It’s Wednesday, May 23rd, 2012….and here’s The Gouge!

Leading off the mid-week edition, it’s the “Maryland, My Maryland” segment, courtesy of the corruption and cronyism endemic in the “Everything’s” Free State:

O’Malley’s Tutorial

Maryland’s Governor offers a lesson in progressive taxation.

And seriously on drugs for the same amount of time believing his record is a ticket to the Oval Office.

Governor Martin O’Malley is the gift that keeps on taking. Even as he grabs ever more from Maryland taxpayers, he’s providing useful instruction in the real purpose and pattern of progressive taxation, which is that sooner or later it comes after the middle class.

Last week the legislature in Annapolis enacted another huge tax increase, this time hitting anyone earning more than $100,000 ($150,000 for couples). This isn’t a tax on the 1%. It’s a tax on the top 14%. (Hey, you gotta pay for in-state tuition fees for illegals somehow!)

Readers may recall that when Mr. O’Malley first raised taxes, in 2007, he said he could balance the budget on the backs of the rich. That didn’t work out so well. The number of millionaires fell sharply in the state, whether because of the recession or because they sought tax shelters or simply fled to lower-tax states. Revenues came in far below projections, and the deficit forecast ballooned. (See “Millionaires Go Missing,” May 26, 2009.)

So Mr. O’Malley is now going where the real money is—the middle class. The highest state-local combined income tax rate will rise to 8.95% from 8.7% and 7.95% when Mr. O’Malley became Governor, giving Maryland one of the highest rates in the nation. About 300,000 Maryland filers reported six-figure incomes last year.

A family of four earning $250,000 a year will be able to save money by moving to Washington, D.C., arguably the most liberal city in America. The same family can save $6,000 a year by relocating across the Potomac River to Virginia, where the top tax rate is 5.75%, according to the Tax Foundation. State Senator James Brochin, a Democrat who opposed the tax increase, says: “I won’t be at all surprised if we’re not back in two years with a new plan to raise taxes.” (TWO years; who’s HE kidding?!?

The alternative would be to reduce state spending to match current revenues, especially in a state where spending has grown to $35 billion from $28 billion since 2007. But most Democrats and their union allies denounced an alternative plan to avoid the tax hike and allow spending to grow by $700 million, or 2%, as a “doomsday budget.” The tax bill ties the new revenues to a pay raise for public-employee unions. Mr. O’Malley says government services are “severely undercapitalized,” as if Maryland households aren’t.

The progressive tax ratchet—the racket—is to pretend government can squeeze more money from the rich than is possible, then spend the imaginary windfall, then when deficits persist claim there’s no choice but to raise taxes on the upper middle class and eventually on everyone who has income to tax. This is why Californians making as little as $48,000 pay a tax rate of 9.3%.

Our condolences to Maryland residents who are getting soaked again, but thanks to Mr. O’Malley for this tutorial in progressive government. In a second term, rest assured President Obama will do the same.

For those of you unfamiliar with politics in the People’s Democratic Republic of Maryland, O’Malley replaced Bob Ehrlich, a Republican governor who, despite having to work with a solidly Liberal state politburo, turned a billion dollar-plus deficit into a billion dollar-plus surplus in one term.  It took O’Malley less than one year to put Maryland’s budget back into the red.

As Baltimore’s mayor, O’Malley promised to improve school performance and sharply lower crime.  He did both….by lowering the passing grade 10 points and modifying (to his definite advantage) the methodology for tracking the incidence of violent crime.  Oh….and did we mention he’s cheated on his wife?  It will come as no surprise that any of Marty’s “achievements” ever drew the notice of the dutifully-Democratic Baltimore Sun, perhaps the worst local rag on the planet.

O’Malley’s a disgrace as a human being and an embarrassment as governor….or would be if Dimocrats had any sense of shame.  Trust us; as soon as we are able, we’ll be voting with our feet.

In a related item, courtesy of the WSJ, Harvey Golub details….

How the Recovery Went Wrong

Of the 11 recoveries in the last 60 years, this one is at or near the bottom in job growth and every other economic indicator.

Wrong?!?  It ain’t ever been right….NEVER!

President Obama, in speech after speech, proudly makes the following point: Although we inherited the worst recession since the Great Depression, we have generated net new jobs every month, and while we need to do more, we are going in the right direction.

Of course, recoveries always go in the right direction—that is, things get better over time. But merely going in the right direction is an incredibly low performance standard. Moreover, since deep recessions are generally followed by more robust recoveries, this should have been one of the strongest recoveries ever.

So what went wrong? All the available Keynesian levers for achieving economic growth have been pulled, yet the recovery is one of the weakest since World War II. The problem lies with the way the “stimulus” was carried out, the uncertainty of looming higher taxes, and the antibusiness rhetoric and regulatory strong-arming of this administration.

