Heads They Win, Tails We Lose.

For the second consecutive year, Social Security payments will not increase. Federal rules require that COLA increases occur when the Consumer Price Index is higher than the previous year. However, when the CPI is constant or falls, SSI payments are fixed at the previous year's level' and increases do not resume until the CPI exceeds that level.

Until 2009 this prudent rule for Social Security had resulted a string of unbroken payment increases: the average SSI COLA from 2000 through 2009 has been 2.8%, while the CPI has increased on average by 2.6% over the same period. And everyone, particularly the AARP, was quite happy.

Then in the first full year of the Great Comeuppance the CPI fell, and SSI payments were frozen. Uncle Sugar Daddy has broken the bad news that 2010's CPI also fell 0.6% below the 2008 level, so that next year's SSI payments will remain unchanged. Now all Hell has broken loose in The Dismal Swamp.

The White House and Democrats want to ignore the COLA rule, and toss an extra $250 toward each senior, if not to buy their love, then at least to secure their vote. That's an additional $14B on the fiscal bonfire. But that's our kids' problem, right?

A Tax Gedanken Experiment.

N. Gregory Mankiw, Harvard professor of economics and confessed fat-cat, runs through the math of the proposed tax hikes, and finds that, combined with current tax rates, it will effectively zero out all growth in his next dollar.

Dust to Dust.

This scene from "F for Fake" tries to answer the question "and who stood here?"

Not Business as Usual?

Two nuggets in the news that add to the increasing pile of evidence that we are doomed:

1. A UAW chapter has nixed a deal to sell an Indianapolis parts plant that would have kept its doors open, albeit with lower wages and benefits. The opponents' rationale was that when the plant closes, many of the union workers will be able to transfer to other plants, keeping their current higher rates of pay. The unlucky workers at the plant who cannot transfer, all of the support workers at the Indy plant, and local merchants are, of course, left holding the bag.
2. It seems that majority taxpayer-owned General Motors has made over $90K in contributions to congressional campaigns, including those of Democrats John Dingell, Debbie Stabenow, and Republican Eric Cantor. To say that this reeks of "moral hazard" is to be polite.
   

Scooting to Insolvency.

An often-encountered TV commercial: offers for senior mobility scooters with where Medicare picks up the cost...

Scooters for seniors are a good thing, as is any medical technology or treatment that helps people lead more comfortable and productive lives. As health care becomes more entwined with politics, one can forsee the pressure for Medicare and Medicaid to pick up the tab for many, many good things like scooters. Ultimately someone must pay for all of these good things.

Taking the High Road.

Democrats will stick to the issues for the rest of the campaign, the NYT reports. Critical issues like their opponents' divorces, drinking, bankruptcies, philandery, lawsuits, kids' bad grades, and fashion sense.

So Much for Free Trade.

China is trying to bully Japan to give up control of some of her fishing waters by halting exports to Japan of technologically critical rare-earth elements.

An Observation.

Four years ago, our TV was bombarded by ads for Jumbo home loans, teaser-rate home loans, no-interest home loans, etc. Now we see many ads for companies that will help you "walk away from your mortgage, scott-free". God, what hath we wrought?

Obamacare's Collateral Damage.

Tucked in the deep recesses of the Obamacare Law is this mind-blowing tax-reporting provision (as reported by the Paper of Record):

...To improve compliance, the new health care law requires businesses to file tax forms known as 1099s identifying anyone to whom they pay $600 or more for goods or merchandise in a year.

Businesses will also have to send copies of the form to their vendors, suppliers and contractors. The forms are already widely used to report various kinds of payments of taxable income other than wages, like interest income or dividends. But the health care law requires filing the forms in many more instances than they were typically used before.

The premise of the requirement was that businesses would be more likely to pay taxes on their income if they knew that the income was already being reported to the Internal Revenue Service by their business partners...

The claim is that whopping $17B in additional revenue may be recovered over the next ten years. Of course, the cost to businesses - particularly small businesses - is not considered. Former GE CEO Jack Welch made the following observation: a independent truck driver who hauls cross-country loads will have to issue 1099s to dozens of truck stops, simply for fueling-up his rig, or face the wrath of the IRS.

