“What is a mere individual to do? Live as sane and decent a life as you can, love your family and friends and understand that everybody is in this together." 

 · Ron Smith


“More grist for the mill,” said Bill Urban a/k/a Catonsville Bill about The Wall Street Journal’s editorial, Jack Lew’s Flee America Plan.

Several registered approval of Bill’s comment in the forum following the editorial: “Lew was the Office of Management and BUDGET Director ignorant of the simplest Senate rules on budget votes - obviously qualifying him for Obama's White House.”  Add mine to the list, too.

Jul 16, 2014 · The Obama Treasury wants to drive more U.S. companies overseas, the Wall Street Journal observes in an editorial.

Jack Lew’s Flee America Plan – The Wall Street Journal / Top Stories in Opinion

So the same Administration that refuses to work seriously on tax reform has decided that its top economic priority is providing even more incentives to drive American companies overseas. And then accusing anyone who disagrees of having a lack of "economic patriotism."

Yes, that can only be Jack Lew in action, the Treasury Secretary who must make the statue of Alexander Hamilton want to put on a blindfold. On Tuesday he sent a letter to House Ways and Means Chairman Dave Camp urging the Michigan Republican to punish American companies that decide to opt out of the developed world's highest corporate tax rate.

"What we need as a nation is a new sense of economic patriotism," lectured Mr. Lew. The letter called for Congress to urgently enact new penalties and restrictions on businesses that relocate outside the U.S.

Mr. Lew is responding to a recent flurry by U.S.-based companies to merge with or acquire foreign companies so they can relocate their headquarters overseas. These so-called inversions allow companies to reduce their overall tax burden by avoiding America's 35% corporate tax rate—40% on average including state levies—on income they earn overseas. The combined U.S. rate is double the average in Europe and is more than triple the 12.5% rate in Ireland.

The pace of inversions has been picking up as more CEOs conclude that President Obama isn't serious about tax reform. These executives have a fiduciary duty to their shareholders, and they can't cede a permanent tax advantage to their global competitors. So they decide to move.

Pfizer PFE in Your Value Your Change Short position tried to do an inversion earlier this year with its attempt to buy U.K. drug maker AstraZeneca, AZN.LN in Your Value Your Change Short position which rejected the offer. And this week two U.S.-based drug firms, AbbVie Inc. ABBV in Your Value Your Change Short position and Mylan Inc., MYL in Your Value Your Change Short position announced plans for foreign mergers that would allow them to move overseas. The Journal counts 19 inversion deals announced since the beginning of last year, with 14 this year alone.

There's a liberal canard that the U.S. statutory tax rate is high but companies pay only a few cents on the dollar in reality. That's true in some cases in which companies are able to exploit loopholes (especially green-energy subsidies) or deduct big losses over several years. We've written about Whirlpool, for example.

But the claim is obviously false in general given deals like Mylan's proposed acquisition of overseas generic drug businesses from Abbott Laboratories. ABT in Your Value Your Change Short position The new combined company will be based in the Netherlands, where the corporate tax rate is a high but not insane 25%. Even a 10-percentage-point rate cut is enough of an incentive to relocate.

Mr. Lew doesn't know much about economics or he'd realize that his rush to block these inversions will have the perverse effect of driving even more deals in the coming months. If CEOs think Congress will close the inversion possibility, and that tax reform is dead until Mr. Obama leaves office, more of them will decide to move while they still can.

As for "economic patriotism," Mr. Lew also doesn't understand that foreclosing inversions would only make U.S. firms more vulnerable to foreign takeovers. If executives can't reduce their tax disadvantage by moving abroad, more of them will choose to serve shareholders by offering to be purchased by foreign firms that have a lower world-wide tax rate. And even if CEOs resist a foreign offer, shareholders might prefer the higher after-tax return on their investment. Who's the real Benedict Arnold of tax policy here?

Even Mr. Lew admits in his letter to Mr. Camp that the "best way to address this situation is through business tax reform that lowers the corporate tax rate, broadens the tax base, closes loopholes, and simplifies the tax system." But he and the President have done

Former Senate Finance Chairman Max Baucus worked hard on reform, but Mr. Obama showed no interest and the Montana Democrat finally gave up and agreed to be U.S. Ambassador to China. In February Mr. Camp introduced the most thorough-going reform in a generation of both corporate and personal taxes, but the White House ignored it. The basic problem is that Mr. Obama and his political factotum Mr. Lew care less about reform to make America competitive than they do about raising more tax revenue to spend.

