Warren Buffett supporting Obama’s plan?

I recently read an article by Steve Brawner concerning Warren Buffett. Here is part of the article:

[John Boozman] says that Buffett is being hypocritical to support Obama’s proposed tax increases because they wouldn’t solve the problem and wouldn’t affect him. In fact, he says, Obama’s bill might raise the secretary’s taxes if she and her husband make $250,000 while Buffett continues benefiting from those loopholes.

“It’s just class warfare,” he says. “It’s a simplistic solution that, like I say, it directs off the real issue of why we’re not creating jobs, why we’re having the increase in the discrepancy between the rich and our middle class, lower middle class.”

Addington, McConaghy Debate Obama’s Jobs Plan

Published on Sep 9, 2011 by

Sept. 9 (Bloomberg) — David Addington, vice president at the Heritage Foundation, and Ryan McConaghy, economic director at Third Way, discuss President Barack Obama’s $447 billion jobs plan. They speak with Deirdre Bolton and Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Is Buffett getting misquoted by the Obama administration?

Did Warren Buffett really disagree with Obama’s tax plan?

(Scott Eeels/Bloomberg)
September 30, 2011|By James Oliphant
Republicans are getting a great deal of mileage out of an interview investor Warren Buffett gave Friday morning, contending that the billionaire failed to endorse President Obama’s jobs plan or the proposed tax hike that bears his name.The Republican National Committee, for example, e-blasted a mailer that claimed Buffett had disagreed in a CNBC interview with Andrew Ross Sorkin with Obama’s plan to raise taxes on America’s top earners.

But did Buffett actually say that? More than anything, while interviewed on the floor of the New York Stock Exchange, he took a pass on commenting on Obama’s plan at all. As they used to say in the 20th century, let’s go to the videotape:

Andrew Ross Sorkin: “Let’s talk about the Buffett Rule for a moment. Talk to me about how it came about in terms of the White House getting in touch with you and you putting your name to this?”

Warren Buffett:  “Well, [National Economic Council Director] Gene Sperling called and said, ’Can we use your name?’ And I said, yes.”

Sorkin: “Are you happy you said yes?”

Buffett: “Sure, I mean I wrote about it.”

Sorkin: “Are you happy with the way it’s been described? Is the program that the White House has presented — a million dollars and over — your program?”

Buffett: “Well, the precise program, I don’t know what their program will be. My program would be on the very high incomes that are taxed very low — not just high incomes. Some guy making $50 million playing baseball, his taxes won’t change. If you make 50 million dollars a year appearing on television, his income won’t change, but if they make a lot of money and they pay a very low tax rate, like me, it would be changed by a minimum tax that would only bring them up to what the other people pay .”

Sorkin: “Does that mean you disagree with the president’s new jobs proposal, which would be paid for by raising taxes on households with incomes of over $250,000?”

Buffett: “That’s another program that I won’t be discussing, but my program is to have a tax on ultra-rich people who are paying very low tax rates. Not just all the rich people. It probably would apply to 50,000 people in a population of 310 million.”

Sorkin: “That means you disagree with the president on the 250,000?”

Buffett: “No, no, you may disagree –“

Sorkin: “I’m asking, you agree that 250,000 is the right number?”

Buffett: “I will look at the overall plan that gets submitted to Congress, which they are voting on, and decide, net, do I like it or do I not like it? There’s no question there will be parts I’ll disagree with.”  (Watch the video of the interview at the end of this article.)

Part of the confusion stems from Obama’s use of Buffett’s name in recent speeches as promoting the idea the rich “pay their fair share.”  The Buffett Rule, as Buffett described in the interview and as he has proposed elsewhere, would affect a small percentage (less than 1) of America’s wealthiest citizens and would elevate the rate they pay on capital gains to be comparable to middle-class tax rates.

Essentially, the proposal was boiled down to a metaphor that has billionaires such as Buffett paying taxes at a lower rate than their “secretaries.”

When Obama rolled out his version of the rule, it was described as a tax on millionaires, but in truth, it wouldn’t affect most people who earn more than $1 million a year unless they derived most of their income from investments.

Along with that proposal, Obama has advocated letting the George W. Bush-era tax cuts expire for families making more than $250,000 a year—something which has nothing to do with Warren Buffett or the “Buffett Rule.”

Here’s what Buffett told the Fox Business Network Friday:

“I didn’t say the wealthy should pay more. I said the ultra-wealthy who are paying very low tax rates should pay more and the figures show that the 400 top tax payers who earned an average of almost $230 million apiece were paying 21% in a combined payroll tax and income tax, which is well below what all the people in my office pay now. What I’m talking about would not apply to someone that made $5 million a year as a baseball player or $10 million a year on media. It would apply only to probably 50,000 people out of 309 million who have huge incomes pay very low taxes. If you have a country with a deficit of over a trillion dollars and you think it can be solved by voluntary tax payments then you believe in the tooth fairy. There should be a policy that applies to people with money who earn lots of money and pay very low rates. If they earn it by normal jobs what I say would not hit them at all.”

Related posts:

The Top 10 Percent of Earners Paid 70 Percent of Federal Income Taxes

Dan Mitchell on Taxing the Rich Max Brantley this morning on the Arkansas Times Blog, August 15, 2011, asserted:   Billionaire Warren Buffett laments, again, in a New York Times op-ed how the rich don’t share the sacrifices made by others in the U.S.. He notes his effectiie tax rate of 17 percent is lower than […]

 

Steve Jobs versus President Obama: Who created more jobs?

I loved reading this article below. (Take a look at the link to other posts I have done on Steve Jobs.) David Boaz makes some great observations: How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its […]

 

Steve Jobs’ view of death and what the Bible has to say about it

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

 

8 things you might not know about Steve Jobs

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

 

Did Steve Jobs help people even though he did not give away a lot of money?

