Tax for news bailout is a bad joke

Newspapers have been an important part of our society, communicating information and news. But the Internet has served the same function (and I'd say even better) than newspapers have in recent years. I'm not impressed with how they've competed in the marketplace, and how "impartial" (or biased to the left in their reporting) they've been. Given the amount, quality and diversity of information you can get online from other sources, I don't think newspapers have an inherent right to stay in business. I can get more news in a more timely manner online, than I can through traditional print media. Unfortunately, another big, dumb, slow company is now being talked up for help by big-government do-gooders through a proposed “Newspaper Tax.”

Where do the taxes and bailouts end? I don't agree with the bailouts of Wall Street, the big banks, or the Big 3 Automakers.. and I damn sure don't want the newspapers bailed out. Let's call a spade a spade - this is socialism. Through this proposal, they're essentially holding a gun to taxpayers' heads (or wallets, in this case), and saying "Fork it over, or the fish wrap gets it!"

Local blogger Andrew Hudson frames the issue in a nice way (ironically, through the Internet) but he and other Democrats have no problem using the coercive power of government to prop up their favorite industry or company... or decide which business or industry fails or succeeds – at least in the short-term. In fact, I'd say they're rewarding failure - just like Congress has with the banks and automakers. It's getting to a tipping point where taxpayers are saying "ENOUGH" to more tax increases.

It's not so much a political issue as it is about economic freedom, and how individual citizens should have the freedom to spend our money how we choose to – not how government can. It's like a Jerry Lewis Telethon where taxpayers are forced to "give 'til it hurts." Mr. Hudson knows that almost all taxes enacted by government stay in place forever, and are rarely repealed. This sounds like a sneaky way to extract more money from Colorado taxpayers, to fund an increasingly greedy state government.

Currently, 44 of our 50 states face budget shortfalls. What bureaucrats fail to remember is that budget deficits occur when spending exceeds cash inflows. To reduce or eliminate these deficits, they should (gasp!) cut spending. Trying to balance state budgets on the increasingly-burdened backs of taxpayers qualifies as cruel and unusual punishment. The cause of these shortfalls is that government has spent too much money and made too many promises that it can't deliver on.

Our country wasn't founded or built on propping up industries or companies who “deserve” to be in business. This is another step of slouching towards socialism, all in the name of good intentions – which the road to hell (in this case, bigger government) is paved with. Enough's enough –this “Newspaper Tax” idea should be dropped like a bad habit.

Recipe for Republican renewal

How could the GOP could become the Grand Old Party once again? Their chances in 2010 aren't very good right now, even if the Democrats go hog wild with more pork-barrel spending, and big-government programs. The past eight years of George W. Bush and his administration don't inspire a lot of confidence for most Americans in the Republican party. Now, it's still possible the party could regain relevance in the next few years. It's not an easy process, and will require attributes that a lot of politicians don't have – or if they do, they're in short supply. Such as common sense. Economic and financial literacy. Remembering and governing by the founding principles of the Republican party and the United States.

Vince Lombardi told his Green Bay Packer team back in the 1960s, “Gentlemen, this is a football.” It was his way of stressing the fundamentals to his players. That's exactly what Republicans must remember (and put into governance) if the party wants a chance in hell of staying relevant – or even in existence. It's the Constitutional, limited-goverment principles our country was founded on.

Simple things like cutting (or at least freezing) spending... balancing our budgets... and making sure new programs are necessary before approving them. And utilizing our military for national defense – not international offense into foreign lands, with no clear enemy, goals or exit strategy.

It's definitely not the “neo-conservative” bill of goods that was sold to the GOP and our country. And it's not blindly supporting a leader regardless of how they govern, because they have an “R” behind their name.

That's the reason Republicans lost en masse in 2006 and 2008. Average Americans looked at supporters of the party and the President as loyal Kool-Aid drinkers who acted like Seargeant Schultz from Hogan's Heroes (“I know no-thing... I see no-thing!”), and saw nothing wrong with anything President Bush did. It was “Hallelujah, Hail Bush, Pass the Ammunition.”

