Stern has an estimated 20 million loyal listeners and, in a close election, pandering to the religious nuts may be Bush's undoing.
So what's worse, a social conservative big spender like Bush or an even goofier big government tax and spender like Kerry??
www2.ocregister.com
Scary Kerry
The Democrat has unveiled parts of his economic program. Be afraid. Be very afraid.
By JOHN SEILER
Editorial writer,
The Orange County Register
jseiler@ocregister.com
It's one thing to object to Sen. John F. Kerry's patrician demeanor, his repetition of his Vietnam experience or his self-flattering comparisons to JFK.
That's the lighter stuff of campaigning.
It's quite another to hear his ideas, and want to run in the opposite direction.
That's what happened to me last Tuesday evening as I listened to his acceptance speech after his near-sweep on Super Tuesday and presumptive win of the Democratic nomination for president.
His preliminary economic positions, albeit not fully developed at this point in the campaign, should be frightening to all those who look to live in an America with limited government, free markets, free trade and personal liberty.
He presented one bad idea after another, both on principle and, really, in practicality. If I could, I'd like to give the junior senator from Massachusetts a brain transplant, with ideas from economists and leaders that see human behavior, independent choice and opportunity as cornerstones of a free and strong economy. I'd implant ideas from Joseph Schumpeter, Ludwig von Mises and Milton Friedman.
But no, for the moment he is advancing the following ideas, and they could play a crucial role in a presidential election year where the campaign could turn on job creation. Here's why I find them so scary:
1. Cut the deficit with more spending? Kerry promised Tuesday "to cut the deficit in half in four years and invest in health care and education."
His Web site charges, "By borrowing from future generations to give tax relief to those who need help the least, George W. Bush's economic policies have, for the first time in history, forced the federal government to spend $1 billion more EACH DAY than it takes in. John Kerry believes that we need a smaller and smarter government that wastes less money" (emphasis in original).
He's certainly right that the president bears blame for running up the deficit, estimated to rise above $500 billion for the fiscal year that begins Oct. 1. But Kerry has a problem: He's following the Gray Davis approach of "solving" a deficit problem by spending more.
A Feb. 29 Washington Post story detailed the Kerry spending proposals so far. The senator, it found, "is promising to spend at least $165 billion more on new programs during his first term in office than he could save with his tax plan, a mix of breaks for the middle class and increases for corporations and the most affluent. The $165 billion figure does not include the cost of several proposals Kerry has not fully detailed or backed with estimates."
So the number could be a lot higher. At a minimum, though, that comes to $41 billion a year in new spending.
And he will cut the deficit - how?
"My impression is that Kerry is way more a big spender - aside from the current president [Bush] - even than Bill Clinton," Chris Edwards, director of fiscal policy at the Cato Institute, told me.
So, readers, beware Kerry's rhetoric that "we need a smaller and smarter government."
2. Taxing the rich. "Together we will build a strong foundation for growth by repealing the Bush tax cuts for the wealthy." Kerry promised Tuesday. His Web site adds, "John Kerry has the courage to roll back Bush's tax cuts for the wealthiest Americans so we can invest in education and health care."
It's too bad he hasn't taken a cue from the first JFK, President Kennedy, who in 1960 promised tax cuts "to get America moving again" - which really happened after the tax cuts were enacted shortly after his death.
"Basically, what Kerry is doing is a little disturbing," Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University, told me. He said rolling back the Bush tax cuts "would hurt the economy. Clearly, we know that lowering taxes has helped the economy. [The Kerry campaign] says this isn't generating enough jobs. But what would jobs creation be without the tax cuts? Kerry is advancing an anti-growth policy."
Adibi added that the solution to the massive budget deficit is not tax increases that slow growth but reducing spending. Maintaining the tax cuts while restraining spending would mean that "as the economy grows, the deficit will go down."
3. Foreign tax havens. On Tuesday, Kerry promised, "We will repeal every tax break and every loophole that rewards any corporation for gaming the tax code to go overseas and avoid their responsibilities to America." His Web site says, "He isn't afraid to crack down on corporations that are hiding their money in Bermuda to avoid paying their fair share and will end special tax giveaways to companies that ship jobs abroad."
But as the old saying has it, there's nothing more mobile than capital and rich people. Corporations flee to Bermuda because taxes are too high here in the United States.
"If we make it difficult for American companies to do this [move offshore], they will relocate to elsewhere in the world," Adibi said.
4. Raising the minimum wage. "We ... will raise the minimum wage because no one who works 40 hours a week should have to live in poverty in America," Kerry said Tuesday.
"One thing is clear in economic theory," Adibi said. "Raising the minimum wage will hurt the employment of those people in that kind of market" for low-skilled work. Employers react by paying the higher rate but hiring fewer people. So much for another Kerry promise, on his Web site, to "bring back the 3 million jobs that have been lost under George W. Bush."
If you raise the cost of something, you get less of it, Adibi said. So raising the cost of low-wage jobs would mean there would be fewer of them. "If this is the direction we go on the minimum wage, it will be bad news," Adibi concluded.
5. Government picking "good companies." "We will provide new incentives for manufacturing that reward good companies for creating and keeping good jobs here at home," Kerry said Tuesday. But consumers, not government, determine which companies are "good," meaning responsive to customer needs and what they consider value.
And "good," for government, too often means politically preferred. This would be an immense boondoggle that would scramble the signals companies need to produce products that real people - not government bureaucrats - actually want. The way to help businesses of all kinds grow and create jobs is to reduce the burdens of taxation and regulation - the opposite of the Kerry program.
6. Health care as a right. "We will stand up for the fundamental fairness of health care as a right and not a privilege," the senator said Tuesday. This is an old bromide of Democrats going back to Harry Truman. The last attempt was the infamous HillaryCare proposal under President Clinton in 1994, which would have established a vast federal bureaucracy controlling the minutiae of everyone's health care. National outrage pulled the plug on it.
Unfortunately, President Bush has helped Democrats by enacting a part of this program, his federalization of Medicare prescription drugs.
Kerry is playing on American frustration about health care costs that keep rising as much as 15 percent a year in recent years. But the solution is to continue, as Mr. Bush has done to some extent, advancing medical savings accounts and other market reforms, not to move toward a Canada-style socialized medicine scheme that, in the end, would ration care to all.
And, the rights to be protected by government are those of defense, due process, equal treatment and individual liberties. It was the old Soviet constitution that was heavy on utopian guarantees of health care and education for all, but light on personal freedom - not our Constitution.
A final point. The Kerry proposals, should he be elected, first would have to get through Congress. And this November, Republicans are likely to retain control of at least one house. If that happens, members of Congress would act much as they did under President Clinton, restraining the wild spending impulses of a Democrat in a way that, ironically, they have not been able to do with a fellow Republican in the White House.
It's still true that, as the old saw has it, the president proposes but Congress disposes.
But it's not good news that Kerry, unlike the first JFK and even Bill Clinton (who proposed a middle-class tax cut in 1992 and generally supported free trade), in addition to wanting to greatly increase spending, seeks to increase taxes.
In that, Kerry is a throwback to the tax-increase ideas of Michael Dukakis in 1988 and Walter Mondale in 1984. Both lost. Maybe his ideas should frighten his strategists, too. |
