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George Rebane

Congressman Tom McClintock is a good man, and a politician Jo Ann and I have supported since our SoCal days.  We continue to support him.

McClintock110630 Last Thursday night (30jun11) we were in south (Nevada) county attending a townhall meeting with the congressman at a local Lions Club.  The focus of his speech was the country’s financial crisis and the ongoing debt limit negotiations.  As expected, Tom was there with a lot of charts and graphs that illustrate his usual substantive presentations.  His California District Director Rocky Deal and I estimated that the gathering was just shy of 250 people.  It was a good roomful with people of every political coloration in attendance since Tom represents us all.  Q&A time produced a lot of excellent ones from all over the map.

Perhaps I asked him the most awkward question of the evening, because Tom answered it as if he had misunderstood me.  In his talk the congressman reviewed the loggerheads between the Keynesian and Austrian school positions on government intervening in a nation’s economy and attempting to create jobs.  He highlighted FDR Sec Treas Henry Morgenthau’s 1939 testimony to Congress that is now iconic in conservative circles, and still invisible to progressives (search RR, ‘Morgenthau’).  RR readers are familiar with the diametric arguments.

My question concerned the Democrats’ eternal silence on Morgenthau’s testimony and if whether in their debt limit negotiations the Republicans ever considered that Team Obama and the Democrats want to purposely weaken America economically so as to have us stand down as one of the world’s hegemons, and put us into a more compliant mood to work as a peer toward a global collective.

GrossFederalDebt The congressman responded by saying that no one in Washington denies Morgenthau’s assessment of FDR depression era policies; it is a matter of historical record that on the eve of WW2 Morgenthau lamented that Keynesian government spending programs had not worked and had resulted only in increasing the national debt.  He also recounted that President Obama, in a meeting with members of Congress, clearly and believably stated that his administration would be judged by how it restored America’s economy to strength, therefore that was the goal and focus of his efforts.  And that was that.


Given that the congressman was addressing a room full of people that included his Democratic constituents, perhaps he did not want to be as candid as he could.  But that is not the character of Tom McClintock.  I walked away from the meeting with the feeling that our congressman (and perhaps others of his Republican colleagues) believe in these past two years that they have been debating the left on ways and means to achieve a common goal.  That the immediate and obvious failures of recent progressive policies involving the explosion of government and its commitment to astronomical levels of debt were nothing more than the products of the ongoing historical give and take between the Keynesian and the Austrian approaches to managing the economy.

As these pages show, I join my small voice with the many national commentators who point out that if we look at Obama’s path to the White House, the people he has surrounded himself with, and their written and spoken words, then there is a much simpler explanation for the strivings and accomplishments of this administration.  It is not enough to just accuse them of being insane in their reapplication of policies that haven’t worked and this time expect a different result.  It is not productive to continue to negotiate with the progressives under the public face of a common goal.  Since if such goal does not exist, then the Republicans are doomed to bear the burden of every failure that derives from these negotiations – this is the consistent advice from every theory and handbook on successful negotiations.

Undoubtedly there is political risk in calling out the progressives on their global agenda.  But continuing on the current fruitless path under erroneous assumptions is a recipe for a bitter political certainty.  Both sides endlessly repeating their mantras of ‘cut spending’ and ‘increase taxes’ spreads a boring fog on an economically threatened electorate that is demonstrably deficient in history, current events, and critical thinking skills.  As studies have shown (Bryan Caplan, 2007), in their minds the most oft repeated and simple one-liners will prevail.

I believe that the debt limit debate should be elevated to point out the extent that American liberals in public life have signed up for nudging (a la Cass Sunstein, the administration’s regulatory czar) or precipitously shoving us into their brave new world order.  This would not characterize them as being necessarily evil or wishing ill to our citizens.  Progressives are zealots of their own stripe who, over the past century, have left a long record of the kind of governance that they believe would most benefit mankind.  It is that record which needs to be brought into the debate, and connected to the mandates that Democrats are now spreading across the land.

Putting the progressive future on the table and shining a light on it will make it accessible to at least the voters who are not yet in the grip of transfer payments.  When the global future is visible to everyone in all its ‘glory’, it may also motivate the left to reconsider their approach to how fast they want to “fundamentally transform” us.

Believing their own words makes it plain that not everyone on the left wants America to remain a strong and sovereign nation-state.  In any case the perennial global goal of the progressives begs to be considered publicly by conservatives, and for critical thinkers Occam demands its place among the explanations for the progressives’ current behavior in the debt limit negotiations.

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64 responses to “Tom McClintock Townhall – An Alternative Ignored?”

