Tuesday, April 26, 2011

Political Correctness: A National Competitive Disadvantage?

While I disagree with many of professor emeritus Dr. Robert Weissberg's individual points, I fully agree with him that political correctness limits the capacity of  individuals, institutions and nations to engage in successful problem solving. And I believe that this increasingly will pose a disadvantage to the United States as it competes with China and other rapidly rising nations in economic, educational and political endeavors. I am not so troubled by liberal answers as I am by the myriad of questions and concepts that liberals are afraid to honestly explore. This engenders self censorship and limits our capacity to engage in effective problem solving and policy making. An example of this was seen when liberal Harvard Professor Robert D Putnam resisted releasing the findings of research that, much to his distress, demonstrated that increased diversity erodes civic involvement and social capital in communities. But, at the end of his paper he reverts back to political correctness and presents recommendations that do not logically stem from his findings. In spite of the social and economic strain that he documented, he declares that diversity is "inevitable" and "enriching" and recommends the creation of community centers. Underlying political correctness made it impossible to even explore the possibility that  perhaps the social and economic costs of policies that actively increase diversity and undermine assimilation ,outweigh the benefits. This same mindset leads to that paradox that those who "celebrated diversity" or any other social phenomenomare rarely if ever willing to study their real social and economic impact.

A myriad of other beliefs are held as unexamined articles of faith and those who question these a priori truths are treated as heretics. For example when former President of Harvard Larry Summers proposed that perhaps biological may be one factor among many that explains the underrepresentation of women in the sciences, rather challenge him through spirited, intelligent debate, vitriolic protests erupted that ultimately lead to his resign. We are now at a point where an honest expression and debate of competing visions on race, culture and other controversial topics has become all but impossible. In effect, such taboos limit our capacity as a society to understand and create viable solutions for the economic, educational, political and social challenges we face.

Clearly, only in the context of a half century of unparalleled peace and prosperity did key segments of American Society have the luxury of elevating feelings above fact and engage in social engineering not grounded in historical experience. In contract, resurgent powers like China suffered more than a century of famine, poverty, chaos and conquest. And for the first thirty years of its existence, Marxist driven policies resulted in a man made famine that claimed the lives of at least 18 million and severe setbacks in education, industry and culture.  This shocked the Chinese leadership to surge forward with unprecedented reforms, which were only made possible by profound changes in the decision making process. Whereas solving and policy making were once driven by static ideology and a priori truths, divorced from experience, they were now dynamic and results driven. In other words, if a policy or course of action produced results, it was pursued, if not it was abandoned and concepts were adjusted accordingly. As is the case with (comparatively) free markets, the fortunes of individuals and industries increasingly became a product of their choices and less of the machinations of state planners and politicians. In contrast the United States has moved in the exact opposite direction and not by chance, the Unite States has increasingly become indebted to China and other resurgent powers.

Take the issue of education; political, economic and educational elites have expressed concerns that academic achievement of American students is a threat to our economic and social welfare. Of particular worry was the academic performance of American students relative to our competitors and the continuing performance gap that exists between ethnic groups within the United States. So how have our "experts" responded to this "sputnik moment"? First, they have been nearly unanimous in their calls for increased federal spending, indifferent to the fact that over the last thirty years this has not produced discernible results. Furthermore, they fail to note that per student expenditures are already much larger than in Japan and South Korea, which are wiping the floor with us.

 Secondly, they have pursued a myriad of reforms, among these ideologically driven germs are: multicultural curriculum transformation, the elimination of honors courses and discouraging academic tracking. While at the School of Education, not one of my professors spoke about the need to increase the competitiveness of our students within national and international job markets. Capitalism and competition were not to be mastered, but confronted in the name of "social justice". We were never told to draw lessons from the success of East Asian students both in their countries of origin and in the United States. The possibility that ethnic performance gaps may stem from the behaviors, culture and custom of individuals and groups was never raised. We were repeatedly told that our those who did not achieve were victims and the culprits were always external factors, like racism and other real or imagined grievances. The idea that they were in any way responsible for the perpetuation of their educational shortcomings was beyond the pale of polite discussion. Clearly in the case of educational affairs, political correctness has limited our capacity to understand and create viable solutions to our ills.

The political correct worldview becomes most apparent when we compare how the United States and other nations approaches issues of immigration.. If over half of of a particular immigrant group ended up on welfare, the politicians and general population of Singapore would call for an immediate moratorium of immigration from that nation in question. The more liberal members of the study might be open to a resumption, only under the conditions that only the more skilled and educated members of that group would be invited in and the use of welfare would be prohibited. The nations of origins would almost certainly be billed for the cost of providing health care, education and incarceration to their citizens. Why? Because any nation that is not beset by political correctness recognizes that immigration must first and foremost serve the interests of the host country. In contrast, the possibility that a congressional debate would be held that explored the rates of welfare use among different immigrant groups would be next to impossible. The fact that welfare is used by only 5.4% of immigrants from India and 54% of those from the Dominican Republic should be considered vital data for conscientious politicians and policy makers, yet they remain in the shadowy realm of unspoken taboos. If acknowledged, troubling figures on performance gaps between different groups are used to justify a further expansion of federal programs. Good policy making is always based on a sober look at the facts on the ground, not on the assumption that a program will substantially alter outcomes. So, while a sensible planner would probably support programs designed to help members (that are already present) of a group with low socio-economic outputs, they would consider it sheer follow to actively increase the size of that group, at least until they were able to demonstrate that the facts on the ground have changed. But, in the real of political correctness, such lines of thinking are forbidden, regardless of the social or economic costs.

And how would most Japanese respond to proponents of multiculturalism who believed that new immigrants did not have to assimilate the norms, behavior, culture and customs of their new nation? How would they respond to those who believed that (let's say) conservative Moslems from Somalia did not have to assimilate on the grounds that all cultures and values were not only equal, but enriched the nation by increasing its diversity? To start off with, they would not welcome any population that did not have a strong potential for quick assimilation. And after a few drinks of saki, they would be emboldened to declare the obvious - the fact that Somalis are beating down the door to get into Japan and not the other way around is a testament to the superiority of Japanese Culture (in encouraging positive social and economic outcomes). Or more specifically, Japanese culture (not race) has been a key element in producing the peace, prosperity, rule of law, cleanliness and courtesy that made Japan attractive to the Somalis in the first place. The thought of the more successfully accommodating the less successful culture would be absurd to anyone who has not yet elevated sensitivity and relativism to religious heights. And any government that would foster drastic demographic change (not accompanied by profound assimilation) would be thrown out in a flash. Why? Because, culture (not race) and the values, behaviors, norms and institutions that it engenders makes a nation what is is. And culture and traditions do not exist as abstractions; if they are not learned and lived by natives and newcomers alike, they lose their hegemony and are lost in but a generation.

