If one was looking for fiery, crowd pleasing, political rhetoric from former Speaker Newt Gingrich as he addressed CPAC today, they were likely disappointed. What Gingrich did do was run through a litany of policy solutions he claimed he has committed to implement immediately upon taking office in January of 2013.

Contrasting an America that can versus an America that can’t, Gingrich compared America’s speed and might in winning WWII versus her current inability to seal its own border. In a lighter moment, the former Speaker contrasted the efficiency of package tracking by Federal Express with the government’s inability to track illegal immigrants, suggesting sending each one a package may be the best way to apprehend the latter.

He also mentioned repealing Obamacare, Dodd Frank, and Sarbanes Oxley on his first day in office. He stated his desire to be a “paycheck president” versus a “food stamp president,” a term he used to denigrate Barack Obama.

Calling for a Fall campaign focused on substance, Gingrich also mentioned eliminating the Capital Gains tax and implementing 100% expensing for all new equipment written off in one year to help get the economy growing. Additionally, he called for a modernization of the workforce, proposing that unemployment compensation be linked to business training programs to avoid paying people for 99 weeks “for doing nothing.” (more…)

Just over a week ago in an article I published here in Big Government: “New California Budget Crisis May Torpedo November Tax Increase Initiative.” The article illuminated how State Controller John Chaing had shocked California’s spendthrift politicians by announcing the State would be out of cash beginning March 8th and would miss up to $5.4 billion in vendor payments through May 1st. The timing of the Chaing announcement was disastrous for state politicians; because it destroyed any hope that Governor Jerry Brown’s $6 billion tax increase initiative on the ballot in November would pass.

Now it appears that Brown successfully lobbied for California to get $6 billion in cash and siphon off a total of $18 billion from the $25 billion mortgage settlement with the five largest U.S. banks, who were accused of fraud in the handling of foreclosures and loan modifications. But as Franklin Center Fellow, Steven Greenhut asks in a deliciously sarcastic article: “Why should a taxpayer in Houston or Wichita bail out irresponsible California homeowners, banks and the state’s public employees’ retirement fund?” Greenhut highlights that the mortgage settlement money is really just another accounting entry, because the real source of cash to fund the “Left Coast” is “implicitly via Federal Reserve/Government coffers.”

Most Americans still snarl about crony capitalism when they think of multinational banks taking $1 trillion slurp of taxpayer’s hard earned cash and then paying themselves record bonuses, while hiking fees and cutting off borrowers. But with the United States President and Congress solemnly telling Americans healthy banks were key to our future, most Americans gritted their teeth and came together to bail-out of banks, insurance companies, and other financial firms.

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When Ronald Reagan said that big government undermined the economy, some people dismissed his comments because of his philosophical belief in liberty.

And when I discuss my work on the economic impact of government spending, I often get the same reaction.

This is why it’s important that a growing number of establishment outfits are slowly but surely coming around to the same point of view.

• The European Central Bank published a study showing “…a significant negative effect of the size of government on growth.”
• A study by two Harvard economists found that “large adjustments in fiscal policy, if based on well-targeted spending cuts, have often led to expansions.”
• The Organization for Economic Cooperation and Development noted in recent research that welfare programs are economically destructive because they lure people into dependency because “net disposable income would increase despite putting in fewer hours.”
• A study from the International Monetary Fund concluded that “Cuts to pension and health entitlements had the most beneficial effect on economic growth.”

This is remarkable. It’s beginning to look like the entire world has figured out that there’s an inverse relationship between big government and economic performance. (more…)

This year marks the twenty-fifth anniversary of the United Nation’s Brundtland Report, which defined Sustainable Development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” But aristocratic socialists have corrupted the sustainable development movement into a vehicle to achieve vast administrative power for themselves. Nations that adopt Sustainable Development are doomed to fail at meeting the needs of the present generation and through debt accumulation from deficit spending will consign future generations to a life as debt slaves.

Through the early 1980s, socialist Latin American economies powered growth by quadrupling their indebtedness from $75 billion to $315 billion. With aristocrats controlling government, while the poor had no voice in these loan matters, nor did they benefit from them as most of the loan proceeds were siphoned off to benefit the aristocrats and their crony amigos.

When Ronald Reagan was elected President in 1980, the U.S. economy had suffered a decade of stagflation, turning our Midwest manufacturing base into the Rust Belt. Reagan was determined to regain international economic dominance by reasserting our Founding Father’s demand for limited government and maximum personal liberty. Reagan viscerally believed what John Adams wrote:

“ the moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence”

Reagan’s relentless focus overcame the bi-partisan drumbeat to continue the socialist expansion of the money supply to promote growth. He then leveraged monetary restraint with the largest income tax cut in American history to power the American economy to sustained growth with low inflation.

