I have many pet peeves, but one that causes me endless frustration is the Washington “spending cut” scam. This happens when politicians increase spending, but claim that they’re cutting spending because they previously had planned to make government even bigger.

The proposal unveiled yesterday by the Co-Chairman of President Obama’s Fiscal Commission is a good example. If you read through their report, it sounds like there are lots of spending cuts. But they never explain that these supposed cuts are really just reductions in previously-planned increases.

Here’s the bottom line. As shown in the graph, it is quite simple to balance the budget (and permanently extend all of the 2001 and 2003 tax cuts) if politicians simply limit spending growth. You can balance the budget within a few years with an overall cap on spending at current-year levels. But if you prefer a more moderate approach, you can let spending increase 2 percent each year and balance the budget by the end of the decade.

The proposal from the Fiscal Commission, incidentally, does not balance the budget – even though they have a big tax increase (which they assume will have zero negative impact on economic performance).

So what does this mean?

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Nancy Pelosi’s self-indulgent bid to remain leader of the House Democrat Caucus has hit some road-blocks. Not only does the New York Times think this is a terrible, horrible, no-good, very bad idea, but several House Democrats have recently realized that keeping her as the face of their party mightn’t be the best strategy. A vote is expected Wednesday, but her fate will probably be sealed over the weekend.

President Obama made a giant error in letting “never had a real job” Timmie Giethner and “heck of a job” Larry Summers slither around his administration’s neck in 2008.  Lucky us.

We must not make the same mistake.

We need to fix this thing… and Freedom Works’ Dick Armey is the man to do it.

That’s right–in the ultimate act of true bipartisanship, I want Dick Armey and Barrack Obama to agree we should re-instate Glass-Steagall.

In 1999, Glass-Steagall was repealed and commercial banks and investment banks were finally free to debt-molest us the “slack jawed rubes.”  Like incestuous Wonder Twins, they became Too Big Too Fail.

The problem with “bankruptcy” as a TBTF solution is that we cannot predict who will be in the White House or running Congress when the next financial crisis hits.  But with Glass-Steagall back in place, we have far less to worry about…. Goldman Sachs will no longer be our Treasury Department.

It also means we’ll be free to repeal Dodd-Frank Wall Street Reform without hearing Obama whine about consumer protections.

The fact is in ten short years, after we ended a 37 page law, we got screwed with our pants on, and replaced it with 2319 pages of VCR instructions (kids ask your parents) written by banker lobbyists to employ lawyers.

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For this weeks edition of ‘Eyeblast Hits The Street’ , we went out seeking opinions from both liberals and conservatives on what they believe congress should do now that the midterm elections are over and Republicans have regained control of the House of Representatives.

Here’s what they had to say:

To see more ‘Eyeblast Hits the Street’ videos, check out this channel. To keep up to speed with Eyeblast.tv, you can find us on Twitter and Facebook.

Picture: EDDIE MULHOLLAND

Other than the fact that it is easy to recognize that these are Progressive Leftists who have fully embraced the cradle-to-grave entitlement society, British newspapers are asking for the public’s help identifying any of the specific people pristinely photographed destroying property in London yesterday.

Any chance some these Progressive rioters were on the streets of St. Paul in 2008? They sure look an awful lot like them.

By the way, if you are a Progressive American, or a Democrat, you own this riot too. These are your Progressive European brethren, and there is no escaping that fact. If this country continues down the path American Progressives are charting, this is our future.

All of this mob-fueled destruction from the self-proclaimed Progressive masters of conflict resolution. What hypocrites.

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In the wake of a Big Government exclusive report featuring audio of CBS Anchorage affiliate KTVA-TV staffers seemingly plotting potentially damaging scenarios for Alaska Republican Joe Miller’s Senate campaign, the station has been forced to cancel two evening news broadcasts, allowing time for extended discussion on journalistic ethics.

Along with the cancelled broadcasts, the CBS affiliate had already quietly announced the dismissal of two producers in response to Big Government’s reporting.

Two newscasts from Anchorage’s CBS news affiliate, KTVA-TV Channel 11, were canceled Wednesday so staff could deal with fallout from a phone message left by a station employee on the voice mail of a staff member working on Senate candidate Joe Miller’s campaign Oct. 28, the station announced on its website.

Wednesday’s 5 p.m. and 6 p.m. broadcasts were canceled because of time constraints related to an internal discussion on journalistic ethics, according to a message the station’s general manager, Jerry Bever, posted at KTVA.com.

“Events over the last week and a half have been challenging for our station,” Bever wrote in the Wednesday statement. “As the result of a conversation within our newsroom that was accidentally recorded and released to the public, our newsroom credibility has been called into question, and the public’s trust in us has been tested.”

