June 26, 2003
The Root of Old Europe’s Problem

While Kagan makes a good point that Old Europe’s biggest problem with the US is that America’s might makes Old Europe feel impotent, there may be a simply reason to explain the behavior of Old Europeans. After all (hat tip WSJ), Old Europeans are exposed to trace amounts of cocaine on a daily basis and the exposure may be cumulative.

An Intriguing Perspective on Politics

I owe a hat tip to someone, but I forgot where I first saw this link. At any event, I am grateful to whoever it was. David Brooks has a fascinating piece on the difference between Republican and Democratic perspectives. His theory explains why many prominent Democrats make inane statements about President Bush being a threat to the country (or comparing him to Hitler, or threatening our civil rights, etc.). If you think I am painting with a broad brush here, go read Brook’s column. He has many specific examples. However, I am most interested in his theory (which is really an extension of Kagan’s work) on why the Democrats are acting in such a destructive manner:

EARLIER THIS YEAR, Robert Kagan published a book, Of Paradise and Power: America and Europe in the New World Order. Kagan argued that Americans and Europeans no longer share a common view of the world. Americans are from Mars, and Europeans are from Venus. The essential reason Americans and Europeans perceive reality differently, he argued, is that there is a power gap. Americans are much more powerful than Europeans, and Europeans are acutely aware of their powerlessness.

Something similar seems to be happening domestically between Republicans and Democrats. It's not just that members of the two parties disagree. It's that the disagreements have recently grown so deep that liberals and conservatives don't seem to perceive the same reality. Whether it is across the ocean or across the aisle, powerlessness corrupts just as certainly as power does. Those on top become overly self-assured, emotionally calloused, dishonest with themselves, and complacent. Those on the bottom become vicious. Sensing that their dignity is perpetually insulted, they begin to see their plight in lurid terms. They exaggerate the power of their foes. They invent malevolent conspiracy theories to explain their unfortunate position. They develop a gloomy and panicked view of the world.

Republicans are suffering from many of the maladies that afflict the powerful, but they have not been driven into their own emotional ghetto because in their hearts Republicans don't feel that powerful. Democrats, on the other hand, do feel powerless. And that is why so many Democratic statements about Republicans resemble European and Middle Eastern statements about America.

As an Independent, I must admit this theory makes more sense than anything I have developed. Many of the Democratic contenders for President are making ridiculous statements (e.g., I could not believe Gephardt said he would simply overrule the Supreme Court if he disagreed with it). This is not the way to appeal to swing voters. Appeal to our reason, our common sense. Tell us why you would do a good job (legally). It is OK to criticize the current president, but tell us what you would do better. Criticism with suggestions is constructive and appreciated. Criticism with no suggestions is a sign of weakness.

June 24, 2003
American Perspectives

The Washington Post and ABC released another joint poll today. It is important to note that the random sample was American adults, not registered or likely voters. So while this is a very good representation of what Americans think as a whole, it may differ quite a bit from what likely voters think. Despite this limitation, I think it speaks volumes about the 2004 election. I have made charts from the four questions I found most illuminating.

Note: My nice web software is still packed and I'm pasting in the pictures from blogger. Some of the charts look sloppy this way, so I have also inserted links to a full-size chart in each description.

The first chart simply tracks President Bush's approval (and disapproval) ratings since he took office. The graph allows you to immediately see the impact of 9/11 on his ratings. As any American would expect - although this perplexes many from other cultures - Americans immediately supported President Bush and his war on terror. However, by the time the war to Liberate Iraq was started, most of this bounce was gone. I think President Bush gained a permanent 5 to 10 points of approval based upon his response to 9/11, but the massive jump in ratings was a temporary phenomenon. However, President Bush's ratings are still extremely high and will pose major problems for any potential challenger.

The second chart shows that over 60% of the American public believe that liberating Iraq was good for the United States. This is especially interesting given the way the question was worded. It does not ask if we did the right thing; only the most blinded leftist would still claim the world would be a better place if Saddam were still in power. But the question asks is the United States better off and the majority still agree. Only 33% disagree. And how strong is that disagreement?

The third chart shows that most of those who disagreed that the war was good for the US would change their minds if more Weapons of Mass Destruction are found. Only 11% would still maintain that the war was unjust. I found this to be the most promising and interesting response in the entire questionnaire. It shows that the American people have a better understanding of the world than most pundits would credit. It also implies that the Democrats will have absolutely no chance of winning the White House in 2004 if more WMDs are found in Iraq.

