Fact—we rely on businesses (large and small) to supply us with essential goods and services every day.

Fact–In order to keep bringing us those goods and services, the businesses which provide them must take in more money than they spend in providing those goods and services. This is called a profit margin. Without profit margin, there’s an incentive for businesses to stop bringing you those goods and services. This would be a bad thing.

Fact–Since profit margins provide incentives to businesses to bring you the best goods and services at the cheapest prices (recall that LOTS of businesses provide the same goods and services, and to get YOUR money, they’ve got to give you what YOU want), when a business makes LOTS of profits, it is obviously doing something VERY right. Nike and Microsoft aren’t deadbeats producing what nobody wants to buy and wasting resources. The fact that each makes HUGE profits, means that there’s lots of happy people running around in their sneakers and typing away on their computers. When more and more people value their own money more than they value possessing a pair of sneakers or a laptop, Nike and Microsoft will stop making profits. That may happen some day, but not this day. As of right now MILLIONS of people every day WILLINGLY exhange dollars for the products that these companies make. Why? Because to these people the VALUE of possessing these products EXCEEDS the value of the dollars they’re trading to Nike and Microsoft.

If you follow the news (and if you’re following this sorry excuse for a blog, you’re a safe bet to follow the news as well) you’ll recall that President Obama is attempting to make hay out of the fact that *GASP!* insurance companies make *PROFITS*.

Does he think you’re stupid?

While you ponder that question (hint, the answer is ‘yes’), please consider that insurance companies currently make a whopping 3.8% profit margin on sales of their policies. That means once all the revenues are collected and taxes are deducted, they make 3.8% more than the amount it cost them to produce the things they sold.

I used to sell gum, lollipops and candy out of my knapsack when I was a freshman in high school. I used to buy lollipops for ten cents apiece and sell them for a quarter. Charms Blow Pops. Nothing finer. Luckily, I wasn’t taxed on my earnings (Obama hadn’t yet been elected). I made $.15 per sale…for a profit margin of 60%. Lots of kids would rather have a Blow Pop after lunch than that extra quarter lying around in their pocket. I understood that….and got them what they wanted. Never an unhappy customer.

Was I evil?

Check out the rest of the companies on that chart I linked to above. Look at those margins:

Application software–22.8% margin.

Beer companies—22.2% margin.

Cigarette companies–15.7% margin.

Hell even book publishing manages a 7.6% margin. Want to fight injustice? Go find out what the starting salaries of editorial assistants are and then show them that 7.6% number.

And here are these big bad insurance companies making a measley 3.8% margin on their policies.

Forget about PROFITS. Profits don’t mean anything unless you understand them relative to what it costs to PRODUCE that profit. A billion dollars of profit may only yield a margin of 2 or 3 percent. Do you feel as badly about a company pulling down big profits if you know that it COSTS them huge amounts to bring their goods and services to you? Those goods and services that you actually LIKE and WANT to buy?

Obama is a snake oil salesman. A charlatan. Be very afraid because him and his party hold the levers of government in their sweaty little hands.

I’ll close with a paraphrase of Dr. Cornelius’ classic reading from the sacred scrolls in Planet of the Apes. He was speaking of “Man”, but he just as easily could have been talking about Liberals.

Beware the beast Liberal, for he is the Devil’s pawn. Alone among God’s primates, he taxes for sport or lust or greed. Yea, he will nationalize his brother to possess his brother’s land. Let him not breed in great numbers, for he will make a desert of his home and yours. Shun him; drive him back into his jungle lair, for he is the harbinger of death.

Damn you.

Damn you all to Hell!

How much is too much? When the “carrot” of earning lots of money becomes the “stick” that beats you to death with taxes, what’s a young entrepreneur to do? Does she work hard, innovate and pioneer? Or does she reconsider? How is America better if she reconsiders? Why are we incentivizing that reconsideration?

Consider:

Newly released data from the IRS clearly debunks the conventional Beltway rhetoric that the “rich” are not paying their fair share of taxes.