As Mr. Camp put it to us in an email on Wednesday: "We've been down this road before, and we know companies will continue to do this as long as our tax rates remain the highest in the world. America cannot compete as long as our tax policy is so dysfunctional. Even the Secretary admits that tax reform is the right answer, so let's do it. Send me your plan."

Don't hold your breath, Congressman. Mr. Lew's letter shows that the White House now wants to exploit the inversion flurry as an election year opportunity to demagogue business. Look for Majority Leader Harry Reid to rush a bill to the Senate floor on Mr. Lew's punitive proposals and then try to use the votes in Senate races this fall. Republicans ought to turn the tables and assail Democrats for supporting the world's most punitive corporate tax rates and driving capital and jobs overseas.

A real agenda for "economic patriotism" would support a tax policy to make America competitive again as a destination for global investment and job creation. But that's going to take a less cynical President and Treasury Secretary.

Thanks, Catonsville Bill. “More Grist for the Mill” is an apt metaphor for those of us who remain committed to seeking the truth and separating the inedible chaff from the actual wheat.

Keep it coming!


Just when we think it can’t get worse, comes another total outrage.  Instead of sending these illegal children back to their families in their home country, the government is going to pay U.S. families to take them in as foster children and pay them up to $6000 per month and provide them free health care.   Is there any way to stop this madness when the President seems intent on encouraging more of this invasion?”  — Ellen Sauerbrey

Kristin Tate:  HOUSTON, Texas--Breitbart Texas has learned that foster parents will be paid thousands of dollars per month for each illegal immigrant they house. 

Crittenton Foster Care recently placed an advertisement in the Penny Saver Newspaper in Murrieta, California asking for "loving, compassionate parents to provide a loving home" for illegal immigrant minors. It said, "Help heal the wounds ... for children in foster care programs including survivors of human trafficking and unaccompanied refugee minors. Reimbursements up to $6,054 monthly tax free."

Breitbart Texas spoke with a spokeswoman from Crittenton, who made it clear that almost anyone can become a foster parent and start collecting benefits. 

The spokeswoman claimed that in order to be considered, prospective foster parents must "have one bedroom available with furniture in it, pass a background check, and provide a driver's license."

She additionally stated that foster parents must attend four Saturday classes and have their home inspected prior to taking in the children. Parents who offer up their homes could have a child placed in their home in "as short as 45 days." 

The amount of monthly payments, administered by the federal government, depends on how old the immigrant child is. The older the child, the higher the payment, according to the Crittenton spokeswoman--but the average payment per illegal immigrant is $1,009. 

She also told Breitbart Texas that the migrants' healthcare is "already taken care of" by the federal government. 

Many have expressed frustration that instead of being turned away, immigrants who enter the country illegally instead get to enjoy a myriad of taxpayer subsidized benefits. This includes housing, food, education, vocational training, and legal counsel   . 

The apparent lack of consequences for crossing the border illegally, coupled with such benefits, arguably incentivizes more migrants to enter the U.S. illegally. 

Follow Kristin Tate @KristinBTate




A “Must Read” from Bill Urban a/k/a Catonsville Bill:

The Washington Times, July 7, 2014

URBAN: The soft bigotry of low economic expectations

“Jobs surge,” shouts one nationally distributed print headline. “Investors on Thursday seized on robust jobs numbers.” This, in response to the Bureau Of Labor Statistics report for June: “Total non-farm payroll employment increased by 288,000.” But left out of the euphoria is another part of that same BLS report: “The number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 275,000.” The net increase in full time work is … 13,000? So this is what passes for robust in the 21st century. And so it goes, with the liberal policies of President Obama leading us down the garden path.

Many today are too young to know, or have forgotten, what a genuine robust recovery looks like. To paraphrase an old axiom, if you can’t learn from what was good about history, you’re doomed not to repeat it. But year after disappointing “year of Obama” and summer after “summer of recovery,” they insist on following the same failed liberal path.