In another example of how Americans do pay attention to world events that impact their security, the fourth and final chart shows that the majority of Americans would support military action against Iran if it were needed to prevent them from developing nuclear weapons. I am sure the results of this poll will be seen by the Iranian leaders. Not only do they have to deal with pressure from President Bush, but now the American people are ready to support military intervention. Wonderful! I remain hopeful that the Iranian government will fall without the need for US military intervention. I am also proud that most of my fellow Americans have a realistic perspective of national security despite the ignorance of many pundits in the mainstream media.

June 22, 2003
Dividend Taxation, Part III

As a follow-up to the earlier post on dividend tax policy and implications, I received additional input from another knowledgeable reader. Bob, a CPA from Cleveland, writes:

I agree with Jack's take on the taxation of dividends but I have always held that it would be better if dividends were taxed but corporations were able to deduct the dividends paid. This would eliminate the double taxation of dividends but would also benefit dividend recipients in retirement plans. When you finally take money from your 401k it's taxable at ordinary rates-including all those dividends you received.

Pay special attention to Bob's point on 401ks. Even "tax free" dividends can become taxable income in some retirement plans. This is yet another reason to move from an income tax system to a consumption tax system. In the meantime, I have a suggestion to address this for those of you who can take advantage of a Roth IRA. My wife is a full-time homemaker. While I could shelter some cash from the government by investing in a traditional IRA for Lady Quixote, I do not. Instead, I pay my taxes this year, and then save as much as possible in a Roth IRA for my wife. With this money, I invest in companies that pay dividends. So long as Lady Quixote does not withdraw the money early, we will never pay taxes on any gains from these investments.
I suspect that the reason that this wasn't done was because it would be described as a tax break for "corporations" and as we all know, "corporations" (whatever that is) are BAD.

Could be. However, Napoleon Bonaparte's axiom Never ascribe to malice that which is adequately explained by incompetence may also apply. We have too many lawyers, and not enough representation of other professionals in office. Perhaps you and Jack should run for office someday. I have often thought of forming a Blog Party and organizing a stealth campaign. If I ever do so, I will be looking for candidates throughout the USA. If you (or any of my other readers) are interested, let me know.

Thank you for writing and sharing your professional expertise with us.

Small Town America

I have been in my “new” home for less than a week. It is new to me, but it was built just after WWII. Nice solid construction, but the wiring is somewhat irregular and none of the wall sockets are grounded. Needless to say, I have been buying lots of adapters just so I could plug in my equipment. While I have never been much of a handyman, I suspect I will be improving my skills over the next few months.

In my new town, with a population of about 17,000 people, I had a choice between two local phone companies. I went with the underdog, a small local company that offered a nice package that included my telephone service, cable TV, and a cable modem. After four years of dial-up service, I was looking forward to high bandwidth again.

This weekend, people had problems reaching us by telephone. Most of the time when people called our number, they got some other business that was closed for the weekend. Other times, they reached us. I tried to call my phone company, but they are not available until Monday morning. Strike one for the underdog.

Sunday afternoon, I tried to keep my kids busy with the electronic babysitter while my wife and I unpacked. The cable TV was out. So instead of unpacking, I played in the yard with my kids. That wasn’t all bad, but I was growing disillusioned with my telephone/cable company. I met a neighbor who informed me that cable was out for the entire neighborhood. Strike two for the underdog.

Sunday evening, after the kids were asleep, I was looking forward to finally posting again at Solport. I answered some of the emails that have accumulated and was about to post when my cable modem service stopped working. Strike three for the underdog.

I am going to have an, uh, interesting conversation with the underdog as soon as possible. I suspect I will be moving to satellite television and to the other telephone company. Since the underdog is the only game in town for a cable modem, I may give them one more chance on this. Otherwise, I could learn to like DSL (which the other firm provides).

The cable ISP outage only lasted about an hour, so I can post. It was my choice to move to a small town. I have done so before and I enjoy the benefits of small town America. But I do not associate bad service with small town America and hope this media company is just having a bad week. If this is indicative of their normal service, I do not see how they will stay in business since alternatives are available for most of their offerings.

June 12, 2003
Californian Politics

If you haven't been following Californian politics, you may want to start paying attention. A few people have been collecting signatures to recall Democratic Governor Gary Davis. It looks like they may succeed. Let's assume they succeed in gathering the required number of signatures in time for this to be voted on this fall.

