President Demonstrates an Open Mind on Public Schools

President Obama today acknowledged the fact that more money being spent on public schools won't necessarily produce better results.

This is a truism that few proponents of public education are willing to acknowledge.

If spending more and more money on education always generated better results, then the test scores of kids in the Washington DC public school system (which has some of the highest per capita education spending in the nation) would far exceed those of, say, your average home-schooled child. This is obviously not the case.

Also surprisingly, some of the President's other comments on the matter revealed an open-mind about changing some of the prevailing standards of public schools.

"Asked in an interview if he supported a year-round school year, Obama said: "The idea of a longer school year, I think, makes sense." He did not specify how long that school year should be and said that U.S. students attend classes, on average, about a month less than children in most other advance countries.

He said more resources must be matched with reforms, including the removal of teachers who, once identified as underperforming and given the chance and the training to improve, are still not serving students well."

All in all, making changes along the lines of the President's suggestions would allow taxes that are used for education to be spent more efficiently and would more than likely produce far superior educational results, which would be a great outcome for taxpayers and parents alike.

Rats Escaping From the Good Ship White House

Reports indicate that Larry Summers, economic adviser to President Obama, will leave his post to return to a teaching role at Harvard University.

"White House economic adviser Larry Summers will be leaving the administration after the November elections. Summers, as director of the National Economic Council, has been a lead architect of President Barack Obama's economic recovery policies. Those policies, particularly the stimulus, have been attacked from the right as too expensive and from the left as stopping too short."

Summers is at least the third high-profile departure in recent weeks, coming on the heels of the high-profile defection of White House budget director Peter Orszag (who stepped down in July) and White House Council of Economic Advisers Chairwoman, Christina Romer (who left a few weeks ago).

At this point, it's not clear whether Summers is being pushed or whether he jumped. But who cares, really. The fact is, President Obama has done a dreadful job in shepherding the economy, and has clearly received no help from his paid advisers.

The reality is that no amount of shuffling of the deck by President Obama will mitigate the spanking he's going to get from voters in November.

Obama Unleashes Some Howlers at Townhall Meeting

President Obama hosted a townhall meeting yesterday, in order to shore up support for his economic agenda and to remind Americans how his administration's policies have supposedly helped them.

"President Obama said Monday that his economic policies helped prevent a depression, although he acknowledged that many Americans are still struggling.

In a town hall meeting sponsored by the CNBC cable network, Obama responded to questions from unemployed workers, recent college graduates, small business owners and one prominent hedge fund manager. He sought to reassure middle class families that the American dream is still attainable, while at the same time rebutting criticism that he is anti-business."

Of course, claiming that a trillion dollar "stimulus" package which involved printing money out of thin air and distributing it to recipients to use on projects that in general were not necessary is not a textbook way of avoiding a depression. In fact, that method was tried during the 1930's by FDR and actually resulted in the Great Depression lasting the 12 to 15 years that it did.

Even more laughable was President Obama's assertion that his policies are making the American Dream more achievable for the middle class.

"He said he understands that Americans are frustrated with the slow pace of the recovery and lack of jobs. But he stressed that his policies are designed to help middle-class families climb the economic ladder by making education more affordable, reducing the cost of health care and supporting home ownership."

Let's see if we can address his policies in these three areas one by one:

1. Education: the federal government's policy for higher education (which, to be fair, did not originate with President Obama) involves gigantic subsidies through low-cost student loans, which encourage colleges to continue raising prices (tuition) well beyond where it would be without the federal subsidies. All in all, involvement of the federal government ends up making wage slaves out of the college students who graduate (or leave without graduating) with enormous student debt enabled by the federal government.
2. Health Care: another sector that's rife with government involvement and much higher prices than necessary. Recent reports on the impact of ObamaCare suggest that insurance companies are raising prices to cover the higher anticipated costs of ObamaCare.
3. Home Ownership: the federal government's policies (namely, using Fannie and Freddie Mac to acquire outstanding mortgages, encouraging home loans to lower-income families, and having the Federal Reserve keep interest rates at foolishly low levels for extended periods of time which encouraging excessive borrowing by consumers) are actually directly and indirectly responsible for the current housing bubble.

