It’s Tuesday, December 6th, 2011….but before we begin, we offer this brief bit of commentary.

The Dims are the running the political equivalent of Dean Smith’s famous four-corner offense:

They’re up after three quarters, and now all they want to do is burn some time, preserve their lead and look to score only if presented with an easy lay-up.  Which is exactly why Republicans can’t compromise by playing a defense of passive bi-partisanship; the Dims will just run out the clock.

The GOP has to go after the ball….and go after it hard.  They need to change to pace of the game….and if necessary, the rules.  Otherwise, Howard Phillips will have been right when he observed, “The main difference between the Democrats and the Republicans is that the Democrats would take us over the cliff at 80 miles an hour; the Republicans would stay within the speed limit — but we’re still heading over the cliff.”

And that cliff is far closer than most realize; and getting closer every minute The Obamao’s in office.

Now, here’s The Gouge!

First up, with apologies to George Santayana, as this next item forwarded by George Lawlor confirms, those who refuse to remember the past are more than willing to condemn the rest of us to repeat it:

OECD Suggests Raising Taxes to Combat Inequality

 

Governments in a number of developed economies should consider introducing or raising taxes on wealth and property as part of a range of measures designed to halt and reverse rising income inequality, the Organization for Economic Cooperation and Development said Monday. (Ahhh!  The OECD; yet another useless international money pit fed by your tax dollars!)

In its first report on the subject since 2008, the OECD said the gap between rich and poor in most of its 34 members has continued to widen. The average income of the richest 10% of the population in developed economies is now nine times that of the poorest 10%, having been five times as large in the 1980s.

Since the mid-1990s, differences in income have risen rapidly even in countries such as Sweden and Germany that have traditionally had the least inequality. Only two OECD members — Mexico and Chile — have managed to buck the broader trend, but that was from the starting point of having the most unequal income distributions.

The OECD said that rising inequality was fueling dissatisfaction with social and economic structures in a number of developed economies. “The social compact is starting to unravel in many countries,” said Angel Gurria, the OECD’s secretary general. (We can only assume Senor Gurria means the somewhat discredited “Do as little as possible until you’re 50, then retire on more than you made while you weren’t really working” compact the Greeks dreamed up!) “Young people who see no future for themselves feel increasingly disenfranchised. They have now been joined by protesters who believe that they are bearing the brunt of a crisis for which they have no responsibility, while people on high incomes appear to have been spared.”

The OECD said a number of factors have contributed to the rise in inequality. Technological change has been disproportionately beneficial to the highly skilled, as have changes in labor market and other regulations designed to respond to the increase in competition during a period of rapid globalization. Reductions in tax rates for those on high incomes, and reductions in welfare benefits for those without work or in low paid employment has also played a part, the OECD said. (Yes, you’re paying for this tripe!)

“This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility,” Gurria said. “Without a comprehensive strategy for inclusive growth, inequality will continue to rise.” The OECD said that strategy should include better education systems and more training when people start work, while providing freely accessible education and health services would also help.

But the Paris-based think tank said governments should also review their tax systems to ensure that higher earners pay their “fair share” of taxes. “This can be achieved by raising marginal tax rates on the rich but also improving tax compliance eliminating tax deductions, and reassessing the role of taxes in all forms of property and wealth,” the OECD said.

….The OECD study only covers the period up to 2007, but its authors said that levels of inequality are unlikely to have changed during and immediately after the financial crisis. “My guess is there will not be a lot of change,” said Michael Forster, the study’s lead author. “There has been an enormous increase in unemployment, but at least temporarily some of the top incomes have fallen as income from capital has gone down.”

For whatever reason, we were intrigued by that last paragraph; why would a study published in 2011 arbitrarily omit figures after 2007, despite data for subsequent years being readily available?

Then we read the latest from the Cato Institute’s Alan Reynolds in WSJ, and it all made sense:

Tax Rates, Inequality and the 1%

 

Those who obsess over income shares should welcome stock market crashes and deep recessions because such calamities invariably reduce ‘inequality.’

A recent report from the Congressional Budget Office (CB0) says, “The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007.” (There’s that arbitrary 2007 end-date again.)

