Friday, March 25, 2011

How California Taxpayers Help Fund the California Democratic Party

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Sunday, March 20, 2011

Pretty Pictures and a Political Rorschach Test


"The power to tax is the power to destroy"
John Marshall, Chief Justice of the United States (1801-1835)
A recent blog post regarding U.S. income tax caught my eye. The post included an aesthetically beautiful infographic from data artist Stephen Von Worley and his Data Pointed blog that, according to multiple blog posts, purports to show once again that those #@*&# rich people are just not being taxed enough.

Unfortunately, as an engineer and scientist, I have a number of problems with the infographic. One problem is that the original chart is mislabeled, based on the data that it presents as I will explain below. Another problem is that many people apparently misinterpreted what the chart actually tells you.

Infographics, though often useful, are essentially "visual statistics," which reminds me of a favorite quote.

"Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital." -- Aaron Levenstein
Why the Chart is Mislabeled
The original post proclaims "The tax man cometh, and to illustrate the inequities of his cleft-hoofed embrace, we’ve charted the shift in U.S. income taxes from rich to poor over the past century." Unfortunately, the data behind the chart does NOT show this.

The chart claims to show relative tax burden, which in the post is defined as "the amount of tax due relative to the long-term average at each income level."

So what does the infographic actually show? After some reverse engineering, it actually shows the relative change in marginal income tax rate compared to historical averages. Keywords here are "relative change, " "marginal income tax rate," and "historical averages" It’s a common mistake, but high marginal tax rates DO NOT equate to actual tax burden or increased revenues for the government. High marginal tax rates do affect behavior and dissuade earning and investment plus encourage tax avoidance strategies.

Choose Your Average
The non-obvious distortion is that the chart relies on historical averages. Averages themselves can be greatly deceiving.
"Then there is the man who drowned crossing a stream with an average depth of six inches." -- W.I.E. Gates

"The average human has one breast and one testicle." -- Des McHale
Fist, a little background information. Since the inception of the federal income tax, the top marginal tax rate ranged from 7% to 94%. The chart below is color coded according to a chart used later in this post. The source data is available here.

Marginal Tax Rate for Top Income Category, by Year (1913-2011)
Meanwhile, for the bottom tax bracket, the tax rate varied from a low of 0% in the 1970's/1980's to a high of 23% during the New Deal, World War II.

Marginal Tax Rate for Bottom Income Category, by Year (1913-2011)

The average marginal tax rate for top earners was over 59%, with a standard deviation of ±25% for the specified 99 year period (1913-2011) since the 16th Amendment was passed. If considering the entire 235-year history of the United States, the average drops to 25%. If using just the last 25 years, then the historical average is 35.8%. Choosing the specific time period dramatically affects the average.

Relative Difference in Top Marginal Tax Rate Compared to
Historical Average, by Year (1913-2011)

Marginal tax rates for all income taxpayers were at historic highs for twenty years, from 1944 to 1963. For upper income taxpayers, the top marginal rate was 90% or more. Even for the bottom of the income ladder, the rates were over 20%.

However, there was a ten year period (1977-1986) when the marginal rate for lower-income taxpayers was 0%--zip! Mathematically, these zeroes reduce the average. For example, the average marginal tax rate for low-income taxpayers over the thirty-year period (1944-1963, 1977-1986) drops to 13.7%.

The History Embedded in the Charts
With due apologies to Stephen Von Worley for mashing up two of his beautiful infographics, here is some of the history of the U.S. income tax embedded in the charts. The numbered annotations are described below.

Marginal Tax Rate

This is an excellent infographic showing how the marginal tax rate changed over time. The tax rate is presented as a heat map. The higher the tax rate, the closer the color is to white hot. The lower the tax rate, the closer the color is to cool black. The data is also adjusted for inflation, which shows the effect of "bracket creep" over time.

Original, unmodified image:

I re-oriented this graphic to match the "tax burden" chart.

(click image to enlarge)



Changes in Marginal Tax Rate Compared to Historical Average

This is an aesthetically beautiful infographic showing how the marginal rates changed compared to their historical average, over the lifetime of 99-year history since the 16th Amendment was ratified.

Original, unmodified image:

(click image to enlarge)

Note 1:Two lines are added to the United States Constitution upon ratification of the 16th Amendment, legalizing federal income tax.
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Congress subsequently passed the Revenue Act of 1913. The 18 pages of legislation imposed a federal income tax ranging from 1% to 7%, depending on income. The 1913 federal income tax form and instructions are simple and run just four pages.

Note 2:
Due to the costs of World War I, Congress passes the War Revenue Act of 1917 and the Revenue Act of 1918, dramatically increasing the top marginal tax rate to 67%, then to 77%.

