Cribbing a lot from Taranto...

"Froma Harrop, a member of The [Providence] Journal's editorial board and a syndicated columnist, has been named president of the National Conference of Editorial Writers. The NCEW is a 64-year-old professional organization. Its members include editorial writers, editors, broadcasters and online opinion writers. One of its new missions, the Civility Project, endeavors to improve the quality of political discourse."--Providence Journal, April 15

"Make no mistake: The tea party Republicans have engaged in economic terrorism against the United States--threatening to blow up the economy if they don't get what they want. And like the al-Qaida bombers, what they want is delusional: the dream of restoring some fantasy caliphate. . . . Americans are not supposed to negotiate with terrorists, but that's what Obama has been doing. . . . That the Republican leadership couldn't control a small group of ignoramuses in its ranks has brought disgrace on their party. But oddly, Obama's passivity made it hard for responsible Republicans to control their destructive children. The GOP extremists would ask Obama for his firstborn, and he'd say, 'OK.' So they think, why not ask for his second-born, to which he responds, 'Let's talk.' "--Froma Harrop syndicated column, Aug. 2

So... I guess the NCEW's new mission of improving civility in discourse is going gangbusters under Froma Harrop's leadership, eh?

Bitch Doubles Down: She actually claims that what she said is perfectly civil.

She claims her statements are factual -- the Tea Party really is engaging in terrorism, hence this isn't incivil. It's just a fact.

I see incivility as not letting other people speak their peace. ItÂ’s not about offering strong opinions. If someoneÂ’s opinion is fact-based, then it is permissible in civil discourse. Of course, there are matters of delicacy, and I dispensed with all sweet talk in this particular column. And I did stoop to some ad hominem remarks, IÂ’ll admit.

...

Yes, I was angry, but IÂ’m engaging in the defense of my country. I know the tea partiers say the same, but their behavior is that of a national wrecking crew. Most may be nice people who donÂ’t know what theyÂ’re doing, but many a country has foundered on the passions of nice people.

As far as the facts are concerned, I stand my ground. Terrorism is not confined to physical attacks. In May, The Wall Street Journal reported this:

The Pentagon has concluded that computer sabotage coming from another country can constitute an act of war, a finding that for the first time opens the door for the U.S. to respond using traditional military force.

And

“If you shut down our power grid, maybe well put a missile down one of your smokestacks,” said a military official.

Blowing up the U.S. economy to make a point would be an even more serious attack, in my book. And thatÂ’s what the tea party saboteurs were threatening. They are what they are.

Well that concludes that project, doesn't it?

God didn't love me enough to make me pretty.

Just stating a fact.

"The Civility Project:" can be found here.

Here's their contact information:

Phone: 717-703-3015

Fax: 717-703-3014

E-Mail: ncew@pa-news.org


They should be asked if they have formally abandoned the civility project, or if it was always a partisan scam, or if they endorse their president's claim that it is a fact that the Tea Partiers are kin to Al Qaida terrorists, whereas it was an outrage to call Obama a "socialist."

Posted by: Ace at 02:54 PM | Comments (331)
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Joe Biden, April 23, 2010:

"All in all we're going to be creating somewhere between 100[,000] and 200,000 jobs next month, I predict," Biden said, according to a pool report, adding that he "got in trouble" for a job growth prediction last month. "Even some in the White House said, 'Hey, don't get ahead of yourself.' Well, I'm here to tell you, some time in the next couple of months, we're going to be creating between 250,000 jobs a month and 500,000 jobs a month."

Jay Carney, August 3, 2011:

“The White House doesn’t create jobs,” Carney said, adding “the government, together — White House, Congress — creates policies that allow for greater job creation.”

You know who creates jobs though? And who therefore should get the blame, should jobs not be created?

Congress. Note that just after claiming the White House doesn't create jobs, Carney demands that Congress create some jobs.

This is really a slip of the tongue, I imagine. But having laid down the marker that the White House doesn't really create jobs (refuting all the previous WH statements about "saving or creating" jobs), he starts speaking of Congress creating jobs.