Republicans and some “conservatives” who looked at everything President Clinton did with a critical eye, turned a blind eye to the Bush Administration's policies that increased our country's debt, and decreased our liberties – all in the name of the “War on Terror.” Never mind that terror is a tactic, not an enemy – and makes about as much sense as a “War on Frontal Assaults.” The WOT rings hollow when our southern border with Mexico is an absolute sieve, and it's obvious the Administration was never serious about border security, or discouraging illegal immigration.

Americans saw borrowing and spending skyrocket to new all-time highs... and “staying the course” in two military conflicts, because we hadn't “finished the job” yet – whatever the hell it was. Even though back in 2003 the President declared, “Mission Accomplished.” Combine this with the biggest stock market crash since the Dirty 30's, and most folks on Election Day were ready for “change.” They didn't care about the details – as long as it wasn't the policies or party of George W. Bush.

Effective leadership today will require a lot of courage and candor from elected officials to citizens, bordering on brutal honesty. Especially when it comes to financial and economic matters, and how they affect policy decisions across the board.

The starting point for all decisions must be made with this premise: The United States of America is bankrupt, along with at least a dozen states. The state of California is Exhibit A. We can no longer afford to be the world's policeman, or show other countries the American way of life, whether they want it or not. The bailouts and stimulus programs (whether from Bush or Obama) are probably being funded by printed – and not borrowed – money, which is debasing the currency, and will cause high (if not hyper-) inflation in the next year or two.

We're the world's largest debtor nation, owing a good chunk of that debt to foreigners. The Fannie Mae and Freddie Mac bailouts last September were done to appease these foreign investors, who could have put in “sell” orders, and really wreaked havoc with our bond and real estate markets. The more important international battles in the short to medium-term will be financial and economic, and not military.

In the coming years, there will major paradigm shifts in the US. There will be a reduction – if not an elimination – of guaranteed pensions from corporations, state and federal governments. Fewer benefits, an increase in retirement age, and means testing will probably all be in place. Wall Street will no longer be a major financial center or sphere of influence, because of the arrogance, corruption and excessive greed of investment bankers – and that includes Hank Paulson.

For you “true believers” who think Paulson is a hero deserving Man of the Year honors, I'll sell you ocean-front property in Wyoming. Paulson made a ton of money shorting the mortgage-backed securities that he helped create – which means when the value of these “assets” went down (and he knew they would, because they were dogs from the get-go), he cleaned up. The $850 billion Banker Bailout Bill he railroaded through Congress was a scam as well. Banks have hoarded the money, and it hasn't gone to buy up troubled assets as Paulson said it would.

Wall Street and the stock market are a huge Ponzi scheme, and 401(k) plans will go down in history as one of the biggest scams ever foisted on American employees/investors. Warren Buffett says it best: “If you're at a poker table for awhile, and you don't see the sucker – you're it.”

Americans are starting to realize they've been played for suckers by Wall Street with the help of Democrats and Republicans, and they're none too happy about it. I've got a hunch that the Madoff scandal is only the tip of the proverbial iceberg, and we'll see more stories like this in the future.

Foreign leaders, central banks and investors are looking at our country and leaders like we've smoked large quantities of crack cocaine. They don't believe in or trust American leadership like they used to – and neither do a growing number of citizens.

I realize that some of you may disagree with what I'm saying, and think none of these events could ever happen in the US. Or you think that I'm not being a loyal Republican. Frankly, I don't care. I call it like I see it, and my predictions in the past have been pretty accurate. I knew that John McCain was a no-hoper back in July, and if you didn't figure it out by Labor Day, you were truly drinking the red-state Kool-Aid. Think about this: If the new-fangled, neo-conservative Republican way was so great, then what caused the electoral a**-kicking the last two elections?

The only way the GOP can regain prominence is to totally reject the foreign and domestic policies of George W. Bush, and get back governing by the limited-government, Constitutional principles that made this country great. And not just giving it lip service – but actually putting it into practice. Voters today are increasingly angry about what's going on; and their patience for nice platitudes, speeches, or general BS is quickly running out.

A lot of Obama supporters engaged in the cult of personality, but too many Republicans did as well. Either the party gets back to the fundamentals of our country's Founders, or it's doomed to irrelevance and a footnote in history.