  Did Steve Jobs help people even though he did not give away a lot of money? (I just finished a post concerning Steve’s religious beliefs and a post about 8 things you may not know about Steve Jobs) Uploaded by UM0kusha0kusha on Sep 16, 2010 clip from The First Round Up *1934* ~~enjoy!! ______________________________________________ In the short film […]

 

Warren Buffett does not endorse Obama’s plan

Addington, McConaghy Debate Obama’s Jobs Plan Published on Sep 9, 2011 by Bloomberg Sept. 9 (Bloomberg) — David Addington, vice president at the Heritage Foundation, and Ryan McConaghy, economic director at Third Way, discuss President Barack Obama’s $447 billion jobs plan. They speak with Deirdre Bolton and Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg) […]

 

Do the rich avoid the taxes that we all pay?

Do the rich avoid the taxes that we all pay? Do the Rich Avoid Taxes? Posted by David Boaz President Obama says the rich should pay higher tax rates, citing billionaire Warren Buffett, who says he pays a lower tax rate than his secretary. Various analysts have pointed out that Buffett takes very little salary […]

 

President Obama and Alternative Minimum Tax

President Obama and Alternative Minimum Tax Dan Mitchell does it again. He is always right on the mark. CPAs Celebrate as Obama Proposes to Create a Turbo-Charged Alternative Minimum Tax Posted by Daniel J. Mitchell Wow, this is remarkable. The alternative minimum tax (AMT) is one of the most-hated features of the tax code. It […]

 

Brantley, Buffett and Obama: “Stop coddling the rich”

Brantley, Buffett and Obama: “Stop coddling the rich” The Laffer Curve, Part I: Understanding the Theory Max Brantley is fond of accusing Republicans of coddling the rich and here comes Warren Buffett and validates both what President Obama and Brantley have been saying. However, will the increase in taxes have the desired result that they […]

 

Buffett wants the rich soaked but that will not solve our problem in the budget

Max Brantley on the Arkansas Times Blog, August 15, 2011, asserted: Billionaire Warren Buffett laments, again, in a New York Times op-ed how the rich don’t share the sacrifices made by others in the U.S.. He notes his effectiie tax rate of 17 percent is lower than that of many of the working people in his office on account of preferences for […]

 

Brummett touts Buffett’s math, but it is wrong

Five Key Reasons to Reject Class-Warfare Tax Policy Max Brantley on the Arkansas Times Blog, August 15, 2011, asserted:   Billionaire Warren Buffett laments, again, in a New York Times op-ed how the rich don’t share the sacrifices made by others in the U.S.. He notes his effectiie tax rate of 17 percent is lower than […]

 
October 26, 2011 – 7:57 am Categories: Taxes | Post a comment

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The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 23)

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 23)

This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.

Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the  debt limit “a sugar-coated satan sandwich.”

“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.

Hultgren Statement On Opposition To Budget Control Act

Monday August 01, 2011

Washington, D.C. – U.S. Rep. Randy Hultgren (IL-14) released the following statement after voting against the Budget Control Act.

“Tonight, I voted against a flawed bill that doesn’t go far enough,” said Hultgren. “I’ve been clear from the very beginning I would not support any effort to increase our nation’s debt ceiling if the proposal does not hold true to the values of Cut, Cap, and Balance, as well as enact serious structural changes.

“It is my opinion that the proposal approved by the House tonight falls short of what we need to do to put our country back on the right track. By failing to require Congress to approve a Balanced Budget Amendment (BBA) prior to any further increases in the debt ceiling, this bill does not provide the structural changes that I stated were necessary to earn my support.

“When leadership changed the bill on Thursday night to strengthen the BBA provision, that change earned my support; in failing to keep that strong language, I could not, in good conscience, support this bill.”

October 26, 2011 – 6:44 am Categories: spending out of control | Post a comment

“Woody Wednesday” Allen on the meaning of life jh66

Here is a review of a Woody Allen movie followed by a great post I got from Brad Williams’ blog.

PopcornBiz

You Will Meet a Tall Dark Stranger, Woody Allen, Billy Graham

The Night Woody Allen and Billy Graham Argued The Meaning of Life

It’s the kind of encounter made in TV heaven: the neurotic intellectual New York Jew and the fire-and-brimstone televangelist arguing about what it all means.

Woody Allen interviewed Billy Graham in the 1960s, where the two men discussed all manner of topics touching on religion, morality and the meaning of life. It was a respectful, intelligent and often funny conversation the likes of which would be impossible in today’s cultural climate, according to the legendary director, who recounted the meeting to the film press as he promoted his latest movie.

Allen‘s talk with Graham resonates with him today, informing in part the themes of his latest film, “You Will Meet a Tall Dark Stranger.” The movie stars Naomi Watts, Josh Brolin, Anthony Hopkins and Gemma Jones in a story about the quest for comfort and certainty, and how faith — even an irrational one — can help us find solace.

In New York this week to discuss “Stranger,” Allen reflected on his meeting with Graham.

“Years ago I was on television with Billy Graham and I was taking this position, this bleak outlook position and Billy Graham was saying to me that even if I was right and he was wrong, and there was no meaning to life and it was a bleak experience and there was no god and no afterlife or no hope or anything, he would still have a better life than me, because he believed differently and even if he was 100 percent wrong, our lives would both be completed and I would have had a miserable life wallowing in a bleak outlook and he would have had a wonderful life, confident that there was more.”

In “Stranger” these two opposing positions are staked out by Josh Brolin as Roy, a struggling novelist, and Gemma Jones as Helena, his mother-in-law who has begun taking great comfort in her visits with a psychic.

“And so that was one of the main themes of this picture, that someone like Gemma could be deluded — as I felt Billy Graham was deluded — and she would have a better life than someone like Josh, who is more scientific minded and had a more realistic of life, but was going to have a more miserable life.”