This does NOT mean that the United States should fear demographic and cultural change. I am certainly not extolling the xenophobia that characterizes most other nations. America's openness and desire to welcome new immigrants and the talents and energy that they bring are strengths. But, it seems reckless to simultaneous pursue dramatic change, while prohibiting an honest assessment of the risks and rewards, costs and benefits that it offers. This philosophical shift has limited our capacity, relative to other nations, to make wise, balanced decisions for the benefits of natives and newcomers alike. And the growing divide between officially sanctioned, political correct discourse and the real sentiments and desires of many Americans hearkens us back to the final decades of the Soviet Union. Not allowing for the open and honest expression of discontent deprived soviet decision makers of invaluable feedback that allowed them to address the widespread social and economic ills that were plaguing their society. As Dr. Putnam demonstrated in his studies, frustrated citizens either "hunker down" and withdraw from civil and political participation or vote with their feet. Or worse yet, they gravitate towards demagogues that foment and capitalize on their anxieties. In the mean time, China, South Korea and other nations that have not yet been encumbered by political correctness are surging forward with economic development and innovation, as we fall further into debt. And the handful of politicians like Dr. Ron Paul who promote honest discourse and painful but necessary solutions are labelled as "extremists."

Einstein insane

Standing Up to the PC Bullies

Robert Weissberg

Solving America’s problems is hard enough without self-imposed obstacles. And the most destructive of these self-imposed burdens is shooting the messengers who bring “bad news.” This willful blindness is the equivalent of forbidding doctors from asking about “embarrassing” or personally “sensitive” behavior. In politics, messenger killing “bullets” are accusations with names like Islamophobia, Homophobia, Racism, Sexism, and if that doesn’t work, accuse them of the Mother of all Modern Evils: Hate.

Messenger shooting is increasingly commonplace but seldom closely scrutinized. And absent putting it under the microscope to develop an antidote, culprits easily escape scot free and tribulations multiply. Consider an almost generic example.

Professor Robert Engler has taught sociology at Chicago’s Roosevelt University for 12 years. Like many professors, he occasional tells a joke, but in this instance, mirth cost him his job, probably his career plus thousands in legal fees. Here’s the joke:

A group of sociologists did a poll in Arizona about the new immigration law. Sixty percent said they were in favor, and 40 percent said, 'No hablo English.'"

The gag may not be a side-splitter, but it hardly insults Hispanics. Nevertheless, in the spring of 2010 it elicited two written complaints as ethnically offensive, and as a result, he was fired and his course, “City and Citizenship” (a graduation requirement) was discontinued. In fact, his department refused to put the “harassment” charge in writing and Engler only discovered the accusation in the student newspaper.

And why was this lame joke so harmful? Cristina Solis justified her complaint with "If that is what it took to give him a reality check, and to make sure that no other student has to go through that, maybe it's for the best." She also claimed that Engler’s joke was inappropriate for "a school like Roosevelt University, which is based on social justice."

This mountain-out-of-a-mole hill strategy is hardly unique--a free speech organization FIRE encounters dozens per year. Important lessons are to be learned from this seemingly minor Politically Correct outrage.

First, American education has produced an entire generation that is hyper-sensitive to any affront, real or imagined, who collect grievances as some hobbyists collect postage stamps. Indeed, victimhood seems hard wired into their DNA so an insult-free environment, regardless of millions spent for sensitivity training, let alone accommodations, is beyond reach. Further add quick-to-demonstrate groups whose raison d’ĂȘtre (and funding) depends on quick-trigger mobilizations of angry followers.

Second, it is impossible to anticipate what might stir the pot. Unlike Pakistan, our blasphemy laws are unwritten, even unknowable in advance. The eminent Harvard historian Stephen Thernstrom was brought up on charges that he offended black students when he said “slave” instead of “enslaved person” since, it was claimed, “slave” de-humanized those in bondage. When the Dean took the student’s side, he decided not to teach the course in the future.

Third, the aggrieved party is judge and jury. Professor Engler could not request that an impartial panel of humor experts to assess the joke’s hurtfulness. After all, the only admissible credential for this expertise is one’s racial or ethnic identify, and who can challenge that? So, if a black accuses a white of racism, trial over.

Fourth, emotional harm trumps scientific truth. The truth may set you free but it will not win back your job. When co-discoverer of the structure of DNA and Nobel laureate James Watson characterized sub-Saharan Africans as having lower IQ’s than whites, he was pushed out as chancellor of the Cold Spring Harbor Laboratory (see here). Nor did he regain his job when he backtracked with” there is no scientific basis for such a belief” (actually ample but not all scientific data support Watson’s initial statement. For confirming data, see here).

Fifth, once stigmatized as “offensive” there is no redemption. Dog killers get a better deal. Profusely apologizing, adding endless qualifiers, claiming that one’s offensive remarks were misinterpreted or taken out of context do not bring absolutions. And it only takes a tiny handful of incidents to kill public discussion. Larry Summers will probably go down in history not for his stellar academic record but as the Harvard Dean who famously hinted that biology might explain why women do not occupy top scientific position. Anybody want to re-open the debate?

Finally, and perhaps most depressing, those deemed guilty of “offensiveness” will seldom receive any public backing, regardless of the charge’s ridiculousness, its scientific accuracy or one’s expertise. Even the accuser’s outright scurrilous lies will not draw public rebuke. The heretic is on his own though trusted friends may privately provide succor. Nor is the First Amendment relevant—this only protects you from government action, not enraged private citizens. Perhaps the only exception has been Juan Williams who got a $2 million dollar contract from Fox News after admitting that airline passengers in Muslim garb made him nervous. I suspect that ordinary passengers uttering those “hateful” words would receive extra airport security.

What can be done? In the short run, not much—the offended cannot be mollified. Prosecuting heretics is undoubtedly just human nature; only the subject changes—religious dissenters in medieval times, those who link violence to Islam today.

But, there is some good news—orthodoxies bringing dangerous willful blindness are not forever. In Victorian times even mentioning venereal disease was taboo; today schools may be legally required to explain it to youngsters.

The path to success begins by overcoming the accused heretic’s isolation. PC types are typically bullies quickly emboldened when they can attack timid, isolated enemies, one at a time. Perhaps Roosevelt University faculty and students should have organized an ethnic humor night with stand-up comics telling Hispanic, Jewish, Black and Polish jokes? Bring in Jackie Mason or Chris Rock. Give Professor Engler an open mike and a coach to polish his delivery.

More important, don’t surrender to those using “being offended” as the ticket to success. Appeasement only brings a bigger bill next time around. How many times have we seen an “offensive” incident eliciting demonstrations demanding hiring more minority faculty, extra sensitive training, a new publicly funded cultural center and similar accommodations to, allegedly, heal the wounds? In fact, these pay-offs often encourages hoaxes.

