Friday, April 16, 2010

Israel Or Terrorists



War On Terror: Are we still Israel's staunch ally? Or do we blame the Jewish state for Islamist violence? An increasingly anti-Israeli U.S. government cannot have it both ways.

We now have a president who buys into the longtime Islamist propaganda claim that the lack of an Israeli-Palestinian agreement is causing Islamist terrorism.

Here's the line, taken to its logical conclusion: If only the Iranian-sponsored Hamas terror outfit were handed full control of what it's entitled to next door to Israel, Iraq would magically improve; the Taliban wouldn't fight so hard to make Afghanistan and Pakistan into Sharia states; Osama bin Laden would send a new audio tape to al-Jazeera thanking the Great Satan; and al-Qaida sleeper cells the world over would get orders to continue their slumber indefinitely.

Barack Obama isn't the first president to link a Palestinian accord to the "vital national security interest of the United States," as the president said this week. But he is the first with a policy of bullying the Israeli government to make friends with Muslim powers.

Consider his "New Beginning" speech in Cairo last June.

The Jewish state got plenty of lip service. We heard that "this bond is unbreakable" between the U.S. and Israel. The next day the president even visited the Buchenwald concentration camp to soften the speech's blow.

And what a blow it was. The Nazis' genocide of the Jews was given the "on the other hand" treatment.

Millions of Jews may have been sent to the gas chambers and ovens, but on the other hand, according to the president, "it is also undeniable that the Palestinian people — Muslims and Christians — have suffered in pursuit of a homeland. For more than 60 years they've endured the pain of dislocation. Many wait in refugee camps in the West Bank, Gaza and neighboring lands for a life of peace and security that they have never been able to lead. They endure the daily humiliations — large and small — that come with occupation."

And what is the main obstacle to those Palestinian aspirations?

The domestic policies of the Israeli state — "the United States does not accept the legitimacy of continued Israeli settlements," the president told an adoring, largely Muslim audience. "Israel must also live up to its obligation to ensure that Palestinians can live and work and develop their society ... progress in the daily lives of the Palestinian people must be a critical part of a road to peace and Israel must take concrete steps to enable such progress."

The U.S. has embraced the kind of thinking found in political scientists John Mearsheimer and Stephen Walt's recent book, "The Israel Lobby."

"Israel may have been a strategic asset during the Cold War," the authors argue, "but it has become a growing liability now" that has "reinforced anti-Americanism around the world, helped fuel America's terrorism problem, and strained relations with other key allies in Europe, the Middle East and Asia."

The truth is that a Palestinian deal will almost certainly embolden Islamist terrorists and their state sponsors, because it would be celebrated as a Jewish defeat.

The likely result: more terrorist recruits, more attacks and more dead innocents, including Americans.

You can't be against the terrorists and against Israel too.

Yet that is exactly the new U.S. policy.

The Great Tax Disconnection In Washington By Rep. Eric Cantor



It's April 15th, that dreaded day when it comes time to pay the tax man.

As nagging as the pinch may feel this year, the sad reality is that it's bound to grow far worse in the future — that is, of course, unless Washington moves to repair the deteriorating fiscal health of our country by reining in its out-of-control spending habits.

According to the nonpartisan Congressional Budget Office, debt held by the public under the Obama administration would grow from $5.8 trillion at the end of 2008 to a stratospheric $20.3 trillion in 2020, or from 40% of the economy to 90%, respectively.

Also, annual interest on the debt would more than quadruple over the next 10 years, rising from $187 billion last year to $916 billion in 2020. By 2018, interest will eat up $2 billion per day.

With our debt ballooning to unsustainable levels, it's time for Washington to stop pretending there won't be severe consequences for our expansion of government spending programs.

Such a weighty debt load over time makes huge, growth-killing tax increases inevitable. The majority party has already made clear that it will raise taxes on income, capital gains and dividends.

Democrats, including the president himself, refer to a portion of this as the expiration of the "Bush tax cuts."

Yet for years these have been the people's tax cuts, and erasing them is a tax increase by any definition. In other words, by year's end, Americans will face the "Obama tax increase."

