What do you do when you can’t run on your record? If you watch the Democrats you will find out. The answer is to manufacture bogus issues out of thin air and try to anger and scare people into voting against dismal Democrat policies.

It was just a short while ago that New York Congressman Tim Bishop introduced a bill called the U.S. Call Center and Consumer Protection Act. Never mind that there are no significant call centers in Bishop’s Congressional district on the east end of Long Island. Never mind that his district is still losing jobs that are unrelated to call centers. This is a top priority of his. Why? Because he thinks that if he can get the topic of outsourcing on the table, he might have a fighting chance of holding his seat, because his opponent doesn’t hold a fourteenth century world view that our economy is confined to our borders. We live in a global economy like it or not and we are able to buy affordable products because some of them are made or serviced in other countries. In a similar vein our economy is able to grow and add jobs because we sell high-end products like Boeing jets to their economies.

The Birth Control Brouhaha

Now we have the national Democrat party trying to manufacture an issue over birth control. For those who have been watching the Republican presidential debates, who wasn’t scratching their heads over George Stephanopoulos’ questions and persistent follow-ups about states regulating contraception. Huh? Where did that come from? Dick Morris seems to have figured it out.

httpv://youtu.be/FcBLSp0RScE

It will not be long before the ads start rolling out that the Republican nominee, whoever that may be, favors states banning contraception. With enough lies and distortion, the Democrats hope to make an issue where none exists. There is no movement to ban contraceptives in this country. But under the Constitution could a state ban them? Yes. (Note that I say under the Constitution, not under an activist Supreme Court that likes to rewrite the Constitution as they go along). So the question asked, will be a Constitutional one, the ad that will follow will be that the Republican candidate favors what the Constitution merely allows. I think the Constitution also allows states to pass laws banning silly hats in public, that doesn’t mean that everyone who believe in the Constitution believes in such laws. It is the electorate’s job to police that nonsense.

The Real Issue

What  is being missed here is the real issue. If contraceptives should be required to be provided and free under ObamaCare, why not toothpaste? Why not soap or deodorant? Band-Aids? Tums? Kleenex? Birth control pills cost about $15-$50 per month, according to Planned Parenthood. For this you need insurance? That is the cost of 2-3 packs of cigarettes, 2-3 gallon jugs of milk. Perhaps if you can’t afford to come up with that much cash, you should learn to play Pinochle until you can. How about splitting the cost with the other partner? Hell, a bottle of wine to get the festivities started will get you half way there.

The real problem is we have lost the concept of insurance. Insurance is designed to prevent a financial catastrophe from striking due to an unforeseen event. Heart attack, cancer, something that is very expensive and very unwelcome. The brouhaha over birth control is like lobbying for your auto insurance to cover your gas purchases, or your life insurance to cover your groceries. It is beyond ridiculous and it will guarantee that health care costs will not be curtailed by ObamaCare but accelerate until either the cost is astronomical or we will have to wait weeks, months, or years for service. There is a reason that you have to wait about three months to get a CT can in Canada today, but if you want to get one for your dog, it will be about three weeks. The CT scan for you is free through government health insurance. The CT scan for your dog is out of your pocket.  It is simple economics; supply and demand. If you fix the price then you have to wait. It may be free, but you could die waiting. Perhaps that’s how ObamaCare plans to save money.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

President Obama, always on the campaign trail, is now on the road trying to explain why his class warfare strategy is not class warfare. In his State of the Union address, he once again invoked the “Buffett Rule”, which is little more than a fig leaf to allow Obama to raise taxes. But what about some other “Buffett Rules”?

Spending

What is the Buffett Rule on spending? Does Warren Buffett agree with President Obama that we should spend 150% of what we take in? Did Warren Buffett become one of the richest men on the planet by spending 150% of what he takes in and borrowing the shortfall? I think Buffett’s counsel would be to live within our means; don’t spend more than you take in, but I didn’t hear President Obama invoke the “Oracle of Omaha” when he submitted his budget to the Senate that was voted down 97-0. I didn’t hear Obama mention spending at all other than to say some nonsense about cutting spending by $2 trillion over ten years. At the rate we are going that level of spending “cuts” will mean we are $8 trillion deeper in debt ten years from now rather than $10 trillion. We need to cut $1 trillion in spending next year. So let’s hear what Buffett has to tell Obama about spending.