Indeed, the IRS data shows that in 2007—the most recent data available—the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government. This is the highest percentage in modern history. By contrast, the top 1 percent paid 24.8 percent of the income tax burden in 1987, the year following the 1986 tax reform act.

Remarkably, the share of the tax burden borne by the top 1 percent now exceeds the share paid by the bottom 95 percent of taxpayers combined. In 2007, the bottom 95 percent paid 39.4 percent of the income tax burden. This is down from the 58 percent of the total income tax burden they paid twenty years ago.

To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

Some in Washington say the tax system is still not progressive enough.

via The Tax Foundation – Tax Burden of Top 1% Now Exceeds That of Bottom 95%.

Are we really to tell our children—”Work hard, but not TOO hard! You don’t want to end up paying 90% of that last dollar you earn to Uncle Sam, do you?”

Of course this is mostly theoretical, since none but a small percentage of our population are in that top 1% bracket. Still, it’s all about incentives, isn’t it? It’s about what such a twisted formula says about success in our country. We clearly don’t like it.

And that’s wrong.

Has Obama rescued the economy? You very well may think that if you get your news from the NY Times or MSNBC or any one of a trillion other mouthpieces for the Democrat party, but reality (as it often does) has intervened to spoil the party.

Cast thine eyes on this from the indispensible Innocent Bystanders blog (I know, I’m late to the party on this, but well, I’m late to the party on lots of things and haven’t let that stop me before):

So Obama didn’t know what he was talking about when estimating the effects of the recession OR what he should do about it.

Do we need to trust him on anything else, particularly health care?

With the economy still faltering and jobs still being lost, Mr. Obama’s credibility is sinking and his job approval rating is declining along with the popularity of his initiatives. Republicans, who had insisted the stimulus was wasteful and wouldn’t work, are being vindicated.

The political fallout that mattered most, however, has been among Democrats in the House who will face tough re-election fights next year. They’re in a state of near-panic over the lingering recession. Their confidence in Mr. Obama is fading, and they no longer believe in quickly passing the president’s agenda. Cap and trade has been put off until the fall and health-care reform is starting to stall.

For Mr. Obama, this is all a potentially disastrous turn of events. On Capitol Hill, delay favors the opposition and tends to lead to defeat. The longer a bill sits around, the more its contents are dissected and the less likely it is to pass. Mr. Obama realizes this fact, which is why he is pressing for a quick vote on his health-care reform.

His plan has been to exploit the economic downturn to enact his entire agenda, not just the stimulus. The president’s position, which he repeated again this week, is that his health, energy and education reforms are necessary to create a sustainable economic recovery. It’s a clever political argument, but it makes little economic sense and few people buy it.

That’s not all. The stimulus is such a large increase in spending that it turned the deficit into a political issue. There is a growing national wariness to adding billions (or trillions) to the budget, even for a relatively popular cause like health care.

Had Mr. Obama and Democrats proceeded differently, they’d have better odds now for enacting their agenda. They are victims of their own tactics.

via The Obama Agenda Bogs Down – WSJ.com.

I disagree with that last sentiment, actually. Had he and the Democrats proceeded differently, they’d have succeeded in enacting “some” form of their agenda, but surely not the agenda that’s currently sitting like a steaming nugget on the floor of the American barn. It’s the nature of a radical agenda to be unpopular (thus the term “radical” or “outside the mainstream”), and that’s exactly what their agenda is—radical. The best chance they had of getting it through was to create a diversion and then force feed it down our throats before we had the presence of mind to snap our jaws shut. The economy presented the perfect distraction and the Democrats commenced with the force feeding. They got as far as they could before we caught on and gagged.

It’s not surprising that the much-ballyhooed “economic stimulus” hasn’t done much stimulating. President Obama and his aides argue that it’s too early to expect startling results. They have a point. A $14 trillion economy won’t revive in a nanosecond. But the defects of the $787 billion package go deeper and won’t be cured by time. The program crafted by Obama and the Democratic Congress wasn’t engineered to maximize its economic impact. It was mostly a political exercise, designed to claim credit for any recovery, shower benefits on favored constituencies and signal support for fashionable causes.