While Allen is steadfast in his belief that people like Helena — or Billy Graham — are comforting themselves with lies, he does harbor a certain level of jealousy of the peace it affords them.

“I do feel that it’s important to have some kind of faith in something, but\ impossible for many of us. I personally don’t have any faith in anything. It’s great if you can. The only trouble is, is in Gemma’s position in the movie, she’s happy, deluded, with that character she through her lot in with at the end — they’re both crazy — but happy for the moment, because they’re going to have a rude awakening eventually, because she was not Joan of Arc, the reincarnation thing doesn’t really happen and she’s going to sooner or later, reality sets in in a crushing way. As it does and will with everybody, including Billy Graham. But it’s nice if you can delude yourself for as long as possible.”

Thursday, January 17, 2008

Woody Allen and the Meaning of Life

 
I have a strange sort of appreciation for Woody Allen, though I can’t say that I’ve ever seen a single one of his many films. My entire sympathy for Allen rests in the interviews and comments that I read about him from time to time. Some day, I may have a Woody Allen film fest to get to know him a little better.Today I read another interview/excerpt about Woody Allen, and it did a good job of expressing his hopeless world view. Here is a quote for you to get the feel of his philosophy, “The fact that there is no god and that we’re alone in the universe makes it more important than ever to act decently, but people don’t, very frequently.” Allen believes that there is no God at all, and yet he persistently and stubbornly insists that people ought to “act decently.” The natural response to that is, “Why, Woody, should we act decently then?” It seems that it is precisely this sort of question that has driven his most recent films.His latest film, “Cassandra’s Dream,” demonstrates Allen’s struggle with this very question. He says, “I’ve always felt that the worst kind of crimes and sometimes not the worst crimes often go unpunished. Everyday, from genocide in the political spectrum to street crime, people do terrible things and get away with it.” If there is no God, then Allen is precisely right, which again begs the question of why people ought to “act decently.” Allen has no good answer for that.Eventually, this sort of reasoning must lead one to ponder why to live at all, which is another thing that Allen ponders. What, exactly, is the point of life. Here’s Allen again, “I feel the trick is to try and find, not meaning, because there is no meaning, but to try and find some enjoyment in that context and know that it’s meaningless, short, nasty, brutal, and still, you know, find a modicum of enjoyment, get what you can get out of it, which is not a lot.” Can you see the connection between believing that there is no God to the inevitable conclusion that there is no meaning to life? Once God is erased from the equation, one is left with a meaningless existence in which the best one can hope for is to scratch a “modicum of enjoyment” out of life.

This leads to the final Allen quote in the article. His philosophy of life eventually cause people to ask him the ultimate question. Here he answers in his own words, “People say, `Well, why go on at all?’ Camus’ question, why choose life? And the only answer I can ever give to that is we seem to be hard-wired to. The brain asks the questions, but the blood says live. So if a guy comes in here with a gun, you do everything you can to get it away from him. You do whatever you can to live. You bargain, you lie, you jump on top of him.

“You’re hard-wired for self-preservation, but when you think about it cerebrally, why, to what end, what am I savoring here? And you can’t really think of a good answer, so you give up and say, `I can’t think of an answer, but my body fights to live, so I’m not going to resist that. I’m going to go along and trust the impulse toward life.”

I find Woody Allen interesting because his reasoning is sound. He is right to say that if there is no God, then art and life and love and everything here is meaningless. I like reading about him because he is clearly uncomfortable, or so it seems, with this dismal outlook. His philosophy forces him to admit that horrible crimes will ultimately go unpunished, and that truly, there is no reason to go on living because life is both meaningless and without purpose. In his films, he struggles with this Godless reality. I grieve for him and for others like him who can have no hope for any meaning beyond fleeting, worldly pleasures.

Perhaps you wonder why I find this interesting at all and not simply morbid. I find it interesting because Woody Allen displays the inherent hopelessness of a godless universe and the bleak truth that without God, there truly is no purpose in the anything. That explanation will never satisfy one made in the image of God. Fallen as we are, we still long for something more than that. I hope that Woody Allen can find mercy in Jesus Christ, in whom we find purpose and justice and meaning for life.

Related posts:

“Woody Wednesday” Will Allen and Martin follow same path as Kansas to Christ?

Several members of the 70′s band Kansas became committed Christians after they realized that the world had nothing but meaningless to offer. It seems through the writings of both Woody Allen and Chris Martin of Coldplay that they both are wrestling with the issue of death and what meaning does life bring. Kansas went through […]

Francis Schaeffer and C. Everett Koop were prophetic (jh29)

Francis Schaeffer and C. Everett Koop were prophetic (jh29) What Ever Happened to the Human Race? I recently heard this Breakpoint Commentary by Chuck Colson and it just reminded me of how prophetic Francis Schaeffer and C. Everett Koop were in the late 1970′s with their book and film series “Whatever happened to the human […]

“Woody Wednesday” Allen is searching for satisfaction in wrong place jh17

Coldplay – 42 Live Coldplay perform on the french television channel W9. In 1992 Woody Allen took up with one of his adopted kids and lived in with her. He was given over to the pursuit of pleasure. Actually he has made that a major focus of his life. In the latter part of his […]

“Woody Wednesday” Allen realizes if God doesn’t exist then all is meaningless (jh 15)

The Bible and Archaeology (1/5) The Bible maintains several characteristics that prove it is from God. One of those is the fact that the Bible is accurate in every one of its details. The field of archaeology brings to light this amazing accuracy. _________________________- I want to make two points today. 1. There is no […]

“Woody Wednesday” How Allen’s film “Crimes and Misdemeanors makes the point that hell is necessary (jh 14)

