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Sarah Palin's rise raises Questions about Conservative Women

2009-11-19T12:21:00.003-06:00

Sarah Palin is all the rage as she promotes her new book, Going Rogue: An American Life. She was a conservative darling before she wrote the book and all the more so now that this book is being promoted by the former governor and GOP nominee for Vice President.

Columnist Jedediah Bila pointed out in a recent article that Palin's book conveys the qualities that made her a star in the 2008 Presidential campaign, noting "Palin almost immediately establishes herself as someone who reveres the ideals that she cherishes most — her faith, her family, and her liberty — but who also has a pungent distaste for the hypocrisy of the political machine: 'But it seemed that every level of government I encountered was paralyzed by the same politics-as-usual system. I wasn't wired to play that game' (5). She later echoes a kindred reflection: '...I had to live with my own conscience, so I voted according to my principles and let the chips fall where they may' (66). Palin pledges allegiance to her convictions and both the Alaska and United States constitutions, but not to her party, narrating several instances when she confronted GOP waste and corruption, choosing instead to side with her self-proclaimed 'commonsense conservatism': 'At the time, both parties, nationally and locally, were spending uncontrollably. No wonder voters couldn't tell Republicans from Democrats'" (146).

In spite of the fact her messaged resonated so clearly with many Americans and some could argue that she nearly pulled the McCain campaign out of the jaws of defeat, I believe that Palin and other women and minorities face a serious handicap when running for national office. That handicap is the mainstream media.

I have been arguing in my column, in interviews, and on my radio program, that the mainstream media will do everything in its power to prevent a conservative female or minority from being elected to national office. The left has believed that minorities and women would have no political power without the liberal agendas of the past. The left wants to keep these groups on an ideological plantation, with women and minorities marching in lockstep. I assume the progressives don't realize that the idea behind giving these groups their freedom was to empower them to be able to disagree with their agenda. That is, after all, what freedom is about.

Many on both the left and right disagree. They point out people like Bay Buchanan, who has enjoyed a successful career as a political consultant; yet she has never faced the scrutiny of the election process. To me, she is a weak argument.

Another popular example is Elizabeth Dole. There is no doubt about it; Dole has had an impressive career. Former Secretary of Labor, former Secretary of Transportation, and an US Senator, Dole has certainly had a career filled with accomplishments. Unfortunately, these individuals are missing the point. You can point to many successful conservative females in politics, but we only have one that was on a national ticket and that was Sarah Palin. Now Dole has run for national office, but had little to show for it. She was an interesting novelty, but not a serious candidate by any measure.

The only way to test my thesis is to apply it only to female candidates who have actually had the nomination for national office. Enter Sarah Palin. Palin was literally butchered by the mainstream media by every measure. The thought of Palin as Vice President provided nightmares to the left and to the media that largely supports a liberal agenda. Attention women and minorities, if you are serious about national office, you better be prepared to worship at the alter that "got you there." Other wise, we better be prepared to change the way the media looks at women and minorities.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Capitalism and Morality

2009-11-17T21:11:00.007-06:00

I am a fan of Glenn Beck. I like his shows, website, and enjoy his books. Recently I spent some time with his latest, Arguing with Idiots. The book is excellent, although I choose to not waste my time with idiots since there are so many "sincere undecideds" that I believe are open to a better way of thinking about policy issues. He tackles several of the key headline issues that we hear about daily and clearly shows the insanity on the left when it comes to approaching our national problems. However, I had a very difficult time with his view of capitalism.

Beck's book tackles the question of capitalism from a purely utilitarian perspective, in my opinion. Capitalism, he argues, is not right or wrong, but is simply the most efficient. He recognizes the role of human behavior and the fact that capitalism clearly leads to better results, but in the end he says it as neither bad nor good. I could not disagree more. Capitalism is the most moral economic system in the history of the world.

Command economies -- be they communist, socialist, democratic socialist, or whatever -- have the following immoral characteristics:

The government is a common vehicle for theft, taking money from one group to give to another in pursuit of political, social or other objectives. The taking of money from some to give to others is little more than stealing. Just because it has taken the power to do it, it does not make it right. Government expenditures are only "moral" when they benefit everyone and show special interest to no one. Furthermore, it must be in areas that the government is the only one that can do it.

These types of governments have monetary policies that print money to pay for government programs (inflation), which devalue all other money in an economy. When individuals or crime syndicates do this, we call it producing counterfeit money, when government does it we call it business as usual. A truly capitalistic economy would depoliticize the currency and link it to gold or other precious metals to preserve the currency's value.

These economies create social distortions on a macro level that we would never want on a micro level. We would not want families to be subsidized in a manner that encourages divorce so the children would receive more money, we would not want to reward poverty and waste or discourage individuals from increasing their income. These type of distortions are common in these types of command economies, but are contrary to free markets.

Few can honesty argue against capitalism's power to produce jobs, new technology, better opportunities, and personal economic growth. But these are only part of a much more important system. I guess it is fine if one wants to reduce the virtues of capitalism to efficiency, but to me it is selling one of the most powerful -- and moral -- systems far too short. Capitalism embodies liberty, efficiency, and morality. The most important and persuasive, is its morality. That is a high ground that should be taken in the war of ideas.

Earmarks Reflect a Bigger Problem

2009-11-15T10:06:00.005-06:00

At the height of the 2008 Presidential campaign, John McCain finally began to make traction in one important area, which was earmarks. McCain, who was never a purist in the eyes of most conservatives when it came to government spending, did have an excellent track record in this area compared to Barack Obama. Generally, most Americans were more comfortable with McCain over Obama on this issue.

Although this issue gathered some stream for a short period of 2008, in 2009 it has fallen entirely off the radar screen, thanks to multi-trillion dollar bailouts and an exploding national debt. It simply does not seem that important to most policy makers.

This is too bad, because earmarks are an excellent indicator of the moral decay in the Congress and the total disregard of elected officials when it comes to taxpayer dollars. A few months ago, Citizens Against Government Waste (CAGW) released its annual Congressional Pig Book, which went largely unnoticed by the media. In it, the book revealed over 10,000 earmarks, worth $19.6 billion from 11,610 in fiscal year 2008 to 10,160 in fiscal year 2009, the total tax dollars spent to fund them increased by 14 percent, from $17.2 billion to $19.6 billion.

Tom Schatz, the President of CAGW noted that "Everyone in Washington has promised a new era of transparency and restraint in earmarks, from President Obama to the leaders of both parties in Congress. Sadly, the hard numbers from the 2009 appropriations bills tell a different story. The current Democratic congressional majority is following the same trajectory as their Republican predecessors. They came into power promising to cut earmarks, and made a big show of it during their first two years. However, as the 2009 Pig Book amply illustrates, pork-barrel spending is growing fast." That is largely the story of pork. It is an excellent target of cowardly politicians fighting for the political life, but is no longer an issue when elected officials sit in decision making.

The new transparency rules were intended to get ridiculous bills out in the light, however CAGW uncovered over 220 earmarks worth over $7.8 billion that violated Congress's own rules. The book is only a "best of" the worst forms of government spending. There are many more not in the book that will certainly get you angry, but CAGW's examples are powerful and include:

$3.8 million for the Old Tiger Stadium Conservancy in Detroit;

$1.9 million for the Pleasure Beach water taxi service in Connecticut;

$1.8 million for swine odor and manure management research in Ames, Iowa;

$380,000 for a recreation and fairgrounds area in Kotzebue, Alaska;

$143,000 for the Greater New Haven Labor History Association in Connecticut;

$95,000 for the Canton Symphony Orchestra Association in Ohio; and$71,000 for Dance Theater Etcetera in Brooklyn for its Tolerance through Arts initiative.

A million here and a million there, and the next thing you know you are discussing real dollars.
The typical reaction to these type of bills is balance budget amendments and line item vetoes. These reforms are mere band aids that do not address the larger question of the areas that the government are allowed to spend. That would require a closer examination of the US Constitution and an adherence to Article I, Section 7 of that document. Doing such would not only cut into the billions of irresponsible pork, but attack the trillions in spending that threatens the future of our country. Now that would be change I would appreciate.