As a result, much of the stimulus’s potential benefit has been squandered. Spending increases and tax cuts are sprinkled in too many places and, all too often, are too delayed to do much good now. Nor do they concentrate on reviving the economy’s most depressed sectors: state and local governments; the housing and auto industries.

via Robert J. Samuelson – President Obama, Democratic Congress’s Squandered Stimulus – washingtonpost.com.

But then we knew all that already, didn’t we? We were told by our fawning media to disregard our natural impulses AGAINST spending our way out of a deficit (especially spending that wouldn’t even HIT until after 2010 anyway!) and admonished for not trusting the mixed race messiah with our economic well being. He was the first African-American President, don’t you know? All else be damned.

Turns out we got what everyone gets who doesn’t pay attention to details and pegs their hopes to fluffy idealism.

We got screwed.

Read the whole thing.

To a plurality of Americans, that’s the hope. According to a new Rassmussen poll:

Forty-five percent (45%) of Americans say the rest of the new government spending authorized in the $787-billion economic stimulus plan should now be canceled. A new Rasmussen Reports national telephone survey found that just 36% disagree and 20% are not sure.

According to news reports, only $36 billion of the stimulus plan had been spent as of late May.

Just 20% of adults say the tax cuts included in the stimulus plan should be canceled while 55% disagree. The stimulus plan includes $288 billion in tax cuts.

While there is a wide partisan gap on the question of stimulus spending, there is little partisan disagreement on maintaining the tax cuts.

President Obama on Monday vowed to speed up the pace of stimulus spending and said the money will help “create or save” 600,000 more jobs this summer.

Ever the leader of men, Obama has vowed to spend more while the country begs for less.

Is the honeymoon over?

Had to read this headline twice.

Obama seeks fiscal responsibility mantle

He’s seeking it now? I mean, it’s nice, if it’s true, but I can’ t believe that this is about anything except Obama trying to cover his ass after his MASSIVE outlay of irresponsible spending contained in the “stimulus” package. Let’s see what you think.

WASHINGTON (Reuters) – President Barack Obama sought on Tuesday to show he was serious about improving the U.S. budget picture as he called on Congress to pass new limits on tax cuts and spending programs to avoid adding to deficits.

Obama urged passage of “pay-as-you-go” legislation that would require any new tax cut or automatic spending program to be paid for within the budget.

“The ‘pay as you go’ principle is very simple. Congress can only spend a dollar if it saves a dollar elsewhere,” Obama said in a speech at the White House attended by several Democratic members of Congress.

I guess that first sentence gives it away, doesn’t it? Reuters couldn’t help itself. Instead of saying that Obama’s plan is meant to actually IMPROVE an overtaxed economy that he himself created, they say that the move was designed to “show he was serious” about improving the economy. Is that the same thing as what I said? Not even close. I can either do something, or so something that “shows I’m serious” about doing something. If you actually had a vested interest in that thing I was supposed to be doing, would you rather I actually DID that thing or instead show merely that I was serious about doing it?

Second, he’s going to cut the deficit by removing tax cuts? Doesn’t he read the papers? Tax cuts increase revenue. By raising taxes he’s going to DECREASE the amount of money in the treasury and INCREASE deficits.

Finally, the kicker. He says that this “pay as you go” program will work by requiring that a dollar be “saved” before any new dollar can be spent. He did NOT say that a dollar of spending had to be CUT before another can be spent. He said that a dollar had to be SAVED….which is Obama-speak for….what, exactly?

Imagine the following scenario. Democrat pork-wranglers get together to propose a bill to increase spending by $100billion. According to Obama, he won’t sign it until the porkies can show that $100billion will be “saved” by the passage of that bill. What sort of proof does he need? Doesn’t say. I’d bet it’s a pretty low threshhold, what about you? The porkies would likely say that spending $100billion now will save $100billion in future costs.

