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Commentary

Why do Democrats live far beyond their means?

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Republicans typically enjoy massive support from people who actually know how the world works, namely, small business owners, investors and entrepreneurs. But do Barack Obama and his new Supreme Court nominee know how the world works?

Sonia Sotomayor

Let’s look at Obama’s Supreme Court nominee first.

Here is what she says:

I would hope that a wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who hasn’t lived that life.

So she discriminates against people based on sex and race. There are words for people who discriminate against others based on sex and race.

The American Thinker reports on how she lives within her means: (H/T Commenter ECM)

Sotomayor’s annual earnings come to $196,000 a year ($170,000 a year as an appeals judge and $26,000 for part-time teaching). She has served as an appeals judge for 17 years. This service was preceded by lengthy tenure at a corporate law firm of Pavia and Harcourt, where she was a partner, and presumably was well compensated.

Yet after a career that has spanned 25 years, Ms Sotomayor only has one thousand dollars in net savings. As reported in the New York Post, Sotomayor’s bank account holds $31,985. Her credit cards debts are $15,823, and she has $15,000 in unpaid dental bills. That leaves her with $1,162. Sotomayor’s total assets, revealed as $708,068, consist almost entirely of equity in her Manhattan apartment.

And here is what it means for us:

If confirmed as a Supreme Court justice, Ms Sotomayor will be ruling on numerous cases that involve investors, savers, corporate profits, business regulation, and related free-market issues…. the fact that Ms Sotomayor, after so many years of highly paid professional work, has no savings or investments and no experience or apparent “empathy” with savers or investors, should be highly troubling to the tens of millions of Americans who do have investments, 401Ks, and personal savings.

And here is how this has affected her previous rulings:

In one of her most important rulings (as reported in the New York Times), Sotomayor ruled that corporations must address environmental concerns in the most radical manner without consideration of the cost. If one particle of pollutant remains to be removed, even at the cost of bankrupting all of the companies in the S&P 500 index, that particle must be removed. If a small business has failed to purchase the most advanced equipment available to address environmental concerns, even if the price of that equipment is one hundred times the revenue of the business in question, the equipment must be purchased. That is how much “empathy” we can expect from Judge Sotomayor.

If she is confirmed, she will probably hurt our free market capitalist system, and the liberties grounded by it. The more that the court hurts business and commerce with judicial activism, the more we lose our jobs, our incomes and our liberty itself.

Barack Obama

Now, let’s take a look at how Obama lives. First of all, it’s well known that Obama was raised with a silver spoon in his mouth and went to all the best private schools, where he snorted expensive cocaine. And he awarded massive taxpayer grants to the hospital where his wife worked after her salary was nearly tripled.

The National Review reports:

One of Obama’s Earmark Requests Was for the Hospital That Employs Michelle Obama.

Dan Riehl notes, via Amanda Carpenter, that in the list of earmarks he requested, $1 million was requested for the construction of a new hospital pavilion at the University Of Chicago. The request was put in in 2006.

You know who works for the University of Chicago Hospital?

Michelle Obama. She’s vice president of community affairs.

As Byron noted, “In 2006, the Chicago Tribune reported that Mrs. Obama’s compensation at the University of Chicago Hospital, where she is a vice president for community affairs, jumped from $121,910 in 2004, just before her husband was elected to the Senate, to $316,962 in 2005, just after he took office.”

The NY Daily News reports on how well the Obamas live within their means. (H/T Sweetness and Light)

A close examination of their finances shows that the Obamas were living off lines of credit along with other income for several years until 2005, when Obama’s book royalties came through and Michelle received her 260% pay raise at the University of Chicago. This was also the year Obama started serving in the U.S. Senate.

In April 1999, they purchased a Chicago condo and obtained a mortgage for $159,250. In May 1999, they took out a line of credit for $20,750. Then, in 2002, they refinanced the condo with a $210,000 mortgage, which means they took out about $50,000 in equity. Finally, in 2004, they took out another line of credit for $100,000 on top of the mortgage.

