Maggie's Farm

"The financial-services sector subtracts value from society," he said, comparing it with gambling, law, and government as entities that simply move money around and extract a bit for themselves.

The US produces 90% of the new medicines in the world. The absence of price controls on drugs makes that possible, and the rest of the world benefits from the work done in our research labs.

It's not easy being a drug company. Most research hits dead ends; the government has endless hurdles, litigation can drive you into bankruptcy - and everybody wants the stuff for free.

The WSJ says that this bounty of new treatments will be eliminated by price controls.

The sheer size of the fiscal hole that the Obama administration is digging us into, or burying us within, is mindboggling enough.  But, that isn’t stopping them from purposely adding to our confusion as they try to dig the hole deeper.

Tom Blumer exposes the tomfoolery at his valuable everyday read Bizzyblog.

Until now the US Treasury has hidden the size of our deficits by including Social Security taxes, and treating them as if in a Trust Fund although there is none and the monies have been spent, so Social Security is actually in negative cash flow within the next two years.

Now Blumer finds the Treasury Department under Wall Street-import Tim Geitner bringing along the tricks that sank Wall Street.  The Treasury is now reporting the deficit of receipts versus expenditures as $175-billion less between last October and March.  How?  The Treasury is somehow calculating a Net Present Value of its TARP bailout expenditures, in other words what they think they’re going to be worth.

As Blumer points out:  

Mixing hundreds of billions of dollars of NPV into what has essentially been a cash flow report turns the Monthly Treasury Statement, and deficit reporting in general, into an exercise that will become not only become ever more difficult to comprehend, but one that will also be routinely subject to political manipulation. Judgments as to what discount rate to use, how collectible loans are, and even what should and should not be considered an “investment,” will have multi-billion dollar impacts on the publicly reported deficit. NPV might even directly affect policy. Why should Geithner or Obama allow banks chomping at the bit to get out from under TARP to do so, when their repayments will only increase the reported deficit? Already, the administration, which has projected a fiscal 2009 deficit of over $1.8 trillion, has avoided the political embarrassment of estimating a shortfall that would round off to $2 trillion using true cash-flow reporting.

Hope ‘n Change requires prestidigitation, otherwise known as quick fingers, picking our pockets.

Ponder.

Defenders of government workers and unions say that their pay and benefits need to be higher than those in the private sector or non-union, in order to attract better talent or create better product.  Defenders of tort attorneys say that their high fees are needed to attract those who provide proficient counsel to the otherwise defenseless overwhelmed by the complexity of the laws and to offset the costs of their risk of losing cases.

Yet medicine, where doctors and scientists labor through the many years and huge costs of gaining expertise to save and better lives, is somehow to continue to attract the best when doctors’ burdens are increased to personal and professional breaking point, innovation is not encouraged by recompense, and rewards are reduced to that of an able plumber.

How costly is lack of competence?  In which realm are we actually getting value?  

Or, will Einstein be proven correct: “If I had my life to live over again, I’d be a plumber.”

Via RCP, a superb essay by Carl Schramm Up From Poverty. How economic growth occurs remains a mystery to economists - or at least a subject of endless debate.

One quote from the essay:

In the touchstone year of 1820, 84% of the world's population lived in what would today be judged "extreme poverty." Today, only 16% do. That is such an astounding achievement that it is difficult even to comprehend. According to the World Bank, in the last 30 years alone-a time of rapid globalization-the number of people living in extreme poverty fell by 25%, or 500 million people. The outbreak of entrepreneurial capitalism within the Communist political system of the People's Republic of China accounts for most of this achievement, but almost every region of the world has seen a decline in the share of its population living in extreme poverty. Bright spots such as Israel and Mauritius, moreover, have proven that growth can occur in regions previously thought allergic to it.

There’s a new gang in town. They’re not trying to act tough. They don’t have to. They’ve already proven they are. They’re not trying to look tough. They look like your neighbors. They’re not teenagers. They have become worthy adults by passing difficult hurdles.

But, they do have colors. They’re red, white and blue.

The new gang is called the Warrior Legacy Foundation.  The warriors are not just military veterans but anyone who reveres the contributions and sacrifices of veterans, and wants to see their commitment honored and passed on to coming generations, whether serving in the military or not.

