Mickelson, Sarkozy and Our Future

"The power to tax is the power to destroy." - Daniel Webster

It was Supreme Court Justice Oliver Weldell Homes who argued that "taxes are the price we pay for civilization" and to some extent, most of us can agree.  Most conservatives and advocates of limited government would argue that some level of taxation is necessary to maintain the core functions of government.  But, in an era of huge budget deficits and stagnant economic growth, many public officials, including President Obama, tell us we should address our deficit problem "in a balanced way."  Code words for higher taxes and promises of future spending cuts.  

The President got Part One of his plan with the tax hikes on the "wealthiest few" in his standoff with GOP leadership over the fiscal cliff in December.  But, as Speaker John Boehner revealed, the President does not think America has a spending problem.  President Obama's direction for American became incredibly clear in his Inaugural speech on Monday in Washington, when he said "We reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future."  In other words, the President has no intention of reforming our existing entitlement programs and believes we ought to spend more to "invest" in more government directed industries, education and whatever else his Administration can deem necessary.  

And how does the President proposes we pay for these existing programs and new initiatives?  Higher taxes of course.  What President Obama does not tell us, however, is that current events are revealing how the "taxes yourself into prosperity" philosophy simply does not work.  Take the recent comments of golfer Phil Mickelson and the actions of former French President  Nicholas Sarkozy.  Mickelson took heat over his comments that California's tax hike on upper income individuals (10.3% to 13.3%) in addition to federal tax increases may propel him to flee California, maybe even the United States.  And, when a former President, like Sarkozy, is reported to be moving to London to escape France's new 75% tax on top income earners, the "soak the rich" crowd has remained silent.  

And when the wealthiest few uproot for lower taxed states and countries, then who picks up the tab?  The "99%."  When President Obama said he would not raise taxes on those making less than $250,000, we should have asked him -- what do you mean by taxes?  In fact, report after report shows that middle income Americans will pick of the tab for Obamacare.  The Heritage Foundation reports 18 new taxes imposed by a bill called the "Affordable Care Act."  So then what happens to the middle income folks for California, France and America when the rich are properly soaked and the government that's been built requires more revenue?  Well, more taxes.  

One does not have to be an economist to understand that taxes are a means of directing behavior and people are naturally inclined to avoid pain.  This is of course the theory behind taxes on things like cigarettes, supported by the public health community, as an incentive to get people to quit smoking.  There are countless ways to showcase how tax policy influences behavior; Mickelson and Sarkozy are prime examples.  

But, Republicans should be careful in how they make their case, avoiding the argument that "it's their money they should keep it."  While there's good reason that people who work hard, take risk and create value should be rewarded, this argument alone is not a sufficient and does not address real human needs.  What is important to note is that by raising taxes on the wealthiest few you will get less of them -- they'll either physically move out of state or country, or shift their assets elsewhere.  

You will also get less from them.  When you have less people who are willing to risk capital, invest and innovate, there will be fewer jobs created (not counting government jobs) for middle class folks, raising families and building communities.  And when the wealthiest few leave to protect their assets, their money is then taken out of the local economy -- much of which is supporting small businesses (restaurants, retail stores, car dealerships, etc.)  And ultimately, the tax burden will fall of the backs of those who remain --the middle class, who do not have the luxury of mobility.  This is already happening in France.   

But, here's the good news.  There are 30 Republican Governors in the United States who have been working to make their states debt free, lowering the tax and regulatory burdens and their economies are growing.  Governor Rick Perry has already been recruiting Phil Mickelson to move to income tax free Texas.  Louisiana is talking about scrapping their income and corporate taxes.  Michigan is a right-to-work state.  

The Obama model of tax, spend and then tax more will be placed up against the GOP state leadership model over the next two years.  In 2014, we will get a better idea of whether Obama's re-election was about crafty messaging and superior GOTV effort or whether Americans have actually bought in to his real agenda.  

Will Free Markets Repopulate Cities?