Treasury Secretary Mellon understood the negative impact on the high level of taxation.
"The present system is a failure. It was an emergency measure, adopted under the pressure of war necessity and not to be counted upon as a permanent part of our revenue structure. The high rates put pressure on taxpayers to reduce their taxable income, tend to destroy individual initiative and enterprise, and seriously impede the development of productive business…. Ways will always be found to avoid taxes so destructive in their nature, and the only way to save the situation is to put the taxes on a reasonable basis that will permit business to go on and industry to develop."
Note 3:
Due to the unpopularity of the Wilson Administration and World War I, Warren G. Harding was elected President, along with solid Republican majorities in Congress. Congress reduced tax rates by passing the Revenue Act of 1921.

Note 4:
Congress, under the leadership of President Coolidge, reduced all income tax levels by passing the Revenue Act of 1926. The bottom marginal rate was reduced to 1.5%. The top marginal tax rate was reduced to 25%.

Note 5:
The Republican Congress had previously passed the disastrous Smoot Hawley Tariff, heavily opposed by Democrats. Democrats made major gains in the Congressional election of 1930.

Congress, under President Hoover, increased income taxes for all income levels by passing the Revenue Act of 1932. The bottom marginal rate was increased from 1.5% to 4%. The top marginal tax rate was increased from 25% to 63%. It was the largest peacetime tax increase in U.S. history, up to that point.

The combination of bad policy and increased taxation lead to disastrous unemployment, shifts in economic activity, and decreased investment activity. Welcome to the Great Depression.

Note 6:
Congress, under the President Franklin Roosevelt (FDR), passes the "soak the rich" tax policies of the Revenue Act of 1935 (The Wealth Tax Act) and the Revenue Act of 1936. Top marginal tax rates increased to 79%.

Roosevelt’s leadership was challenged by previous Democratic Presidential candidate, Alfred E. Smith, in his famous 1936 radio address, "Betrayal of the Democratic Party."

Note 7:The immense costs of the "New Deal" policies of FDR's Administration plus World War II lead to the highest marginal tax rates for all income levels. Top marginal rates reach an astonishing 94%. Even low-income taxpayers faced a 22.2% rate.

The United States emerged from World War II with its industrial and manufacturing capacity relatively untouched. Much of Europe and Asia were enslaved by oppressive Communist regimes. India was seduced by the unfulfilled promises of Socialism. The United States helped rebuild Europe and Japan and was engaged in a Cold War with the Soviet Union and the Communist Chinese.

Because the United States was essentially the only game in town for those that enjoy Western-style democracy, the federal government could continue to oppressive tax rates.

Note 8:
The Revenue Act of 1964 cut all income tax levels by about 20%. Top rates were reduced to 70% while bottom rates were reduced to 14%.

The tax cut was made popular by Democratic President John F. Kennedy and was an attempt to spur the U.S. economy. Unfortunately, President Kennedy was assassinated before the legislation was finally enacted.

Note 9:The Tax Reduction and Simplification Act of 1977 essentially reduced bottom tax rates to 0% for the next ten years. Top rates were unaffected.

This 0% rate effectively reduces the historical average for lower income taxpayers and causes the "birds eye" pattern in chart of relative marginal tax rates.

Note 10:Congress passes Economic Recovery Tax Act of 1981 (ERTA), better known as the Kemp-Roth tax cut. Top rates were reduced to 50% while bottom rates remained at 0%.

Tax brackets indexed to inflation, reducing "bracket creep." Note how the white line in the tax brackets chart flattens after this point.

Note 11:
Congress passes the Tax Reform Act of 1986, eventually reducing top tax rates to 28%, their lowest levels in modern history. The act also increased bottom tax rates from 0% to 14%.

Although many consider it the second Reagan Tax cut, the act was officially sponsored by Democrats, Richard Gephardt of Missouri in the House of Representatives and Bill Bradley of New Jersey in the Senate.

Note 12:
Congress passes the Omnibus Budget Reconciliation Act of 1993, raising top marginal tax rates from 28% to 39.6%.

The act received no Republican votes and was opposed by some Democrats. Vice-President Gore provided the tie-breaking vote in the United States Senate.

Note 13:
In response to recession from the Dot-Com bubble, Congress passes the Economic Growth and Tax Relief Reconciliation Act of 2001. The act is also known as the first of the Bush tax cuts. Rates were reduced at all levels. The top marginal tax rate was reduced to 35% while the bottom marginal tax rate was reduced to 10%.