Finally, when all is said and done, there is no substitute for invoking truth or at least an argument that is likely to be true. The truth often hurts, it can be offensive and lowers self-esteem, but public debate built on soothing lies invites disaster. Consider what might now happen at Roosevelt University. Other professors teaching potentially controversial subjects will cleanse any “insulting” references to Hispanics or other easy-to-anger groups. Topics like crime, teenage pregnancy and welfare dependency will vanish lest a slip of the tongue, even the wrong facial expression, brings charges of harassment. Prudent faculty might also revert to plain vanilla boring lectures and award sensitive students “A’s” as an insurance policy. Other might just pander to these groups to play it safe. Classes will grow duller, less spontaneous and Hispanic students, among other thin-skinned students, will receive an incomplete, watered down but flattering education filled soothing lies. And they will never know it and so graduates will have feasted on a diet of lies and omissions. So much for Roosevelt University’s commitment to social justice.

FamilySecurityMatters.org Contributing Editor Robert Weissberg is emeritus professor of political science, University of Illinois-Urbana and currently an adjunct instructor at New York University Department of Politics (graduate). He has written many books, the most recent being: The Limits of Civic Activism, Pernicious Tolerance: How teaching to "accept differences" undermines civil society and Bad Students, Not Bad Schools. Besides writing for professional journals, he has also written for magazines like the Weekly Standard and currently contributes to various blogs.

Monday, April 25, 2011

Bad Students, Not Bad Schools???

In his book Bad Students Not Bad Schools, professor emeritus of the University of Illinois at Chicago, Dr. Robert Weissberg sharply departs from educational orthodoxy and poses some troubling questions about the state of American Education and the persistent achievement gap. His thesis that systemic failures in academic achievement are less reflective of substandard schools and more indicative of the motivation and ability of students themselves has been written off as "pessimistic" and even as "racist," but few have been willing to seriously explore the most important question: to what extent does evidence and experience validate or invalidate his thesis? In no way am I endorsing his vision, rather I am declaring that by allowing intellectual taboos to narrow this debate, we are limiting our ability to successfully address what all sides agree is a serious national problem. Given the forty years of failed progressive and (to a lesser extent) conservative reforms, alternative explanations and solutions must be considered, because as Albert Einstein best put it, the definition of insanity is "doing the same thing over and over again and expecting different results." Here is a brief summary of the contents of the book:


Chapter 1 Introduction: A Nation at Risk or a Nation in Denial?

Academic achievement requires intelligence and motivation. School resources, pedagogy and instructional quality are important but secondary. Unfortunately, both liberal and conservative reformers have ignored brains and work ethic and concentrate on secondary factors. It is possible to attract smarter, more motivated students if the high political price will be paid. Politicians, parents and reformers instead prefer mediocrity since it is easier.

Chapter 2 Bad Students, Not Bad Schools

“Bad schools” are not created “bad.” Indifferent, anti-intellectual often violent students make schools bad, and pouring in more resources will fix nothing unless the students themselves change. Chairs and desks do not fail exams; students fail, and to assert that the physical facilities bring inadequacy allows parents and students to escape responsibility. Shipping slackers to a “good school” solves nothing; worse, this misguided policy will ruin the “good school.”

Chapter 3 Motivating Students Or You Can Take a Horse to Water And Make a Dehydrated Equine Feel Better About Herself ? Academic achievement requires motivation, and today’s educators foolishly believe in making learning fun and “relevant”—the Sesame St. model. This approach is doomed. Learning inescapably involves pain, and without a struggle, personal advancement is impossible. Substituting cheap self-esteem to avoid agony is particularly harmful to the intellectually less able.

Chapter 4 Closing the Racial Gap in Academic Achievement

American educators have long obsessed over closing racial gaps in learning and every attempt, regardless of the billions spent or tactics, has come up short. More important, trying to close these gaps undermines learning for both whites and blacks. The futile effort will only dumb-down education so as to provide the illusion of progress.

Chapter 5 The “War” on Academic Excellence

Recent efforts to uplift the least able students have harmed smart kids. Programs for the intellectually gifted have been decimated under No Child Left Behind. This is the opposite of what occurred in the late 1950s and early 60s when the US responded to Sputnik by concentrating on bright students. What rescues America from self-imposed education collapse is importing smart youngsters plus scientists born overseas. This may not last forever.

Chapter 6 The Museum of Failed Educational Reforms

The parade of “guaranteed-to-succeed” reform fiascos resembles comets--they keep returning despite past disasters. This applies to both liberal and conservative panaceas. Disappointment is predictable: few reformers suffer personally from dismal outcomes, research assessments are often shoddy, advocating futile gimmicks can be career boosting and reform-minded foundations are unaccountable for their iffy schemes. Americans are addicted to low-effort magic bullets.

Chapter 7 Business-like Solutions to Academic Insufficiency

Reformers often insist that education should be treated as a business with clear standards and strict accountability to insure progress. Total nonsense. The parallel is inappropriate—you can’t “fire” non-performing students no matter how rotten or disruptive. The business-like infatuation on test scores and accountability almost inevitably subverts quality education and promotes cheating.

Chapter 8 The Alluring Choice Solution

School choice—vouchers and charter schools—infatuates “conservative” educators. This approach has seldom succeeded. More important, it falsely assumes that if students and parents were given ample choice, they would crave academic excellence. More likely, they prefer sports and country club-like facilities, not tough academics.

Chapter 9 Reforming Education is Now the New Great Society and Why Fixing Schools Will Subvert the Social Peace

Education spending has sky-rocketed with little to show for these billions. Reformers misunderstand what today’s fixes are about. Schooling has become the reincarnation of the 1960s Great Society, a cornucopia of social welfare jobs and contracts. It is less about boosting learning than securing the social peace by preventing urban unrest.

Chapter 10 Hope?

American education struggles as the intellectual abilities of students declines. Conceivably, educators may be performing admirably given this down turn. Nor may modern society require universal stellar academic achievement—tasks can often be mechanized or outsourced to smarter foreigners. Our most formidable obstacle to progress is denying the obvious—it’s the students, not the schools that bedevil American education.

Mr. Sowell, Please Run For President!

Mr. Sowell, please run for President!

Tom Sowell: Economists are the real “Party of No!”

“Economists are the real “party of No.” They keep saying that there is no such thing as a free lunch– and politicians keep on getting elected by promising free lunches.

Such promises may seem to be kept, for a while. There are ways the government can juggle money around to make everything look OK, but it is only a matter of time before that money runs out and the ultimate reality hits, that there is no free lunch.

We are currently seeing what happens, in fierce riots raging in various countries in Europe, when the money runs out and the brutal truth is finally revealed, that there is no free lunch.

