Category Archives: Domestic Policy

Professor Gruber’s Lesson: Intelligence isn’t Wisdom

06 Saturday Dec 2014

Posted by in Democrats, Domestic Policy, Jonathan Gruber, Republicans, stupidity

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“And if I claim to be a wise man, it surely means that I don’t know.” – Kansas, “Carry On Wayward Son”

By Greg Smith

Anyone who took a few humanities or social science courses in college probably dealt with professors, highly educated people, who were dismissive in word or deed of views that opposed their own. These classes taught, through the arrogance of academia, how humans use education to justify an ideology instead of expanding an understanding of opposing views.

More than anything else the hubris of these academics taught the difference between knowledge and wisdom.

Which brings us to the MIT economics professor who has so thoroughly embarrassed himself and the Obama administration with his comments disparaging the intelligence of the American voter. Jonathan Gruber must be a smart man. You don’t graduate with a Ph.D. from Harvard and get a job on MIT’s faculty by being academically challenged.

How could someone who is evidently pretty bright talk about the “stupidity of the American voter” on camera? Moreover, why would he feel the need to repeatedly disparage the common people who stock the shelves, build the cars, police the streets, pay the taxes, fight the wars and support the bowling alleys? He comes off sounding – and come to think of it looking – like Waylon Smithers describing the “drones” who work in sector 7-G.

GruberSmithers

So often the hallmark of high intelligence is an arrogance-induced foolishness in which the sufferer dupes him- or herself into a dazed delusion of omnipotence. This is dangerous in anyone involved in government because it is such a short leap to justifying the means with the ends.

One need only look back to the Vietnam War to see where such hubris can lead. When John F. Kennedy was elected president in 1960 he brought in a youthful administration that included Robert McNamara, a Harvard MBA who ran the Department of Defense and war in Vietnam until 1968. McNamara was a very successful auto executive who advocated modern management techniques for the Pentagon.

These data-driven decision-making processes work very well in a highly defined process like building cars – McNamara ran Ford Motor Company – or even ordering military spare parts. A war, on the other hand, has far too many components that cannot be quantified. Placing a technocrat in charge is a recipe for disaster.

Enter, stage right, Obamacare and our dear Dr. Gruber and his computer models. It is hard to imagine the computer model that can take into account all the nuts and bolts that form healthcare in America. It covers all roughly 318 million residents. It covers births, deaths and every medical expense and decision in between. Anyone who believes they can accurately quantify and plan the infinite number of individual inputs and outcomes, especially in such a rapidly changing sector, is fooling themselves.

Most of us are probably not smart enough to put together a credible computer model of something much smaller than the U.S. healthcare system. But then most of us lack the sanctimonious belief in our own infallibility to try, which places us much lower on the scale of “stupidity” than Dr. Gruber.

A smart man may be able to put together a convincing healthcare computer model. A wise man would know better than to try.   ©

Greg Smith is a stupid freelance writer and political consultant who lives in Bantam, CT. His stupid blog is found at www.betterfatthanfascist.com.

Government Action is Source of, Not Solution to Income Inequality

12 Wednesday Mar 2014

Posted by in Domestic Policy, Personal Freedom

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By Greg Smith

President Obama has made income inequality an issue in this midterm election issue, but his plan unfortunately ignores the source of inequality, a lack of good blue-collar jobs and hurdles for new small businesses that will only make the situation worse.

During the Great Recession college-educated workers had an unemployment rate less than half that of persons with only a high school diploma. College graduates earn considerably more than high school graduates, are far less likely to live in poverty, and these figures ignore the roughly 20 percent increase in persons receiving Social Security disability payments in the four years between 2008 and 2011. Since blue-collar workers are more likely to do physical labor they are a greater share of people on disability programs.

President Obama’s administration has been quite unfriendly to blue-collar labor. Blue-collar jobs are much more susceptible to loss from government regulation and policy. An example is the Environmental Protection Agency regulations squeezing out coal mining jobs. The granddaddy of them all is the Affordable Care Act, which places considerable new burdens on employers to provide healthcare to employees.

Blue-collar jobs on average pay less than white collar work, so the cost of healthcare is a much greater percentage of the value of the output of blue-collar workers, meaning the ACA, commonly referred to as Obamacare, is much more likely to negatively impact either creation of new or maintaining current blue-collar jobs.