He is working very closely with his senior economic advisers to come up with new proposals to help advance growth and job creation. He is working with members of Congress to help advance growth and job creation. And he will continue to do that. There are things that Congress can do now to create jobs, and they should. There are things that Congress will be able to do when they return from recess to help create jobs and spur growth, and they should. And he looks forward to working with Congress to do that.

Odd, isn't it, that when there are jobs being created -- or at least predicted to be created -- it's the White House creating them.

But when no jobs are being created, that's not the White House's problem.

After all, it's Congress that creates jobs.

Thanks to soothie for the Biden quote.

brb, lowerin' the bar, shiftin' blame

Posted by: Ace at 02:12 PM | Comments (153)
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I've been peddling this crazy semi-prediction for a year and a half. I've mentioned it on the blog.

If Obama looks doomed a year out from the election, will he simply decline to run?

Roger Simon asks if he should.

Obama seems to be acknowledging his failure thusfar when he adds a a special new caveat to his Yes We Can slogan:

"It's been a long, tough journey. But we have made some incredible strides together. Yes, we have. But the thing that we all ought to remember is that as much as good as we have done, precisely because the challenges were so daunting, precisely because we we were inheriting so many challenges, that we're not even halfway there yet. When I said 'change we can believe in' I didn't say 'change we can believe in tomorrow.' Not change we can believe in next week. We knew this was going to take time because we've got this big, messy, tough democracy," President Obama said at a campaign fundraiser in Chicago on Wednesday night.

No, he didn't say "tomorrow" or "next week." However, hedid actually provide a specific time frame. In 2009, he said: "if I don't have this done in three years, then there's going to be a one-term proposition."

We're now six months out from "three years." And what does "done" mean? Done seems to mean "economy fully recovered and growing."

I think "done" will have to be redefined as "barely begun" for him to have any chance.

Should he decline to run again? Even if he believes in the Leftist Dream, he has to begin to realize another leftist, without his track record of demonstrable failure, would have a better chance of keeping the dream alive.

The Chattering Classes have a heard mentality. While three months ago they were airily predicting Obama almost could not lose, they are now reversing themselves. This latest article from Politico is one of the most forward-leaning of its type so far, virtually predicting that Obama is doomed.

The consensus has been that for all his problems, Obama is so skilled a politician — and the eventual GOP nominee so flawed or hapless — that he’d most likely be reelected.

DonÂ’t buy into it.

This breezy certitude fails to reckon with how weak his fundamentals are a year out from the general election. Gallup pegs his approval rating at a discouraging 42 percent, with his standing among independents falling 9 points in four weeks.

His economic stats are even worse. The nation has 2.5 million fewer jobs today than the day Obama took office, a fact youÂ’re sure to hear the Republicans repeat. Consumer confidence is scraping levels not seen since March 2009.

Where’s the bright spot? Hard to see. Obama has few, if any, domestic achievements that enjoy broad public support. No one assumes employment, growth or housing prices to pick up much, if at all — something Obama is essentially powerless to change. And the political environment and electoral map are significantly tougher than in 2008, especially in true up-for-grabs states.

“The historical precedents of what happens to incumbent presidents in these economic circumstances are not positive or encouraging,” said Geoff Garin, a top Democratic pollster. “There has been a false sense of confidence among a lot of Democratic activists.”

Obama advisers acknowledge the challenges posed by the economy but argue that voters will like his rescue of the auto industry, signing of Wall Street reform, championing of new restrictions on credit-card issuers, repeal of “don’t ask, don’t tell,” investments in clean energy and victory on insurance protection for people with pre-existing conditions.

OMG, he's going to run on the auto bailouts and Don't Ask, Don't Tell being repealed?

Is that the best you've got? Seriously?

That's a long piece from Politico, and worth reading in full (just for entertainment and schadenboners). Like coaches say, you're never as good as it looks like you are when you win, and you're never as bad as it looks like when you're losing.

But Obama has six to nine months to get us out of this hole. That's it. And if the double-dip comes -- forget it. That will take us deep into 2012.

One area Politico discusses (apart from the obvious ones -- the horrific economy, the $7 trillion in new debt he'll have added) is Obama's weak legislative legacy.