As painful as next year's tax hike will be, it will provide only a small glimpse into the tax hikes Americans may face in the future.

But higher taxes aren't the only way our exploding debt will erode America's superpower status. Swelling red ink forces us into a state of dependency on countries like China whom we rely on to buy our debt.

It drives up the long-term risk of inflation and a weak dollar. It also means precious dollars for defense will be siphoned away for debt repayment.

That's why Federal Reserve Chairman Ben Bernanke and former CBO Director Steve Elmendorf both sent stern messages to our lawmakers last week that action must be taken to head off dire economic harm.

It would be nice for Congress to have an open and honest debate about how we can get our budgets under control.

The most obvious venue for that discussion would be the annual congressional budget process that sets the parameters for federal spending.

But after 16 months of record spending, the House majority is in no mood to remind voters about the damage we are doing to federal coffers. Speaker Nancy Pelosi is even threatening to take the unprecedented step of foregoing the production of a budget altogether.

So as Americans are dotting their i's and crossing their t's on their tax returns this month, Democrats in Washington say they are immune from such accountability.

In the rare instances when the administration and majority Democrats talk about spending restraint, they rarely follow through. Over two months ago, Republican Leader John Boehner and I communicated to President Obama that if he would send up the spending reductions he proposed under an expedited procedure allowed under the law, we would use our authority to force a debate and vote on those provisions. We have yet to hear back from the president.

Under one-party rule, Washington has dangerously lost its sense of equilibrium. This cavalier approach to debt is moving us toward an economic abyss, and more of the same will only push us over the edge.

There are no free lunches. If our government is going to continue to spend and inject itself into the private economy the way Europe does, we are also going to have European-style taxation, higher structural unemployment and slower growth.

But we need not go down this road to stagnation — and that's why the November election is so critical.

Republicans stand ready to restore balance to Washington by bringing responsible, adult leadership that focuses sharply on job creation and building economic opportunity. We will make the difficult spending decisions to put a lid on our deficits.

And rather than putting the squeeze on our nation's job creators and entrepreneurs, we will embark on a pro-growth strategy that puts the American entrepreneurial spirit back on display.

Today, taxpayers are reviewing their own balance sheets to ensure the financial security of those they are responsible for.

The American people should demand no less from their elected officials in Washington.

Rep. Cantor, who represents Virginia's 7th District, serves as House Republican whip.

Wednesday, April 14, 2010

What Gov't Can't Do



Federal Failure: Auditors say the Postal Service's business model isn't viable, and a magazine reports that GM leads the league in producing the worst-made cars on the road. Big government breeds big incompetence.

The post office, which has a government-protected monopoly on first-class mail delivery, could lose at least $238 billion over the next decade.

This is a government agency — its claims of independence are not believable — that has no competitors, has raked in $27 billion in taxpayer's money since 1970, is exempt from most taxes and can borrow from the U.S. Treasury at rates below market value.

Yet, it cannot break even, much less make a profit. There's something deeply amiss with how the USPS does business.

Current conditions and outlook are similar at GM, which could now stand for Government Motors since Washington owns 60% of the automaker after last year's bailout and the Canadian government owns another 12%.

The proof is in the product. Four of the seven cars on Forbes Magazine's worst-made list are made by General Motors: the Cadillac Escalade in the luxury SUV category; the Chevrolet Aveo in the subcompact group; and the Chevrolet Colorado and GMC Canyon in the pickup truck category.

All have low ratings for reliability by Consumer Reports, and all have poor showings in J.D. Power's dependability rankings.

Yes, sales are up at GM. But we're not confident in the carmaker's future, despite what the public is being told about improvements in coming models, the fall introduction of its electric plug-in, the Volt, and an initial public offering later in the year.

The lanes ahead just aren't open for GM. Its majority stakeholder knows nothing about building cars, and it took over a company that has had falling sales every year since 2000. Nearly one-fifth of GM is owned by the autoworkers union, which knows something about building cars, but little about designing and engineering them.

The union knows even less about the American work ethic, which will be needed if the carmaker is to recover even a portion of its once-dominant market position.