Investing

Warren Buffett is regarded as a masterful investor. What’s the Buffett Rule on investing? President Obama took credit for saving the auto industry. Really? If that is his idea of a good investment why does the price of GM stock have to rise to $52 before the American people’s investment to break even? GM stock is currently trading around $25. How many people are expecting GM’s stock to double in the near future? Or is it more likely that union contracts will once again, drag GM beneath the waves? My research indicates that Warren Buffett does not hold any GM stock. I wonder why? I do know that Warren Buffett made a very tidy profit by investing in Goldman Sachs. Meanwhile American taxpayers, you know, the ones who are under taxed, bailed out that company and many others. How much did Buffett invest in Solyndra? How much money is Warren Buffett investing in high-speed rail in California? Why should the American people believe that someone who has never held a job in private industry (Obama) is suddenly the smartest venture capitalist in America? How big of a portfolio do the real venture capital firms put in the hands of new hire fresh out of college? But this president takes billions of our tax dollars and squanders them on his pet projects and then lectures us how we need to invest in our future when they go belly up. When is Warren Buffett going to tell him to stop?

The Buffett Rule on Taxes

At the State of the Union address we were introduced to the famous secretary of Warren Buffett. She’s the poor woman who pays a higher tax rate than Mr. Buffett on her income. It is estimated that the poor dear makes between $200,000 and $500,000, otherwise she would not be paying double the tax rate of Buffett. That could put her solidly in the top 1% of earners in the country, if she is at the high-end of that range (the top 1% is earnings above $343,000). So Barack Obama actually lamenting that the top 1% is over taxed? Of course not. It is not about who is paying too much, it is about who is not paying enough.

The problem is spending, plain and simple. There are not enough rich people in America, even if taxed at 100% to close the budget gap. What Obama is doing is class warfare. Let’s get people angry enough at the wealthy so that Obama can then link the wealthy to the Republicans and sneak back into a second term.

If Obama thinks he is playing by the rules, Buffett’s rules, then he should at least play by all of them.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

Congressman Tim Bishop has not been able to keep from spending, no matter what. The Postal Service has an $8.5 billion deficit, and Tim Bishop is out there fighting to keep an unneeded post office open. We are trillions of dollars in debt and he comes out blasting the Tea Party, because they want Congress to not waste anymore money on green boondoggles like Solyndra.

At issue is a Continuing Resolution, that is, a bill to provide temporary funding to the government. At the heart of the issue is that the Federal Emergency Management Administration (FEMA) has run out of money, so there is an issue of whether to give them $3 billion more or $6 billion more. In addition the Republicans want to cut funding for such green projects like Solyndra, which just declared bankruptcy after getting a $500 million taxpayer-funded loan guarantee. How heartless can those Tea Party people be to not want to send good money after bad for progressive boondoggles? But of course we should listen to Tim Bishop. After all he has been such a trusted steward of our money so far, right?

The above chart shows how much debt limit has been increased by Congress to keep the government functioning, since 1940, when it was almost zero. Tim Bishop was sworn into Congress in January of 2003, from a point where it had leveled off, the line almost goes vertical. That is eight trillion dollars in additional borrowing in just ten years in office, and he has the utter gall to say the Tea Party’s calls for restraint are unwarranted? Somebody has to do it. If Tim Bishop and Nancy Pelosi had not spent trillions of dollars that the government didn’t have, maybe we wouldn’t be quibbling over $3 billion.

Waste and Fraud

It remains to be seen if Solyndra was a massive fraud or the Democrats thinking they are really investment bankers and venture capitalists rather than elected officials, but we could have used that $500 million rather than waste it. But Bishop objects:

“Even worse, the Republican bill calls for much of that sum to be funded by cutting federal loan programs that have encouraged new job creation by U.S. automakers and clean energy manufacturers.” — e-mail message from Tim Bishop to his constituents.