In response to the further recession caused by the September 11, 2001 World Trade Center terrorist attack, Congress accelerated some of the changes by passing the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The Open Question
So the question remains, are marginal rates too low for top income earners?

By international comparison, no.

The marginal tax rate is less important than the effective tax rate. Despite the official tax rate, how much to people really pay. This is measured as the tax paid divided by the adjusted gross income.

The Tax Foundation tracks this information (see Table 8), but only since 1980. Using their information, the following chart shows that top tax payers pay more as a share of the adjusted gross income (AGI). The calculations for AGI changed with the 1986 tax law, which results in the apparent spike on the chart.

Because top taxpayers have more income, they would also pay more taxes in absolute dollars, even if their tax rates were the same or lower. However, the chart shows that high-income taxpayers do indeed pay a larger share of their income in taxes than do almost all income classes.

Average Effective Tax Rate by Income Class and by Year
This effect is also obvious looking at the amount of share of revenue contributed by different income levels. Not surprisingly, high-income taxpayers pay the bulk of U.S. income tax.

See also ...

"The Rich Don't Pay Taxes" Lie: Purposely Deceptive, Or Backed Up by Data?

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Sunday, February 27, 2011

Van Jones is the Source for "Koch Plantation"

At a Tea Party counter-union rally in Jefferson City, Missouri, a MoveOn.org counter-counter protester responded to a sign proclaiming "Liberty, Not Slavery" by telling the Tea Party members that "You're on Koch's plantation." The incident was reported by Gateway Pundit and later on the The Blaze. The reference was obviously to the supposedly "evil" Koch Brothers, who fund Americans for Prosperity (AFP), a major ally of the Tea Party. Oh, and David Koch also funds NOVA on PBS (scroll to the bottom of the PBS page) so you know he must be evil, right?


That phrase, "Koch's plantation," sounded familiar. Where had I heard it before?

In January 2011, the Koch Brothers held a secretive meeting in Palm Springs for the ultrawealthy and the well-connected on the Right. Many from the American Left were there to protest (and protest they did).

The "Koch plantation" reference comes directly from a Van Jones speech, at a meeting sponsored by Common Cause to protest the Koch Brothers' event.

The "plantation" line is at about 6 minutes, 55 seconds ([6:55]) into the video.

"We will not live on a national plantation run by the Koch Brothers."


The remainder of the speech is classic Van Jones partisan, class-warfare rhetoric with a few quotable moments.

[0:22]
"I was born in 1968 ... that was the year 'They' assassinated hope in America."

Hmm, so who is this nameless "They" for whom Van Jones cannot mention? Is he aware of some conspiracy that he dare not mention? There were many prominent political figures assassinated in 1968, including political violence throughout the United States.
  • Martin Luther King: April 4, 1968 by James Earl Ray, a long-time criminal and white supremacist. The assassination sparked riots across the United States, including in Washington, D.C., Chicago, Baltimore, Louisville, Wilmington, Kansas City--many of which were most damaging to black communities themselves.
  • Robert Kennedy: June 5, 1968, carefully premeditated by Sirhan Sirhan, a 24-year-old Palestinian immigrant.
  • Violent protests at the 1968 Democratic Convention in Chicago. The protests were held by groups to the left of the Democratic Party at large, including Students for a Democratic Society (SDS). Some SDS members later went on to form the Weather Underground domestic terrorist organization.
  • There were protests by Left-wing organizations around the globe.
Van Jones seems fascinated by '68, the year of his birth. His Twitter account is @VanJones68.

[0:39]
"... and 'They' tried to assassinate hope in our country."

Again, who is "They"? Misguided white supremacists? Palestinians? The Democratic Party? Rioters?

[0:50]
Speaks about 40 years in the Wilderness.

[4:47]
"Our political process has been hijacked by people who are only interested in their own gain, who are only interested in their own profit, and are willing to tell any lie, and spend any amount of money, to prevent America's government from coming to the rescue of the American people."

Unfortunately, many Americans feel that government has become the problem--not the solution. I do not want to be "rescued" by a government that wishes to dictate every matter in my life. Nor do I wish the government to confiscate my wealth to pay for other's follies.

[5:15]
Talks about Tea Party and their concern about Liberty. But, there are two threats. Over-concentration of political power. But there is a greater threat. Excessive concentration of economic power.

[9:12]
"If you want to know what side to bet on, ... big money mean people ... or little people with the truth on their side ... look over there in Egypt"

... attendee ...
[9:33]
"Bring Egypt here!"