The binding commitment is to the military code of conduct: “I will never forget that I am an American, fighting for freedom, responsible for my actions, and dedicated to the principles which made my country free.”

As one of the founders remarks, “Veterans make the community in which they live a better place.” That community ranges from their block to the world. Think for a moment about how your community would be lacking if not for veterans.

To me, what makes a warrior, in any walk of life, is the willingness to give 110%, more than they themselves thought they were capable of, donating comforts not for glory but for being the best and furthering the betterment of others. Those are the traits that distinguish a worthy life and neighbor and citizen.

The Warrior Legacy Foundation is not out to make claims for government benefits. It is focused on raising the profile of the warrior class as a guide to what we all need to be and raise our children to be. Go to the above link and sign up to be part of this important mission. Be a neighbor and not just a bystander.

Some more info here. 

The words for the Mauldin toon are "...forever, Amen. Hit the dirt."

The current issue of the Digest from the National Bureau of Economic Research carries findings from Stanford University economists looking at the different economic outcomes for similarly situated Jamaica and Barbados from different macroeconomic policies pursued between 1960 to 2002.

Both had the institutional foundation from being British colonies and similar sugar and tourism-based economies, yet from 1960 to 2002 Barbados’ GDP expanded about three times faster than Jamaica’s.  The current income gap in favor of Barbados is near five times larger than at independence.

Why?

Jamaica pursued extensive state intervention in the economy, nationalization, income transfers and the like, and borrowed heavily to fund growing deficits.  Barbados followed a more restrained posture toward business, spending and borrowing.

Sound portentous?

Can You Get What You Pay For? Pay-For-Performance and the Quality of Healthcare Providers

Misconceptions about the interrogation memos. WSJ

Truman's decision to recognize Israel

Hatikva 2009. A Guiness world record.

Peter Orszag is the guy in charge of Obama's domestic agenda. From The New Yorker's Letter from Washington:

Orszag dismissed the criticism as a caricature. “I don’t see how it interferes with the doctor-patient relationship to suggest that it would be better if your doctor had more information about what would work for you,” he said. “The best way of putting it is that your doctor shouldn’t have disincentives to give you the higher-quality care, which often happens now.” Far from a huge government bureaucracy, he proposes a simple adjustment of incentives: “You get paid more if the treatment has been shown to be effective and a little less if not.” Orszag seems more right than wrong about how to bring down health-care costs, but the truth is that, while there is obviously a great deal of waste in the American medical system, nobody knows for certain whether Orszag’s plan—which is now Obama’s plan—will work.

As Orszag explained his ideas, I couldn’t help remembering an encounter I had with him one day in the hallway at O.M.B. I told him that I had read his Princeton undergraduate thesis. He looked at me and smiled a little sheepishly. He said that at some point after his arrival at graduate school, in London, he had had a sudden realization: that he had made a mistake, and the crucial formula that he had used in his thesis, the one that had won him the prize, was incorrect. “It was so innovative,” he said, “that it was wrong.”

Starting to write about the US debate over torture, I first turned to Merriam-Webster’s Online Dictionary. The word derives from the Latin, to twist.  Three current definitions are offered: 1. to cause anguish of body or mind; or more drastically, 2. to inflict intense pain to punish, coerce, or afford sadistic pleasure; and 3. “straining” as in distortion or overrefinement of a meaning or an argument.

That definition allows greater clarity about the positions being argued about torture.

The Geneva Conventions apply to restricting the first definition unduly against enemy state soldiers and civilians.  The applicability to nonstate terrorists is not addressed.  Thus, the Bush administration labeled them “enemy combatants” and tried mightily – in the midst of great uncertainty, confusion, danger, and rapidly changing events -- to blend civilized restraints with practical considerations of gaining intelligence.

The Associated Press report of the speech by the very liberal President of the Israeli Supreme Court at Princeton a few days ago highlighted the problem facing Western governments, “that one of the main challenges the court faces is that international law has yet to fully adapt to modern terrorist threats.”  This learned lesson is important from someone widely hailed by the Left for her other positions.  Israel, like other parliamentary governments, does not have a Constitution like does the US, so its supreme court ranges more widely – and liberally -- in deciding right and wrong, legal and illegal.  Israel, uniquely, sits on the frontline, within and without, facing existential terrorist attacks.