$39 billion in stimulus dollars have been earmarked for green energy jobs. So far, $19 billion has been spent and 3,500 jobs have been created. That’s $5.4 million per job, people, do you think we can do better than that in the private sector? But what is a “green job?” According to Labor Secretary Hilda Solis, if you drive a hybrid bus, it’s a green job, if you drive a gas-powered bus it is not a green job.

As one pundit put it, Washington is the only place where the circus never leaves town. This is what Congressman Bishop decries that Republicans are trying to cut. Do you think your hard-earned money is being well spent?

There is a report out today that the federal government paid about $600 million to federal workers who are DEAD! The Justice Department buys muffins for a meeting that cost $16 each! Medicare and Medicaid routinely have $60-$100 billion per stolen, and Tim Bishop has no suggestions how to cut, and even takes the time to write his constituents that, “I am sick and tired of this divisive posturing we have come to expect from the Republican Tea Party Caucus.”

I have a piece of news for you, Congressman, in case you have not been paying attention. The last Democrat who thought it would be a great idea to attack his opponent as beholden to the Tea Party was a guy named David Weprin in the 9th Congressional District of New York special election. In a district that was 3:1 Democrat registered voters, he lost big. Many Tea Party members from the heart of your district traveled on their own time and at their own expense into Brooklyn and Queens to get out the vote for Bob Turner. If you think it is a winning strategy to attack the Tea Party, I have three words for you. Bring it on.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

It is almost astounding to watch the news analysis programs after the latest jobs reports of the creation of a paltry 18,000 jobs and unemployment ticking up to 9.2%. Nearly lost in the data is that the news from prior months was revised in a negative direction and at the same time the progressive talking heads say the stimulus worked.

Well some do. Those with the courage to admit that it didn’t work are quick to say that it was only because it wasn’t big enough. Great! What we really need right now is to be $20 trillion in debt before we find out that didn’t work either. The other argument is the shoulda, coulda, woulda argument. “Imagine, how bad it would have been if we did nothing.” Back at you, “Imagine how great we would be doing if we didn’t have a Washington run ponzi scheme called Social Security and had personal savings accounts instead. Imagine how there would have been no financial crisis if Washington didn’t decided long ago that everyone has to own a home whether they could afford it or not. Imagine how energy independent we would be if Washington didn’t force us away from our own oil, natural gas, and nuclear power to buy from foreign despots.” I could go on, but I think you get the point.

When the talk on main street is about our massive debt and how concerned the average American is, the progressives launch into such things as saying the Republicans haven’t written a jobs bill, and cling desperately to their tax raising wealth transfer programs.

The Two Myths

The two progressive myths I refer to are that 1) government is responsible for creating jobs; and 2) we need the government to transfer wealth from those who have to those who don’t through taxes.

Private industry creates jobs, and more specifically small businesses create the most. The best way for the government to help with job creation is to stay the hell out of the way. As an example, there were a couple of wineries on Long Island whose business was stuck because they were waiting for word from Washington on approval of a change to the shape of the wine bottle and the label that would go on it. It took the involvement of a U.S. Congressman to get the process, which normally takes 48 hours but has been stuck for months, to break up the log jam. Why is Washington even involved? As a wine consumer, unless a skull and crossbones is on the label, there is nothing there that is a deal breaker in my decision on whether to buy that wine or not. It is a combination of price, type of wine, reputation of the winery, year that will most influence my decision. If the result is me is spraying the room with a mouthful of wine that tastes like dishwater, the news will spread about the reputation of the winery. Some clerk in a cubicle in Washington isn’t going to be the final arbiter of my choice.

Let’s look at innovation that is done by private industry and the fallacy of government genius becomes crystal clear. When a new technology product comes on the market it is typically expensive, often very expensive, and its features are few. In my own experience, when I first went to college to study engineering, on my first Christmas home I received a calculator as a present. I was thrilled. This was basically a four function calculator and it retailed for $130. Today, four function calculators are throw away items. The first automobile GPS system cost thousands of dollars and it required a large unit be installed in the trunk of the car. Today you can carry them in your pocket.

