My Daily Reading Habits

Something that fascinates me is how people inform themselves–how they get their news, what books they read, who they listen to, and what they watch.  This was the topic of one of my first blog posts, “You Are What You Read.” I think that people are profoundly influenced by who they listen to and what they read.

Reading Newspaper

Sometimes people ask me what I read, and some just assume what I read by what I write.  I read a lot.  I believe that “leaders read and readers lead.”  Here’s how and what I read.

How I read

Much of my news intake happens through my email.  If I find a site that has a good articles on it, I’ll subscribe to their email newsletter or RSS feed.  Side note: if you are a blogger, the surest way to lose readers is to not have a way for people to subscribe to your posts.  If I go to a site, and they don’t have a way to subscribe (either through my RSS reader, or by email), it’s unlikely that I’m coming back.

If I subscribe to a new newsletter via email, I will let the newsletters come to my Inbox for a few weeks, and I’ll read most of them.  After a few weeks, I decide whether the newsletters are worth my time to continue reading, and if it is, I create a filter in Gmail for them.  I prioritize them by putting them into one of three categories:

High Priority: these are newsletters that I highly value, and read them regularly (daily or weekly).
Medium Priority: these are newsletters and Google Alerts that I will skim daily.  There are hundreds of emails per day that go in this category.
Low Priority: these are newsletters that I only occasionally read, and most of the time I’ll go in and just delete them every few days.

My second way of ingesting information is through my Feedly ().  I used to use Google Reader, until they closed down that application.  I follow 189 blogs through Feedly, and I break these up into several categories:

  • Atheism and Apologetics
  • Blogging
  • Christianity and Theology
  • Economics
  • Hispanic Political blogs
  • Leadership
  • Personal friends
  • Personal Interest
  • Politics

A third major way that I get information is through podcasts.  My podcasts roughly follow the same categories as the blogs that I read.

Another major way that I get information is through Twitter.  When I first joined Twitter, I thought it would be a huge waste of time, but I’ve come around to see it as a great way to deliver information.  I follow (and am followed by) around 28,000 people, so I use Twitter lists to filter whose tweets I see regularly.  I also use Hootsuite and Buffer regularly to read tweets and schedule my own tweets to go out.

Side note: for those of you that might think that I spend all of my time on Twitter and Facebook, because you see me post throughout the day, I’m not.  I schedule my posts the night before–or early in the morning–so that they go out throughout the day.  This way, I’m not stealing from my employers by using the time that I promised that I would give them.

Something of interest to many people that follow me will be that I don’t watch TV news much.  For large events (like the presidential inauguration, the State of the Union, or such events) I will watch TV–and typically switch back and forth between Fox and MSNBC–but for the most part I avoid TV news.  I do, however, occasionally watch C-SPAN’s Washington Journal (not live, usually several days behind).

On the less timely form of reading, I also read books, both on my and by listening to them on my commute–I have an Audible.com account.  I’ll write a post someday on what books I read.

What I Read/Listen To

I know many of you have been saying to yourselves for the past few paragraphs, “But WHAT do you read?”  Here’s a list:

High Priority – these are things that I read daily or weekly

Email newsletters:
Best of the Web Today: written by James Taranto of the Wall Street Journal (who has been described as, “so sharp, he sneezes thumbtacks”), a witty and insightful daily post.  Long, but well worth the daily time.
RealClearPolitics.com: a daily digest of political editorials from the right and the left, and during election seasons, RCP has a great aggregation of polling data.
Harvard Business Review: a daily email of business and leadership articles.
The Hill daily political digest: The Hill has good political reporting, and also aggregates political news from other news sites.
Michael Hyatt: One of the best leadership and blogging sites out there.
Salon.com Daily Digest: This is a left-leaning site, but I read a LOT of articles on this site.  I like to see what the other side is saying :)

Blogs:
Atheism: Debunking Christianity, ExChristian.net
Blogging: Copyblogger
Christianity: Desiring God, Justin Taylor, Kevin DeYoung, Stuff Christians Like
Economics: Cafe Hayek, EconLog, The Becker-Posner Blog, Freakonomics, James Pethokoukis
Friends and Family: Living by Lysa, Kacie Mann, Drew Hunter, Chris McGarvey, Above All Things, EFAMILY, and Genuine Chris
Politics: Ann Althouse (center-right), Cato@Liberty (libertarian), FiveThirtyEight (center-left), The Fix (center-left), The Agenda (right)

Podcasts:
48 Days – Dan Miller is a best-selling author that has a podcast that’s on finding your passion, and doing work that is meaningful, purposeful and profitable.
Dave Ramsey – everyone needs to get their financial life in order; Dave Ramsey helps you do that.
Desiring God sermons – to feed the soul.
EconTalk – one of the best economics podcasts out there.
Entrepreneurial Thought Leaders – weekly talks by thought leaders, presented at Stanford.
Grace Church of DuPage sermons – in case you miss a week of Pastor Daryle Worley, you can still get your fix.
HBR IdeaCast – weekly podcast of the Harvard Business Review; short and interesting
Hugh Hewitt – a practicing lawyer, constitutional law professor and author, as well as a radio talk show host, Hewitt has a interview format on his show, and has some of the most interesting interviews.
Manager Tools – if you are a leader or manager, and want to grow in the technical aspects of managing, this podcast is for you.

Medium Priority – these are things I skim, but don’t always read.  A medium priority is something that I will skim headlines on, and will read it if it sounds like a good story.  For instance, I have a Google Alert (below) on every Illinois congressperson, and I skim the headlines on them to see if they’re doing something interesting.

Email Newsletters:
Reuters Top U.S. News
Seeking Alpha – financial news
New York Post Morning Newsletter
Stratfor Security Briefings – emails about national security
InvestorGuide.com daily summary – stock market daily summary
Commentary Daily
The Patriot Post
Foundation for Economic Education (The Freeman)

Blogs/Podcasts:
Atheism: Sam Harris
Blogging: ProBlogger
Christianity: Blogging Theologically, Challies
Economics: Keith Hennessey, The Big Picture, Carpe Diem, Greg Mankiw
Leadership: Knowledge@Wharton, Seth Godin
Podcasts: C-SPAN Newsmakers, This is Your Life