Israel has taken extensive measures to restrict its armed forces from breaching this elusive line between proper actions and excessively avoidable harm to civilians and to enemy combatants.  In the US, the bipartisan Congressional remedy, led by John McCain, was to restrict our military.  The argument is that our military does not have the necessary professional experience to apply extensive interrogation techniques, undue use undermines the order necessary to our military, and that leads to undermining both discipline and self-respect in energetically fighting for what is right.

The Bush administration went further in, pardon the pun, agonizing or torturing itself in defining restrictive conditions for the use of extensive interrogation techniques by CIA professionals upon leading captured terrorists.

None of this has satisfied those who take a more restrictive posture.  There’s the camp, including some with dedication to fighting terrorists, who believe that a purist conception of Americans requires that we don’t use extensive interrogation techniques regardless of the possible benefits or risks.  Then, there’s the camp that outright opposes US battles against terrorists, sometimes trying to mask their position with support conditional on impossible and impractical crippling hamstringing, borrowing from the self-righteousness of the first camp to distract from their own true priority.  This camp is allied with a third camp, politicians whose primary motivation is to exploit the arguments for their own benefit.  Democrats who, in the wake of 9/11’s awakening, supported or argued for  extensive use of interrogation techniques in recognition of Americans’ expectations of firm resolve then denied and flip-flopped in their pursuit of power in unseating the Bush administration and Republicans in Congress.  These Democrat politicians “strain”, the third definition of torture, in distortion or overrefinement of their argument, relying upon the idealistic or contorted arguments from the first two camps.

So, now, the Obama administration is hoisted by its own petard of its own most ardent supporters in confronting the practical needs to govern and to be held responsible for America’s security.

Those within the Obama administration who argued from experience and proper caution for moderation were overruled and selective release of documents and photos launched that seek to discredit the Bush administration’s efforts, and even criminalize policy.  Opponents decry this as reckless self-endangerment and self-denigration of America, and call for fuller release of the record to demonstrate both the care taken and the needed survival results.  Even the New York Times recognizes the danger but, true to its Obama-lean, couches it in the politician Obama’s self-interest: “Mr. Obama and his allies need to discredit the techniques he has banned.  Otherwise, in the event of a future terrorist attack, critics may blame his decision to rein in C.I.A. interrogators.”

So, there we are, tortured for the past six years by tendentious and selfish attacks from within upon our ability to withstand and overcome tenacious, brutal and serious attacks from without.  Now, due to the Obama administration’s irresponsibility, we face at least three more years of torture, of undue agony, that fruitlessly weakens our unity and resolve and exposes us all to potentially greater physical threats to our well-being and very lives.  Our troops on the frontline are not bemused by this Obama administration recklessness with their safety and missions, nor should be the rest of us placed closer to frontline dangers as our intelligence professionals seek cover by retreating from their duties.

Quicker than most expected, even those most critical of him, President Obama has unleashed his and his political party’s dénouement as grossly irresponsible and corrupt, to the unacceptable danger to the country’s survival.

His partial and skewed release of formerly secret documents about the interrogation of captured terrorists raises the prominence of the issue, and consequently of other major issues, in ways that very well may, and should, relegate the Democrat Party to the political hinterland for a generation.

1.  The weight of informed and involved expertise on the interrogations is that they served to avoid additional terrorist attacks.  The MSM’s trumpeting of the Obama partial releases makes it unavoidable for the MSM to provide the consumers of its media with the fuller story that will emerge.

2.  Polls have consistently demonstrated the public is more in tune with better safe than sorry, and with little sympathy for applying Americans’ civil rights to foreign terrorists.  The risks that Obama is taking with our security, and that of our allies, is not acceptable.

3.  The Congressional Democrats, who have harped at every move taken by the Bush administration, own leadership were not only fully informed of those measures at the time but -- before seeking political advantage by unscrupulously reversing course – were advocates of even sterner measures.  Continuing exposure of the formerly secret documents will further reveal their crass perfidy.

4.  The increased exposure further highlights to the public the recidivism of many released from Guantanamo and the demurral to accept releasees by European countries critical of Guantanamo.  This reinforces the conclusion that benign treatment of sworn enemies is suicidal.