I don't think this stuff drives elections much in the first place. But it is notable that while Obama's stewardship of the economy gets low marks, his legislative accomplishments -- much easier things to do, given his party controlled Congress for two years -- are also unpopular.

A big hurdle for the president is the unpopularity of the very policies that his team thought would be big accomplishments in the first term.

Obama delivered on his promise to help prevent an economic collapse early on, help save the auto industry, crack down on Wall Street and then enact the most sweeping expansion of government-supported health care coverage since the 1960s. ItÂ’s not clear heÂ’s getting much of a political boost for any of it.

A top Democratic strategist who is close to the White House said that Obama’s first-term record “is going to be, on balance, probably a liability” for his reelection, partly “because of the failure to sell and explain the things that they were doing.”

Ah. That again. Obama, the alleged great communicator, just hasn't "sold" these wonderful things properly.

“I believe history will judge what they did to be correct,” the strategist said. “But the failure to communicate why they were doing it has meant that there is such confusion. … It’s ground he’s going to have to make up, rather than things he’s going to be able to run on.”

Polls show his economic policy, the health care law and the auto bailout get positive reviews from fewer than half of voters. Hard to see how that changes.

I suppose there is some room for liberal hope in the idea that Obama is such a great orator. He will fill people with gauzy good feelings as he did in 2008.

But is that even true? Was he a good orator, ever? Is he even above average?

Matthew Continenti doesn't think so.

Barack Obama has a communications problem. His reputation for eloquence and argument is highly exaggerated​—​at best. Speech after speech, appearance after appearance, the president has failed to persuade the undecided that his views are correct, much less win over opponents. You can blame partisan polarization, the institutional limitations of the presidency, the diversity of new media, whatever. The truth is, the more Obama talks, the worse he performs.

...

The classic example of the presidentÂ’s failure to sway public opinion remains health care. The Washington Post reports that Obama has delivered 58 speeches on the topic since he became president. An obvious case of diminishing returns: According to the RealClearPolitics average of polls, Americans oppose the presidentÂ’s health care overhaul 51 percent to 38 percent.

Now there is one card left to play, of course. Racism.

Oh I don't think that will fly. At all. I think it will be seen as what it is, an embarrassing demonstration of incompetent excuse-making for previous incompetence.

Still, some on the left are giving it a go.

Barack Obama's difficulties are the result of racism: It has been a frequently recurring theme ever since he emerged as a serious presidential candidate. Obama himself has raised it occasionally, though not often, but his supporters fall back on it all the time--including now.

Here's DeWayne Wickham in yesterday's USA Today: "This total lack of respect is downright contemptible--if not unpatriotic. Such contempt, I'm convinced, is rooted in something other than political differences. . . . The presence of Jim Crow, Jr.--a more subtle form of racism--is there."

What prompts these accusations of racism? In Wickham's words, Speaker John Boehner "contemptuously waited more than half a day to return a call from the president," and House Majority Leader Eric Cantor complained to reporters that Obama cut short a meeting, "as though the president needs his permission to end a White House gathering." In reference to the Cantor spat, Wickham writes:

That encounter might have reminded Obama of the open letter Frederick Douglass, a runaway slave and abolitionist who became one of this nation's first black diplomats, wrote to his slave master.

It would be "a privilege" to show you "how mankind ought to treat each other," Douglass told the man who had badly mistreated him. "I am your fellow man, but not your slave.

This is overwrought to the point of absurdity.

...

For the purpose of argument, let's stipulate that the assertion is true: that racism is the reason Barack Obama is unable to govern effectively. What are the implications?

...

The trouble with this for the president's supporters is that one cannot assert Obama is unable to govern effectively because of racism without conceding that he is unable to govern effectively. To put it mildly, that is not a strong argument in favor of re-electing him.

It's all so absurd -- only racists would vote against a president who's had a 9% unemployment rate throughout most of his term! -- and yet, it's among their declining bullet-points in the case for Barack Obama.

Posted by: Ace at 01:30 PM | Comments (310)
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Remember, this is all because Boehner didn't return Obama's phone call promptly.

Nothing to do with the fundamentals.

Or Europe.