Google Alerts: Aaron Schock, Adam Kinzinger, Alvin Plantinga, Americans for Prosperity, Angus King, atheism, Benghazi, Berkshire Hathaway, Bill Enyart, Bill Foster, Bob Ewoldt, Bobby Rush, Brad Schneider, Bruce Wolf and Dan Proft, Cheri Bustos, concealed carry Illinois, Corey Robin, coup in Nigeria, Dan Lipinski, Danaher, Danny Davis, Darlene Senger, debt crisis, Dennis Hastert, economics, ex-Christian, Flibe Energy, gun control, gun sales, health care rationing, Illinois legislature, Illinois redistricting, “I’m a moderate,” James MacDonald, Jan Schakowsky, Jesse Jackson Jr., John Loftus atheist, John Shimkus, Kelly Ayotte, Luis Gutierrez, Mike Quigley, Naperville, nuclear reactor, ObamaCare, Paul Ryan, Peter Roskam, price controls, Randy Hultgren, reactor design, redistricting reform, Richard Dawkins, Rodney Davis, Roe Conn, Sam Harris, Scott Walker Wisconsin, secular humanism, Stephen Hawking, supply-side economics, Tammy Duckworth, Ted Cruz, term limits, Thomas Sowell, Tim Walberg Michigan, Transatomic Power, trickle-down economics, voter ID law

New/Trial Reading

Here are some things that I’ve recently started reading or listening to, and haven’t decided yet whether I will continue to follow them or not:

Email newsletters:
Morning Buzz from YG by Mark Bednar – a short-ish daily political digest from the Young Guns Network.
– this is a daily political digest from Brad Dayspring, the Communications Director of the National Republican Senatorial Committee.
CitizenLink Team daily email – this is a socially conservative daily email from a subsidiary of Focus on the Family.
The Fiscal Times – a center-left take on fiscal issues.
The American Conservative – “Authentically conservative — modest, open-minded, and uninterested in partisan chicanery,” according to them.

Podcasts:
Steve Deace – on the recommendation of a friend, I’m checking out this conservative talk show host from Iowa.
Commonwealth Club of California – a weekly center-left political forum.
The Christian Worldview – another recommendation from a friend.
Guntalk – given the recent focus on gun control, I’ve started listening to a couple of gun shows.
Cam and Company – another gun show; this is the NRA news daily show.

Posted in Leadership, Politics, Weekly Reads | Tagged , politics, reading | Leave a comment

What’s the alternative to Keynesian stimulus?

I read an article recently in Forbes about why the financial press buys into a non-existent Keynesian consensus, which prompted a conversation with a liberal friend about what the alternative to Keynesian stimulus is.

It’s telling that my friend didn’t know what the alternative to Keynesian economics was, though I think that’s typical of low- to medium-information Democratic voters.

Here’s my answer about the alternative:

Stimulus spending DOES stimulate the economy (Write this down; Bob’s actually saying this), which is why the Democrats are constantly trumpeting it.  Here’s the problem, though; it’s very hard to say that government stimulus actually stimulates the economy MORE than the alternative.  Economics is all about allocation of scarce resources.  When the government takes scarce resources and uses it for “stimulus,” it’s taking those resources away from other uses.  If the government didn’t use that money, then it would be used by other entities for other purposes.

It’s all about the multiplier effect.  Government spending, according to some, as a multiplier effect of 0.4-0.9 (which means that for every $1 of government spending, GDP growth is between $0.40 and $0.90), which means that it’s not effective.  Robert Barro of Harvard University has estimated from past stimulus packages (not the most recent one) that the government stimulus multiplier is 0.4 following the first year, and 0.6 in the second year and following.  Democrats would argue with that, saying that the multiplier effect of government stimulus is 1.1-1.2 (creating a positive GDP growth).  So, it’s debatable whether stimulus is effective or not.

What’s not debatable is that, relative to government spending, tax cuts are actually MORE effective as a way to increase GDP growth.  Tax cuts have a higher multiplier effect than stimulus does, which is why Republicans advocate for them.  Greg Mankiw, the chair of the economics department at Harvard, says that while government stimulus has a multiplier of about 1, tax cuts/adjustments have a multiplier of about 3 (which means that for every $1 of tax cuts, the economy grows by $3).  However, with tax cuts, you can only cut so much before you start cutting into essential government functions.  It’s kind of like the Federal Reserve rates in that respect; you can only cut them so much.

Why do tax cuts have a greater multiplier effect than government stimulus?  Because, fundamentally, the private sector is more efficient than government is.  If you give people a tax cut, that money is used more efficiently; those scarce resources are used more economically, thus creating greater growth.

When the government does a stimulus, the government officials are choosing what’s most important: roads, teachers, unions, construction, etc.  But, typically, they choose only those sectors from which their supporters come.  This is likely not the sectors where the resources are ACTUALLY needed, so the effect is a lower GDP growth.

I don’t think anyone can argue that stimulus “works,” because you’re pumping billions of dollars into the economy.  However, what you CAN argue about is whether it’s MORE effective than the alternative.  Democrats say you can’t do any better than a 0.9 multiplier; Republicans think you can.

The data on the 2009 stimulus package has been in for a long time; it wasn’t effective in raising GDP, and it caused a debt-drag on our economy that may cause a downgrade on our debt and a continually slow economy.

Posted in Economics, Politics, Video | Tagged , Gary Becker, Keynesian economics, multiplier effect, stimulus | Leave a comment

What’s Wrong With Universal Background Checks?

The last remaining plank of President Obama’s gun control legislative package is the “universal background check” provision, which would, seemingly, make a background check a requirement for ALL gun purchases.  Currently, the law is that a background check must be run only by gun dealers (FFL holders).  Any gun that is sold between two private individuals doesn’t have that requirement.

Gun Background Check Form

So, what could be wrong with universal background checks?  Polls have been done that show upwards of 90 percent approval of such a law, yet there are some major organizations that oppose it.  Why?

Really, the only credible argument that I’ve seen that opposes it is that a “universal background check” law would require some kind of gun registration system, either centrally or distributed, to track whether the background checks have been done.

People on the left have pooh-poohed this notion of a universal registration system.  I have a friend who, on Facebook, had this to say about a registration system:

“Gun nuts are so stupid. UNIVERSAL background checks are not linked to gun registration… but for [sic] sake of argument lets say it was, why is everyone afraid of gun registration? Oh because after gun registration then the government is going to confiscate my guns. Then after the imaginary gun registration and imaginary gun confiscation…then the government is going to take over everything and….SOCIALISM …..AHHHH!!! This fear of gun registration is so silly to me. It [sic] coming from a place of unrealistic paranoia…everyone keep in mind that GUN REGISTRATION is not actually being proposed.”

So, I have a few questions: first, is a registration system actually a part of the proposed legislation in Congress? And secondly, is it right to be concerned about a universal registration system for guns? Does gun registration lead to gun confiscation?

Is a gun registry system a part of the proposed gun control legislation?