5.  Members of our intelligence community, and of formerly cooperating foreign intelligence agencies, will pull back from full exertion due to increased restrictions imposed and from reticence to be pilloried by leftists in power.

6.  G-d forbid another significant terrorist attack occurs, particularly traceable to the denuding of vigilance among our intelligence agencies, the backlash will be harsh against those who crippled our security.

7. The cumulative impact of 1-5 above, and hopefully not even the 6^th, sits on top of the unfolding and recognized debacle of the Obama administration and Congressional Democrats’ handling of the economic downturn to slip by intrusions -- into the economy, into health care, into taxation, into almost any facet of society it can -- that are destructive of our and future generations’ solvency and freedoms.  The unease already claims a majority of citizens, and will become overwhelming.

8.  The corruption endemic within the Washington and Chicago way of doing things, already evident to any observer, will be increasingly exposed as Democrats and their media allies lose their impunity to stifle full airings.

9.   The willingness and arrogance of members of the Obama administration to invent ludicrous and extra-legal rationalizations for power grabs leads to more, as lies beget lies.  The cover-ups and the overstepping of clearer legal red lines will create scandal after scandal.

10.  In 2010, Republicans will increase their depleted power within Congress.  The uniqueness of 2008 will be a memory, there won’t be a tail from a campaigning Obama, and centrists who regret straying into Democrat votes will be reduced.  The hue against Obama and Democrat excesses and dangers will lead to more exposures.

The only reason that Obama and Congressional Democrats would avoid this dénouement is if one believes there are too few Americans with the intelligence to know up from down.  The Democrats are counting on that poor bet.      

Left and Right participants, from Trotsky to Hayek, in the 20^th Century’s debates over the role of government have agreed that a major danger emerges from the coming to power of the “New Class” of intellectuals and public policy managers whose primacy over the hoi polloi (some even refer to the commoners as sardines) is ensured by self-profiting politicians, together extending government controls into more spheres of society.  (A brief summary of New Class thought at Wikipedia.)

This New Class debate lay at the core of understanding the essential corruption of morality, of true popular governance, and of state powers that ensues from the rise of this privileged New Class.

My friend Lorie Byrd tries to explain to the in-denial and in-disparagement New Class the Tea Party protests across the country by about 600,000 ordinary citizens: “many average, everyday Americans were not thrilled with the ‘change’ they were getting from the new administration.”  This is not an intellectual movement, couched in fancy words, but is the hoi polloi’s recognition of a basic intellectual truth, that the New Class is robbing their resources for their own expansion of power and profiteering.

The rude – indeed classless -- disdain and insult expressed by so much of the liberal commentariat toward the Tea Partiers exhibits their deeper fears of their spreading rejection as more and more Americans realize and react to their gross power grabs.  Their fear, and arrogance,  propels their haste to ram through major redefining programs before they are stopped by the 2010 elections reducing their Congressional majorities.

2010 can’t come soon enough.  So, it is proposed that Tea Partiers crowd the townhall-type meetings held by their Congressmen and Senators to drive the point home before 2010.

The New Class may lack class, but they will recognize their overstepping will undermine their own survival.  Behind their crude attitude toward Tea Partiers is their recognition their window of opportunity to further aggrandize themselves is short.

The legacy media is rapidly being replaced by alternatives which do not insult or ignore the legitimate grievances of the hoi polloi.  The captains of industry  in-bed-with taxpayer bailouts for their excess greed and irresponsibility are recognizing the self-destructive deal with the devil relegating them to managers of the corporate state.  The unions, whose demise in private industry has been offset by controlling the government bureaucracies, are seeing their legislative goals to increase their sway sinking, while their bankruptcy of public services through excess benefits is arousing the poorly served public.  The leaders of non-profits, who use their tax-exemptions to indulge in obtaining taxpayer grants that feed huge compensation packages, are startled that they are being viewed as abusing their privileges.

Onward, Tea Partiers.  

A quote from Terry Mattingly's piece of the above title:

Consider, for example, the media storms surrounding discussions of Holy Communion and the sacramental status of Catholic politicians who disagree with church doctrines on abortion, marriage and other issues. In his book "Render Unto Caesar," Chaput argued that it's the "political duty" of Catholics to "know their faith and to think and act like faithful Catholics all the time" -- even those who work inside the Washington Beltway.

