Rich Lowry wrote a great commentary on Democrats who themselves become filthy rich using the same tax code that Mitt Romney uses, even while they demonize those that do. It is a laugh. I mean are we to believe that Barack Obama with all his book royalties, isn’t filthy rich? And that his tax accountants aren’t right now exploiting the same Congressionally-crafted tax loopholes as any other wealthy American would?

For that matter, I recall in 2004 two of the most brazen and wealthy Americans — John Edwards and John “Heinz Ketchup” Kerry — running on the Democrat ticket. Where was the outrage then?

Here’s Lowry:

Stephanie Cutter, an adviser to the Obama reelection campaign, wrote a scathing memo the other day about Mitt Romney’s experience at Bain Capital, subtitled “Profit at Any Cost.”

Cutter sounded like a sworn enemy of private equity. Except a few years ago, she was a spokeswoman for J.C. Flowers, a private-equity firm. Why do work for J.C. Flowers when there are so many other worthy ventures needing communications help that don’t make insane amounts of money and pay incredibly well?

Presumably Cutter wanted to be as well compensated as possible, by J.C. Flowers and the “several Fortune 500 companies” her communications firm served, according to her bio. This is utterly unremarkable but for the fact that she is part of an Obama team that argues there is something inherently wrong with income inequality. In his signature Osawatomie, Kan., speech, President Barack Obama asserted that rising inequality hampers those at the bottom. If that’s so, shouldn’t the people around him endeavor to keep from adding to the injustice by making too much money?

But none of them goes out and gets poor. Very few of them, it seems, even go out and get middle-class. They get rich. Many of them climb right into the 1 percent. Obama economic adviser Alan Krueger gave a speech recently lamenting the shrinking middle class, without mentioning that the reason for its diminishment is that so many people have risen all the way out of the middle. By Krueger’s (perverse) standard, major Obama officials have heedlessly contributed to the destruction of the American middle class by earning too much.

Consider only the chiefs of staff. President Obama’s new chief of staff, Jacob Lew, made $1.1 million in one year working for Citigroup. His prior chief of staff, William Daley, made $8.7 million in roughly one year working for JPMorgan Chase. His original chief of staff, Rahm Emanuel, made $16 million working for an investment firm. Judging by this record, President Obama only feels comfortable entrusting his affairs to men who have earned outrageous paydays.

The Obama 1 percenters abound. President Obama’s first national economic director, Larry Summers, earned $600,000 as president of Harvard, then went to a hedge fund where he made $5 million in one year, before joining the administration. His first budget director, Peter Orszag, left to make $2 million to $3 million a year at Citigroup. His current national-security adviser, Tom Donilon, got $7 million from his work at Fannie Mae from 2000 to 2003.

Certainly Obama’s top aides don’t have to make millions in finance, but they’d almost have to go out of their way not to get rich. In the aggregate, they are smart, highly educated, and hard-working. They tend to marry people with the same characteristics. They have relatively stable families. They have success — indeed, the 1 percent — written all over them. They probably would be scandalized to work at a private-sector job paying “only” $50,000, the median household income in the U.S.

In a report that has the tone of a revelation about it, the New York Times discovered that the 1 percent is a “varied group, one that includes podiatrists and actuaries, executives and entrepreneurs, the self-made and the silver spoon set.” By one estimate, the 1 percent starts at households making $380,000 a year. That means in 2005, Michelle Obama alone was almost making enough to hoist the Obama household into the dreaded 1 percent with her $316,962 job at the University of Chicago Hospital.

Is it too much to ask that one high-profile Obama official leave government and refuse to make more than $70,000 a year out of solidarity with the middle class and commitment to income equality? Of course it is. Just as the definition of a recession is when someone else loses a job, greed is when someone else makes a lot of money. For anyone hoping to get to the top, the collective message of current and former Obama officials should be clear: Do as they do, not as they say.

I was ROFL, as they say or rather tweet/text, when I read the part where senators recommended replacing Google search formulas with a “panel of experts.” I mean, if that doesn’t sum up everything that is wrong with the government I don’t know what does. Has any government panel of experts ever solved anything?