"We're not steering this bus—it's all coming from Europe," Art Cashin, director of floor operations at UBS Financial Services told CNBC. "We’re hearing reports of funds drawing out of European banks and we’re pretty close to something that might turn ugly."

"It may translate into a strain on the financials system and earnings on the multinationals, which have been carrying the load for Wall Street," Cashin added.

European shares hit a two-year low. The Bank of England and European Central Bank both left rates unchanged, but it did little to improve investor confidence. The ECB signaled it was buying government bonds in response to a deepening European debt crisis.

Investors were also spooked after ECB President Jean-Claude Trichet said "downside risks may have intensified."

But America is the engine of Western growth, and I have to think if America were experiencing a recovery, Europe would be doing better, too.

In fact Europe had been growing some -- growing more than Obama's America -- but it looks like we're all going down together.

Allah calls his post "total fear," after an analyst's appraisal of the mood on Wall Street. And it's not fear about the debt deal and America's longer-term financial health, but more than likely of the short-term fear about a double dip.

In fact, the debt deal came to fruition at exactly the same time as a series of devastating economic reports that indicate we will be lucky if the current moment is only a “slowdown” and not the beginning of—maybe even the middle of—a double-dip recession. You don’t need an economics degree to see the disaster in these numbers. Lower consumer confidence means less consumer spending, which means less demand, which means less economic activity, which means no improvement in employment figures and very possibly a worsening of unemployment. What we are seeing on Wall Street this week is that a coming recession is being “priced in.”

I think the public has long known that Obama's recovery was not a recovery. It seems like Wall Street is finally realizing this.

Allah points out something that's been bothering me.

If you assume (as I do, and as you probably do too) that a great deal of hoarding/risk aversion is going on, because no one knows what the tax/spending environment will actually turn out to be, then delaying the final work-out of our debt deal until Thanksgiving or Christmas continues freezing the wealth-creation forces in paralysis until then.

That's a very bad idea.

I earlier wrote that Obama knows some adjustment to entitlements will have to happen -- after all, he campaigned on just that idea. But, for political benefit, he refuses to acknowledge this now; he wants to delay until he's re-elected.

It's not just important political decisions that have been put off, at Obama's insistence, until 2013. It is crucial economic decisions -- and wealth and job creation that flow from those decisions -- that have been delayed for a year and a half, until Obama decides it's safe to consider the national interest again.

Posted by: Ace at 12:47 PM | Comments (286)
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It isn't just about Wisconsin's future, but the nation's.

You can donate to the Wisconsin GOP here, or to a group called Frontline Wisconsin.

And if money is tight, donate volunteering time. There will be a liberal army in Wisconsin to drive the vote. We cannot just sit back and hope our voters show up too.

One major hurdle is that the unions will be acting as if their salaries are on the line, which they are.

Conservative-leaning taxpayers often say their own economic well-being is on the line, but don't act as if it were. They don't come out to drive the vote en masse. They act as if these issues aren't directly relevant to their personal finances, as if they're abstract issues.

They're not. The union knows this is more than abstraction and philosophy, and we need to know that to. And act in that knowledge.

Would you donate four hours of your time if doing so resulted in $1000 or $2500 more dollars of income per year for the next ten years? Most people would. Pretty sound investment of time.

And that's what's on the line here. But people don't act like that's the case.

Thanks to Ben for all this.

Posted by: Ace at 12:06 PM | Comments (80)
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We're still waiting on Obama's 2008 vetting, but do remember they spent all that time vetting a plumber. So.

Politico writes the opposition research is about to drop:

Perry would also have to answer for parts of his record that have either never been fully scrutinized in Texas, or that might be far more problematic before a national audience.

Veterans of Sen. Kay Bailey Hutchison’s unsuccessful 2010 primary challenge to Perry recalled being stunned at the way attacks bounced off the governor in a strongly conservative state gripped by tea party fever. Multiple former Hutchison advisers recalled asking a focus group about the charge that Perry may have presided over the execution of an innocent man — Cameron Todd Willingham — and got this response from a primary voter: “It takes balls to execute an innocent man.”

I've looked into that, a bit. The man, Williamson, escaped from a burning house, leaving his children inside to die in the fire. His ex-wife claimed he'd done it (though she didn't have any evidence of that). Experts forwarded evidence post-conviction suggesting the evidence of deliberate arson presented at trial was faulty.