Crimes and Misdemeanors: A Discussion: Part 1 Adrian Rogers – Crossing God’s Deadline Part 2 Jason Tolbert provided this recent video from Mike Huckabee: John Brummett in his article “Huckabee speaks for bad guy below,” Arkansas News Bureau, May 5, 2011 had to say: Are we supposed to understand and accept that Mike Huckabee is […]

Agnostic Allen notes, “The people who successfully delude themselves seem happier than the people who can’t” (Woody Wednesday Part 5)

Woody Allen interviews Billy Graham on Religion This article below makes we think of the lady tied to the Railroad in the Schaeffer video. Dr. Francis schaeffer – The flow of Materialism (Modern man sees no hope for the future and has deluded himself by appealing to nonreason to stay sane. Look at the example […]

A review of Woody Allen’s latest movie “Midnight in Paris” (Woody Wednesday Part 4)

Midnight in Paris Not Dove Family Approved Theatrical Release: 6/10/2011 Reviewer: Edwin L. Carpenter Source: Theater Writer: Woody Allen Producer: Letty Aronson Director: Woody Allen Genre: Comedy Runtime: 100 min. MPAA Rating: PG-13 Starring: Owen Wilson, Rachel McAdams, Kurt Fuller, Kathy Bates Synopsis: Midnight in Paris is a romantic comedy that follows a family travelling […]

Woody Allen films and the issue of guilt (Woody Wednesday Part 3)

Woody Allen and the Abandonment of Guilt Dr. Marc T. Newman : AgapePress Print In considering filmmaking as a pure visual art form, Woody Allen would have to be considered a master of the medium. From his humble beginnings as a comedy writer and filmmaker, he has emerged as a major influential force in Hollywood. […]

According to Woody Allen Life is meaningless (Woody Wednesday Part 2)

Woody Allen, the film writer, director, and actor, has consistently populated his scripts with characters who exchange dialogue concerning meaning and purpose. In Hannah and Her Sisters a character named Mickey says, “Do you realize what a thread were all hanging by? Can you understand how meaningless everything is? Everything. I gotta get some answers.”{7} […]

“Woody Wednesday” Part 1 starts today, Complete listing of all posts on the historical people mentioned in “Midnight in Paris”

I have gone to see Woody Allen’s latest movie “Midnight in Paris” three times and taken lots of notes during the films. I have attempted since June 12th when I first started posting to give a historical rundown on every person mentioned in the film. Below are the results of my study. I welcome any […]

 
Posted by Brad Williams at Thursday, January 17, 2008

 
October 26, 2011 – 12:10 am Categories: Current Events | Post a comment

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99th anniversary of Milton Friedman’s birth (Part 17) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

Milton Friedman was born on July 31, 1912 and he died November 16, 2006. I started posting tributes of him on July 31 and I hope to continue them until his 100th birthday. Here is another tribute below:

Worse still, America’s depression was to become worldwide because of what lies behind these doors.
This is the vault of the Federal Reserve Bank of New York. Inside is the largest horde of gold in the world. Because the world was on a gold standard in 1929, these vaults, where the U.S. gold was stored, provide an excellent test of where the depression originated. If the depression had started in Europe or somewhere else in the world, the U.S. would have lost gold, more gold would have flown out of the country then came in. If, on the other hand, the depression started in the United States, the opposite would happen. More gold would come in from abroad as the effects of our depression spread there then went out abroad, in reality that is exactly what happened.
When the international money system was based on gold, the rules of the game were these. The gold in the United States was supposed to control the amount of money issued by the Federal Reserve. In turn, the amount the Federal Reserve issued controlled the amount of money issued by the commercial banks which in turn controlled the amount of money that individuals, businesses and industry could get from the banks. The result, a monetary structure all supposedly tied to the amount of gold in the vaults in the United States. But in 1930 the Federal Reserve didn’t play by the rules. It stood by as banks started to collapse and with each one that went the money supply fell. Businesses and industry inevitably began to fail. Americans, now poor, bought less from abroad. Britain was one of the countries effected. Like the United States, Britain had its own monetary structure tied to gold. The trouble was that Britain could now sell less abroad. It cut down the amount it bought from abroad but not by enough. Under the rules of the gold standard, it had to pay the difference in gold. With every bar of gold that was shipped out of Britain, the amount of money decreased.
A depression that was already underway in Britain got worse. British gold flowed into the United States, supposedly to form the foundation of a new slice of the monetary structure. But the Federal Reserve didn’t let it. The gold was simply locked away. The results, Britain remained in trouble until in 1931 it went off the gold standard cutting the link between the amount of gold and the amount of money. In the United States, suffering the worst depression in history, there was plenty of gold, but to no avail.
Although these events happened almost 50 years ago, many of our policies today derived directly from them. Central bankers throughout the world, government officials everywhere, are afraid of a new great depression. They, have therefore, moved the opposite direction. Instead of the problem of too little money, we are faced with the problem of too much money. The problems of inflation that plagues us today trace directly from the problem of deflation that plagued us from 1929 to 1933.
People came to believe that free market capitalism had failed. Something was needed to replace it. At Cambridge University in England, a new orthodoxy emerged in the 30’s one that has remained powerful to this day.
It owes its influence to the brilliance of one man. John Manrd Kane was unquestionably one of the greatest economists of all time. Like other economists of his generation, he found The Great Depression both a paradox and a challenge. It was a paradox because it seemed to contradict some of the fundamental principles that economists have come to take for granted. Kane rose to the challenge by constructing a complex and sophisticated hypothesis which not only explained what had been going on, but also offered a way out way to end The Great Depression and to avoid similar episodes in the future. The core of his theory was that what happened to the quantity of money didn’t matter. What really mattered was a particular category of spending. In economists jargon, autonomous spending. What kind of spending is that? It might be investment by business enterprises in building factories and adding to the number of machines and adding to inventories. It might be spending by individuals to build houses. Or, most important of all, it might be deficit spending by government. If private spending on investment, on house building, is not enough to maintain full employment, then government could always step in and spend enough to make up the difference. The theory of pump priming was born. The theory was a godsend to politicians who had been grasping at any expedient. After all, throughout the ages, politicians had been only too willing to spend money provided they didn’t have to tax their citizens to pay for it. And here along came a scientific theory offered under the most responsible of auspices that justified what they had been wanting to do all along. Is it any wonder that government spending has exploded ever since or that deficit spending, even without the excuse of war, and on a large scale, has become the order of the day?
In America, the new Roosevelt administration adopted the Keynesian approach. It authorized massive spending on government projects. It involved government increasingly in the running of the economy. It developed programs designed to provide security for every individual. In England too, the idea that only the government could bolster the economy was firmly established as this film at the time makes clear.
With the assistance of the national government, work was restarted on the great Granada, 534. And we all hope that this is a prelude to a period of increasing prosperity in the industry. Exports of cotton goods to India have increased and as a result of the quota system in the colonies, which the national government introduced in order to diminish the dangers of Japanese competition, exports of cotton good to those colonies have been more than doubled. One of the most important contributions which the national government has made toward the improvement of social conditions has been a housing campaign without parallel in our history.
Though some of these measures may have been useful and indeed needed during the depression years, the length to which they have since then carried would have horrified Kane.
Kane died in 1946. I have always regarded it as a tragedy that they did not live another decade. He was the one man who had the standing, the personality, the force of character to persuade his disciples not to carry too far some ideas which were good for the 1930’s but which did not apply in the post war situation. That he might have done so is suggested by an article he wrote just before his death. The last article he ever wrote published after his death. In that article he expressed strong reservations about the lengths to which some of his disciples had been carrying his ideas. If he had been able, if he had lived another decade, the postwar inflationary explosion might have been avoided.
October 26, 2011 – 12:04 am Categories: Milton Friedman | Comments Off on 99th anniversary of Milton Friedman’s birth (Part 17) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 3 of 7)