(Example, the first draft of Congress’s new “Volcker Rule” is already up to about 300 pages and has propted more than 1,300 questions on exactly how regulators will enforce the newly proposed banking rules. I know! They need a “Panel Of Experts! It reminds me of the brilliant movie Idiocracy).

[WSJ] Eric Schmidt, executive chairman of Google, gave a remarkable interview this month to the Washington Post. So remarkable that Post editors preceded the transcript with this disclosure: “He had just come from the dentist. And he had a toothache.”

Perhaps it was the Novocain talking, but Mr. Schmidt has done us a service. He said in public what most technologists will say only in private. Whatever caused him to speak forthrightly about the disconnects between Silicon Valley and Washington, his comments deserve wider attention.

Mr. Schmidt had just given his first congressional testimony. He was called before the Senate Judiciary Antitrust Subcommittee to answer allegations that Google is a monopolist, a charge the Federal Trade Commission is also investigating.

“So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. OK? I mean, I don’t know how to say it any clearer,” Mr. Schmidt told the Post. “It’s not like we raised prices. We could lower prices from free to . . . lower than free? You see what I’m saying?”

An absence of consumer harm didn’t stop senators from offering some improbable recommendations. Among them: that Google replace its algorithm with a panel of experts to ensure “fair” search results. As Google tries to improve the relevancy of its search results for consumers, some sites inevitably come up higher and some lower in the results. The losers now lobby Washington.

“Regulation prohibits real innovation, because the regulation essentially defines a path to follow,” Mr. Schmidt said. This “by definition has a bias to the current outcome, because it’s a path for the current outcome.”

Here’s a great commentary by Jonah Goldberg (from his G-file e-letter) on the OWS movement:

As I mentioned in the Corner, I love this story about the fraying tensions among the Occupy Wall Street crowd.

Aside from the general schadenfreudtasticness of it all, I found this bit to contain some fascinating contradictions. Apparently some of the “facilitators” — you might call them the avant-garde of the avant-garde of the avant-garde of the lumpenproletariat — have started censoring and taxing the drummers.

To Shane Engelerdt, a 19-year-old from Jersey City and self-described former “head drummer,” this amounted to a Jacobinic betrayal. “They are becoming the government we’re trying to protest,” he said. “They didn’t even give the drummers a say. . . . Drumming is the heartbeat of this movement. Look around: This is dead, you need a pulse to keep something alive.”

The drummers claim that the finance working group even levied a percussion tax of sorts, taking up to half of the $150-300 a day that the drum circle was receiving in tips. “Now they have over $500,000 from all sorts of places,” said Engelerdt. “We’re like, what’s going on here? They’re like the banks we’re protesting.”

Wait a second. The leadership of OWS is imposing a 50 percent tax rate on the most successful and entrepreneurial protesters and they’re regulating their ability to satisfy the consumer (as it were)?

This Engelerdt guy’s grasp of political theory is a bit off, though. First he says that the organizers are becoming the sort of government they’re protesting. Except that has it exactly wrong. They’re becoming the sort of government they’re demanding!

He then goes on to say that the decision to confiscate so much of the drummers’ obscene profits makes the organizers like the banks. But the banks don’t tax anybody — that’s government’s job. In fact, if these guys had their way, the drummers should be taxed at a much higher rate, right? Why should the drummers make so much more than the guy running the seminar on how to make hemp-twine condoms or the lady teaching folks how to recycle everything from urine to toilet paper?

Beyond the Occupy Wall Street crowd playing the part of the “useful idiots” of organized socialist, national socialist (i.e., Nazi)  and communist parties, you’ve got a massive number of economically-ignorant, naive or at minimum mis-educated youths who seem unaware that they’re protesting the wrong street: Instead of occupying Wall Street they should be occupying K-street, or better yet, the Independence, First, and Constitution streets that surround the Capital building.

