Economic Good Things

Yesterday Congress passed yet another drunken-sailor budget, which would suspend the debt ceiling for another two years and result in an additional $322 billion in spending, ballooning the deficit to $22 trillion dollars.

Not long ago my conservative friends and I took to the streets protesting the unfathomable $16 trillion debt that the federal government had foisted upon our children and grandchildren. Then we got steamrolled by Obama, not exactly a top-drawer economist. Even holding both houses was not enough to stop the spending tsunami, and before you could blink, the Democrat socialist revolution had overtaken Congress.

In an effort to extinguish my “hair on fire” I set out looking for some little rays of economic sunshine among the dark clouds. Here’s what I found:

  • DEREGULATION is driving the economy at an unexpectedly brisk pace. All around I see businesses starting and expanding, construction projects popping up like popcorn, opportunities for workers of all types at premium wage rates, and consumer spending and optimism going through the roof.
  • FOREIGN TRADE POLICIES, TARIFFS AND ALLIANCES – President Trump clearly understands the “art of the deal”, and his push-back against China is bringing positive change. Protests in Hong Kong might drive regime change, or at least policy change. And Trump’s outsized influence on Brexit, Iran, Russia and North Korea all have economic implications. While international trade is not a “zero sum” game, other nations are finally feeling the heat of dealing with an “A-team” on the economic playing field.
  • ENERGY INDEPENDENCE – For a very long time, the USA economy was like many American families – one paycheck away from bankruptcy. At any time a Middle Eastern mullah could shut off the supply of oil, plunging our economy into chaos. That threat is now extinguished.
  • AGENCY REORGANIZATION – Russ Vought and Mick Mulvaney of the OMB are tightening the noose on agency leadership, getting more bang for the taxpayer buck, down-sizing and decentralizing, and updating personnel and procurement procedures. Every day they are changing the government culture to more closely operate like private business.

When Mulvaney was my congressman, we had several discussions about federal spending, with me venting my frustration that the debt was exploding and nobody cares. Mulvaney, always the pragmatist, said, “We can’t fix the deficit and debt by reducing spending. It’s way too late for that. We will have to outgrow it.”

At the time, Mick’s message was not what I wanted to hear. And I still would like to see a more mixed approach: cut spending while the economy is healthy and growing. But the appetite for restraint is just not there. Not with the Democrats and many weak-kneed Republicans in Congress who win re-election by giving away free candy. Not with the president, who had to adopt the same stance to guarantee re-election and time to complete his mission. And frankly, not with the under-informed spoiled-brat public, most of whom pay no federal taxes and whose ranks are swelling every day with immigrants from nations who have never participated in a consumer-driven supply-and-demand economy.

Can our debt keep expanding without consequences? Probably not. But all you can do is all you can do.

I used to employ a business strategy that seemed to work pretty darn well. Every business is segmented into products, or markets, or divisions. Too many executives and managers put all of their energy and focus into the underperforming segments of their businesses, ignoring the segments that are smoking hot and growing. I always promoted the strategy of putting maximum effort and resources into what’s doing well instead of beating your head against the wall trying to fix the losers.

So yes, we had a bad budget deal. Boogers. But if we look closer, there are a lot of “good things” going on.

Seems this worlds got you down
Your feelin’ bad vibrations frown
Well, open your eyes girl, look at me 
I’m gonna show you how it ought to be
We’re gonna’ have a good thing
Such a good thing baby

Good Thing – Paul Revere and the Raiders

In memory of Paul Revere, one of the truly good guys in the history of rock and roll.

Time to Dump Government Unions

President Trump’s State of the Union speech included a lengthy “to-do” list: infrastructure improvements, workforce development, secure borders and immigration reform, strengthened military, and much more.

One of President Trump’s “to-do” items grabbed my attention, although I have not seen it mentioned anywhere in the press.  Half-way through his epic speech, he said:

All Americans deserve accountability and respect — and that’s what we are giving them. So tonight I call on Congress to empower every cabinet secretary with the authority to reward good workers — and to remove federal employees who undermine the public trust or fail the American People.