To answer this question, one must understand a little bit about the background check process, and what the government can and cannot do.  When a licensed firearms retailer does a background check, they are submitting an individual’s personal information to the FBI to run through the National Instant Criminal Background Check System (NICS).  The NICS system either approves or denies the person the ability to buy a firearm, giving the licensee a unique identification number to record the background check.  The NICS system is then required by law to delete any personal information about the person whose name was run in the background check.

The licensed firearms dealer is then required to keep accurate records of the transaction, including the name, age, and place of residence of each person that buys a gun from them.  They are then required by law to immediately respond to ATF trace requests, and their records can be perused at any time by federal authorities.

So, in essence, we have a distributed gun registry today, with the exception of private sellers.  Under the bill under consideration in the Senate today (S.649), a private seller who wanted to sell his gun to someone would have to transfer his gun to a federally licensed dealer, who would then run the background check on the buyer, and then transfer the gun to the buyer upon a successful completion of the background check.  There are some exceptions in the Senate bill, as written today:

  • Gifts between spouses, between parents and their children, between siblings, and between grandparents and their grandchildren.
  • Guns that are left in wills.
  • Temporary transfers at home (if you loan someone a gun at your own home for shooting).
  • Temporary transfers at the range or while hunting.

Bottom line on this question: the federal government is NOT allowed to keep background check information, but it does require its federally-licensed gun dealers to keep all that information, and they can come and get it at any time for their gun tracing program.  So, while there is an incomplete database of firearms owners today (because not everyone buys their guns from a gun dealer), after the law is passed, there will be a complete, distributed database of firearms owners that can be accessed at any time by the federal government.

Note: It really has to be this way, too.  If you don’t have record-keeping in the background check process, then the background check system has no teeth.  If the law were written in such a way that private sellers could run their own background checks, but didn’t have to keep the same records as the gun dealers, then how would the law be enforced?  It would be unenforceable.  The law would have no teeth.  A person could run a background check on his brother, and then give the gun to someone else, and the government would have no recourse.  In order to have truly universal background check system that are enforceable, the government must have some kind of universal registry.

Is a gun registry system something to fear?  Does a gun registry lead to gun confiscation?

Why do the “right-wingers” and “gun nuts” (or “gun rights advocates,” if you must refer to them that way) cry “Gestapo” when the topic of a gun registry is brought up?  My friend Broc says it’s no big deal; thoughts of gun confiscation is “coming from a place of unrealistic paranoia,” he says.

Being that this is a purely hypothetical situation, I guess the only way to confirm whether a gun registry leads to gun confiscation would be to find examples (contemporary or in history) where a registry has led to confiscation.

Here are some examples that I found:

  • Canada just recently (February 15, 2012) passed a law to dismantle its nationwide firearms registry, because of an uproar over the government confiscating weapons as bureaucrats added weapons to the banned weapons list.  You can watch a video below of a Canadian newscaster who discusses the Canadian firearms registry and its implications for the United States.  Time elapsed from registry to confiscation: 19 years.
  • Australia has had a national gun registry since the 1930s, and in 1996 passed a gun control law that banned all semi-automatic guns.  Though the Australian Constitution does not allow the government to take property from its citizens without just compensation, the government confiscated all semi-automatic weapons under a buyback program which paid each owner an average of $500-some dollars for their weapon.  Time elapsed from registry to confiscation: 66 years.
  • In California, where every firearms owner is required to register their firearm, the state confiscated SKS rifles in 1997 based upon the registrations, unless an owner could prove that they acquired the rifle before June 1, 1989.
  • The United Kingdom, which has had a gun registry since 1921, banned all semi-automatic centerfire rifles, as well as pump-action shotguns in legislation passed in 1987, and then all handguns above .22 caliber in 1996, and then finally all .22 caliber handguns in 1997.  All firearms owners were required to surrender their guns in exchange for payment.  Time elapsed from registry to confiscation: 76 years.
  • New York City passed a gun registry law in 1967, requiring everyone who owned a semi-automatic rifle or shotgun to register it.  In 1991, Mayor David Dinkins banned the possession of many of these, and police have gone door to door to collect these weapons. Time elapsed from registry to confiscation: 24 years.
  • In New Orleans in 2005, after Hurricane Katrina, police were dispatched to confiscate firearms, according to the New York Times, including legally registered firearms.
  • In 2011, the new South African regime passed the Firearms Registration Act, which required all firearms to be re-registered.  In the process of re-registration, more than half of the applicants were denied, and forced to turn in their guns.  Time elapsed from registry to confiscation: >2 years.

These are just (relatively) contemporary examples.  There are others that are historical, including the Weapons Control Act of 1938 in Germany which made it illegal for Jews to own firearms.  This was used, in conjunction with the 1928 Law on Firearms and Ammunition, which required gun registration and licensing, to strip Jews of their firearms.  We all know how that turned out.

It’s okay, though, because according to President Obama, “I am constrained by a system our founders put in place,” so he won’t be taking away firearms in the United States.  And I believe him.  There’s very little chance that he will confiscate firearms from law-abiding citizens (though they might in California).

But that’s not to say that it won’t happen in the future (oh, no! It’s the slippery slope argument!).  It has been done time and time again in history (as shown above).  Those on the Left are defensively stating today, “We don’t want to take away your guns! We love hunters and sportsmen.  We just want to make sure that criminals don’t get them.”  They don’t want to take away guns; neither did those that passed registry laws in Canada, Australia, the United Kingdom, New York City, South Africa, Germany, Russia, Turkey, China, Cambodia, Guatemala, Bermuda, Cuba, New Zealand, Greece, Ireland, Jamaica, etc.  And I believe them; they don’t want to take away guns… today.

Posted in Politics | Tagged gun confiscation, gun control, gun registration, gun violence, | 6 Comments

Do Strict Gun Control Laws Work?

One of the things that has troubled me in the gun control debate is this: is there any data that suggests that strict gun control laws actually produce results?  Do gun control laws reduce murders?  Do they even reduce gun murders? I decided to do some very rough research.  Here’s what I found.

