May 2012

The “stimulus” plan devised by House leaders and the White House at a price tag of nearly $150 billion is now being rejected as too small by Senate Finance Committee head Max Baucus. His plan would give out much more welfare benefits, and provide tax “rebates” to millions more people who don’t even pay taxes, than the House plan proposed. (I described yesterday how other Senators are busy proposing all sorts of welfare for inclusion in the stimulus plan, and how millions of dollars from the plan may end up financing left-wing special-interest groups).

Baucus’s stimulus plan would also give out rebates even to individuals making over $75,000 per year and married couples making $150,000 per year, who would be barred from receiving rebates under the House plan, which gives rebates only to people making less than that.

To try and pay for his new welfare proposals (and additional rebates), Baucus’s plan eliminates some of the business tax cuts contained in the House plan, eliminating a few billion dollars worth of tax “incentives for business investment” that might create jobs.

Baucus also engages in funny bookkeeping to make it seem like his much more costly plan costs only $156 billion, just a little more than the House plan. “House leaders and tax writers were skeptical yesterday that the Baucus plan could offer all those measures for the $156 billion price tag he put on his bill,” since the business tax cuts he removed from the House bill can’t begin to pay for all the welfare he added to it.

Future generations will have to pay off the federal debt incurred to pay for either the House or Senate versions of the “stimulus” plan. As The Washington Post notes, “The cost of either plan would be tacked onto this year’s federal budget deficit.”

Earlier, how I discussed how the stimulus plan will increase the financial power of Fannie Mae, an agency that engaged in Enron-style accounting fraud and helped create the housing bubble; how the rebates in the stimulus plan won’t revive the economy; and how the income limits on rebates in an earlier version of the stimulus plan would deny rebates to middle class people in high-living-cost areas, even as they would allow rebates to go to some rich people who receive unearned income and avoid taxes through tax loopholes.

Well, President Bush has given his final State of the Union address and the news stories analyzing it are soon to be legion. Among the most anticipated topics was what he would say about global warming and what the U.S. government should do about it. A couple of weeks ago, the flagship of UK leftism, The Guardian, confidently predicted that Bush would reverse himself and “make a historic shift in his position on global warming.” Sorry, Guardian readers. I’m sure staff writers Gaby Hinsliff, Juliette Jowit and Paul Harris didn’t mean to get your hopes up.

For a late-night recap of what Bush actually did say, let’s turn to CEI’s very own global warming guru, Myron Ebell:

President Bush made it clear in his State of the Union speech that he has not changed his mind that the best policies to address global warming are based on developing new technologies rather than enacting mandatory targets and timetables to reduce emissions. He also said that any new international agreement to succeed the Kyoto Protocol must include commitments from the major developing nations. Since China, India, and other major developing countries have adamantly opposed agreeing to mandatory emissions cuts for themselves, this means that no new treaty will be agreed that includes Kyoto-style mandatory targets and timetables–that is, as long as the next administration continues President Bush’s policies. In my view, President Bush is correct to prefer new technologies to mandatory emissions cuts and the governments of China, india, and other developing countries are right to oppose any new international agreement that would consign their people to perpetual energy poverty because the blessings of abundant energy far outweigh any potential negative impacts of potential global warming.

I would also note that President Bush did not comment on cap-and-trade bills in Congress, on whether the EPA would make an endangerment finding for CO2, or on whether the polar bear would be listed. I hope that these are signals that the president does not support cap-and-trade and is having second thoughts about endangerment and the polar bear listing. Even if one thinks, as I do not, that a Kyoto second round is desirable, it would be utterly foolish to enter into mandatory domestic programs to reduce emissions before an international treaty is agreed.

So there you have it, OpenMarket readers. The dark, cold night of energy rationing is held at bay yet again. The same bargain still applies: you keep using the energy that keeps you warm, and we’ll keep defending it.

The guest list for the First Lady’s Box for tonight’s State of the Union speech provides a preview of individuals to whom the President may give a public nod or even praise. One such individual to look out for is Blanca Gonzalez.