So what does all of this have to do with the topic at hand? Well, to get these products off the ground someone has to buy them. Who can afford them? The richer folks among us. In doing so, they have made a decision and a choice to take their wealth and exchange it for the new gadget. By doing so, their purchases fuel the innovation that improves the product and drives down the price. Driving down the price to the point where the masses can afford it with their lesser wealth while at the same time creating jobs by the thousands. All without a government program in sight. So there is your wealth transfer and job program, all without government programs, entered into willingly by all participants. We like to call that freedom and liberty.

“Wait a minute!” the progressives will exclaim, “How do you think GPS got invented if not for the government?” True enough. It was invented by or for the military, the same as was the case for the Internet. But the last time I looked the military is right there in Article II, Section 8 of the Constitution, so I am okay with that.

But so much for the invention, rolling it out to the masses was still done by private industry, not government. And because of the efforts of private industry, we are all a little bit richer than we otherwise might be, or than people elsewhere still are. Here is a further example.

Can it be true? Those greedy capitalists thinking of ways to get rich by making products cheaper so that more people can afford them? The bastards! So the government should get out of the way of private enterprise. It cannot pick winners and losers. The Soviets couldn’t do it, the Cubans can’t do it, the Chinese are giving up on it, so why are the progressives clinging to it? We are not in the mess we are in because of a lack of government regulation and programs. We are in the mess we are in because 180 cases of wine sit on a loading dock on Long Island waiting for a phone call in Washington to say, “You’re label passed our excellent standards.” Please!

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

How many times are we going to hear asinine comments like the following from Zack Burgess at the Philadelphia Tribune?

After Monday’s debates it seemed at times as if the GOP was focused on bashing the president vs. dealing with the problems that face the country. At this point I would like to hear from  presidential scholars, people within the GOP and the Democratic party about how the next nominee from the GOP will run their campaign. Does the GOP have a plan? Or will their platform be solely based on bashing the president? It really didn’t look as if they had an answer for high unemployment, a stalled economy  and soldiers bogged down in Afghanistan. And believe me, I’m not taking the president off the hook, but I want to know about the  GOP and where they seem to be going, because right now it doesn’t look like they have a clear strategy or answer…besides bashing the president. Is this strategy going to work? Most times it doesn’t. Your thoughts. Zack Burgess Enterprise Writer The Philadelphia Tribune

Let me try to explain it so that even Zack Burgess can understand it. The problem, my friend, is in Washington not out among the everyday folks. The Republicans, unlike your fellow travelers, do not think they are smarter than 340 million of their fellow Americans such that they can command and control the economy, like some Soviet politburo which, by the way, couldn’t do it either. This economy is recovering, far more slowly than it should, not because of Obama’s policies but in spite of them.

This administration has thrown more monkey wrenches into the economy than I thought existed. The housing market? It is still in the tank because the administration is trying to micromanage everyone’s mortgage. Get the hell out of the way, let the market find a natural bottom and it will resume its historical 3.5% per year growth rate. Unemployment? Stop throwing program after program on small and medium businesses so that they have no idea what it will cost to hire the next employee. That includes ObamaCare, Dodd-Frank, cap and trade, card check, QE2, subsidies for green energy, Chevy Volts. Stop throwing away money on stimulus that did not work, and if you don’t believe me, ask your president what a shovel ready project is. The stimulus was one big, massive, porkulus bill to pay off supporters with taxpayer dollars, e.g., public sector unions. Remember, in selling the stimulus program we were warned that if nothing was done, unemployment would rise to 9%. So, by that very definition the stimulus program made the problem worse than if we did nothing.

President Obama is the most inexperienced person ever elected to the office. He is so clueless he thinks ATM machines are the reason we have high unemployment. Shall we return to to using quill pens?

So here is what the Republicans stand for. We are spending too much money. Stop it. We are putting too many programs on small and medium businesses such that they cannot calculate the cost of hiring, so they are not hiring. Stop it. We have public sector unions who are bankrupting state and local governments and it cannot continue. Stop it. Businesses have trillions of dollars overseas that they don’t want to bring back because if they do, a very large chunk of it will go right into the government spending machine. Stop it. We have program after program in Washington that has no basis of authority in the Constitution (Article 2, Section 8). Stop them.

