Just a decade ago, California was the place to be.  The state looked economically unstoppable.  It had a technology boom.  It was attracting the best and the brightest to create whole new industries.  It has great weather.  California looked to be the future and a land full of riches.

But then something happened.  It didn’t happen all at once, but it happened.  California had a terrific economic surplus–investments there seemed to return greater returns because it was located in California.   California politicians worked to redistribute that surplus to other parts of the population, because, hey, there would always be more–more business investment, more jobs, and more growth.   California raised taxes to pay higher wages to governmental unions on the notion that the “investment” would yield results or for fairness sakes.  California believed that it could regulate businesses to get better outcomes for society.  These are all great goals to have.

But eventually, California lost its luster.  Other states began competing with California for its technology and defense jobs.  They worked to become more conducive to business.  They lowered their taxes and worked to make their governmental services more competitive and efficient.  For many businesses, California is no longer the “must be” place, for many others, California is no place to do business at all.  So the growth has slowed, and California is now stuck with an unsustainable welfare state dependent on high taxes that businesses are less willing to pay than before. 

A better blog than this one points out the similarities between California and Wisconsin–including the out-of-control spending and borrowing.

http://www.marketplacemagazine.com/blogs/blog2.php/2009/05/26/replace-california-with-wisconsin-and

There is a notion out there that Wisconsin doesn’t have to compete–that we can afford to tax businesses and make things more difficult for them because we have a “high quality of life” and other such nonesuch.  We do have a high quality of life.  But make no mistake about it–states compete and there are other states that are able to offer a similar quality of life for less.

Executive Mansion,
Washington, Nov. 21, 1864.

Dear Madam,–

I have been shown in the files of the War Department a statement of the Adjutant General of Massachusetts that you are the mother of five sons who have died gloriously on the field of battle.

I feel how weak and fruitless must be any word of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering you the consolation that may be found in the thanks of the Republic they died to save.

I pray that our Heavenly Father may assuage the anguish of your bereavement, and leave you only the cherished memory of the loved and lost, and the solemn pride that must be yours to have laid so costly a sacrifice upon the altar of freedom.

Yours, very sincerely and respectfully,

A. Lincoln

http://news.yahoo.com/s/nm/20090519/bs_nm/us_obama_emissions

Pres. Obama has released a plan to make the car industry achieve ambitious fuel standards.  It will add about $1,300 to the price of the car.

Obama said car buyers would recoup the money with the lower fuel costs realized under more efficient mileage standards.

“This is a winning proposition for folks looking to buy a car,” he said. “Over the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage.”

I suppose that’s true.  One reason for these types of requirements is the large externality of Middle Eastern Oil–it costs quite a bit to have the kind of military that will keep the peace in that volatile region of the world.  That’s why I’d advocate for a higher tax if it would be used to offset a decrease in income taxes (it would be used for higher governmental spending, as Doyle has illustrated in Wisconsin, so I keep my mouth shut).

But what Obama completely misses is that while American’s expenditure on transportation may drop, consumers will be receiving less car for their money.  

Automakers have chosen to give consumers features instead of gas mileage.  If consumers wanted better gas mileage, good car companies respond, as they did when gas was expensive.   Every auto purchaser can do exactly what Obama wants them to do right now.  They choose not to because of other considerations–such as making a profit.   Obama is taking away a choice that consumers used to have–if they didn’t want to make that choice, they didn’t have to, but now they will lose the choice.  How can consumers be better off by having fewer choices?

Hey, you know what’s a good choice–coming to the CYP tailgate.  Information below on how to sign up.

http://online.wsj.com/article/SB124217336075913063.html

Introductory economics at Harvard is known as EC 10. In my day, it was taught by Marty Feldstein, the latest in a long line of great economists to teach the course.

Marty is fiscally conservative. But if you were paying attention, the most important thing that you could learn from Ec10 was that there is no free lunch to be had–you can be a big government liberal, but you’d better be cognizant of the future price.   His editorial in the Wall Street Journal is a reminder of that truism, forgotten as it may be.
He reminds us that high marginal tax rates on the wealthy will inevitably lead them to working less, killing off the very sorts of activities (investing and entrepreneurship) that we need to escape from the recession. Changing international tax laws to tax investments in other countries will not change the situation in the US and could make U.S. companies far less competitive, meaning fewer management jobs for the U.S.

The last paragraph is a good summation of the short-sightedness of the administration’s tax proposals: yes, U.S. companies will find it slightly less expensive to produce in the U.S., but the system overall advantages foreign-based internationals.

It’s a truism that with the new mobility of capital in the world, capital just won’t stay put long enough for any country to force the owners to pay extraordinary taxes for grandiose public health schemes or the wanton waste that is the stimulus package.

Hey, come to the May 21st reception listed below.

CYP, along with co-host Milwaukee County GOP, will be hosting a Milwaukee Brewers tailgate on Saturday June 27th at Miller Park. The Milwaukee Brewers face the San Francisco Giants at 6:05pm.