I find it amazing that the Left is so worried about the Koch Brothers and is evidently is not bothered or worried about the spending by the likes of Stephen Bing, Peter B. Lewis, Fred Eychaner, Haim Saban, Peter Angelos, George Soros, etc., etc., shown here and here. Or, how about those well-connected, ultrawealthy from the Left, many from outside of California, that attempted to impose and formally institute one-party rule in California by passing Proposition 27? Even Common Cause, who openly fights the secretive ways on the Koch Brothers, fought against the alliance of well-financed backers of Proposition 27. For that, I give Common Cause some credit.

See also ...

"Capital Rivals: Koch Brothers vs. George Soros"

"Koch Industries Continues to Expand Political Influence"

"California Proposition 27, Elimination of Citizen Redistricting Commission (2010)"

"Proposition 27 Revealed!"
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California Legislative Analysts' Office (LAO) Weighs in on Public Pensions


The California Legislative Analysts' Office (LAO) finally weighed in on the California public pension crisis.

I have great respect for the LAO and include links to their material to view without comment. Jason Sisney form the LAO presents "Public Retirement Benefits, Options for the Future," which takes just 15 minutes to watch. The materials provided include the webcast, a summary transcript of the webcast, and copy of the presentation slides.

Presentation Slides
  • View Slides in Adobe Acrobat (PDF)
  • Download Slides Microsoft PowerPoint (PPT)
Webcast (via YouTube)



Transcript
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Do Public-Employee Unions Have Major Influence in California Politics?

With the recent turmoil in the Wisconsin public-employee union debate, it begs the question here in California: Do public-employee unions have undue influence over the political process?

A March 2010 report from the California Fair Political Practices Commission (FPPC), titled Big Money Talks: The 15 Special Interests that Spent $1 Billion to Shape California Government seems to provide evidence of the undue influence of public sector unions in California politics.

The relevant information appears on page 10, in a table titled "The 15 That Spent $1 Billion to Influence California Voters and Public Officials." The data is shown below and available online here.

The minimum entry price for an organization was $34 million. The top spender, California Teachers Association (CTA), spent over $211 million.

Charting the data, the imbalance becomes quickly obvious. The two top senders in California politics are both public-sector unions. California Teachers Association (CTA) is by far and above the largest spender, spending nearly twice that of the next biggest spender, California State Council of Service Employees (SEIU).

(click image to enlarge)


Likewise, charting the spending by the type of organization, again, an obvious pattern appears. According to FPPC data, roughly thirty cents of every dollar spent by the big spenders in California politics comes from the two major California public-sector unions. And where do the unions get all that money? From employee's state-mandated union dues, essentially paid by California taxpayers. With whom do these public-sector unions bargain for their salary and benefits? With many of the same Legislators placed in office courtesy of generous campaign funding from labor. Am I the only one that sees the inherent conflict of interest?

As an aside, I'm also amazed by the spending from California's native American tribes, apparently related to casino gaming.

See also ...
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Wednesday, January 26, 2011

Former Democratic Party Candidate for President Speaks about the "Betrayal of the Democratic Party"

