It’s Wednesday, January 11th, 2012….and here’s The Gouge!

Leading off the mid-week edition, the American Enterprise Institute‘s Kevin Hassett describes the Dimocrats’….

Stealth redistribution

The government’s response to the Great Recession has been characterized as a bailout for the rich and a cold shoulder for the poor. This perception has been magnified by the media coverage of the Occupy Wall Street movement. The story would present future historians with a puzzle if it were true. How could the most liberal president in American history, accompanied for his first two years by an equally liberal Congress, be so uncharitable?

The answer is, they weren’t. Since 2007, and apparently well below the radar, the safety net has expanded radically. The benefits available to those who do not work are sharply higher, and likely explain a good deal of the high unemployment we still see today. Staying home and collecting a government check has never been so attractive.

The stark numbers have been highlighted in recent research by University of Chicago economist Casey B. Mulligan. It is very easy to believe that overall spending on social programs has increased following the recession, since the program’s automatic stabilizers are always triggered during an economic slump. Mulligan points out that spending increased not only due to the recession, but because the eligibility requirements for most programs were expanded, and their benefits increased. Spending per person has gone up, not just total spending.

The nearby chart taken from the study provides a concise glimpse of his main results. It represents the average amount of assistance (inflation-adjusted) that an unemployed or underemployed individual under the age of 65 received from the beginning of 2006 to the end of 2010. The benefit of not working increased sharply over that time, from about $10,000 to $15,000 per year-a 50 percent increase. And remember that the chart does not show the overall increase in spending. Clearly those in need have not been abandoned.What has constituted the increase? The average monthly unemployment-insurance payment received was $834 at the beginning of 2006, while by the end of 2010 it was $2,667. Home retention actions (mortgage modifications) were almost nonexistent in 2006 but increased sharply due to pressure from Uncle Sam. Consumer loan charge-offs (commercial banks’ declaring that a debt-usually credit-card debt-is unlikely to be collected) increased significantly over the four-year period, for the same reason. Other transfers, such as food assistance, increased as well.

Yes, unemployment is high, but is it any wonder?

After all, why learn to fish when someone’s willing to….

….serve you lobster….particularly when someone else pays for it!

In a related item courtesy of G. Trevor, Lord High King of All Vietors, Tim Nerentz opines on what was, at least prior to the Walker Awakening….

Downward Wisconsin

We used to make things here in Wisconsin. We made machine tools in Milwaukee, cars in Kenosha and ships in Sheboygan.  We mined iron in the north and lead in the south.  We made cheese, we made brats, we made beer, and we even made napkins to clean up what we spilled.  And we made money.

The original war on poverty was a private, mercenary affair.  Men like Harnishfeger, Allis, Chalmers, Kohler, Kearney, Trecker, Modine, Case, Mead, Falk, Allen, Bradley, Cutler, Hammer, Bucyrus, Harley, Davidson, Pabst, and Miller lifted millions up from subsistence living to middle class comfort.  They did it – not “Fighting Bob” La Follette or any of the politicians who came along later to take the credit and rake a piece of the action through the steepest progressive scheme in the nation.   

Those old geezers with the beards cured poverty by putting people to work. Generations of Wisconsinites learned trades and mastered them in the factories, breweries, mills, foundries, and shipyards those capitalists built with their hands.  Thousands of small businesses supplied these industrial giants, and tens of thousands of proprietors and professionals provided all of the services that all those other families needed to live well.  The wealth got spread around plenty.    

The profits generated by our great industrialists funded charities, the arts, education, libraries, museums, parks, and community development associations.  Taxes on their profits, property, and payrolls built our schools, roads, bridges, and the safety net that Wisconsin’s progressives are still taking credit for, as if the money came from their council meetings.  The offering plates in churches of every denomination were filled with money left over from company paychecks that were made possible because a few bold young men risked it all and got rich.  Don’t thank God for them; thank them that you learned about God.

Their wealth pales in comparison to the wealth they created for millions and millions of other Wisconsin families.  Those with an appreciation for the immeasurable contributions of Wisconsin’s industrial icons of 1910 will find the list of Wisconsin’s top ten employers of 2010 appalling:  

Walmart, University of Wisconsin–Madison, Milwaukee Public Schools, U.S. Postal Service, Wisconsin Department of Corrections, Menards, Marshfield Clinic, Aurora Health Care, City of Milwaukee, and Wisconsin Department of Veterans Affairs.