The cost is $30 per person. This includes a ticket to the game, catered food and drink.

There are a limited number of tickets available, so make your reservation soon.

Hope to see you there!

What is the difference between a conservative and liberal judge? Do politics influence too many judges? What is judicial activism and why must we pick judges that avoid it?

Mike Brennan, a retiring Milwaukee Circuit Court judge and leading Milwaukee conservative will briefly answer these questions at a reception on May 21st at the Milwaukee Athletic Club. Please join us for this special night.

There will be appetizers and a cash bar. No reservation is needed. We will collect a $10.00/person donation at the door to cover expenses.

Speaker: Michael B. Brennan – Former Milwaukee Circuit Court Judge and current Trial Attorney with Gass Weber Mullins LLC will talk about the role of Judges and politics in the Judiciary.

Date: May 21st
Time: 6PM
Location: The Elephant Room at Milwaukee Athletic Club (758 N. Broadway)

Brought to you by the CYP and the Milwaukee Federalist Society.

I like to read liberal blogs and magazines.  I like to know what the other side is doing.  One of my favorite is Slate.

Slate is kind of neat because sometimes, they serve just as good critics (their legal person, though, is a jerk and they hired Eliot Spitzer, as if anyone wants to hear from that guy).   Here’s an example:

http://www.slate.com/id/2218102/

A big argument put forth for national insurance is that it will somehow save money.  Apparently, according to Obama, $2 trillion.  But how?  No one really knows.  As this article points out, its not obvious there are such savings to be had.

The fact of the matter is that healthcare is expensive because it consists of  large hospitals with highly educated people administering the best technology (machines and pills).  That’s where the large amount of expenditures go.  “Controlling costs” means cutting some of those things, which is paramount to recieving less healthcare–people who have paid for healthcare and are accustomed to it are not keen on that idea.

Anyone who wants universal healthcare ought to be upfront about the cost.  When people have insurance, they use more health care (the government, health insurers and our mothers have not been able to make Americans make the lifestyle choices that we so desperately need to make, so I doubt Obama can, although…). 

Universal healthcare will cost a large amount of money–more than just soak the top 5% of taxpayers amount of money.  As in, Social Security payroll tax amount of money.  Beyond saving a few billion dollars on “paperwork” there is no reason to believe that “universal care” or “public option” or the gobbly-gook referenced in the Slate article alters the old adage that there is no free lunch.

When did the AP start writing this fact check article?

http://www.google.com/hostednews/ap/article/ALeqM5gII_eXwpVyrwITxM1gouPdCc–RgD985HVI00

I find its pretty good–very critical.  Was it around when Bush was President?

I mean if someone put anecdotes on a piece of paper and called it a ”report”–wow.  I can see writing a speech like this, but a “report”?  I know Bush butchered in the English language, but that is just silliness.

In Jason’s earlier post on the Chrysler bankruptcy drama, he criticized the president for demonizing the secured creditors (including hedge funds) that failed to capitulate to the administration’s demands.  Well, now, it appears that the hedge fund community is also voicing their disdain for such tactics.  

Last week, the NY Times published a letter written by Clifford Asness, managing partner of AQR Capital Management, a $20 billion hedge fund based in Greenwich, Conn., which addresses the president’s approach.  It is worth reading the letter in its entirety, but Russ Roberts does capture some of the best parts if you are short on time.

As Daniel Bice outlines in a recent post, that was the headline in a blogpost on the Habush, Habush & Rottier website, that is before they removed it.

The reason Wisconsin trial lawyers are just so excited is because a provision in the Wisconsin budget would change the liability law in a profound way.  One does not have to be an attorney to realize that such a change completely changes the dynamics of a case when plaintiffs are required to meet a 1% liability standard instead of a 51% standard.  As Bice points out, the reasoning behind the change is simple: trial lawyers want to be able to easily target the deep pocket in every situation, even if that deep pocket was only 1% liable.

At a time when Wisconsin is hemoraging jobs, Gov. Doyle somehow thinks it is a prudent move to not only make it more difficult for businesses to thrive by increasing taxes , he also wants to make it more difficult for every day individuals to live their lives.  If anybody thinks this would not fundamentally change the way in which insurers operate in this state, they have no clue.  Premiums would almost certainly be affected.  So now the good people and businesses of Wisconsin can expect tax increases and premium increases.  Furthermore, I hope Wisconsinites don’t believe the garbage which will surely follow when these premiums increase.  These increases will be a result of the lobbying efforts of the trial lawyers, not the big bad insurance companies.

This is a perfect example of why conservatives need to prepare for a brutal ’10 campaign.  Gov. Doyle’s reckless policies, blindly supporting tax increase after tax increase, all the while serving as the personal advocate for some of the state’s strongest and most well organized special interest groups, namely the trial lawyers and the teachers unions, need to be stopped.  I for one am not prepared to accept these policies as “business as usual” in Madison.