Christmas is a time to reflect on our blessings, and this year is no exception. For the first time in a decade, things are beginning to head in a good direction, but there is still much work to do. The 2016 election was only a reprieve, it was the beginning of the real work and not the end of it.
Things are Getting Better ...
A few examples supporting the change,
· The last two consecutive quarter’s growth of over 3%. So much for the ‘new normal’ of 1% we were told we must accept under the previous administration.
· Unemployment is at the lowest rate in 17 years. Hispanic unemployment is at the lowest level ever recorded, and black home ownership is at a record level.
· Regulations are being removed that have inhibited business investment, job formation, and economic growth.
· Real median household income continues its upward climb from 2014 and is at its highest level ever at about $59,000.
· Just this week a major tax reform bill was passed that takes some significant steps toward reform. More about that in just a bit.
... But More Work To Do
But there is still much to do.
· Our national debt doubled under the Obama administration from $10 to $20 trillion, and there has been no serious attempt at spending reform.
· The labor participation rate is still well below its historic average of 66-67%, at around 62-63% where it sat for most of the Obama administration. There are many people who are not yet sharing in this year’s improvement.
· The number of people receiving assistance, and the amount paid for assistance programs continues to climb. This is wrong on a couple of levels. First, it is contrary to our purpose as charity is our responsibility and not the governments. Second, it is bad stewardship as government is extremely inefficient, delivering on average only about 30₵ in services for each $1 it takes in.
· Members of both parties are resistant to the reform efforts being put forth, as is the government bureaucracy. As a result we are seeing,
o Leaks undermining reform efforts.
o Willful refusal to enforce laws.
o Biased investigations and collusion to cover misdeeds.
o Hollow arguments made to mislead and derail reform.
The Forces Against Change
Why this resistance? Because some politicians and bureaucrats like things the way they are. Why? Because the present state ensures their employment, the funding they rely on, and the power that comes with funding control. It’s man turned toward himself, and enlarging himself.
In our governance system, four institutions naturally work against any president’s agenda. They are: Congress, the judiciary, the bureaucracy, and the media. Into this mix Woodrow Wilson brought the idea of positive liberalism a century ago that had it roots in Europe. Instead of relying on markets, free associations, and local government units to effect change, positive liberalism relies on a centralized government’s power. A country’s national government must “use its centralized powers positively to prioritize and reorder the general welfare. Wilson believed that social justice could be implemented by separating governments political and administration dimensions by using neutral ‘scientific’ administration methods.” Underlying this notion is the idea that government would not become tyrannical because it would only do what ‘science’ deemed proper. However, if men were angels there would be no need for laws.
Dan Devine notes at least four problems with positive liberalism’s principles, all driven by some significant differences between managing public and private administrations. These include,
· The staff is the line. There must be cooperation between key political and career staff to achieve significant accomplishments, and they must be achieved quickly to prevent losing momentum.
· The process itself is the substance. There are many overlapping products and programs delivered by complex overlapping processes across differing agencies.
· Manager’s don’t manage. Instead they sell ideas to the bureaucracy who currently must act to carry them out.
· There are no politically neutral ideas.
What this notion creates is a bureaucracy insulated from responsibility. Power without a check always leads to tyranny.
The Hollow Tax Arguments
There have been repeated Democratic claims the tax bill passed this week would only benefit the rich, and its weight would be born by the middle class. Objective analysis shows that is not likely the case. It is estimated as much as 80% of American taxpayers will benefit under the new law.
But let’s look at the Democratic argument. One way to examine to examine this Democratic charge is to look at where the rich reside and whose policy they support. Below is a list of the top 12 counties in the U.S. in terms of median income. A median is a statistical measure representing the 50th percentile, fifty percent of the population earns less than the median figure and fifty percent earns more. We saw above that the U.S. median income is about $59,000. The median income in each of these counties is 50 to 100% greater than the U.S. average.
Several other things to note about the data.
· Seven of the top twelve counties are in VA and MD, in the Washington DC area. Not New York City. Not Silicon Valley, Not Chicago, LA, or San Francisco, but Washington.
· The trend among these twelve counties is they increasingly support Democrats and their policies. In 2000, nine of these twelve counties voted Republican. Now it is only five.
The above leads to a question. If the new tax bill really benefits the wealthy, would Democrats oppose it? After all, it appears the wealthy are part of that party’s constituencies. From the data above, they would not. So what is happening? They are telling lies. The politicians expressing the world will end are putting their needs, and their party’s needs, above those of their country. So what should we do?
I heard a media and political analyst today say the real question about the new tax bill is “How much revenue will it bring in?” With all due respect, this is an ignorant question. The real question is how much of our income should we be allowed to keep and maintain control over, and how much should be given to government.
In answering that question, one must consider how good a steward has the government been with what was entrusted to it. We have a government that is very inefficient, delivering on average about 30₵ in services for each $1 it takes in, as mentioned earlier. At the same time Washington seems to keep doing better and better as noted in the median income figures just presented. We also have a federal government (congress and bureaucrats) that are not addressing any of our real problems; immigration/security, entitlement reform, debt reduction, maintaining infrastructure, and even putting together a budget. Any real answer requires eliminating bureaucracy, and making what remains accountable to the people they serve.
Given congressional performance, and that of the bureaucracy, they should get less until they demonstrate they will take on and resolve the problems just noted, most of which they created through irresponsible policy. But to do that they will have to put the country’s interest before their own and their party. We have a few who are acting to do just that. The real question is how many more will join them? It is easy to say you love your country, without meaningful action those words are hollow.
I've written about this before, but with events today it is worth reiterating.
Today (Dec. 28) NY Gov. Cuomo cried over the new tax bill. He stated limiting the state and local tax deduction “put a dagger in the heart of New York and California.” He added, “You want to hurt New York? You want to hurt California? They’re the economic engines.” Enough with the melodrama please.
To cut to the chase, the governor is an ass. He is saying he is okay with a policy that rewards and subsidizes state political incompetence and mismanagement, as our previous policy did by giving deductions for state income, sales, and property taxes. No deduction should be given to any of these items. It is wrong. It violates what is supposed to be one of our founding principles - equality under the law. The state you live in should not matter from a federal tax perspective. There should be a rate and a basis for the rate (such as income), and you should simply pay whatever the rate is for the amount you’ve earned. It is really quite simple.
Any state is free to make whatever tax policy it wants, but to say that any state should be rewarded for their tax policy is asinine. If a state effectively spends what it collects in taxes, then it should attract investment and people. If it does not, then it is likely that investment will decrease and people will leave. Both New York and California have been losing citizens and business for a long time. If they really want to address the problem, they need to only look in the mirror.
 U.S. Bureau of the Census, Real Median Household Income in the United States, St. Louis Federal Reserve, https://fred.stlouisfed.org/series/MEHOINUSA672N. Accessed 12/17.
 U.S. Bureau of Labor Statistics, Civilian Labor Force Participation Rate, https://data.bls.gov/pdq/SurveyOutputServlet. Accessed 12/17.
 Wolf, Dan, p. 178, Collectivism and Charity: The Great Deception, living rightly publications, 2016.
 Devine, Dan, p. 90, Political Management of the Bureaucracy, Jameson Books, 2017.
 Rubin, Richard, New Analysis Shows Senate Bill's Tax Benefits Shift Over Time, Wall Street Journal, Nov. 20, 2017. https://www.wsj.com/livecoverage/tax-bill-2017/card/1511210888, accessed 12/17.