Given the impact his policies have had on the economy (which can be measured, most notably, by the incredibly high unemployment rate), it's simply not credible for President Obama to claim that he has staved off a Depression and is helping ordinary Americans achieve economic independence.

Hopefully Americans are paying attention and are ready to send a clear message to incumbents in November's elections.

War on Drugs a Complete Failure

The decades old War on Drugs has been an unbridled flop from its inception, wasting untold amounts of taxpayer money and attempting to control private activities that don't need to be interfered with by an over-arching federal government.

So it comes as no surprise that a recent study shows that drug use continues to increase, despite (or perhaps because of) the efforts of the federal government.

"The rate of illegal drug use rose last year to the highest level in nearly a decade, fueled by a sharp increase in marijuana use and a surge in ecstasy and methamphetamine abuse, the government reported Wednesday.

Gil Kerlikowske, the director of the Office of National Drug Control Policy, called the 9 percent increase in drug use disappointing but said he was not surprised given "eroding attitudes" about the perception of harm from illegal drugs and the growing number of states approving medicinal marijuana.

"I think all of the attention and the focus of calling marijuana medicine has sent the absolute wrong message to our young people," Kerlikowske said in an interview.

The annual report from the Substance Abuse and Mental Health Services Administration found marijuana use rose by 8 percent and remained the most commonly used drug.

Mike Meno, a spokesman for the pro-legalization Marijuana Policy Project, said the survey is more proof that the government's war on marijuana has failed in spite of decades of enforcement efforts and arrests.

"It's time we stop this charade and implement sensible laws that would tax and regulate marijuana the same way we do more harmful — but legal — drugs like alcohol and tobacco," Meno said."

Let's be clear: the federal government should have no role in trying to prevent individuals from undertaking an activity that harms only themselves, let alone spending hundreds of billions of dollars and needlessly putting foreign governments at risk of being toppled as they strive to meet the US-imposed mandates of this War on Drugs.

Of course, the fact that a person believes that the consumption of most drugs should be legal does not mean that same person actually believes that everyone should use drugs.

The US should immediately cease the pointless War on Drugs, continue to encourage education on the harmful effects of drugs, and prohibit their use by anyone before they reach the age of majority. Any other approach will keep us mired in an unwinnable war, whose vast and undocumented costs are paid for not just by Americans but by other countries that are fighting the war for us.

Senate Republicans Take a Stand Against Tax Hikes

Senate Republicans appear to be resolute in their stand against any tax hikes for Americans who make more than $250,000 per year.

"President Barack Obama's plan to raise taxes on wealthier people while preserving cuts for everyone else appears increasingly likely to founder before Election Day.

Senate GOP leaders declared on Monday that Republicans are, to a person, opposed to legislation that would extend only middle-class tax relief — which Obama has repeatedly promised to deliver — if Democrats follow through on plans to let tax rates rise for the wealthiest Americans. The GOP senators forcefully made their case one day after House Republican leader John Boehner suggested he might vote for Obama's plan if that ends up the only option.

Both Republicans and Democrats are using the looming expiration of Bush-era tax cuts as a defining battle in elections to determine control of Congress.

It would take numerous Democratic defectors to pass the Republicans' version — extending all the Bush tax cuts — or the issue could be left for a postelection congressional session if Republicans block the measure with a filibuster. Obama last week declined to say whether he would veto a bill that preserved the tax breaks for the wealthy.

On Sunday, Boehner said he would support renewing tax cuts for the middle class but not the wealthy if that was his only choice. Though Boehner was clear that he supports extending the full range of tax cuts, the White House jumped on his remarks as a possible change of heart."

There's simply no reason to raise taxes on anyone in the midst of a recession. Frankly, even if we weren't in the midst of a recession, the government's haul of each person's income and property in the form of taxes is already high enough and wouldn't warrant a further increase.