Alas, the journalists think they are writing about the rights of politicians, while some Catholic bishops want to discuss the salvation and, yes, damnation of souls. If journalists insist on describing this conflict in strictly political terms, he said, there is no way the public will ever understand what is happening.

The note I wrote in my son’s 9^th birthday card today says, “Character is everything,” and I listed the many traits of sound character he has of which I am proud.  I’m even proud of his hijinks at school for which he gets in trouble.  He immediately takes responsibility, his punishment, and does not lie, evade or implicate others.

After he left for school this morning, I turned to my coffee and local newspaper.  The frontpage carried a New York Times article about how Disney is trying to discover what TV shows will appeal to boys, “a group that Disney used to own way back in the days of ‘Davy Crockett’ but that has wandered in the age of more girl-friendly Disney fare such as ‘Hannah Montana.’ “  Disney’s consultant focuses on Black Sabbath T-shirts and such as their key.

Instead, Disney should refocus on Davy Crockett.  Disney, and other children’s programmers, used to present tales of heroism and character. Beaver Cleaver and his big brother were to be emulated and not the worse than Eddie Haskells that are the lead characters today on Disney and Nickolodean.  Parents were guardians and guides, not dolts.

I looked back at when the change started in the late ‘60’s, the chronological root of many of today’s cultural ills. By the 1980’s, when I had risen high in corporate life, I saw the ramifications as the up-through-the-ranks World War II generation who were my mentors began to retire or be pushed aside by a new breed with big degrees but relatively little experience and even less earned character. They measured themselves and others by smooth talk, quick tricks and personal profit, over the hard truths, diligent effort and contribution to all’s success that their predecessors emphasized and demanded.  The new scorecard was perverted.

The current economic fallout is a direct result of this replacement of character with selfish and reckless aggrandizement.

Excellence requires that we provide consistent value, not cut-throat abandon of values.

Investment produces lasting benefits to many, while speculation chases the fastest – and usually elusive -- buck.

Simple, straightforward information delivers meaning, while mumbo-jumbo complexity hides empty promises.

Reasonable, factual expectations leads toward tangible accomplishments, while “irrational exuberance” and greed lead toward being a willing target for schemers.

Looking to honestly satisfy others’ needs creates bonds of lasting trust, while exploiting others’ fears and ignorance creates temporary dupes.

Competing to be best and to earn trust creates standards of worthy behavior, while unearned honorifics and facile words and actions breaks down society’s bonds and future.

Making a positive difference in society and in others’ lives leaves a legacy, while hollow charisma leaves a vacuum.

You can’t have too much character.  Character is life’s scorecard.

Sunday's New York Times had an op-ed - a Sunday op-ed having particular prominence - by George Bisharat, “Israel on Trial.” Bisharat recites every charge raised by any source accusing Israel of violating international law in its treatment of Gaza.

Surely the NYT would defend its publishing of this screed as giving both sides of a story.  A law professor who has known Bisharat, son of a Palestinian father, since law school remarks on Bisharat’s “Personal Intifada”:

Bisharat has devoted the past 25 years towards delegitimizing Israel. The links are too numerous to list, but almost everything Bisharat does and says is geared towards isolating and demonizing Israel. But Bisharat doesn't stop there, he also seeks to delegitimize Israel's supporters in the U.S.

One must wonder if the NYT publishing Bisharat’s op-ed means the NYT disbelieves its own reporting, and if the NYT is even sincere in its attachment to international law.

In January, the NYT examined the charges in long detail, “Weighing Crimes and Ethics in the Fog of Urban Warfare.”

Deciding requires an investigation into battlefield circumstances that cannot be carried out while the fighting rages, and such judgments are especially difficult in urban guerrilla warfare, when fighters like Hamas live among the civilian population and take shelter there. While Israel is the focus of most criticism, legal experts agree that Hamas, a radical Islamic group classified by the United States and Europe as terrorist, violates international law.

Shooting rockets out of Gaza aimed at Israeli cities and civilians is an obvious violation of the principle of discrimination and fits the classic definition of terrorism. Hamas fighters are also putting civilians at undue risk by storing weapons among them, including in mosques, schools and allegedly hospitals, too, making them potential military targets. While urban and guerrilla warfare is not illegal, by fighting in the midst of civilians, often in civilian clothing, Hamas may also bring risk to noncombatants.