Mr. Burgess seems to believe that if you don’t like his massive government program, you have to show him your massive government program. He doesn’t seem to grasp the idea that massive government programs are the cause the problem. It wasn’t deregulation that caused the financial crisis, it was everyone following the government’s lead to have every Tom, Dick and Harry own a home whether they could afford it or not, and if you stood in the way, the government was going to steamroll you, paint you as racist, or otherwise destroy you. The government took the lead and Goldman Sachs, Lehman Brothers and others dutifully followed along.

The plan and the strategy of the Republicans is to cut government down to size. Limit it to the authority granted by the Constitution, stop running ponzi schemes that would make Bernie Madoff blush, and get spending under control (see Paul Ryan plan). I guess what confuses people like Mr. Burgess was that all seven candidates at the debate seemed to agree on this. The idea is to grow this great economy, not try to micromanage it by picking winners and losers.

As former New York City mayor Ed Koch once famously said to a reporter who kept asking him the same question, “I can explain it to you. I can’t comprehend it for you.”

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

The most recent trial balloon was in New York’s 26th Congressional District special election. There Democrat Kathy Hochul ran on the demagoguery that Paul Ryan’s budget plan, which her Republican opponent Jane Corwin supported, meant the end of Medicare. Hochul said:

“We had the issues on our side—did we not have the right issues on our side?” Ms. Hochul said at her victory party, as supporters chanted “Medicare! Medicare!”

We had the issues on our side? “We can balance our budget the right way and not on the backs of our seniors,” she said. Democrats said the program [Medicare] should be steadied through other measures. Okay, tell us, just what are those measures? Anyone?

Where is balancing the budget on the back of seniors in the Ryan plan? Better yet, how does the Ryan plan stack up against the Democrats plan? Oh, that’s right, the Democrats don’t have a plan. The Democrats want to continue the status quo of spending us into oblivion. They want to take the only real plan on the table, the Ryan plan, and not challenge it with ideas of their own, but try to hang it around the necks of the Republicans.

SenateDemocrats were expected to bring up the House Republicans’ 2012 budget plan for a vote this week, but not their own plan, which remains under lock and key.

The Democrats want to get the Republicans in the Senate on record as supporting the Ryan plan as did all but four Republicans in the House. They believe that by pointing to support for the Ryan plan, they are home free to retake the House while retaining the Senate, reelect President Obama and finish the job of destroying America, the America we know and the America our founders envisioned. But don’t take my word for it, listen to Harry Reid.

“There’s no need to have a Democratic budget, in my opinion,” Reid told the Los  Angeles Times last week. “It would be foolish for us to do a budget at this  stage.”

After all if you have a plan, people can look at it and evaluate it and from where the Democrats are coming from it would be suicidal to actually admit through a vote what they are trying to do.

Next to the lackluster economy and a persistently high 9 percent unemployment rate, runaway spending and debt remain among the voters’ greatest concerns. But the Democrats‘ strategy right now is not to grab the deficit by the horns and wrestle it into submission. It is to play political games with the issue and with the American people, to help the Democrats win back control of the House and rebuild their dwindling forces in the Senate. — Washington Times, 24 May 2011

The Democrats who have added $5 trillion to the debt since re-taking control of Congress in 2006, have not passed a budget and have no intention of doing so and as every household and business knows, without a budget spending will be out of control.

While the Democrats draw up their battle plans to smear, lie, and distort the issues, and terrorize seniors in the hope that they will remain ignorant and not question the accuracy of their statements, it will fall upon the Tea Party to ramp up another education effort to spread the truth. I’ll let Mr. Ryan lead off here:

http://www.youtube.com/watch?v=DJIC7kEq6kw&feature=player_embedded

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

We knew it was coming because the situation was so clear. Congressman Paul Ryan introduced a bold plan to deal with out of control government spending and the Democrats had no credible plan of their own. So what does one do in a case like that? Lie, smear, distort, and scare the uninformed into thinking that we should shut up and surrender our liberties to the government. But the level of the latest lies is remarkable if only because of how shameless it is.

