so now, HilClin08 has honed her tools well, with lots of money, a lot of lawyers on board already, and a PR team to give the impression she can raise the dead (Nationalized Healthcare) and walk on water (raise taxes, but only on “them"). The primaries will be a bloodbath, and HilClin08 seems hungry for the fight. The downside to this, is that it will be very difficult afterwards to recreate the image of the thoughtful, gentle leader. If we are going to pick music to represent the candidates, at a time when most Republicans will try to be like Toby Keith, HilClin08 will sound like Ludacris. With similar imagery. The Democratic primaries will set her image, and America will be very likely to see HilClin08 in a new light by summer, one with power and conviction, but not likely to be quite the picture she planned.

I have made it no secret, that the best Republican candidate for 2008 is the present Secretary of State and former National Security Advisor, Condoleeza Rice. No stranger to tough opposition and cheap shots, or to racism and sexism used against her, Rice will be, I think, impossible for HilClin08 to defeat, in large part because of the damage done early by HC’s in-party rivals. If it happens that another Republican wins the nomination, it will come down to National Security credentials. Nothing else will be as important in the success of the next President as that issue with Rice in the race, though the election will be influenced, as always, by the Economy. If another Democrat than HC wins the nomination, then the general election will revert more or less to normal conditions of mixing security and the economy for the vote, because without HC or Rice in the mix, the two most formidable forces on each side will have been removed and the voters will know this. The nominees will have to energize the voters, and at this time I simply do not see a candidate with the requisite qualities to do so, save HC and Rice. Political parties have made incredibly stupid mistakes before, so there is no reason to believe they cannot fumble again here.

Hillary Clinton will, absolutely, run for President in 2008. She is not, to any standard, qualified for the job. But she has the money and organization to be the early poll leader and is in position to win the early primaries, key to any Democrat’s run. If the Democrats are smart, they will recognize this now, and polish her image collectively and prepare for the hard questions to come, but party history shows this is extremely unlikely. If the Republicans are smart, they will recognize the limitations of any of the narcissist Senators or other high-maintenance hairspray types out there, and get serious about preparing a candidate for the real work to be done. Sadly, again there is little reason to believe they will do the responsible thing. Fortunately, on the whole the Democrats play dirtier than the Republicans, and by the time the parties hold their conventions, the Left will have more damage control and cleanup to do than the Right.

Hillary Clinton: The Heat-Seeking Candidate. And that could make all the difference.

Dubya's Choice

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George W. Bush should decide who best is qualified to serve as his successor in the White House, and should make his opinion known to that candidate and in due course, provide his full and unwavering support for the campaign.

Democrats would be outraged by such a bold decision on the part of the President, even though it has a long and valid presidential precedent. They would claim it plays with the political process, when in fact it would not harm the process one bit, except making clear to Americans how to continue the programs and policies of George W. Bush. And that, in my opinion, would be a serious blow to any Democrat’s hope to grabbing the White House.

The first President, George Washington, made clear that he considered James Monroe something of his protege. It in no way subverted the electoral process, and in these days of popular votes, for Dubya to note whom he likes is no threat to the voice of the people. Also, throughout pesidential history, many Chief Executives have played their preferences or supported the Party’s choice. Dubya’s father enjoyed a healthy margin of victory in 1988, in large part because Ronald Reagan supported him, so that GHWB appeared to be Ronnie’s pick. Before that, in 1964 LBJ enjoyed a landslide victory, in large part because he appeared to JFK’s right-hand man. It’s worth noting that because Reagan did not make his personal preference known ahead of the campaign, he was more or less stuck with the party choice, whom he backed loyally. And because Kennedy never anticipated his demise, he did not make public the choice to kick LBJ off the boat, and so America was misled about what Jack Kennedy wanted.

Ordinarily, there would be small value to pressing to have a President name his personal choice to follow him, but the stakes are extremely high for 2008. The Global War on Terror will be continuing, and in a different aspect. Just as the majority of Americans in 2004 understood that no issue was as important as the War on Terror, they will be looking for the right leadership and direction in 2008 on that same issue. by 2007 it will be necessary, even critical, for Bush to name an individual who is best-qualified to meet that challenge. Personally, I do not doubt for an instant that the best candidate is not the one who knows the Economy best, or the Abortion or even the Court issues best, would ideally be a candidate known for handling pressure and complex issues, someone with direct experience in National Security, and someone who has worked in addressing our relations with other countries in the context of the threat from Global Terrorism. The sole candidate so qualified is Secretary of State (and former National Security Advisor) Condoleeza Rice. If President Bush has someone else in mind, it would be important to know his preference, but this is absolutely an instance where America should know the mind of George W. Bush.