But Hamas’s violations tend to be treated as a given and criticized as an afterthought, Israeli spokesmen and officials say. They say that Israel has never sought to hit civilians, medical workers or United Nations facilities or personnel. “The rules of engagement are very clear,” said Mark Regev, the government spokesman. “Not to target civilians, not to target U.N. people, not to target medical staff. All this is very clear in Israeli military doctrine.”

In a 2006 interview, then- prospective candidate Barack Obama praised our troops in Iraq but when asked whether “Did [Congressman John] Murtha say that in the right way?” his charge that Haditha Marines committed “cold-blooded murder," Obama deferred to Murtha:

“You know, I don't have the exact quotes in front of me. What I know is here is a guy who served our country. I would never second guess John Murtha... I think he's somebody who knows of which he speaks.”

One after another, the Haditha Marines have been found not guilty.  I’ve written many, many blog posts on the details of each case.  I’ve yet to read anywhere, including the leftist blogs, any substantive criticism of the proceedings’ consideration of the facts.

Two cases remain open: Platoon leader SSgt Frank Wuterich and Battalion Commander LtCol Jeffrey Chessani.  As in the other cases, the politically-propelled zealous prosecution has been handed a series of setbacks to their legal position.  The latest is the appeals court upholding of the dismissal of charges against Chessani because of undue command influence.  The entire judgment is here. A portion gets down to tacks:

“[W]e are convinced the Government failed to meet its burden of demonstrating, beyond a reasonable doubt, that these proceedings were untainted by the appearance of UCI. [Undue Command Influence]  We are similarly convinced that an objective, disinterested observer, fully informed of all the facts and circumstances, would harbor significant doubt about the fairness of this proceeding.”

The prosecution can appeal further, up to the US Supreme Court.  Otherwise, the prosecution can choose to restart the case from scratch, under new leadership.  The same cause of dismissal, for SSgt Wuterich, is expected.

These Marines have suffered from a runaway frenzy in prosecution.  It’s time it ended.

The father of one of the boys in my son’s Little League team is a similarly distinguished LtCol of many years service in the Marine Corps, preparing to assume a vital and very challenging command.  Is the message we want to give him and his family that they may face similar ruinous consequences of simply doing their duty?

Unlike Obama, I won’t defer to Murtha but to the known honor and courage of my fellow Marines. 

George Bernard Shaw warned “Beware of false knowledge; it is more dangerous than ignorance.”  The major overhaul of American health care pursued by President Obama and his supporters is based on many false premises and is excessive and likely to do more harm than good.  Tuning up and improvements already always dynamically occurs.  Instead, ObamaCare is aimed at dramatically changing one-sixth of the US economy in ways that are untested or tested and found wanting, primarily involving huge increases in government direction of health care.

The details of ObamaCare are largely being left to Congress, the same body that stuffs  the federal budget with earmarks, waste, and other programs that are not requested.  ObamaCare is premised on claims for drastic changes in health care and major increases in government programs being necessary.  Those claims are largely specious.

Below the fold, the top ten specious premises for ObamaCare are discussed:

1. Comparing US Health Care To Other Developed Countries 
2. US Health Care Spending Is More Than We Can Afford 
3. Reform Overhaul Will Yield Major Savings
4. Increased Evidence-Based Medicine And Health Information Technology Will Significantly Improve Care and Reduce Costs 
5. Present Administrative Costs And Insurer Profits Are Too High 
6. US Consumer Dissatisfaction Requires Drastic Health Care Changes 
7. Health Care Costs Are So High They Are A Major Cause Of Personal Bankruptcy 
8. The Number Of Uninsured Is So Large That Drastic Health Care Changes Are Necessary
9. More Preventive Care Will Better Serve Consumers And Save Costs 
10. Health Care Consumers Are Being Served By Drastic Health Care Changes

(More could be added, such as that government restraints on prescription drug prices will not impede incentives for innovations, but they are so transparently false that the list below dwells on other ObamaCare premises more misleading.)