But it's not as if there was evidence presented to prove his innocence -- rather that the technical evidence of arson presented was weak.

Having only skimmed the matter, the case bothers me as some Texas executions do -- not enough people on the execution review board are taking their duty to halt improper executions seriously. The mandate they have assumed seems to be expedited executions, not insuring no innocent man is put to death.

Proponents of the death penalty do not seem to comprehend that they are precisely one dead innocent man away from an end to executions. Sometimes I wonder which side of the debate some of us are really playing for.

That said, it's really a case of poking holes in the case presented at trial, rather than proof of innocence. The circumstantial evidence -- a man escaping a fire in his home uninjured, while leaving his children to burn -- is pretty damning.

The Willingham case is just one episode in PerryÂ’s gubernatorial tenure that could be revived against him in the very different context of a national race, potentially compromising him in a general election. The opposition research file on Perry is huge and goes well beyond the best-known Perry controversies.

But even the greatest hits reel is bad enough: Perry issued a 2007 executive order mandating the human papillomavirus vaccine for sixth-grade girls, while PerryÂ’s former chief of staff lobbied for Merck, the only provider of the vaccine. He spent hundreds of thousands of taxpayer dollars on a rental mansion while the governorÂ’s residence underwent repairs. During his administration, the whole board of the state juvenile justice system resigned over allegations of covering up sexual abuse in detention centers. And thatÂ’s before delving into a shaky state budget, which has included to-the-bone cuts in education and other programs suburban swing voters care about.

All that means Perry is hardly the “generic Republican” who President Barack Obama struggles to beat in polls. That’s what concerns Republicans who think nominating him instead of a blander, more stylistically mainstream candidate like Mitt Romney or Tim Pawlenty would be a gift to the incumbent.

So here comes the media assault on Perry. But their first attack seems to be a misfire.

Texas Gov. Rick Perry wages an assault on stateÂ’s university establishment

The print edition of the paper has an even harsher headline:

Gov. Perry wages war on TexasÂ’s ivory tower

War? Assault? Nice headlines, huh? Here are the details of this assault-slash-war -- contained in the article itself.

Are you ready for the horrors contained herein?

[Perry's Higher Education Summit] marked the beginning of an effort — spearheaded by the governor, one of his six-figure campaign donors and a conservative think tank — to re-engineer Texas’s leading public universities to become more like businesses, driven by efficiency and profitability.

The initiative stayed pretty much under the radar until last fall, when it became public that PerryÂ’s alma mater, Texas A&M University, had compiled a spreadsheet ranking faculty members according to whether they were earning their keep or costing the school money. The university already had rankled professors with a program that paid bonuses based on anonymous student evaluations.

More recently, Perry has proposed that the state’s top colleges come up with a four-year degree that costs no more than $10,000 — a goal that skeptics say cannot be achieved without sacrificing academic quality and prestige.

As the governor edges toward running for president, with an announcement likely in the next few weeks, his embrace of those ideas — and the furor that has followed — tells much about his populist political impulses.

The rest of the article details further the general outline of this "assault." You will be horrified to learn that an ally of Perry's questioned professors spending more time doing abstract research than teaching students (a criticism, by the way, made all the time by reformers in the university system).

Pretty damning stuff, huh?

Stanley Kurtz of NRO wonders where the WaPo was in 2008, when this headline could have run, but did not:

Obama funded ChicagoÂ’s hard-left

Referring to Obama's membership on the leftwing Annenberg Challenge (I think).

Kurtz goes on to wonder exactly what the WaPo thinks it's accomplished with this piece on Perry, and its risible headline:

[W]hile liberal readers will be horrified, I suspect many Americans will be delighted by Perry’s “war” with the Ivory Tower.

The article itself isn't a bad one. It explains what Perry did, and offers some quotes criticizing him, and a couple defending him.

But look at what they did with the headline.

You know how every political ad features headlines from newspapers attacking a candidate? I think this is the WaPo's deliberate effort to provide Obama with one of those perfect-for-an-advertisement headline.