Obamacare's war on the Poor

2009-11-14T14:38:00.003-06:00

There are, in public policies, these inconvenient things called the "secondary effects." These are the unintended consequences of even the best intended laws. Critics of Obama's national health care program have questioned its intentions from day one. Few doubt the program will lead to a serious rationing of health care (adding 40 million on the system and allegedly lowering spending will have that impact) and will lead to increase taxes for millions of Americans.

According to public opinion surveys, the number one issue of most voters is unemployment. This sentiment is backed up by the hard fact that unemployment recently broke into double digits, increased employment is still dragging, and the numbers added to the dole are still in the hundreds of thousands each month. One of the main deterrents to the creation of jobs is taxes. Obamacare is nothing short of a direct tax on labor and the cheapest labor in particular.

Writer Eric Staib has spent some serious time with this massive legislation that will change health care and the economy forever. He points out that "According to pages 269-273 of the gargantuan bill, employers of full-time workers will be required to cover at least 72.5 percent of the premium of the least expensive health-insurance plan available that fulfills the bill's minimum criteria of 'acceptable coverage.' In cases in which family coverage is provided, 62.5 percent of the premium is to be borne by the employer. Depending on the specific plan and other variables such as location, this amounts to a direct labor tax of approximately $300 per month for an individual, or nearly $700 for family coverage." Simply put, that means an additional cost of $300 a month for adding an employee and more than twice that if he or she has a family. This, of course, leads to discrimination of potential employees if they have a family.

To make matters worse, if adding $300 or $700 to a preexistent employee and the return being given back to the company is worth less than that, he or she might be laid off or find themselves part time. That leads to another problem, Obama's bill leaves the definition of part-time in terms of the health care bill to Obama's Czar on the subject and not the Department of Labor. The lower the number of hours are used in defining part-time, the fewer the hours people will have at a job. It will create a devastating cycle.

The political left claims to hate regressive taxes (those that get higher as you make less income), but that is exactly what this bill promises to be. The less productive (lower paid) employee will be the one in the business decision makers' crosshairs. Instead of improving the lot of those who are in need of national health care, this legislation promises to do them more harm by also making them unemployed or under employed.

Another unintended consequence of this bill, but certainly tied in to it, will be the continued growth of outsourcing to foreign countries as a viable way of doing business. Cheap labor that is around the world will be a more attractive source for getting things done. Instead of helping the working poor and those who aspire to rise up the economic ladder, Obamacare promises to make the "working poor", simply "poor."

The Road to Serfdom is Paved with Exceptions

2009-11-14T13:16:00.004-06:00

For decades I have been sitting across the table from politicians, authors, business leaders, and economists as guests on one of the radio. There have been a few that believe that the government is the solution to virtually every problem. Government needs to solve health care, housing, poverty, and more. The vast majority believe that freedom works. They will be quick to say government does too much and that its role should be strictly limited.

These conversations tend to run a similar course. They will say the "free market is so amazing and powerful, it is able to create jobs and new industries. It is terrible that government seems to do everything in its power to undermine the economy's potential." However, you dig a little deeper and then you start finding exceptions. Most of the time those exceptions are based on what they do for a living. Attorneys who represent clients who have suffered property damage will say, "they support free enterprise, except when it comes to the regulations they place on insurance companies." The farmer will tell you, "I definitely support free enterprise, except when it comes to agriculture subsidies." Scientists definitely believe the economy is best left alone "except when it comes to research grants." You get the idea.

As a result, the United States is, largely, socialistic. We can argue to what extent, but there is no doubt what our country has become. The single biggest (and fastest growing) part of our GDP is government and it has evolved over the decades to accommodate exceptions like those above. Now we have millions of Americans who support free enterprise, "except." That "except" is bankrupting us and destroying our freedoms.

One of the most inspiring things I ever witnessed was the "Damn Right" campaign for President of Pete dupont in 1988. In that year, I actually voted for the former Delaware Governor while managing a Congressional race in West Texas. I have the feeling I was the only one who casted such a vote in that town. He lost big time in the ballot box, but his message is as potent today as it was then. Pete duPont had no problem telling farmers, seniors, scientists and anyone else that they were part of the problem and that everyone would have to sacrifice in order to restore our freedoms. It was "damn right" for people to carry their own weight and not seek government as a solution.

Those who founded this Republic were aware that it was the natural tendency of government to expand over time. That is why they believed in the dispersion of power and they wanted to make changes in policy hard to achieve. The states would not ratify the Constitution with its "necessary and proper clause" that could be used for all form of abuses, without a Tenth Amendment that makes it perfectly clear that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Those who created this republic saw a nation of nations, with each state offering their own unique approaches to solving problems. They believed that each of these states served as a check to the others because people could leave that state to another that provided more freedom. The decline in our liberties and the increase in socialism, are all linked to the undermining of the political institutions in government designed to protect us from an authoritarian federal government. It is also indicative of a nation that is rapidly moving from "rule by law" to 'rule by mob." The fast track to socialism the US is taking is not driven nearly as much by philosophy as it is selfish want.

If we are interested in restoring individual freedoms and making a nation into one that has prosperity as a priority, it begins by leaving our personal preferences behind. That is a necessary part of the path to freedom to get us off the road to serfdom.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

The GOP may have a race of three

2009-11-09T12:02:00.005-06:00

If you listen to the mainstream media, the race for the GOP nomination is pretty much a dead heat between three candidates: former governors Sarah Palin of Alaska, Mike Huckabee of Arkansas, and Mitt Romney of Massachusetts. No one else needs to apply. Most would argue that John McCain was too old and certainly too moderate in 2008. Nothing has changed since then and, according to the pundits, these three are the only ones with the name identification, revenue sources, and organization to be taken seriously. Thanks to the media, they have done the vetting for us. Thank goodness, because I certainly did not want to do any of the heavy lifting.

Seriously though, is the race already history? Do we need to not get behind a candidate but simply wait for one of these three to rise to the top? I have seen several articles on the subject and although there are some times additional candidates are thrown in, the reoccurring theme includes these three candidates. Of the articles, one of the most interesting was by Paul Bedard in Washington Whispers from US News & World Reports.

Bedard recognizes there are other players in consideration for 2012, including one or two that are not on his top three lists and he already places them in the "also ran" department. These include Indiana Gov. Mitch Daniels, Mississippi Gov. Haley Barbour, and Minnesota Gov. Tim Pawlenty. He points out that the Republican Party is not much for surprises and is big on those who have paid their dues being rewarded, noting that "In a party that allows for only a handful of big names in the primaries and favors those making a second try, the room is getting full." But this is not just the opinion of a journalist, but even among professional observers of the Party. GOP pollster Bill McInturff stated that "We already have a relatively mature field." Those that are considered most "mature" or established" include Palin, Huckabee, or Romney.

"I always talk about oxygen in a presidential primary race, with the amount of oxygen being finite, meaning attention and coverage," McInturff is quoted by Bedard. "If Governor Palin does run, it is difficult to imagine how a new candidate gets the oxygen needed for a breakout," he says. "In this way, it accrues to the advantage of already established candidates like Palin, Huckabee, and Romney."

The race is certainly not over, but the GOP is extremely cautious in its choices of candidates. I think the writer hit the nail on the head when he pointed out that "the Republican camp generally likes to nominate somebody who has run before." Call it what it is, but this is good old fashion due diligence, which is the type of approach that is common in the Republican Party. I think many, if not most, Democrats wish they had done a little more homework in its choice of a President in 2008.

The one thing that is not being included in this "conventional wisdom" is the role of the Tea Parties, which are maturing and demanding more on a daily basis. The "good old boy" network and the "get along gang" are not nearly as popular as they use to be. Of the three candidates considered in the top three, Palin is certainly the most interesting to those who consider themselves a part of the Tea Party movement. I, personally, am keeping an eye on Governors Daniel and Barbour as well as her. I think the Tea Party could change all of the rules on Presidential politics and 2012 could be an interesting year indeed.

Before you vote for another candidate...

