It’s Thursday, September 22nd, 2011….and before we begin, this campaign commercial, courtesy of Bill Meisen, is yet another sign The Obamao could be in for a very long campaign:

Now….if between now and January 2012, medical science can come up with a cure for foot-in-mouth disease….

….Rick Perry may actually win the GOP nomination!

Now, here’s the Gouge!

First up, former Amex CEO Harvey Golub speaks real truth to power in the WSJ:

A Jobs Bill That Boggles the Mind

The president worries about the fiscal misfortunes of local governments, then proposes a plan to penalize municipal bond buyers.

When President Obama first started talking about a “jobs bill,” my initial reaction was one of amazement. He apparently has not learned from the failure of his first trillion-dollar stimulus package that no amount of government spending will achieve self-sustaining economic growth in light of his administration’s anti-growth policies. (We numbered among the absolutely un-amazed!)

And what exactly are those polices? First and foremost, the president has promised to raise tax rates on the “millionaires” making more than $250,000 per household. Meanwhile, he’s ignored entitlement reform, retarded the development of our energy resources, and added new layers to our regulatory burden. He’s also increased the uncertainty inherent in an already dysfunctional and perverse tax code, added trillions to our national debt, spent taxpayer money ineffectively and inefficiently, tried to micromanage the economy, and acted as an incompetent venture capitalist by investing in “green jobs” and high-speed rail. (Uhhh….other than that, how are you enjoying the recovery, Mrs. Lincoln?!?)

This administration routinely grants and withholds favors by substituting its judgment of what is valuable and good for that of the people. What stimulus spending can do to create jobs is entirely temporary, whether in the public or private sector, and is rooted only in a political calculus.

When I read the president’s jobs program, my concern deepened as I realized that his whole approach is a metaphor for the broader Obama economic plan. For example, on the one hand he wants to devote almost half the $475 billion in additional federal spending to states, as he says, to employ teachers, policemen and firefighters and refurbish or build some new infrastructure that states have already decided they don’t need or have deemed a low priority.

On the other hand, the bill will add billions of dollars per year to state and local government expenditures by reducing the tax benefit of state and municipal bond issues for taxpayers earning more than $250,000 per year. In total these bonds represent $2.5 trillion in outstanding bonds, with billions more issued each year.

The president obviously believes that tax-free bonds are a benefit to the buyers when, in reality, the benefit accrues entirely to the municipalities that issue the bonds. Because the bonds are tax-free, the issuers pay a lower interest rate—by an amount almost exactly equal to the tax benefit. By reducing the benefit, municipalities will be forced to pay significantly higher rates, increasing their annual debt-service cost. And, since high earners comprise only about one third of the owners of these bonds, lower-rate taxpayers will receive an added benefit from the higher interest paid. In effect, the municipalities will pay more in interest than the federal government will receive in tax payments.

Investors in new bond issues will be unaffected. Those investors that have portfolios of municipal bonds will switch to high-grade corporates or pay the tax from the higher interest payments they’ll receive. All of the supposed increase in tax payments from this plan will simply be a transfer from municipal and state governments to the federal government through the hands of investors.

The president also wants these reduced tax benefits to apply to existing bonds, bought under the assumption of receiving the higher tax benefits. It is not very often that higher taxes are applied retroactively, but this will be one of those times. As a result, existing bondholders will see the value of their municipal bonds decline substantially based on the lower tax benefits.

The interesting questions for me are: Did anyone on his economic staff, at Treasury, or at the Office of Management and Budget tell him about this? Did he even ask?

From my perspective, interest on municipal debt should have no tax-free benefits at all. Municipalities should pay market rates based on their credit-worthiness and individuals should pay taxes on the interest just as they do when they buy corporate bonds. The current system, in effect, subsidizes heavy issuers of bonds at the expense of states that issue bonds at more modest levels. If the true cost of borrowing were reflected in the interest rates, these local and state entities may moderate their spending levels. But if the president wants to count this as a tax savings, let’s make the change in the context of a far broader reform of the tax code and do so prospectively.

From green jobs to “cash for clunkers,” many of us have suspected that economic illiterates were setting the economic policy of this administration. The president’s jobs plan proves the point. That the president could wail about the misfortunes of municipalities and argue that the federal government urgently needs to send cash, and then simultaneously propose a change in the tax treatment of municipal bonds that takes the cash back, reveals a depth of cluelessness that boggles the mind.

For more on the subject of Team Tick-Tock’s monetary mystification, we turn to Dan Henninger’s Wonder Land:

Obama’s Tax Morass

Barack Obama and his perpetually angry Democratic “base” are the outliers on comprehensive tax reform.

Barack Obama has a remarkable habit of dumping the responsibility for solving massive fiscal and political problems on someone else. After Congress shoveled its way through his original stimulus proposal in 2009, it spent a year erecting a Rube Goldberg apparatus around health care. What emerged from these great off-loadings of work was an even grander mess.