AR15

First, I went to the website of the Brady Campaign to Prevent Gun Violence, and downloaded the full state scorecard report.  The Brady Campaign ranks each state (except for a couple of states from which there isn’t much data) on its gun laws, and how strict they are.  They rate things like:

  • Gun Dealer Regulations
  • Limiting Bulk Purchases of weapons
  • Record Retention
  • Crime Gun Identification
  • Laws on Reporting Lost/Stolen Guns
  • Background checks on all gun sales
  • Permit to Purchase
  • Ammunition Regulations
  • Assault Weapons Ban
  • Large Capacity Magazine Ban
  • Child Safety Locks
  • Access Prevention
  • No Guns in the Workplace
  • No Guns on College Campuses
  • Not a CCW Shall Issue State
  • No State Preemption

(You can see a description of the categories here)

The score scale is from 0-100, and the top ten states with the “best” (strictest) gun laws are:

State State Rank State Score
California 1 81
New Jersey 2 72
Massachusetts 3 65
New York 4 62
Connecticut 5 58
Hawaii 6 50
Maryland 7 45
Rhode Island 8 44
Illinois 9 35
Pennsylvania 10 26

Given those rankings, one would expect that gun violence in these states would be the lowest among all the states.  So, I looked at the FBI data from 2011 (the same year that the Brady Campaign had rated the states), and found an aggregated of all the FBI info on the Guardian UK website, and found the following ranking of states (in this case, the #1 state has the lowest incidence of gun homicide per 100,000 residents):

State State Rank Gun Homicide Rate
Hawaii 1 0.07
New Hampshire 2 0.53
Rhode Island 3 0.57
South Dakota 4 0.68
Iowa 5 0.71
Vermont 6 0.75
Montana 7 0.76
Minnesota 8 0.82
Maine 9 0.90
North Dakota 10 0.93

So, only two of the top ten states with the strictest gun control laws made it into the top ten states with the least gun violence (Hawaii and Rhode Island).  At least the rest of the top ten states were above average, and made it into the top 25, right?  Wrong.  Here’s where the strictest states ranked in gun violence among the states:

State Gun Law Ranking (Brady Campaign) Gun Violence Ranking (FBI)
California 1 32
New Jersey 2 29
Massachusetts 3 18
New York 4 41
Connecticut 5 23
Hawaii 6 1
Maryland 7 44
Rhode Island 8 3
Illinois 9 27
Pennsylvania 10 40

Only 4 of these states were above-average when it comes to gun violence.

Interpreting the Data

There’s only a few possible explanations for this data:

  1. 2011 was a really bad year for gun violence in the states that have the strictest gun control laws.  This data is a fluke.
  2. Since there’s no uniform minimum standard of gun laws across the United States, the “bad” laws in some states cause a rise in gun violence in the states with “good” gun control laws.
  3. Strict gun controls laws have minimal effect on gun violence.
  4. There are other causes of gun violence (other than guns) that aren’t accounted for in this data.

It’s also possible that some gun laws have an effect on gun violence, but once those basic laws are in place, additional laws have very little or no effect.  It’s interesting to look at a geographical map of gun violence in the United States.  It seems that there are pockets of high gun violence, and pockets of very low gun violence.

regional gun violence

It looks like there are regional pockets of violence.  It also looks like the states that have very low violence and low violence vary widely as to where on the Brady scale they lie.  Some, like Montana, North Dakota, South Dakota and Utah, are among the worst-rated on the Brady scale.  Others, like Washington, Oregon and Colorado score fairly well on the Brady scale.  This lends credence to the third and fourth interpretations of the data–that most gun control laws don’t have a large effect, and there are factors other than guns that have a greater influence on gun violence.

Discussion Question: Do you see more evidence for the effectiveness of gun control laws?  If not, should Congress and state legislatures be pursuing stricter gun laws?

Posted in Leadership, Politics | Tagged , gun control, gun violence, murder, | 31 Comments

Liberals’ Demand Economics Don’t Work

Ronald Reagan once said, “It isn’t so much that liberals are ignorant. It’s just that they know so many things that aren’t so.” One of those things, recently, that liberals are increasingly espousing is demand economics. I’m hearing it more and more, from MSNBC liberals: “We have a demand problem, not a spending problem.”  Why are liberals wrong about demand-side economics?

Obama signing stimulus

The Claim

Here’s the situation as a liberal might explain it:

In an economy that has 10% unemployed people, the government ought to provide an income for the unemployed. By doing so, those unemployed people will necessarily go out and spend all of that money, creating a demand for goods in the economy. A business owner in that economy benefits from that demand (he sells goods to the unemployed), and in turn has profits that go up, and in turn hires another person to help in his business, removing someone from the unemployment rolls.

The business owner also orders more supplies, which creates demands for more raw goods, which in turn employs more people at other companies. At every point in the economic food chain, more goods and people are in demand, and employment increases, the economy improves, and revenues to the government increase.

So, any money that might have been borrowed in order to pay the initial unemployment benefits is gained through economic growth, and the debt is easily paid off, thereby justifying the initial debt.

The middle class emerges once again. The unemployment rate nationally is reduced dramatically. Tax receipts spike. The deficit drops. Everyone wins.

In other words, the government, by borrowing money, can create enough demand to jump-start an economy, and by jump-starting the economy we can pay off debt.

There are several problems with this economic theory:

  1. Demand-side economics only take into account short-term goals.
  2. Demand-side economics cannot be sustained.
  3. Demand-side economics don’t work well when accumulated debt it already holding down the economy.
  4. Demand-side economics doesn’t take into consideration other forms of demand.

Why Demand-Side Economics Don’t Work

First, demand-side economics only take into account the short-term. There is a trade-off to borrowing money. When you borrow $250,000 in order to buy a house, sure you inject $250,000 into the economy. However, with that comes some trade-offs. First, you’re locked into those monthly payments for 15 to 30 years. Second, you end up paying $379,443 for the house, not $250,000, depending on your term and interest rate. Third, you might find yourself unable to move if you can’t later sell the house.

Similarly, in a national economy, if we borrow $1 trillion to “stimulate” the economy, we’re locking ourselves into those debt payments for the long-term (see discussion of debt and the economy below). We are also paying a LOT more money for that $1 trillion in the future, which decreases future demand (if you paid for your house in cash, you would spend the $129,443 in interest savings on other things in the intervening 30 years). Finally, by increasing our debt, we will find ourselves unable to other things in the future, if we are paying an increasing amount of money on debt payments. Today, the U.S. is paying between $360 billion and $460 billion per year in debt interest payments, and that is while interest rates are an average of 2.2%. If interest rates rise, as they are expected to do, our interest payments will skyrocket. For every 0.25% rise in interest rates, our interest payments on our national debt will increase $41 billion.

The second problem with demand-side economics is that they cannot be sustained. Stimulus packages, as we’ve seen, don’t always work as we expect that they will. The $787 billion stimulus of 2009 did very little to boost the economy (though liberals will say that it kept us out of a depression), and certainly hasn’t caused enough of a boost to the economy where we can pay back the $787 billion in debt. In fact, I can’t think of any scenario in history where a stimulus has been done, and the debt has been paid back. I’m open to anyone pointing out if I’m wrong on this point. However, it seems to me that when we borrow money for stimulus, we continue to pay interest on that debt ad infinitum.