(Have you noticed how liberals love to refer to the “great recession”? It is simply a way to mitigate and excuse Mr. Obama’s poor performance. But to subconsciously reference the “Great Depression” as relative in any way is quite a reach. The 2008 recession lasted only 18 months, and saw a 4.3 percent decline in GDP versus a 26 percent drop in the early 1930s. No, the emphasis belongs on the post-recession performance. )

Let’s analyze one good economic lesson from history. We need only to go back thirty years or so to the presidency of Ronald Reagan. This turns out to be quite a teachable moment given that Mr. Reagan also inherited a serious recession, with 10.8 percent unemployment versus 10 percent in 2009.

Back then (much to President Jimmy Carter’s chagrin) there was a “misery index” in the news, created in fact by an adviser to President Lyndon Johnson, Arthur Okun. Adding unemployment and inflation rates together, it actually reached 20.8 percent in 1980, while in 2009 it was under 9 percent. (In the early 1980s, 16 percent plus mortgage rates were the norm. Mortgage rates since 2009 have averaged 4.4 percent.)

(Ironically, the 2008 recession was due to a housing bubble and mortgage meltdown created by liberals, including the second highest all-time recipient of Fannie Mae and Freddie Mac campaign contributions, then-Senator Obama. And he achieved this lofty ranking in only a single senatorial term.)

Mr. Reagan had to contend with both a severe unemployment crisis and extreme inflation. He unswervingly went to work with conservative principles. How did that turn out?

It took about two years for Mr. Reagan to undo what he inherited. According to the BLS there were only 68,000 more non-farm jobs in all of 1982 (89,328,000 in January, 89,396,000 in December). But the job market really warmed up in 1983, with 3,467,000 new jobs, about 289,000 per month. In 1984, warmer still - just under 4,000,000 new non-farm jobs – about 327,000 per month. (At this point, Mr. Reagan’s two year job numbers equaled Obama’s jobs numbers in five years.) And another 2,563,000 new jobs created in 1985. This is what robust jobs growth looks like.

How would the liberal media describe these kinds of numbers today? If the current coverage is any indication there would be whoops and hollers, and talk of repealing the 22nd amendment. But here the math does get slightly more complicated; suppose the media could claim current job numbers that were equal to Mr. Reagan‘s, they would still be overstating their case. The non-farm workforce was 90 million in 1982. It was 131 million in 2009 … a 45 percent larger workforce. 

From the low point in 1982 through 1986, there were about twelve million new non-farm jobs. From the 2009 low point through 2013 … about 7.5 million. So, with a 45 percent larger workforce, Obama would need about seventeen million to equal the strength of the Reagan recovery. Monthly and yearly figures cited above (1984, for instance) would today equate to 474,000 a month and almost six million jobs annually! This is what a Reagan-style recovery would look like today.

A Reaganesque seventeen million jobs compared to Obama’s seven million jobs … there’s conservative versus liberal … there’s the ten million or so folks still stuck on the couch.

Recalling the research of the late Senator Daniel Patrick Moynihan, President George W. Bush often referred to the “soft bigotry of low expectations.” Isn’t it time the liberals take the long view and stop excusing this sad performance, and stop applying this soft bigotry to their charismatic neophyte? These low economic expectations have whitewashed the loss of as many as ten million jobs, when the Reagan way forward toward great employment heights was always there to see.

Mr. Urban writes from Catonsville, Maryland.



From a long-time Ron listener:

"Comprehensive" seems to the buzz word today.  "Comprehensive Immigration Reform" is, of course, amnesty and open borders.

I have decided to apply this word to other things.

Comprehensive life reform:  death

Comprehensive truth reform:  lying

Comprehensive wealth reform:  bankruptcy

Comprehensive career reform:  being fired

Comprehensive nutrition reform:  starvation

Comprehensive peace reform:  war 

Comprehensive water reform:  flooding

Comprehensive pregnancy reform:  abortion

Ron would have loved this.

You know those long-time Ron listeners. Always astute, always thinking.

These sound like White House Talking Points. Any day now, we’ll be hearing such terms from the Commander-in-Chief or one of his many minions.