First, exactly how weak has this recovery been? The Federal Reserve Bank of Minneapolis tracks economic performance for each recovery and compares gross-domestic-product growth and job growth, the two most important indicators of economic performance. Over the past 60 years, there have been 11 recessions and 11 recoveries.

Sadly, this recovery is near the bottom of all 11. Cumulative nonfarm job growth is just 1.9% 34 months into recovery, the ninth-worst performance and well below the average job growth of 6.5%. Cumulative GDP growth is just 6.8% 11 quarters into this recovery, less than half the average (15.2%) and the worst of all 11.

But wouldn’t things be even worse without massive fiscal and monetary stimulus? It’s true that monetary policy by the Federal Reserve has resulted in extraordinarily low interest rates, almost zero for the past three years. Normally, low interest rates would result in increased borrowing by individuals and businesses, generating increased economic activity. Its positive effects in this recovery, however, have mainly been to help the government borrow more cheaply, large banks recapitalize quickly, and homeowners refinance at low rates.

Uncertainty regarding ObamaCare and higher taxes on businesses and individuals has discouraged the type of borrowing and lending that low rates generally encourage. Near-zero interest rates have also resulted in historically low yields on savings and encouraged riskier investments. In effect, we have subsidized increased spending by penalizing savings.

Fiscal policy, under the control of the president and his party, increased expenditures by about $700 billion per year since 2008 and launched a spending package of about $800 billion (along with various “targeted” temporary tax reductions), all of which resulted in an increase in national debt of over $5 trillion. In other words, we borrowed $5 trillion, for which we will pay interest for who knows how long, in order to stimulate the economy now.

There’s little doubt that this level of spending—$5 trillion in an economy with an annual GDP of about $15 trillion—has a temporary stimulative effect. The question is, was it a good investment? For the most part the money was spent poorly and we will get very little future value from it. Billions were spent to reward favored constituencies like government employees and the auto industry. Billions more were spent on training programs that don’t work and unemployment insurance that reduces incentives to actually find work. Little went toward building infrastructure or other assets that will help the nation create wealth over time.

So, yes, we are going in the right direction—but far too slowly to create reasonable economic growth and needed jobs. By their very nature, recoveries involve people and businesses making investments and spending money and borrowing to do both. However, for rational people to spend or invest requires confidence in the future. The “animal spirits” so necessary for a true recovery have been dampened by this administration’s policies and rhetoric.

Indeed, this administration has been overtly hostile to business across the economy except for progressive favorites like electric cars or wind and solar power. It has tightened regulatory screws on the coal industry and all other fossil-fuel providers, enacted health-care “reform” based on false estimates of its likely costs and effects, unleashed a hostile National Labor Relations Board on businesses, and passed financial regulations in the form of Dodd-Frank along with hundreds of other regulatory actions that put increased burdens on the private sector. Meanwhile, the president has yet to pass a budget or announce a plan to rein in government expenditures.

The president has said, over and over again, that he wants to increase taxes on businesses—small and large—and on financially successful individuals. He doesn’t quite articulate the point that way, but that is the effect. After all, he says millionaires and billionaires aren’t paying their fair share. He forgets, or simply does not know, that the top 1% of earners actually pay as much as the bottom 90%, and the bottom half pay no income taxes at all.

In this negative environment, businesses are less willing to invest in the future, and individuals are less willing to spend what they can. Meanwhile, savers and retirees have seen much of their income decline because of low interest rates. The massive costs of all the stimulus have been wasted because of the heavy counterweight put on the economy by the administration’s antibusiness and pro-redistribution policies.

Speaking of massive costs, as this next bit of commentary by Phil Kerpen, courtesy of Bill Meisen, confirms, the bill for the one campaign promise The Obamao’s kept is about to come due….and that right soon!

Obama’s war on coal hits your electric bill

Liberals: they’d be Conservatives if they only understood how sh*t actually works!

Obama’s War on Coal has already taken a remarkable toll on coal-fired power plants in America. Last week the U.S. Energy Information Administration reported a shocking drop in power sector coal consumption in the first quarter of 2012. Coal-fired power plants are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago.

It’s the result of an unprecedented regulatory assault on coal that will leave us all much poorer.

Last week PJM Interconnection, the company that operates the electric grid for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) held its 2015 capacity auction. These are the first real, market prices that take Obama’s most recent anti-coal regulations into account, and they prove that he is keeping his 2008 campaign promise to make electricity prices “necessarily skyrocket.”

The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt. (Not to mention the hit Ohio and Pennsylvania will take as a result of dramatically decreased coal production.)

Why the massive price increases? Andy Ott from PJM stated the obvious: “Capacity prices were higher than last year’s because of retirements of existing coal-fired generation resulting largely from environmental regulations which go into effect in 2015.” Northern Ohio is suffering from more forced coal-plant retirements than the rest of the region, hence the even higher price.