If the recall election takes place, two things will happen at the election. First, the voters will have decide if they will recall Governor Davis or not. This will be done as a simple yes/no vote. If people vote to keep Davis in office, then things continue as normal (as normal as California gets anyway). If people vote to kick Davis out, then things get even more interesting.

In the same election where California citizens decide whether or not to recall Davis, they must also vote on his replacement. If Davis is recalled, whoever gets the most votes will become Governor of California through 2006. This becomes very interesting since there will be no primary election.

If fifty people ran for the position, whoever gets the most votes will be elected, even if they only get a few percent of the vote. This has major implications for the parties. The smart thing to do is to have one person run from each major party so they do not risk splitting votes. But this assumes all interested politicians can come to a unselfish understanding about who should run. Frankly, I doubt most politicians are that unselfish. So the party who has the fewest candidates running will have a big advantage.

To make this story even more interesting, Arnold Schwarznegger may run. While he is refusing to commit until after Terminator III is released, he has expressed interest in being Governor of California. He also has been delivering some great sound-bites (hat tip to Ben):

The actor mentioned the recall only indirectly in his speech, quipping at one point, "This is really embarrassing. I just forgot our state governor's name, but I know that you will help me recall him."

The Austrian-born former body building champion also poked fun at his lingering accent and at being married to NBC News correspondent Maria Shriver, a Democrat and member of the Kennedy family. He pledged to stay married to Shriver in sickness and in health, Schwarzenegger said, adding, "And being a Democrat is a sickness."

He will be a candidate to watch in an election already worth watching.

A Different Perspective

My five-year-old son was explaining how things were made to his three-year-old brother. Specifically, he was explaining how teddy bears were made. First, you kill a bear. Then you rip out his insides and a man puts stuffing in it. Then it goes to the store and someone buys it.

My eldest was quite happy to describe all this, but his younger brother started to look concerned. Lady Quixote then intervened and gave a more correct explanation. But I liked the original story better.

June 11, 2003
Only the French (hat tip Lady Quixote)

According to Fox News, the French government's tourist office is a bit concerned about the loss in American tourism revenue.

French tourist board spokeswoman Louise O'Brien said preliminary statistics show a 15 percent drop in American tourists heading there for the first quarter of 2003, compared to the same period a year before.

Fifteen percent does not sound like a lot to me, but then again tourism was already down in 2002 from previous years because people were afraid of flying after 9/11. At any rate, the French are getting worried and have created a video starring several Americans which encourages people to visit France.
[Woody] Allen pitches the land of wine, cheese and berets in a video produced by the French government's tourist office touting that nation to travel journalists. "The United States and France have been great friends and great, great allies going back many, many years," Allen says in the video titled France: Let's Fall in Love Again.

As my wife said, Only the French would want an incestuous pedophile for a spokesman.

June 10, 2003
Dividend Taxation & Interview with Jack

Last week, I expressed my wish that the US would move from income taxes to consumption taxes and wondered if the move to eliminate the dividend tax was a step in that direction.  As part of that, I repeated the common refrain that one of the problems with eliminating the dividend tax is that people who own companies can easily use this change to pay absolutely nothing in federal income taxes.  I linked to Warren Buffet who has been one of the most vocal critics of eliminating the dividend tax.

I received an email from Jack, who blogs at the Periphery of Known Space.  We started discussing the affect the new tax legislation will have on dividends.  As part of our discussion, I asked about his background.

Jack enlisted in the Army in 1989.  He was a Calvary Scout and served in Germany and the States.  He was honorably discharged in 1992, and enrolled in a Californian trade school for automated accounting/full-charge bookkeeping.  In 1996, he went to college in New York and starting interning in 1998.  He is now a Senior Tax Consultant at one of the Big 4 accounting firms.  (I am getting old, I remember when people talked about the Big 8 accounting firms).  As you might expect, Jack has been closely following the new taxation laws.

Keep Jack's expertise in mind as you read his words:

Warren Buffet is wrong. Buried towards the end of the Bloomberg article is this quote from Steve Forbes, "..and part of it is a misunderstanding that the dividend income shouldn't be taxed twice." Warren knows a lot about amassing wealth, but I guess he doesn't know squat about taxes or he thinks everyone else is a fool.