I have long pressed for accountability from government employees.  We all know that as the cost of government continues to spiral out of sight, resulting in a $21 trillion debt (and climbing), performance continues to decline.  The federal government hires more and more employees, at ever high wages and benefits that far eclipse comparable jobs in the private sector, with no improvement in results.  Any work done by the federal government will take much longer and cost much more than the same work done outside the Beltway.

The problem is clear, it is huge, and it is easy to solve:  we must eliminate the destructive influence of federal government employee unions.

No business or private organization could survive in an environment where managers can not fire or discipline their employees.  And what employer could afford hiring three people for every job just to get the base amount of work done due to minimum five-week vacations, 21+ days of paid sick leave whether used or not, 12 or more holidays, personal leave, six hour (or less) work days, long lunches, protesting time, travel to exotic locales for meetings, “she’s away from her desk” time, etc.  Government employees are virtually guaranteed over-market salaries, regular raises, bonuses, Cadillac benefits and lifetime employment regardless of performance.   And in many cases the service level to the taxpayers who pay the salaries is disgraceful – witness the abuse of Western landowners at the hands of federal agencies and veterans who die waiting for care at VA hospitals.

Worse yet, the cozy union/Democrat alliance is quid-pro-quo corruption at its worst.  Unions collect gargantuan sums of money to be fed directly to the Democrat party, and federal workers vote overwhelmingly for Democrats, who repay the favor to their benefactors.  It’s so easy to be generous with somebody else’s money.

Of course there are federal government employees who earn their keep, especially in the armed forces and security agencies.  But there are also buildings all across the nation overstuffed with un- or under-productive federal employees and officials who won’t or can’t address the outrageous waste.  Meanwhile, competent and cost-effective individuals and companies who could do the work of the people efficiently can’t break through the bureaucracy.

Now is the time to eliminate the federal government employee unions once and for all.  I call on Congress and the President to relieve this festering sore on the behind of the taxpayers.  Rep. Ralph Norman (R-SC) gets it.  He told me,  “This could be part of federal right-to-work legislation.”

We are tired of being told that federal spending can’t be cut because it’s just too huge to even bother trying.   We demand that our legislators do their jobs, which are setting and administering budgets, appropriating funds, and overseeing agency and department heads.  OMB Director Mick Mulvaney and Labor Secretary Alexander Acosta must step up.  The taxpayers will hold you all accountable as you must hold your federal bureaucrats accountable for efficacious results.

Tom Balek – Rockin’ On the Right Side

I’m proud to a union man
I make those meetings when I can, yeah
I pay my dues ahead of time
When the benefits come I’m last in line, yeah.

Union Man – Neil Young

 

Coffee Talk on Tax Reform


Some “coffee talk” on tax reform:


Our national debt is now approaching $21 trillion ($231 trillion if you include unfunded liabilities like government pensions), and nobody seems to care.  Most of our congressmen still want to spend more and tax less.  I guess they think we can just print more money whenever we want and there is no down side.  They had better hope interest rates can be artificially held to near zero for generations to come.


Everybody knows the tax code is ridiculously complex.  But few understand what a drag on the economy this complexity causes.  Here’s something to think about:  the cost of filling out government tax forms is estimated by the IRS at $400 billion per year.  At the bottom of every business tax form is a small box that asks how many hours were spent preparing this form.  The preparer will write “2 hours” or “.5 hours” on the form, and the IRS rolls up this number, multiplies it by some arbitrary labor cost per hour, and comes up with $400 billion.  But that’s just for filling out the form!  It doesn’t include the billions of hours spent on accounting to generate the numbers to report on the form!  I know some of this accounting also serves internal purposes, but much of it does not, especially in small businesses.  And we aren’t even counting the cost of the IRS, the IT systems required for data gathering, or the Advils swallowed every April.

I’ll bet the cost of reporting taxes easily exceeds a trillion dollars.  Think about it:  our annual GDP is $20 trillion.  Ask any business owner what percentage of the labor hours in his business are spent punching computers, gathering data and doing accounting.  A conservative average might be 25%.  That would be $5 trillion of bookkeeping per year.  Imagine what our economy could do if we didn’t spend a quarter of our time bean-counting instead of making something useful.