The $825 billion stimulus did little for unemployment but jacked up the deficit. ObamaCare is now rumbling toward a terrified health-care industry like Godzilla bouncing off buildings on Main Street. Even Mr. Obama’s jobs speech to a joint session of Congress triggered a stock-market rout.

This week, the president proposed a $1.5 trillion, 10-year tax increase and called it a path to reform. As night follows day: The Obama tax proposals, if passed, would ruin tax reform for years. More’s the pity, because on taxes bipartisan support exists for reform to a degree absent on nearly any other major issue. If this president wanted to run for re-election with a pro-growth tax reform in the works, it would be his for the asking. He isn’t asking.

Last year saw the release of two major bipartisan tax-reform proposals—the Bowles-Simpson commission, Mr. Obama’s own creation; and the Domenici-Rivlin report from the Bipartisan Policy Center. GOP House Ways and Means Chairman Dave Camp is intent on comprehensive reform, with the support of Senate Finance Chairman Max Baucus, a Democrat.

The “Tax Reform” section of the 67-page Office of Management and Budget document detailing Mr. Obama’s growth and deficit proposals reads as if written by competing factions in the White House. The case for real reform says all the right things: broaden the base, reduce rates, etc. No one would disagree. But the details are a complete disconnect.

There are no permanent tax cuts for anyone. That’s off in the undefined future. The rhetoric and substance of the actual tax proposals are presented in the same angry anti-wealth rhetoric Mr. Obama has been using since his first economic message.

This is tax reform from Dr. Jekyll and Mr. Hyde. If passed, it would kill any chance of achieving the reform of the current tax system that is regarded by everyone else as a worthy goal.

Comprehensive tax reform is always political trench warfare against the status quo, requiring support from the White House and both parties in Congress. In any such effort, the current system’s array of tax expenditures and loopholes—the things Mr. Obama wants to end—are the reformers’ bargaining chips. The idea that Congress should end all these breaks “now” only to reduce deficits they created, get no tax reduction or simplification in return, and then do real reform later is ludicrous. What Mr. Obama is proposing would blow up tax reform.

Bowles-Simpson illustrates the trade-offs: To achieve their top marginal rate of 23% (which would turbocharge economic growth) means eliminating all tax expenditures; but if politics required keeping or revising current breaks, such as the mortgage deduction, the top rate rises to 28%. That’s how tax reform works. This was the grand bargain that enabled the tax reform of 1986—cutting the top individual rate to 28% from 50%—which was led in Congress by GOP Sen. Bob Packwood and Democratic House Ways and Means Chairman Dan Rostenkowski.

When John Kennedy became president, the top marginal individual rate was 91%. But the tax code was littered with loopholes—for a reason. With such high rates, tax breaks were the only way the economy could function. Kennedy got rid of loopholes and dropped the top rate to 70%. Barack Obama wants to get rid of loopholes and raise rates.

The president’s “pass-this-now” list targets tax preferences for the oil, gas, coal and insurance industries, plus an array of cats-and-dogs accounting rules and international tax practices. All these should be bargaining chips in a larger, more economically productive tax reform. The Obama proposal would leave the current anti-growth tax morass intact, other than the higher taxes and the Buffett Rule. What he wants are wealth taxes, period. If he got that, does anyone believe he’d revisit reform in a second term?

If Mr. Obama is pushing these proposals merely to raise revenue or to create a campaign issue, so be it. If he truly thinks he is going to make the super-rich “pay their fair share,” it is hopelessly naive. Over time the Beltway’s tax artisans would carve out escape tunnels in the Obama tax prison. It will still be a mess.

Conventional media spin, encouraged by the Obama campaign, holds that “anti-tax” Republicans make compromise impossible. It is true, remarkably so, that an unprecedented degree of agreement has emerged among the Republican presidential candidates on lowering taxes. Less remarked is how close the GOP is now to the tax-policy ideas of the Democratic center. House Speaker John Boehner last week called for revising the tax code very much along the lines of Bowles-Simpson and Domenici-Rivlin.

Barack Obama and his perpetually angry Democratic “base” are the outliers on comprehensive tax reform. And on much else.

Henninger is too kind; it’s more like EVERYTHING else!

Next up, an interesting bit of heresy from Jonah Goldberg:

Tyranny of the Typical

And now let us recall the “Fable of the Shoes.” In his 1973 “Libertarian Manifesto,” the late Murray Rothbard argued that the biggest obstacle in the road out of serfdom was “status quo bias.” In society, we’re accustomed to rapid change. “New products, new life styles, new ideas are often embraced eagerly.” Not so with government. When it comes to police or firefighting or sanitation, government must do those things because that’s what government has (allegedly) always done.