It's also interesting to note the media's portrayal of this issue as being about the "wealthy".

Sure, a sizable portion of those who make over $250,000 per year can probably be rightly characterized as "wealthy". But surely there are plenty of those who make that much who aren't "wealthy" in terms of the amount of assets they own less their own personal liabilities, due to a high-cost lifestyle, having just entered that income bracket for the first time, etc.

Anyway, what's wrong with treating Americans the same regardless of their income amount, by applying the same (low) percentage of tax on everyone's income?

Failing to do that suggests we are embracing at least one of Karl Marx's famous slogans, "from each according to his ability, to each according to his needs".

Poverty Soaring During Obama Administration

What?!? This can't possibly be. Poverty is soaring while the Democrats have near complete control of our federal government? But, but, but...aren't their policies so compassionate, so brotherly to the less well-off and shouldn't they be making us a more egalitarian state???

"The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama's watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.

Census figures for 2009 — the recession-ravaged first year of the Democrat's presidency — are to be released in the coming week, and demographers expect grim findings.

It's unfortunate timing for Obama and his party just seven weeks before important elections when control of Congress is at stake. The anticipated poverty rate increase — from 13.2 percent to about 15 percent — would be another blow to Democrats struggling to persuade voters to keep them in power.

"The most important anti-poverty effort is growing the economy and making sure there are enough jobs out there," Obama said Friday at a White House news conference. He stressed his commitment to helping the poor achieve middle-class status and said, "If we can grow the economy faster and create more jobs, then everybody is swept up into that virtuous cycle."

Of course, none of this should be any surprise to anyone who believes that stealing money from one group of people and giving to members of another group is no way to alleviates the latter's long-term issues.

Democrats have long advocated this approach, using the tax code as their personal blunt weapon, in order to justify taking from productive members of society and giving to those who are less industrious, less thrifty or prone to making poor personal decisions, and who are poorer as a result.

Democrats should heed the lesson and begin to focus their time and energy on ways to significantly lessen the federal government's drag and influence on the overall economy, which would almost instantly result in a recovery in jobs that would astound even the most fervent free-marketers and completely reverse the lapse into recession that we have experienced over the past couple of years.

Areas they should focus on are reducing the length of time that unemployment can be claimed, eliminating the federal minimum wage rate, relaxing drilling rules in the US and slashing corporate, personal and capital gains tax rates (and making commensurate cuts in federal spending at all departments and levels).

Mexico Rethinks the War on Drugs

Overrun with violence and massacres, Mexico is now considering whether having its own War on Drugs is worth the devastation it has caused.

"A debate about legalizing marijuana and possibly other drugs — once a taboo suggestion — is percolating in Mexico, a national exhausted by runaway violence and a deadly drug war.

The debate is only likely to grow more animated if Californians approve an initiative on Nov. 2 to legalize marijuana for recreational use in their state.

Mexicans are keeping a close eye on the vote, seeing it as a bellwether.

"If they vote 'yes' to approve the full legalization of marijuana, I think it will have a radical impact in Mexico ," said Jorge Hernandez Tinajero , a political scientist at the National Autonomous University .

Discussion about legalization flew onto the agenda last month, the outcome of President Felipe Calderon's pressing need to win more public support for waging war against criminal organizations profiting hugely from drug trafficking."

Just like in the US, in Mexico massive amounts of money are spent by the government to stem the use of narcotics. However, the effort in Mexico is generally aimed at preventing the trafficking of drugs up to the US, while in the US the War on Drugs is also aimed at stopping their use.

Mexicans have paid a steep price for playing along with the US and trying to do their part to stop Americans from using recreational drugs. Criminal gangs have taken over large parts of the country and have engaged in open wars with the government, leaving thousands dead in recent years.

However, even if Mexico makes drug use in their own country legal, if the US does not follow suit with similar laws making consumption legal here, it's very possible that Mexican criminal gangs will still have a role to play in moving drugs into the US.