99th anniversary of Milton Friedman’s birth (Part 16) (“Free to Choose” episode 3 – Anatomy of a Crisis. part 2 of 7)

99th anniversary of Milton Friedman’s birth (Part 16)

Milton Friedman was born on July 31, 1912 and he died November 16, 2006. I started posting tributes of him on July 31 and I hope to continue them until his 100th birthday. Here is another tribute below:

George Eccles: Well, then we called all our employees together. And we told them to be at the bank at their place at 8:00 a.m. and just act as if nothing was happening, just have a smile on their face, if they could, and me too. And we have four savings windows and we said, never leave the window. Lunch hour, anything else, we must have every window open all day. But, the important things was we knew you would have a big line so there was no use trying to hurry, because the line was going to continue. So we said, now, when you get a withdraw slip and the passbook, go back and check the signature. Even though you know your friend John Jones, just to delay time, just to mark time and then when you pay the money out, we are not going to pay in $100 bills. We are going to pay in $5, $10 and $20. And count it twice and hand it out with a smile.
Friedman: The banks survived the morning. But they didn’t have enough cash left so in the afternoon they called for more from the Federal Reserve Bank.
George Eccles: So the Federal Reserve sent up the armored car, two big sacks full of currency were brought in by the guard crowded through the crowd and the assistant manager, Morgan Kraft, came in also. So Mariner and my brother grabbed Mr. Kraft and he says, now, get up on this marble counter and tell these people that you brought up a lot of money and there is more where that came from! And he did. And then Mariner got up and said now you’ve heard that story, were not going to close. We’re going to stay open as long as any of you people want your money. So don’t worry about it at all. Well, of course, you had one other bank in the city and we called him and told him he couldn’t close either. He said well I can’t I haven’t got any money to stay open. So we made him a temporary loan. Because if we had another bank close while this run was going on the psychology of the public would be such that they’d, we’d never break the run in our bank. Everybody would come until they got all of their money out. (END)
The bank survived the first day’s run. It was time to change psychology. The second day was to be very different.
George Eccles: So that evening we called our employees all together because we knew that the next day that people had been working during the day and would have heard about this and the next morning we’d have them with us. So we figured now we can’t let a crowd build up in the lobby. So we told our tellers, I say now, you pay out this money just as fast as you can. So when anybody comes in the front door they don’t see a line. You pay out in $100 bills and don’t let any line ever develop at your window. Well it never did. So along about noon time people were just coming and going in a normal fashion and the run was over.
Friedman: It was all a question of reassuring the public that they could get their money. The Federal Reserve System was there to insure that this happened by supplying cash to the banks.
Why didn’t this system prevent The Great Depression after 1929? Because from 1929 to 1930 after the stock market crashed, the Federal Reserve system allowed the quantity of money to decline slowly thereby throttling the monetary structure. By December 1930, the quantity of money had fallen by 3% which may not seem much, but a growing economy needs additional money in order to prevent deflation and problems. Given this throttling of the monetary system, what happened after that was more or less inevitable. If the Bank of United States had not happened to fail, some other bank would have been the victim. It would have failed and would’ve set off the runs. Once the runs started, the Federal Reserve could have prevented them from having the disastrous consequences they did by stepping in and providing the banking system in general through creating new money with the cash it needed to meet the demands of the depositors. After all, once depositors start trying to take their money out of the banks, there is a strong tendency for the quantity of money to fall. Each dollar of cash which is withdrawn from a bank had been backing several dollars of deposits. If the Federal Reserve had stepped in, bought government securities on a large scale, provided the cash, the depositors would have found that they could’ve got their money and they would have stopped asking for it.
Ironically, the people at the New York Reserve Bank knew that this was the right policy. No one had advocated it more forcefully than Benjamin Strong, the first head of the bank. Tragically for America, he died two years before the real crisis.
With the death of Benjamin Strong, a truly remarkable man who not only ran the New York bank but was also the key figure in the entire Federal Reserve system. A struggle for power broke out between New York, the other banks and the Board in Washington. New York lost, the other banks and even more, the Board in Washington, won. That was a little noticed event but it was the first step in that massive move of power to Washington that has dominated our lives ever since. Then and now, this building housed the U.S. Treasury Department. But at that time, the Federal Reserve Board also had its modest offices somewhere in the same building. The shift of power was sealed a few years later when the Board got its own magnificent temple a few blocks away from here on Constitution Avenue. Despite excellent advice from New York, the system refused to buy government bonds, something which would have provided cash to the commercial banks with which they could have met more easily the insisted demands of their depositors. Instead, believe it or not, the system stood idly by while banks crashed on all sides. As the head of one of the banks put it, the reserve system had to keep its powder dry for a real emergency.
But if this wasn’t an emergency, what was? As bank after bank closed a chain reaction was in process destroying money as it went. It’s a process that even today a few bankers understand.
If you ask an individual banker whether he creates money, he’ll look at you as if you are mad. Of course not, he’ll say. I don’t create money, all I do is I accept deposits from high customers, I put a little of that deposit in the vault as a reserve and I lend the rest out. I don’t create money. From the point of view of the economist, the situation is very different. As I explained earlier, most of the deposits on the books of banks were put there by an accountant’s pen. But that simple fact is concealed from the individual banker, because is doesn’t happen here, inside the bank, it happens as a result of the transactions between banks.
As the men who ran the Federal Reserve knew very well, it happens when money loaned by one bank is deposited into another bank, to be loaned out yet again. In the depression the process was working in reverse. The banks were destroying money. Nonetheless, the Federal Reserve let it happen.
The end result was that by the time the whole sorry episode was over, by 1933 the quantity of money in the United States had gone down by a third. The slow throttling had turned into strangulation. For every $3 of currency in deposits the people had in 1929, only $2 were left. For every three banks that were open in 1929, in 1933 only two were left.
The terrible depression that followed was a direct result of bungling by the Federal Reserve System. Their monetary policy starts with any hope of economic recovery.
October 26, 2011 – 12:03 am Categories: Milton Friedman | Post a comment