Even though the main thrust of the actual story is that he wants reform, and he'd like the state university system to provide, as was its original charter, and affordable education for citizens of Texas.

Posted by: Ace at 11:19 AM | Comments (387)
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It's now gotten a little back, at -341, but this is a steeper month-long drop than we saw after TARP.

You'll be happy to know The Hill strives to pin this on the GOP.

The carnage on Wall Street, which precedes a widely anticipated jobs report due Friday, is likely to increase anxiety at the White House and in Congress on the troubled economy, as both sides have something to lose.
A worsening economy could hurt President ObamaÂ’s poll numbers and give hope to a field of GOP candidates running to replace him.

At the same time, an economy that has slowed since Republicans won back the House in the 2010 midterm election will also raise questions about the GOPÂ’s economic stewardship.

After morning trading on Thursday, the Dow had lost nearly 1,100 points since July 25, the first day of trading after talks between President Obama and Speaker John Boehner (R-Ohio) on a big debt deal broke off.

By comparison, the Dow lost 819 points on Oct. 6, 2008, when the House failed to approve the Troubled Asset Relief Program (TARP).

How ya like them apples? The sell-off is not due to the double-dip that the market now seems to think is >50% likely, but rather because Republicans didn't give in to Obama's July 25th offer.

I see. I used to think the market was priced based on fundamentals and outlook and projected profits and consumer confidence and prospects for growth.

Now I see it turns exclusively on whether a a Speaker returns the President's phone calls promptly.

(The Rick Perry piece was put into draft as this is a breaking story, and commenters are talking about it.)

Posted by: Ace at 10:45 AM | Comments (336)
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Cantor had previously described Obama as "in over his head."

He offers a fuller outline of Obama's serious intellectual deficiencies to NRO.

Obama seems to think about issues on the level of babytalk.

He’s overly sensitive to someone differing with him on policy grounds,” Cantor says.

And he’s isn’t persuasive. “There’s never any sort of economic argument that he can make for his position. It always reverts to that social-justice end,” Cantor argues.

Not that Obama uses the phrase “social justice.” “It’s ‘fairness.’”

What’s more, Obama’s prickliness is “directly opposite” Cantor’s experience with Vice President Joe Biden: “I had almost seven weeks with the vice president, and those talks were substantive. He and I spoke weekly. Our staffs met daily. The agenda was set. Our staffs had done the initial ‘tolerance test’ as to probing how far either side could go on a particular issue. And if it was too far, we tried to stay away from it.”

By contrast, Cantor believes the president’s ideological mindset is impenetrable: “This guy just doesn’t get it.”

"Fairness" is an emotional response, particularly when there is no supporting concrete evidence offered to explain why one position is fair and one isn't. It's just a gut thing, which is fine for a disengaged voter in deciding for whom to vote for President, but the actual policy wonk in chief is supposed to have a stronger grasp of the details of the problem beyond "fairness."

Does the supposed intellectual not think in terms of numbers and abstractions?

Posted by: Ace at 09:50 AM | Comments (251)
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It's tough, and it involves a lot of things that are virtually impossible, like zeroing out education costs, but this is the rough outline of what must be done.

It won't be pretty and it won't be popular. Here are the first 8 items, out of 20:

1. Social Security: Yeah, theyÂ’ll say youÂ’re throwing Granny off the cliff. But itÂ’s her or the grandkids. So implement aggressive means-testing and other reforms to cut 20 percent of spending for $150 billion in savings.

2. Medicare: Ditto, for $100 billion in savings.

3. Keep on going and reduce Medicaid and other health-care services spending by 10 percent: $33 billion.

4. National defense: Republicans will howl, but thereÂ’s room for a 10 percent cut to all national-defense spending, including non-DoD activities such as DoEÂ’s work maintaining our nuclear arsenal. That nets $74 billion in savings. Surely we can slaughter hapless desert barbarians more cheaply.

5. “Other income security.” That’s the welfare state bits and pieces not included in Medicare, Medicaid, Social Security, food stamps, etc. Welfare of the checks-from-Uncle variety. Eliminating it entirely saves $159 billion.