2009-11-08T09:48:00.004-06:00

Examples of irresponsible governing can be found everywhere and transcend political party lines. Democrats are being held by a particularly high standard these days because they are in the driver's seat. Here is a reality check, Democrats have been fairly honest about their intentions to move rapidly to government control or ownership of the means of production (socialism) for years. Those quiet critics on the side, the GOP, have been equally cooperative in that effort. Their only concern is the pace towards massive government control. Republicans should actually be held to a higher standard.

There are certain bills that were passed that I am using as a litmus test for the next election. Every candidate who supported either bailout and candidates who support socialized medicine in any form are two good examples. Those who voted for such, need to be dealt with in a manner Horatio Bunce handled one of my favorite historical characters.

When Davy Crockett (also known as the "king of the wild frontier") served in the US House of Representatives and ran for reelection. He was handled rather firmly by one of his constituents named Horatio Bunce. Bunce told Crockett that he believed in the Constitution and that Crockett had, essentially violated his oath of office. This bothered Crcokett who strongly believed in the Constitution and limited government. He wanted to know exactly what he was talking about. Bunce told him "My papers say that last winter you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?" Crockett recognized the vote and the fact that the Constitution does not give him the right to allocate those dollars. He tried to justify it because the amount was so "small."

Bunce would have none of it, "It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe, is a charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other. No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose. If twice as many houses had been burned in this county as in Georgetown, neither you nor any other member of Congress would have thought of appropriating a dollar for our relief. There are about two hundred and forty members of Congress. If they had shown their sympathy for the sufferers by contributing each one week's pay, it would have made over $13,000. There are plenty of wealthy men in and around Washington who could have given $20,000 without depriving themselves of even a luxury of life.' "The congressmen chose to keep their own money, which, if reports be true, some of them spend not very creditably; and the people about Washington, no doubt, applauded you for relieving them from the necessity of giving by giving what was not yours to give. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.'

Crockett repented for his bad decision and pledged to not do such again. When an appropriation bill came forward that was not constitutional (aid for the widow of an Admiral), he offered his own salary for a week to help her if his colleagues would join him, and if they did, the sum to be given would be higher that the appropriation. That bill to provide aid was destined to be approved until Crockett took them to task. They voted against the bill, but also kept their week's pay. Crockett got back on the House floor after the vote and noted "You remember that I proposed to give a week's pay. There are in that House many very wealthy men - men who think nothing of spending a week's pay, or a dozen of them, for a dinner or a wine party when they have something to accomplish by it. Some of those same men made beautiful speeches upon the great debt of gratitude which the country owed the deceased--a debt which could not be paid by money--and the insignificance and worthlessness of money, particularly so insignificant a sum as $10,000, when weighed against the honor of the nation. Yet not one of them responded to my proposition. Money with them is nothing but trash when it is to come out of the people. But it is the one great thing for which most of them are striving, and many of them sacrifice honor, integrity, and justice to obtain it."

In 2010, if your member voted for bills that are unconstitutional, hold them accountable. If they are not willing to repent, you need to look else where for candidates. Kevin Brady (R-TX), on my show indicated that if TARP had been spent differently, there would have been better results. He had no regrets other than that. Sen. John Cornyn (R-TX) argued that he voted for TARP because "the best minds in the country argued that the economy would collapse without this spending." Those "best minds" did not swear to defend the Constitution. Candidates who have voted for bills like this need to denounce those decisions or we must decide to denounce them.

Buffet is Bullish on Trains

2009-11-04T13:00:00.004-06:00

There has been a great deal of buzz this week about Warren Buffet discussing a recent purchase by his company. Buffet is noted for his candor, which makes him one of the more credible voices when it comes to the status of the economy and Wall Street in particular.

Recently, Buffet was found on the Fox Business network visiting with anchor Liz Claman. In particular, he was discussing his Berkshire Hathaway's gamble into the railroad business. Just recently the company purchased Burlington Northern Santa Fe in a deal worth about $44 billion.

This is a bold move for Buffet in a shaky economy, but typical of a person who has learned to take advantage of sales that can be found when a business environment is in decline. Furthermore, with the move towards reducing energy costs in order to support the environment and save dollars, trains are a very smart form of transportation. Buffet does not buy things he is not comfortable with and had already owned 25 percent of the company before he acquire the rest of it in a recent meeting in Fort Worth, Texas.

Why trains versus trucks or other forms of transportation? Buffet told Claman that "the rails move a freight at a much more environmentally friendly way than the truckers do. And they also only use about a third of the fuel. So, it's helping...It helps in terms of the atmosphere. It is a very, very efficient, effective, environmentally friendly way of moving freight. And, you know, our rail system is a huge asset to the country."

Claman covered a topic that is extremely important to anyone concerned about transportation. She noted that trains are, in transportation, the "cheapest, best way. But then there's cap-and-trade, Warren. Some analysts are very skittish about coal and a possible backlash if cap-and-trade goes through. You mentioned now -- you said, we're going to see a diminishing of coal use. But what do you think cap-and-trade would do to the business if that went through?"

Buffet can not easily dismiss the topic, but noted "It won't change the composition of what utilities are doing tomorrow or next week or next year. The utilities over time are going to use less coal and probably more nuclear. Our own utility, for example, uses wind very substantially in Iowa. So, over time, coal is going to diminish somewhat. Now, I think that will hit Eastern coal more than Western coal, but that's a fact of life over a considerable period of time. And that's true whether there's cap-and-trade or not, yes."

One of the things that caught my eye in the interview was Buffet's discussion of his view of the dollar in this current economy, stating "You're seeing us get rid of a lot of dollars today in exchange for a lot of assets. So, I would rather own physical assets than own dollars." Why? Because of the rapid decline of the value of dollars through the printing of money. Those of us who cannot afford to purchase railroads, might want to consider precious metals as a part of an investment strategy.

Wal-Mart Revisited

2009-11-03T23:48:00.007-06:00

Wal-Mart has its detractors on the left and the right. Liberals lament the "artificially low wages" and the "disregard for the little guy," be that person an employee or a business owner. Conservatives tend to dislike the company's passion for cheap products, which translates into huge imports from other parts of the world. Its fans note that Wal-Mart is noted for its ability to drive down prices and generally lowers employment in the areas it moves in to.

With that, I was intrigued by a recent article in Foreign Policy that discussed the impact that India's first Wal-Mart had this past summer in Amristar. Those opposed to the major stores feared that Wal-Mart was going to destroy the country's traditional culture. Foreign Policy, on the other hand, sees it as an indicator of major things to come on the economic front.

The article points out that Wal-Mart has started operations in 15 countries since 1991, and 13 of them have seen their economies explode. The average annual growth was a substantial 4.4 percent. In fact, the article demonstrates that over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average.

Is this mere coincidence or is there something more to it? Does Wal-Mart provide the spark plug for these countries to explode economically or are they simply effective at doing their homework and know where the next great economy will be?

Foreign Policy argues that it is more of the latter than the former. Wal-Mart is very selective of the country's it chooses. Without a middle class, people who have money to spend but it is scarce enough that value truly matters, a country easily removes itself from the selection process. Wal-Mart wisely selects places that has a very large middle class, which helps to guarantee the country's future profits.

According to the World Bank, the number of the middle class in the devolving world should increase from should increase from 56 percent in 2000 to 93 percent in 2030. Next on the Wal-Mart radar screen are Russia and the countries of Eastern Europe, according to Foreign Policy.

The economic indicators of countries before and after Wal-Mart are impressive:

Brazil has 352 stores and went from an average annual GDP of 1.3% before Wal-Mart to 3.8 percent on average between 2003 through 2007 after the store entered the scene.

Japan has 371 stores and went from an average annual GDP of 0.5% before Wal-Mart to 2.1 percent on average between 2003 through 2007 after the store entered the scene.

Even Mexico has enjoyed the Wal-Mart years with 1,242 stores and went from an average annual GDP of 1.7% before Wal-Mart to 3.3 percent on average between 2003 through 2007 after the store entered the scene.