The third problem with demand-side economics is that it doesn’t work well when accumulated debt is already holding down the economy. In theory, economic stimulus might create demand in an economy, as Keynesians/liberals claim. However, I think it’s more appropriate this way: “economic stimulus might create demand in an economy that’s not weighed down by debt.” A study was done by two Harvard professors, Carmen Reinhart and Kenneth Rogoff, that found that when a nation’s debt reaches 90% of its annual GDP, the economic growth is, on average, 1% lower than when its debt was under 80% of GDP. In other words, a high level of national debt makes it very hard to create economic growth. Many countries in Europe have seen this in the last few years. Japan has had this problem for the better part of 20 years.

The comparison to a family budget doesn’t work very well in this category; but the comparison to a large company may work pretty well. If you have a large company, it could be to your advantage to borrow some money in order to make an investment in equipment or in a marketing campaign, to gain market share or to introduce a new line of products, for example. Many financial advisors will say it’s risky to borrow in order to do these types of things, but we’ll say our hypothetical company will do it anyways. When you have a small amount of debt, this can work splendidly. If your gamble doesn’t pay off, then you can pay for the loan out of profits for the next few years until the loan is paid off. However, if you’ve continually borrowed and borrowed, each time on the “next big idea,” then you will reach a point when your “next big idea” doesn’t pay off, and you cannot make the loan payments, and you default on the loan. Then you’re forced, as a company, to liquidate part or all of the business to pay off the loan, at which point other loans may be called, and your company goes under. Similarly, borrowing money when you’re debt-to-GDP ratio as a nation is at 20% is a much different gamble than when your debt-to-GDP ratio is over 100% (as our is now). Your risk as a nation is higher, and if your gamble doesn’t pay off (as in the 2009 stimulus plan), then you’re stuck with an increased debt that you really cannot afford.

The fourth problem with a demand-side economic model for government is that it doesn’t take into account other (and perhaps better) types of demand. When the government spends money, it’s deciding where that money goes, necessarily making a choice as to what is the best sort of “demand.” In the case of the Obama administration, it decided that the following were the best types of demand to create:

  • Increasing food stamp payments
  • Construction projects – high speed rail, highway improvements, public housing projects, renewable energy investments
  • Increases in Pell grants
  • More teachers
  • Aid to balance state education budgets
  • Payroll tax credit
  • Increasing the number of weeks of jobless benefits (unemployment)
  • Aid to states for Medicaid spending

Cynically, I think that most of the stimulus spending went to sectors where there was a political motivation to spend money, not where there was an economic motivation to spend money (state government, construction, education). This is the fundamental problem with government-supplied demand-side economic policies: it doesn’t send capital where its use would have the greatest economic effect; it sends capital to where its use has the greatest political effect, often to the detriment of the economy.

An Alternative Economic Solution

Liberals do have a point when it comes to demand. Demand for goods and services is a driver of economic growth. However, pushing money into areas in which it otherwise (in a free market) would not be used is an inefficient use of capital. Capital will, in a free market, find its most efficient path to create economic growth, while the government does not. If, instead of confiscating capital from the private sector in the form of taxes or debt, the government were to leave capital in the hands of the private sector, current and future demand would be created, in the most efficient way possible.

In the initial example above, if the government were to refrain from increasing taxes to fund their stimulus (I’ll deal with borrowing below), then the private sector has that much money with which to create demand in their own ways. For example, if the business owner doesn’t have to pay taxes to pay for the stimulus package, then he might have enough money with which to hire an extra employee, or to start a new product line, or to finance an expansion of his business to another community. Instead of the government dictating where the demand is created, the individuals, businesses and communities are instead creating the demand that boosts the economy.

But what about the government borrowing to fund the stimulus? What could possibly be wrong with that? Borrowing, while creating an immediate demand, decreases future demand. Not only does the government have to pay back the stimulus money at some point, but it also has to pay it back with interest. Our $787 billion stimulus in 2009 will cost us $17.3 billion each year, every year, until we pay back the money, which we are unlikely to do (given our track record of paying back our debt). That $17.3 billion is demand that is removed from our economy every year. That decreases our annual GDP by 0.1% each year, which is not insignificant, given that our annual GDP growth is about 1.3% in this sluggish economy.

Bottom line: Government borrowing to fund stimulus packages may temporarily increase economic output (though not necessarily, as we saw in the 2009 stimulus), but actually decrease economic output over the long run. High government debt also decreases economic output, though to what extent is still yet unknown.

Discussion question: Why do you think liberals fall for the demand-side (Keynesian) economic theory?

Posted in Economics, Politics | Tagged demand, , Keynesian economics, supply | 18 Comments

Ten Specific Problems with the Convention on the Rights of Persons with Disabilities

A while back, I wrote a post on the U.N. Convention on the Rights of the Child, which was a horrible treaty that would restrict the rights of parents to raise their children, and subject the United States to the whims of an international body, instead of being able to make its own laws in this arena.  You can read my post here.

Well, the U.N. Convention on the Rights of the Child was not passed by the Senate (thankfully), but now a new treaty is coming before the U.S. Senate: the U.N. Convention on the Rights of Persons with Disabilities.  It’s equally bad, and should not be approved by the Senate.  Here are ten specific problems with this treaty.  I’m reprinting these ten reasons from ParentalRights.org’s president Michael Farris (you can see the original PDF version here):

  1. Any remaining state sovereignty on the issue of disability law will be entirely eliminated by the ratification of this treaty. The rule of international law is that the nation-state that ratifies the treaty has the obligation to ensure compliance. This gives Congress total authority to legislate on all matters regarding disability law—a power that is substantially limited today. Article 4(5) makes this explicit.
  2. Article 4(1)(a) demands that all American law on this subject be conformed to the standards of the UN.
  3. Article 4(1)(e) remands that “every person, organization, or private enterprise” must eliminate discrimination on the basis of disability. On its face, this means that every home owner would have to make their own home fully accessible to those with disabilities. If the UN wants to make exceptions, perhaps they could. But, on its face, this is the meaning of the treaty.
  4. Article 4(1)(e) also means that the legal standard for the number of handicapped spaces required for parking at your business, private school, or house of worship will be established by the UN—not your local government.
  5. Article 4(2) requires the United States to use its maximum resources for compliance with these standards. The UN has interpreted similar provisions in the UN Convention on the Rights of the Child to criticize nations who spend too much on military issues and not enough on social programs. There is every reason to believe that the UN would interpret these provisions in a similar fashion. The UN believes that it has the power to determine the legitimacy and lawfulness of the budget of the United States to assess compliance with such treaties.
  6. Article 6(2) is a backdoor method of requiring the United States to comply with the general provisions of the UN Convention on the Elimination of All Forms of Discrimination against Women. This treaty enshrines abortion rights, homosexual rights, and demands the complete disarmament of all people.
  7. Article 7(2) advances the identical standard for the control of children with disabilities as is contained in the UN Convention on the Rights of the Child. This means that the government—acting under UN directives—gets to determine for all children with disabilities what the government thinks is best.
  8. Article 25 on Education does not repeat the parental rights rules of earlier human rights treaties such as the International Covenant on Civil and Political Rights or the International Covenant on Economic, Social, and Cultural Rights. This is an important omission. Coupling this omission with the direct declaration of “the best interest of the child” standard in Article 7(2), this convention is nothing less than the complete eradication of parental rights for the education of children with disabilities.
  9. Article 15’s call for a ban on “inhuman or degrading treatment or punishment” is the exact same language used in the UN CRC which has been authoritatively interpreted to ban any spanking by parents. It should be noted that Article 15 is not limited to persons with disabilities. It says “no one shall be subjected to … inhuman or degrading treatment.” This means that spanking will be banned entirely in the United States.
  10. The United States, as a wealthy nation, would be obligated to fund disability programs in nations that could not afford their own programs under the dictates of Article 4(2). This is what “the framework of international cooperation” means.