OMB Director Mick Mulvaney knows that there is terrible waste in government, and we could cut a huge chunk out of the federal budget without causing any pain for Americans.  And while he is making the effort to cut spending as best he can, it won’t work.  “Too slow,” says Mulvaney, an honors scholar and holder of advanced degrees in international economics, commerce, and finance.  “The only way to turn the ship around is to grow the economy.”

Mulvaney believes 3% GDP growth, which has been fairly common in our history, would grind down our debt and reduce the drag on the economy, but only only if we could muster some restraint in the growth of spending.  It’s encouraging and discouraging at the same time.  It’s definitely do-able.  But our elected class has learned that they can get elected and re-elected by promising to give everybody somebody else’s money.


The purpose of taxes is to fund the government.  Collecting taxes should be simple:  Here is the budget for next year (say $1 trillion).  Add up the total wages of all adult citizens ($33 trillion).  Divide – the answer is 3%.  Ask each citizen to send a check for 3% of their wages to the swamp.

That might be a little bit too simple – for example, all business and investment profit would need to be distributed as personal income, not retained.  But our tax code has grown to over 75,000 pages, and that’s because it is used for much more than just funding the government.  It’s all about controlling our behavior.  Most tax laws were put in place to reward some of us with tax breaks, or to punish some of us with higher taxes, or to encourage (or require) all of us to act in a certain way.

If you think the government should have less control over your daily life, you should want the tax code to be severely simplified, and the corrupt IRS whittled down to reflect its core mission.


Tom Balek – Rockin’ On the Right Side

It’s Hell! Tryin’ to make it
When you’re doin’ it by yourself
It’s Hell! Payin’ taxes
When there’s no money left

Cut the Budget, Or A Whole Department? You Decide!

When is the last time the Federal Government asked you what you want it to do?  Been a while, hasn’t it?

Here is yet another example of how elections really do matter.  The Trump administration, via Mick Mulvaney and his Office of Management and Budget, wants your input.

They set up a web page on the White House website and are asking for suggestions from citizens on how to make our federal government “more efficient, effective, and accountable to the American public.”

They want you to name names.  They are asking for details.  If you have seen a federal agency that is not operating at, shall we say, “peak efficiency”, here’s your chance to do something about it.  Trump and Mulvaney want to know which agencies, boards, and commissions are screwing up, wasting money, or are no longer even necessary, and visitors to the website are encouraged to share their ideas and solutions in detail.

In addition, citizens are asked to weigh in on federal government management reform and reorganization of the government.  How damn refreshing is that?

It’s hard to resist the temptation to “select all” for elimination or reform and hit enter.  So I zeroed in on all the departments and agencies related to the Indian Reservation debacle.

Rumor has it that Mulvaney and his team are also planning to “tech up” the government to modern business standards, something I have advocated for years.

Information technology (IT) advancements have been at the center of a transformation in how the private sector operates—and revolutionized the efficiency, convenience, and effectiveness with which it serves its customers. The Federal Government largely has missed out on that transformation due to poor management of technology investments, with IT projects too often costing hundreds of millions of dollars more than they should, taking years longer than necessary to deploy, and delivering technologies that are obsolete by the time they are completed. We are working to close the resulting gap between the best performing private sector organizations and the federal government.

— Office of E-Government and Information Technology

Of course asking for input and actually using it are two very different things.  But I find it flattering to even be asked, after two terms of total arrogance in the executive office.

So I hope you will take a few minutes and look over the long list of agencies.  Consider whether the National Endowment for the Arts is still deserving of taxpayer support, and check yes or no.

Tom Balek – Rockin’ On the Right Side

Do you love me,
Do you want to be my friend?
And if you do
Well then don’t be afraid to take me by the hand
If you want to
I think this is how love goes
Check yes or no

Check Yes or No – George Strait

We Can Rebuild the Military AND the Budget

carrier-landing

President Trump’s campaign promise to “Make America Great Again” included his plan to restore our military preparedness to at least pre-Obama levels.  His message resonated with voters, and still meets little resistance from political leaders or from citizens.

Most Americans sense that our armed forces are no longer up to the task of defending our homeland while dealing with international conflicts, and this week’s briefings to Congress by our top military brass didn’t leave us feeling any less hinky.