This news caused quite a stir, feeding the left’s obsession with inequality. Washington Post columnist Eugene Robinson, for example, said this “jaw-dropping report” shows “why the Occupy Wall Street protests have struck such a nerve.” The New York Times opined that the study is “likely to have a major impact on the debate in Congress over the fairness of federal tax and spending policies.”

But here’s a question: Why did the report stop at 2007? The CBO didn’t say, although its report briefly acknowledged—in a footnote—that “high income taxpayers had especially large declines in adjusted gross income between 2007 and 2009.”

No kidding. Once these two years are brought into the picture, the share of after-tax income of the top 1% by my estimate fell to 11.3% in 2009 from the 17.3% that the CBO reported for 2007.

The larger truth is that recessions always destroy wealth and small business incomes at the top. Perhaps those who obsess over income shares should welcome stock market crashes and deep recessions because such calamities invariably reduce “inequality.” Of course, the same recessions also increase poverty and unemployment.

The latest cyclical destruction of top incomes has been unusually deep and persistent, because fully 43.7% of top earners’ incomes in 2007 were from capital gains, dividends and interest, with another 17.1% from small business. Since 2007, capital gains on stocks and real estate have often turned to losses, dividends on financial stocks were slashed, interest income nearly disappeared, and many small businesses remain unprofitable.

The incomes that top earners report to the IRS have long been tightly linked to the ups and downs of capital gains. Changes in the tax law in 1986, for example, evoked a remarkable response—with capital gains accounting for an extraordinary 47.7% of top earners’ reported income as investors rushed to cash in gains before the capital gains tax rose to 28%.

That was obviously temporary, but the subsequent slowdown in realized gains lasted a decade. Taxable gains accounted for only 16.7% of the top earners’ income between 1987 and 1996. And the paucity of realized capital gains kept the top earners’ share of income flat.

When the top capital gains tax fell to 20% in 1997 and remained there until 2002, realized capital gains rose to 25.4% of the top earners’ income, and it explained much of the surge of their income share to 15.5% in 2000. Stock gains were more modest from 2003 to 2007, yet the tax rate on profitable trades was down to 15%, so realized capital gains rose to 26.7% of income reported by the top 1%.

True enough, capital gains are not the whole story, and the CBO’s report, “Trends in the Distribution of Household Income Between 1979 and 2007,” notes that “business income was the fastest growing source of income for the top 1 percent.” But that too was a behavioral response to lower tax rates.

In 1988, business income jumped to 16.5% of the reported income of the top 1%, from 8.2% in 1986. Why? As the CBO explains, “many C corporations . . . were converted to S corporations which pass corporate income through to their shareholders where it is taxed under the individual income tax.”

The CBO estimates top incomes from individual tax returns. So it looked like a big spurt in top income in 1988 when thousands of businesses switched to reporting income on individual rather than corporate returns as the top individual tax rate dropped to 28% from 50%.

In reality, it was just a switching between tax forms to take advantage of the lower individual tax rate. Such tax-induced switching from corporate to individual tax forms in 1986-1988 makes it illegitimate to compare top income shares between 1979 and 2007.

After the tax rate on dividends fell to 15% in 2003 from 35%, the share of income reported by top earners from dividends doubled to 8.4% in 2007 from 4.2% in 2002, according to similar tax-based estimates from economists Thomas Piketty and Emmanuel Saez. Top earners held more dividend-paying stocks in taxable accounts rather than in tax-exempt bonds, or they kept dividends in tax-free retirement accounts.

In short, what the Congressional Budget Office presents as increased inequality from 2003 to 2007 was actually evidence that the top 1% of earners report more taxable income when tax rates are reduced on dividends, capital gains and businesses filing under the individual tax code.

If Congress raises top individual tax rates much above the corporate rate, many billions in business income would rapidly vanish from the individual tax returns the CBO uses to measure the income of the top 1%. Small businesses and professionals would revert to reporting most income on corporate tax returns as they did in 1979.

If Congress raises top tax rates on capital gains and dividends, the highest income earners would report less income from capital gains and dividends and hold more tax-exempt bonds. Such tax policies would reduce the share of reported income of the top earners almost as effectively as the recession the policies would likely provoke. The top 1% would then pay a much smaller portion of federal income taxes, just as they did in 1979. And the other 99% would pay more. As the CBO found, “the federal income tax was notably more progressive in 2007 than in 1979.”