Federal government loves to eat up our money: “Yum Yum Eat em up”

The federal government loves to eat up more and more of our money. Back in the first few years of the 20th century our federal government usually spent about 3% of our money per year unless we were involved in a war, but now the percentage of GDP is up to almost 25%. It reminds me of the “Yum Yum Eat em up” short film I saw many years ago.

Federal Spending Is Outpacing Inflation

Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.

Prices of goods and services normally rise year to year, but federal spending has risen even faster. Although spending grew substantially after 9/11, less than half of the increase can be attributed to defense and homeland security spending.

YEAR-TO-YEAR PERCENTAGE CHANGE

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Federal Spending Is Outpacing Inflation

Source: U.S. Bureau of Labor Statistics and White House Office of Management and Budget.

Chart 4 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

Wild Man From Borneo – YUM YUM EEAAAAT EM UP!

October 25, 2011 – 2:27 pm Categories: Current Events, spending out of control, Taxes | Post a comment

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Obamacare at the Supreme Court

Obamacare at the Supreme Court

The time is finally here for the Supreme Court to hear this case.

Hans von Spakovsky

September 28, 2011 at 11:00 am

The National Federation of Independent Business (NFIB) stole a march on the Obama Administration this morning by filing a petition with the U.S. Supreme Court appealing the 11th Circuit’s Obamacare decision.

The Department of Justice (DOJ) had announced on Monday that it was not going to ask all 11 judges of the 11th Circuit Court of Appeals to review en banc the August 12 decision of a three-judge panel of the 11th Circuit that found the individual mandate unconstitutional. This opened up a path to an appeal by DOJ to the Supremes.

Dan Mitchell gives 12 reasons Obamacare will fail.

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However, with this petition, the NFIB jumped ahead of Eric Holder’s slow-moving DOJ (which until Monday had done everything it could to slow-walk this case filed by 26 states and the NFIB). The NFIB is obviously not appealing the three-judge panel’s opinion about the unconstitutionality of the individual mandate. But the NFIB is appealing the portion of the panel’s decision that held that the unconstitutional individual mandate could be severed from the Obamacare legislation.

The NFIB is asking the Court to overrule this holding, since “Congress itself deemed [the mandate] ‘essential’ to the Act’s new insurance regulations.” Given that the 11th and 6th Circuits have issued “directly conflicting final judgments about the facial constitutionality of [Obamacare’s] mandate,” the case is one that the Court should obviously take up given its interest in eliminating conflicting opinions in the courts of appeal.

What also differentiates this particular case from the many other lawsuits that have been filed against Obamacare is the “all star” lineup of Supreme Court litigators that the NFIB and the 26 states have lined up to argue their case before the Supreme Court. It includes Michael Carvin, a former DOJ official who has argued (and won) numerous cases before the Court; Gregory Katsas, a former DOJ official who was a clerk to Justice Clarence Thomas; Kevin Marshal, another former DOJ official and Thomas clerk; Hashim Mooppan, a former Justice Antonin Scalia clerk; and Randy Barnett, a nationally recognized constitutional scholar and professor at Georgetown.

The lawyers for the states include Paul Clement, former Bush Administration Solicitor General; Lee Casey, another former DOJ official who clerked for Alex Kozinski, who is now the Chief Judge of the Ninth Circuit; and David Rivkin, another Supreme Court litigator with wide experience in the government, including in the White House and the DOJ.