General Daniel Allen reported that only three of the Army’s fifty combat brigade teams could deploy if needed.  Admiral William Moran said less than half of the Navy’s fighters are in service and our fleet is the smallest it has been in 100 years.  Our Air Force planes average 27 years in age, well past their life expectancy, and we are short 750 pilots and over 1600 maintenance technicians.

Of course every government program wants more money, more money, more money.  Always.  But it appears the military has been cut to the bone, and our leaders made it clear to President Trump that they need funds, now – if we want to continue to have any foreign policy leverage.

Sen. John McCain (R-AZ) is pushing for a huge military budget increase, but he may have to fight that through a conservative Congress and a tough new OMB director, Mick Mulvaney.  Mulvaney agrees with President Trump that national defense is our highest priority.  But he is also a budget hawk, tasked with keeping Congress’ promise to the voters to stop the insanity of our $20 trillion debt.

McCain attacked Mulvaney over his alleged “failure to support the military” by blindly supporting every request for “more money” as a congressman, but Mulvaney’s counterpunch embarrassed the crusty McCain, who could not differentiate between the “top line military budget” and the “overseas contingency operation”, a much-abused and unaccountable military slush fund.

McCain wants $100 billion.  The generals are asking for a $40 billion increase.  Trump is thinking more like $30 billion – with the requirement that it not be wasted.

Is President Trump right about the need to refresh our military?  Yes.

Is it time to send John McCain to the glue factory?  Yes.  Thanks for your service, John.  Have fun at Sun City.

Am I glad to have a tight-fisted skinflint like Mulvaney at OMB keeping an eye on our money?  Hell yeah!

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right SideHell yeah!
Turn it up!
Right on!
Hell yeah!

Hell Yeah! – Montgomery Gentry

 

 

Mulvaney Set to Drain the Swamp

mulvaney-alligatorFor a long time I have suspected that because liberals see everything through the prism of skin color, they assume conservatives do too, and are therefore racists.

Only recently have I realized that the same is true of political corruption.  Liberals think that conservatives who run for office or accept administrative posts must be doing it to enrich themselves unethically because that’s what they, the liberals, do – or would do, given the chance.

For instance, Senator Elizabeth Warren (D-MA) excoriated HHS nominee Rep. Tom Price (R-GA) during his hearing for a $300 profit he made on a stock purchase in a company that benefited from a ruling his committee made.  Her condescending rebuke was designed to paint Price as a monster who made shady self-serving deals using his government influence.  How rich.  Warren, a “one-percenter” with assets estimated at $10 million, falsely claimed Native American heritage to land a professorship, and received $350,000 for teaching one  college course.

Democrats point out, with faux concern and anger, that President-elect Trump’s cabinet picks are mostly wealthy individuals.  Like Trump himself, his nominees have accomplished a level of business (not government) success that not only builds wealth, it also indicates competence.

The Democrats can grandstand and delay, race-bait and class-envy ad nauseam, trying to hold up the confirmation process.  But it won’t work.  The swamp will be drained.

Only the shallowest of observers can’t see that these all-stars are not in it for personal profit.  Quite the contrary; they are sacrificing their earning power and precious time as an act of patriotism, service and charity.  And isn’t it just possible that the wealthy Democrats, most of whom have never earned a dollar in the private sector, are panicking at the prospect that their own gravy train may soon fall off the tracks?

The Trump team tapped budget hawk Rep. Mick Mulvaney (R-SC) to head up the Office of Management and Budget.  Mulvaney was a co-founder of the uber-conservative Freedom Caucus and has a stellar resume in budget, finance, and business – both inside and outside the Beltway.  Mulvaney isn’t rich – during legislative sessions he slept in the closet of his office.  But he is focused and determined.  And he is building his own all-star team, starting with Heritage Action brainiacs Russ Vought and Jessica Anderson.  The Beltway is abuzz today with talk of a plan to reduce the national debt by $10.5 trillion in ten years, based on the Heritage Foundation’s Blueprint for Reform published last year.

This is what common-sense Americans have been praying for since Rick Santelli’s rant on CNBC gave birth to the Tea Party in 2009 – a glimmer of hope that our children will not have to deal with the economic destruction caused by our monolithic $20 trillion federal debt.  In his rant, by the way, Santelli gave kudos to Wilbur Ross, another Trump appointee.