And if they raise taxes high enough, the producers will simply stop producing!

Here’s the juice, courtesy of two perfectly pertinent quotes:

“During recent centuries, many aspiring rulers have curried the common man’s favor by promising them other men’s property.”  Peter Kershaw

 

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on the majority always votes for the candidates promising the most benefits from the Public Treasury with a result that a democracy always collapses over loose fiscal policy always followed by dictatorship. The average age of the world’s greatest civilizations has been 200 years.”  Sir Alexander Fraser Tyler

Put another way, Capitalism, while imperfect, has been the greatest engine of productivity, wealth-creation and societal improvement the world has ever known.  Socialism has failed every time and everywhere it’s been tried.

Any questions?!?

Next up, courtesy of the WSJ, blogger and law professor Glenn Reynolds writing in the December 3rd Washington Examiner:

The reason why a bachelor’s degree on its own no longer conveys intelligence and capability is that the government decided that as many people as possible should have bachelor’s degrees.

There’s something of a pattern here. The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people.

But home ownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits—self-discipline, the ability to defer gratification, etc.— that let you enter, and stay in, the middle class.

Subsidizing the markers doesn’t produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers.

But as this next item details, Team Tick-Tock truly embodies Einstein’s definition of insanity:

Navy, Agriculture Departments to Purchase Biofuels For Fleets

 

Turning from those who need to speak up to someone we hope to never hear from again, Michell Malkin has an interesting aspect of the Donald’s recently-proposed reality show:

Trump-ed up: You won’t believe what Eason Jordan’s up to now

 

Here’s a blast from the past. Remember Eason Jordan? Every conservative political blogger worth his/her salt knows and remembers who he is.

Former CNN head Eason Jordan is the disgraced journalist who admitted in a 2003 New York Times op-ed piece titled “The News We Kept to Ourselves”that he deliberately and intentionally whitewashed Saddam Hussein’s atrocities and regurgitated Hussein propaganda for a decade in exchange for access. Let me underscore that: In 2003, after the U.S.-led Coalition invasion of Iraq and the fall of Saddam Hussein, Jordan confessed that CNN had deliberately reported Baathist propaganda during the Saddam era because it was more urgent to keep their Baghdad bureaus than to tell the truth about that brutal regime.

Former CNN head Eason Jordan is the disgraced journalist who suggested our U.S. troops were wantonly targeting journalists for murderat the 2005 World Economic Forum in Davos, Switzerland. Here’s a refresher on the scandal and a reminder that, as reported on this blog, none other than Democrat Rep. Barney Frank, liberal political commentator David Gergen, and former Democrat Sen. Chris Dodd all confirmed/condemned the slander. He resigned from CNN in February 2005 as a result of the blowback.

Former CNN head Eason Jordan is the disgraced journalist who showered gifts on North Korean dictator Kim Jong-Il and heaped praise on Fidel Castro for inspiring the creation of CNN International.

….So, what’s Eason Jordan up to now? Well, my jaw just about dropped when I read this announcement late Sunday night from conservative Newsmax trumpeting Eason Jordan’s starring role in the upcoming Donald Trump GOP debate:

“Former CNN Chief Heads Up Newsmax ION Debate”

No, it’s not a parody [bolded for emphasis]:

A prestigious team of some of the top producers in network and cable television news — including the former head of CNN’s news division — has been assembled to produce The Newsmax ION Television 2012 Presidential Debate to be moderated by businessman Donald J. Trump.

Newsmax Media and ION Television announced the production team, which collectively has more than a century of experience in managing major network coverage of U.S. presidential debates and elections, on Sunday.

“ION, Newsmax and Mr. Trump are committed to host a serious presidential forum which will include some of the most reputable journalists and media people in the nation,” Brandon Burgess, CEO and Chairman of ION Television, said.

The ION Television network reaches more than 99 million U.S. homes. During prime time, ION typically has more viewers than any major cable news channel in the key demographic 25-54 group.

The debate will be also streamed at Newsmax.com. Newsmax is the nation’s leading conservative online media publisher reaching more than 10 million readers monthly.