President Obama’s proposed budget includes increasing the income and capital gains tax bracket on those earning over $200,000 while reducing the percentage of income that can be deducted for charitable contributions, and other itemized deductions such as mortgage interest, to 28%.  Combined, the effect would be to raise their tax percentage bracket into the 40’s.

Both tax increases raise ironic issues for the many more affluent who voted for Obama and Democrat Congressmen and Senators, which those who didn’t might enjoy.  However, one should expect alliances opposing these tax increases between many Republican and Democrat voters, if for no other reason than self-interest, not to mention the deemed negative economic growth and charitable impacts.  I’ll leave the capital gains and housing arguments for now to focus on the charitable deduction.

Obama is focusing on the wrong problem with the charitable tax deduction, besides making matters worse.

The strongest arguments for retaining the present charitable tax deduction are:

·    It’s our money, not the government’s, and particularly in a time of increasing taxes retaining any of our money is preferable.

·     Most itemized deductions are already reduced by 3% of the amount for single taxpayers by which their adjusted gross incomes is above $75,000 and married joint taxpayers above $150,000, the reduction reaching a loss of up to 80% of the itemized deductions at higher adjusted gross incomes.  Charitable deductions are, also, already restricted to 10% of corporate income, 30% of individuals’ if to a private foundation (which contributes to other public charities), and 50% to a public charity.

·     Individuals can make better choices and exert better controls over charitable spending than the government.

·   Many important functions are funded via the charitable deduction, such as religious institutions, education, veterans organizations, aid to the poor.

·    Many of the added government programs on which the higher tax revenues would be spent are unnecessary or wasteful.

The strongest arguments for restricting the present use by the more affluent of the charitable deduction and other itemized deductions are:

·    The better off economically are larger beneficiaries of the tax deduction because they are at a higher tax bracket.  Although they are also already being taxed for a percent of tax revenues double the size of their proportion of incomes, Obama argues that they should pay even more, to help fund his panoply of major spending increases on programs for which he and Democrats yearn as important.

·     Er, can’t think of any others.

This may seem to pretty much seal the case against further restricting the itemized deduction.

However, there is still a separate case to be made in favor of some further restrictions on the charitable tax deduction.  Most lay in the realm of more enforcement of the present tax code.  In too many cases it is abused.  During the Bush administration, enforcement was increased.  More is needed and remains to be done.  This should be Obama’s focus.

·    Some not-for-profit organizations’ executives receive compensation that is unreasonable and excessive, the present IRS Code’s metric.  Public embarrassment has caused some to be cut back.  The new IRS 990 filing developed during Bush’s administration will further expose compensation practices.  It’s an amorphous tax Code metric, but instances grossly over the line are clearer.  One should expect the IRS to follow up, especially when public embarrassment isn’t enough.  Similarly, many charities spend disproportionate amounts of their income on administration and fund-raising.  Some are combining to cut overhead.  Others whose spending is out-of-whack to their purpose should face percentage limitations on such functions.

·    Current economics is leading to closer contributor scrutiny of which charities merit donations.  Similarly, some added information should be made public about some contributors, as many tax-exempt organizations influence US public policies.  The new IRS 990 filing provides much added and new information from which to judge charities.  Much will be available on the Internet.  As the voluntary disclosure of foreign contributors to former President Clinton’s foundation exhibits the potential influence of non-citizens on US public policies, and the refusal of former President Carter’s to disclose, all contributions by non-citizens should be publicly disclosed.

·   The IRS Code for tax-exempt, tax-deductible 501(c)(3) public charities is drawn broadly.  A tax deduction or exemption on income is not a privilege granted by the government, but a right that can only be legally circumscribed.  Still, when government spending is increasing and taxes increased, it is reasonable to re-examine which income is to be taxed.  The IRS Code does not require major percentages of  charities’ income to be spent on their purported purpose.  Further, many organizations receiving the public charity designation are spending for purposes either distant from their ostensive “charitable” purpose, or possibly less needed in the face of other needs.  Many not-for-profit hospitals do not provide appreciably more care to the poor.  Many educational organizations are thinly veiled partisan political fronts.  Many that purport to aid the poor are targeted at aiding a political party’s ends.  The IRS explanation of the present Code, below, should be tightened to reduce or eliminate veiled political party advocacy, is aimed at the poor to require that a significant proportion of spending is upon those in financial need, or to curtail edifices in excess of clear need.