Tax returns for 2004 reveal $14,395 in mortgage deductions. If we assume an effective interest rate of 6%, then they owed about $240,000 on a home they purchased for about $159,250.

This means they spent perhaps $80,000 beyond their income from 1999 to 2004.

The Obama family apparently had little or no savings during this period since there was virtually no taxable interest shown on their tax returns.

These numbers clearly show the Obamas were living beyond their means and they might have suffered financially during the decline in housing prices had they relied on taking ever larger amounts of equity from their home to pay the bills.

And what did the Obamas learn from this?

But in 2005, Obama’s book sales soared and the royalties poured in. Michelle explained, “It was like Jack and his magic beans.”

Without those magic beans, the Obama family would have eventually suffered the consequences of too much debt.

President Obama has never faced consequences in his private life when it comes to managing money. He always had enough money simply by borrowing more and more. And just when things got tight, those magic beans came along to save the day.

I guess this explains Barack Obama’s fiscal policy and his surprise at the consequent surge in unemployment. But he can count on his new judge to back him to the hilt in all of his unconstitutional interventions in the free market – neither of them knows the slightest thing about saving and investing… just borrowing and spending.

News

CRISIS! British politicians caught abusing expense accounts

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I remember when Stephen Harper took over from the corrupt left-wing Liberal party in Canada, the first thing he did was to pass the Federal Accountability Act, which requires all expense claims to posted on government web sites for the public to see. Conservative MPs could be seen having business meetings at Subway, while Liberals bilked the public for thousands for various junkets. I was so happy for the Canadians.

But the Conservative Party isn’t running things in secular socialist Britain…

Muddling Towards Maturity posted on the whole sordid story, which appeared in the National Review.

David Pryce-Jones writes:

It turns out that the Blair-Brown Labour government could not bring itself to raise salaries for MPs, but instead set up “the system” of allowances that were privileged and kept secret. An MP could claim thousands of pounds more or less on his own say-so, with shaky receipts for dubious expenditure, and the result is that some have built property portfolios worth a million pounds or more.

…Supervising this milking of “the system” was Michael Martin, the Speaker. In the early days of Tony Blair, this man was press-ganged into a job for which he was unfit. An old hardline socialist and trade-union man, he saw himself as defender of entitlements rather than liberty and proper government. He put in outrageous claims for himself and his wife. He did his very best to suppress information about the embezzling and spivery going on under him, in the classic manner of a trade unionist getting whatever he could for his comrades.

READ. THE. WHOLE. THING.

And Muddling also linked to this updated story in the New York Post, entitled “The Mother of All British Scandals”.

…A government minister, one of the richest men in the House of Commons, claimed $150,000 from the taxpayer to finance the mortgage on a “second home.” (He already had seven.) A leading Tory repaired the moat around his stately home on expenses.

Sometimes, the claims were trivial and comically embarrassing: tampons, diapers, the repair of leaky pipes, ice-cube trays ($2.50), hair straighteners ($150) and Scotch eggs ($1.25). Taxpayers unknowingly rented two pornographic movies for the husband of another Cabinet minister. A Tory spokesman on “skills and education” hired an electrician to change his light bulbs. (Cost to the taxpayer? About $225.)

The worst claims bordered on the fraudulent — and some stepped over that border. One MP claimed mortgage-interest payments of about $17,000 on a house that had no mortgage. Another took $55,000 in expenses on a necessary “second home” near Parliament, when his primary home was only a few hundred yards away.

Many MPs “flipped” — i.e., changed their homes from primary to secondary in order to receive second-home allowances. One MP flipped three times and got more than $150,000 of public money.

…Prime Minister Gordon Brown claimed $8,000 to pay for his brother to clean his London apartment. My favorite example, though, is the case of Sinn Fein MPs from Northern Ireland who claimed about $750,000 in expenses to attend a Parliament that they refuse to attend on principle.