It appears that those who hat Wal-Mart and despise its arrival to their country will likely find themselves crying all the way to the bank. Maybe countries would serve themselves well by developing policies that mirror Wal-Mart's criteria for expansion.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Federalist No. 10

2009-11-01T13:05:00.016-06:00

Few people have read the Constitution and fewer still have read the documents designed to make the case for it. James Madison, Alexander Hamilton, and John Jay worked passionately to make the case for the states to ratify the US Constitution. The Federalist Papers were 85 essays (which were first written as articles and circulated as pamphlets and as articles in newspapers through out the states and they elaborated on the principles of the Constitution) and are considered a primary source for understanding the founding document.

The Founders called on three of the most powerful minds in government at the time to make the case for the new government. Alexander Hamilton, who would go on to become the first Secretary of the Treasury, was an advocate of a strong, but limited government. John Jay, who would go on to become the first Chief Justice of the US Supreme Court was like Hamilton in his convictions. Finally, there was James Madison, who was known as the Father of the Constitution since he scribed virtually every word of the proceedings leading to the founding document. It is Madison's Federalist Number 10 that I consider my favorite of these articles. The article first appeared in November 1787.

The consensus in American politics in these early years was decidedly anti-partisan. In this essay, Madison makes a remarkable case for this country to choose a uniquely American way of governing. I suggest reading the entire document, because of its powerful arguments and a message so alien from modern American politics today.

Madison argues that "The instability, injustice, and confusion introduced into the public councils, have, in truth, been the mortal diseases under which popular governments have everywhere perished; as they continue to be the favorite and fruitful topics from which the adversaries to liberty derive their most specious declamations. The valuable improvements made by the American constitutions on the popular models, both ancient and modern, cannot certainly be too much admired; but it would be an unwarrantable partiality, to contend that they have as effectually obviated the danger on this side, as was wished and expected." "Popular governments" were, in a word, democracies. This document is a great warning to the people of France at that time who were about to break out in a revolution of their own. Where as the US Revolution was based on responsible freedom, limited government, and symbolized by the Liberty Bell. The French Revolution was known for its factions, revenge, and symbolized by the guillotine.

Madison goes on to point out that "There are again two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests." In other words, Madison argues that you cannot accommodate the views of the majority without oppressing everyone who disagrees with that popular decision. Totalitarian regimes have no functional factions, because those who would disagree with the government are simply oppressed. On the other hand, if mobs rule, we are oppressed by majorities. Madison, argued that such is just another form of tyranny. He also argued for a third way, he believed that one of the virtues of the Constitution is that the federal government would be so limited in power, these type of battles should be fought in the states. If people were truly passionate about a certain issue, they could move their battle to a state that reflected their values. With a strict republic based on rule by law and limits on the federal governments, individuals would be able to enjoy a high level of freedom on a state and local level. This would not only make our nation more prosperous and financially sound, but also free. It is one more case for restoring the much neglected Tenth Amendment of the Constitution.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

People in New York are Voting with their Feet

2009-11-01T11:42:00.008-06:00

Politicians keep telling us that the rich need to "suck it up" and throw in well beyond their share. They tried this in Maryland and it has resulted in a drop in revenue that is comparable in their tax rate increases. A recent study from the Empire Center for New York State Policy is showing that the state is suffering from a similar fate.

The authors of the studies -- E.J. McMahon and Wendell Cox -- point out that between the years 2000 and 2008, there was a departure of 1.5 million people, mostly from New York City, with destinations that were safer for finances. Proof that money was a major factor in the decision making is seen in the income groups that have been coming and going from the state and the impact it is having on the budget.

According to the study, the families that have been leaving have income levels that were 13 percent higher than those arriving to the Empire State. In Manhattan and the New York County area, the impact was even more profound. Those leaving the Big Apple had an average income of $93,264, which was approximately 28 percent higher than those who were arriving (which made $72,726 on average).

The real injury is not so much in people, but in revenue. According to the study, the trade off in the income groups of those arriving and those leaving translated in a lost $4.3 billion in taxpayer income. Add that to the other years in the study (2001 through 2008) and it adds up to a devastating $30 billion.

The authors of the study are some what cautious in their approach and do not attempt to single out a particular reason for the mass departure, but the Wall Street Journal places the state's and city's excessive tax rates. Citing the Tax Foundation, between the years of 1977 and 2008, New York was consistently ranked first or second for having the highest rates compared to the rest of the country. During the years covered in the Empire Center Study, New York's taxes ranged between 11 and 12 percent of income.

Taxes reach its highest level in 2004 saw a high in departures in 2005. That year, the state lost approximately 250,000 people who moved to other parts of the country. Meanwhile the state has passed another massive tax bill that likely lead to people leaving the state as they vote with their feet.

There is an old saying, "the more you tax something, the less you get of it. The more you subsidize something, the more you get of it." New York is committing economic genocide, through heavy taxation, on its most affluent residents. The result, ironically will be fewer tax dollars and a decidedly poorer state.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Lies, Damnable Lies, and the Growth of GDP

2009-10-30T00:33:00.003-05:00

The 3.5 percent jump in the Gross Domestic Product (GDP) has many (particularly in government) declaring that "the recession is over!" Tell that to the 10 percent of the population that remains unemployed and to the thousands of small businesses limping along in an economy that is still flat, at best. There is an old saying, "any increase is significant when you are starting at zero." That is a fair summation of the "jump" in the GDP.

Many who are well versed on what is going on in the political and economic front are far more cautious than those in politics with an agenda and those in the media who are die hard fans of those with an agenda. Many economists are approaching this increase in the GDP with a healthy amount of cynicism, which may be why you are seeing little about their criticisms in the media. But there are many with serious business and economic credentials that are pleading for caution.

RDQ Economics states that "We need many quarters of GDP running at this pace (or faster) to make significant inroads into reducing unemployment." Great point, jumping to conclusions about the recession will have us making 10 percent unemployment a reasonable expectation for a healthy economy. I do not believe any of us are ready for that.

Stephen Stanley, RBS stated that consumption played a big role in getting the increase, but the "details look less promising. About 40% of the increase in consumer spending came from motor vehicles, reflecting the transitory boost from the cash-for-clunkers program. As auto sales recede in the fourth quarter, consumer spending is likely to grow much less rapidly. Similarly, state and local governments seem likely to face tougher cutbacks with no further boost from the fiscal stimulus while defense spending is likely to cool. Meanwhile, residential investment looks likely to keep growing but at a less vigorous pace while business investment spending growth looks unlikely to improve much more until a clearer picture on consumer demand emerges." The increase is caused by government, which can only be sustained by continued increases in spending, which will only further destabilize the long term economy. Our GDP is built on a house of cards and Stanley's suggestion that the fourth quarter will see another decline makes perfect sense.

Guy LeBas, Janney Montgomery Scott, note that "The final handful of dirt on the Great Recession's grave: today's data provides a needed psychological end to seven quarters of shrinking economic output. While there's a great deal of uncertainty as to conditions for the coming few quarters and years, at least we can say the last few months have been good ones for output. We remain very much concerned, however, that the pace of consumer activity will slow sharply now that government spending incentives are expiring." Bottom line is that there is a genuine concern that the increase is driven by government smoke and mirrors, and not in a real increase in consumer demand.

Paul Ashworth of Capital Economics stated that "Our concern, however, is that all those positive factors will fade badly in the second half of next year. If consumption growth remains unusually lackluster, then GDP growth would slow to a crawl again." Ashworth, like many economists, recognizes that this demand is artificial and driven by the government. When the government pressure subsides, the GDP will likely shrink.

Millan L. B. Mulraine of TD Securities suggests that "with the significant fiscal and monetary stimulus providing the main impetus for this sharp rebound, we expect GDP growth in the coming quarters to be less robust as their impact wanes..." Again, government created GDP.

Finally there is John Silvia of Wells Fargo who noted that "Big contributors were consumer spending on autos - cash for clunkers - federal government, inventories and housing - tax credit… Core issue: how much of this is sustainable without Fed programs?" What an excellent question, one I wish was asked by more people in politics and the media.