Blanca Gonzalez, Mother of Cuban Political Prisoner; (Miami, Florida)
Blanca Gonzalez is the mother of Normando Hernandez Gonzalez, a political prisoner suffering under the regime of Fidel and Raul Castro. In 2002, Blanca Gonzalez fled Cuba and applied for political asylum in the United States; she now resides in Miami, Florida with her husband. While in Cuba, she was a human rights activist and was harassed by the Cuban regime. Her son, Normando Hernandez Gonzalez, is a writer and independent journalist and was arrested on March 18, 2003, in his hometown of Camaguey, Cuba. Normando Hernandez Gonzalez was sentenced to 25 years of imprisonment for reporting on the conditions of state-run services in Cuba and for criticizing the government’s management of issues such as tourism, agriculture, fishing, and cultural affairs. Hernandez received the PEN/Barbara Goldsmith Freedom to Write Award in April 2007, an award that recognizes international literary figures who have been persecuted or imprisoned for exercising or defending the right to freedom of expression. He has also been recognized by the Costa Rican legislature. His health has deteriorated due to a severe, chronic, and untreated gastro-intestinal disorder which causes constant diarrhea, headaches, intermittent fever, and poor gastro-intestinal absorption. He has lost at least 35 pounds. Normando Hernandez Gonzalez remains in prison.

The reference to “the regime of Fidel and Raul Castro” seems to indicate that there will not be a change in U.S. policy towards Cuba until Fidel’s epigone is also gone, which likely means a continuation of the status quo for a few more years. The embargo didn’t bring down Fidel after nearly half a century, so Raul could well cling on to power with enough ruthlessness and some Venezuelan oil and money.

But until that happens, it’s worth remembering just how murderous and brutal the Castro brothers have been, so I hope that Ms. Gonzalez’s appearance tonight encourages people to see the film Shootdown, a new documentary about the shooting down of two civilian planes piloted by American citizens in international airspace. The pilots were part of the Cuban-American Brothers to the Rescue organization, whose mission is to rescue Cubans trying to flee Castro’s socialist paradise on inner-tube rafts across the Florida straits. Trailer here. Theaters and showtimes here.

In the last few days, I’ve been following the saga of Detroit Mayor Kwame Kilpatrick with the same fascination I often reserve for car crashes. Briefly, even as his city has continued its never-ending stream of economic hard luck, Kilpatrick allegedly spent hundreds of thousands of dollars in taxpayer funds to carry on an affair with another city worker and then fired several police officers who might have exposed him. The officers sued, Kilpatrick denied having an affair, and a jury awarded them nearly $7 million.

Last week, The Detroit Free Press reported the contents of a variety of text messages that seem to show that Kilpatrick, indeed, had an affair and tried to cover it up. It’s likely another blow for Detroit and, I strongly suspect, it will end in Kilpatrick’s resignation.

As fascinated as I am with every last sleazy detail, however, it seems highly likely that nothing is going to change for the city even after Kilpatrick leaves and the city finds a less sleazy mayor.

Although Time Magazine put him on its list of the country’s worst mayors, however, Kilpatrick has actually done some things that might please conservatives and libertarians: He has cut property taxes, worked to attract business, and trimmed city payrolls. But I’m not sure if anyone–right or left–has confronted the real problem: Detroit, under Kilpatrick and all his successors, has cared too much about big business and not enough about setting up a city that people want to live in.

The city, for example, was perfectly willing to use eminent domain to destroy thriving neighborhoods and replace them with massive new auto plants. The city proper actually has more auto assembly jobs today than it did in the late 1970s. Kilpatrick himself has made ample use of tax credits and incentives to attract Quicken Loans and remodel a long-vacant hotel. GM received lots of city help in buying the massive renaissance Center Complex in the downtown and remodeling it to be its new headquarters.

None of this, however, does much good for the population in a city that has virtually no sizable supermarkets, not a single movie theater in its downtown area, and very few restaurants outside of a few-block Greek Town section. Aside from a few Home Depot stores, the city has no big box retail either. The result, not surprisingly, is that it’s a place where almost nobody actually wants to live. Until Detroit provides a friendly economy for these consumer services, it’s never going to make an economic comeback…even if it dumps its sleazy mayor.

Earlier this month, House leaders reached a deal with the White House on a $150 billion “stimulus” plan that would increase the deficit to give rebates to people who pay little or no taxes, but not people who currently pay a lot of taxes.

As if that deal didn’t contain enough welfare already, the Senate is preparing to lard up the “stimulus” plan with billions more for mortgage counseling, aid to state governments in the red, food stamps, extended jobless benefits in (mostly high-tax, anti-business) states with high unemployment rates, and home heating oil subsidies.

Even if the “stimulus” plan does stimulate consumer spending, it won’t necessarily boost American industrial production, since many consumer goods are now purchased from foreign countries, like China.

The “stimulus” plan will give greatly expanded lending authority to Fannie Mae, the government-backed mortgage giant that engaged in Enron-style accounting fraud and helped create the housing bubble that threatens the economy with a recession.

Thus responds Homer Simpson to Marge when she complains about his not paying the gas heating bill, on tonight’s new episode of “The Simpsons,” which kicks off with the family huddled around the fireplace trying to keep warm.