Please call your Senators and ask them to vote No on this terrible treaty.  Click here to find out how you can take action.

Posted in Family, Politics | Tagged , parents, treaty, U.S. Senate, United Nations | 2 Comments

President Obama Obscures the Facts on Small Business

In his weekly address today, President Obama laid out what sounded like a very compelling argument for raising taxes.  However, he was deliberately misleading about the impact of increasing taxes on small businesses.

Here’s what he said about the impact of the increased taxes on small business:

“When it comes to taxes, for example, there are two pathways available.

“One says, if Congress fails to act by the end of the year, then everybody’s taxes automatically go up – including the 98% of Americans who make less than $250,000 a year. Our economy can’t afford that right now. You can’t afford that right now. And nobody wants that to happen.

“The other path is for Congress to pass a law right away to prevent a tax hike on the first $250,000 of anyone’s income. That means all Americans – including the wealthiest Americans – get a tax cut. And 98 percent of Americans, and 97 percent of all small business owners, won’t see their income taxes go up a single dime.

“The Senate has already passed a bill like this. Democrats in the House are ready to pass one, too. All we need is for Republicans in the House to come on board.”

If it’s not going to affect practically anyone, why are those stupid House Republicans dragging their feet??

Well, it turns out, those 3% of small businesses are pretty important to our economy.  The Investors Business Daily explains,

“But this is, to put it politely, deceptive. By jacking up taxes on the most successful 3% of small businesses, Obama will destroy hundreds of thousands of jobs, shrink U.S. output and force companies to raise prices.

“As usual, the data tell the story.

“America has some 34.8 million small businesses, according to a recent Treasury Department study. Sounds like a lot, until you consider that 30 million of them employ no one other than the owner.

“Of the remaining 4.8 million that do employ workers, 1.2 million have incomes above $200,000 — where Obama’s tax hikes kick in.

“Here’s the rub: Those 1.2 million small businesses that will be hit by Obama’s small-business tax are the nation’s most prolific job creators, accounting for 54% of all private-sector positions — or 77.6 million in all.

“And while they make up just 3% of all small businesses, they earn 91% — or $341 billion — of all profits reported by the small businesses with workers. “They are the most successful and therefore the biggest job creators,” as the Heritage Foundation recently pointed out.”

Hmmmm… I hope that somebody tells the president that he’s about to destroy hundreds of thousands of jobs.  Maybe he’ll be too busy selling his tax hikes to the public to pay attention.

Discussion Question: Are you in favor of raising taxes on our nation’s most prolific job creators?

Posted in Economics, Politics | Tagged , fiscal cliff, , , small business, tax policy, tax the rich, , U.S. economy | 4 Comments

New Members of Congress from Illinois

2012 was a wave Democratic year. There were quite a few surprise Democratic winners across the country, including in Illinois. Illinois had the distinction of being a bright spot for the Democrats in 2010, in an otherwise Republican wave year. They held on to the Illinois legislature and the governor’s mansion, and so controlled the redistricting process in Illinois.

Last Tuesday, Democrats won four seats from the Republicans, and held on to one competitive seat near St. Louis, while Republicans held one competitive seat. Here are the new members:

Tammy Duckworth – 8th Congressional District (Republican to Democrat) – The 8th congressional race was probably the most publicized of the races. Incumbent Rep. Joe Walsh was a controversial Republican member of Congress who was closely associated with the Tea Party. Walsh had originally decided to run in the 14th district, challenging Randy Hultgren for the seat, but later decided to run in the 8th district to avoid a member-on-member primary fight. Duckworth, who had run for Congress in 2006, and had lost to Peter Roskam, had been appointed the director of the Illinois Department of Veterans Affairs, and after President Obama won his first term in 2008, was appointed the Assistant Secretary for Public and Intergovernmental Affairs at the U.S. Department of Veterans Affairs. She also has a list of “firsts” for Congress: first Asian-American elected in Illinois; first disabled woman elected to Congress (she lost her legs when a rocket-propelled grenade hit her helicopter in Iraq in 2004); first member of Congress born in Thailand. She won the race by a convincing 55-45%. She will be 44 years old when she takes office.

Brad Schneider – 10th Congressional District (Republican to Democrat) – Schneider ran in another competitive district. Bob Dold, the incumbent congressman, had defeated Democrat Dan Seals in 2010 to replace Mark Kirk, who won the U.S. Senate race in Illinois that year. The National Journal ranked Dold as one of the most vulnerable incumbents in 2012. Despite being endorsed by the Chicago Tribune and the Daily Herald, Dold fell to the Democratic wave. Brad Schneider is a management consultant who ran his own consulting firm, Cadence Consulting Group, until he decided to run for Congress. His lack of income from his business was an issue in the campaign. He won the district by a very slim 2,500 votes. He will be 51 years old when he takes office.

Bill Foster – 11th Congressional District (Republican to Democrat) – Foster was in the unique position of running for his old job. He was elected to Congress in 2008 to represent the 14th congressional district after Dennis Hastert resigned from Congress (after losing his speakership). Foster was unseated in 2010 by Randy Hultgren in a hard-fought race. In the 2010 redistricting, Hultgren’s district was made substantially more Republican, so Foster decided to run in the new 11th district, a competitive (but Democratic-leaning) district. He ran against Rep. Judy Biggert, a 7-term incumbent whose district was eliminated in the redistricting. Biggert faltered in the debates, allowing Foster to take the advantage. Foster is a physicist who worked at Fermilab for 22 years, and was on the team of scientists that won the 1989 Bruno Rossi Prize for cosmic ray physics. He won the district 58-42%. He will be 57 years old when he takes office (again).