Will Gingrich Regret his Endorsement?

2009-10-28T08:59:00.008-05:00

I like Newt Gingrich. He is smart, optimistic, and brings a credible perspective to issues that the left has a difficult time dismissing. However, Gingrich's best days may be behind him and the type of politician that believes political success (getting Republicans elected) is more important than policy, simply does not resonate with the growing number of Republicans who are not going to be satisfied with a candidate simply because he or she is in the GOP. There was a time that Gingrich was a rebel. I remember back in the 1980s and early 1990s, when Republicans were largely an inconsequential minority in the US House (like they are today) and he stormed the floor of the US House with other unhappy members, when the Congress was not in session and performed "special orders," which is the giving of speeches to an empty House. These messages informed voters via C-Span about what the Congress was doing and went against the "get along" decorum that politicians were so noted for.

Gingrich created a group of political insurgents that he called COS -- the Conservative Optimistic Society. These members, largely of the neoconservative variety, chipped away at the status quo and by 1994 became a big enough player to get the US House into the GOP's hands for the first time in decades.

When the COS got started in the 1980s, I was working for a US Senator and, later, with Washington think tanks. Although I was impressed with Gingrich's ability to get dissent of Democrat policies noticed, I was never comfortable was his fundamental approach to governing. Gingrich, who was one of the only members of Congress with a PhD in history (in his case, from Tulane) is an excellent debater. The problem is, the former Speaker rarely fought against the growth of government, but the pace of which government grew. Gingrich has never been opposed to more government, but the speed of the expansion. This has been reflected in his role as leader of the GOP in the House; the way he addresses policy issues in general, and is even demonstrated in his values when he made an endorsement in an up coming Congressional race.

The Wall Street Journal sets the stage: "You might have heard about the unusual election next week in New York's 23rd Congressional District. It's unusual for several reasons: It's taking place in an odd-numbered year, there was no primary, and there are three candidates." This is due to the President choosing the sitting Congressman (Rep. John McHugh) to be Army Secretary. The Journal goes on to lay out the landscape of the race, "Local GOP bosses nominated a state legislator, Dede Scozzafava, who is so liberal that she also received the endorsement of the Acornite Working Families Party. (Under New York's unusual 'fusion; system, several minor parties have spots on the ballot, and a candidate may receive multiple party nominations.) Doug Hoffman, who had been passed over for the GOP nod, won the Conservative Party nomination. Establishment Republicans like Newt Gingrich lined up behind Scozzafava, while conservatives like Sarah Palin endorsed Hoffman. This threatened or promised, depending on your point of view, to split the Republican vote to the benefit of Democrat Bill Owens."

If Owens wins, Gingrich and other Republicans who put party above ideas will blame people like Palin who places philosophy above party. Like many of us, Palin believes the party is only a vehicle and the GOP is one that is broke. The reality is, if Owens wins, it will be because establishment conservatives doing the expedient thing, rather than the right one. If Republican Scozzafava wins, the GOP will be the biggest loser of all as that brand continues to stand for nothing. If Owens wins, it will be because of a lack of courage among those who should do the right thing.

Alarming Communist Rhetoric and Reality

2009-10-24T12:25:00.011-05:00

Increasingly we hear that the US government is moving rapidly towards communism. Most dismiss such rhetoric as alarmist and irresponsible, but Karl Marx himself left certain benchmarks on the characteristics of a communist regime. These are among the "essential elements" of this form of government, found in his Communist Manifesto.

Under communism, we are told there "should be an abolition of property in land and application of all rents of land to public purposes." We have this, to a certain extent, already, since virtually every county, city, or other local jurisdiction has property taxes. You could own your property "free and clear" for years, but you will continually pay "rent" to your county or other local government for as long as you live in it.

Marx called for a heavy progressive or graduated income tax. We have it, according to Steve Moore of the Wall Street Journal, "The latest data show that a big portion of the federal income tax burden is shouldered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes."

Communism advocates the abolition of all rights of inheritance. The government is not quite there yet, but is working on it. The trend had been towards increasing the amount people were allowed to pass on to their children and grandchildren. This administration will have them rise to levels we have not seen in decades.

Communism calls for the centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly. Have you heard of the Federal Reserve? This institution mirrors Marx's image to a tee.

Marx advocated the extension of factories and instruments of production owned by the state. Who would have believed that we would have the President of the United States accepting the resignation of the CEO of General Motors? The government has exploited our economic crisis as a basis for massive expansion. The relationship between government and business has been "too close for comfort" for years, now the entanglements of where government ends and business begins is almost impossible to determine.

The control of transportation and communications are also parts of the Marxist agenda. It has been under government coordination for decades. As government tries to introduce "fairness doctrines" and wages a war on media networks, the possibilities are endless. If the government starts to bailout dying publications, you can only imagine what that will due to further distort media bias.

Communism argues for the equal obligation of all to work. This almost sounds like a "responsible" government notion...if you do not work, after all, you should not eat. However, Marx argued that people should be required to work and only be able to retire when the government says you can do such. The government has not reached that point yet (although tax and other laws have enormous influence on when people choose to retire), but it is designing tax and other regulatory law to make retirement all the more unobtainable.

Free education for all children in public schools. Public education is imperative if a government is going to dictate to a people what it can and cannot do. In the US, it was not until the 1830s that the state governments even established department of educations and there were virtually no government schools for the first 50 years of the republic. The Founders believed education was a check against a government that could grow out of control. Today, most Americans have no idea about what the government can and cannot do, because they have no idea what rights the Constitution gives them or what limits the Constitution puts on the state.

The rhetoric is not nearly as alarming as the moves towards Communism the country has been taking for years. It is time for Americans to get honest about the state of our nation, no matter how unpleasant the rhetoric.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Canadians Die Waiting for Health Care

2009-10-23T09:12:00.006-05:00

The Canadian health care system, which is often touted as the future of medicine, has been the subject of controversy for years. So much so, in fact, that the Canadian government is seriously entertaining privatizing major elements of the system.

The surface of the program should discourage most. It is touted as free, but is funded through taxpayer dollars. We are told it is universal, but the country's own Supreme Court says that is only in its lines. In fact, two Canadian justices wrote three years ago that "access to a waiting list is not access to health care."

The system is overused, there is virtually no consumer incentive to act responsibly regarding it, and the results are huge lines, delayed treatments, and even death.

In spite the government's best efforts of controlling every aspect of Canada's health care system, the market has risen to address the needs of a public that has grown discontent of having to wait on a list. Seventeen weeks from the time a general practitioner says one needs a specialist and one actually sees one, is too long for most Canadians. Responding to the need, the British Columbia Automobile Association recently began offering "waiting-list insurance" to some of its members as part of a pilot program.

Those who buy the coverage receive treatment in a private clinic in British Columbia or the United States if they were placed on a government care waiting list longer than 45 days. 45 days is still too long for most, but it was an improvment. The kind of improvement the government could not handle as it shut it down to investigate if the program was legal.

"This is an example of a company that's actively soliciting for clients that have the ability to pay for the privilege of queue-jumping," said Adrian Dix, a member of B.C.'s Legislative Assembly. "In my view, and in the view of the legal opinion that we obtained, it is illegal, and it violated both provincial and national health legislation." This is one of the many dark sides of socialized health care. Not do its proponents want to put everyone in a collective system, they do not want anyone who can afford to do more (like insurance for waiting lists) to have that opportunity. The idea of any elected official -- or any responsible individual -- being opposed to such a program is beyond comprehesion. What is "fair" and "equal" in the Canadian system is the misery.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Do Health Insurance Companies make too Much?

2009-10-21T23:31:00.014-05:00

We are told, daily, about the "exploitative" profits being made by the large health insurance companies in the form of premiums. The "huge" amount of dollars collected should be grounds for the massive take over of health care by the government, we are often told by the media. Politicians discuss these companies like preachers from the pulpit, using terms such as "immoral" and "disgusting" as measures of the amounts they make. According to the Associated Press, the real numbers show a different story.

Health insurance profit margins run around 6 percent, give or take a point or two. That is very small compared to other forms of insurance and below the standard 7 percent most of us learned in economic classes as the corporate average for profits.