New and larger taxes, banking legislation and tax code changes all cost businesses money to comply. Since the value of white-collar work is higher, the marginal cost of complying is lower for businesses that employ white-collar workers. This heavier burden on unskilled labor is a cause of outsourcing, wage stagnation, and underemployment.

This causes employment to be more scarce, meaning workers must accept employment at lower wages just to have a job. And those who can’t get a job have to exist on unemployment, work under the table, or try to get on disability. These options pay less than even a lower-end full-time job.

The best way to help lower income workers is to lessen the burden of taxes and regulations that create needless hassles for new or smaller businesses, usually due to lobbying by larger, established businesses and industries to remove the chance for competition. Even well-intentioned laws, rules and regulations cost money to comply with, a burden considerably greater on newer and smaller businesses.

In the first four years of the Obama administration the Federal Register, a list of proposed rules, final rules, public notices, and Presidential actions increased by 310,211 pages, and this doesn’t include state laws and regulations. Ignorance of the law is no defense. Every new law and regulation makes it harder for small businesses, which according to the Small Business Administration create 64% of new private-sector jobs, to succeed.

It is little wonder why the pace of new laws and regulations churned out by government in this country is choking the life out of blue-collar jobs and small businesses. President Obama’s plan so far is for more rules and laws. That ought to help.

The name of this blog is another way of saying with government, the cure is normally worse than the disease. President Obama’s prescription will only make the patient more ill.   ©

Greg Smith is a freelance writer and political consultant who lives in Bantam, CT. His blog is found at www.betterfatthanfascist.com.

Click to access FR-Pages-published.pdf

GOP Needs Platform to Repeat ’94, Avoid ’98

09 Sunday Mar 2014

Posted by in Domestic Policy

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By Greg Smith

Attention Congressional Republicans: You only have 240 shopping days until the next election. Get me something nice!

If campaigns were like Christmas presents, Congressional GOP efforts in 1998 would have been like a second-hand toaster or a $10 gift certificate to the grocery store. The party had caught President Clinton in his web of lies and didn’t bother to do much else. It was a classic example of playing it safe. ‘Hey, why trot out new ideas that may flop when we showed President Clinton is sleazy? What more do voters want?’

But 1994, oooh, that was like a diamond-encrusted Lamborghini with a walk-in humidor and a lifetime supply of cola and Pop Rocks. Even a diabetic non-smoker without a driver’s license couldn’t help but love it. The GOP needs to pay attention to the lessons of these two elections if they want real success in November.

In 1994 Republicans won a historic victory. They were the party out of power running against Hillary Clinton’s plan for health care and a national ban on ‘assault’ weapons. The U.S. had suffered an embarrassing and tragic defeat in Somalia, unemployment had come down but was still hovering near 7%. Blue Dog Democrats and independents were disaffected. Why does this sound so familiar?

Republicans put together the Contract with America, which contained specific ideas and promises to at least put those ideas to a vote. Then as now, Republicans were tarred with the epithets of liberalism: women hating, flat earth believing, gun toting, homeless hating war mongers who want the poor to starve and no one to have health care. But Republicans believed in their message, presented it with confidence and won a historic victory. Not one Republican running for re-election in 1994 was defeated while 34 Democratic House incumbents – including the sitting Democratic Speaker of the House Tom Foley – lost. Republicans won a total of 54 House seats and eight in the Senate. The drubbing was so bad President Clinton had to publicly explain why he was even relevant and veered right to prep for his 1996 re-election run.

Republican strategy in 1998 could not have been more different in there basically was none. The GOP had become fat and happy and saw a pro-active campaign strategy as a needless risk because Clinton had been caught, literally, with his pants down in the Oval Office. Midterm elections are historically a win for the party that doesn’t control the presidency, but in 1998 Republicans lost five seats in the House and gained nothing in the Senate. It was the first time in 68 years a sitting President’s party had a net gain in a midterm election. The ramifications for Republican hesitance in 2014 should be clear.

So far the upcoming election has a political landscape like 1994. Unfortunately, the Republican plan to traverse that landscape looks more like 1998. There is still time, but the various GOP factions can’t even sit down together, never mind hammer out a platform. If Republicans wait until state primaries are decided to determine a platform it will be too late.