This is absolutely amazing. Read the whole thing!

Ed West has more on this story. First of all, the British government hands out taxpayer money to lobbying firms, in order to be lobbied for policies they really want to enact anyway. And here, he talks more about solutions to the problem of government entitlements.

Commentary

Thomas Sowell and Walter Williams are my two favorite living economists

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UPDATE: Welcome visitors from Free Canuckistan! Thanks for the link, Binks!

Let’s see some of their recent posts.

Is Obama’s weak foreign policy going to get us killed?

My biggest concern about Jimmy Carter II is for the nations that rely on us to protect their liberties. Our armed forces project strength abroad that safeguards the liberties of our allies against our enemies. Thomas Sowell just nails this point in his post about the dangers of weak foreign policy, a point most of us don’t even think about.

As if it is not enough to turn cutthroats loose to cut throats again, we are now contemplating legal action against Americans who wrung information about international terrorist operations out of captured terrorists.

Does nobody think ahead to what this will mean– for many years to come– if people trying protect this country from terrorists have to worry about being put behind bars themselves? Do we need to have American intelligence agencies tip-toeing through the tulips when they deal with terrorists?

…Repercussions extend far beyond issues of the day. It is bad enough that we have a glib and sophomoric narcissist in the White House. What is worse is that whole nations that rely on the United States for their security see how easily our president welshes on his commitments. So do other nations, including those with murderous intentions toward us, our children and grandchildren.

Who caused the subprime mortgage crisis?

Thomas Sowell writes about who caused the subprime mortgage crisis. And he has a new book out about it, too!

Beginning in the 1990s, getting a higher proportion of the American population to become homeowners became the political holy grail of government housing policies. Increasing home ownership among minorities and other people of low or moderate incomes was also part of this political crusade.

Because banks are regulated by various agencies of the federal government, it was easy to pressure them to lend to people that they would not otherwise lend to– namely, people with lower incomes, poorer credit ratings and little or no money for a conventional down payment of 20 percent of the price of a house.

Such people were referred to politically as “the underserved population”– as if politicians know who should and who shouldn’t get mortgages better than people who have spent their careers making mortgage-lending decisions.

My own comprehensive post on this topic is Democrats caused the recession and Republicans tried to stop it.

What happens when the secular left undermines morality?

I’ve blogged about how atheism cannot ground the rationality of moral values, moral duties and moral accountability. The presumption of materialism is inconsistent with rationality, consciousness and free will which are necessary pre-conditions for non-ephemeral morality. So what happens to civil society when atheists push religion out of the public square? Walter Williams explains.

To see men sitting whilst a woman or elderly person was standing on a crowded bus or trolley car used to be unthinkable. It was common decency for a man to give up his seat. Today, in some cities there are ordinances requiring public conveyances to set aside seats posted “Senior Citizen Seating.” Laws have replaced common decency. Years ago, a young lady who allowed a guy to have his hand in her rear pocket as they strolled down the street would have been seen as a slut. Children addressing adults by first names was unacceptable.

You might be tempted to charge, “Williams, you’re a prude!” I’d ask you whether high rates of illegitimacy make a positive contribution to a civilized society. If not, how would you propose that illegitimacy be controlled? In years past, it was controlled through social sanctions like disgrace and shunning. Is foul language to or in the presence of teachers conducive to an atmosphere of discipline and respect necessary for effective education? If not, how would you propose it be controlled? Years ago, simply sassing a teacher would have meant a trip to the vice principal’s office for an attitude adjustment administered with a paddle. Years ago, the lowest of lowdown men would not say the kind of things often said to or in front of women today. Gentlemanly behavior protected women from coarse behavior. Today, we expect sexual harassment laws to restrain coarse behavior.

I personally feel alienated by how impolite, unchaste, unromantic and unchivalrous my generation has become.