The US should have a similar period of introspection and consider whether making drugs legal here would be in our best interests as a whole.

As unpalatable as the use of drugs is, it is generally a victimless crime, no different in many cases than the consumption of alcohol.

The War on Drugs has become a fiasco on many fronts (government waste, needless deaths, personal liberty), and the sooner it ends, the better off we will all be.

Republicans Outflanked by Obama's Tax Plan?

President Obama's tax plan, including allowing businesses to write-off the cost of new plant and equipment acquired before the end of 2011, is a politically bold stroke that may put Republicans on the defensive heading into the crucial November elections.

The Republicans have reacted quickly, but their own proposal lacks detail and may leave some voters feeling that they are engaging in politics and not sufficiently trying to solve what ails the country.

"House Republican Leader John Boehner on Wednesday proposed a two-year freeze on all tax rates and a cut in government spending to the levels of 2008, before a deep recession took hold of the economy.

In a broadcast interview, the Ohio Republican said he was offering a "bipartisan" alternative to the package of business tax incentives and infrastructure spending that President Barack Obama was slated to announce later Wednesday in Cleveland."

Let's hear some specifics from Rep. Boehner on what exactly he proposes to cut in the federal budget (from my standpoint, we can slash pretty much everything, but it's easy for me to say since I'm not running for office). Empty rhetoric won't sway voters.

Boehner's other proposal to, in effect, extend the Bush tax cuts for another two years is sound and deserves the full support of politicians from both parties.

For now, what the country needs is not to be forced to pick and choose between President Obama's and the Republican's recent economic proposals. We need to enact both proposals in order to ensure we emerge from the economic doldrums.

Republicans however should be concerned that failing to support Obama's tax plan will be viewed as obstructionist and worse, possibly an attempt to sandbag the economy, and sour voters on their own ability to lead the country out of the economic wilderness.

Obama's New Stimulus Proposal

In his latest attempt to jump-start the floundering US economy, President Obama actually suggests something that makes sense.

His proposal would allow businesses to immediately write-off 100% of capital equipment purchased by the end of 2011.

"President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of showing action on the economy ahead of the November elections.

An administration official said the tax breaks would save businesses $200 billion over two years, allowing companies to have more cash on hand. The president will outline the proposal during a speech on the economy in Cleveland Wednesday.

Amid an uptick in unemployment to 9.6 percent, and polls showing that the November election could be dismal for Democrats, Obama has promised to propose new steps to stimulate the economy. In addition to the business investment tax breaks, he will also call for a $50 billion infrastructure investment and a permanent expansion of research and development tax credits for companies."

Allowing companies to immediately expense their costs is a start towards improving the current economic climate, and is worth pursuing. In addition, making the R&D credit permanent is also a good idea and will be embraced by American businesses.

None of these changes will directly affect the current unemployment picture, however.

Major changes are needed at this point to reduce sky-high unemployment, to include relaxing federal regulations concerning who businesses can hire and how much they have to be paid and ending unemployment benefits after a short period of time to discourage people from staying on the dole well beyond when they normally and historically would have.

Of course, further uses of tax policy as a tactic, such as slashing (or even eliminating) the corporate income tax and reducing payroll taxes (offset by current or future entitlement decreases) would be a major, major boon to the economy.

The Outlook For Jobs

With unemployment continuing to remain at an uncomfortably high rate, observers are left to wonder when the federal government will actually begin to adopt pro-growth policies that will help to bring unemployment down to a much lower percentage.

For now, the AP comments on the type of workers that will continue to do best in this low-growth environment.

"Whenever companies start hiring freely again, job-seekers with specialized skills and education will have plenty of good opportunities. Others will face a choice: Take a job with low pay — or none at all.

Job creation will likely remain weak for months or even years. But once employers do step up hiring, some economists expect job opening to fall mainly into two categories of roughly equal numbers:

• Professional fields with higher pay. Think lawyers, research scientists and software engineers.

• Lower-skill and lower-paying jobs, like home health care aides and store clerks.