These are not computer models or projections or estimates. These are the actual prices that electric distributors have agreed to pay for new capacity. The costs will be passed on to consumers at the retail level.

House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) aptly explained: “The PJM auction forecasts a dim future where Americans will be paying more to keep the lights on. We are seeing more and more coal plants fall victim to EPA’s destructive regulatory agenda, and as a result, we are seeing more job losses and higher electricity prices.”

The only thing that can stop this massive price hike now is an all-out effort to end Obama’s War on Coal and repeal this destructive regulatory agenda. The Senate will have a critical opportunity to do just that when it votes on stopping Obama’s most expensive anti-coal regulation sometime in the next couple of weeks. The vote is on the Inhofe Resolution, S.J. Res 37, to overturn the so-called Utility MACT rule, which the EPA itself acknowledges is its most expensive rule ever.

This vote is protected from filibuster, and it will take just 51 votes to send a clear message to Obama that his War on Coal must end. Of course, Obama could veto the resolution and keep the rule intact, although that would force him to take full political responsibility for the massive impending jump in electricity prices.

Yeah….but unfortunately, by the time voters realize their folly, Barry O will be halfway out the door to his retirement home on Martha’s Vineyard….funded of course on your nickel!

Meanwhile, in the “MSM Bias….WHAT Bias?!?” segment, HotAir.com’s Ed Morrissey reveals the truth behind the headline….

WaPo/ABC poll shows dead heat between Romney, Obama …

The latest Washington Post/ABC News poll shows Barack Obama only three points ahead of Mitt Romney, 49/46, within the margin of error.  The poll also shows Obama’s advantage among women dissipating, and the President falling further behind his challenger on the economy.  All of this is rather amazing, given the manner in which Republicans keep shrinking in the sample series:

After months of aggressive campaigning on jobs and the economy, President Obama and Mitt Romney, his likely Republican challenger, are locked in a dead heat over who could fix the problem foremost on voters’ minds, according to a new Washington Post-ABC News poll.

The parity on economic issues foreshadows what probably will continue to be a tough and negative campaign. Overall, voters would be split 49 percent for Obama and 46 percent for Romney if the November election were held now. On handling the economy, they are tied at 47 percent.

Despite flare-ups over issues including contraception and same-sex marriage, more than half of all Americans cite the economy as the one concern that will decide their vote in the fall, relegating others — such as health care, taxes and the federal deficit — to single-digit status.

In other words, the shiny-object distraction strategy from Team Obama hasn’t worked out as planned.  Neither has the sample strategy from the WaPo/ABC pollster.  Today’s D/R/I is 32/22/38, which means this model would only be predictive for a turnout model where only 22% of voters are Republican.  Just to remind readers, the 2008 turnout split from exit polls showed a 39/32/29 split, and that was considered a nadir for Republican turnout.  In the 2010 midterms, the split was 35/35/30.

Take a close look at the Republican representation in WaPo/ABC polls this year. Starting in January, that has been 25%, 23%, 27%, 23%, and now 22%.  The pollster seems incapable of finding a representative number of Republicans for this poll series.  Perhaps that should give the two news organizations involved a hint about finding a new pollster.

Even with this poor sampling, though, Obama can’t gain any momentum.  His job approval dropped in this series from 50/45 to 47/49.  His rating on the economy sank to 42/55, not as bad as March’s 38/59 but slipping from last month’s 44/54.  Among all adults (as in the preceding figures), Obama only leads Romney by 4, 49/45 — and a Democrat who can’t get to 50% among general-population adults is in serious trouble.  The 49/46 comes from registered voters, with its substantial handicap among Republicans.

How important, by the way, was gay marriage to voters in this poll?  A whopping 1% think it’s the most important issue.  In contrast, “morals/family values” went up from 3% in January to 5% in May.  “Health care/repealing ObamaCare” also increased, from 3% in January to 7% in May, but it came in a very distant second to the economy and jobs, which took 52%.  So much for the distraction strategy, indeed.

Yet the major networks and newspapers still wonder why their audience and subscription levels are falling faster than Sandra Fluke’s undergarments!

And for those requiring further proof of the MSM’s unrelenting bias against anything and anyone who threatens the certainty of The Dear Misleader’s second term, consider this amazing coincidence noted by Bret Baier and Special Report:

Not News

The big story Monday that 43 Catholic institutions across the country have filed more than a dozen lawsuits against the Obama administration was pretty much absent from the network evening newscasts. Neither NBC Nightly News nor ABC World News included any mention of the legal fight specifically targeting the president’s health care law and the HHS contraception mandate that the plaintiffs say is a threat to religious freedom.

CBS Evening News spent 19 seconds on the subject — a significant legal action by a cross-section of Catholic institutions against an administration in an election year.