President-elect Trump calls it “draining the swamp”, which encompasses both rooting out corruption and slashing out-of-control spending.  It makes me picture OMB Chief Mulvaney in the role of Amos Moses, that badass Cajun in the Louisiana bayou, knockin’ alligators in the head with a stump!

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right SideNow Amos Moses was a Cajun
He lived by himself in the swamp
He hunted alligator for a living
He’d just knock them in the head with a stump!

Jerry Reed – Amos Moses

 

I love this 1982 video of Jerry Reed and Glen Campbell rockin’ it up with this funky, swampy, bluesy version of Reed’s “Amos Moses.”  You won’t find more guitar pickin’ power in one camera shot.  Reed is most widely known as Burt Reynold’s sidekick in the “Smokey and the Bandit” movies, but he was an outstanding musician and songwriter, and was revered by guitar players world-wide.  Among his innovations was the “claw” style of picking, which he allegedly taught to Chet Atkins.  Campbell had a stellar career until it was derailed by alcoholism and, later, Alzheimer’s disease.  He started as a studio guitarist, was an early member of the Beach Boys, and eventually had his own television show plus many gold records.

 

Here Come Da Judge(s)

here-come-da-judgeOne more month until Decision Day, and as of this writing the 2016 presidential election is still a toss-up.

Speaking of tossing-up, I once heard a perfect description of a hard choice:  It’s being up to your neck in crap and having a bucket of puke thrown at your face.  (sorry)

There’s Hillary, the queen of arrogance, who lies in the face of a dead soldier’s mother without blinking, trades back-door deals with dictators and bankers for mountains of cash, and shamelessly turns everything she touches into molten corruption.

And there’s Donald, the narcissistic and boorish bull-in-the-china-shop who not only speaks with the vocabulary of a junior high kid, he acts like one whenever somebody pushes his buttons.

At an informal town hall meeting this week, Congressman Mick Mulvaney made a surprising prediction.

“Trump will win,” Mulvaney pronounced. “And he will struggle for six months, unable to put any of his policies in place, mostly because of the 60-vote rule in the Senate.”  Then, according to Mulvaney, Trump will try the Obama “pen and phone” approach, taking matters into his own hands.  “And we [Mulvaney and other conservative legislators] will be on the House floor stopping him.  I’ll tell him, ‘I like what you are trying to do, but you can’t do it on your own’.”

Mulvaney says their principled stand will teach Trump to work with Congress, heal the Republican party, and restore the voters’ respect for government.

If the decision hinges on which candidate is less distasteful, it’s going to be a tough choice.  But there is a much more compelling factor in this election that can’t be dismissed.  Our next president will establish the makeup and tenor of the supreme court and lower courts for decades to come.

If judges and justices were all honorable and operated within the constraints of the Constitution, this would not matter.  They aren’t, so it does.

The separation of powers built into our Constitution should prevent one branch from dominating the others, but despite a Republican majority in both houses our legislative branch has become impotent.  President Obama’s administrative branch has steam-rolled Congress, as executive orders go unchecked, and agencies execute the President’s playbook with support from activist Democrat circuit and appellate judges. 70% of the appellate courts are now home to Democrat appointees, thanks to what Ken Cuccinelli, president of the Senate Conservatives Fund calls a “knee-jerk surrender” on nominees by Senate leader Mitch McConnell.

The next president will nominate several Supreme Court justices and countless other circuit and appellate judges.  Donald Trump promises to select constitutionalists for judicial openings, and already has a list of prospects for the Supreme Court.  Hillary Clinton will install radical liberals if she is elected, which, combined with the fecklessness of Congress, will alter the balance of power, perhaps permanently.

When a liberal administration and courts have unfettered rule over the nation, our basic freedoms are at risk.  Religious freedom, property rights, protections from overreaching regulation, and free speech are under assault even now.

If you vote for Hillary, stand back.  Cause here come da judge(s).

Tom Balek, Rockin’ On the Right Side

Rockin' On the Right SideI’d rather be lost
In the jungle of Brazil
Than to face the judge this morning
The way he feels
Here come da judge!

Here Come Da Judge – Shorty Long

There were a bunch of “Here Comes the Judge” songs.  Here’s my favorite, from 1968.