Beware those slippery statistics

"Lies, damned lies, and statistics," the comment attributed to Mark Twain and Benjamin Disraeli, is typified by today's government economic stats. Some people are shocked when I tell them that the government's “core inflation rate” (also known as the CPI) doesn't include food or energy. And that our economy isn't as good as the government says it is. But such is the case. I'm not being a doom-and-gloomer; there are always opportunities to profit in and successfully navigate any market, if you know how to do it. But this government understatement of inflation overstates our country's GDP, and hence misrepresents current economic conditions. It's also an overlooked reason why Democrats and Republicans have basement-low polling numbers, and why Republicans lost badly in 2006.

Voters don't believe what Washington pols tell them about immigration, Iraq, inflation – and pretty much everything else. GOP candidates who did the best in '06 were the ones with (or perceived to have) the most consistency and credibility on the issues: Namely Tancredo, Coffman, and Hillman (even though he lost by a nose in the state treasurer's race).

Here are a few of my favorite economic whoppers:

Economic Lie #1: “The dollar decline isn't that bad, because it only affects our purchases of imported goods.”

Even if this were true (and it's not), most of the products we buy are imported. We really don't produce or manufacture much in America today. Except for agricultural commodities, YouTube videos, and hot air from so-called business 'gurus' on HeeHaw (CNBC) and Fox Business News.

The declining dollar affects the cost of all products and services. Companies face increased costs for oil and gas, utilities, and other commodities, so they have to pass them along to the end consumer. Gasoline has tripled in the last 5-6 years. Crude oil has quadrupled to almost $100/barrel. Part of this is due to stagnating supplies and increased demand from China and India, along with the increase in monetary inflation.

Economic Lie #2: “You just need consistency with the inflation numbers, not accuracy.”

Huh? This is like fixing the gas gauge on your car to show a full tank, even though it's almost empty. You feel better about it, but doesn't change the reality of your situation. Even though the Fed says the CPI is acceptable, it's not in the 'comfort zone' of American consumers and businesses who have to absorb these costs. Excluding food and energy from inflation numbers is absolutely insane.

Wall Street folks can say that plasma-screen TVs and computers are going down in price, but you only buy these items every one to three years. Americans consume food and energy on a daily basis.

Economic Lie #3: “We want inflation in small doses, it's good for our economy. Deflation gives you scenarios like the Great Depression of the 1930's” (see video here, at the 6:20 mark).

Small doses of inflation eventually turn into big declines in purchasing power, as we've seen over the past few decades. It hits savers and seniors especially hard, who live on a fixed income or rely on their life savings during retirement. Pat Powell has been smoking the Wall Street funny weed, and Peter Schiff delivers a powerful rebuttal to this load of intellectual horse apples.

I'll wrap this up, and resume my Thanksgiving weekend escape out here on the Great Plains with family. Best wishes to you and yours for a happy holiday.

Spooky signs for US economy

Even though the Federal Reserve will probably treat Americans to an interest rate cut on Halloween, the goblins of massive debt -- consumer, corporate, and government -- still loom large over the US economy. So it's flattering when one of my postings here about that scary situation is echoed by a respected economic commentator. Dr. Marc Faber (author of the Gloom, Boom and Doom report, and who correctly predicted the 1987 stock market crash) used the same alcoholic metaphor as yours truly in saying of the Fed's earlier cut in US interest rates:

“Each time you bail out, the problems become bigger and bigger, and the credit problems become much, much larger. The Fed feeds its customers with booze, and when they get totally drunk and fall off their chairs, the bartender gives them more booze to keep them going. One day, it will lead to the ultimate breakdown.”

What that 'ultimate breakdown' will be, I'm not exactly sure – but it probably won't be pretty. I hope I'm wrong that the US won't have to suffer the mother of all economic hangovers; however, I don't see any way around it. No country can have long-term, sustainable economic growth based solely on borrowing, spending and increasing the money supply – and the US is no exception.

My 2007 year-end gold estimate of $818/ounce also looks good. Gold's trading at $783.50 today (10/26) with solid upward momentum. No market goes straight up or straight down, and commodities tend to have some violent swings in both directions. I realize the Dow has gone back over 14,000 recently, but when you look at inflation-adjusted gains of the Dow versus gold, there's no comparison.

