As usual, the left is wondering whether corporations pay their “fair share.”  This time, it seems they may have a point.  As Time magazine reported yesterday, a recent Wall Street Journal study of Congressional Budget Office statistics showed that American corporations paid an effective tax rate of 12.1% last year.  That’s the lowest number in four decades, despite a nominal tax rate that runs 35%, second only to Japan’s 39.5%; if you include state corporate taxes, America is now number one in the world.

So why the low effective tax rate?  According to both the Journal and Time, it’s due to a corporate tax break set into the stimulus package, which allowed corporations to use an accounting trick: they could take write-offs on capital investments all at once rather than over time.  Typically, you take a tax write-off as the value of a good depreciates – if you buy a computer, it loses value over time, and you write that in your tax returns.  Under the stimulus package, you were allowed to basically write off the whole purchase.  The result was huge write-offs for corporations.

Now, normally, this wouldn’t be a bad thing.

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On Tuesday, the New York Republican State Committee issued a press release blasting Sen. Kirsten Gillibrand (D-NY) for cosponsoring a ban on insider trading when her husband shorted housing stocks 34 times and made a “killing” during a period when she was “privy to inside information.”

The New York GOP press release reads in part:

When New York’s junior senator Kirsten Gillibrand (D-WFP) was a member of Congress – and privy to inside information on a plethora of topics – her husband “shorted” housing stocks at least 34 times , making a financial killing for the couple, as millions of Americans saw the value of their homes abruptly plummet. The Gillibrand’s timing in betting against the housing market was conspicuously perfect, the New York State Republican Party today noted.

Now, Senator Gillbrand is purporting to be a champion of reform against “insider trading” among members of Congress – using the issue to raise money for her re-election campaign.

A May 2010 article published by the Wall Street Journal confirmed that Sen. Gillibrand’s husband, Jonathan Gillibrand, did execute more than 250 transactions in options in 2008:

Almost all the trades were in put options, which convey the right to sell a stock or other instrument at a given price until a given date. At least 34 times, Mr. Gillibrand bought puts on stocks of home builders, including Beazer Homes USA Inc., Hovnanian Enterprises Inc., Meritage Homes Corp. and Ryland Group Inc. These were bets the builder stocks would fall; if they did, the puts’ value would rise.

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Former New Jersey Governor Jon Corzine had little trouble finding $500,000 in his role as a top Obama campaign bundler, but locating the missing $1.2 billion in customer funds he oversaw as the head of MF Global funds is proving far more difficult–impossible even, reports the Wall Street Journal.

A person close to the investigation told The Journal that a “significant amount” of customers’ money appears to have “vaporized”:

Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.

Many officials now believe certain employees at MF Global dipped into the “customer segregated account” that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

During a House hearing in December, Mr. Corzine said he “doesn’t know” where the $1.2 billion went or is.

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On Friday, Reps. Howard McKeon (R-CA) and Elton Gallegly (R-CA) were named as recipients of discounted mortgage loans from the now-defunct Countrywide Financial Corp., previously the nation’s largest mortgage lender before being bought out by Bank of America.

Reps. McKeon and Gallegly both claim they did not know their loans were processed through the so-called “Friends of Angelo’s” VIP division, a reference to Angelo Mozilo, the former head of Countrywide whom TIME magazine named as one of its “25 People to Blame for the Financial Crisis” report.

The two California Republicans join Democratic Congressman Rep. Edolphus Towns (D-NY) as the three of four House members identified by the House Oversight and Government Reform Committee as having had loans processed through Countrywide’s VIP loan program.  Rep. Towns also says he was unaware that his loan had been routed through Countrywide’s VIP loan division.   The fourth House member the Committee has identified as having received a discounted loan has yet to be publicly identified.

Rep. McKeon’s spokesperson, Alissa McCurley, says Rep. McKeon was “shocked and angry” when he learned his $315,000 mortgage loan had been processed through Countrywide’s VIP loan division.  Ms. McCurley stated that Rep. McKeon, who serves as the chairman of the House Armed Services Committee, “had no knowledge of the Friends of Angelo designation” and “has never met or spoken to Angelo Mozilo.  Mr. McKeon is going back trying to figure out what Countrywide did to this loan 13 years ago.”