“So identified has the State become in the public mind with the provision of these services,” Rothbard laments, “that an attack on State financing appears to many people as an attack on the service itself.” The libertarian who wants to get the government out of a certain business is “treated in the same way as he would be if the government had, for various reasons, been supplying shoes as a tax financed monopoly from time immemorial.”

If everyone had always gotten their shoes from the government, writes Rothbard, the proponent of shoe privatization would be greeted as a kind of lunatic. “How could you?” defenders of the status quo would squeal. “You are opposed to the public, and to poor people, wearing shoes! And who would supply shoes … if the government got out of the business? Tell us that! Be constructive! It’s easy to be negative and smart-alecky about government; but tell us who would supply shoes? Which people? How many shoe stores would be available in each city and town? … What material would they use? … Suppose a poor person didn’t have the money to buy a pair?”

It’s worth keeping this fable in mind as the reaction to last week’s CNN-Tea Party Express debate hardens into popular myth. Moderator Wolf Blitzer had asked Rep. Ron Paul (R-Texas) what should happen if a man refuses to get health insurance and then has a medical crisis. Paul — a disciple of Rothbard — explained that freedom is about taking risks. “But, congressman, are you saying that society should just let him die?”

At this point, a few boneheads in the audience shouted “yeah!” and clapped, though liberal pundits and activists imagine they saw an outpouring of support.

Paul calmly replied that he’s not in favor of letting the man die. A physician who practiced before Medicare and Medicaid were enacted, Paul noted that hospitals were never in the practice of turning away patients in need. “We’ve given up on this whole concept that we might take care of ourselves and assume responsibility for ourselves,” he observed. “Our neighbors, our friends, our churches would do it.”

Both Mitt Romney and Rick Perry have condemned the response from the Paulistas in the audience and endorsed a more active role in government in health care.

Still, it’s amazing how quickly status quo bias kicks in. Since the 1960s, it has become a given not only that the government should be more involved in areas like health care and poverty but that these problems remain intractable because the government has not gotten more involved. That’s the premise behind so many of the anti-libertarian questions at the GOP debates. Any rejection of the assumption is derided as a right-wing effort to “turn back the clock.”

Well, let’s do just that for a moment. Charles Murray, my colleague at the American Enterprise Institute, notes that the most remarkable drop in the poverty rate didn’t come after President Lyndon B. Johnson declared war on poverty but when President Eisenhower ignored it. Over a mere 12 years, from 1949 to 1961, the poverty rate was cut in half. Similarly the biggest gains in health coverage came when government was less involved in health care, i.e. before the passage of Medicare and Medicaid in 1966. Duke University Professor Christopher Conover notes that in 1940, 90 percent of Americans were uninsured, but by 1960, that number was down to 25 percent.

Blitzer’s specific error was to use “society” and “government” as interchangeable terms. People need shoes. But that doesn’t require the government to provide shoes for everyone. Similarly, poverty rates should go down. But does that mean it’s the government’s responsibility?

Maybe the answer is yes. But if it is, the burden of proof that the government can do better than “society” should fall on those who, in effect, want the government to win the future by “investing” in shoes — rather than on those of us who are open to the idea of turning back the clock.

But regardless of the Dimocratically-inspired bullsh*t the MSM seeks to spread, America may finally be waking up to reality:

Americans Say Federal Gov’t Wastes Over Half of Every Dollar

Believe state and local governments waste proportionately less money

Americans estimate that the federal government wastes 51 cents of every dollar it spends, a new high in a Gallup trend question first asked in 1979.

The current estimate of 51 cents wasted on the dollar is similar to what Gallup measured in 2009, but marks the first time Americans believe more than half of federal spending is wasted. The low point in the trend is 38 cents wasted on the dollar, in 1986. (Due of course primarily to the steadying influence of the Great Ronaldo!)

Americans are less likely to believe state and local governments waste money they spend than they are to believe this about the federal government, with the state estimate at 42 cents on the dollar and the local at 38 cents. (Meaning the majority of respondents reside in states other than The Peoples’ Dimocratic Republic of Maryland)

In a related item, courtesy of George Lawlor, Jay Cost suggests it’s beginning to look a lot like….

Mondale 2012!

http://www.weeklystandard.com/blogs/morning-jay-mondale-2012_593981.html?page=1

On the Lighter Side….

Hat tips to Brenda Berry and Speed Mach for those last four gems.

Finally, we’ll call it a wrap with the “TMI!” segment, and the story of once-lovely lady….

Florence Henderson Reveals Embarrassing STD, ‘B-Bunch’ Secrets in Book

Great; so now we know (a) New York mayor John Lindsay gave Carol (aka “Flo Ho”) crabs during a one-night stand (we must have missed that episode!), and (b) why Mike never took an interest in his red-hot stepdaughters.  Yo….Flo!  Anything else you want to tell us we didn’t really want to know?!?

Magoo