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Members of the Obama administration do not care whether Catholics and those of other faiths are angry about the ObamaCare mandate regarding contraception, sterilization, and abortion-inducing drugs. It’s quite possible that, like exhibitionists, the White House enjoys the shock value that accompanies all their edicts and executive orders to people of main-street America. Waiting for average Americans to recover from the shock gives them a window of time to amuse themselves at the reaction as they also develop their talking points and spin. But, this year, they have an election to win.

To appease those they view as rigid, conservative Catholics, the administration’s talking points are that they’ll “work it out” with them, give them a year to “adapt” their consciences to engaging in behavior that is against their values, and, perhaps, the favorite means of the White House to ensure a minimum of voter loss: hand out a waiver.

But, exactly what should be “worked out?” “Adapt” to what? A “waiver” from what? All of this talk of flexibility is helping the White House to muddy up the real issue.

The spin by the White House, in the midst of this constitutional crisis, is simply a variant on its age- old theme that healthcare is an unalienable right that the government must give to people. Remember that, in liberalism, unalienable rights come from the government, not from the Creator. With the contraception, etc. mandate, the administration just tweaked the message a bit- made it a bit “pinker,” dare we say: that all women deserve access to free contraception- including Catholic women. How could we leave Catholic women out? After all, that would be discriminatory, right? Wrong.

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Fear the sweater vest!

So much for Governor Mitch Daniels’ “truce” on social issues. Rick Santorum refused to raise the white flag on his principles and charged ahead. Tonight he celebrates a trifecta victory in Missouri, Minnesota, and Colorado, all but shattering the myth of Romney’s inevitable cruise to victory in the presidential primary.

I’ll admit it. I didn’t see it coming. To be sure, this victory comes with caveats, as I wrote here. Santorum picked up only five delegates tonight and has 22 delegates to Romney’s 106, but it’s a move in the right direction. (The delegate count is here.)

But Santorum understands something that few of the other candidates can put into words: that the power to mandate is the power to compel and compulsion must be grounded on something higher than the mere will of the sovereign. This is a very effective argument against Barack Obama, but it it also a very effective one against Mitt Romney and Newt Gingrich, who also supported the Wall Street bailouts, cap and trade (taxing breathing) and of course, the individual mandate in health insurance. Both Gingrich and Romney are essentially progressives in their view that there is nothing government mustn’t do.

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President Obama says we should allow the federal government to take charge of our healthcare; as usual, the “experts” are best positioned to instruct us how to live our lives.

Except they’re not.  Today, according to the AP, the Center for Disease Control and Prevention told Americans that they eat too much bread and rolls, and that such foods account “for more than twice as much sodium as salty junk food like potato chips.”  No wonder we’re fat.

Unfortunately, the federal government that now tells us that we eat too much bread is the same government that originally told us to stuff our pieholes with … bread.  Remember the original food pyramid?

I remember this pyramid – I grew up learning about it in my vaunted public school.  Notice how the bottom section is enormous, and suggests 6-11 bread, cereal, rice and pasta servings each day.  Why did the government originally mandate that?  According to Harvard Medical School’s Eat, Drink and Be Healthy (Simon & Schuster, August 2001), the government was attempting to help out farmers via the Department of Agriculture’s recommendations.

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There’s been a great deal made of whether the unemployment rate dropped, or if the number of individuals in the job market dropped by some 1.2 million. If the American Spectator is to believed, this has all been much ado about nothing. Owing to a once-in-a-decade adjustment based upon census data, they make the case that the workforce didn’t lose over a million workers, but neither did the real unemployment rate drop.

In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate “drop” created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as…wait for it…zero.

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Is it April Fool’s Day? Has somebody in Paris hacked the website at the Organization for Economic Cooperation and Development? Have we been transported to a parallel dimension where up is down and black is white?

Please forgive all these questions. I’m trying to figure out why any organization – even a leftist bureaucracy such as the OECD – would send out a press release entitled, “Rising tax revenues: a key to economic development in Latin American countries.”

Not even Keynesians, after all, think higher taxes are a recipe for growth.

Ah, never mind. I just remembered that the OECD is a hotbed of statism, so the press release makes perfect sense. After all, the US-taxpayer-funded organization has become infamous for reflexively advocating big government.

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Ronald Reagan was a classic. He broke the back of the Evil Empire and started deregulating an overburdened U.S. economy. It was Ronald Reagan in 1964 that told Americans we face a time for choosing — and if you haven’t watched the entire speech, you’re missing out.

Today marks the 101st anniversary of Reagan’s birth. If you miss him and wish for another like Reagan, join The Heritage Foundation in sharing your thoughts in their new Facebook app:

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So Facebook filed its IPO papers, and the numbers are eye-popping.  The company appears to be worth about $100 billion, or a bit more than the GDP of Tunisia.  Others shade it a bit lower, but one thing is certain: it’s good to be Facebook.