The so-called 'barbarous relic' has tripled from its low of $252/ounce in 2000, while the Dow's performance isn't nearly that impressive, even though it's increased in nominal terms from a low of around 7,500 in 2002 to the mid-13,000s. This increase in the Dow index does not correlate to a healthy American economy – no matter what CNBC talking heads or Washington politicians say. Billionaire investor Jim Rogers (former odd-couple investing partner of George Soros, and co-founder of the Quantum Fund), says the US is “undoubtedly in recession.”

And never mind what Larry Kudlow, Dick Cheney, or Mike Rosen may claim, national deficits and debt still matter – now more than ever.

For better schools, don't overspend, overcome

Since I don't see many first-run movies today, because of the high prices and low quality, here's an older cinematic analogy to illustrate how Democrats and Republicans differ on the approach to government. Today's script comes from House Speaker Andrew Romanoff's state-wide education grandstanding tour. There's a 1992 movie with Daman Wayans titled Mo' Money. That seems to be the Democrats' answer for everything. Recent examples include Amendment 23 and Referendum C. Remember how Bill Owens, Bruce Benson, the Denver Post, Rocky Mountain News and almost all state Democrats promised us this would be the answer to Coloradoans' dreams? We'd see fully-funded schools, freshly-paved roads and highways, and they wouldn't be asking for another tax increase again.

But - surprise, surprise - in today's Rocky Mountain News, we're told to look for the premiere of "Amendment 23: The Sequel." That's because Romanoff sees these (gasp!) schools with bad sewer systems, unacceptable gym equipment, and golly-gee whillikers, that's not good enough for Colorado kids. And what would that mean for state government if this big-government pipe dream comes true? Mo' Money, Mo' Money, and Mo' Money in state coffers - and out of taxpayers' pockets.

It's painful to be right at times, and I was in my 2005 post about Democrats' almost insatiable appetite for taxing and spending. Romanoff also opines in this article: "Coloradans haven't been dared to dream about what their schools could be... There's a real appetite for this conversation."

Note to the Speaker: There already has been some dreaming (and doing) with educational alternatives in Colorado. Some parents have chosen to home-school their kids, and others have opted to send their kids to charter schools - where some have waiting lists in the hundreds, and sometimes thousands for kids to get accepted. Not to mention the push for educational vouchers, so parents (and not some state bureaucracy) could decide where their children would be educated.

But that doesn't set well with the Democrats biggest supporters, the CEA and teachers' unions. Remember what Rep. Mike Merrifield said about people who supported choice in education? "There must be a special place in hell for these Privatizers, Charterizers and Voucherizers. They deserve it!" Since Dems can't offend their biggest source of campaign contributions, they obey the CEA's marching orders.

Let me think about this: Liberal Democrats defend to the hilt a 'woman's right to choose' an abortion (also known as killing an unborn human being), but parents of living children don't have the right to choose where, how and by whom their kids are educated? Another example of liberal logic - the ultimate oxymoron.

Contrast the Democratic "Mo' Money" approach to the Clint Eastwood movie, Heartbreak Ridge. Eastwood plays Marine Sergeant Gunny Highway, whose three words about overcoming adversity best reflect my (and most conservative Republicans') approach to improving education: Adapt, Improvise, Overcome. Alternative schools such as Hope Online Learning Academy are using the Gunny's approach, giving disadvantaged kids an alternative to the failure of public schools.

But that doesn't tow the Dems' company line on education, so they have the Rocky Mountain News criticize Hope Academy . Publish a story about a non-public school succeeding? That's not in the big-government, big-education playbook, so they can't allow that to happen.

However, support is rapidly gaining for charter and online school alternatives. A recent Gallup poll showed 60 percent of adults polled favored charter school alternatives, and 40 percent approved of online choices. That's up from 42 and 30 percent respectively in a similar poll back in 2000.

Americans are increasingly fed up with the Mo' Money approach to government and education. Private-sector, free-market alternatives that adapt and improvise are (and always have been) the best ways to overcome challenges and promote positive change in America.