You cannot have generous welfare state laws that allow people to retire on government pensions while they are in their 50s, in an era when most people live decades longer.

In the United States, that kind of generosity exists mostly for members of state government employees’ unions– which is why some states are running out of money, and why the Obama administration is bailing them out, in the name of “stimulus.”

Once you buy the idea that the government should be a sort of year-around Santa Claus, you have bought the kinds of consequences that follow.

The results are not pretty, as we can see on TV, in pictures of rioters in the streets, smashing and burning the property of innocent people, who had nothing to do with giving them unrealistic hopes of living off somebody else, or with the inevitable disappointing of those hopes with cutbacks on the giveaways.

Nothing is easier for politicians than to play Santa Claus by promising benefits, without mentioning the costs– or lying about the costs and leaving it to future governments to figure out what to do when the money runs out.

In the United States, the biggest and longest-running scam of this sort is Social Security. Fulfilling all the promises that were made, as commitments in the law, would cost more money than Social Security has ever had.

This particular scam has kept going for generations by the fact that the first generation– a small generation– that paid into Social Security had its pensions paid by the money that the second and much bigger “baby boom” generation paid in.

What the first generation got back in benefits was far greater than what they themselves had paid in. It was something for nothing– apparently.

This is the way a Ponzi scheme works, with the first wave of “investors” getting paid with the money paid in by the second wave. But, like Social Security, a Ponzi scheme creates no wealth but only an illusion that cannot last. That is why Mr. Ponzi was sent to prison. But politicians get re-elected for doing the same thing.

As the baby boomers begin to retire, and there are now fewer working people per retired person to pay for Social Security pensions, this scam is likewise headed for a rude revelation of reality– and perhaps riots like those in Europe.
All the incentives are for politicians to do what they have done, namely to promise benefits without raising enough taxes to pay for them. That way, it looks like you are getting something for nothing.

When crunch time comes and politicians are either going to have to tell people the truth or raise taxes, the almost inevitable choice is to raise taxes. If the people think they are already taxed too much, then the taxes can be raised only for people designated as “the rich.”
If “the rich” object, then demagogues can denounce them for their selfishness and “greed” for objecting to turning over ever-growing amounts of what they have earned to politicians.
Economists often make stronger objections than the high-income people themselves. That is because history has shown repeatedly that very high rates of taxation lead to all sorts of ways by which those very high rates of taxation do not have to be paid.
No matter how high the tax rates are, they do not bring in more revenue when many of the people subject to those tax rates do not in fact pay them. The scams inherent in welfare states are not only economically counterproductive, they turn group against group, straining the ties that hold a society together.”
(The above article is titled, “Progress and Riots” at Investors Business Daily…

Multicultural Education by Thomas Sowell

Enjoy this cogent analysis and critique of multicultural education by the great Thomas Sowell. Although progressives pride themselves on their critical thinking and rationality, like religious conservatives, many hold a pantheon of views supported by faith and not evidence. For example, we are told that increasing diversity and promoting multiculturalism will create a more peaceful, tolerant and democratic society, but the proponents of this article of faith have yet to present us with any evidence or examples that support this belief.


by Thomas Sowell
Most of the arguments for so-called "multicultural" education are so flimsy, inconsistent, and downright silly that it is hard to imagine that they would have been taken seriously if they were not backed up by shrill rhetoric, character assassination, and the implied or open threat of organized disruption and violence on campus.Let us examine the multiculturalists' questions, one by one:

Why do we study Western civilization, to the neglect of other civilizations?

Why is that question asked in English, rather than in some non-Western language? Because English is what we speak. Why do we concern ourselves with the Earth, which is an infinitesimal part of the known universe? Because that is where we live. If we want to understand the cultural and institutional world in which we carry on our daily lives, we need to understand the underlying rationale and the historical evolution of the way of life we have been born into.

None of this has anything to do with whether English is a better language than some other languages. English is in fact more inconsistent and less melodic than French, for example. But we speak English for the same practical reasons that cause people in China to speak Chinese. Attempts to turn this into an invidious comparisons issue miss the fundamental point that (1) languages exist to serve practical purposes and (2) they serve those purposes better, the more people in the same society speak the same language.

Why don't we study other civilizations equally? The most obvious answer is the 24-hour day and the limited number of days we spend in college. It is stretching things very thin to try to cover Western civilization in two semesters. Throw in a couple of other civilizations and you are just kidding yourself that you are educating anybody, when all that you are really doing is teaching them to accept superficiality. Those whose real agenda is propaganda are of course untroubled by such considerations.

Any suggestion that any aspect of Western civilization has been admirable, or better in any way than the corresponding aspect of any other civilization, will of course be loudly denounced as showing bias instead of being "non-judgmental." However, the one thing that no civilization has ever been is non-judgmental. Much of the advancement of the human race has occurred because people made the judgment that some things were not simply different from others, but better. Often this judgment was followed by abandoning one cultural feature and using the other instead.

We use Arabic numerals today, instead of Roman numerals, even though our civilization derived from Rome, and the Arabs themselves got these numerals from India. Arabic numerals (or Indian numerals) have displaced other numbering systems around the world because they are better-- not just different. Paper, printing, and books are today essential aspects of Western civilization, but all three came out of China-- and they have displaced parchment, scrolls, and other forms of preserving writings all around the world. Books are not just different, they are better-- not just in my opinion, or in the opinion of Western civilization, but in the practice of people around the world who have had an opportunity to make the comparison. Firearms have likewise displaced bows and arrows wherever the two have come into competition.

Many of those who talk "non-judgmental" rhetoric out of one side of their mouths are quick to condemn the evils of "our society" out of the other side. Worse, they condemn American society or Western civilization for sins that are the curse of the human race all across the planet. Indeed, they condemn the West for sins that are worse in many non-Western societies.

Perhaps the classic case is slavery. The widespread revulsion which this hideous institution inspires today was largely confined to Western civilization a century ago, and a century before that was largely confined to a portion of British society. No one seems interested in the epic story of how this curse that covered the globe and endured for thousands of years was finally gotten rid of. It was gotten rid of by the West-- not only in Western societies but in other societies conquered, controlled, or pressured by the West.

The resistance put up by Africans, Asians, and Arabs was monumental in defense of slavery, and lasted for more than a century. Only the overwhelming military power of the West enabled it to prevail on this issue, and only the moral outrage of Western peoples kept their governments' feet to the fire politically to maintain the pressure against slavery around the world. Of course, this is not the kind of story that appeals to the multiculturalists. If it had been the other way around-- if Asian or African imperialists had stamped out slavery in Europe-- it would still be celebrated, in story and song, on campuses across America.
Why are the traditional classics of Western civilization written by dead white males?