This is a warning to the GOP: If it simply runs against the Affordable Care Act Republicans will not win the Senate and will probably pick up only a dozen seats in the House. The majority of voters may not approve of Obamacare, but they understand there is a serious problem with health care in this country. And if Republicans are incapable of coming up with and pushing a viable alternative – an easy task — what does that say about their ability to lead, not to mention their political beliefs? Public approval of Congressional Republicans isn’t exactly stratospheric, so just assuming the unpopularity of President Obama’s policies will win the Senate for the GOP is a recipe for wasting a once-in-a-generation opportunity.  ©

Greg Smith is a freelance writer and political consultant who lives in Bantam, CT. His blog is found at www.betterfatthanfascist.com.

Tax Cuts Should Take Backseat to Spending Cuts, Reforms

08 Saturday Mar 2014

Posted by in American Resurgence, Domestic Policy

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By Greg Smith

This is boring. This is dull. This is important.

For many years the standard Republican template for economic growth has been cutting taxes, but with an enormous national debt it is time to recognize tax cuts without spending cuts, tax and regulatory reform are almost meaningless. Today, whether you tax or borrow the money from the private sector the effects will be nearly the same.

In years past one of the favorite descriptions Republicans pinned on Democrats was “tax and spend.” Democrats wanted bigger government and were willing to raise taxes to pay for it. President Reagan’s massive tax cuts passed in 1981 were very sensible and when you look at the 33% increase in federal tax revenue in constant dollars from 1981 to 1990 the tax cuts more than paid for themselves. Military and social spending went up considerably, which was why the national debt increased in the 1980s.

Post-Reagan GOP

Comparing the Republican Congress of 1995-99 with the Bush administration, which enjoyed Republican control of Congress from 2001-07, show a considerably different agenda and outcome.

The elections of 1994 were such an enormous victory for Republicans that President Clinton was actually forced to explain why he was still even relevant. The Republican-controlled Congresses from 1995 through 1999 among other initiatives reformed welfare and farm subsidies while controlling spending increases, resulting in government much friendlier to economic growth and employment. Clinton was pretty much forced to go along. When he takes credit for the balanced budget toward the end of his term, he is taking credit for Republican plans he fought tooth and nail.

These were serious reforms with serious consequences: By 1999 the country was at four percent unemployment, which economists consider to be full employment. National debt actually began to be retired. Quite a contrast to the predictions made by detractors in 1995.

President Bush took office in 2001 and Republicans held both houses of Congress until 2007. Bush was never a conservative and was not much of an ideologue when it came to tightening the purse strings. While both the defense budget and social spending increased, Republicans stuck to the idea of lower taxes because it worked under Reagan, but when Reagan took office tax rates were much higher and a greater impediment to growth, so his cuts had the potential to unleash much more growth.

One of the basic arguments for Reagan’s tax cuts was the Laffer Curve, which argues government would collect zero tax revenue with tax rates of 0% or 100%. In the latter case no one would bother working on the books. Government would actually collect more money with 50% tax rates than at 90% tax rates because of the greater incentive to work. The truth of this is elemental.

But if tax rates continue to decline at some point government begins to collect less revenue. Where this point sits is an open question, but it explains tax cuts today – while they should still increase revenue and are justifiable on other grounds – are not going to produce the same increase in revenue as under Reagan because marginal tax rates are already much lower than in 1981. Tax cuts should produce slightly greater revenue, but tax cuts by themselves will not solve our debt problem. We cannot grow our way out of our debt without cutting regulation, waste and simplifying the tax code.

Continuing to spend as we are now requires borrowing, and borrowing money causes the same outcome as taxing: wealth is destroyed because it is taken from economically useful activities – the private sector which exists on its own merits – and given to the public sector in which only a fraction of the money is spent in a way that indirectly generates wealth-producing jobs.

Today, tax cuts without spending cuts are almost meaningless because whether you tax or borrow the money out of the economy matters very little, you still remove it from the private sector. The GOP should look at the successes of Congress from 1995-99 – reform, cut and simplify government bureaucracy and programs, and then consider tax cuts. Republicans fail to claim the success of this strategy at their electoral peril.  ©

Greg Smith is a freelance writer and political consultant who lives in Bantam, CT. His blog is found at www.betterfatthanfascist.com.