This madness must end.

The President's View on Taxing Investment Return.

Another telling moment at the President's CNBC Wall Street Town Hall: during an exchange about taxes on the Ultrarich, the President suggested that it was only reasonable that a Big Wheel should pay taxes on his dividend income at a rate closer to the higher rate that his secretary pays on her wages. Perhaps the President forgot that taxes were paid on those dividends before their distribution, as income to the company. Also, the Big Wheel is not getting a guaranteed return in exchange for his labor, but the secretary is. The Wheel is also risking a loss on his capital investment, but that is another tax policy argument. Perhaps the President forgot these facts. Then again, perhaps he didn't know them - unlikely - or maybe his ideology guides him otherwise.

Wonderland Comes to the Street.

On CNBC the Lecturer in Chief expounded on the economy, blaming others (GOP, Bush, the Ultrarich) for all problems, and generally how those who disagree with him are just so wrong. Lots of Obamites in the town hall crowd, and one could swear there was an APPLAUSE sign over them.

Outrage of the event: the President claimed that government is less intrusive than it was thirty years ago. Make sure to pick up your jaw before leaving the room.

Now That's Efficiency!

From CNBC: Senator Carl Levin will attend A123 Systems' opening of its new car battery plant today in Livonia, Michigan. It will provide 3000 jobs...provided by $2.4B of Federal Stimulus Ham. That's a paltry $800K per job. Observers of the electric car business note that there may already exist a substantial surplus in electric car battery production in the U.S. Levin's answer: more Federal Ham to pay folks to buy electric cars. The Chevy Volt will start at a list price $40K. Will Uncle Sam throw in $10K of that to make them competitive with comparable vehicles with conventional power plants?

Iran Gaming Nuclear Inspections.

The New York Times reports that Tehran refuses access of the IAEA's most experienced inspectors to its nuclear development programs, including the agency's chief inspector for Middle East nuclear programs.

Acceptance Through Irrelevance?

Fred Schwarz pens a thoughtful essay on the changes in the American political and religous landscape fifty years after JFK's speech to the Greater Houston Ministerial Association.

Tony Blair Stands Firm.

Former British Prime Minister was goaded by Christiane Amanpour to concede that intervening in Iraq was a mistake, and he would have nothing to do with it. Ms. Amanpour's frustration in clearly evident in the video as Mr. Blair strays from "the narrative".

A Bend in the River.

This lay-historian continues to be (naively) baffled that when a society passes a "major historical juncture", that the occurrence of this event is not considered obvious. This is setting aside any consideration as to what course needs to be set to navigate beyond this point.

We believe that a clear - and simple - declaration of such a historical juncture that Western Civilization has recently passed is David Hart's reflection of our world in that of Rome's emperor, Julian.

While You Were Out, Civilization was Changed.

From yesterday's ruling from San Francisco's Federal Circuit Court, striking down California's Proposition 8: "Gender no longer forms an essential part of marriage".

Better make that a double, Joe.

The Un-Christianity.

The American Spectator reviews Mortal Follies: Episcopalians and the Crisis of Mainline Christianity, by William Murchison. He chronicles the decline of this historically critical Protestant denomination, correlated with its "rejection of orthodoxy in favor of cultural and political fads, regardless of the spiritual consequences".

The Evangelical Lutheran Church in America (ELCA) is now following a similar path. One hopes one will chronicle that tragedy as well.

Sorry, Bernie.

The Iranian Government's Ministry of Culture has issued a list of acceptable haircuts. (the picture is of the beloved "Bernie" from the early '70s TV show, "Room 222")

Lost in Space.

NASA Administrator Charles Bolden, a decent and brave man, shared the President's primary goal he envisions for NASA: reaching out to the Muslim world, so that they can feel good about their contributions to math and science. We are not making this up. In contrast, let us remember this moment shown below, that occured nearly fifty years ago:



President Obama's vision for NASA is pathetic. To see a preview of this diminished role for the U.S. in space, see Deputy Administrator Lori Garvin's webcast with Space News earlier this year.