The greatness of Milton Friedman

Watch this interview. Beautifully succinct.

Tip of the hat to my friends at The Other Club

Taxes and Illegal Immigration

One of the easiest solutions for enforcement of immigration law which would discourage illegal immigration:

1. All employers shall check the social security numbers of all individuals who will be issued 1099s and W-2s against a national database. If they are not on a national database, then the taxpayer shall not be able to claim the deduction. This is no different than the tax code stating that taxpayers cannot deduct bribes or the cost of illicit drugs on their return.
2. Start doing random audits of employers to determine whether their records are up to date on their efforts to do this. First time offenders get a small fine, second time offenders get a bit fine, and finally the third time is criminal. In addition to this, all such persons not deemed to be U.S. persons will be deemed employees: so the employer will also be on the hook for all back payroll taxes (both employer and employee portions) for the period this person was paid by the taxpayer.
   

These two elements, is properly enforced, would do a lot to stem illegal immigration by making it much less appealing to employers to hire them. Many illegals would "self-deport" when many of their job prospects dry up.

The bright side of Grhanholm's Victory

A former colleague of mine had this thing to say about Granholm winning re-election and the democrats getting control of the state senate in Michigan: "My commute to work will be a lot easier now with everybody leaving the state to find work elsewhere".

Election Post Mortem: Democrats

Now the Democrats have siezed control of the House of Representatives for the first time in 12 years, and outright control of the Senate to boot. They were more so beneficiaries of a tired and corpulent Republican majority, as well as fatigue with the perceived lack of progress in Iraq. The Democrats were able to win majorities by not offering any real alternatives, but by aggressively putting out the message that Republicans were wasteful, corrupt, and inept.

Credit needs to be given to Rahm Emanuel, who is largely responsible for the Democratic resurgence. Emanuel recruited candidates that would appeal to red-state voters: pro-gun, nominally pro-life, and adverse to tax and spend politics.

This victory is a great opportunity for the Democrats to become the pro-growth, hawkish party they once were. This election can be seen as repudiation of the Kossites, as their messiah, Ned Lamont was thoroughly thrashed by Joe Lieberman. A democratic majority that would run on a pro-growth, economically populist, and militarily robust party could garner a natural constituency. That, coupled with gubernatorial wins in several states which would provide the opportunity to re-draw more Democratically favorable congressional districts after the 2010 census, could start the beginning of the ascendancy of the party for a long time.

However, should the Democrats not heed the lessons of the Republican defeat and their own defeat of just twelve years ago, they can very well be doomed to repeat it. Art Laffer, the famed economist, said at a lecture I attended that the electorate hasn't really changed over the years, but the political parties have. He said there is a natural majority of the electorate that is pro-growth with a strong foreign policy. From the 30s through the 60's, it was the Democrats that embodied this, while the Republicans were isolationists and anti-growth. Roles reversed in the 70s and 80s. The Clintons managed to co-opt a lot of this during the 90s, but lost it when Clinton left office when the Democrats became infused with Bush Derangement Syndrome. They were rebuffed in 2002 and 2004 because they were seen as anti-growth and weak on national defense.

Thus lies the problem, they must eschew their baser tendencies to tax, spend, and incite more partisan rancor with unnecessary investigations and gridlock. So that means that they will end up infuriating the leftists on their base. But if they're willing to buck them (and they have proven that they have not delivered a single winner yet for the party) and grasp building a greater and lasting majority, the opportunity is there.

My take on it is that the opportunity is there, but it will be squandered. The problem is that the Pelosis, the Conyers, the Rangels, the Waxmans, the Waters of the party are socialists and their baser tendencies will override the bigger picture. I don't think that they can necessarily do what it takes to build that majority, but I can see the Republicans blowing it too.

I guess we'll be able to tell by what they do over the next few months. Stuff like John Bolton comes to mind. If they let him come to a vote, they're looking big picture. If they stuff him in committee and use him for partisan grudge settling, then they're not ready for prime time.

Election post mortem: Republicans.

On a macro perspective, it seems that there are variety of reasons the Republicans "lost" the election. I saw they lost the election on a macro perspective rather than the Democrats "winning" on the basis that the Democrats had no platform of substance outside of not being Republicans. in no particular order, here are some key items (and these primarily apply to the house Republicans):

1. The Republicans became the party of government. Many exit polls were showing that 11% more voters identified the Republicans as the "party of big government" than the Democrats. There is much validity that the house Republicans became a rubber stamp of the President's "conservative welfare state": No Child Left Behind, Medicare prescription drug benefit are the most obvious. This is indicative of the house leadership, particularly Tom DeLay. Tom DeLay is no conservative, and ran his position as house leader in such a manner that would make Tip O'Neil proud - using earmarks and other pork to get legislation passed. From 1998-2006, outside of taxes and welfare reform, it becomes difficult to think of any substantially conservative (in terms of limited government) initiative passed by the House. They were more content to featherbed, bribe constituents with entitlements, rather than reduce the scope of government. This covers one of my basic tenants of nominally conservative parties, they lose their raison d'etre when they stop being conservative. Or to use another analogy, if I want a big government party, I'll vote for the real thing in the Democrats.
2. Corruption. While in historic terms, the Republicans have not been as bad as some other congresses, the fact that they have an "R" after their name means they are held to a different standard than Democrats. Just look at the difference in the coverage of Foley, DeLay, Ney, etc versus the equally bad acts of Jefferson, Reid, etc. and how the press gave the Dems a pass on their "culture of corruption" accusations. Republicans need to be extra vigilant on these matters, and immediately remove potential problems long before primary/election season. Becoming more proactive on the ethics front would have inoculated them on many of these charges.
3. Iraq. It was an issue, but not necessarily for the reasons everybody thinks. To some degree, this election reflected the mood on the events in Iraq, but it was not an anti-war vote as many on the left would think. If you look at the breakdown of people of don't think that things are not going well in Iraq, I would wager that 1 in 3 are just plain "anti-war" and the other 2/3rds want a more aggressive resolution to the problem. I think that on a big picture, there needs to be an effort to show a lot of the good things that are happening outside of Baghdad: the reconstruction efforts, the functioning local governments and growing businesses, etc to offset the media's obsession with the carnage in a localized area. The press has been negligent in its lack of balance on this coverage. Republicans should have spent a lot more time constantly educating the public on everything that was going on in Iraq the past 3 years to counteract the Dems/MSM.
4. A do-nothing congress. This congress would talk a lot about taking on big issues like immigration and entitlement reform and would do nothing. While on many fronts, doing nothing is better than doing something, the perspective of inaction without explanation infuriates many voters and increases the anti-incumbent sentiment.

So, what to do about it? What is obvious is probably what they won't do. Remember that they are the party of limited government and govern on that principle. Elect leaders who believe in limited government who can effectively communicate the need for limited government to the electorate constantly.