Here is the ad in question from the Agenda Project, titled “America the Beautiful.”

http://www.youtube.com/watch?v=OGnE83A1Z4U&feature=player_embedded

The message they want you to belive is simple. Paul Ryan’s would end Medicare, period. Seniors would be pushed to their deaths by Ryan and his “friends.” This is a blatent lie. The Ryan plan says that no one over the age of 55 would see any changes to their plan. Bill O’Reilly thought the ad was so dishonest that he ran a segment on his show, The O’Reilly Factor to address it, and right from the start his guest, Sally Kohn, scoffs when O’Reilly points out that no one under 55 would see any changes, saying perhaps they should put in a disclaimer saying the woman in the wheelchair was 54. Really? Did the woman in the wheelchair look like she was 54? or 84? Kohn said it was not a distortion, it was an exaggeration.

Distort, v. 1) to twist awry or out of shape; make crooked or deformed. 2) to give false, perverted or disproportionate meaning to; misrepresent: to distort the facts

Exaggerate, v. 1) to magnify beyond the limits of truth; overstate; represent disproportionately

Some might call that a distinction without a difference. Either way it is not true and she claims it is harmless. She then tacks hard left and says ads during the ObamaCare debate about death panels was an exaggeration and also a lie. Not even close. It is a fact that Ryan’s plan does not affect people over 55. It is a fact that ObamaCare wanted to install a government panel that would advise doctors on treatments that took into consideration how many years of quality life a patient had remaining. The only exaggeration was that ObamaCare didn’t actually call them death panels.

O’Reilly pressed on with the ads and Ms. Kohn poo-poo’d it away, “It’s a silly ad. I’m not going to defend a silly ad.” So telling outright lies is okay as long as you are silly when you do it? She continued, “We’re having this conversation because of this ad.” What conversation? A conversation about lying and silliness? What about debating what you don’t like in the Ryan plan and what the left has that is better? No chance. The smirk on her face gives it away. She is tickled that such a bold faced lie is out there and it will affect seniors and she knows the famous line from Winston Churchill, “A lie gets halfway around the world before the truth has a chance to get its pants on.”

The tenth rule of ethics of means and ends is that you do what you can with what you have and clothe it with moral arguments.– Saul Alinksy, Rules for Radicals

So is the moral argument that someone uncovered the death panels? This is like the Democratic congressional aide that told me there is no such thing as ObamaCare, because there was no legislation that offically carried that name. The left calls it end-of-life counseling, the right calls it death panels. It’s a panel, and what typically happens at the end of one’s life? Death.

But don’t take my word for it, judge Ms. Kohn’s demeanor and truthfullness for yourself.

http://www.youtube.com/watch?v=MVAXXeBKOrA&feature=player_embedded

Ms. Kohn claimed that the real purpose of the “silly ad” was to get people talking. Okay, Ms. Kohn, then how about on your next public appearance you talk about this:

http://www.youtube.com/watch?v=RMJE9jBroUU

So, Sally Kohn, instead of making silly and stupid videos of grandma in the wheelchair, why not make an intelligent video like this one and make the case for your solution over Paul Ryan’s plan? Or don’t you have a case?

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

With gas prices on the rise, Bill O’Reilly, is once again targeting his favorite whipping boy, The Speculators. Like a 1940′s whodunit, we are told of those evil greedy speculators and how we need more government intervention to reign them in. The question that is never asked nor answered is, where do the speculators go when gas prices fall? If their evil intent is to drive up prices so they can make obscene profits, why would they ever stop?

It was only about three years ago when gas prices were similarly on the rise. The O’Reilly Factor was all over the speculators and how they were greedy, selfish, and had to be stopped. But from June 2008 to December 2008 the price of a gallon of regular gasoline dropped from $3.99 to $1.66 and no mention was made about the speculators. Why? Did they disappear? No.