[Bloomberg] Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

The figures demonstrate how the nation’s political and financial classes are prospering as the economy struggles with unemployment above 9 percent and thousands of Americans protest in the streets against income disparity, said Kevin Zeese, director of Prosperity Agenda, a Baltimore-based advocacy group trying to narrow the divide between rich and poor.

“There’s a gap that’s isolating Washington from the reality of the rest of the country,” Zeese said. “They just get more and more out of touch.”

Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June.

That’s right. People working for the federal government make more money than those who actually produce things, be they in Silicon Valley, New York City, Atlanta or B.F. Idaho. And why is that? Well as Tina Korbe points out the Beltway “boasts one lawyer for every 12 city residents” — that’s a lot of “fat cats” to grease the palms of your slimy senator or representative in turn for tax dollars and fabricated “shovel ready” phantom jobs required to sort through phone-book sized regulatory bills.

The Bloomberg report continues:

Lobbyists play a prominent role in the Washington economy. In 2010 there were 12,964 registered lobbyists, with most working in or around the nation’s capital, according to figures compiled by the Center for Responsive Politics, a Washington- based research group that tracks political spending. Spending on lobbying efforts reached a record $3.51 billion last year, up from $3.49 billion in 2009.

Ironically, while President Barack Obama and Democrats have been expressing solidarity with this confused lot of Marxists, they’re well entrenched in the Lobby enterprise.

This week the Washington Post reported that “President Obama has still managed to raise far more money this year from the financial and banking sector than Mitt Romney or any other Republican presidential candidate, according to new fundraising data. … Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined, according to a Washington Post analysis of contribution data.”

The Democrats are against lobbying and big banking… except when they’re for it.

WSJ:

After Congress created the Consumer Financial Protection Bureau as part of Dodd-Frank, President Obama said the government would prevent “hidden penalties and fees” and ensure “clear and concise information.” He promised banks that “unless your business model depends on cutting corners or bilking your customers, you’ve got nothing to fear from reform.”

Flash forward to today, and the full weight of Mr. Obama’s Washington is coming down on a bank for making perhaps the most transparent pricing change in the history of American finance. Is there any consumer who hasn’t heard that Bank of America will start charging a $5 monthly fee on debit cards? Could there be a simpler communication to allow consumers to consider other debit cards or other payment options?

For doing exactly what President Obama claimed that he wanted, the bank was rewarded by the President with an assault on national television. Mr. Obama told ABC television that the proposed fee “is exactly why we need this consumer finance protection bureau that we set up that is ready to go.”

When ABC host George Stephanopoulos asked if the fee could be stopped, Mr. Obama replied, “Well, you can stop it because it—if you—if you say to the banks, ‘You don’t have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated.’”

Mr. Durbin, incensed at the results of his plan to transfer wealth from banks to retailers, has been urging customers to close their accounts at Bank of America. Reasonable people can disagree about which politician is more economically irresponsible—the President who wants bureaucrats to dictate profit margins or the Senator who encourages a run on a bank.

Exactly. How did the Democrats expect the banking world to react to government price controls that cut their debit-card profits in half?

In any event, one should beware this new Consumer Financial Protection Bureau (CFPB) — because a group of un-elected, unaccountable bureaucrats are now with us forever. Their actions have already created unintended disincentives that diminish consumer purchasing power and create fewer customer choices. It starts with debit. But one day they’ll move on to credit-card, prepaid cards, and so on.

WSJ:

All of the details weren’t clear in media reports as we went to press, but it seems Mr. Reid’s surtax would raise tax rates on millionaires by five percentage points starting January 1, 2012, or less than four months from now. That’s a year earlier than the tax increases that Mr. Obama is proposing. So much for the President’s promise that “nobody is talking about raising taxes right now.”

How this would stimulate a sluggish economy even under Keynesian economic theory is a mystery, unless you believe like Democrats apparently do that tax rates don’t matter to economic growth.