Take it a step at a time. They are written by dead people for two reasons: First, there are more dead people than living people. Second, a classic is not something that is hot at the moment but something that survives the test of time. There may be things written today that will survive to become classics, but we won't be here when that happens. The things we know are classics were almost by definition written by dead people.

Why were they white? Do we ask why the great classics of China were written by people who were Chinese? If we found that the great classics of China were written by Swedes, wouldn't we wonder what the hell was going on?

Should there be any mystery as to why they were written by males? Is anyone so utterly ignorant of history that they do not know that females had more than enough work to keep them busy for most of the history of the human race? Maybe men should have shared some of that work. But history is what happened, not what we wish had happened. If most of the people who were educated were male-- as they have been throughout history, and even are today in some societies-- then most of the people who leave the kind of written material left by educated people will be men. You don't get great mathematical discoveries from people who were never taught algebra.

Much the same reasoning applies to other groups considered to be (1) oppressed and (2) "under-represented" among those whose historic achievements and contributions are recognized. But how can a people's achievements be unaffected by their oppression? One of the many reasons to be against oppression is that it keeps people from achieving all that they could have achieved if they had been treated more decently. To proclaim oppression and still expect to find the oppressed equally represented among those with historic achievements and contributions is almost a contradiction in terms.

The past is many things, but one thing it is, is irrevocable. A past to your liking is not an entitlement.

Don't we need multiculturalism to get people to understand each other and get along with each other?

Since this is an empirical question, you would expect people to seek an empirical answer, yet most of those who talk this way seem content to treat the matter as axiomatic. But is there any evidence that colleges that have gone whole hog into multiculturalism have better relations among the various groups on campus? Or is it precisely on such campuses that separatism and hostility are worse than on campuses that have not gone in for the multicultural craze?

You want to see multiculturalism in action? Look at Yugoslavia, at Lebanon, at Sri Lanka, at Northern Ireland, at Azerbaijan, or wherever else group "identity" has been hyped. There is no point in the multiculturalists' saying that this is not what they have in mind. You might as well open the floodgates and then say that you don't mean for people to drown. Once you have opened the floodgates, you can't tell the water where to do.

How are we to be part of the global economy, or engage in all sorts of other international activities, without being multicultural?

Ask the Japanese. They are one of the most insular and self-complacent peoples on Earth today. Yet they dominate international markets, international finance, international scientific and technological advances, and send armies of tourists around the world. This is not a defense of insularity or of the Japanese. It is simply a plain statement of fact that contradicts one of the many lofty and arbitrary dogmas of multiculturalism.

Sunday, April 24, 2011

It's Ok To Be Progressive (Anywhere But Washington DC)

It will probably come as a surprise that I, the dreaded arch-conservative, the Grinch who stole progress, support progressive politics in any place but Washington DC. In fact, I positively view the efforts of the people of Portland Oregon and other towns, to limit sprawl, preserve green space and strengthen public transportation. If they decided to legalize the marriage of cats and dogs and men and monkeys, it would be their business and their business alone. And I even view the socialist kibbutzim with great favor.

The reason is that on a local level progressive initiatives are more democratic and represent true self governance. And although I am personally averse to high taxation, I respect the rights of local communities to determine what portion of their earnings they would like to invest in the public sphere. On the other hands, federal efforts to impose "progress" are by their very nature coercive, and less responsive to the needs, desires and cultures of local communities. And most importantly, those who are unhappy with local initiatives are always welcome to challenge them through the democratic process or to vote with their feet and find another town or state that better reflects their values. In contrast, nothing is as permanent as temporary federal program and when politicians in DC imposes their laws and taxes across the land, there is nowhere to run.

How to Reform Reform

In hindsight, ill conceived reforms, from the Patriot Act to bank bailouts and Obamacare, share several fundamental characteristics. They are a contradictory mix of needed reforms, questionable choices and appalling concessions to special interests. This occurs because politicians inevitably seize the opportunity to mine 1,000 page bills with earmarks that cater to powerful lobbyist. This is made possible because in the time allotted to consider a bill, legislators, let alone the general public, cannot read and fully comprehend the details of such massive bills. And even when the more abominable terms come to light, few are willing to challenge them, because doing so would result in other legislators dropping their support for the bill. After investing their political capital in promoting a bill, few are wiling to "kill the dog to get rid of the fleas."

In order to improve on legislation, it's essential to: slow it down and break it up. No matter how pressing the crisis appears to be, legislators and the public must resist efforts to quickly ram a bill through  Congress. It is better to measure twice and thrice than to recklessly raise an edifice that will vex future generations. If the great  behemoth of Health Care reform were broken up into a dozen separate bills, the legislative process would have been more transparent and the finished product would been less distasteful to the public. For example, why could we not have debated and voted on a bill that solely addressed the issue of pre-existing care? The vast majority of the public would have supported such a bill. Why not debate the (many) merits of promoting greater access to mental health services? And most importantly, why not submit the noxious and unconstitutional mandate to purchase health insurance to the vote? The bottom line is that it's unthinkable to let good policies get buried in a bad bill or bad policies fester in an otherwise good bill.
These principles clearly apply to efforts to tackle our out of control national debt. Rather than push through a budget whose sheer size overwhelm our analytical capacities, we must tackle each issue separately. Without sound reform of entitlements (that comprise 60% of the budget), even the most aggressive cuts to discretionary spending would do little to curb debt and much to hobble an already ineffective and sclerotic federal government. Social Security and Medicare and Medicaid each warrant separate debates and separate reform bills. Efforts to address the flaws in these (currently) fiscally unsustainable entitlements would be incredibly contentious, but certainly merit fact (not feeling) driven debate, followed by a decisive vote. And the inescapable fact is that with nearly $100 trillion in unfunded liabilities, unless we undertake serious reforms, we will face impending bankruptcy and the virtual elimination of a safety net for the poor.

Afterwards, we must engage in a serious debate on our our imperial foreign policy, which drives the size and scope of our defense expenditures. Until we seriously weigh the costs and benefits of our role as the great nation builder and globo-cop, we will never achieve sustainable defense spending. And to further challenge our constitutionally illiterate politicians, it wouldn't hurt to have a healthy debate on the 10th Amendment, or specifically what roles and responsibilities does the constitution assign the federal and state governments. As a native of Illinois I can attest to the fact that state governments can be as bad or worse than the federal government, but their fiscal licentiousness is held in check by their inability to print money.

Unlike some of my more short sighted conservative brethren, I recognize that taxes will have to rise. However, if we increase revenue without first curbing spending, we will encourage politicians to further put off unpopular entitlement reform. Raising tax rates must be discussed as but one aspect of badly needed tax reforms. Our outmoded tax codes are riddled with numerous problems, including an internationally uncompetitive corporate tax rate, gaping loopholes and economically irrational subsidies. Together, they have exacerbated deficits, encouraged the flight of industry, discouraged the creation of new jobs, distorted the tax burden and augmented corporate lobbying.