The speculators were still there, but this time they were driving prices down. Huh? Speculators don’t care if the price goes up or the price goes down. All they care about is that the price moves in the direction they predict it will. If speculators predict prices will rise because of supply and demand, which could be affected by growth in China or political upheaval in the Middle East, they will help push prices up. If they predict prices will fall because of a severe economic contraction, they will help push prices down. They are performing a legitimate market function by providing liquidity, they are not out to get “the folks,” as Bill likes to say. Economist Walter Williams explains it here using other commodities to take some of the emotion out of the discussion where oil is concerned:

Here’s a non-rocket science question: If you expect a reduced harvest of wheat, corn, rice or any other commodity some time in the future, what would be the wise thing to do about your consumption today? I bet that the average person would answer: Consume less now so that more will be available in the future.

But how in the world can people be encouraged to consume less now? Enter the futures market, which consists of a worldwide group of millions upon millions of traders, often called speculators. Speculators, betting on a future shortage, buy up wheat, corn and rice today in the hopes of making money selling it for a higher price when the bad harvest hits. As speculators buy more and more wheat, corn and rice, they drive up today’s prices. As today’s price gets higher, people consume less, but more importantly, people do the intelligent thing without bureaucratic edicts. The vital role of the futures trader, or speculator, is to allocate goods over different time periods. And, it’s not just wheat, corn and rice that must be allocated over time but all commodities including oil.

Okay, that may explain the speculators but some have also said there is ample supply of oil, so why are prices rising?  If it is not the speculators, who is at fault? To that I say turn your eyes toward Washington. Oil is an international commodity that is priced in U.S. dollars, because U.S. dollars are the world’s reserve currency. But what has our government been doing to the dollar? With the reckless spending and unprecedented borrowing and indebtedness, we are printing money like crazy which is driving down the value of the dollar. As the value of the dollar falls, you need more of them to buy the same amount of oil.

As you can see from this chart, the trend in gasoline prices closely matches the trend in gold prices. At one time our dollar used to be backed by gold, so you can look at gold as value based money rather than fiat money. Fiat money is where a government issues paper and says it has a worth that the government determines. There isn’t any real commodity or thing of value behind it, it has value because the government says so. Let’s look at it a different way. Let’s say you could buy your gasoline by using gold instead of paper dollars. In 1990 it would have taking 0.003 ounces of gold to buy a gallon of gasoline. In April 2011 it would take 0.0025 ounces of gold to buy the same gallon of gasoline. So while we are starting to worry about gasoline costing nearly $4 a gallon nationwide, it is really relatively cheap on an historical basis, so watch out.

Historically you can see a slight upward trend in the price of gasoline when using gold as the standard of value. It has been climbing, but not ridiculously so.

So lay off beating up on the speculators and start turning your firepower on Washington. If we don’t get our fiscal house in order and soon, we will be in very deep trouble indeed. This has to be fixed and it has to be fixed now; not in ten years, not in twenty years, NOW.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty’s Lifeline.  Feel free to follow him on Twitter and at the book’s fan page at www.facebook.com/libertyslifeline

To no one’s surprise, President Obama followed his lame first attempt at a budget with the same tired class warfare “taxing the rich is the solution plan”. The problem is spending. This problem is not going to get fixed until we: a) stop spending more; b) start spending less; and c) spend less than we take in until the debt is paid off. Yes, I said paid off. We are the wealthiest country on earth. We should be able to live within our means and not have to borrow to keep a bloated, inefficient, unaccountable government in Washington growing and growing.

Let’s take a look at the facts. The following three charts show how much of Adjusted Gross Income is earned by the most productive 1%, 5%, and 10% (the blue bars) and what share of total income taxes they pay (the red bars). This is over a twenty year period:

What is clear from all three of these graphs is that over the past twenty years if you look at the trend lines, while the most productive amoung us produced more, the share of the tax load they paid grew even faster. So let’s stop the sleight of hand about how many dollars the changes in tax law affect Mr. Obama personally and let’s be clear, to use Mr. Obama’s favorite phrase, there was no tax cut voted in December, the vote just maintained the status quo. So, Mr. President, level with the American people. Just what percentage of total income taxes do you want the most productive 10% of Americans to carry? Since you feel 70%, the amount they carry today, is not enough, what do you think is fair? 80%? 90%? 100%? Should the most productive 10% of Americans pay all of the income taxes while the other 90% pay none? Stop dancing around and be straight with the American people and tell us how much of the total pie is fair for the most productive to pay?