Here are some of the points from the AP article:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. It is not at all surprising that other health sectors did far better -- drugs and medical products and services were both in the top 10.
Doing better still -- at the top of the list -- network and other communications equipment, at 20.4 percent; the railroads brought in a 12.6 percent profit margin.
HealthSpring, the best performer in the health insurance industry, posted 5.4 percent; that mark proved less than Tupperware, Clorox bleach and Molson and Coors beers.
UnitedHealth Group, reporting third quarter results last week, saw a better picture; it obtained a 5 percent profit margin on an 8 percent growth in revenue.

We have been told that the Bush Administration provided the "hot years" for health insurance companies. Reality, again, shows something else as industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward, never cracked 8 percent.
So what companies were the real performers? Surprisingly the list includes Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands 8.5 percent.

I personally do not care how much a business makes as long as its profits are legal and they face competition. The Obama Administration likes to complain about the health insurance industry "monopoly" on health care, as if we were all dealing with a single company. In light of the fact health insurance companies are making considerably less than other industries, it is clear that these companies do not enjoy anything like a monopoly. We will not, however, be able to say the same about Obama's public option.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Are the Democrats really for the Poor?

2009-10-20T21:12:00.003-05:00

One of the big debates over fiscal policy is the discussion of "priorities." Government, is going to spend, it is merely a question in what areas, we are told. In that debate we are told that Democrats (or liberals of any political party) are for the "poor," while conservatives are for the "rich." We often hear about "rich Republicans" and "poor Democrats," but how does this line up with reality?

In the last Presidential election, the only two serious contenders on the Democrats side were Barack Obama (who eventually won) and Sen. Hillary Clinton. Both used very populist rhetoric and to varying degrees, both sounded as thought they were pulling chapters out of the works of Karl Marx. Yet there is a cloud that hang over these "poor Democrats." That is the political realities that financially drove both of their political campaigns.

Personal income is a strong indicator of ones relationship to the constituents they represent. Barack Obama made ten times more than Sen. John McCain (who became the Republican nominee in the last year) accounted, with over $4 million in income. Meanwhile his wife cries poverty over having to have to make "outrageous" student loan payments to their old schools -- Princeton, Columbia, and Harvard (where's the violin music when you need it?).

In the same vein, Sen. Hillary Clinton, made an impressive five times more than Obama at approximately $20 million. My mathematical skills suggests I refrain from attempting to calculate the difference between McCain and her.

But personal wealth is only the beginning, there is also the lessons we learn from those who supported their campaigns. From the media we would have to assume that McCain certainly received much more from his rich Republican buddies than either (or even both) of the Democrats. The reality could not be further from the truth, Sen. John McCain raised a fraction of what Obama raised (who broke a presidential campaign record) and during the primaries, he could not keep pace with Clinton.

The debate about wealth, poverty, and politics, is really quite cloudy. I sincerely doubt that homeless and other poor people (the alleged beneficiaries of Democrat policies) are fueling their Presidential campaigns. In fact, a Fortune Magazine article implied that business was voting for Hillary. What kind of business? The big corporations that can actually afford liberal and big government policies and see such as a way of keeping smaller competitors at bay. We saw from the so-called stimulus packages (designed by Democrats in Congress, yet supported by both parties) in September of 2008 and again in the early days of the Obama Administration, that some of the biggest beneficiaries were the largest corporations in the United States.

The truth of the matter is that the mega rich support liberals over conservatives. In fact, Obama's support was 3 to 1 in that category. The reasons the rich supports liberal candidates might be quite cynical. Major corporations know they can absorb the regulations, tax requirements, and other obligations that come with being large. They also know such laws could put their aspiring competition -- the rising enterprises often driven by the middle class -- out of existence. Americans need to get serious about this issue and start by asking the question, what type of policies actually help the poor?

The Truth About Trade Deficits.

2009-10-16T22:51:00.003-05:00

The dreaded "trade deficit" is shrinking...let's celebrate! Wait a minute, this is happening in the context of the worst unemployment in a quarter of a century, a jump in inflation, and a period of protracted economic decline.

The balance of trade -- the amount of goods imported versus goods exported -- has been a tool used by those who are shallow in their economic knowledge and deep in their fear of competition. We are told by many politicians that trade deficits (importing more than we export) is a "terrible" thing and demonstrates an economy in decline. As a result of decades of trade deficits, the US is a "debtor" nation, we are told.

So the recent news stories should be good news: "Trade Gap Continues to Narrow." This narrowing is because the amount of goods we are importing each year is actually shrinking. There are few, if any, who would argue that this economy is anything but weak and has been in a downward spiral. This reality should not be a surprise to any student of history. When the economy is weak, we can't afford to buy. Our trade deficit shrinks with our spending power.

In 1928 Republican Herbert Hoover was running for President of the United States against Democrat Al Smith of New York. Hoover, the Secretary of Commerce under one of the most successful Presidents in US history, was running against a very popular governor. It was easy for Hoover to defend the record of the President he served, Calvin Coolidge, as virtually every indicator pointed to an administration noted for its prosperity. "A chicken in every pot and a car in every garage" was a message that rang true to most voters.

During the 20s, Coolidge and his allies took a tax rate that was as high as 70 percent under their predecessor and lowered the top rate to a low of 5 percent. Coolidge opened economic trade with countries and unleashed a level of prosperity we had not seen in generations. The number of people who made six digits (a very high income in the 1920s) increased four fold. Inflation was less than 2 percent and unemployment was at a comparable amount. They called it the "Roaring Twenties" for a reason.

In spite all the glitter, there were signs of "rust" for those who cannot look beyond the surface. That was the trade deficit that grew rapidly during his administration. This area fell under the Secretary of Commerce and Hoover was taunted by his opponent through out the race as the man who over saw this area of "decline." Finally Hoover got on the protectionist bandwagon and told voters that if Smith or he were elected, there would be quotas and tariffs placed on trade. Hoover won and by the Fall of 1929, he was sticking to his guns and pursuing protectionism in the form of the Smoot-Hawley Tariff Act.

That law did exactly what it intended to do -- slash the import of goods. Within a few years, the US had its first trade surplus in decades and also one of the highest unemployment rates in history. The Stock Market crash that proceeded the Depression was fueled by this trade protectionism. Wall Street knew that, if we penalized imports, foreign countries would retaliate. That led to the Market crash because investors knew that the value of goods would decline as the trade markets would shrink.

The high unemployment rate was associated with the trade surplus for a very simple reason. We imported more goods than we exported because our buying power had declined dramatically. Through out our nation's history over the last century, our periods of highest prosperity were accompanied by eras of trade deficits. Meanwhile, trade surpluses accompanied economic decline. In our prosperity we were buying more, from everywhere.

Today, the trade deficit is shrinking because the economy is weak. Our national buying power is in decline. Trade deficits continue to do what they have done for centuries -- indicate strength and not weakness.

Congress is bent on making "Public Option" Inevitable

2009-10-16T22:40:00.004-05:00

The phrase "public option," when it comes to the health care debate, has become so poisonous that everyone who supports socialized medicine have distanced themselves from that language. No longer will the government mandate everyone to be on "public" insurance. Rather, the government is going to force everyone out of private options and to government care. It is not as "cut and dry" as the approach they prefer and some (the very rich) will still enjoy private coverage, but the vast majority will find themselves with no other practical option than the government.

Peter Landers of the Wall Street Journal reports that "Insurance companies have another made-to-order report saying that the Senate Finance Committee's health bill would drive up health costs." Citing a report from PriceWaterHouseCooper, Landers notes that "The Oliver Wyman report says that unless the Senate beefs up the proposed mandate on Americans to carry insurance, average annual medical claims five years after the overhaul takes effect would be 50% higher than today, not accounting for medical inflation. That would increase the premiums for family coverage by $3,300 in today's dollars, it says." Many families who are struggling to hold on to the health insurance they have will feel forced to give up that private option, especially if there is a government option in the wings and regardless of how poor of an alternative it is.