This is what a century of progressivism will get you.  Wisconsin is the birthplace of the progressive movement, the home of the Socialist Party, the first state to allow public sector unions, the cradle of environmental activism, a liberal fortress walled off against common sense for decades.  Their motto, Forward Wisconsin, should be changed to Downward Wisconsin if truth in advertising applies to slogans.

There is no shortage of activists, advocates, and agitators in this State.  If government were the answer to our problems, we would have no problems.  The very same people – or people just like them – who picketed, struck, sued, taxed, and regulated our great companies out of this state are now complaining about the unemployment and poverty that they have brought upon themselves.  They got rid of those old rich white guys and replaced them with…nothing.

Wisconsin ranks 47th in the rate of new business formation.  We are one of the worst states for native college graduate exodus; our brightest and most ambitions graduates leave to seek their fortunes elsewhere.  Why shouldn’t they?  Our tax rates are among the worst in the nation and our business climate, perpetually in the bottom of the rankings, has only recently moved up thanks to a Governor who now faces a recall for his trouble.

In 1970, the new environmental movement joined unions and socialists in a coordinated effort to demonize industry.  When I was in college, the ranting against “polluting profiteers” was like white noise – always there.  They won, and here is the price of their victory: in 1970, manufacturers paid 18.2% of Wisconsin’s property taxes – the major source of school funding – and in 2010 those who remained paid 3.7%. 

So who is it that caused the funding crisis in our schools and the skyrocketing tax rates on our homes?  It is the same ignoramuses who are sitting on bridges, pooping on things, and passing around recall petitions.  The unemployed 26-year old in the hemp hat looking for sympathy might look instead for some inspiration from Jerome I. Case, who started his agricultural equipment business at the age of 21, miraculously without an iPhone 4s.

Mr. Case got rich by asking people what they want and making it for them.  He did not get rich by telling people what he wanted and waiting for them to do something about it.  If you want to declare war on your own poverty, memorize that.

In the last decade alone we have lost 150,000 manufacturing jobs in this state – over 25%.  And it’s not just jobs that have been lost; the companies that provided them are gone.  Those jobs are not coming back, no matter how long we extend unemployment benefits pretending they are.  The 450,000 people who still work in manufacturing in Wisconsin are damn good it at, but we are now outnumbered by people who work for government.  A significant number of the latter are tasked with taxing, regulating, and generally harassing the former.  While it is true that many manufacturers chased low-wage opportunities on their own, many more were driven out of the state by the increasing cost of doing business here.

It is a myth that unions improve wages.  If you consider only the 1,000 jobs in a closed shop, you might think an average union wage is, say, $30/hr.  But if you add in the zero wages of the 10,000 jobs lost in companies chased out by union harassment, the average of all 11,000 union workers is reduced to $2.72/hr.  Do you know the average wage of union iron miners in this state?  Zero.  And the left is fighting hard to keep it that way in Northern Wisconsin – looking out for the working man, they call it.

It is also a myth that free trade causes job losses.  Over the past three years, U.S. manufacturers sold $70 billion more goods to our Free Trade Agreement (FTA) partners than we bought from them.  Conversely, we suffered a $1.3 trillion trade deficit with countries where no FTA’s exist.  I doubt that kids are going to learn that in our government-union monopoly schools – it doesn’t fit the narrative.

No one wants to see another person suffer in poverty, and liberty is the best economic policy there is.  The great industrialists of Wisconsin took less than a generation to lift millions up to a life of dignity, pride, prosperity and good will.  When enterprise was free and government was limited, we all prospered. 

Those great men of industry were not anointed at birth to be rich; they rose from nothing to great wealth through their own hard work and the value they added to their employees and their customers through choice, competition, and voluntary exchange.  That is the only sure path to real prosperity; the debt economy is a temporary illusion.

Look again at the list of our famous industrialists and the list of our current employers.  Who would you wish your child or grandchild to grow up to be?  Who do you think will do more good on this earth – Jerome I Case and his tractors, or the Coordinator of Supplier Diversity at MPS. 

If you chose MPS, then apply now – that job is open, and it pays up to $72,000 plus benefits and early retirement.  Go in peace and save the world.  Me, I’m going with the tractor guy.

But as Thomas Sowell observes, like any real-world, profit-making endeavor, no one’s interested in last year’s performance:

Kodak and the Post Office

The news that Eastman Kodak is preparing to file for bankruptcy, after being the leading photographic company in the world for more than a hundred years, truly marks the end of an era. The skills required to use the cameras and chemicals required by the photography of the mid-19th century were far beyond those of most people — until a man named George Eastman created a company called Kodak, which made cameras that ordinary people could use.