The $3b that Warren's company would hypothetically issue in dividends is what is left over of the original $5b after the federal and state governments take their 'fair' share. So the government already has taken 2/5 of the income that the company has earned. This isn't itself a problem; the government needs to be funded. The problem is that when the company pays the dividend, the proceeds will be taxed again, hence double taxation, at the same statutory rate of 40% (+or-). Therefore, of the $3b, $1.2b is paid in taxes leaving $1.8b for the shareholders to do as they wish. The effective tax rate on the original $5b is now 64%.

This is an excellent point.  Those that oppose the elimination of the dividend tax have only pointed out that owners would pay no personal income tax if they elected to pay themselves via dividends.  However, they completely ignore the fact that the company already pays ~40% in Federal and State corporate income taxes.  I confess that I have been inadvertently among those looking at the smaller picture and I thank Jack for correcting me. 

Since most of us will never own a company worth billions, let me restate Jack's point with a simpler example.  Assume you own a small firm.  After years of effort, your company is starting to make a profit.  After all expenses other than your own salary, your firm has a profit of $100,000.  Assuming that the dividend tax is eliminated, let us look at two options.

Option A:  You listened to Warren Buffet and decided not to pay yourself a salary.  Instead you will pay yourself in dividends so you can avoid paying personal income taxes.  So your firm made a profit of $100,000 and has to pay $40,000 in state and federal corporate income taxes.  That leaves you with $60,000 and you pay no personal income tax on this.

Option B:  You ignore Warren Buffet and pay yourself a salary of $100,000.  After paying your salary, your firm breaks even (no profit, no loss) and pays no corporate income tax.  You earn $100,000 and pay $40,000 in state and federal personal income taxes.  This leaves you with $60,000.

Either way, you pay taxes.  For the sake of simplicity, I did not try to minimize taxation by considering personal deductions, combinations of salary and dividends, etc., so the actual amount of taxes would vary.  The point is that Warren Buffet and I were wrong.  Eliminating the dividend tax does not give the rich a free ride.  It simply would eliminate double-taxation.

However, the media accounts are doubly wrong.  The new tax laws do not eliminate the dividend tax. Instead, the rate has been lowered to 15%.  According to Jack:

The new law will tax dividends at 15%. Therefore the shareholders will effectively receive $2.55b, giving the dividends and effective rate of 49%. This reduction still wouldn't allow taxpayers to amass wealth without paying taxes as Warren suggests. Adding the anti-abuse provisions that were included in the previous and current tax cuts, the federal and state governments will still be able to sleep easy knowing that the 'richest' will not "pay absolutely nothing" in income taxes.

Jack also shared some of the background of the new tax laws:
When the two tax bills were working their way through the House and Senate, the House favored 0% tax on dividends, while the Senate version favored the taxpayer to exclude the first $500 of dividend income from their ordinary income, and the remainder would be tax at 10% in 2003 and 20% in 2004. The version that passed applied a 15% capital gains rate, or 5% capital gains rate for taxpayers in the 10%-15% brackets, on all dividend income.

This does not surprise me.  Recently the House has had the admirable view that if you are going to do something, do it right.  Unfortunately, the Senate seems to prefer half-measures and the resulting compromise bills are usually weaker than what the House wanted.  Some of this difference may be due to the larger Republican Majority in the House vs. the Senate.  However, I believe most of the difference is due to the term length differences between the House and Senate.  Congressmen serve two-year terms while Senators serve six-year terms.  This difference may be the reason why the Senate has tradionally been more conservative than the House, no matter which party holds the majority.

One of the best things about blogging is that it allows one's assumptions to be challenged.  I am fortunate that my readers send me thoughtful responses to my discussions.  I hope that my readers learn from my posts.  I certainly learn from their responses.

June 05, 2003
Blogger, Blogspot, and Blogging

Steven Den Beste has some interesting comments on Blogspot and Blogger. He does a good job summarizing some of the problems, but since he does not use these programs himself a few points should be clarified. I use Blogger and it is not nearly as bad as presented. It should not be lumped together with Blogspot. Blogspot is horrible and people are fleeing it in droves. But if one uses Blogger with their own site, as I do, there are no real problems. Even if Blogger should lose all of my archives, I have backup on my site – which I also burn to CD when I do my regular backups. When used properly, Blogger is no more risky than any other program.