And it is that same union that used a 67-day strike in 1970 to win concessions from GM that led decades later to a financial strain so heavy that Washington felt it had to bail out the shrinking giant.

The Postal Service is likewise weighed down by unionized labor that has far more control than it should.

The Government Accountability Office that issued the report calling the USPS business model into question suggests it outsource operations to keep down the size of its unionized work force, whose wages account for about half of the Postal Service's costs.

The GAO also suggested the post office: cut back on its contributions to employee benefits, which are 23% of its costs and are more lavish than those offered by other federal agencies; close unneeded facilities, which the unions oppose; and alter work rules set by collective bargaining agreements so that workers can be easily assigned to different jobs, boosting productivity.

Auditors at the GAO recommended, as well, that Congress pass legislation that requires the financial health of the USPS to be taken into account if union contract negotiations this year and the next don't go well and the parties end up in binding arbitration.

The implicit message is that the USPS and the taxpayers are not an endless font of money for postal workers' salaries.

Unions aren't the only reason that GM and the post office are struggling. Poor management at both has contributed to their declines. But union contracts handcuff businesses more than bad management. So do politics and the incompetence of government planners, who have ruined far more than just GM and the USPS.

General Motors and the post office will probably still be around this time next year, but their conditions are unlikely to be improved much as long as they are still captives of Washington.

The very existence of these venerable institutions will be questionable at best until they are operated entirely in the private sphere.

Reform's Nasty Little Surprises



Health Overhaul: Many thought Nancy Pelosi was joking when she said, "We have to pass the bill so you can find out what's in it." But the more we learn about her 2,400-page horror, the more we realize the joke's on us.

Barely a day goes by without some new revelation of what the health care bill contains — and how its provisions are already starting to hurt millions of people. The overhaul has already begun tearing down our old health care system — the best in the world — and replacing it with something mediocre, bureaucratic, costly and even dangerous.

Here's just a sample of how, as the speaker of the House put it, we're now "finding out what's in it":

• Despite promises that ObamaCare would cut costs for average Americans, we now see a front-page headline in the Los Angeles Times that tells us "Health care overhaul won't stop premium increases." Why? "Although Democrats promised greater consumer protection, the overhaul does not give the federal government broad regulatory power to prevent increases."

If it did, the health insurance industry would soon go the way of the Dodo bird. Contrary to overhaul supporters' propaganda, the industry's profit margin is tiny — just 3.5% of sales. Premiums are rising not because of insurers' greed, but due to higher health care costs driven by out-of-control government spending, which is growing twice as fast as the private sector.

• An IBD/TIPP Poll last summer showed that as many as 45% of practicing physicians would consider retiring or giving up their practice if ObamaCare was passed. That's bad enough. Now comes this tidbit from the Wall Street Journal: "At current graduation and training rates, the nation could face a shortage of as many as 150,000 doctors in the next 15 years, according to the Association of American Medical Colleges."

It's no surprise that fewer smart, talented, driven people want to become doctors. Why should they? To face an endless barrage of bureaucratic paperwork? To be second-guessed on every procedure they perform or prescription they write? To have their incomes capped forever?

Government already makes up half the $2.5 trillion spent last year on health care. What reasonable person would spend hundreds of thousands of dollars on schooling and more than a decade on training just to work for a government bureaucracy? The answer is obvious. And the numbers show it.

• Along with fewer doctors, we're now about to see fewer hospitals — all thanks to ObamaCare. The new law essentially forbids doctor-owned hospitals from expanding, and makes it nearly impossible for doctors to open new hospitals.

As Molly Sandvig, executive director of Physician Hospitals of America, told, more than 60 doctor-owned hospitals being developed around the country will be canceled. "That's a lot of access to communities that will be denied," she said.

• The rules of the new bill (with 2,400 pages plus 153 of amendments) are byzantine in their complexity — so much so that even members of Congress still have no idea what they passed.

On Tuesday, the New York Times reported that, to the surprise of many lawmakers, one provision states that members of Congress and congressional staff may be removed from their current coverage under the gold-plated Federal Employees Health Benefits Program.