That is the other side of the two edged sword; not only will Obamacare drive up the prices of health insurance for all those who stay in the private option, it will also put taxes on virtually everyone to pay for it, including (or maybe, especially) those who are already paying for insurance of their own. Just like those individuals forced to pay property taxes while their own kids attend private schools, socialized health care will mandate every taxpayer to pay for the services, even if they are not using the programs themselves.

The demagogues that are currently driving the debate are telling those that have private insurance (approximately 85 percent of the population according to US News and World Reports) will continue to have such after a socialized medicine program becomes law. The truth is, they might have the right, but between being forced to pay for a service they do not want to use and having the cost of the insurance they want to use growing exponentially, they will find themselves "crowded out" of the private option and forced in to the public one.

Because of the same "crowding out" effect in education (people being forced to pay taxes for it, even if they prefer their children to go to private school), 90 percent of all children in the US are in public schools. In England, where public health care is financed in a similar way as we are moving, 90 percent of the population is under socialized medicine. This is not a mere coincidence, but a clear warning for us today.

Obama Declares war on Fox

2009-10-14T17:10:00.006-05:00

We are all familiar with Obama's distaste for dissenting opinion when it comes to the media. Back in his 2008 campaign for President, the Obama campaign left reporters from The New York Post, The Dallas Morning News, and The Washington Times on an airport tarmac. The Post and Times are noted for their conservative bent and all three were guilty of endorsing John McCain. Once those endorsements were announced, reporters from each of these newspapers were left out in the cold.

ABC News reported at the time that "The campaign says that a limited number of seats forced it to make the tough decision of which journalists would be permitted to follow the Democratic presidential candidate in the last four days of the campaign, but the papers are calling foul, claiming they were targeted for their editorial-page positions and kicked off while nonpolitical publications like Glamour and Jet magazines remained on board." It would seem any news publication would have a stronger case to stay on board than Glamour.

Even before Obama was elected there was talk of restoring the "Fairness Doctrine" that had silenced conservative voices for decades until Ronald Reagan reversed the policy in the 1980s, leading to the rise of Rush Limbaugh and others. Obama says he favors consensus, the kind of consensus that only comes from controlling the media.

The Obama Administration is at it again and is now declaring war on the Fox News Channel and many in the media are weighing in.

The "war" against Fox came from pretty high sources in the Administration with White House communications director Anita Dunn describing a new, aggressive, press strategy regarding the network. PRNewser reports on, and has video of White House communications director Anita Dunn's strategy which "she explained in a straightforward slam of Fox News Channel during an appearance on CNN's 'Reliable Sources,'" stating "Fox News often operates almost as either the research arm or the communications arm of the Republican Party," said Dunn. "Let's not pretend they're a news network the way CNN is." The senior aide added, "What I think is fair to say about Fox, and certainly the way we view it, is that it really is more a wing of the Republican Party."

Reports of the White House attack is drawing comments from around the news industry. Time Magazine's James Poniewozik discusses what the Administration has to gain from such an approach, "Of course, it's possible that the Administration is simply making the case because it believes that it's right and Fox News is wrong. But politically, you would think that the White House seeks to gain something from a fight, since Fox News probably is." There is little doubt that Fox loves the attention, and many of my friends with the network have brought Obama's attack to my attention and the personalities themselves discuss it on the air. With Obama's rapidly shrinking numbers, why would not Fox want to be the place to go if you are unhappy with the Administration?

There is certainly a concern that the White House is going too far in its stance. The Orlando Sentinel's Hal Boedeker writes that "Maybe the White House should get out of the press-critiquing business. It's never been a wise move for any White House. The complaints come off as whining. The White House certainly should stop condescending to Fox News, which is a slap against that channel's fans. The smarter move would be for Obama to engage. Why doesn't he put his smooth, unflappable style to the test on Fox News?"

Even liberal publications have echoed a similar concern. The Nation's John Nichols thinks the strategy is weak from both a political and historical perspective: "Whether the grumbling is about Republicans on Fox or bloggers in pajamas, there's a word for what the president and his aides are doing. That word is 'whining.' And nothing -- no attack by Glenn Beck, no blogger busting about Guantanamo -- does more damage to Obama's credibility or authority than the sense that a popular president is becoming the whiner-in-chief."

With the other major news media being little more than a microphone for an increasingly unpopular Administration, voters are going to look for an alternative. Obama and his staff have made it easy to identify where to go to for that.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

One Simple Election Reform Could Stem Tide to Socialism

2009-10-14T14:51:00.004-05:00

The United States government has, for years, put a premium on the act of voting. The idea is, the more people voting, the better. Are you getting your license renewed? Apply for a voters registration! Are you applying for Food Stamps? Go ahead and register to vote! This idea, however, goes completely against the grain of trying to maintain a responsible government. Our Founding Fathers believed in the idea of "quality of vote" versus "quantity of vote," which is the mantra we have today.

We all know that in the early days of our republic, an entire gender (females) and ethnic group (Blacks) were not allowed to vote. What most of us are not taught, however is that the vast majority of the population (regardless of race) was not allowed to vote in those early years. Voting was largely determined by states and virtually all of them had property ownership requirements that excluded, by many estimates, as much as 90 percent of the population. The discrimination practiced by the early leaders was not nearly as inclined toward race, as it was making sure that those who participate had a vested interest in the process. Those with property had to pay taxes directly, giving them (in the eyes of the early leaders) a right to participate in the process.

The classical economist John Stuart Mill argued that, if any person was receiving money from the government, they should be prohibited from voting until they were financially free from any assistance. This idea would not be merely welfare recipients, but corporate "fat cats" getting subsidies from Uncle Sam. Mill argued that there was no way to maintain a small and reasonable government if people could vote benefits for themselves. It was similar to serving on the board of an organization and being allowed to vote on something that directly benefits you. That would be bad form and everyone would expect you to "abstain." "Abstain" we all should do if we are eating at the trough.

Unfortunately, that was then, and this is now. Such a proposal would not be politically palpable. What if there was a third way beyond the "anyone with a pulse can vote" mentality pervasive today and the elitist position found earlier in our nation's history? It is against the law for candidates to campaign for office within a certain distance of voting locations. That is why, when you walk up, you are bombarded with people offering you flyers up to an invisible line. Yet, the single most important information -- party affiliation -- is actually seen on your ballots. Worse still, we allow people to vote "straight ticket," requiring absolutely no thought at all.

To restore integrity in the ballot box, we should remove party affiliation from every ballot entirely and from voting locations. This will require every person who goes in to vote to know exactly for whom they are voting and why. They should not be provided a "cheat sheet" in the form of the ballot for the most important test they take for liberty each election cycle. Those who cry "foul" will be implying their followers cannot read or lack the faculties to make such decisions. What an insult to their constituents. Without party identification, our elections will become a sober task in maintaining our liberty and not a celebration of ignorance. Will we have fewer voters? Most definitely, but we will have more thoughtful voters.

Are the Rich Necessary?

2009-10-10T20:58:00.003-05:00

Hunter Lewis, author of the provocative Where Keynes Went Wrong, produced another winning book in Are the Rich Necessary?. Clearly policy makers in Washington, DC do not seem to think so and seem to have a very hostile view of the affluent. The "goose that lays the golden egg" is certainly in season. Lewis asks several tough questions that people need to ask in order to get a better understand of the economy and the world..

Lewis is a prolific writer who has written for The Atlantic, The New York Times, and the Washington Post and is the author of six books including the before mentioned Where Kenynes Went Wrong. He co-founded Cambridge Associates, a global investment firm whose clientele reads like a who's who of leading endowments and families, and includes the most prominent American universities. he has also served on boards and committees of fifteen leading nonprofits including the World Bank. He has appeared on "The Today Show," NPR, Fox and the BBC. He lives in Charlottesville, Virginia.

Lewis tackles many important questions, including:

Does Obama's objective of limiting charitable deductions for the rich make sense?

What impact is Wall Street having on politics (and vice versa)?

Is the income gap actually widening and if it is, what can be done to reverse that trend?