6. Welfare for bureaucrats: Making federal-employee retirement and disability systems totally self-funding saves $123 billion.

7. Eliminate federal education spending entirely: elementary, secondary, and higher-ed. Leaving it to the states and to the market saves us $106 billion. Harvard will figure something out.

8. Eliminate “community and regional-development” spending, a.k.a. boondoogles and slush funds, except for disaster relief: $15 billion.

Williamson's plan involves essentially ending all federal welfare spending, which is almost impossible to contemplate. Which, in turn, should give an idea of how difficult this is, and how large a hole we're in.

One of Williamson's suggestions -- and he doesn't even include this in getting to his trillion; this is bonus -- is ending the home mortgage interest deduction.

He suggests that this is a distorting social-engineering intervention in the tax code, a boondoggle, a pander to home owners.

Honestly, that's what I always thought it was, myself. But Richard Epstein writes that there is a good conceptual reason why this deduction exists.

The root of the difficulty is this: it is not all that easy to figure out which downward adjustment in taxable income counts as a tax expenditure, and which does not. Right now the current income tax system starts with gross income, a number that is then reduced in various ways to get an "adjusted gross income" figure, which is the normal taxable base.

For example, an ordinary business deduction for inventory reduces the amount of taxable income, but no one thinks of that deduction as a tax expenditure. Why? The proper economic definition of taxable income must subtract out, from the revenues received, the expenses incurred to obtain the gross receipts. To recognize the income but to disallow the deduction makes taxation punitive, thereby unwisely discouraging individuals to invest in socially productive activities by forcing them to pay taxes on a nonexistent economic gain.

Isolating tax expenditures, therefore, requires a strong understanding that the best definition of income is: appreciation in net worth plus consumption during the relevant tax period. Once that is done, the next task is to look for some administrative justification for not taxing certain kinds of income.

...

One clear case of a tax expenditure is the interest deduction on a home mortgage. There is no question that interest payments count as expenditures, and thus a reduction to gross revenues. But that expenditure is offset, not quite perfectly, by the consumption value of the home purchased with a home mortgage.

A precise economic test would first allow the interest deduction but bring the imputed income attributable from home use into the system, even though it is not a receipt of any kind. But since calculating that imputed income is too costly, the law should follow the simpler rule that treats the consumption enjoyed as a perfect income offset to the interest deduction. In fact in most cases, the consumption value of the home is probably greater than the interest payments on the loan, especially toward the end of the life of the mortgage. Nonetheless, that excess imputed income goes untaxed, because of the insoluble difficulties of its direct measure.

I'm not sure I understand that. Or rather, I understand that, but what I'm missing is why he says this should be treated like a business expense.

It's not a business expense, deducted from net income, to find actual profit.

It's a living expense. Those who rent don't subtract their rent payments from their income. No one subtracts their food costs from their income. 90% of the country needs a car for purposes of moving to and from their place of work, but no one suggests car ownership interest should be deducted from net income and hence immune to tax.

I'm not sure I understand why he's saying that in the case of this incurred living expense, the cost of owning one's dwelling, a taxpayer should deduct that expense from his net income for purposes of finding taxable income.

Maybe I'm just slow. Or maybe he didn't explain it well enough.

He has a good quote in here, which Mr. Obama should ponder:

Political forces cannot redistribute the wealth that the economic system does not produce.

Posted by: Ace at 09:06 AM | Comments (237)
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(observation of CNBC's propensity for understatement courtesy of soothsayer)

Dow down 3%, and now, I believe, negative for the year.
Employment down.
Consumer confidence down.
Real wages down.
Inflation up... etc...

5 signs you may be entering a double dip recession.

CNBC: What do you mean, wrath of God?

I'll defer to the experts:

Dr Ray Stantz: What he means is Old Testament, real wrath of God type stuff.

Dr. Peter Venkman: Exactly.

Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!

Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes...

Winston Zeddemore: The dead rising from the grave!

Dr. Peter Venkman: Human sacrifice, dogs and cats living together... mass hysteria!

Stock up on shotguns, baseball bats, hedge trimmers & lawn-mower blades. This one is going to get bumpy.

Posted by: Open Blogger at 08:22 AM | Comments (214)
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