We doubt that’s how millions of small business owners will feel if they start paying a top marginal rate on their income—which they report through the individual tax code as Subchapter S companies—of 40%. That would rise to nearly 46% in 2013 under Mr. Obama’s other tax proposals (including deduction phaseouts), plus another 3.8% under ObamaCare’s tax increases on investment and payroll income. So Uncle Harry would take nearly 50% of everything they make. Who wouldn’t want to run out and hire more workers with that incentive?

Here’s a great tribute to Apple co-founder Steve Jobs, by Kevin Williamson:

Jobs was sometimes criticized for not being a philanthropist along the lines of Bill Gates. Take this article, for example:

Last year the founder of the Stanford Social Innovation Review called Apple one of “America’s Least Philanthropic Companies.” Jobs had terminated all of Apple’s long-standing corporate philanthropy programs within weeks after returning to Apple in 1997, citing the need to cut costs until profitability rebounded. But the programs have never been restored.

CNN, being CNN, misses the point. Mr. Jobs’s contribution to the world is Apple and its products, along with Pixar and his other enterprises, his 338 patented inventions — his work — not some Steve Jobs Memorial Foundation for Giving Stuff to Poor People in Exotic Lands and Making Me Feel Good About Myself. Because he already did that: He gave them better computers, better telephones, better music players, etc. In a lot of cases, he gave them better jobs, too. Did he do it because he was a nice guy, or because he was greedy, or because he was a maniacally single-minded competitor who got up every morning possessed by an unspeakable rage to strangle his rivals? The beauty of capitalism — the beauty of the iPhone world as opposed to the world of politics — is that that question does not matter one little bit. Whatever drove Jobs, it drove him to create superior products, better stuff at better prices. Profits are not deductions from the sum of the public good, but the real measure of the social value a firm creates. Those who talk about the horror of putting profits over people make no sense at all. The phrase is without intellectual content. Perhaps you do not think that Apple, or Goldman Sachs, or a professional sports enterprise, or an Internet pornographer actually creates much social value; but markets are very democratic — everybody gets to decide for himself what he values. That is not the final answer to every question, because economic answers can satisfy only economic questions. But the range of questions requiring economic answers is very broad.

Paraphrasing President Obama, one job of the U.S. Treasury Department’s Consumer Financial Protection Bureau is to determine if a business is making ‘too much profit.’ Mr. Obama is correct in his assessment that nobody is entitled to “a certain amount of profit,” but where he runs frighteningly amok is taking that assessment to mean that government should be the decider, rather than the American consumer.

Mr. Obama’s statement is quite telling, and scary too: Recall the former Soviet Union leaders used to brag that they suffered no bankruptcies in the USSR — the reason being that one can never have a bankruptcy if there is no private property, or private ownership of business. The president told us in 2008 that his wish was to “fundamentally transform America.” Judging by his words below, he wasn’t kidding. And he wonders why so many Americans fear him, and think he’s a socialist or communist?

President Obama joined fellow Democrats in blasting a new fee on debit card users announced by Bank of America, arguing that banks do not have an “inherent right” to a certain amount of profits.

The bank has come under a hail of criticism after it announced it would begin charging debit card users $5 a month, blaming the move on policymakers who curbed the amount of fees they could collect from retailers.

“You don’t have some inherent right just to get a certain amount of profit if your customers are being mistreated,” he said in an interview with ABC News. “My hope is that you’re going to see a bunch of the banks saying to themselves, ‘You know what, this is not good business practices.’”

“This is exactly why we need this [CFPB - Treasury Deparment's Consumer Financial Protection Bureau],” the president said. “We need somebody whose sole job it is to prevent stuff like this.”

Prevent stuff like what? Making a profit? Wouldn’t merchants (the banks’ customers) best determine if they’re being gouged or not rather than an unelected and unaccountable group of bureaucrats in the U.S. Treasury department? Wouldn’t consumers best decide, rather than some government bureau, if they would prefer credit cards or prepaid cards?

As Jonah Goldberg pointed out recently, here’s how government grows: It (1) either creates a real problem or invents a mythical one, then (2) proposes and enacts a “solution” to that problem. (3) Repeat steps 1 & 2.