But we don’t have enough revenue because of the Bush tax cuts, you say. Okay, let’s put that one to rest as well.

It is clear that the tax revenue collected hit its peak after the Bush tax cuts. They fell off after the start of the recession, which is expected, but it appears they bottomed in 2010 and the Bush rates were extended (not increased, not decreased). It’s the spending, stupid!

Trying to raise more money through raising tax rates runs into Hauser’s Law. As I explain in Liberty’s Lifeline, W. Kurt Hauser looked at eighty years of revenue data and concluded that tax revenues will not exceed 20% of GDP no matter how high the rates. If spending continues at 24% of GDP where it is now, we will be digging a hole out of which we will never escape. It’s the spending, stupid!

Instead of leading, President Obama, came out yesterday with Budget 2.0, and basically made a campaign speech instead of a serious policy statement demonstrating leadership. Here is Charles Krauthammer’s analysis:

httpv://www.youtube.com/watch?v=FR0E3trOF-k

President Obama ran for office with the promise of bipartanship. He promised to change the tone in Washington. He has not even been able to change his role from campaigner-in-chief to chief executive and instead has become punter-in-chief. He punted his responsibility to put together a budget to a bipartisan commission. He didn’t like the yucky medicine his commission offered up and so he dismissed their recommendation. He now talks of a new bipartisan commission.

He also likes to follow the instructions of his mentor Saul Alinsky, “pick a target, freeze it, personalize it, polarize it.” He did it to the members of the Supreme Court in his State of the Union address after the Citizens United v FEC decision by calling them out as they sat immobile in front of him. He repeated it yesterday by inviting Paul Ryan and other Republican leaders to this speech and then attacked them.

httpv://www.youtube.com/watch?v=3JjGGnwe6UQ

When I started writing this blog in 2008 it was primarily because I saw the candidate Obama as someone with no executive experience, a few years in the Illinios senate where he voted mostly present, less than a full term as a U.S. Senator before he bailed out to run for president, and the author of a couple of books and I was stunned that people across America actually believed this man, who may be great guy to have a beer with or play a game of basketball or golf, could actually handle the job. Well, as another of his mentors, Reverand Wright, once said, our chickens are coming home to roost. I would much rather have Jimmy Carter sitting in the Oval Office today than this man, and that’s saying something.

It’s about the spending, Mr. President, and if you don’t understand that, wake up Joe Biden and give him a turn at the wheel. It’s time to take your responsibility seriously and make some tough decisions. Right now 2012 is a pipe dream for you.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of Liberty’s Lifeline blog.  Feel free to follow him on Twitter

Does Congressman not understand what is at stake here? Perhaps he does:

http://www.youtube.com/watch?v=Xwv5EbxXSmE

But Senator Schumer has his marching orders from the Democratic caucus and those marching orders are to do nothing to get our spending under control but instead to use the word “extreme” in every way possible. I am sure that the word extreme has been carefully poll tested, focus grouped, massaged by marketing media mavens, so that it is designed to do the most political damage to the Republicans when the Democrats finally force a government shutdown. Isn’t politics great fun? With a little more time, the Democrats can start running commercials of grandma being pushed down the stairs in her wheelchair, little babies crying for milk, and union members the middle class being led away in handcuffs.

This is the ideal of government courtesy of the Democrats and members like Chuck Schumer who went straight into politics from law school. As one of the youngest members of the New York State Assembly, who could possibly be better qualified for a career of telling you how to live your life and writing the rule book to do that? Real world experience is such a bore, when utopia is only a reelection away.

So while the gargantuan budget deficit is consuming our children’s future, the progressives do what they do best, chant slogans. Extremists! Extremists! But this time, they have been unmasked and the American people know who the real extremists are, and who is actually putting solutions on the table.

Originally posted at Liberty’s Lifeline.

Bill O’Connell lives in New York and is the author of Liberty’s Lifeline blog.  Feel free to follow him on Twitter