Of course, tackling all of these daunting issues separately will greatly increase the duration of the reform process. But, this is a small price to pay for the promotion of greater transparency, serious debate and well thought out policies that will ensure the long term fiscal health of our nation. But to do so, voters must start punishing rather than rewarding politicians who promise the impossible: more warfare, more welfare and even lower taxes. Vote Ron Paul 2012!

Brief Thoughts on Human Nature & Political Philosophy

While I share the progressive dislike of former president GW Bush, I disagree with the source of their sentiments. Their concerns were not that Mr. Bush so expanded the size of the state, but rather he was the "wrong helmsman." Most hoped for a leader who could utilize the largess of the federal government to promote social and economic transformation, whereas I as a conservative am skeptical of the "ship itself." This brings us to an underlying difference in the ways in which liberal and conservative thought tends to view man. Historically, liberals like Jean-Jacques Rousseau have viewed man either as a tabula rasa, a blank slate shaped by socialization or being born good, but corrupted by society. Conservatives have tended to believe more in a set human nature with innate vices. For this reason, liberals have been more inclined to support a powerful state that pursues the "perfection of mankind" or in the case of Che Guevara, the creation of a "new man". And conservatives have sought to limit the folly unleashed when flawed men with power seek to perfect the social and economic lives of other flawed men and communities. The great conservative commentator Jack Hunter artfully expresses these sentiments in this brief piece, in which he reserves his harshest criticism for neoconservatives who he refers to as:

 "...a collection of trigger happy John Lennons who continue to imagine a middle east that will happily embrace American values at the point of the gun, that in Iraq and now Afghanistan the scenario has yet to play out hasn't seem to deter the right wing utopians that continue to champion it."
 Here are some other excerpts that most caught my attention:

"Grandiose liberal efforts do not work not because they are simply led by the wrong kind of men, because they are lead by men period."

"Multiculturalism is well intentioned, yet is seems ever time different cultures cohabit it creates more friction than friendship."

"I've been uncomfortable with the term conservative for some of the reasons that I've already mentioned, also because so many big government Republican hacks have so damaged the term...after all GW Bush called himself a conservative, yet no other popular label better describes my philosophy, I believe in limited government primarily because I do not want other flawed men who inevitably create so many flawed systems, programs and bureaucratic schemes to have that much power over me...I am screwed up enough as it is."

Liberals seem to believe that man is inherently good and the larger the collective effort, the quicker humans can evolve tending ever closer to earthly perfection. I believe that individuals can be and many are good people despite man's overall flawed nature which does not evolve and can never be perfected on this earth. Some might find this pessimistic view of humanity depressing, but its actually quite liberating. Those who keep wondering when we will eradicate racism, sexism and religious strife often drive themselves bonkers with their futile efforts. The only way to truly due away with such problems is to eradicate man altogether as ethnic attachments, differences between the sexes and even yearning for G-d are significant constant aspects of the human experience. and that we often become jealous or nasty about such differences is also unfortunately part of our makeup."

"Conservatism recognizes man's flaws and seek to do the best with the reality at hand. Liberalism tries in vain to create its own reality and ideal, never taking into account the flawed nature of the material that it seeks to work with."

"That the ridiculously large government that we suffer under today had to  circumvent our nation's founding document at every turn to become so powerful is no accident...And seeking a return to constitutional government is much more than some cheap conservative catch phrase. Though it might seem contradictory, being a conservative in America necessarily means being a radical, because any serious attempt to actually stuff our modern federal government back into its constitutional box, a colossal unprecedented reversal of more than a century and a half of government expansion would be nothing short of a revolution."

"Will this ever happen, perhaps not, perhaps I am being utopian thinking that a return to constitutional government is even possible. Yet as liberals continue to argue that the solution to our problems is to place even more power into even fewer men, I will continue to argue for fewer laws restrained powers and smaller government, so when men do their inevitable worse we can at least minimize the damage."

Sunday, April 17, 2011

Minority Contract Set Aside Scandal

A recent article in Craine's Chicago Business and NPR detailed the shortcomings of Chicago's minority owned firm set aside program, which seeks to maximize the number of minority owner firms that receive city contracts. Often, firms employ a minority front to gain the contract, when in fact the real owners are white males. The focus of this piece was the lucrative construction contract of the west side Walmart by Broadway Consolidation, whose CEO, Margaret Garner is an African-American single mother. Both the city and Walmart widely publicized their choice as proof of their "commitment to diversity" and "investing in the community." The investigators found that 17 out of the 19 subcontractors that she employed were white males, which was a violation of the spirit and possibly the letter of the law. Sadly, the construction costs overshot the $17.8 million bid by nearly $10 million and each of the unapid subcontractors placed liens against her firm, which ultimately led to the bankruptcy of Broadway Consolidation. There are several lessons that we can draw from this incident:

Unlike the city, minority entrepreneurs are economically rational. Whereas city government heavily relies on political criteria (race, sex & nepotism) on their choice of contractors, Ms. Garner presumably chose the firms that offered the best service and lowest costs, regardless of the race or gender of their owners.

When the city places political considerations above economic ones, the cost and quality of work will suffer. I am betting that Mayor Daley would not have let political or ideological considerations guide business decisions  that involved his own money. But hey, who cares? It's only the tax payers money!

While contract set asides may benefit politically connected minority entrepreneurs, they do little to help the residents of Chicago's poorest residents. If anything, widespread city inteference dissuades businesses from investing in the city.

More than anything, this demonstrates one key problem with affirmative actions, most often seen in educational institutions; it is rarely in the interest of competent individuals or firm to be promoted beyond their ability. For example, an African-American student who would have excelled in a good school that corresponded to their ability (like Northwestern), will run a much higher risk of failing out of a top tier school (like Harvard) that recruited them largely on racial criteria. While Ms. Garner's firm was successful, it's yearly revenues amounted to $5 million, which leads me to believe that the $17 million dollar Walmart Contract was out of her league. Perhaps if Ms. Garner had resided over a project that matched her experience and expertise, her company would be growing, rather thank bankrupt. So, while such policies may satisfy the liberal conscience of university or city administrators, they do little to benefit the minorities that they are designed to help. This may be less noxious than the traditional Chicago practice of granting city contracts solely on the basis of family or political connections, but it most definitely is not in the interest of the people of our great city.