Media Research Center President Brent Bozell said quote — “If this isn’t ‘news’ then there’s no such thing as news.”

To borrow from the “if a tree falls in the forest” conundrum, if a story harmful to The Obamao falls in the MSM’s lap, does it make a sound?

Which brings us to today’s Money Quote, courtesy of the WSJ and Mark Landsbaum writing in the Orange County Register:

“Jerry Brown is a bad guesser. On Monday he said the budget deficit will be $15.7 billion, 70 percent higher than his guess in January when he said it would be $9.2 billion. Wrong again. On Friday the independent Legislative Analyst said it will be $17 billion. Who knows what it will be by the time you read this? Certainly not Brown. . . .

Brown wants voters to believe the government is impoverished, that colleges are about to crumble, teachers will queue up in soup lines, and beaches will be overrun with grunion. OK, the grunion scare may not be on Brown’s list of alarming warnings. Yet.

The fact is, California’s state budget spends $30 billion more than was spent on all state government functions in 2007-08, at the peak of the pre-recession bubble. That’s a 15-percent increase. Are you spending 15 percent more than you spent in 2007-08?

Indeed, Brown proposes increasing spending for K-12 schools from $29.3 billion in last year’s budget to $34.0 billion by the end of 2013. That’s austerity necessitated by poverty?“

Turning now to the Follow-Up segment, Kimberly Strassel, writing at Political Diary updates us on the status of Greg Jaczko, the martinet Harry Reid’s hand-picked to head the NRC:

Jaczko Quits Nuclear Panel

Nuclear Regulatory Commission Chairman Gregory Jaczko on Monday announced his resignation, saying only that now was an “appropriate time” to step down from the regulatory body. Translation: Mr. Jaczko resigning while the resigning is still (relatively) good.

Installed at the NRC in 2004 at the demand of his one-time boss, Senate Majority Leader Harry Reid—and elevated to the chairmanship by President Obama in 2009—Mr. Jaczko’s tenure has been one wild controversy after another. This included his decision to peremptorily shut down a review of the Yucca Mountain waste repository (in Mr. Reid’s home state of Nevada), as well as his clumsy handling last year of the Japanese nuclear plant crisis.

By the fall of 2011, all four of his fellow commissioners—two Republicans and two Democrats—had sent a letter to the White House citing their “grave concerns” that an “erratic” Mr. Jaczko was withholding information from them, intimidating personnel and overriding the will of the majority. All of those commissioners meanwhile also openly testified at a House hearing that Mr. Jaczko engaged in bullying and intimidating behavior toward NRC staff. William Magwood, a Democrat on the commission, testified as to Mr. Jaczko’s “extreme behavior” and “raging verbal assaults” against female staffers.

Democrats have defended Mr. Jaczko throughout, not wanting to lose their best weapon in the fight against more nuclear power. But the NRC inspector general is currently investigating the accusations about Mr. Jaczko’s temper and personnel problems, and his report is due out soon. Here’s to betting Mr. Jaczko was encouraged to officially offer his resignation, before any report findings cause another political firestorm that made it harder for President Obama to name a successor.

Indeed, while Mr. Jaczko said he’d serve until a replacement was found, the White House on Monday announced its intention to find a successor quickly. Republican commissioner Kristine Svinicki’s term is up on June 30, and while she has been renominated for another term, Mr. Reid has yet to hold a vote. The White House may be hoping to get a Democratic name to the Senate quickly, and then hold Ms. Svinicki’s reconfirmation hostage to approval of their own pick.

So here’s to you Mr. Jazcko….

We’d say good riddance to bad rubbish, but that’s not nice.  And besides, ‘twould be redundant; after all, Jazcko’s a Liberal….is there any other kind?

On the Lighter Side….

Finally, we’ll call it quits with the Dan Rather Memorial “The Documents Were Fake, But The Story Was True” segment, brought to us today by Best of the Web and one clearly demented Bernie Quigley:

From one Bernie Quigley writing at TheHill.com comes the funniest defense we’ve seen yet of Elizabeth Warren, the Thirty-Second Indian:

Elizabeth Warren might be excused for wanting to be Native American. She can claim an old American soul, going back generations in Oklahoma. In the heartland it is almost universal for those who have been there for a few generations to claim Indian blood; that is, to wish it were there even if it isn’t. It is not so much a lie as it is the acculturation of personal and regional American myth; the fabric of old-soul American consciousness. “Our spirit will walk among you,” said Chief Joseph. Indeed it does. . . .

So Warren’s claim to be “part Indian” is correct in mythical terms.

“Correct in mythical terms” is the best excuse since “fake but accurate.” Meanwhile, did you hear Warren has signed a contract for a new memoir? It’s called “The Will to Powwow.”

We all know….

….but as Quigley’s screed convincingly confirms, it’s all Progressives possess.

Magoo