"Those that do not remember history are doomed to repeat it."
Alfred E. Smith, the four-term Democratic governor of New York, became the Democratic candidate for President in 1928 but lost to Herbert Hoover. Franklin Roosevelt had nominated Alfred Smith for the Democratic candidate for President in 1928. In 1932, Smith supported Franklin D. Roosevelt for President. By 1936, Smith was appalled by Roosevelt's "New Deal" policies and attempted to warn the Democratic Party. Because of Roosevelt's popularity, Smith's January 25, 1936 speech was considered by some to be treason. Remarkably, many of Smith's views would now be considered "Republican" or "Tea Party" viewpoints, portions sounding as though they were written by Glenn Beck himself. My how things have changed.
BETRAYAL OF THE DEMOCRATIC PARTYBy Alfred E. (Al) Smith
At the outset of my remarks let me make one thing perfectly clear. I am not a candidate for any nomination by any party at any time, and what is more I do not intend to even lift my right hand to secure any nomination from any party at any time. Further than that I have no ax to grind. There is nothing personal in this whole performance so far as I am concerned. I have no feeling against any man, woman or child in the United States. I was born in the Democratic party and I expect to die in it. And I was attracted to it in my youth because I was led to believe that no man owned it. Further than that, that no group of men owned it, but on the other hand, that it belonged to all the plain people in the United States.
Patriotism above Partisanship
It is not easy for me to stand up here tonight and talk to the American people against the Democratic Administration. This is not easy. It hurts me. But I can call upon innumerable witnesses to testify to the fact that during my whole public life I put patriotism above partisanship. And when I see danger, I say danger, that is the "Stop, look, and listen" to the fundamental principles upon which this Government of ours was organized, it is difficult for me to refrain from speaking up.
What are these dangers that I see? The first is the arraignment of class against class. It has been freely predicted that if we were ever to have civil strife again in this country, it would come from the appeal to passion and prejudices that comes from the demagogues that would incite one class of our people against the other.
In my time I have met some good and bad industrialists. I have met some good and bad financiers, but I have also met some good and bad laborers, and this I know, that permanent prosperity is dependent upon both capital and labor alike.
And I also know that there can be no permanent prosperity in this country until industry is able to employ labor, and there certainly can be no permanent recovery upon any governmental theory of "soak the rich" or "soak the poor."
A Government by Bureaucrats
The next thing that I view as being dangerous to our national well-being is government by bureaucracy instead of what we have been taught to look for, government by law.
Just let me quote something from the President's (Franklin Roosevelt) message to Congress:
"In 34 months we have built up new instruments of public power in the hands of the people's government. This power is wholesome and proper, but in the hands of political puppets of an economic autocracy, such power would provide shackles for the liberties of our people."
Now I interpret that to mean, if you are going to have an autocrat, take me; but be very careful about the other fellow.
There is a complete answer to that, and it rises in the minds of the great rank and file, and that answer is just this: We will never in this country tolerate any laws that provide shackles for our people.
We don't want any autocrats, either in or out of office. We wouldn't even take a good one.
The next danger that is apparent to me is the vast building up of new bureaus of government, draining resources of our people in a common pool of redistributing them, not by any process of law, but by the whim of a bureaucratic autocracy.
The 1932 Platform
Well now, what am I here for? I am here not to find fault. Anybody can do that. I am here to make suggestions. What would I have my party do? I would have them reestablish and redeclare the principles that they put forth in that 1932 platform.
The Republican platform was ten times as long. It was stuffy, it was unreadable, and in many points, not understandable. No Administration in the history of the country came into power with a more simple, a more clear, or a more inescapable mandate than did the party that was inaugurated on the Fourth of March in 1933 (the Democrats).
And listen, no candidate in the history of the country ever pledged himself more unequivocally to his party platform than did the President who was inaugurated on that day (Franklin Roosevelt).
Well, here we are!
Millions and millions of Democrats just like myself, all over the country, still believe in that platform. And what we want to know is why it wasn't carried out.
Now, let us wander for awhile and let's take a look at that platform, and let's see what happened to it. Here is how it started out:
"We believe that a party platform is a covenant with the people, to be faithfully kept by the party when entrusted with power, and that the people are entitled to know in plain words the terms of contract to which they are asked to subscribe.
"The Democratic Party solemnly promises by appropriate action to put into effect the principles, policies and reforms herein advocated and to eradicate the political methods and practices herein condemned."
My friends, these are what we call fighting words. At the time that that platform went through the air and over the wire, the people of the United States were in the lowest possible depths of despair, and the Democratic platform looked to them like the star of hope; it looked like the rising sun in the East to the mariner on the bridge of a ship after a terrible night.
But what happened to it?
Economy in Government
First plank: "We advocate immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance to accomplish a saving of not less than 25 per cent in the cost of the Federal Government." (remember, this was the Democrat's 1932 Platform)
Well, now, what is the fact? No offices were consolidated, no bureaus were eliminated, but on the other hand, the alphabet was exhausted. The creation of new departments -- and this is sad news for the taxpayer -- the cost, the ordinary cost, what we refer to as housekeeping cost, over and above all emergencies -- that ordinary housekeeping cost of government is greater today than it has ever been in any time in the history of the republic.