Serves them right. This came to light after the Congressional Research Service was besieged by calls from concerned congressmen who didn't realize they might have to give up their own super-duper health care coverage. They only meant to strip us of our good health care coverage, not theirs. Now they're angry.

• Then there's the promise that only those earning over $200,000 — you know, the "rich" — would be taxed for Obama-Care. In fact, according to the Joint Committee on Taxation, those making less than $200,000 will pay taxes of $15.2 billion over the next 10 years — despite what was promised.

By 2019, the JCT says, 14.8 million taxpayers will be affected by the health care overhaul's limits on tax deductions of medical expenses. Of those, 14.7 million will earn less than $200,000.

If you're wondering what the overhaul hath wrought, you're not alone. It's less than a month after passage of the bill that seized control of 17% of the economy with nary a congressman reading it, and already Americans are being hurt. Another few months of this, and repeal may not be an option, but a necessity.

The Cruelty Of The Minimum Wage By Walter Williams



Which allows an American Samoan worker to have a higher standard of living: being employed at $3.26 per hour or unemployed at a wage scheduled to annually increase by 50 cents until it reaches federally mandated wages at $7.25?

You say, "Williams, that's a stupid question. Who would support people being unemployed at $7.25 an hour over being employed at $3.26 an hour?" That's precisely the outcome of Congress' 2007 increases in the minimum wage.

Chicken of the Sea International moved its operation from Samoa to a highly automated cannery plant in Lyon, Ga. That resulted in roughly 2,000 jobs lost in Samoa and a gain of 200 jobs in Georgia.

Given Samoa's low cost of living, $3.26 provided Samoan workers a higher standard of living than some of their neighbors on other islands. Now these workers are unemployed.

What's worse is that Starkist, Chicken of the Sea's competitor, might leave the island as well. If that happens, increases in the minimum wage will have cost more than 8,000 jobs in Samoa's canneries and related industries; that's nearly half of its labor force.

Samoan standard of living will be further reduced by the increased cost of goods it imports. Ships delivering goods from the U.S. and elsewhere to Samoa will not have as much cargo on their return trips, making shipping a costlier proposition.

Cannery jobs flourished in Samoa because of its location, and it was one of the few American territories exempted from the minimum wage. Even the proposed 2007 increases in the minimum wage exempted Samoa.

Since Del Monte, Starkist's parent company, is headquartered in Speaker Pelosi's San Francisco district and Chicken of the Sea is based in Southern California, Republicans had a field day suggesting that Pelosi's calling for Samoa to be exempted from the increases in the minimum wage reflected political payoffs and a conflict of interest.

I thought that as well, as suggested in a May 9, 2007, column, but exempting American Samoa from minimum wage increases would have been the most compassionate act, short of minimum wage repeal.

The unemployment effect of minimum wages isn't restricted to American Samoa but affects the mainland U.S. as well. Overall teenage unemployment stands at a record 25% while adult unemployment hovers around 10%. Also at a record high is the 50% unemployment rate among black teenage males.

One might ask why teen unemployment, particularly that among black teens, is so much higher than adult unemployment. The answer is simple. One effect of a minimum wage law is that of discrimination against the employment of less-preferred workers. Within the category of less-preferred workers are those with low skills.

Teens are disproportionately represented among such workers and are therefore more adversely affected by minimum wages. Black teens are disproportionately represented among teens with low skills and therefore share a greater burden of minimum wages.

One of the more insidious effects of minimum wages is that it lowers the cost of racial discrimination; in fact, minimum wage laws are one of the most effective tools in the arsenals of racists everywhere, as demonstrated by just a couple of examples.

During South Africa's apartheid era, its racist unions were the major supporters of minimum wages for blacks. South Africa's Wage Board said, "The method would be to fix a minimum rate for an occupation or craft so high that no Native would likely be employed."

In the U.S., in the aftermath of a strike by the Brotherhood of Locomotive Firemen, when the arbitration board decreed that blacks and whites were to be paid equal wages, the white unionists expressed their delight saying, "If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain."