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A recent article in the Wall Street Journal on how the Occupy Wall Street movement has begun to camp out in New York City churches confirms what we’ve been reporting here on BigGovernment.com; #Occupy organizers allowed an alleged rapist who’d already been arrested by the police to camp out with other Occupiers.

Alleged OWS Rapist Tonye Iketubosin

The Wall Street Journal buries the lede by putting this detail at the very bottom of the article. Most of the piece takes a neutral/positive tone about how nice these churches are by expanding their social justice mission by welcoming the occupiers and how respectful the occupiers are by contributing to the church’s electricity bills. No actual explanation is given as to why it even makes sense for the Occupiers to be sleeping in a church as opposed to an apartment or hotel. If you think that the camping out indoors is done for the benefit of the homeless, you’ll see in a moment that the Wall Street Journal article actually makes a distinction between “the homeless” and rank-and-file occupiers. Apparently, the whole “occupy” premise of group camping is beyond any rational examination at this point.

If diligent readers (who get past the paywall) make it to the end of the Wall Street Journal article, they will learn that all is not tranquil in the collectivist paradise.

There have been petty fights and disagreements about who can stay and who must go. The housing committee has set up a hot-line for protesters to register for one of about 150 spots at the churches, and the person must be on the list when they check in each evening.

But the homeless and criminals have managed to slip in.

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At an event Wednesday in Rock Hill, South Carolina, former Speaker of the House Newt Gingrich drew applause from the crowd when he called the congressional insider trading scandal uncovered by Breitbart editor Peter Schweizer and a report by 60 Minutes a “good example of a bipartisan mess.”

Mr. Gingrich said he favored a law requiring members of Congress to place all their assets in a blind trust and to submit to a three day reporting requirement on any and all investments.  Although the former Speaker of the House did not refer to it by name, a bill proposed by freshman Congressman Sean Duffy (R-WI) called the RESTRICT (Restoring Ethical Standards, Transparency, and Responsibility in Congressional Trading) Act would do precisely as Mr. Gingrich proposes.

As the Wall Street Journal reports:

Mr. Gingrich said it is wrong for lawmakers to be able to buy and sell stocks based on information they learn in their government jobs. He laid part of the blame on campaign finance rules that favor wealthier candidates for Congress who can afford to pay for their own elections. As a result of those rules, a larger share of lawmakers in both parties come to Congress with extensive financial portfolios.

Mr. Gingrich’s recent statements echo those he made in November when he declared his support for applying the same insider trading laws that apply to private citizens to members of Congress.

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Continuing his fight against costly food stamp fraud and abuse, Ranking Member of the Senate Budget Committee Sen. Jeff Sessions (R-AL) has sent a letter to Secretary of Agriculture Tom Vilsack requesting an immediate explanation of the USDA’s oversight procedures combating food stamp fraud.

Sen. Sessions’s move came in response to a USDA press release announcing “new tactics to combat fraud and enhance SNAP program integrity.”

As Sen. Sessions explains in his letter:

I have a responsibility on behalf of taxpayers to hold federal agencies accountable for how public funds are being spent. I would therefore ask that the Committee be immediately provided with a thorough explanation of all oversight actions your Department is taking, as well as a list of recommended federal reforms that would reduce waste, inefficiency, and abuse in the food stamp program. I would further ask for a follow-up report within the next sixty days detailing the findings of all oversight that USDA will have conducted….Unmonitored welfare programs, over time, can hurt the very people we are seeking to help. Our goal is not only to improve the outlook for our indebted Treasury, but to help needy Americans achieve a better future through work and personal development.

Annually, the nation’s food stamp program–officially known as the Supplemental Nutrition Assistance Program (SNAP)–costs taxpayers $89 billion, a figure that has more than doubled under President Barack Obama.   The number of Americans receiving food stamps has skyrocketed in recent years.  Today, 46 million Americans–1 out of 7 citizens–receive food stamps, a jump of more than two-thirds prior to Mr. Obama’s vast expansion of the program. (more…)

Yes, says Yale Law Professor Jonathan Macey in an article in today’s Wall Street Journal.

From WSJ:

On closer examination, it appears that what Congress really wants is to keep making the big bucks that come from trading on inside information but to trick those outside of the Beltway into believing they are doing something about this corruption. For one thing, the rules proposed for Capitol Hill are not like those that apply to the rest of us. Ours are so broad and vague that prosecutors enjoy almost unfettered discretion in deciding when and whom to prosecute.