The Unbalanced Budget
Another plank: "We favor maintenance of the national credit by a Federal budget annually balanced on the basis of accurate Federal estimate within revenue."
How can you balance a budget if you insist upon spending more money than you take in? Even the increased revenue won't go to balance the budget, because it is hocked before you receive it. What is worse than that?
The Middle Class Will Pay the Debt
Now here is something that I want to say to the rank and file. There are three classes of people in this country; there are the poor and the rich, and in between the two is what has often been referred to as the great backbone of America, that is the plain fellow.
That is the fellow that makes from one hundred dollars a month ($1,500 a month in 2009 dollars) up to the man that draws down five or six thousand dollars a year ($76,500 to $92,000 annually in 2009 dollars).
Now, there is a great big army. Forget the rich; they can't pay this debt. If you took everything they have away from them, they couldn't pay it; they ain't got enough. There is no use talking about the poor; they will never pay it, because they have nothing.
This debt is going to be paid by that great big middle class that we refer to as the backbone and the rank and file, and the sin of it is they ain't going to know that they are paying it. It is going to come to them in the form of indirect and hidden taxation. It will come to them in the cost of living, in the cost of clothing, in the cost of every activity that they enter into, and because it is not a direct tax, they won't think they're paying, but, take it from me, they are going to pay it!
What About State's Rights?
Another plank: "We advocate the extension of Federal credit to the States to provide unemployment relief where the diminishing resources of the State make it impossible for them to provide for their needs."
That was pretty plain. That was a recognition in the national convention of the rights of the States. But how is it interpreted? The Federal Government took over most of the relief problems, some of them useful and most of them useless. They started out to prime the pump for industry in order to absorb the ranks of the unemployed, and at the end of three years their employment affirmative policy is absolutely nothing better than the negative policy of the Administration that preceded it.
"We favor unemployment and old age insurance under State laws."
Now let me make myself perfectly clear so that no demagogue or no crack-pot in the next week or so will be able to say anything about my attitude on this kind of legislation. I am in favor of it. And I take my hat off to no man in the United States on the question of legislation beneficial to the poor, the weak, the sick, or the afflicted, or women and children
Because why? I started out a quarter of a century ago when I had very few followers in my State, and during that period I advocated, fought for, introduced as a legislator and finally as Governor for eight long years, signed more progressive legislation in the interest of the men, women and children than any man in the State of New York.
Unconstitutional Measure -- Unfulfilled Pledges
And the sin of this whole thing, and the part of it that worries me and gives me concern, is that this haphazard, hurry-up passage of legislation is never going to accomplish the purposes for which it was designed and -- bear this in mind, follow the platform -- under State laws.
Another one: "We promise the removal of Government from all fields of private enterprise except where necessary to develop public works and national resources in the common interest."
NRA (National Recovery Administration)! A vast octopus set up by government, that wound its arms around all the business of the country, paralyzed big business, and choked little business to death.
Did you read in the papers a short time ago where somebody said that business was going to get a breathing spell?
What is the meaning of that? And where did that expression arise?
I'll tell you where it comes from. It comes from the prize ring. When the aggressor is punching the head off the other fellow he suddenly takes compassion on him and he gives him a breathing spell before he delivers the knockout wallop.
Wasteful Extravagance
Here is another one: "We condemn the open and covert resistance of administrative officials to every effort made by congressional committees to curtail the extravagant expenditures of Government and improvident subsidies granted to private interests."
Now, just between ourselves, do you know any administrative officer that has tried to stop Congress from appropriating money? Do you think there has been any desire on the part of Congress to curtail appropriations?
Why, not at all. The fact is that Congress threw them right and left -- didn't even tell what they were for.
And the truth, further, is that every administrative officer sought to get all that he possibly could in order to expand the activities of his own office and throw the money of the people right and left. And as to subsidies, why, never at any time in the history of this or any other country were there so many subsidies granted to private groups, and on such a huge scale.
The fact of the matter is that most of the cases now pending before the United States Supreme Court revolve around the point whether or not it is proper for Congress to tax all the people to pay subsidies to a particular group.
Here is another one: "We condemn the extravagance of the Farm Board, its disastrous action which made the Government a speculator of farm products, and the unsound policy of restricting agricultural products to the demand of domestic markets."
What about the restriction of our agricultural products and the demands of the market? Why, the fact about that is that we shut out entirely the farm market, and by plowing under corn and wheat and the destruction of foodstuffs, food from foreign countries has been pouring into our American markets -- food that should have been purchased by us from our own farmers.
In other words, while some of the countries of the Old World were attempting to drive the wolf of hunger from the doormat, the United States flew in the face of God's bounty and destroyed its own foodstuffs. There can be no question about that.