Facebook is special because, in network economic terms, its product is a platform, and successful platforms are few and far between.  For all its bells and whistles and features and privacy policies, Facebook remains—at heart—a place that people hang out.  As the proprietor of a popular hangout, Facebook gets to write the rules guiding all the folks who think it’s a good place to pitch their businesses or to make some sales.  In network economic terms, these businesses operating inside Facebook’s business comprise an aftermarket.

In a very real sense then, Facebook operates as a private-sector regulator of a vibrant commercial marketplace—the Facebook aftermarket.  Vendors in this marketplace develop and launch “apps,” literally software applications that run atop the Facebook platform.  Facebook has a symbiotic—and asymmetric—relationship with these Facebook app companies (or FBapps).  The symbiosis is clear: the more people who like Facebook, the bigger the potential audience upon which each FBapp can draw; the better the FBapps, the more popular Facebook will become.  The asymmetry is equally clear: each individual FBapp needs Facebook more than Facebook needs it.

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What’s the worst policy idea that would cause the most damage to society?

I’m tempted to say the value-added tax since our hopes of restraining the federal government will be greatly undermined if we give the buffoons in Washington a new source of revenue. Indeed, this is one of the reasons why Mitt Romney may be an ever greater long-term threat to American exceptionalism than Barack Obama.

But even though the VAT is fiscal poison, it’s not the most dangerous policy proposal.

At the top of my list is global taxation.

I wrote in 2010 about some of the awful global tax schemes being pushed by the United Nations. And I also noted that unrepentant statists such as George Soros are pimping for global taxation.

I even wrote a paper back in 2001 to explain why global taxes are such a bad idea.

The details of the tax don’t matter. It’s the principle.

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I have watched Ron Paul for a very long time and one trend I see over and over is the split that emerges between people of roughly under the age of 40 and those who are older when his name is mentioned. I have no polling data to back this up, but young people seem to like Ron Paul and older people seem not to.

This is by no means uniform. I know plenty of older folks who love the good doctor and plenty of young people who do not like him, but generally the above statement holds I think. Why is this?

Fundamentally I believe it comes down to faith in the markets and whether or not one is playing for the future, or if one is clinging to the past.

Young people have much to lose in the economic quagmire we find ourselves in, namely their future. They recognize that times have changed, that the old economic regime is corrupt, and in order to get things going in any real way (not government stimulated) fundamental reforms must be implemented. Many, including myself would embrace a gold standard or a standard based on a basket of commodities. This is a radical departure from the Fed centered fiat currency regime. It would disrupt the current economic order, but a reset is needed and many young people recognize that it is vital that we head in this direction before it is too late. The economic hubris of the 20th century has come home to roost. We would like a real economy.

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After spurning Trump debate, Romney takes his endorsement

Nevada, or, as I like to call it, “Snowfall,” may be poorly named after the blizzard of ads we’ve been seeing elsewhere in Florida, South Carolina, New Hampshire, and Iowa; but beneath the calmness and lack of exposure is a well-oiled strategic machine that is methodically getting out the vote.

If the latest poll is to be believed, Mitt Romney might just strike political gold in the “Silver State.” Romney is the favorite of 50% of likely GOP caucus-goers, according to the Democratic-leaning polling firm Public Policy Polling. He’s leading his next closest rival, Newt Gingrich, by 25 points. Ron Paul is third at 15 percent, and Rick Santorum is fourth at 8 percent.

Nevada has been particularly hard hit by the economic downturn, with a high number of home foreclosures and an unemployment rate that recently soared to an all-time high of 14.9%. In other words, Nevada’s looking for a turnaround; Nevada Republicans think that the guy who turned around the Olympics next door might be able to help.

For the Mitt supporters out there, Romney is doing especially well in the state that went for Barack Obama in 2008, with 55% of the vote. I quote the PPP poll:

Romney hits the 70% favorability mark in Nevada, something we’ve seen for him in very few states. Just 25% see him unfavorably. That’s partially due to an 89/8 standing with Mormons, but he’s at a still very strong 64/30 with non-Mormons as well. One thing that’s contributing to Romney’s strength in Nevada is a strong advantage on the electability question. 56% think he would be the strongest candidate against Barack Obama this fall with no one else topping 21%.

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Wednesday night, the House of Representatives overwhelmingly passed H.R.3567; The Welfare Integrity Now for Children and Families Act of 2011; which makes it illegal to use an EBT card in a strip club, liquor store or casino. The concern began, shortly after welfare recipients were issued funds electronically through ATMs, when Welfare Reform passed in 1996. Since then there has been a disturbing trend of welfare not being spent on the things people think welfare should be spent on.