I can confirm the work-around (manually republishing your archives) for the permalinks. When you do your first post of the day, the permalink works fine. But future posts (on the same day) will not have a valid permalink unless you manually update your archives or you wait a day when Blogger automatically updates the archives. I’ve tried MT and bumped into problems with some of my readers who prefer low screen resolutions (not just MT’s fault, I use frames and most people no longer do this). I am considering switching to Nucleus after discussions with Kevin Whited, but will hold off until I see what Google does with Blogger and how Blogger's newest release works.

2010 -- Here Comes Gecko-Man

It looks like Peter Parker imitators should be studying gecko lizards, not spiders.

In this month's issue of Nature Materials, a team of scientists reports that it has prodcued a dry, glueless adhesive that would allow humans to scurry across the living-room ceiling - supported solely by the feeble molecular attractions that occur every time two objects touch.

Dr. Geim...envisions robots that can go anywhere on their gecko-like feet; bandages that won't hurt to remove; and a more efficient way to handle computer chips in vacuum environments, where sticky residues can't be used.

Do not look for this anytime soon, the current experiments are both expensive and flimsy. However, do not be surprised if you are walking down the street in the year 2010 and see a man crawling up a building.

More Thoughts on the Economy - Response to Email
Admiral Quixote,

I found your blog through a post you made at Samizdata a couple weeks ago, and it's become a daily stop for me.

Thank you. Incidentally, I change some of my links periodically to get fresh perspectives and took Samizdata off my list. However I have found myself really missing Samizdata (especially the comments) and will probably relist it the next time I make changes to Solport's links.
I wonder if Alan Greenspan isn't overstepping his authority or sphere of influence, and what exactly his reasons for changing his tune regarding tax cuts would be. Recall that around February 11th of this year, Greenspan roundly criticized the stimulus package including the proposed tax cuts. He said fiscal stimulus, if it comes this year, is premature. And for his comments, Sen. Bunning (R-Kentucky) angrily rebutted that Greenspan's job is to set monetary policy, and to leave the fiscal policy to the President (and Congress). There was even talk that perhaps Greenspan's job was on the line.

On the other hand, Bunning and others weren't complaining two years ago when Greenspan offered his support for the first round of tax cuts.

But I find it interesting that now he has come out in support of a tax cut package he previously decried.

Yes, Alan Greenspan is a character. I believe Greenspan should have retired years ago, so I naturally agree with Senator Bunning. You are right, Bunning is gunning for Greenspan; he even uses his official website to slam Greenspan. This is not a recent development, Senator Bunning has been after Greenspan for years.

Unfortunately, President Bush has announced he will reappoint Alan Greenspan next year. While I am not impressed with President Bush's handling of the economy, he is a skilled politician. So I see two main reasons for this decision.

1) Since the national debt is increasing -- at least for the short-term -- it helps the US to have very low interest rates. While he may have started lowering rates a bit late, Greenspan is currently a strong proponent of low interest rates. In fact, he is pushing to lower them again.

2) Alan Greenspan enjoys the confidence of the average American. Since the 2004 elections will take place about the time Greenspan's current term ends, President Bush probably feared making Greenspan a political issue.

My guess is that reason 2 is the main reason President Bush continues to support Greenspan. If the economy is still slow next year -- which I doubt, but it is certainly possible -- the economy will be the Democrat's biggest issue. President Bush is too shrewd a politician to give them additional ammunition by firing Greenspan.

However, since President Bush has already announced he will reappoint Greenspan, why did Greenspan change his tune on the tax cuts? Well, Greenspan is also a politician of sorts. Realistically, he will probably not live another ten years. So his legacy is on his mind. Currently he enjoys a good reputation among most people and he does not want to ruin it at the last moment. As I discussed yesterday, many economic indicators predict that the economy is improving and will be in good shape in 2004. Greenspan certainly is aware of these indicators. So my guess is that Greenspan's recent comments were to protect his reputation. If he continued to say tax cuts were a bad idea and the economy continues to improve, his reputation might suffer.

On the 2004 elections: I'm not sure the Democrats will have to manufacture a scandal--let's assume the WMD issue remains the same on election day as it stands today--that is, no weapons to be found, few if any legitimate facilities to be seen. Don't you think they'll try to pounce on that, to allege impropriety in the evidence-gathering or outright deception? At any rate, if you're right and the economy does rebound significantly, Iraq may be the strongest card in the Democrats' hand. Public sentiment seems to remain strongly positive even in the uneasiness of not yet finding the "evidence", so it could take a sustained campaign by the Democrats.