So in this case the Democrat Congress, under the Durbin Amendment, invented the problem — that the economy was harmed by debit card fees that were too high for merchants — then enacted the solution, the Durbin Amendment, which by government fiat cut in half banks’ debit profitability, telling them that they could only charge 24 cents per debit transaction (from 44 cents).

This “solution” to an imaginary “problem” was typical liberally-activist government arrogance stemming from a belief that its “experts” could devise better economic engineering than that of 300 million consumers acting collectively.

It also smacks of hypocrisy in the form of propping up one kind of crony corporatism (bowing to the retail lobby) even as they demonize another (banking).

Here’s how the Democrat’s “solution” will affect you: less consumer choices — not just Bank of America, but the rest, like Wells Fargo, CitiGroup, Regions, and Morgan Chase, for starters, are now eliminating free checking and charging annual fees for debit-card holders, as well as eliminating many points programs.

According to CNN, “Your debit card may soon be denied for purchases greater than $100 — or even as little as $50.”

Hey, but thank heavens the government is “protecting us.”

Even worse, Mr. Obama must hate poor people. Without free checking, many poor Americans will be forced into costly high-percentage paycheck-cashers and money lenders. (Hello Amscot!)

Worst of all, the Durbin Amendment is a jobs killer: According to Portfolio.com, “the majority of startups and entrepreneurs often use their personal accounts as the initial run of funding. They count on the perks they can collect as ways to reward their staffs, especially when they can’t always afford the high-flying salaries of the past.”

Sorry, small business!

This is especially true for the smaller banks and credit unions that cannot absorb the financial loss:

The most noticeable change will likely be the closure of bank branches, reversing a decade-long growth. Branches today serve as customer-recruitment centers, as customers, once enrolled, do much of their banking electronically, by ATM or online. By making many new customers unprofitable, however, the Durbin amendment eliminates the incentive to compete by offering more branches.

Citing the negative impact of the Durbin amendment and other regulations on customer profitability, Texas-based IBC bank recently announced its decision to close 55 supermarket-based branches, eliminating 500 jobs, rather than increasing banking fees. Other banks will inevitably follow suit.

Conceived of as a narrow special-interest giveaway to large retailers, the Durbin amendment will have long-term consequences for the consumer banking system. Wealthier consumers will be able to avoid the pinch of higher banking fees by increasing their use of credit cards. Many low-income consumers will not. Banking will become less innovative and consumer-friendly.

No word yet from President Obama if large chain retailers will next be investigated by the CFPB for earning “a certain amount of profit.”

When the going gets tough on President Obama you can count on him to revise decades of economic history.

[WSJ] President Barack Obama on Thursday said the U.S. has lost some of its competitive edge and gotten a “little soft.”

Mr. Obama, in an interview with WESH-TV in Orlando, said his administration has been tough on the country’s trading partners and tried to strengthen U.S. manufacturing.

“This is a great great country that had gotten a little soft and we didn’t have that same competitive edge that we needed over the last couple of decades,” Mr. Obama said in response to a question about the country’s economic future. “We need to get back on track.”

Mr. Obama has faced heavy criticism for his handling of the economy, and the high unemployment rate –9.1%– is threatening his re-election bid.

As a wise man once said, you’re entitled to your own opinions but not to your own facts. Obama’s context may have regarded the strength of trade and manufacturing, but don’t think for a second that he’s not attempting to portray our current economic plight as something that has been building for decades. It’s just not true. Every economic indicator of relevance shows increasing and steady improvement over the last 2-3 decades. Those who pine for the days of assembly-line factories also miss the point: Those losses were often due to technological advances or simply cheaper wages overseas (benefiting consumers with cheaper costs). It’s like crying a river for all of those railroad and telegraph jobs we no longer provide. It makes no sense. We’re an IT and service economy, and we’re better off for that transition.