“With Donald Trump and the top-notch media and production team led by Eason Jordan we have organized, we expect the The Newsmax ION 2012 Presidential Debate will have the largest audience of any Republican primary debate to date,” Newsmax CEO Christopher Ruddy said.

On Sunday, Newsmax and ION Television announced several key staff for their debate:

Eason Jordan, Executive Producer — Jordan worked for 23 years with CNN, where he served as chief news executive and president of news gathering and international networks. Jordan’s journalistic honors include Emmy Awards, Peabody Awards Edward R. Murrow Awards, Headliner Awards, ACE Awards, the Robert F. Kennedy Journalism Award, the Vanguard Award, and the Livingston Award. He is the founder and CEO of Poll Position, a news, polling, and social media company. He is also a member of the Council of Foreign Relations.

And a serial appeaser of dictators. And slanderer of the troops. “Prestigious?” “Reputable?” “Top-notch?” Saddam, Fidel, and Kim Jong Il approve!

I asked Newsmax tonight if they googled Jordan before hiring him for the debate spectacle and if they were aware of his background. No response yet. Maybe, just maybe, someone will ask Trump himself. He’ll be ubiquitous on the airwaves and in the national media this week as his new book launches today. It’s called… “Time to Get Tough.” I’ll say.

We doubt this scam will happen, as to date, only Newt Gingrich, in another display of incredibly poor judgement, saw fit to RSVP he’s in; but in the unfortunate event it does, we will most decidedly NOT be watching.

And since we’re on the subject of the Most Interesting Man in the World (just ask him!), some observations on Newt from Michael Barone:

Newt Keeps Pitching the America of His Imagination

 

Here are a couple of things to keep in mind about Newt Gingrich, as he leads in polls for the Republican presidential nomination nationally and in Iowa and South Carolina, and may be threatening Mitt Romney’s lead in New Hampshire.

One is that he is an autodidact. A second is that he has incredible perseverance.

Autodidact is a fancy word for someone who is self-taught. Gingrich calls himself a historian and says his worldview was shaped at age 15 by viewing the bones at the ossuary at Verdun, site of the World War I battle. And he did earn a Ph.D. in history in 1971, with a dissertation on “Belgian Education Policy in the Congo: 1945-1960.”

But he hasn’t pursued that or any other subject with scholarly rigor. Instead, in his voluminous writings and unusually lengthy speeches, you will find references to the futurist Alvin Tofler, to Olympic beach volleyball, to zoos and space exploration. You’ll find management book lingo, salesmanship tips, offbeat and sometimes revealing facts and anecdotes.

Gingrich started running for Congress as a teacher at West Georgia College, in a traditionally Democratic area where he had no local connections, in 1973. That was when Richard Nixon was president. Nelson Rockefeller was governor of New York, and Ronald Reagan governor of California. Both had supported tax increases and signed bills legalizing abortion. Paul Ryan, Marco Rubio and Bobby Jindal were not yet in kindergarten.

The sophisticates of the time said that Vietnam proved that America was overextended and impotent, Watergate proved that it was morally unworthy and corrupt, and stagflation proved that its days of economic growth were over. Gingrich disagreed on all three counts.

With autodidact intensity, he argued then and has argued ever since, that America is not in decline but at the brink of technological and economic breakthroughs; it is not a waning power in the world, but one that can inspire revolutionary transformation; the wave of the future is not the liberal welfare state but (in a 1983 phrase that never quite caught on) the conservative opportunity society.

Politically he persevered through adversity. He ran a strong race against a longtime Democratic incumbent but lost in the Watergate year of 1974. He set out to run again, but after Jimmy Carter clinched the Democratic nomination he knew he could not win in rural Georgia. It was only when he ran a third time in 1978 that he finally won.

I remember Gingrich predicting that in the 1984 cycle Republicans would win a majority in the House of Representatives. Every political insider thought that was ridiculous, and it illustrates Gingrich’s tendency toward overoptimism. But while he was wrong on the timing, he was right on the reasons why the Republicans could and would end the Democrats’ decades of control. He saw that the South was moving Republican as elderly incumbents retired and that smart young Democrats elected in Vietnam and Watergate years would be replaced by Republicans. That finally happened in 1994, and Gingrich became speaker of the House.