It was Kodak’s humble and affordable box Brownie that put photography on the map for millions of people, who just wanted to take simple pictures of family, friends and places they visited.

As the complicated photographic plates used by 19th century photographers gave way to film, Kodak became the leading film maker of the 20th century. But sales of film declined for the first time in 2000, and sales of digital cameras surpassed the sales of film cameras just 3 years later. Just as Kodak’s technology made older modes of photography obsolete more than a hundred years ago, so the new technology of the digital age has left Kodak behind.

Great names of companies in other fields have likewise vanished as new technology brought new rivals to the forefront, or else made the whole product obsolete, as happened with typewriters, slide rules and other products now remembered only by an older generation. That is what happens in a market economy and we all benefit from it as consumers.

Unfortunately, that is not what happens in government. The post office is a classic example. Post offices were once even more important than Eastman Kodak, and for a longer time, as the mail provided vital communications linking people and organizations across thousands of miles. But, today, technology has moved even further beyond the post office than it has beyond Eastman Kodak.

The difference is that, although the Postal Service is technically a private business, its income doesn’t cover all its costs — and taxpayers are on the hook for the difference.

Moreover, the government makes it illegal for anyone else to put anything into your mail box, even though you bought the mail box and it is your property. That means you don’t have the option to have some other private company deliver your mail. In India, when private companies like Federal Express and United Parcel Service were allowed to deliver mail, the amount of mail delivered by that country’s post offices was cut in half between 2000 and 2005.

What should be the fate of the Postal Service in the United States? In a sense, no one really knows. Nor is there any reason why they should. The real answer to the question whether the Postal Service is worth what it is costing can be found only when various indirect government subsidies stop and when the government stops forbidding others from carrying the mail — if that ever happens.

If FedEx, UPS or someone else can carry the mail cheaper or better than the Postal Service, there is no reason why the public should not get the benefit of having their mail delivered cheaper or better.

Politics is the reason why no such test is likely any time soon. Various special interests currently benefit from the way the post office is run — and especially by the way government backing keeps it afloat. Junk mail, for example, does not have to cover all its costs. You might be happy to get less junk mail if it had to pay a postage rate that covered the full cost of delivering it. But people who send junk mail would lobby Congress to stay on the gravy train.

So would people who live in remote areas, where the cost of delivering all mail is higher. But if people who decide to live in remote areas don’t pay the costs that their decision imposes on the Postal Service, electric utilities and others, why should other people be forced to pay those costs?

A society in which some people make decisions, and other people are forced to pay the costs created by those decisions, is a society where a lot of decisions can be made despite their costs being greater than their benefits.

That is why the post office should have to face competition in the market, instead of lobbying politicians for government help. We cannot preserve everything that was once useful.

Like the U.S. Postal Service, Kodak, which not only pioneered practical personal photography but invented digital photography as well back in 1975, is a victim of mismanagement and bloated pensions.  But one is left wondering whether the U.S. Postal Service, absent the bureaucratic laziness inspired by it’s government-protected monopoly and do-less-for-more union workforce, could not have remained competitive today.

And since we’re on the subject of a day late and a dollar short (though, in the USPS’s case, it’s more like 20 years and about $20B short!), Wisconsin’s Ron Johnson advocates a plan we, along with many others, suggested some 15 months and several trillion dollars ago:

A 2012 Republican Strategy for Congress

A series of votes can clarify the differences between the two parties on energy, taxes, spending and regulation.

“….America’s Choice would clearly present two different visions of the country’s future—one represented by the Republican Party and the other represented by the Democratic Party and its leader, President Obama. Once Congress returns from recess later this month, the Republican majority in the House could focus on one major area of domestic policy at a time. For example, February could be used to debate, craft and pass an energy utilization policy.

When the House debates and passes an agenda item, Republican senators, candidates and conservative groups could concentrate on the same issue, using the same powerful facts and figures to inform and persuade the American public. Coordinating our focused efforts improves our ability to compete with the presidential bully pulpit and counteract media outlets that often work to marginalize us.”

http://online.wsj.com/article/SB10001424052970204124204577148803361818044.html?mod=WSJ_Opinion_LEADTop

Oh well….better late than never.

Which brings us to today’s Money Quote, and Marco Rubio thoughts on The Obamao’s debt reaching the size of the U.S. economy:

“It is like watching a horror movie,” Sen. Marco Rubio (R-FL), told WOKV-AM in Jacksonville on Monday. “You know those movies where the people in the audience are screaming, ‘Don’t go in that door!’ because you know the killer is there? Well, it is the same thing with this debt. We know how this ends.“

Yup!  We either all die….