Congress’s rules would be clear and precise. And not too broad; in fact they are too narrow. For example, the proposed rules in the Stock bill are directed only at information related to pending legislation. It would appear that inside information obtained by a congressman during a regulatory briefing, or in another context unrelated to pending legislation, would not be covered.

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Congressman Tom McClintock (R-CA) made the following statement to the House Chamber on October 26, 2011:

Mr. Speaker:  The government’s continuing failure to address our nation’s gut-wrenching unemployment stems from a fundamental disagreement over how jobs are created in the first place.  We are now in the third year of policies predicated on the assumption that government spending creates jobs. We have squandered three years and trillions of dollars of the nation’s wealth on such policies, and they have not worked because they cannot work.

Government cannot inject a single dollar into the economy until it has first taken that same dollar OUT of the economy. True, we can SEE the job that is saved or created when the government puts that dollar back into the economy.  What we can’t see as clearly are the jobs that are destroyed or prevented from forming because government has first taken that dollar OUT of the economy.  We see those millions of lost jobs in a chronic unemployment rate and a stagnating economy.

Government can transfer jobs from the productive sector to the government sector by taking money from one and giving it to the other.  That’s at the heart of the President’s plan to spend billions of dollars to hire more teachers and firefighters and police officers.  But these temporary government jobs come at a steep price: every dollar spent sustaining one of these jobs is a dollar taken from the same capital pool that would otherwise have been available to productive businesses to invest in creating permanent jobs.

Government can also transfer jobs from one business to another by taking capital from one and giving it the other. That’s how we got Solyndra.  We put a half-billion dollars at risk to create 1,100 jobs (that’s $450,000 per job).  Now that half-billion dollars are gone and so are the jobs.  And who pays for these losses?  Other businesses and their employees – meaning fewer jobs created.

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In a state where thousands of properties have been threatened and continue to be threatened, California is in desperate need of meaningful eminent domain reform that will respect the rights and property of its residents. The preceding legal overview in California demonstrates just how difficult it is for private property owners to defend themselves against California’s redevelopment machine, which siphons billions and billions of dollars into a closed economic system that benefits private parties and hurts not only property owners, but all taxpayers as well.

The anti-government “throw-the-bums-out” crowds have had their chance to speak out on how to curtail the deficit and what to do with those hated entitlements that are the antithesis of the America they pine for. A recent WSJ/NBC News poll provided a glimpse of just how dependent on big government entitlements Americans have become–even among the Tea Party. Not that this should be a surprise to anyone watching the slow shift of the American mindset from citizen, to consumer, to ward of the State over the past century.

According to the Wall Street Journal who co-sponsored the poll, “Americans across all age groups and ideologies said by large margins that it was ‘unacceptable’ to make significant cuts in entitlement programs in order to reduce the federal deficit.”

No wonder President Obama in his State of the Union speech only paid lip service to Social Security and Medicare reform, mentioning each by name only once in over 7,000 words of text. He knows what Americans are really about as summed up in the old adage: “It all depends on whose ox is being gored.”

And the poll exposes a potentially discrediting hypocrisy within the Tea Party movement who claim to be for smaller government and a return to a libertarian Nirvana. Consider: by a nearly 2-to-1 margin, self-described Tea Partiers declared significant cuts to Social Security “unacceptable.”

In fact, as the poll reveals, less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the mounting deficit about which they cry warnings of impending doom.

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The fount of business knowledge that is Forbes.com ran a bit dry this weekend when it published a blog by one Rick Ungar in which he made the case that taxpayers don’t actually fund public employee pensions in Wisconsin. Just let that marinate for a moment.

Ungar was attempting to disprove Gov. Scott Walker’s assertion that the state’s pension and health insurance systems for public sector workers are budget-busters that can only be fixed with the budget repair bill and the curtailing of collective bargaining privileges.

(The leading health insurance plan, WEA Trust, for example, is controlled by the state’s largest teachers union, the Wisconsin Education Association Council.  But I digress…)

As his ace in the hole, he cites a blog written by “Pulitzer Prize-winning reporter” David Cay Johnston. A Pulitzer – wow – why even waste my time scrutinizing that one?

Writes Ungar:

“The pension plan is the direct result of deferred compensation – money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.”

If this is true – that pensions are simply “deferred compensation” – then why do taxpayers only ever hear about “low” teacher salaries, and not the teachers’ total compensation package? Because that wouldn’t fit the unions’ narrative that school employees are eating dog food and living one step above poverty.