The government lawyers in the DOJ’s Office of the Solicitor General who will be arguing the constitutionality of Obamacare will have their work cut out for them.

October 25, 2011 – 12:56 pm Categories: Healthcare, President Obama | Post a comment

Each American’s Share of National Debt Is Growing

Each American’s Share of National Debt Is Growing

Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.

As Washington continues to spend more than it can afford, future generations of taxpayers will be on the hook for increasing levels of debt. The amount of debt per citizen will skyrocket.

INFLATION-ADJUSTED DOLLARS (2010)

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Each American's Share of National Debt Is Growing

Source: U.S. Census Bureau and Congressional Budget Office (Alternative Fiscal Scenario).

Chart 21 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

October 25, 2011 – 11:52 am Categories: spending out of control | Post a comment

Video clip of Michele Bachmann in interview after October 11, 2011 Republican debate

I do like Michele Bachmann a lot and I love what she has to say in the article below too.

Slate.com vs. Tea-Party/Christians/Bachmann

Posted by Andrew J. Coulson

Slate worked itself into a lather yesterday over the insidious education policy implications of Michele Bachmann’s Iowa Straw Poll victory:

As recently as a decade ago, Republicans like George W. Bush, John McCain, and John Boehner embraced bipartisan, standards-and-accountability education reform…. Now we are seeing the GOP acquiesce to the anti-government, Christian-right view of education epitomized by Bachmann…. Against a backdrop of Tea Party calls to abolish the Department of Education and drastically cut the federal government’s role in local public schools….”

To support this narrative, Slate asked Bachmann what the federal government’s role was in education, to which she replied, “There is none; Education is a matter reserved for the states.”

Oh, whoops, sorry. Got that last quote wrong. That wasn’t Bachmann‘s answer, it was the answer of the FDR administration.

This answer rests squarely on the Tenth Amendment, which reserves to the states and the people powers not expressly enumerated and delegated to Congress by the Constitution. It was published by the federal government in 1943, under the oversight of the president, the vice president, and the speaker of the House.

Though it might come as a surprise to Slate‘s writers, our nation was not founded on state-run schooling. And, until very recently in historical terms, the idea that the federal government had a role to play in the classroom was unthinkable. It may have required some theorizing to evaluate the merits of Congress-as-schoolmarm prior to the feds getting involved in a big way in 1965, but now… now we can just look in the rear-view mirror (see chart below).

With nearly half a century of hindsight, advocating a federal withdrawal from America’s schools does not seem “anti-government.” Just anti-crazy.

Related posts:

Video clip of Michele Bachmann in interview after October 11, 2011 Republican debate

I do like Michele Bachmann a lot and I love what she has to say in the article below too. Slate.com vs. Tea-Party/Christians/Bachmann Posted by Andrew J. Coulson Slate worked itself into a lather yesterday over the insidious education policy implications of Michele Bachmann’s Iowa Straw Poll victory: As recently as a decade ago, Republicans […]

Rick Perry’s answer in Republican debate of October 11, 2011 (with video clip)

I really like Rick Perry because he was right when he called Social Security a “Ponzi Scheme” which it is. How did he do in the last debate? You be the judge by watching his response above. Rick Perry’s Moment Posted by Roger Pilon Last night POLITICO Arena asked: Who won the Reagan debate? My […]

Romney attacked in Republican debate of October 11, 2011 (with video clip)

I am not too pleased with Mitt Romney and the article below shows one good reason to oppose him. Can Mitt Romney Escape His Romneycare Albatross? by Doug Bandow Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to Ronald Reagan, he is the author of Foreign Follies: America’s New […]

Barney Frank and Chris Dodd mentioned in October 11, 2011 Republican debate with video clip

Dodd and Frank are the real villians of the mortgage mess and I knew that 3 years ago after reading this article below. Who did the Democrats get to clean up this mess? You guessed it. What a joke. Who Are the Villains of the Mortgage Mess? by Daniel J. Mitchell  Daniel J. Mitchell is […]

Reagan’s 1982 tax increase mentioned during the Republican debate of October 11, 2011 with video clip

Reagan’s statement concerning 1982 tax increase is responded to by Republican Candidates in this clip below: Washington Could Learn a Lot from a Drug Addict Concerning spending cuts Reagan believed, that members of Congress “wouldn’t lie to him when he should have known better.” However, can you believe a drug addict when he tells you […]

Ron Paul on Fed during the Republican debate of October 11, 2011 with video clip

I really like Ron Paul a lot and the reasons I like him are in this article below and in the clip above. Ron Paul’s Success Posted by David Boaz The Washington Post reports that Ron Paul “is enjoying a surge in support and the most high-profile campaign of his life. ” Paul’s unwavering ideals […]

Cain’s 9-9-9 plan center stage at Republican debate of October 11, 2011 (with video clip)

Herman Cain’s 9-9-9 plan did steal the show at the Republican debate of October 11, 2011. Take a look at this article below: The Republican presidential debate in Hanover, N.H. (AP) There was one clear winner from Tuesday’s Republican presidential debate, based on the simple metrics of name recognition: businessman Herman Cain’s “9-9-9 Plan.” Virtually […]

Romney not conservative enough (clip from Republican debate of 10-11-11)

Mitt Romney is not a true conservative. Exhibit #1 Romney wants to start trade wars. Romney for Panderer-in-Chief? by Gene Healy  Gene Healy is a vice president at the Cato Institute and the author of The Cult of the Presidency: America’s Dangerous Devotion to Executive Power. Added to cato.org on October 11, 2011 This article […]

Ron Paul speaking at Values Voter Summit

Ron Paul speaking at Values Voter Summit In this speech above Ron Paul repeats his view that we should not have a Dept of Education and the article below does the same thing. Beating Back Big (Ed.) Brother? Posted by Neal McCluskey It certainly seems quixotic to try to reverse the federal invasion of American […]

Mitt Romney’s religion is becoming an issue

This issue concerning Mitt Romney’s religion is heating up. Baptist pastor taken to task Russ Jones and Chad Groening – OneNewsNow – 10/10/2011 11:05:00 am Popular radio and television commentator Glenn Beck wrapped up the Values Voter Summit in Washington, DC, Sunday in a wave of anti-Mormonism comments lodged towards GOP presidential hopeful Mitt Romney.   […]

October 25, 2011 – 9:48 am Categories: Uncategorized | Post a comment

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Cato Institute grades Perry’s flat tax

I really like to read Dan Mitchell’s opinions.