Bill Enyart – 12th Congressional District (Democrat to Democrat) – the 12th district in Illinois became a competitive district when representative Jerry Costello (D) decided to retire rather than run for re-election. Enyart did not run in the primary election, but was selected as the Democratic nominee after the primary winner, Brad Harriman, dropped out of the race due to illness. Enyart was selected by a 13-member committee to replace Harriman. He ran against Jason Plummer, who was the 2010 Republican nominee for lieutenant governor. Enyart was a member of the U.S. Air Force before joining the Illinois Army National Guard, and was appointed to lead the National Guard in 2007 by Governor Blagojevich. He has promised to work to fix the flaws with the Affordable Care Act when he gets to Congress. He won 52% of the votes in the race. He will be 63 years old when he takes office.

Rodney Davis – 13th Congressional District (Republican to Republican) – Davis was one bright light for the Republicans in a day full of sadness. Davis ran to succeed Congressman Tim Johnson, who had held the seat for 12 years. Johnson ran in the primary race, and had a near-certain chance of re-election. But, after he won the primary election, he announced that he would retire from his seat in Congress. Rodney Davis was selected to replace Johnson on the ballot by a 14-member committee made up of Republican County Chairmen. Davis was the campaign manager for Rep. John Shimkus’ first re-election campaign, and then joined the congressman’s staff. Davis won the race by a slim 1,287 votes. He will be 43 years old when he takes office.

Cheri Bustos – 17th Congressional District (Republican to Democrat) – A former reporter and editor for the Quad-City Times and former alderman on the city council of East Moline, Cheri Bustos ran in a three-way race to challenge incumbent congressman Bobby Schilling, a pizzeria owner from Moline, Illinois. She defeated Freeport mayor George Gaulrapp and Augustana College executive Greg Aguilar in the primary, and then waged a fierce general election race against Schilling, defeating him 53-47%. From her policy positions, she seems like a run-of-the-mill Democrat: she strongly supports the Affordable Care Act (Obamacare), opposes extending the Bush tax cuts for the top tax brackets, supports the DREAM Act, supports a contraceptive mandate, and opposes free trade acts (calling them in one debate “NAFTA-like”). However, she supports a 10% pay cut for all members of Congress until the federal budget is passed. She will be 51 years old when she takes office.

So, Democrats gained 4 seats in the House of Representatives in 2012. The Illinois House delegation now has 12 Democratic members and 6 Republican members, a shift from the 11-8 majority the Republicans had in the last Congress.

These new members of Congress join the other members of the Illinois congressional delegation:

1st Congressional District – Bobby Rush (D)
2nd Congressional District – Jesse Jackson, Jr. (D)
3rd Congressional District – Dan Lipinski (D)
4th Congressional District – Luis Gutierrez (D)
5th Congressional District – Mike Quigley (D)
6th Congressional District – Peter Roskam (R)
7th Congressional District – Danny Davis (D)
9th Congressional District – Jan Schakowsky (D)
14th Congressional District – Randy Hultgren (R)
15th Congressional District – John Shimkus (R)
16th Congressional District- Adam Kinzinger (R)
18th Congressional District – Aaron Schock (R)

Posted in Politics | Tagged Bill Enyart, Bill Foster, Brad Schneider, Cheri Bustos, , Illinois politics, Illinois redistricting, Rodney Davis, Tammy Duckworth | Leave a comment

The Fiscal Cliff: What Is It? How Does It Affect Me?

Now that the election is done, there has been a bunch of talk about how to fix the “fiscal cliff.” But few people actually know what the fiscal cliff is or how it would affect them.

Fiscal Cliff Key Players

President Obama has planned a meeting with congressional leaders for next week. Commentators are talking about the disastrous effects of the fiscal cliff if we should go over it. But what does it really mean? How does it really affect you and your life? Here’s a short primer on the fiscal cliff.

Overview of the fiscal cliff

When people talk about the fiscal cliff, they’re mainly referring to several tax increases that are set to take effect in 2013, and a number of tax cuts that are set to expire at the same time. Here’s a short list of the main ones:

  • The Bush tax cuts expire – $156 billion)
  • The payroll tax holiday expires – $125 billion
  • Failure to patch the Alternative Minimum Tax (AMT) – $88 billion
  • Expiration of business expensing – $48 billion
  • Expiration of other tax extenders – $40 billion
  • New Obamacare taxes – $36 billion
  • Expiration of 2009 stimulus – $11 billion
  • Estate tax increase – $10 billion

These are annual amounts. So, over 10 years, this is a $5.1 trillion tax increase.

So, what does this mean for you, personally? Well, here’s a few specifics about the income tax increases:

  • The bottom tax bracket goes away (and starts getting taxed at 15%. So, if you make under $17,900 (as a married couple), then your taxes will go up by 5%.
  • The second tax bracket remains the same, so if you make between $17,900 and $60,550, your taxes will remain the same (except for the first $17K of income).
  • The 25% tax bracket goes up to 28% (incomes between $60,550 and $146,400, married)
  • The 28% tax bracket goes up to 31% (incomes between $146,400 and $223,050, married)
  • The 33% tax bracket goes up to 36% (incomes between $223,050 and $398,350, married)
  • And new tax bracket is created (39.6%) for incomes above $398,350

Here are some dollar amounts for you: if you’re married, in the middle class, you’ll pay between $895 more and $4,666 more in taxes next year. If you’re married and making $250,000/year, you’ll pay an additional $7,774 in income taxes in 2013 (with a total tax bill of $66,084.

Furthermore, the payroll tax holiday is also set to expire, going back to 6.2% from 4.2%. That means that if you make the median 2012 U.S. income in 2013, you will pay an additional $1,001 in payroll taxes. These are real numbers!

Economics

If the fiscal cliff hits us (and there’s a good possibility that many of the taxes will, including payroll taxes and Obamacare taxes), the economy will slow down. How much the economy slows down depends on which taxes are allowed to increase, and which ones are not.

For example, the Congressional Budget Office (CBO), which released a report on Thursday, says that if all the taxes planned for 2013 are implemented, it would slow GDP growth by 2%. Compare that to our current economic growth of ~1.5%, and you can see that we’re in negative growth, which means recession.

According to a New York Times article, a different analysis by Moody’s Analytics predicts that the fiscal cliff would create an economic slowdown of 3.6%, even higher than the CBO predicted.

However, if only the income tax increases on the highest tax brackets are implemented, says the CBO, the economy would only slow down by 0.25%, which is more palatable to economists, but still 16.7% of our total economic growth for the year! (Take note, those of you who re-elected President Obama because you thought it wouldn’t hurt the economy to tax the rich!).