Now I could go on indefinitely with some of the other planks. They are unimportant, and the radio time will not permit it. But just let me sum up this way. Regulation of the Stock Exchange and the repeal of the Eighteenth Amendment, plus one or two minor planks of the platform that in no way touch the daily life of our people, have been carried out, but the balance of the platform was thrown in the wastebasket. About that there can be no question.
Let's see how it was carried out. Make a test for yourself. Just get the [1936] platform of the Democratic Party, and get the [1936] platform of the Socialist Party (see also "The Road Ahead: A Draft Platform for the Socialist Party," December, 1936), and lay them down on your dining room table, side by side, and get a heavy lead pencil and scratch out the word "Democrat," and scratch out the word "Socialist," and let the two platforms lay there.
Then study the record of the present Administration up to date. After you have done that, make your mind up to pick up the platform that more nearly squares with the record, and you will put your hand on the Socialist platform. You don't dare touch the Democratic platform.
Democratic or Socialistic?
And incidentally, let me say, that it is not the first time in recorded history, that a group of men have stolen the livery of the church to do the work of the devil.
Now, after studying this whole situation, you will find that that is at the bottom of all our troubles. This country was organized on the principles of representative democracy, and you can't mix Socialism or Communism with that. They are like oil and water; they refuse to mix.
And incidentally, let me say to you, that is the reason why the United States Supreme Court is working overtime throwing the alphabet out of the window -- three letters at a time.
Now I am going to let you in on something else. How do you suppose all this happened? Here is the way it happened. The young Brain Trusters caught the Socialists in swimming and they ran away with their clothes.
Now, it is all right with me. It is all right to me if they want to disguise themselves as Norman Thomas or Karl Marx, or Lenin, or any of the rest of that bunch, but what I won't stand for is to let them march under the banner of Jefferson, Jackson, or Cleveland.
"We Can Take a Walk"
Now what is worrying me, where does that leave me as a Democrat? My mind is now fixed upon the Convention in June, in Philadelphia. The committee on resolutions is about to report, and the preamble to the platform is:
"We, the representatives of the Democratic Party in Convention assembled, heartily endorse the Democratic Administration."
What happens to the disciples of Jefferson and Jackson and Cleveland when that resolution is read out? Why, for us it is a washout. There is only one of two things we can do. We can either take on the mantle of hypocrisy or we can take a walk, and we will probably do the latter.
Now leave the platform alone for a little while. What about this attack that has been made upon the fundamental institutions of this country? Who threatens them, and did we have any warning of this threat? Why, you don't have to study party platforms. You don't have to read books. You don't have to listen to professors of economics. You can find the whole thing incorporated in the greatest declaration of political principles that ever came from the hands of man, the Declaration of Independence and the Constitution of the United States.
Constitutional Limitations
Always have in your minds that the Constitution and the first ten amendments to it were drafted by refugees and by sons of refugees, by men with bitter memories of European oppression and hardship, by men who brought to this country and handed down to their descendants an abiding fear of the bitterness and all the hatred of the Old World was distilled in our Constitution into the purest democracy that the world has ever known.
There are just three principles, and in the interest of brevity, I will read them. I can read them quicker than talk them.
"First, a Federal Government, strictly limited in its power, with all other powers except those expressly mentioned reserved to the States and to the people, so as to insure State's rights, guarantee home rule, and preserve freedom of individual initiative and local control."
That is simple enough. The difference between the State constitutions and the Federal. Constitution is that in the State you can do anything you want to do provided it is not prohibited by the Constitution. But in the Federal Government, according to that government, you can do only that which that Constitution tells you that you can do.
What is the trouble? Congress has overstepped its bounds. It went beyond that Constitutional limitation, and it has enacted laws that not only violate the home rule and the State's right principle -- and who says that? Do I say it? Not at all. That was said by the United States Supreme Court in the last ten or twelve days.
Chorus of Yes-Men in Congress
Secondly, the Government, with three independent branches, Congress to make the laws, the Executive to execute them, the Supreme Court, and so forth. You know that.
In the name of Heaven, where is the independence of Congress? Why, they just laid right down. They are flatter on the Congressional floor than the rug on the table here. They surrendered all of their powers to the Executive, and that is the reason why you read in the newspapers references to Congress as the Rubber Stamp Congress.
We all know that the most important bills were drafted by the Brain Trusters, and sent over to Congress and passed by Congress without consideration, without debate and, without meaning any offense at all to my Democratic brethren in Congress, I think I can safely say without 90 per cent of them knowing what was in the bills.
That was the meaning of the list that came over, and besides certain bills were "Must." What does that mean? Speaking for the rank and file of American people we don't want any executive to tell Congress what it must do, and we don't want any Congress or the Executive jointly or severally to tell the United States Supreme Court what it must do!
And further than that, we don't want the United States Supreme Court to tell either of them what they must do.
What we want, and what we insist upon, and what we are going to have is the absolute preservation of this balance of power which is the keystone, the arch upon which the whole theory of democratic government has got to rest. When you rattle that you rattle the whole structure.