Friend and colleague John Cruz has launched a very thoughtful website called The Urbanist Dispatch, a news site with commentary and analysis on issues facing cities.  Cruz is finishing a Master's degree in Urban Planning at Wayne State University and is active in Republican politics.  In a recent column, Cities and Free Markets:  The Manufactured American Dream, Cruz challenges the economics of post-war suburbanization and suggests that there is a new movement toward re-urbanization.  Cruz's analysis draws upon attempts by federal, state and local policymakers to subsidize home ownership and suburbanization and suggests that free markets would be the solution to repopulating struggling urban areas.  Even as a loyal suburbanite, it difficult to argue with Cruz's research and insight.  This article is worthy of your time and the website is well worth bookmarking. 

Bridge On the Ballot

After over year of political controversy surrounding the issue of building a new public bridge from Detroit to Windsor, the DIBC has filed the paperwork to put the issue in the hands of Michigan voters.  The language has been approved and once the signatures are gathered, the issue will appear on the ballot this Fall.  In recent months, the harassment the bridge company has endured from MDOT over the Gateway Project and activist judge Prentis Edwards, seems to have given Governor Snyder an opportunity to backdoor the issue-- potentially by attempting to bypass legislative approval.  The issue was squashed in committee last October after a last-minute bill was placed on the desk of Senate Economic Development Committee Chairman Mike Kowall.  The ballot proposal will put the Governor on the defensive, as some of the most recent polling suggests that 60% of Michiganders oppose a taxpayer funded bridge.

The Leadership of Scott Walker

In contrast to Jennifer Granholm, the Ninth and Twelvth District Republicans were fortunate enough to hear from a strong, resolute leader last week in Governor Scott Walker of Wisconsin.  Greeted at the door by hundreds (maybe thousands) of rent-a-mob, labor union activists, including UAW President Bob King, Governor Walker displayed true competency and commitment to reforming state government.  His tone was never condemning toward his political opponents, but remained vision was clear and bold.  And while he now faces a serious threat in the form of a recall election, by all accounts his reforms are working. They have eliminated a $3.6 billion dollar deficit, cut taxes and unemployment has dropped in Wisconsin from 7.6% to 6.8% since Walker took office in January 2011.  Walker has doubled down on his critics, proclaiming in a recently in NewsMax that states that don't consider serious budget restructuring (like Illinois) will "go the way of Greece."  It is difficult to argue with Walker's logic.  Walker believes he will survive the recall and Wisconsin will continue on a path to fiscal sanity and prosperity.  You can help Governor Walker survive his recall by visiting http://www.scottwalker.org/.   

You are What You Read: A Day in the Life of Jennifer Granholm

Reading through a recent interview in The Atlantic with Jennifer Granholm, it seems almost absurd that this same person was actually elected Governor (twice).  No need for balance in the life of our former Governor; her daily news intake includes this likes of the New York Times, Huffington Post, BuzzFeed, Slate, Mother Jones and Think Progress.  Absent from Granholm's list of media sources was any conservative-leaning (event centrist) publications, as she seems largely uninterested in having her left-wing view points challenged.  She cites MSNBC's Rachael Maddow as a "journalist" (stretching the term) whom she admires and makes sure to take her all-too-predictable swipes at conservative talk show hosts Rush Limbaugh and Mark Levin (she calls "people I don't like").  

Granholm's childish bantering comes as no surprise to those of us who were subject to her style of governing.  In her recent book (coming to a bargain rack near you), she takes potshots at former Republican Senate Majority Mike Bishop and former Democratic Speaker of the House Andy Dillion (not progressive enough for her) for daring to challenge her agenda.  Yet our former Governor claims to have a "special love" for Michigan (she reads The Detroit Free Press), even though she hopped on the first plane to California to teach at Cal-Berkley as soon as her term was up and got a pundit gig on a seldom-watched progressive television network.  Michigan voters were twice tricked into believing Jennifer Granholm represented the views of the majority of Michiganders.  Her post-Gubernatorial career has fully exposed her as the narrow ideologue many of us always knew her to be.  Michiganders should wish her great success in California, if only so that she never thinks of returning to our state to attempt to dupe voters once again. 