KTVA general manager Jerry Bever’s latest statements on the controversy stand in stark contrast to his earlier statements falsely claiming the CBS affiliate’s staff did nothing wrong.

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On today’s Coffee and Markets, Brad Jackson and Ben Domenech are joined by Anne Sorock of the Sam Adams Alliance to discuss their in-depth study of the Tea Party movement, their successes and failures in the 2010 election and how they may influence governing in this upcoming Congress.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. You can find our iTunes feed at CoffeeandMarkets.com. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Veterans Day reminds us we owe more than just parades to the 22 million who served
Which Tea Party Candidates Won?
Sam Adams Alliance’s Research on the Tea Party Movement
Nominations for the 2011 Sammies Awards
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A week before the Election I had occasion to be on the hot Fox Business show Money Rocks, hosted by Eric Bolling. Also on the panel was former New Mexico Governor Gary Johnson. In the brief discussion Johnson impressed me deeply. A Libertarian Republican in the Ron Paul tradition, Johnson is an outspoken and articulate critic of our failed war on drugs and a proponent of legalizing Marijuana.

The topic on the show was gang violence and kidnapping on the Mexican Boarder but Johnson turned that deftly to a discussion of how drug legalization would end Mexican gang violence. It was a tour de force.

There is high demand, It’s a huge cash crop and it’s not going away. Johnson makes a strong case that it’s dangerous only it is because it is illegal. People are forced to go to drug dealers and it funds gangs and terrorists. The government continues to spend $70 billion a year on the most failed policy in U.S. history.

Johnson points out marijuana is considerably less hazardous than alcohol, and even arguably less a public health risk than sugar and processed foods given the national expensive epidemic of diabetes and heart disease. Marijuana is easily grown virtually anywhere and despite billions spent to stem its use, it is as easy to acquire today as it was before the war against it was launched. Marijuana is easier than cigarettes for children to acquire, specifically because it is peddled by drug dealers as opposed to licensed and monitored providers.

The war on marijuana is costly, makes criminals out of otherwise law-abiding citizens, and costs resources better spent on other efforts.

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It doesn’t take a rocket scientist to understand the Obama Administration’s view of business — it publically treats corporations with distain while privately promoting crony capitalism helping their favorite corporations with bailouts and subsidies. GM, Chrysler, Citibank, Goldman Sachs and any company trying to make an electric car, solar panel or wind farm. But by far Google is their favorite crony. As Rep. Darrell Issa, the incoming Chairman of the House Government Oversight Committee, plans his oversight hearing schedule, the incestuous relationship between the $22 billion corporate behemoth and the Obama White House should be worthy of some Mr. Issa’s worthy oversight agenda.

It’s no secret that Google was one of corporate America’s biggest Obama backers donating over $800,000 to his presidential campaign. Google’s CEO Eric Schmidt actively promoted his candidacy and helped pay for the Obama inauguration.

And what has Google got for its “investment” and relationship in the Administration? In Washington, there is an old saying – “Personnel equals policy.” In the case of Google, it’s clear the tail is wagging the dog. Former Google policy maker Andrew McLaughlin, was named White House deputy chief technology officer in June where he’ll be in a position to shape policy that affects Google’s rivals creating a disadvantage for Google’s competitors.

But that is just the tip of the iceberg.

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It is not unusual for the public to wake up to live television footage of student protestors in Islamabad, Athens, Caracas, Jakarta or Cairo waving red banners, smashing windows, breaking into buildings and then starting fires.  However, this morning, the city was London and the protestors were British students burning books.  The press is reporting that the students are angry over an expected doubling of the cost of higher education tuition next year.  I believe the protests are associated with the rising angst of young people in the developed world who believe their economic well-being is in permanent decline.

When most public policy “experts” talk about structural unemployment, it is assumed they are referring to the under privileged in depressed intercity and rural communities.  The high school dropout rate in these forlorn populations continues is twice suburban rate and their standardized test scores are approximately 20% lower.  Consequently, only the most gifted students in these societies can expect to go on to the hoped for permanent lifestyle improvement of a college education.

As shown in the U.S. Department of Labor graphs above for the year 2009, 25 and older workers with a high school diploma make 40% more than a drop-out and those with four year college degrees make over 50% more than a high school graduate.  Consequently, there has been a tremendous push to try to lift Americans out of poverty through a college education.

What the graphs above conveniently ignore is that unemployment for college-educated 20-24 year-olds is currently 9.6 percent, virtually identical to the national average.  In December of 2007, before the Great Recession started, the rate for 20-24 year old college graduates was 3.4 percent.  This 282% increase in unemployment for recent college graduates is the largest percentage increase among all education and age groups.  Furthermore, the unemployment rate for college educated 20-24 year-olds does not include the graduates who are employed part-time, which is at a 17.5% rate.