….or end up like Greece!

And in the Environmental Moment, in yet another harbinger of the imminent impact of anthropogenic global warming….

Alaskan Towns Seek Help Weathering Harsh Winter

Residents of two Alaska communities are seeking outside help after an exceptionally harsh winter left one buried in snow and the other iced in and facing a fuel shortage.

Dozens of U.S. National Guard members are helping the fishing town of Cordova dig out from mountains of snow that collapsed roofs, triggered avalanches and trapped some people in homes. By one count, more than 10 feet of snow has fallen in the town of 2,000 in the last few weeks. With high winds, more snow and possibly rain in the forecast, responders and local volunteers Monday were trying to shovel out buildings considered most at risk.

This winter, almost 15 feet of snow has fallen on Cordova, with a series of bursts that ended with a rain drenching over the weekend that added substantial weight to the snow and slicked the landscape.

Almost 700 miles to the northwest, the old gold rush town of Nome is awaiting the arrival of a Russian tankerthat’s barely inching along in its mission to deliver much-needed fuel. A Coast Guard vessel is cutting a path in the thick ice of the Bering Sea, but ship crews are encountering challenges that are sometimes forcing the vessels to come to a complete stop.

All of it means that the town could potentially face a fuel shortage.

So, at least for the foreseeable future, polar bears throughout the Arctic can paaaarrrrTY!

In a related item forwarded by Jeff Foutch, apparently, at least once in a blue moon, even the New York Times feels compelled to report the news:

A Fine for Not Using a Biofuel That Doesn’t Exist

When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law

But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.

In 2012, the oil companies expect to pay even higher penalties for failing to blend in the fuel, which is made from wood chips or the inedible parts of plants like corncobs. Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.

“It belies logic,” Charles T. Drevna, the president of the National Petrochemicals and Refiners Association, said of the 2011 quota. And raising the quota for 2012 when there is no production makes even less sense, he said.

Penalizing the fuel suppliers demonstrates what happens when the federal government really, really wants something that technology is not ready to provide. In fact, while it may seem harsh that the Environmental Protection Agency is penalizing them for failing to do the impossible, the agency is being lenient by the standards of the law, the 2007 Energy Independence and Security Act.

Gee….no wonder The Obamao praised the EPA today “for being as clear and as least bureaucratic as possible”.

On the Lighter Side….

And in the Wide, Wild World of Sports, with apologies to Bob Martin and any other Bayou Bengals out there, yet another sign the apocalypse is upon us….and a big reason I couldn’t bring myself to pull for LSU Monday night:

Tyrann Mathieu vows to trash talk his way to a national title 

Tyrann Mathieu’s preparation for Monday night’s BCS National Championship has been a little unconventional. In addition to sharpening his on-field skills and watching film of Alabama, he’s also spent a little time looking up the names of the mothers of Alabama players.

And he plans to use them in abundance. Mathieu, aka the Honey Badger, is not only one of the biggest playmakers on the field, he’s also one of the biggest mouths and he plans to use that mouth as a trash-talking weapon against unsuspecting Crimson Tide offensive players. “You try to get the edge any way you got to,” Mathieu said. “When you are on the field you’re just having fun, you’re just talking. If you can get a player out of his zone, you win the battle. (And lose the Culture War.)

“We are so good on defense, nobody wants to get in a shouting match with me and then line up on the other side of the field with (Morris Claiborne).”

Soooo….Yo!….Honey Badger!  How’d the “Yo Mama” trash talkin’ work out for your?  Oh,…and we heard yo’ Mama’s so ugly, she….!

And finally, for the opposing view, we’ll call it a day with a snippet from Greg Couch’s latest at FOXSports.com:

“….Even former Broncos quarterback Jake Plummer said he wishes Tebow would cut out the praying on the field. But when Tebow drops to a knee for a prayer, he isn’t trying to show off. He is doing what he feels. He isn’t asking people to look at him; he is doing what he believes, and people are looking. There is a difference.

Tebow is not a great quarterback. He is a role model. The guy he beat, Ben Roethlisberger, is a great quarterback but no role model. Which one would you want your kids to emulate?

Tebow is changing the narrative, giving us something to believe in from a sports world that rarely offers up anything pure. This isn’t to say that Tebow will be a lasting phenomenon, or that he won’t be. It’s that he is one now, and sometimes there is a moment when you can stop arguing and just watch and enjoy.”

To which we can only add a hale and hearty, “Amen”!

Magoo