Jim Geraghty sums it up nicely:

Er, rewind the tape. We didn’t have the competitive edge we needed over the last couple of decades? Which ones? The 1980s, when the free world outlasted the socialist model and triumphed over the Soviet Union without firing a shot? The 1990s, when our economy integrated the technological breakthroughs of the Internet age and our economy grew to new dazzling heights? Or the last decade, where we responded to the most devastating attack in our nation’s history, where our enemies unleashed mass death in our biggest cities, by toppling two brutal regimes, and we did it all with the unemployment rate between 4 and 6 percent?

The facts are easy to find. Let’s take a gander over at the federal government’s Bureau of Economic Analysis (BEA, Department of Commerce) and Department of Labor (DOL) web pages, for instance.

In the 1980s, gross domestic product (GDP) grew at an average of a whopping 7.8% per quarter (Thanks Reagan!); in the 1990s it grew at an average of 5.6% (another great average); and in  the 2000s (and let’s stop at Bush’s exit, 4th QTR 2008) it grew at an average of 4.4%. Obama’s GDP quarterly growth from 1st QTR 2009 until now? 2.7%

Um, who’s been less competitive?

You can do the same for unemployment too - and it’s truly where the rubber meets the road. The umemployment rate in the 1980s averaged 7.3%, and that’s coming off the late-70s energy crisis and President Carter’s ineptitude. By the time Reagan left office he had it down to 5.3%. In the 1990s, the unemployment rate averaged just 5.8%, and it dropped to 5.1% in the 2000s (again, I’m stopping at Bush’s exit). Indeed, even if you want it averaged by president (which is somewhat a misnomer since the Congress has massive control over an economy), it would read Reagan (7.5%), Bush Sr. (6.3%), Clinton (5.2%), Bush (5.3%) and Obama (9.3%).

This is a great commentary from Jonah Goldberg about the fallacy-laden arguments that occur over time when the government gets its nose into something it never should have and then people attempt to disconnect that market intrusion many years later.

In his 1973 Libertarian Manifesto, the late Murray Rothbard argued that the biggest obstacle in the road out of serfdom was “status quo bias.” In society, we’re accustomed to rapid change. “New products, new life styles, new ideas are often embraced eagerly.” Not so with government. When it comes to police or firefighting or sanitation, government must do those things because that’s what government has (allegedly) always done.

“So identified has the State become in the public mind with the provision of these services,” Rothbard laments, “that an attack on State financing appears to many people as an attack on the service itself.” The libertarian who wants to get the government out of a certain business is “treated in the same way as he would be if the government had, for various reasons, been supplying shoes as a tax-financed monopoly from time immemorial.”

If everyone had always gotten their shoes from the government, writes Rothbard, the proponent of shoe privatization would be greeted as a kind of lunatic. “How could you?” defenders of the status quo would squeal. “You are opposed to the public, and to poor people, wearing shoes! And who would supply shoes . . . if the government got out of the business? Tell us that! Be constructive! It’s easy to be negative and smart-alecky about government; but tell us who would supply shoes? Which people? How many shoe stores would be available in each city and town? . . . What material would they use? . . . Suppose a poor person didn’t have the money to buy a pair?”

It’s worth keeping this fable in mind as the reaction to last week’s CNN–Tea Party Express debate hardens into popular myth. Moderator Wolf Blitzer had asked Rep. Ron Paul (R., Texas) what should happen if a man refuses to get health insurance and then has a medical crisis. Paul — a disciple of Rothbard — explained that freedom is about taking risks. “But, congressman, are you saying that society should just let him die?”

At this point, a few boneheads in the audience shouted “Yeah!” and clapped, though liberal pundits and activists imagine they saw an outpouring of support.

Paul calmly replied that he’s not in favor of letting the man die. A physician who began his career before Medicare and Medicaid were enacted, Paul noted that hospitals were never in the practice of turning away patients in need. “We’ve given up on this whole concept that we might take care of ourselves and assume responsibility for ourselves,” he observed. “Our neighbors, our friends, our churches would do it.”

Read the rest. It’s great stuff. Government doesn’t exist in a vacuum. It makes one wonder how people think we educated ourselves prior to the advent of the Department of Education.