Sure, some Democrats will pounce on this. I do not think it will matter though. The majority of Americans know that Saddam Hussein was an evil dictator who tortured his people and the world is a better place without him in power. Any Democrats who make this an issue will be driving security-conscious moms into the arms of the Republicans. And the Democrats case is made weaker when you look at their pre-Bush comments.
I think Hillary IS planning for 2008, though. This new book is part of her master plan. It clears the deck, cleans up some loose ends.

I agree. I may also vote for the first female President of the United States in 2008.
Finally, Texas may not be income tax-free for too much longer. Governor Perry tried to assure us two days ago that he won't accept an income tax, but Democrats have pushed for one (not too strongly, yet, since they know who the Governor is, but I'm not optimistic that the state will remain income tax-free forever). But your point about spending cuts is well taken.

Thanks for your time and be well.
--Kevin White

Thank you for a thoughtful and interesting message. Good luck in keeping Texas free of an income tax.

Admiral Quixote

June 04, 2003
Sputnik for Sale

(Hat tip to Dave Barry)
If you are a space enthusiast and have at least a half a million dollars to spare, you can buy a piece of history. As the former Soviets come to grips with capitalism, an original Sputnik prototype is available for sale. Where? On ebay.

Other Thoughts on the Economy

As long as I am focused on the economy, I went searching for what others had to say. While I do not agree with all of Arnold Kling's comments, I agree with this:

The President of the United States is not the CEO of our economy. The President operates under much tighter constraints - and we should be happy about that. Limitations on executive power are a good thing.

I do not think that the President should be held accountable for the decline in the dollar, the rise in unemployment, or the rise in the deficit so far. However, I want to make clear that while I am arguing against making the economic attribution error, I am not giving President Bush a "pass" on economic policy.

The Bush economic policy can be evaluated on its own merits. I would give the administration a bad grade on trade, because of the steel tariffs. I would give the administration a bad grade on fiscal policy, because it is making no attempt to identify and implement spending reductions, and because it has not pursued any sort of "exit strategy" for Medicare, which threatens to capture a huge share of GDP for the government... I would give the administration a bad grade on education policy, because it continues to undermine local control of schools.

These policy disappointments cannot be explained away by the economic attribution error. I can say only one thing in defense of the Republicans. On the issues that I just mentioned, their policies are only the second-worst of the two major parties.

As an Independent, I quite agree. Although I do blame President Bush for part of the rise in unemployment. Many jobs were lost as a direct result of the steel tariffs.

Donald Luskin has a nice summary of Fed Chairman Alan Greenspan's recent comments:

President Bush's tax cuts "will create a fairly marked increase in after-tax income in the third quarter and one must presume that a goodly part of that will filter into consumer markets" and lead to more hiring." And, ""Fortuitously, this particular cut in taxes is happening at the right time although I doubt if one could have planned that in advance."

Uh, Chairman Greenspan, it is your job to help advise the government on this in advance. Thanks for the belated support.

While not directly related to the national economy, I was pleased to see Bill Murchison makes a good case for part-time legislatures. The folks in Texas reduced spending by almost $10 Billion dollars over two years and then went home. And Texas does not have a State income tax. Nice to see some people understand that they can reduce spending instead of increasing taxes or going into debt.

Political Implications of a Rising Economy

Those who follow politics closely have been having a wonderful time debating who will be the Democratic nominee for President in 2004. Some have even wondered if Senators Biden or Clinton would join in since the Democrats have no clear front-runner. Now that I am convinced the US economy will be doing well in 2004, I believe none of this matters. For the record, here are my predictions about the 2004 National Elections, offered more than a year in advance.

1) No major Democrat (including Senators Biden and Clinton) will join those Democrats already competing to run against George Bush.

2) It does not matter which Democrat wins the Democratic primary. President George W. Bush will win a second term.

3) President Bush will have strong enough coat-tails that the Republicans will increase their margins in both the Senate and the House.

4) Whether the tax cuts had anything to do with the rising economy or not, the Republicans will use the rising economy to make many of the current tax cuts permanent and will push for more cuts.

If you are a Democrat, start planning for 2006 or 2008. For the immediate future, Dave Barry sums it up best.

Excuse me for laughing until I drool on your shoes, but have you seen the Democrats? There are something like 375 of them running, including somebody named ''Dennis.'' Like we would ever elect a president named ''Dennis.''