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One of the most popular stories about members of the “Greatest Generation” is that of “The Fighting Sullivans” who died aboard the U.S.S. Juneau during the Battle of Guadalcanal. That story is heroic, in part, because it has to do with five brothers who made the ultimate sacrifice for their country during World War II.

Whenever I hear talk about the Sullivans, however, I can’t help but think of four not-so-famous brothers — Max, Verle, Guy and Ted — who also answered their nation’s call. Like many thousands of others, they set aside any personal plans they had for a while and went into harm’s way to fight for freedom.

Max, the oldest, was among the first to be drafted into the Army. Next in line, Verle went to the Navy. Guy followed, donning Army green.

By March 1943, only the youngest son remained at home. That fact prompted a conversation to take place between the 19-year-old Iowan and his father.

“Ted, do you want me to declare you essential to my farm work?” his dad asked, knowing that one son from each farm family could be deferred from entering service if he was needed to work on the farm.

Ted took little time to answer.

“No. If my brothers can go into the service, then I feel that I should go also,” he said, adding, “Besides, I want to do my part in the war” and “Dad, you really don’t need me.”

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One of my first blog posts (and the first one to get any attention) highlighted the amusing/embarrassing irony of having Chinese students laugh at Treasury Secretary Geithner when he claimed the United States had a strong-dollar policy.

I suspect that even Tim “Turbotax” Geithner would be smart enough to avoid such a claim today, not after the Fed’s announcement (with the full support of the White House and Treasury) that it would flood the economy with $600 billion of hot money.

As I noted in an earlier post, monetary policy is not nearly as cut and dried as other issues, so I’m reluctant to make sweeping and definitive statements. That being said, I’m fairly sure that the Fed is on the wrong path. Here’s what my colleague Alan Reynolds wrote in the Wall Street Journal about Bernanke’s policy.

Mr. Bernanke…believes (contrary to our past experience with stagflation) that inflation is no danger thanks to economic slack (high unemployment). He reasons that if people can nonetheless be persuaded to expect higher inflation, regardless of the slack, that means interest rates will appear even lower in real terms. If that worked as planned, lower real interest rates would supposedly fix our hangover from the last Fed-financed borrowing binge by encouraging more borrowing. This whole scheme raises nagging questions. Why would domestic investors accept a lower yield on bonds if they expect higher inflation? And why would foreign investors accept a lower yield on U.S. bonds if they expect exchange rate losses on dollar-denominated securities? Why wouldn’t intelligent people shift their investments toward commodities or related stocks (such as mining and related machinery) and either shun, or sell short, long-term Treasurys? And if they did that, how could it possibly help the economy?

The rest of the world seems to share these concerns. The Germans are not big fans of America’s binge of borrowing and easy money. Here’s what Finance Minister Wolfgang Schäuble had to say in a recent interview:

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Carl Mitz is a third-generation horseman.  The Texan is widely known as one of the nation’s best horse dentists.  He’s treated the teeth of over 100,000 horses and has clients in over 30 states.

But Texas bureaucrats tried for years to shut him down.

In a classic case of economic protectionism, Carl and all other Texas equine dentists were told they had to spend up to $100,000 and four years at veterinary school, where they would learn next to nothing about caring for horses’ teeth, or else abandon their occupation.  To top it off, they were threatened with massive fines and even jail.

Instead of giving up his American Dream, Carl teamed up with other Texas horsemen and the Institute for Justice to fight for their right to earn an honest living.

And this week, they won.

On Tuesday, a Texas judge struck down the effort by the Texas Board of Veterinary Medical Examiners to put equine dentists like Carl—known as floaters—out of business and leave the state’s approximately one million horses without proper dental care.

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Today, in 1918, on the 11th hour of the 11th day of the 11th month, the Great War ended. The diplomats and politicians who came up with that cute little flourish went on to negotiate a “peace” that ensured an even greater way within a generation. A good day to remember that the brave men and women in uniform are at the mercy of the political class.

Republican Joe Walsh (or Congressman-elect Joe Walsh, as his staff now call him) continues to lead Mellisa Bean in suburban Chicago’s 8th Congressional District.  By his lead has shrank from 750 on Election night to approximately 300 votes today.  The margin was shaved in part to 6 Cook County precincts that did not return ballots on Election night.  The ballots, from Hanover, Palatine, and Schaumburg somehow ended up in Cicero, and from there they floated around until they reached the Cook County Election board around 10:00 AM the next morning.