Balanced Explanation of Terrorism

In his essay Do Terrorists Hate Our Freedom? conservative commentator Jack Hunter presents one of the most compelling and balanced explanations of the causes of terrorism. He starts off by dispelling the mantra of GW Bush that terrorists are solely motivated by a jealousy of America's freedom and prosperity. Mr. Hunter takes the (typically) left wing belief that our largely unwelcome military and political intrusion in the affairs of the Islamic Middle East is the main culprit. The Invasion of Iraq was the best give that one could offer Al Qaeda's recruitment department. Not only has this offended their sense of sovereignty, it has allowed the Islamic World to blame the United States for their political and economic ills. This is especially true considering that the internet has allowed, dispersed Al Qaeda cells are able to communicate and coordinate their efforts from the cities of Western Europe, our Saudi Arabian "allies" and even the United States.

He then challenges liberals who pretend that Islam is not a factor in the equation, stating the obvious: while the majority of Muslims are "decent, law abiding citizens," it is not by chance that the majority of terrorists are Muslim. He then questions the wisdom of multiculturalism and promoting mass Muslim immigration in Europe asking us if anyone believes that "if 2,000,000 Southern Baptists planted roots in the heart of liberal San Francisco, that their presence would not create serious religious, political and cultural tensions...the same is true of Islam in Europe." A clash of cultures only can occur when people of incompatible cultures and values are brought together, in the case of Europe this occurred because millions of Muslims were invited into their backyard, whereas the United States "invited itself into the backyard of the Islamic World." Rather than seek to convert Muslim nations abroad and Muslim immigrants at home to secular, market oriented democracy, we should promote an amicable separation.

The Biggest Earmark Is Empire

In his piece "The Biggest Earmark Is Empire", commentator Jack Hunter points out the incompatibility between being fiscally conservative and supporting America's global empire. Whereas most of the left does not acknowledge the waste and ineffectiveness of the welfare state, much of the right is unaware that this is also true for the warfare state. And by promoting aggressive (but fiscally necessary) cuts on welfare programs, while ignoring defense spending, politicians like Paul Ryan do much to lower conservatives in the eyes of the general public. In another post Mr. Hunter adroitly points out that progressives and neoconservatives are both aggressive statists, the only difference being that progressives tend to promote domestic intervention whereas neoconservatives focus on international intervention. And by involving the United States in Libya's Civil War, Obama has achieved the dubious distinction of doing both!

Saturday, April 9, 2011

A Shameful Act of Political Theater

For weeks Republicans and Democrats wrestled over the budget, nearly shutting down the federal government. Republicans portrayed themselves as valiant fiscal conservatives fighting to save the fiscal future of the nation with $68 billion in cuts, which Senator Robert Menendez (D-NJ) referred to as "extreme." Democrats presented themselves as defenders of the people with Schakowky (D-IL) fasting to protest the "draconian, reckless and mean spirited cuts" and Representative Louise Slaughter (D-NY) claiming that Republicans had come to "kill women." At the end of the day, "tough decisions" were made and $38.5 billion in "painful" cuts were agreed on. At a quick glance this appears to be a substantial number, but a careful analysis of the cuts shows that both sides have engaged in shameful act of political theater rather than serious attempts to address our daunting fiscal crisis.

To better understand this sham, we need to reduce it to a more human scale by erasing nine zeros from the $3.818 trillion dollar budget, 2.17 trillion in revenue (taxes), 1.645 trillion dollar deficit and the 14.26 trillion in total debt. If we conceptualized of the government as a family, its income would be $21,700, it's total expenditures would be $38,180, bringing its yearly deficit to $16,450! But wait, it gets much worse; this year's deficit would bring the family's total debt to $142,600! What would you say to such a family? Even the most mild mannered accountant would slap the mother and father across the face and yell out "what in G-d's name were you thinking all those years, living way beyond your means? If you do not immediately and drastically change your ways, not only will you doom yourself to certain bankruptcy, you will burden your children and grandchildren with crushing debt."

So, how does this family respond to their impending financial doom? The "fiscally conservative" republican father proposes a spending reduction of $68, causing the "compassionate" democratic mother to go into histrionic convulsions. In the course of their fight, she claims that this "extreme" cut will starve their poor children, failing to see that the biggest threat they face is looming bankruptcy. And rather than focus on reducing the expenses that comprise nearly 80% of their budget (entitlement & military spending), the republican father ignites a firestorm by bring up highly contentious, but fiscally meaningless expenses (NPR, Planned Parenthood and the EPA) that constitute less than 1 penny of their budget! That would be equivalent to chastizing their son for his purchase of a single stick of gum, while ignoring the brand new car that they just bought on credit. Of course, the family should debate and vote on these philosophically and morally significant issues, but only once they have resolved their grave fiscal crisis.

 After much contentious debate, they finally reach a compromise and decide to cut their yearly expenses by $38.5 dollars. They hail their great accomplishment even though it only represents a 0.231% reduction in their yearly deficit. Clearly neither the mother nor father are serious about getting their finances in order. But, even if they were, their efforts to cut their budget were doomed from the start was because:

- they categorized 57% of their expenses (social security, medicaid & medicare) as  mandatory.

-they refused to consider seriously scaling back their bloated home security system (military), which account for 20% of their budget.

-6% of their budget went towards servicing the interest on their huge loans.

-this means that they could only work with the 17% of their budget that they considered "discretionary, non-defense." A modest reduction of 6% of these expenditures would slash around 35% of their discretionary expenses.

"But way," you say, "can't they solve this problem by increasing their revenues (taxes)?" By reversing their Crazy Uncle W's revenue cuts they would lower their yearly deficit by $370, which is a good start, but without drastic spending cuts, it would barely make a dent in the $16,450 yearly deficit. And clearly the problems of the federal government cannot be solved by "cutting waste" and "eliminating earmarks"; as infuriating as they may be, they constitute a very small portion of overall spending.

On a fundamental level, this problem is philosophical; we will never get our fiscal house in order until we seriously reconsider our vision of the proper role and responsibilities, size and scope of the federal government. We must free ourselves from financially unsustainable and morally corrosive notions of entitlements; we are neither entitled to what we cannot afford nor are we entitled to the wealth of others, especially of future generations. More than anything, we the people of United States must reject shameful acts of political theater and demand that politicians take serious steps to put us back on the path to a sustainable financial future. Having our crooked Uncle Bernanke (continue to) expand the money supply is not an acceptable solution; this will lead to inflation and the debasement of the dollar. The only viable solution is for the federal government to live within its means, just as every family must eventually do. The Republicans will have to swallow the bitter pill of tax hikes and the Democrats will have to acquiese to major cuts in entitlements. The longer we delay this, the more painful the needed economic and cultural corrections will be.

Monday, April 4, 2011

Product of Incest

Supporters of the GM Bailout are celebrating the supposed payback of the funds to the government (will be discussed in a later post). But, a closer look at the deal reveals unsettling details, like a tax break that may go as high as $45 billion. When the federal government and politically connected corporations form "strategic public-private partnerships," their inbred progeny are usually quite costly to American Tax Payers.