His record there was mixed. As I wrote in the 1998 Almanac of American Politics, “He had more success as an inside-the-House legislative leader than as an outside-the-House shaper of public opinion.” Congress passed welfare reform and held spending level for a year, which led to a balanced budget. Gingrich and Bill Clinton were negotiating Medicare and Social Security reforms until distracted in different ways by impeachment.

But many Republicans felt that Gingrich was continually out-negotiated by Clinton, who as Gingrich told me at the time, “never stops learning.” Other Republican leaders nearly ousted him in an unprecedented coup in 1997, and few colleagues are supporting him for president now.

As for the public, Gingrich became widely unpopular due, as I wrote then, to “a cocksureness, a professorial abstractness about policy, a more than occasional petulance and high self regard.” (Which, in the wake of The Obamao, will NOT serve to ingratiate Newt with either Independents or Conservatives.

He also showed a tin ear for proprieties, divorcing two wives to marry other women and signing a seven-figure book contract as speaker (later dropped), just as he signed up for seven figures from Freddie Mac after leaving office.

Asked a year ago whether he was running, Gingrich said, “Why wouldn’t I?” When his campaign staff resigned en masse, he persevered. Now we’ll see if voters entrust this autodidact with a position for which few of his colleagues think he is fitted.

You can put us down as a “nay”!

Meanwhile, though only the Shadow knows what evil lurks in the hearts of men, we’re willing to bet any number of people know what other skeletons are hiding in Newt’s closet:

Pelosi: I’ll reveal information on Gingrich ‘when the time is right’

 

House Minority Leader Nancy Pelosi (D-Calif.) is holding back some information on Republican Newt Gingrich that could detract from his presidential campaign, according to a report published Monday.

“One of these days we’ll have a conversation about Newt Gingrich,” Pelosi toldTalking Points Memo. “When the time is right. … I know a lot about him. I served on the investigative committee that investigated him, four of us locked in a room in an undisclosed location for a year. A thousand pages of his stuff.”

Gingrich, who served as Speaker of the House, worked with Pelosi in Congress from 1987 to 1999. Pelosi also served on the ethics committee that investigated Gingrich for tax cheating and campaign finance violations in the late ’90s.

Gingrich reacted to Pelosi’s comments by thanking her for an “early Christmas gift.” He also said Pelosi would be violating House rules and abusing the ethics process if she disclosed anything from the ethics investigation. “That is a fundamental violation of the rules of the House,” Gingrich said in New York following a meeting with Donald Trump. “She’s now prepared to totally abuse the ethics process.”

Releasing the material would show the “tainted ethics process the House was engaged in,” Gingrich said.

Two thoughts occur to us.  First, Earth to Newt: with an approval rating lower than Hitler’s, what’s Nancy got to lose?  Besides, do you really think voters have any respect left for Congress to lose?!?  Second, given the number of errors in recollection and retracted positions Newt’s made in just the last few months, can there be any doubt a political machine as ruthless and thorough as Team Tick-Tock doesn’t have more on Newt than he’s admitted to date?

Again, we’re no big fan of Mitt, but at least having been through the ringer once before, the odds of an October surprise with Romney at the top of the ticket are significantly less than with Mr. “Always Looking for a Better Mrs. Gingrich”.

Hat tip to G. Trevor, Lord High King of All Vietors for the Pelosi snippet.

Then there’s this just in from Robert Lenzner in Forbes.com, courtesy of Bill Meisen:

Obama’s White House Advisers Killed The Deficit Reduction Panel’s Plan

 

Most of us likely assumed this to be so, but it’s rather revealing Bowles saw fit to publicly confirm what was heretofore only rumor: none of this is about us….it’s all about….

….them!  How’z that cake taste, yo?!?

On the Lighter Side….

Hat tip to John Cotton for the Occupy Pavement photo.

Finally, we’ll call it a wrap with the “Out Of Airspeed And Ideas” segment, courtesy of Speed Mach and the not-so-rapid U.S. Postal Service:

Postal Service Confirms Cuts That Will Slow Mail Down

 

Yeah….like there weren’t any changes or cuts available that would have sped up the mail.  The USPS: government bureaucracy at its best!

Magoo