More from Jim Geraghty at National Review:

“We are in the fight of our lives as we count ballots in Cook County,” says Nick Provenzano, the campaign manager for Walsh who is now signing his messages, “Spokesman for Congressman-elect Joe Walsh, Illinois’ 8th District.” Provenzano offers a description of an exceptionally odd ballot-counting process: “On Election Night, there were six precincts that were still not counted at 1 a.m. We discovered that they had problems in the polling place and were moved to nearby Elgin, Illinois to count the ballots.  At some point in the middle of the night all six precincts  — representing thousands of votes — had been moved to Cicero, Illinois for “safe keeping”

This reminds me of the “safe-keeping” of ballots in Minnesota during the Coleman-Franken recount. National Review continues to detail other irregularities:

“Identifying potential mischief, the Illinois GOP dispatched volunteers to track down these voters to ensure no foul play was occurring with these outstanding ballots,” Provenzano continues. “What they found was alarming. They documented their findings on affidavits and they were submitted to law enforcement for review.” The affidavits describe one voter who had not lived at the listed address in the past 15 years; a voter who a caregiver said “could not respond to questions because of dementia,” and a group of ballots sent to a Clearbrook home for the mentally disabled in Rolling Meadows, Illinois.

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Few industries are more reviled than payday lending, which primarily services the working poor by offering short-term loans at high interest rates. Payday customers borrow an average of $350 for a period of two weeks, or until their next paycheck comes in. The money is handed over on the spot, once the payday store can verify that the customer has a job, earns enough to afford the loan, and hasn’t recently defaulted with another vendor. Payday loans are in high demand: There are 22,000 payday storefronts in the United States and in 2009 they loaned a combined $35 billion.

And yet the industry is fighting for its survival. Montana just voted to make it illegal for the payday-loan industry to operate profitably, so lenders are loading their wagons and wheeling out of “The Land of the Shining Mountains.” They’ve already moved on from Oregon, New Hampshire, North Carolina, Arizona, Georgia, and Washington, D.C, because of similar regulations. The annualized interest on payday loans runs about 400 percent, but the reality is that payday firms see returns closer to 10 percent, or about the same as other less-demonized financial service providers.

Now there’s a danger the federal government will quash the rest of the U.S. payday industry. The Frank-Dodd Financial Reform bill, passed in July, created the Consumer Financial Protection Bureau (CFPB), which posseses the power to regulate paydays at the national level for the first time. The vaguely written law doesn’t allow the CFPB to cap interest rates, but regulators have the latitude to enact other rules that would obliterate profits, such as limiting the number of payday loans a customer can take out over a set period of time.

Payday critics, such as the Center for Financial Responsible Lending (which declined our interview request) argue that payday stores “trap” their customers and practice what “amounts to legal loan sharking.”

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Let’s take a close look at the pre-printed signs students in London are rioting with, and see if we can follow their argument against fee hikes and funding cuts.

The front of their signs all say, “Fund The Future, Stop Education Cuts”

The back of the pre-printed signs say, “No Ifs No Buts £uck Off With Your Cuts” and “F**K Fees”

(Click to enlarge)

Nice education they must be receiving there. These must be communications majors.

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Obama’s bipartisan commission on reducing the federal debt is much in the news today for a draft listing proposed cuts to government spending. They could impact taxes, medicare and social security if adopted.

Scrolling down through the document to item 32, the draft proposes eliminating funding for the Corporation for Public Broadcasting.

32. Cut funding for the Corporation for Public Broadcasting.68

The Corporation for Public Broadcasting’s primary job is to fund NPR and its member stations (and other public radio stations) and PBS and its member stations. The current CPB funding level is the highest it has ever been. This option would eliminate funding for the Corporation for Public Broadcasting, saving just under $500 million in 2015.

Additionally, Congress should end two duplicative public broadcasting programs on President Obama’s termination list: The Public Telecom Facilities Grant Program (PTFP) and USDA’s Public Broadcasting Grants program. In recent years, PTFP has primarily provided funding to help broadcasters transition to digital broadcasts. In FY2010, PTFP received $20 million in appropriations. The President has twice recommended terminating USDA’s Public Broadcast Grants program for the same reason. This program received $5 million in FY10 to provide funding to public broadcast companies to convert to digital transmission as well – an obsolete task.69

Illustrative_List_11.10.2010 –

Dick Morris has picked up on a theme Education Action Group has been trumpeting for months: public employee union contracts, including school employee contracts, are unsustainable and have several states on the verge of fiscal collapse.

Recently on Fox News, Morris suggested California, Michigan, Illinois, New York, and Connecticut are the top five most likely to default, given the severity of their situation and the unlikelihood of the Feds or bond holders coming to the rescue.

“Education Action Group has been way ahead of the curve on this,” Morris told me.  “EAG has been showing the major spending problems, stemming from outrageous contracts, for quite some time.”

Buffalo Public Schools revealed recently that it spent $9 million last year alone on elective surgery for employees.  Coverage for such an extravagance, by its very nature taking funds away from the education of children, was due to the collective bargaining agreement.

In Milwaukee, the school district pays nearly $24,000 per employee for health insurance because such lavish benefits are demanded by the union. (more…)