The good news for the country, though, is that if the fiscal cliff actually happens, it will bring more revenue to the national treasury, and the government won’t have the high deficits that it’s had in the past few years. The deficits will only be about half what they were last year.

Politics

Now, for all of you who are now saying, “Oh, my goodness, I’m going to pay thousands of dollars more in taxes next year,” take heart. Both Republicans and Democrats want to save you. President Obama doesn’t want to raise taxes on the lower and middle classes. He only wants to raise taxes on the top income earners.

However, both parties want to find a way to end the payroll tax holiday, because it’s really hurting Social Security to not have that money going into the fund. So, you’ll likely see that tax go back to what it was. For those outside of Illinois, it will hurt only a little bit. However, for those in Illinois, who saw the payroll tax holiday offset by a 2% increase in the Illinois state income tax, you’ll actually get hurt again by the expiring payroll tax cut. For those in Illinos, it’s just a plain old tax increase, not a return to the old rates. The problem is, do you blame Governor Quinn now, two years after he implemented the income tax increase? Or do you blame President Obama for the “new” tax?

Many of the tax increases listed above will be used as bargaining chips by both sides, and some will end up coming back. The Obama tax increases are likely to be implemented, because they’re part of the president’s plan, and Republican lawmakers want people to feel the impact of the Obamacare law.

If I had to guess, I would say that the “compromise” that the two parties achieve in regards to the fiscal cliff will look much like this: Obama will allow all the Bush tax rates to continue, including the rates for the top brackets. In exchange, he will get the Republicans to concede to a return of the payroll taxes to their 2009 levels, and then will try to blame those new taxes on the Republicans once they hit. Republicans and Democrats will come together to fix the Alternative Minimum Tax law, putting another patch on it for a couple of years. The Obamacare taxes will be implemented. And, after it’s all done, President Obama will call for a new stimulus spending package to help the economy, which is still in the doldrums.

Fiscal Sanity Elusive

In short, politicians will come up with a short-term fix to the tax code, and each go their separate ways, blaming the other for the bad state of the economy. Instead of dealing with the long term problems of our deficit and debt, they will continue to be short-sighted panderers. Instead of fixing Social Security, Medicare and Medicaid, they will punt the costs into the next generation.

While you wait for Congress and the President to do their jobs, consider checking out the Fiscal Cliff Tax Calculator by clicking here, and find out how much more in taxes you’ll pay if they don’t act.

Discussion Question: How well do you think Congress and the President will deal with the fiscal cliff?

Posted in Economics, Politics | Tagged fiscal cliff, John Boehner, , U.S. economy | Leave a comment

The Hard Work of Governing…

In the early morning on Wednesday, all the talk was about bringing the country together. Mitt Romney, in his concession speech, said,

“The nation, as you know, is at a critical point. At a time like this, we can’t risk partisan bickering and political posturing. Our leaders have to reach across the aisle to do the people’s work.”

Obama Victory Speech

President Obama also struck a unifying tone in his victory speech:

“A long campaign is now over. And whether I earned your vote or not, I have listened to you, I have learned from you, and you’ve made me a better president…

“Tonight you voted for action, not politics as usual. You elected us to focus on your jobs, not ours. And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. Reducing our deficit. Reforming our tax code. Fixing our immigration system. Freeing ourselves from foreign oil. We’ve got more work to do.”

Bill Clinton’s Example

How does President Obama go about moving past the politics as usual? As President Obama presides over the divided Congress that Americans chose on Tuesday, I would suggest that he take a page from the most popular Democratic president in recent history, Bill Clinton. Bill Clinton was soundly beaten in the 1994 mid-term elections, and both houses of Congress switched to Republican control. Republicans gained 54 seats in the House, and 9 seats in the Senate in 1994, gaining control in both houses. In 1996, even as Americans re-elected Bill Clinton by an overwhelming majority in the electoral college (379-159), they also elected 3 more Republican senators, and gave the Republicans another majority in the House. However, in all cases, Clinton found a way to work with both houses of Congress in those subsequent 6 years, and much was accomplished, including:

  • Taxpayer Bill of Rights (1996)
  • Small Business Job Protection Act (1996)
  • Welfare Reform Act (1996)
  • Defense of Marriage Act (1996)
  • Health Insurance Portability and Accountability Act HIPPA (1996)
  • Balanced Budget Act of (1997)
  • Taxpayer Relief Act (1997)
  • Internal Revenue Service Restructuring and Reform Act (1998)
  • American Inventors Protection Act (1999)
  • Children’s Health Act (2000)

In addition to these major pieces of legislation, Congress and Bill Clinton worked together to balance the budget for the first time since 1969. How did Bill Clinton do this? And what can President Obama learn from his predecessor’s success?

Triangulation

The main reason for Clinton’s legislative and executive success was, in large part, due to his policy of triangulation. Basically, triangulation was Clinton’s way of staying above and out of the political fray. He borrowed policies from both sides when designing major legislation. His famous “the era of big government is over” statement is a classic example of triangulation; he took a foundational Republican value–small government–and embraced it as his own. He also embraced deregulation, balanced budgets and welfare reform, enabling a tremendous amount of bipartisan legislation for which he could take a lion’s share of credit.

Will President Obama pursue a policy of triangulation when it comes to the Republican House? Clinton’s triangulation was borne out of necessity; American voters had soundly rejected many of the over-reaches of his first two years. President Obama governed from the far left for his first term, with relatively little success after the Republicans regained control of the House. Here are the pieces of major legislation that were passed in 2011 and 2012:

  • Leahy-Smith America Invents Act
  • Korea Free Trade Agreement
  • Columbia Free Trade Agreement
  • Panama Free Trade Agreement
  • Middle Class Tax Relief and Job Creation Act
  • National Defense Authorization Act
  • Federal Restricted Buildings and Grounds Improvement Act
  • Stop Trading on Congressional Knowledge Act
  • Continuing Appropriations Resolution (CR)

Seriously. When a list of the largest legislation that you pass in two years includes a bill to refurbish federal buildings, you know that you haven’t accomplished that much.

President Obama recognized, in his victory speech, that there are many things that will require Republicans and Democrats to come together. There are many significant problems that we need to pass, and we can’t wait four more years until a new president comes in to lead. I suggest that, instead of taking the “I won, you lost” attitude of his first term, a Clintonesque conciliatory stance toward compromise might serve the president much better.

I can’t wait to see if he’s willing.

Discussion Question: Do you think that President Obama will be willing to compromise with Republicans in his second term?  Or is it all just talk, like his first term?

Posted in Politics | Tagged , Bill Clinton, compromise, , fiscal cliff, John Boehner, , | 2 Comments