“The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.  The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.”

If President Obama is really serious about all paying their fair share of increased taxes, he should direct his attentions to this sphere. There’s tens to hundreds of billions of annual tax revenues that might be collected. According to the Center for Responsive Politics analysis done at the request of the Chronicle of Philanthropy, of political donations from the staff at the 25 wealthiest foundations and 75 of the largest charities, 82% from charity employees and 98% from foundation employees went to Obama and Democrat congressional candidates and political party committees. Republican Senator Charles Grassley has led the fight in Congress to examine and restrict charity abuses. 

You might encourage him.

The Obama administration's rationale, complete with many misleading statistics, is here. http://www.whitehouse.gov/omb/blog/09/02/27/TheBudgetandCharitableDonations/

Related: The war on charity at Wizbang

For those who have faith in the power of civil discourse to expose and isolate radical nonsense, there was a small victory this week at San Diego’s prestigious University of California campus.

The faculty and grad students of its Ethnic Studies Department issued a Statement one-sidedly accusing Israel as racist for its actions in Gaza, the Statement failing to consider Gazans’ fault or, indeed, that Israel itself is a multi-racial society where Sephardic (mostly Middle Eastern) Jews as well as Arabs have more rights and economic opportunities than in any Islamic country.  The Ethnic Studies Department scheduled a forum on campus for Wednesday, Feb. 25, to further their charge.

From on and off campus, there was vigorous written refutation of the charge, and criticism of the Ethnic Studies Department’s lack of academic standards.  The refutations were informed and civil.  I wrote a column in the San Diego Jewish World on the matter (including a link to the Statement and comment thread on it), pointing out that the Islamist and pro-Palestinian groups alliance with far leftists on campuses has graduated anti-Semitism from singling out individual Jews to eradicating the Jewish state.

The UCSD Ethnic Studies Department cancelled yesterday's forum, claiming that the “character” of counter-writings is threatening.  This is another of such groups’ canards and excuses, actually further revealing their fear and inability to stand up to determined factual and sane rebuttal.

Each campus is different but, regardless of outcome, this incident demonstrates the power of civil discourse.  If not exercised by those who believe in it, the field is surrendered to those who don’t. 

Next Monday there is to be an Obama administration sponsored Fiscal Responsibility summit in Washington.  Obama’s new Director of the Office of Management and Budget, formerly Director of the Congressional Budget Office, Peter Orszag, will chair the summit.

Orszag is not an extremist, and his prior work at the CBO demonstrates care and understanding of varying views and political forces in shaping government economic and tax policies.

Still, when it comes down to it, he along with his boss -- President Obama -- and other Democrats favors more government command-and-control over Americans and their economic sectors, compared to Republicans favoring more competitive forces to steer our courses. (See P.S. below the fold)

Credited by Democrat Senate Majority Leader Harry Reid as “"a hero in all of this” structuring the $1-trillion+ “stimulus”/porkulus legislation rushed through Congress, Orszag told Politico: “What has already been accomplished is a huge start toward a more efficient [health care] system, and I think you’re going to see more in the budget next week.”  Orszag is primarily referring to the new federal comparitive effectiveness board to determine which treatments are better.  There’s already much such research, much of which is useful and much of which is inconclusive, and its application to specific patients may differ widely.  Applied to all, even if statistically conclusive, will cause some to be denied treatment.  In the hands of government, it will be used as a tool to ration care to save costs.  As this December 2008 report from the then Orszag- run CBO points out: “In considering such changes, policymakers face difficult trade-offs between the objectives of expanding insurance coverage and controlling both federal and total costs for health care.” (The whole CBO report is invaluable reading, especially if you want to get involved in the coming debates over your health care instead of just being on the receiving end.)

Orszag makes his course clearer when he says the next health care measures will be “changes to Medicare and Medicaid to make them more efficient, and to start using those programs more intelligently to lead the whole health care system.”  Currently, Medicare is prohibited from considering the cost of a treatment in determining whether it is approved for payment.  That will change.  Currently, private insurance plans are similarly prohibited.  That will change.

Peter Orszag is a 40-year old academic, and an avid runner.  His views might be more tempered if he were in lesser health or older, not to mention having more practical experience in medicine.