And I don’t understand that concern. It is the theory of most Democrats that giving money to people stimulates the economy. It should be of no concern to anyone whether that money is used to stimulate patrons of a strip club, liquor store owners, or casino magnates (who BTW are often HUGE political contributors).

The bill is almost completely futile. It won’t insure that welfare money is not spent at a strip club; it only means that the ATM at the gas station across the street from the strip club is going to see a lot more traffic.

This is just the kind of government bias, that gives legitimate business a bad name. Certainly those girls are working as hard as any SEIU employee; whose pensions were paid out of stimulus funds, while they protested in Wisconsin. Money spent on bikini wax, cover stick, and glittery lingerie will trickle down through the economy just like any other stimulus package.

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Okay, we made up the word. But in medicine, as any physician knows, a blastoma is a malignancy of so-called precursor cells called blasts.  Should such an anomaly go untreated…well, let’s not go there.  Anyway, we decided to refer to any chronic economic conditions that threaten the health of our economy as econoblatomas, because of the real risk that they are precursors to a potential economic crisis; that is, they can spread.   What follows are what we call the Seven (there are, of course, others) Warning Signs of Econoblastoma.

1. The Euro – A default by any other name:

Greece will default on its debt, probably within the next 60 days.  They’re working on a plan that will allow the EU leaders to call it something else, but whenever lenders get taken to the cleaners by a borrower there has generally been a default.  Greece’s lenders (bond holders) are soon to be taken to the cleaners (again) so we’re about to see the first default in a Euro Zone country.  Now this Econoblastoma has been under treatment for a long time with, we’re sorry to say, poor results.  The prognosis is dire.

The reader will recall that over a year ago, the private bondholders who loaned money to Greece (based on fabricated economic assurances by the Greek government) were informed they would have to take a 20% haircut in order for Greece to meet its obligations.  Then last July the bondholders were told that 20% just wouldn’t do it, and that a 50% haircut would be required.  Now the bondholders are being told,  “fifty percent?” well, “that was okay for starters,” but it’s not nearly enough to treat this particular Econoblastoma.

No, it seems the cure for years of Greek profligacy will require that the holders of about  $206 billion in Greek bonds will have to swap them for bonds that will pay, upon maturity, 60% less.

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On Wednesday, after Indiana Governor Mitch Daniels signed into the Right To Work law, MSNBC host Rachel Maddow squirmed in her chair with excitement as she showed the Super Bowl Village being invaded by Big Labor activists. [see update at bottom of post]

Rather than seeing the Super Bowl as a big event for Indiana, Maddow’s guest, Indiana State Rep. Scott Pelath, sees it as a “national platform” for Big Labor “education” through disruption.

Indiana AFL-CIO union boss Nancy Guyott pulls no punches describing the chaos she intends to create; she has declared war on Super Bowl spectators. From Sterling Wong at Minyanville.com:

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Just hours after winning the Florida primary, Mitt Romney let loose a potential gaffe that turned what should have been a rallying moment for Republican supporters into an uncomfortable position of having to defend the man that is likely to face Obama in the general election.

If taken out of context, which the media is very adept to doing, Romney’s comment, “I’m not concerned about the very poor” sounds heartless and indefensible. In fact, that is exactly how many conservative commentators reacted.

From a purely political position, the criticism is reasonable. Romney effectively handed Democrats a shiny set of brass-knuckles to use against, not only him, but the Republican Party in general as being out of touch with every day Americans. As NRO’s David Kahane put it, “In the Fight of the Century between the Apologetic Oligarch and the Tribune of the Folks, who do you think the fans will be rooting for?” In other words, Romney unwillingly played into the class-warfare meme that Obama has wrapped himself in.

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On this day last year, I posted two charts that I developed using the Minneapolis Federal Reserve Bank’s interactive website.

Those two charts showed that the current recovery was very weak compared to the boom of the early 1980s.

But perhaps that was an unfair comparison. Maybe the Reagan recovery started strong and then hit a wall. Or maybe the Obama recovery was the economic equivalent of a late bloomer.

So let’s look at the same charts, but add an extra year of data. Does it make a difference?

Meh…not so much.

Let’s start with the GDP data. The comparison is striking. Under Reagan’s policies, the economy skyrocketed.  Heck, the chart prepared by the Minneapolis Fed doesn’t even go high enough to show how well the economy performed during the 1980s.

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Washington- General Motors extended-range electric Chevrolet Volt had its worst sales month since August, as negative publicity over fire risks hurt vehicles sales in January.

GM sold just 603 Volts – above its sales in January 2011, but far below GM’s best-ever sales month in December, when GM sold 1,529 Volts.

Last week, GM North America President Mark Reuss said sales of the Volt have been hurt by bad publicity.

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