And that will be that.

There’s one more piece to this ridiculous Reuters article that deserves mentioning:

Republicans have warned that programs such as the proposed health care plan would add to the budget deficit for years to come and have also criticized Obama’s $787 billion stimulus plan, which was passed by Congress in February.

Obama contends that much of the budget deficit was inherited from the Bush administration, which presided over a shift from record surpluses to huge increases in the deficit fueled by the financial crisis and spending for the Iraq war.

“The reckless fiscal policies of the past have left us in a very deep hole,” Obama said. “Digging our way out will take time and patience and tough choices.”

First, Republicans have warned that a complete government takeover of our health care system would “add to the deficit for years to come”??? Are the Republicans the only ones? How about a quote from a Democrat that says it won’t add to the deficit? Does any reasonable person believe this massive spending won’t add to the deficit? Unbelievable. Obama’s position is indefensible…except by the MSM.

Second, Bush left office with the deficit at a tick over $400billion. Obama’s projected deficit for 2009 is $1.85trillion….thanks to the massive pork burger he and his Liberal buddies in Congress just stuffed down our throats. It was sort of like being waterboarded, only half as polite. Here’s a handy chart to post on your night table so that you never forget how deeply and thoroughly we’re all being f***ed by the Lord High Obama:

Obama projected deficit compared to prior administrations

May unemployment numbers are in, and they’re pretty bad. Worse, worse in fact, than even Obama’s crack team of experts predicted.

I guess there are 2 ways of looking at that steaming mess, aren’t there?

First, Obama’s estimates for joblessness with and without the stimulus were way off. An amateur making an amateur mistake. Which leaves the administration open to the theoretical explanation that hey, it might have been much worse had we done nothing. It “might” have, because, as it turns out, we didn’t really know what we were talking about at all with those estimates, therefore, we can’t rule anything out. Sure. I guess. It might have been worse. But there’s no way of ever knowing based on your numbers, which are admittedly full of lightness and air. While this explanation may permit the administration to continue to blow bubbles of hope up the posteriors of people who rely on the NYTimes for information (his base), to any semi-serious consumer of information, anything that flows forth from these numbers (including rosy predictions), are utterly craptastic.

Another explanation could be that Obama’s stimulus plan has made things worse then they ever would have been without the stimulus. That explanation actually assumes that Obama’s team did a good and accurate job of forecasting, at least with regard to the “without the stimulus” line. They assumed that if we did nothing, things would go a certain way, but that if we did X, things would go a different way. Well, it DID go a different way…but not the way Obama thought. They got the baseline right, but misjudged the effectiveness of their own plans. This explanation makes the most sense.

It’s like turning into a skid. They teach you that in driver’s ed. At least they did teach it to me in 1986. I assume they still teach it because it’s good advice. That is, when your rear end is fishtailing out to the right (causing your front to go to the left), the best way to regain control is to steer to the left. Into the skid. Don’t turn your wheel to the right, against the direction that your rear end wants to go. You’ll continue to skid that way, and that’s bad.

It looks like Obama’s grand stimulus plan is turning into one giant turn against the skid. Joblessness is now at 9.4%. Obama told us that if we followed his plan and infused the economy with a trillion dollars in porkbarrel spending, that we’d arrest the jobless trend and level it off by now at somewhere near 7.8%.  It’s not just that it didn’t happen that way, it’s that his actions, when he took them, could not have helped but yield this same result. He turned against the skid. What the econony needed (and continues to need) is pro-business, pro-growth words and deeds. The words to boost confidence and the deeds to follow through. We needed (and need) a commitment to tax cuts so that businesses are incentivized to hire people and make things. We need to permit the failures to fail (GM, Chrysler) so that their capital may be re-allocated according to efficient, capitalist resource management. We need taxpayers to believe that their government is on their side.

What we got was the opposite of that, and we must now deal with the entirely predictible consequences. There was no way that Obama’s plan would yield anything BUT the results it got.