NOVEMBER 3, 2010.

GM Could Be Free of Taxes for Years

General Motors Co. will drive away from its U.S.-government-financed restructuring with a final gift in its trunk: a tax break that could be worth as much as $45 billion.

.GM, which plans to begin promoting its relisting on the stock exchange to investors this week, wiped out billions of dollars in debt, laid off thousands of employees and jettisoned money-losing brands during its U.S.-funded reorganization last year.

Now it turns out, according to documents filed with federal regulators, the revamping left the car maker with another boost as it prepares to return to the stock market. It won't have to pay $45.4 billion in taxes on future profits.

The tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years. In GM's case, the losses stem from years prior to when GM entered bankruptcy.
Usually, companies that undergo a significant change in ownership risk having major restrictions put on their tax benefits. The U.S. bailout of GM, in which the Treasury took a 61% stake in the company, ordinarily would have resulted in GM having such limits put on its tax benefits, according to tax experts.
But the federal government, in a little-noticed ruling last year, decided that companies that received U.S. bailout money under the Troubled Asset Relief Program won't fall under that rule.
Neal Boudette discusses GM's IPO plans, which will raise up to $10 billion and cut the government's stake to below 50%.

."The Internal Revenue Service has decided that the government's involvement with these companies, both its acquisitions plus its disposals of their stock, means they should be exempt" from the rule, said Robert Willens, a New York tax consultant who advises investment banks and hedge funds.
The government's rationale, said people familiar with the situation, is that the profit-shielding tax credit makes the bailed-out companies more attractive to investors, and that the value of the benefit is greater than the lost tax payments, especially since the tax payments would not exist if the companies fail.
GM declined to comment.

The $45.4 billion in future tax savings consist of $18.9 billion in carry-forwards based on past losses, according to GM's pre-IPO public disclosure. The other tax savings are related to costs such as pensions and other post-retirement benefits, and property, plants and equipment.
GM may avoid paying up to $45 billion in taxes for up to 20 years, according to people familiar with the situation. Above,GM's Cadillac logo is displayed on the grill of a Cadillac SRX.

.The losses were incurred by "Old GM," the company that remained in bankruptcy after the current "New GM" resulted from the reorganization last June.

.Investors typically view tax-loss carry-forwards losses as important assets in bolstering a company's balance sheet.

GM's chief domestic rival, Ford Motor Co., last year adopted a plan to preserve deferred "tax assets" which stood at $17 billion at the end of 2009. Ford can use the tax attributes in certain circumstances to reduce its federal tax liability. Ford declined to comment on the GM tax ruling.
Write to Randall Smith at randall.smith@wsj.com and Sharon Terlep at sharon.terlep@wsj.com


Tax Loopholes Are Not Conservative!

After 8 years of the atrocious GW Bush Administration, many Americans equate corporate welfare and tax loopholes with conservativism. To dispel this notion, more conservatives need to join their progressive compatriots and raise hell when companies like GE use tax loopholes to pay zero dollars in taxes and follow their indignation with efforts to close these loopholes.

"But wait, aren't low taxes a fundamental tenant of conservatism?" you may ask.

 Yes, across the board low taxes, fairly applied to all individuals, industries and enterprises is conservative. But, maintaining a tax regiment that combines high corporate taxes (yes, our rate of 35% is among the highest in the world) and a myriad of loopholes and subsidies for politically connected corporations and industries is not. To start off with, its an example of cronyism in which select corporations increase their influence over the government via their lobbying efforts. Such influence allows them to gain unfair advantage over their less connected market competitors. Granting politicians the power to exercise undue control over the economy by helping to choose which companies and industries become winners, is a departure from free market principles. And such actions ultimately increase the tax burden on the larger public.

Predictably, few politicians on either side will fight to create a simpler, less interventionist and burdensome tax code, because that would diminish their power to grant favors and gain campaign contributions.

GE: 7,000 tax returns, $0 U.S. tax bill

By Annalyn Censky, staff reporterApril 16, 2010: 11:52 AM ET

NEW YORK (CNNMoney.com) -- General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0.

How'd it pull off that trick? By losing lots of money.
The 2009 income tax bills for America's biggest companies ranged from $0 to $15 billion. Here's why.

GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.

"This is the first time in at least decades that GE has reported negative U.S. pretax income and it reflects the worst economy since the Great Depression," Anne Eisele, GE's director of financial communications, said via e-mail."

But what about the $10.8 billion profit overseas? GE is "indefinitely" deferring income tax payments on those profits, Eisele said.
It may seem like accounting magic, but it's completely legit.

GE isn't the only "Top 5" company on this year's Fortune 500 list that owed no income taxes. Bank of America (BAC, Fortune 500), which suffered major losses in 2009, included a tax benefit of $1.9 billion in its annual profit.

"That's one way of escaping taxes," said Scott Hodge, president of the Tax Foundation. "Companies get to deduct their losses, so if there's no earnings, then they pay no income tax."

But GE isn't exactly escaping all tax-related pain: The company paid almost $23 billion in taxes to governments around the world from 2000 to 2009, Eisele said.

Plus, paying the accountants to crank out 7,000 tax returns can't be cheap.

And then there's all the lawyers needed to defend those returns. GE filed tax paperwork in more than 250 jurisdictions around the world last year. "We are under examination or engaged in tax litigation in many of these jurisdictions," the company dryly notes in its annual report.

GE may not owe the IRS, but it still has to file -- and its filings are epic.

In 2006, as the IRS ramped up its corporate e-filing program, the tax agency actually issued a celebratory press release when it processed GE's tax return. On paper, the return -- the nation's largest -- would have totaled a massive 24,000 pages. But instead, the IRS was able to upload the 237 MB document in under an hour.

Reading it, though, is apparently taking a bit longer. The IRS is currently auditing GE's tax returns for 2003-2007.

Sunday, April 3, 2011

Purge the Neocons

Jack Hunter offers correctly points out that there was nothing conservative about GW Bush and his neoconservatives cohorts, whose only defining characteristic was their aggressive foreign policy and focus on nation building. The usual conservative skepticism of government attempts to engage in social and economic engineering was most notably absent in those who believed that the United States could transform Iraq & Afghanistan into stable, peaceful, market-oriented democracies. The most dangerous and fiscally irresponsible example of "big government" is reckless warfare and nation building. In the last few years of his life, conservative commentator Robert Novak took a great deal of heat for his public opposition to the invasion of Iraq. And recently the much respected conservative writer George Will called on the American Government to withdraw from Afghanistan and abstain from participating in the Libyan Civil War. If republicans ever hope to gain the support of more thoughtful Americans, they must distance themselves from neoconservative nation-building and affirm the traditional conservative principles of non-intervention.