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A few weeks ago, President Obama purported to promise an overhaul of the Federal regulatory regime, pledging to look at bloated and outdated piles of red tape in order to make the tough cuts necessary, in his mind, to stimulate economic growth.

Writing in the Wall Street Journal, Obama stated, ““Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary…But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.”

But as Big Government demonstrated just a few short weeks ago, the progressive left did not respond favorably to the President’s call for balance between public welfare and private-sector growth. Progressive special interest groups have outlined, instead, a plan of attack on Obama’s regulatory agencies, demanding an iron-fisted regulatory regime designed to punish some of the nations most prolific industries. A few short examples:

• Just days before Christmas, the FCC voted in “Net Neutrality,” an unprecedented power grab on par or greater than Obamacare. Under this scheme, the FCC essentially gave itself regulatory power over telecommunications companies, a job it was never intended to do.
• Speaking of Obamacare, contained within it’s own regulatory scheme is a terrifying Medicare reform project called IPAB, the Independent Payment Advisory Board. IPAB consists of 15 unelected officials charged with making drastic cuts to Medicare benefits – cuts that don’t require Congressional approval and can only be reversed by a Congressional supermajority.
• On the education front, it seems that the Department of Education has been relying on the advice of noted short-sellers as it and Congress formulates policy on for-profit colleges. New rules like the “gainful employment” rule threaten to punish students for choosing not to attend favored non-profit schools and universities in favor of career-oriented schools.
• Across the country, the National Labor Relations Board has been threatening legal action against state legislation designed to protect workers from “Card Check” legislation at the behest of the Obama Administration.
• Although the Clean Air Act was never intended to regulate carbon emissions, the EPA is threatening to use it to punish energy-producing industries that it doesn’t like, like biomass, a plan that could cost Americans nearly a million jobs. At the same time, the EPA is revoking permits for clean coal operations, and despite promising to restore oil and gas production in the Gulf, the Obama Administration has failed to issue new drilling permits, resulting in a de-facto moratorium on domestic oil production.

The Republicans have just introduced draft legislation that could force the Obama Administration to live up to it’s promises to investigate regulatory overreach and institute real, job-saving reforms.

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As evidenced by two recent reports, a chasm exists between the ways state government officials nationwide view federal control of education and health care:

On Feb. 2, the Heritage Foundation published an article in which they highlighted the fact that the majority of states (see graphic at right) have succumbed to pressure to adopt national academic standards; and

Two days earlier, a federal judge sided with attorneys general representing 26 states who had filed a lawsuit challenging the constitutionality of the Patient Protection and Affordable Care Act (a.k.a., “ObamaCare”).

According to a Wall Street Journal article published today, several polls show the majority of Americans believe ObamaCare should be repealed. That sentiment, I believe, stems from the widely-held belief that a person’s doctor is better equipped to make health care-related decisions than some federal government bureaucrat.

Without feeling the need to locate poll results to back it up my contention, I think most parents of school-age children in this country would agree that people closest to their children are better equipped to meet their education needs than some distant, unelected Department of Education bureaucrat in Washington, D.C.

In his Jan. 31 ruling on ObamaCare, which I wrote about here, Judge Roger Vinson wrote, “…this case is not about whether the Act is wise or unwise legislation. It is about the Constitutional role of the federal government.”

Conversely, Heritage outlines the unconstitutional pitfalls associated with federal control of education in the video, “The Dangers of National Standards in Education.” The video includes interviews with Governors Rick Perry (R-Texas) and Nikki Haley (R-S.C.), Rep. Rob Bishop (R-Utah), Missouri education activist Gretchen Logue and others who spoke to Heritage about the dangerous consequences of Race to the Top-style programs.

In short, we must restore federalism (i.e., allowing states to set education standards and determine how funds are spent) to our system of public education.

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The news is in.  Even you can open an account at the Bank of China in New York or Los Angeles.  But you have to hurry, trading will be limited.

What does this bank account entail?  According to the Wall Street Journal,

The Bank of China here in the U.S. has started allowing American customers to open an account and to invest up to $4,000 per day—and a total of $20,000 a year—in Chinese yuan, or renminbi. Until now, you had few options to hold money in yuan, which is a “closed” currency managed, and protected, by Beijing.