Tragically, minimum wages have the unquestioned support of good-hearted, well-meaning people with little understanding who become the useful idiots of charlatans, quacks and racists.

Reaganism, New Jersey Style By William McGurn

Mr. Christie knows he needs to put the hard choices before the state's citizens, and to speak to them as adults.


APRIL 13, 2010

If you think that Snooki getting socked in the kisser during an episode of "Jersey Shore" epitomizes life in the Garden State, you haven't been paying attention. The best reality show on television today isn't running on MTV. It's in Trenton, where Gov. Chris Christie is offering the voters a dose of Reagan Republicanism—with a Jersey twist.

When he was elected back in November, Mr. Christie's victory was thought to augur growing disenchantment with Barack Obama. For the former federal prosecutor, however, his victory was primarily about local disenchantment with New Jersey's overtaxed economy and spendthrift government. Now he is in the thick of what will probably be the defining moment of his governorship: the attempt to enshrine his vision for the future in the state budget.

Associated Press

Gov. Chris Christie: "I'm not signing a tax increase"

Budgets are serious business, but it's been a long time since anyone in New Jersey has been serious about the budget. This year, gross mismanagement and accumulated fictions have left state taxpayers a $10.7 billion gap on a total state budget of $29.3 billion. Mr. Christie's answer is simple: "a smaller government that lives within its means."

However quaint that may sound, when you have to cut nearly $11 billion in state spending to get there, you are going to get a lot of yelling and screaming. Most comes from the New Jersey Education Association, hollering that "the children" will be hurt by Mr. Christie's proposals for teachers to accept a one-year wage freeze and begin contributing something toward their health plans. What makes the battle interesting is the way Mr. Christie is throwing the old chestnuts back at his critics.

Here are a few examples, culled from his budget address, public meetings and radio appearances:

The children will be the ones to suffer from your education cuts. "The real question is, who's for the kids, and who's for their raises? This isn't about the kids. Let's dispense with that portion of the argument. Don't let them tell you that ever again while they are reaching into your pockets."

Your policies favor the rich. "We have the worst unemployment in the region and the highest taxes in America, and that's no coincidence."

Why not renew the 'millionaire's tax'? "The top 1% of taxpayers in New Jersey pay 40% of the income tax. In addition, we've got a situation where that tax applies to small businesses. I'm simply not going to put my foot on the back of the neck of small business while I want them to try to grow jobs by giving more revenue to New Jersey."

Budget cuts are unfair. "The special interests have already begun to scream their favorite word—which, coincidentally, is my 9-year-old son's favorite word when we are making him do something he knows is right but does not want to do—'unfair.' . . . One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits—a total of $3.8 million on a $120,000 investment. Is that fair?"

State budget cuts only shift the pain to our towns. "[L]et's remember this, in 2009 the private sector in New Jersey lost 121,000 jobs. In 2009, municipalities and school boards added 11,300 jobs. Now that's just outrageous. And they're going to have to start to lay some people off, not continue to hire at the pace they hired in 2009 in the middle of a recession."

Isn't your talk of 'stopping the tax madness' just another 'Read My Lips' promise? "[Mine is] much better than 'Read my lips.' I'm sorry, it's just much better. Much stronger. . . . It's gonna be how my governorship will rise or fall. I'm not signing a tax increase."

In some ways, Mr. Christie can speak bluntly precisely because the state is such a mess. Indeed, that's one reason he won election in a blue state. The challenge remains daunting: No governor has yet succeeded in turning around a state as overtaxed and overspent as New Jersey. Indiana under Gov. Mitch Daniels probably comes closest, but Indiana was not nearly as bad as New Jersey.

If he is to survive the headlines about budget cuts and pull New Jersey back to prosperity, Mr. Christie knows he needs to put the hard choices before the state's citizens, and to speak to them as adults. He's doing just that. One reporter for the Newark Star-Ledger summed up Mr. Christie's rhetoric this way: "[F]inally we have a governor who is as teed off as the rest of us at how government spending and taxes have skyrocketed over the past decade."

It's far too early to declare Mr. Christie's Jersey-style Reaganism a success. But it's the one reality show truly worth watching.

Write to