Grading Perry’s Flat Tax: Some Missing Homework, but a Solid B+

Posted by Daniel J. Mitchell

Governor Rick Perry of Texas has announced a plan, which he outlines in the Wall Street Journal, to replace the corrupt and inefficient internal revenue code with a flat tax. Let’s review his proposal, using the principles of good tax policy as a benchmark.

1. Does the plan have a low, flat rate to minimize penalties on productive behavior?

Governor Perry is proposing an optional 20 percent tax rate. Combined with a very generous allowance (it appears that a family of four would not pay tax on the first $50,000 of income), this means the income tax will be only a modest burden for households. Most important, at least from an economic perspective, the 20-percent marginal tax rate will be much more conducive to entrepreneurship and hard work, giving people more incentive to create jobs and wealth.

2. Does the plan eliminate double taxation so there is no longer a tax bias against saving and investment?

The Perry flat tax gets rid of the death tax, the capital gains tax, and the double tax on dividends. This would significantly reduce the discriminatory and punitive treatment of income that is saved and invested (see this chart to understand why this is a serious problem in the current tax code). Since all economic theories – even socialism and Marxism – agree that capital formation is key for long-run growth and higher living standards, addressing the tax bias against saving and investment is one of the best features of Perry’s plan.

3. Does the plan get rid of deductions, preferences, exemptions, preferences, deductions, loopholes, credits, shelters, and other provisions that distort economic behavior?

A pure flat tax does not include any preferences or penalties. The goal is to leave people alone so they make decisions based on what makes economic sense rather than what reduces their tax liability. Unfortunately, this is one area where the Perry flat tax falls a bit short. His plan gets rid of lots of special favors in the tax code, but it would retain deductions (for those earning less than $500,000 yearly) for charitable contributions, home mortgage interest, and state and local taxes.

As a long-time advocate of a pure flat tax, I’m not happy that Perry has deviated from the ideal approach. But the perfect should not be the enemy of the very good. If implemented, his plan would dramatically boost economic performance and improve competitiveness.

That being said, there are some questions that need to be answered before giving a final grade to the plan. Based on Perry’s Wall Street Journal column and material from the campaign, here are some unknowns.

1. Is the double tax on interest eliminated?

A flat tax should get rid of all forms of double taxation. For all intents and purposes, a pure flat tax includes an unlimited and unrestricted IRA. You pay tax when you first earn your income, but the IRS shouldn’t get another bite of the apple simply because you save and invest your after-tax income. It’s not clear, though, whether the Perry plan eliminates the double tax on interest. Also, the Perry plan eliminates the double taxation of “qualified dividends,” but it’s not clear what that means.

2. Is the special tax preference for fringe benefits eliminated?

One of the best features of the flat tax is that it gets rid of the business deduction for fringe benefits such as health insurance. This special tax break has helped create a very inefficient healthcare system and a third-party payer crisis. It is unclear, though, whether this pernicious tax distortion is eliminated with the Perry flat tax.

3. How will the optional flat tax operate?

The Perry plan copies the Hong Kong system in that it allows people to choose whether to participate in the flat tax. This is attractive since it ensures that nobody can be disadvantaged, but how will it work? Can people switch back and forth every year? Is the optional system also available to all the small businesses that use the 1040 individual tax system to file their returns?

4. Will businesses be allowed to “expense” investment expenditures?

The current tax code penalizes new business investment by forcing companies to pretend that a substantial share of current-year investment outlays take place in the future. The government imposes this perverse policy in order to get more short-run revenue since companies are forced to artificially overstate current-year profits. A pure flat tax allows a business to “expense” the cost of business investments (just as they “expense” workers wages) for the simple reason that taxable income should be defined as total revenue minus total costs.

Depending on the answers to these questions, the grade for Perry’s flat tax could be as high as A- or as low as B. Regardless, it will be a radical improvement compared to the current tax system, which gets a D- (and that’s a very kind grade).

Here’s a brief video for those who want more information about the flat tax.

———-

The Flat Tax: How it Works and Why it is Good for America

Uploaded by on Mar 29, 2010

This Center for Freedom and Prosperity Foundation video shows how the flat tax would benefit families and businesses, and also explains how this simple and fair system would boost economic growth and eliminate the special-interest corruption of the internal revenue code. www.freedomandprosperity.org

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Last but not least, I’ve already receive several requests to comment on how Perry’s flat tax compares to Cain’s 9-9-9 plan.

At a conceptual level, the plans are quite similar. They both replace the discriminatory rate structure of the current system with a low rate. They both get rid of double taxation. And they both dramatically reduce corrupt loopholes and distortions when compared to the current tax code.

All things considered, though, I prefer the flat tax. The 9-9-9 plan combines a 9 percent flat tax with a 9 percent VAT and a 9 percent national sales tax, and I don’t trust that politicians will keep the rates at 9 percent.

The worst thing that can happen with a flat tax is that we degenerate back to the current system. The worst thing that happens with the 9-9-9 plan, as I explain in this video, is that politicians pull a bait-and-switch and America becomes Greece or France.

October 25, 2011 – 9:15 am Categories: Cato Institute, Taxes | Post a comment

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