Does Obama vs Romney = Bush vs Kerry?

An incumbent President with strong supporters and bitter opponents.  A presumptive nominee who fails to excite the base of his party.  Sound familiar?  The closer you look, the more Mitt Romney begins to look like John Kerry.  Both Massachussetts blue-blood, country club types of considerable wealth.  Both have difficulty connecting to common folks on the campaign trail.  Both have been accused of changing their positions repeatedly on major policy issues (i.e. "flip-floppers").  Democrats ran his campaign on the platform that he was not George W. Bush; assured that Bush's negatives alone would result in a Kerry victory.  The Romney strategy will be similar, as he will campaign on the platform the President is to blame for the lackluster economy; and that he is not Barack Obama.

There is little room for doubt that Team Obama has been prepared to face Mitt Romney for quite some time.  The Democratic talking heads have already cast a brand on Romney as "out of touch" with average Americans (see car elevator) and have even jumped on the old Team Bush "flip-flopper" strategy on occasion.  And while Romney may have been able to outspend his GOP primary opponents 10-1, he will be met by an Obama campaign that is being rumored to raise as much a billion dollars to secure his reelection.  Team Romney will run their candidate as a economic turnaround expert, who will use the office of the Presidency to jump-start the economy.

This message could work in, a time like ours, when all Americans are concerned about unemployment, national debt, diminished savings and investments.   But, we also know that undecided voters tend to cast their ballots for candidates they connect with.  A recent Washington Post-ABC News poll shows favorable results for President Obama on character issues and on almost all issues (other than the national debt).  A recent Gallup poll shows a serious lack of enthusiasm for Romney among Midwestern Republicans, Young Republicans, highly-religious Republicans and conservative Republicans.  As Team Romney is plotting their victory strategy for 2012, they're going to have to think of something big.  Adding a real conservative superstar as the VP choice may give those of us unenthused about Romney, a reason to get excited about the GOP ticket.  But without some type considerable surge of energy from a VP pick or some other major factor that changes dynamics in Romney's favor, the John Kerry theme of "anyone but Bush" may not be enough to get Barack Obama out of the White House this November.    

Democrats for Entitlement Reform?

It is not just conservatives griping about our emerging entitlement crisis, anymore.  In recent weeks, two separate articles (from seemingly left-leaning sources) have been written addressing this growing concern.  InEsquire, The War Against Youth, Stephen Marche outlines the frustrations many young Americans feel about their current prospects.  More young people are moving home with their parents after college, delaying marriage, delaying having children and are stuck with mounds of student loan debt and limited prospects for employment.  Subseqiuentially, they are also disenfranchised with their political leadership.  Despite the 18-29 demographic breaking strongly for Obama in 2008, many express disillusionment with his leadership on real issues, citing Medicare and Social Security reform as examples.  In short, young Americans are looking for more than just 'hope', they crave substance and real ideas that will give them cause for optimism. 

Washington Post and Newsweek columnist Robert Samuelson recently wrote a column regarding Franklin Roosevelt's concerns about Social Security; how FDR "actively opposed" Social Security as a "pay-as-you-go" system and vetoed a bill in 1942 that designed it as such (the veto was over-ridden).  Social Security has effectively been a "pay-as-you-go" system ever since.  Samuelson says the "demographics are unfriendly" and FDR might not approve of the way his signature legislation has been managed.  The Esquire article called Social Security a "boondoggle" and Texas Governor Rick Perry called it a "Ponzi Sceme."  And while young people express pessimism about their prospects and seem open to reforms that would change our major entitlement programs, there has been little engagement between young Americans and elected leaders about how to fix these problems.  Congressman Paul Ryan's plan to reform Medicare, for example, seems like an opportunity to engage young adults in the discussion.  Instead, partisan differences and attack ads continue, kicking the can further down the road.