To try to understand what’s at play here, let us determine who gains what.  For the Chinese, some might see this move as a clear indication that they want more US dollars.  After all, China is a developing economy, and with that comes expenses.  These expenses to a large degree are outside goods and services with companies that settle their contracts in dollars.  This would be a very shortsighted intuition.

The Big Picture: China is beginning to internationalize the yuan in an attempt to turn it into a new formidable world currency. Opening Chinese banks to American customers is one small step for the yuan, one giant step for China.

How should the average investor look at this move?

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In the 1990s, it seemed as if individual rights, deregulation, free trade, and sound currency were taking hold in Latin America, a region finally on the rise after decades of coups, repression, and violence.

But in the 21st century, left-wing strongmen have made a comeback: Venezuela’s Hugo Chavez, Bolivia’s Evo Morales, Nicaragua’s Daniel Ortega, Ecuador’s Rafael Correa. Other countries in the region are headed in the wrong direction. Authoritarianism has been on the rise in Argentina ever since the economy collapsed (yet again) in 2002. Mexico’s violent drug war is escalating. In Cuba, the transfer of power from one Castro brother to the other hasn’t helped the economy or stopped human rights abuses.

What went wrong?

Reason.tv’s Nick Gillespie sat down with Mary Anastasia O’Grady, a member of the Wall Street Journal’s Editorial Board and a Journal columnist specializing in Latin America, to talk about the outlook for the region – and how free trade and drug legalization would go a long way to solving Latin America’s problems.

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Time was when countries believed in strong currencies — strength measured not in the rhetoric of bearded wise men but of bank vaults flush with gold coin.

Venezuelan tyrant Hugo Chavez recently announced that he would be devaluing his currency on New Year’s day.  As the Wall Street Journal reported:

News of the devaluation came just after the central bank said the Venezuelan economy contracted 1.9% in 2010, the second consecutive year of declining output in the oil-rich nation after a 3.3% decline in 2009.

Both pieces of news suggest Mr. Chávez is having an increasingly difficult time balancing his populist policies with economic reality, according to economists. His government’s widespread nationalizations of private industry have sapped economic growth, while public spending has sparked inflation that the government has tried to contain by measures such as price controls.

There are a couple of striking aspects to this news.  First, in the above excerpt one could easily replace Mr. Chávez’s name with Mr. Obama’s.  Nationalizations or de facto nationalizations cripple an economy by replacing functional markets driven by the people with dysfunctional economies driven by central planners and have a secondary effect of chilling entrepreneurship, and thus competition, innovation and capital formation that drive economic growth.

Constantly imposing costs implicit and explicit on the private sector (i.e. those who must survive by providing a product demanded by consumers in quantities, of qualities and for prices willingly paid by these consumers), including the cost of propping up failed businesses and inflating asset prices, disincentivizes people from partaking in mutually beneficial commercial activity.

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Nationwide, government at every level is requiring more and more of the workforce to get its permission just to earn a living.

In the 1950s, only about 5 percent of the workforce needed a government license to do their job. Today, that number is over 30 percent.  And governments impose all kinds of other requirements that make it hard for would-be entrepreneurs to start and grow small businesses.

Entrepreneurs like Chuck, here:

Unemployment in the United States has now topped 9.5 percent for 14 straight months—the longest stretch since the Great Depression.  Nearly 14.8 million people were unemployed last month.

Consider the nation’s capital.

Year after year, Washington, D.C., is ranked the worst place in the United States to start a small business. How can the District change its ways to allow entrepreneurs to create more jobs and opportunity?

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Daniel Pearl was not beheaded because he was a journalist.

Daniel Pearl was beheaded by Islamic extremists because he was an American and a Jew.

“My name is Daniel Pearl, I am a Jewish-American.”

On February 21, 2002, a videotape was released titled The Slaughter of the Spy-Journalist, the Jew Daniel Pearl. The text from the video reads in Arabic: “My name is (Daniel Pearl), I am a Jewish-American.”

Yesterday Barack Obama signed the toothless Daniel Pearl Freedom of the Press Act of 2009 named in honor of the Wall Street Journal reporter who was killed by terrorists in 2002. The bill promotes press freedom. The president declined to take questions from the media at the signing event.

Jennifer Rubin at Contentions Blog pointed out that Barack Obama forgot to mention that Daniel Pearl was murdered by Islamic extremists.

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