  1. Douglas Keachie Avatar

    Not CALSTRS, and I am expecting this year’s mid July report to be even better.
    July 19, 2010
    12.2 percent return a positive note, but 2008 declines still impact portfolio.
    WEST SACRAMENTO, CA– The California State Teachers’ Retirement System (CalSTRS) investment portfolio posted a solid 12.2 percent return at the end of the 2009-10 fiscal year.
    The CalSTRS investment portfolio’s market value at fiscal year’s end was $129.77 billion. The 12.2 percent return rate beat the actuarial rate of 8 percent and brought in more than $10 billion as the 2009-10 fiscal year ended on June 30.
    However, because CalSTRS bases its investment portfolio performance on a three-year rolling average, the last two years’ losses of 25 percent and 3 percent, still have an effect.
    “We’ve taken steps to position the portfolio for long-term growth, but we’re not out of the woods yet,” said CalSTRS Chief Investment Officer Christopher J. Ailman. “The American economy suffered a near-death experience in 2008, and it’s going to take some time to fully recuperate from that. This year’s performance is a solid start along that road to recovery.”
    The CalSTRS Board and investments staff have positioned the fund for ongoing recovery by:
    Expanding its target asset ranges to avoid having to sell at a loss.
    Temporarily shifting 5 percent of the portfolio from global equities to fixed income, real estate and private equity to take advantage of the distressed market.
    Permanently shifting 5 percent of the portfolio from global equities to create a new absolute return asset class for inflation-protection.
    Adopting a new asset allocation mix to further diversify the portfolio and reduce its stake in the global stock market.
    Launching the Innovations and Risk unit to explore new investments such as a macro global hedge fund strategy, commodities and microfinance.
    Returns by asset class were: 14.5 percent for global equities (U.S. equities posted 15.7 percent, non-U.S. 12.1 percent), fixed income at 12.3 percent, private equity with 21.7 percent, and real estate with -12.4 percent.
    As of June 30, 2010, the portfolio holdings were: 51.7 percent in U.S. and non-U.S. stocks, 22 percent in fixed income, 14.5 percent in private equity, 10.1 percent in real estate, 0.9 percent in absolute return assets and 0.8 percent in cash.
    The California State Teachers’ Retirement System is the second largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 848,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.

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  2. D. King Avatar
    D. King

    Nothing to see here!

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  3. George Rebane Avatar

    The only thing that really matters is that the local jurisdictions are required to contribute no more than the normative predicted amounts. If they need to contribute more, then these become unfunded liabilities and no amount of bullcrap stats will save the day. CalSTRS was underfunded. We shall see.

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  4. Paul Emery Avatar
    Paul Emery

    I need to ask. Where does that 50 percent non taxpayer number come from. Can someone help me on that. It is an assumption without details.

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  5. George Rebane Avatar

    PaulE, According to the National Taxpayers Union the latest IRS report is that in 2008 the bottom 50% of “adjusted gross income” earners paid 2.7% of federal income taxes. And AGI itself is a slippery figure that includes transfer payments for the lower income people who are then taxed on what they make/receive – i.e. they have to give some of it back. The bottom line is that essentially half of American adults pay no federal income taxes on their own earnings. The estimates for all American voters is a bit more than half.

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  6. paul emery Avatar
    paul emery

    Thanks George I’ll check it out

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  7. George Rebane Avatar

    This comment thread on taxes and who pays what may be continued on ‘Class Warfare a la Joe the Lip’
    http://rebaneruminations.typepad.com/rebanes_ruminations/2011/07/class-warfare-a-la-joe-the-lip.html

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  8. Greg Goodknight Avatar
    Greg Goodknight

    Thanks for making my point, Keach. Galbraith was doing just what I referred to, “there never was anything called “trickle down” economics except as a pejorative term”. No economist ever formulated a “trickle down theory” and promoted it, and socialists like Galbraith (I heard him accept the label) in a debate with Buckley) liked pejorative terms for policies that make shaking down businesses harder. Referring to “trickle down” is political speech, not economics.
    My minor was in history, grades were good, thank you.

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  9. Greg Goodknight Avatar
    Greg Goodknight

    Just taking some of Keachie’s post and searching, it turns out he’s cut and pasted a bunch from Wikipedia without attribution. That’s plagiarism, Keach, and it violates the terms of use of the page you copied it from.
    http://wikimediafoundation.org/wiki/Terms_of_use

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  10. Douglas Keachie Avatar

    It’s the meaning of the word “is” . If you wish to believe that there is nothing that anyone thinks of as trickle down economics, as a reflection of the economics they live under, that is your right. BTW, you left out mentioning the oats and sparrows theory from the days of William Jennings Bryant, as a history minor, I thought you’d love that part. And besides, I did not claim it to be an “official theory” of any given economist, now did I? Don’t go claiming utterances that don’t exist.
    Greg, here’s a real wild goose chase for you. Go find out what percentage of people bother to do so, and also, do you contribute to the Wikipedia annual fund drives? I’d be willing to bet they be more than willing to give dispensations to all who do, and I’d qualify, having given for years. if I were making cash off of the repostings of information, that would be altogether another matter. Given the ease with which anyone can search for a unique string from any post, it is very easy to trace stuff. You obviously understand the concept.
    Here’s the thought question, when you did your search, you did so using “copyrighted materials,” so are you guilty of using copyrighted materials. How nitpicky would you like to get? Happy submarining! Don’t run out of coal…
    Oats and sparrows?
    Feed a horse (the rich) more fresh oats (tax breaks), and surely the sparrows (the other 94% of the population) will find a few seeds to eat, in the horse droppings. Such a good image for today!

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  11. Douglas Keachie Avatar

    BTW, if it really bothers the community at large here, I’ll be happy to attach the url, which is all that is required to meet the rules. If nobody other than Greg is distressed by this, then to be somewhat true to the spirit of Wikipedia, I’ll do the following:
    –Wikipedia —
    a simple macro on the keyboard.
    Greg has cited a lot of statistics, with no references whatsoever for many of them. I don’t see anybody crying in their beers over the situation.

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  12. Greg Goodknight Avatar
    Greg Goodknight

    Keach, you also forgot to put quotes around the stuff you lifted verbatim. Is this how you learned to write at UC Berkeley?
    Plagiarism is plagiarism. You didn’t write those words, someone else did.

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  13. Greg Goodknight Avatar
    Greg Goodknight

    To be true to the spirit of Wikipedia, you need to give credit as specified by Wikimedia. You might be surprised to note that can be a list of authors of the article you’re quoting. It’s about authorship credit, Keach, not indulgences to cover past sins. You can’t buy your way out.

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