Of course, when our forefathers wrote the Constitution of the United States it couldn't be possible that they had it in their minds that it was going to be all right for all time to come. So they said, "Now, we will provide a manner and method of amending it."
That is set forth in the document itself, and during our national life we amended it many times.
We amended it once by mistake, and we corrected it. What did we do? We took the amendment out. Fine, that is the way we want to do it, by recourse to the people.
But we don't want an Administration that takes a shot at it in the dark and that ducks away from it and dodges away from it and tries to put something over in contradiction of it upon any theory that there is going to be a great public howl in favor of that something; possibly the United States Supreme Court may be intimidated into a friendly opinion with respect to it.
What I have held all during my public life is that Almighty God is with this country, and He didn't give us that kind of Supreme Court.
Now this is pretty tough on me to have to go at my own party this way, but I submit that there is a limit to blind loyalty.
As a young man in the Democratic Party, I witnessed the rise and fall of Bryan and Bryanism, and I know exactly what Bryan did to our party. I knew how long it took to build it after he got finished with it. But let me say this to the everlasting credit of Bryan and the men that followed him, they had the nerve and the courage and honesty to put into the platform just what their leaders stood for. And they further put the American people into a position of making an intelligent choice when they went to the polls.
Why, the fact of this whole thing is -- I speak now not only of the executive but of the legislature at the same time -- that they promised one set of things; they repudiated that promise, and they launched off on a program of action totally different.
Well, in 25 years of experience I have known both parties to fail to carry out some of the planks in their platform. But this is the first time that I have known a party, upon such a huge scale, not only not to carry out the plank, but to do the directly opposite thing to what they promised.
Suggested Remedies
Now, suggestions, and I make these as a Democrat anxious for the success of my party, and I make them in good faith.
No. 1: I suggest to the members of my party on Capitol Hill here in Washington that they take their minds off the Tuesday that follows the first Monday in November. Just take their minds off it to the end that you may do the right thing and not the expedient thing.
Next, I suggest to them that they dig up the 1932 platform from the grave that they buried it in, read it over, and study it, breathe life into it, and follow it in legislative and executive action, to the end that they make good their promises to the American people when they put forth that platform and the candidate that stood upon it 100 per cent. In short, make good!
Next, I suggest to them that they stop compromising with the fundamental principles laid down by Jackson and Jefferson and Cleveland.
Fourth: Stop attempting to alter the form and structure of our Government without recourse to the people themselves as provided in their own Constitution. This country belongs to the people, and it doesn't belong to any Administration.
Next, I suggest that they read their Oath of Office to support the Constitution of the United States. And I ask them to remember that they took that oath with their hands on the Holy Bible, thereby calling upon God Almighty Himself to witness their solemn promise. It is bad enough to disappoint us.
Washington or Moscow
Sixth: I suggest that from this moment they resolve to make the Constitution the Civil Bible of the United States, and pay it the same civil respect and reverence that they would religiously pay the Holy Scripture, and I ask them to read from the Holy Scripture the Parable of the Prodigal Son and to follow his example.
Stop! Stop wasting your substance in a foreign land, and come back to your Father's house.
Now, in conclusion let me give this solemn warning. There can be only one Capitol, Washington or Moscow!
There can be only one atmosphere of government, the clear, pure, fresh air of free America, or the foul breath of Communistic Russia.
There can be only one flag, the Stars and Stripes, or the Red Flag of the Godless Union of the Soviet.
There can be only one National Anthem. The Star Spangled Banner or the Internationale.
There can be only one victor. If the Constitution wins, we win. But if the Constitution . . . stop! Stop there. The Constitution can't lose! The fact is, it has already won, but the news has not reached certain ears.
Contemporary Cartoon: "Planned Economy or Planned Destruction?"
What was the political mood at the time? Here is a 1934 political cartoon from the Chicago Tribune.
(click image to enlarge)
They say that the nut never falls far from the tree. On careful examination of the cartoon, you may notice a familiar name among those riding in the wagon. The man in the middle, looking straight at you with a shaking fist, is "Ickes". Harold L. Ickes was Franklin Roosevelt's Secretary of the Interior and was responsible for implementing much of Roosevelt's "New Deal" policies. Ickes son, Harold M. Ickes was President Clinton's Deputy Chief of Staff, was a contender for Chairman of the Democratic National Committee (DNC) against Howard Dean, and was a political strategist for Hillary Clinton's failed 2008 Presidential campaign.
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Wednesday, November 10, 2010

Is America A Great Country or What?

This video is courtesy of the CBS affiliate WBZ-TV in Boston. It is presented here without comment. All I ask is that while you watch the videos that you consider our entitlement system, our immigration system, and our legal system. Does the system as practiced make sense and does it meet the goals for which is was designed? Do her views possibly explain the policies and practices of the current Administration?

In the President's defense, I fully understand deadbeat relatives. But, to the best of my knowledge, none is currently violating any laws. Likewise, the President is toughing it out having only declared only $5.5 MILLION in adjusted gross income and himself living in taxpayer-provided housing.

Favorite line: "If I come as an immigrant, you have the obligation to make me a citizen."

Part 1:

Part 2:


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