Has anything really been done to prevent another crash like the one in 2008?

Was the crash attributed to our profit system? Are there viable alternatives to such?

Should we tax average Americans to bailout major financial corporations?

Are the rich even compatible with a free society?

His answers are thorough, thoughtful, and even humorous. He loves to challenge conventional wisdom and does so on virtually every page of the book. The book is thorough and covers many areas of economics and could actually be an introductory text or compliment to such in an introductory economics class. Unfortunately, in our current academic culture, that is largely a dream and not likely to be found in your local college. This is all the more reason why you need to find it yourself.

The best may have been saved for last, in this important book. There, Lewis argues a new way to fill the gap between the rich and poor, of those who want free enterprise and those who want to make sure there are safety nets for the needy. His answer is to foster massive growth of nonprofits through changes in the tax structure. His ultimate goal is to raise nonprofits to the same stature as government when it comes to being a source of help in the eyes of the public.

Lewis brings to light the stark realities that mandate that we need informed voters who can help restore a healthy attitude towards the engines of prosperity that are currently an endangered species. Are the Rich Necessary? is an excellent place to begin that journey.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

The GOP needs to be put in its Place

2009-10-09T20:04:00.003-05:00

The Republican Party could serve itself well by remembering a man that helped to define the GOP. Ronald Reagan was noted for saying that "I didn't leave the Democratic Party, the Democratic Party left me." That message resonated with millions of Americans and led to the rise of "Reagan Democrats." Many of them left that Democratic Party too and some (but certainly not all) of them, joined the GOP. This was part of the Reagan formula for success. It was about values, philosophy, and optimism built on common sense. It had little to do with parties.

In 1980, I was a student at Abilene Christian University and was Chairman of that school's Young Conservatives of Texas chapter. I was also a regional coordinator of Students for Reagan. I was attracted to certain ideas and not partisanship. In my area, Grant Jones was a conservative state senator and also a Democrat. Back then, Charlie Stenholm was a conservative Democrat Congressman. I consistently voted for each of them back in those days because their Republican opponents ran to the left of them.

At this time, there was a Young Republicans chapter at my school and many of them would say, after the Gipper got the nomination, "Reagan in '80, Bush in '81." Reagan was the oldest man elected President and you see how these GOP activists thought about his future.

The Republican Party, at that time was dominated by people that, today, we would call "Republicans in Name Only" (RINOs). The GOP had an Eastern Establishment bent that saw followers of Reagan as among the "unwashed masses" and a mere "necessary evil" to promote their cause. Thanks to Reagan, things changed some what. It became "cool" to be conservative.
Some where over the last two decades, things changed again. When the GOP did something well (cut taxes for job creation, increase economic growth, etc.), they were remarkably silent. Instead, they tried to get fame in a sick form of "me tooism." The left believes government needs to bailout financial institutions and the automobile industry. The GOP's response is "we do too." As a result, I hear conservatives defend Bush's bailout policies. This is a terrible mistake. We should only embrace a candidate's policies that reflect our values and not the candidate because of his party affiliation. Supporting liberty and being Republican are not necessarily the same thing. The last several years have shown that.

Conservatives who continue to defend Republicans who behave like Democrats are like the "co-dependents" who always apologize for their drunk spouse and abusive friends. People who know such individuals (either the abuser or the abused) tend to lose sympathy and in our case, will only chase away potential supporters to our cause. If we want to grow our ranks, we need to stop defending Republicans for being Republicans in Name Only and hold them to the same high standards we have for Democrats. In fact, we should demand an even higher standard. That will disarm Democrats and independents who think our agenda is a Republican agenda and will make them feel comfortable to look more closely at our positions.

Republicans like to say that Democrats spend like drunken sailors. Unfortunately this transcends party lines. Someone needs to hold government accountable and party affiliation should not matter.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Stock Market grows with Unemployment Numbers

2009-10-07T19:19:00.007-05:00

The United States have seen monthly increases in unemployment of hundreds of thousands of people each month for several months in 2009. In fact, the US has experienced the largest increase in unemployment in a quarter of a century. What was Wall Street's response? A remarkable increase in the growth of the stock market numbers. In fact, in March of this year the market had plummeted to just above 6,000 and has gained approximately 80 percent of that since that time.

There is a clear divide between the short term interests of the public and business in general and an even bigger gap between the average person and Wall Street. The latter is all about profits and bottom lines. They could not be happier about the Draconian steps being taken by businesses these past months for several reasons:

When economic environments get to this point, there is nothing that Wall Street desires more than action. Often "retreat" (cutting costs and employees) is one of the most attractive actions in the eyes of investors.

There is no quicker way to cut costs than to cut employees. Employees are one of the most expensive aspects of doing business and so Wall Street is particularly excited by such cuts. The more harsh, the better.

Wall Street has been waiting for the market to capitulate. They have been waiting to see investors hit bottom (the DJA is now roughly half of what it was a year ago) and another indicator that the decline has plateaued is when you start to see massive layoffs. Such job losses are horrific for the recipient of the pink slip, but is great news for those who are investing in those businesses.

I don't believe the job cutting is over. Virtually every publicly owned company is going to seek ways to increase investor confidence in their companies. There is no quicker way to achieve that following a decline in profits than through layoffs. Those who have not cut yet are watching the Market's response favorably and you can expect many more to jump on board. Furthermore, many of the companies that have had layoffs also have vendor relationships that are dependent on them. As we see these companies lay people off, expect many more businesses that are dependent on them to do the same thing.

Unfortunately this ugly trend will continue, in my opinion, until there is a decidedly different approach to policy. Cutting taxes on job creators (AKA, the affluent and business owners), restoring moral hazard (e.g., allowing businesses to fail), and resisting the temptation of regulating our businesses out of existence are just a few of the steps that are needed to restore fiscal responsibility and to encourage a stable economy.

Dancing with Democracy

2009-10-06T06:43:00.005-05:00

Recently I was reading Glenn Beck's Common Sense and found it an excellent read. The book is full of sound reasoning as he made a case for liberty and limited government. In it, however, he discusses the virtues of democracy and how that force will restore our government.

Rush Limbaugh, the conservative radio host who saved the AM dial and made that radio band the hot property it is today has a section of his website and a recurring feature on his program in which he refers to himself as "The Doctor of Democracy."

The late Jack Kemp wrote in his excellent book, An American Renaissance that "bad mouthing democracy" was becoming an occupational hazard of Republicans and that they should embrace that form of government rather than distance them from it. The book was excellent, but like all other things I have read and enjoyed, I certainly do not agree with everything in it. Democracy is an extreme form of government that inevitably we lead to totalitarianism. The US has democratic institutions that are checked by the restraints of republican form of government. In these confusing times, "democrat" and "republican" have nothing to do with parties, but philosophies in this article.

The Founders warned of the excesses of democracy and spoke passionately about limited government:

John Adams: "Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself."

Benjamin Franklin: "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"

Fisher Aimes: "The known propensity of a democracy is to licentiousness which the ambitious call, and ignorant believe to be liberty."

Even Thomas Jefferson, considered by most of his contemporaries to be the most sympathetic of democracy, was quoted as saying: “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

When I traveled to Eastern Europe and the former Soviet Union following the fall of Communism, there were often protests because the people were seeking a quicker pace of reforms. You would find signs, in English to get the message to the United States via TV, that would say "Democracy equals Freedom" and similar themes. Ironically, the first free elections in Germany’s history were in 1932 and led to the rise of Adolph Hitler, whose party enjoyed a mandate. Democracy leads to mob rule and mobs behave in a most destructive fashion riddled with socialism and financial ruin.

We need writers, radio hosts, TV personalities and more to discuss the virtues of republican government, which is found in rule by law. Government should only do those things the people cannot do for themselves. It must be based on law and confined, in our country’s place, to the 17 powers listed in the Constitution. This is why I say that the term "conservative" is a misnomer. There is little liberty left to conserve. The proper term is restore. We must restore liberty, limited government, private property, and free market economics. It needs to become "cool" again to point out the virtues of republican government and to dismiss and to discredit the extremes of pure democracy.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.