He made things worse than they would otherwise have been by implementing a socialist engineering plan to stanch the temporary downturn of a capitalist economy.

And if you believe that he was actually trying to save the economy by implementing his plan, then you can feel sorry for him and hope he does better with his next plan. He turned against the skid when he should hae turned into it. Better luck next time.

But if you’re like me and believe that Obama is hostile to capitalism and planned all along to bleed us down and transform our economy into statist, engineered, socialist dystopia, you understand these last few months as his own “Thelma and Louise”—wherein he’s taken firm grip of the wheel and is deliberately driving us over the cliff.

Who knows. I’m tired and didn’t get much sleep last night. The baby was up a few times last night and is now snoozing peacefully as I tap tap away in the kitchen. I need some more coffee.

Here’s Federal Reserve Chairman Ben Bernanke today testifying in front of the House Budget Committee:

[L]arge U.S. budget deficits threaten financial stability and the government can’t continue indefinitely to borrow at the current rate to finance the shortfall.

“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Bernanke said in testimony to lawmakers today. “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”

Begin planning now?

The Obama Administration’s every act for the past 6 months has been designed to be nothing except unbalanced, risky and detrimental to economic moderation. We should begin planning now to restore balance?

The thing about ‘balance’ is that it doesn’t work on a macro level. Each day must be balanced. Each act must be directed to it. One doesn’t expect balance by doing one thing exclusively for a 6 months and then doing the exact opposite of that thing for the next 6 months. While the year is balanced, admittedly, the day to day is a mess, and any objective you may have to derive value from that balance is non-existent.

I don’t set off on a plan to lose weight by eating 15 Big Macs a day for a month and then eating 15 salads a day for the month after that, do I?

That’s lunacy.

Balance, instead, would be a steady daily diet of salads with an occasional Big Mac thrown in. Maybe 2. I digress…

It’s good that Bernanke is preaching balance and an aversion to spooking the markets. It’s just that there’s been nothing that Obama’s done for the past 6 months to suggest he’s interested in balancing anything, so where’s Bernanke been until now? Has he finally seen the light? If so, I for one must question his vision. The sign’s been blinking red now for a long time. Obama is dangerous, radical, and motivated by a fundamental dislike for the capitalist foundations on which this nation was built.

If Bernanke’s just seeing this now, I’ve got to wonder where he’s had head since January.

NEW YORK Reuters – Vice President Joe Biden acknowledged on Tuesday that some waste is inevitable in the spending of a $787 billion economic stimulus package, in a characteristically blunt assessment.

“We know some of this money is going to be wasted,” Biden said during a roundtable discussion in New York with business leaders aimed at promoting the two-year stimulus plan.

[clip]

Biden said transparency and accountability are key to the programs success.

“There are going to be mistakes made,” said Biden. “Some people are being scammed already.”

Huh.

I wonder what his point is.

Because if it is to show how wasteful and inefficient anything run by the government tends to be, he’s doing a fantastic job.

What incentive does a gargantuan, leviathan government have to suck up the capital of its citizens in an economical fashion? Without wasting? To take only that which it needs? None. A body without regard for waste, who simply sucks more when it runs low has no incentive whatsoever to spend wisely, to track inventory or to conserve.

A private citizen with limited resources, however, is forced—FORCED—by the laws of simple economics to allocate his resources where they are most efficiently used. If a private citizen loses $500, $5,000 or $5,000,000….he feels it. Because his resources are not unlimited, and because he spilled his own sweat to create that money, he has an incentive to avoid that loss by limiting risk, enacting measured responses to events and conserving.

Not the government. If through waste, “scamming” or mistakes, it loses millions or billions of dollars, they can either print more money or simply suck up some more from taxpayers. They don’t create that money from their own effort and thus there’s no incentive for them to conserve.

No incentive to conservation.

Keep that in mind as you listen to Biden and the rest of the Obama Administration explain their takeover of American private enterprise.

They’re doing things with your money that you wouldn’t do with it yourself.