No, the Democrats have a stature problem. While President Bush is striding manfully around aircraft carriers, the Democrats are clustered together in ''candidate forums'' wherein they shout at each other about senior-citizen dental benefits in front of a nationwide TV audience consisting entirely of their spouses.

Barring a major terrorist attack or rampant stupidity on the part of the Republicans (such as passing another steel tariff or a major scandal), the Democrats have no chance in 2004. My cynical side suspects the Democrats will try to manufacture a scandal, but I do not think this will matter. Given President Bush's strong and capable handling of the war on terror and a rising economy, his re-election is almost assured.

Update: It looks like Cox and Forkum agree:

Good News About the Economy

For the past several years part of my professional responsibilities have included tracking and analyzing the US economy. While some of the data I use for this is subscription based, one of my most valuable sources of information is free. The Institute for Supply Management provides several economic reports that are very useful.

Based upon my analysis I am convinced we hit bottom last month and are now rebounding. Barring another unforeseen event (such as a major terrorist attack or another steel tariff), the economy will continue to improve. Not only are we on our way out of the recession, but the economy will be thriving again in 2004.

I have updated Solport's employment charts and expect a net increase in new jobs by the end of the year. For those of you who can afford to invest some money, this is the time to return to the stock market. (Legal disclaimer: There are no guarantees, and the author is not a broker nor affiliated with any of the various stock markets).

June 02, 2003
Solport Gets Results

May 24, 2003 -- I stated

I do think that scarlet letter laws, like the one in your state [Florida], are a bad idea and cause some women to elect for an abortion instead of complying with such an onerous law.

May 31, 2003 - The State of Florida took action:
Gov. Jeb Bush signed a bill Friday repealing the "Scarlet Letter" law that required mothers who put a child up for adoption to publish their sexual histories when necessary to locate the father.

Marriages Among the Poor - A Good Idea?

Iain Murray summarizes three recent studies on marriages within the impoverished. The studies were done by the Heritage Foundation, the Urban Institute, and National Institutes of Mental Health/University of Canterbury.

For unemployed single-mother-headed families, for example, marriage pushes 65 percent of the children above the poverty line (from all the kids being below it prior to marriage); nearly a third of the children in this family category rises 50 percent above the poverty line. Mothers employed part-time and full-time who wed see even bigger gains for their kids.

...70 percent of marriages entered into because of a child's birth or impending birth still endured 12 years later--not much worse than the figure for more traditional marriages where the ceremony occurred before pregnancy (85 percent). "Shotgun" marriages are less fragile than many believe.

Murray's summary is very short and worth the read. More and more research is supporting the wisdom of our grandparents - marriage is the surest way out of poverty.

Note: I suspect the percentages given for successful marriages may sound high to those of you unfamiliar with these studies. However, the typical media claim that "50% of marriages will end in divorce" is simply wrong. It is difficult to give an exact figure, but estimates range anywhere from 12% to 35% of all people will be divorced at one point in their life. In addition, the surveys mentioned by Murray seem to be for first-time marriages. The odds for first-time marriages are quite favorable in most situations. Marriages where at least one partner has already been divorced are less likely to succeed than marriages consisting of two first-time spouses.

Veiled Privileges

A Florida clerk made a mistake and allowed a Muslim woman to have her driver's license picture taken with her veil on. When the State of Florida finally figured this out, they sent Sultaana Freeman a notice saying she had to get her picture retaken without her veil to keep her license. She refused and the State revoked her license. Showing how much she had adapted to the US, she sued.

If I were the judge, I would have refused to hear the case and dismissed it. But the suit is going forward as a freedom of religion issue. There are compelling safety reasons for the State to require a picture ID for driver licenses. And a license is not a legal right, Ms. Freeman could elect to not drive if she felt her religion banned such a picture. This is such a basic and simple point, I am surprised that one would argue otherwise. Chris Muir points out a potential outcome of a decision in favor of Ms. Freeman.

Since a legal victory by Ms. Freeman would negatively impact the safety of US citizens and since the religious "right" in question is not based upon Christianity, it came as no surprise that the ACLU is supporting Ms. Freeman. Hopefully, the ACLU will lose in their attempt to make the US a more dangerous place. If anyone has done an analysis of the ACLU's legal record, I would like to see it. I have the impression that the ACLU has been losing the majority of their cases recently. At any event, I will be keeping an eye on this case. It will be interesting to see who else joins the ACLU in supporting Ms. Freeman.