And those in between? Their outlook is bleaker. Economists foresee fewer moderately paid factory supervisors, postal workers and office administrators."

This should be no surprise to anyone following the job market. Given the fact there are so many people unemployed, those without specialized skills will be competing with that many more people to fill open positions.

However, there was an additional quote provided in the article that is typical of those who expect the government to solve all ills.

"The big fear is the country is simply not preparing workers for the kind of skills that the country is going to need," says Gautam Godhwani, CEO of SimplyHired.com, which tracks job listing."

It's not clear exactkt what the CEO means by suggesting that the "the country" is not preparing people for jobs.

Historically, each American has been responsible for preparing him or herself for the job market.

Yes, schools do provide a basic level of education, but ones work ethic and ability to solve problems and think constructively, which are all instrumental to success in the workplace and being of value to employers, were not something that were given to anyone but rather were earned and developed over time.

In short, bringing unemployment rates back down and in line with historical norms is not a matter of the government providing myriad training programs to unemployed Americans, but rather a multistep process that sees a) the government removing itself from the economy as much as possible and b) each individual taking actions and steps that prepare themselves for being of use to employers

Positive First Step for Israel and Palestinians

Leaders from Israel and Palestine recently got together and had productive discussions about ultimately reaching a peaceful settlement to the decades-long dispute simmering between the two.

"Israeli and Palestinian leaders agreed to a series of direct talks on Thursday, seeking to forge the framework for a U.S.-backed peace deal within a year and end a conflict that has boiled for six decades.

Secretary of State Hillary Clinton, who hosted the first session of talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, expressed confidence that this effort could succeed where so many others have failed.

President Barack Obama, aiming to resolve one of the world's most intractable disputes, has set a goal of striking a deal within 12 months to create an independent Palestinian state that exists peacefully, side-by-side with the Jewish state.

"This will not be easy," Netanyahu said. "A true peace, a lasting peace, would be achieved only with mutual and painful concessions from both sides."

Although Israel has generally been a solid and reliable friend and ally of the US, the time has now come for the US to put significant pressure on them to strike a deal with the Palestinians.

Israel has received untold amounts of financial aid and cutting edge military hardware from the US over the years, which has led them to be more intractable in their dealings with the Palestinians than they otherwise would have if they don't have their "big brother" standing behind them and ready to defend them (rhetorically or militarily) in all their actions.

By no longer being lavished with US taxpayer money, one can hope that Israel will be more willing to negotiate a reasonably favorable settlement with their long-time adversaries, and bring a peace of sorts to the Middle East.

Lowering Tax Rates Will Create Economic Turmoil?

President Obama's mouthpiece, errrr, top economic adviser Jason Furman recently came out against extending Bush tax cuts for Americans with the highest incomes.

The economic rationale he offered for not extending these tax cuts was, to say the very least, not remotely compelling.

"Jason Furman, deputy assistant to the president for economic policy, said a proposed short-term extension for the rich that some economists have advocated would put the country on a slippery slope it would be tough to pull back from.

"There is a concern that (if) you extend those tax cuts for even a year, and that is a way to get a foot in the door ... and make them permanent," he told an event in Washington on the impact of tax policy on families."

Again, for those of you too dense to understand Beltway logic, if the tax cuts are extended for a year, they could be then made permanent, which might then be a "slippery slope".

Got it?! Okay, good.

In all seriousness, the Democrat's opposition to extending the Bush tax cuts is entirely a political decision and has nothing to do with economics.

Trotting out the economic adviser to defend President Obama's stance on this matter is like asking the Secretary of Transportation to comment on the egg recall.

In what perverse universe do you have to live to think that enabling Americans to keep more of their hard-earned money somehow equates to a "slippery slope"?

Only in a world where politicians think that private property exists solely to allow them to regularly plunder it to pursue their own political goals.

In fact, allowing Americans to retain more of their private property is the only way to get us out of the current financial mess that the government has directly and indirectly put us into.