A PHILOSOPHICAL SOCIAL & ECONOMIC ESSAY-62

This essay is a philosophical one based on hard data concerning economic and social conditions in the USA. It contrasts the past and present and projects the near future path the country is on using current trends. While the trends are troubling, the situation is not completely hopeless. There are difficult choices that voters of this country will have to make in order to preserve and sustain the economic prosperity and freedom the vast majority has hitherto enjoyed.

The reader will discover this is not a partisan critique or screed. Fault, backed up by incontrovertible data, is shared by both Democrat and Republican politicos, remembering that in a democracy citizens are ultimately responsible for their own fate. This does not mean that Republicans and Democrats, liberals and conservatives, are equally to blame for our current and pending problems, just that all can be cited as not doing what is right and necessary for the good of the country.

I have used several sources for the data I am quoting to bolster my arguments with the latest being Arthur C. Brooks of the American Enterprise Institute.

In finally trying to address the problems of the current and future projected spiraling national debt and the stubbornly high unemployment and under employment rates, President Obama lectures incessantly about “fairness” in the current federal tax code. His solution is to raise federal income taxes on the “rich” as a basic matter of “fairness.” But just what is “fairness?”

There are basically two ways to define “fairness” in an economic sense where there is mal-distribution of income. One is “redistributive fairness” which President Obama and other liberals in and out of congress favor. The idea is through taxes or financial favoritism to take from wealthier Americans and give to less wealthy Americans and thereby to even out, to some degree, the income people have regardless of whether they have earned it.

The other definition is “meritocracy fairness” which holds that people should receive monetary compensation based on hard work, ingenuity, and innovation – i.e. the money that people make should come as a result of merit.

In his 2010 book The Battle: The Fight Between Free Enterprise and Big Government Will Shape America’s Future, Arthur Brooks states that inequality is “fair” if it is based on merit and equality would be “unfair” if what someone has earned on merit is redistributed to others who have not earned it. There should be penalties, not rewards, for corruption, stupidity, laziness, and incompetence. Where does the public come down in this? According to a comprehensive survey, 89% of Americans believe in “meritocracy fairness” and only 11% opt for “redistributive fairness.” People in the past, our ancestors, came to the United States for economic opportunity, not for redistribution of wealth.

What does a merit or opportunity society entail? It simply means the chance to move up the economic ladder. From the years 2001 to 2007 44% of the people in the bottom 20 percentile of the income spectrum moved up to a higher income group. However, this is, to use a cliché, a double-edged sword. In the true spirit of competition in this same time period 34% of the people in the top 20 percentile fell out of that group. C’est la vie.

Even considering the Obama, et al., redistributive philosophy what is the federal income tax breakdown per income group? The top 0.1% of income households pays 16½% of all federal income tax; the top 5% pays 59% (in 1980 they paid 35% - so much for the idea that the rich are paying less of the tax burden than formerly); the top 20% pays 89%. The next 20 percentile pays 15%; the following 20 percentile 4.0%; the one following that 20 percentile -4.3%; and the last 20 percentile pays -3.8%. On average the last combined 40 percentile groups receive more money from the IRS than they paid. Adding it up, the bottom 80 percentile income groups pays 11% of the tax burden which leaves the top 20% paying 89% of federal income taxes.

Between 47% and 51% (depending upon what year is being considered and who made the estimate) of families in this country paid no federal income tax. When questioned, 2/3 of these people say that everyone should pay something in income taxes. There is an estimated $1,000,000,000,000 per year in deductions, exceptions, and credits sheltered from federal income taxes that benefit people in all income levels.

Another way of stating the federal income tax burden is a breakdown of the amount of income levels: In 2009 1470 households with incomes of $1,000,000 or more paid no federal income taxes owing to tax deductions, shelters, and tax dodges. This represented 0.6% of all 237,000 households with incomes of $1,000,000 or more.

People with $1,000,000 or more of income paid 29% of the federal tax burden; those in the $50,000 - $75,000 income level paid 15% of federal income taxes; $40,000 - $50,000 paid 12½%; and $20,000 - $30,000 paid 5.7%.

What about business and capital gain taxes? The business tax in the USA is 35%, which is the highest in the industrialized world and puts this country at a competitive disadvantage. The president and congress need to get off their collective duffs and lighten this unnecessary weight to our global competitiveness. And the capital gains tax? In the USA it is 15% (on a capital asset held for at least one year). For other countries it is all over the place: Japan 20%; UK 18%; Switzerland 0%; Brazil 15%; Denmark & Finland 28%; Egypt 0%; France 20%; Germany 25% (before 2001 it was 0%); Israel 20%; Italy 12 1/5%; and Netherlands 0%. In many other countries these capital gain taxes are either comingled with other taxes or are dependent upon the capital gains amount. Should our capital gain tax be lower, higher, or the same? As far as I can tell economists are divided on that question. It might help our current economic recession if the rate were at least temporarily lowered a bit.
How about payroll taxes you ask? It is true that Social Security and Medicare taxes are regressive, however these are not the same as federal income taxes. Despite their financial problems one has an expectation of receiving benefits when one retires based on what one pays into these programs. There is no expectation of anyone receiving benefits from federal income taxes commensurate with what one pays.

How has the size of government varied over the years in the United States? In 1913 federal, state, and local government expenditures comprised 8% of our Gross Domestic Product (GDP); in1940 even after the massive New Deal federal spending of the FDR administration it was 15%; in 1980 at the start of the Ronald Reagan administration it was 30%; in 1988 at the end of his presidential term it was 32%; in 2008 at the end of the Geo. W. Bush administration it was 33% and in 2011 it is 36%. At this rate of growth the current administration estimates that by 2038 it will be 50%. In the interval from 1913 to 2011 there have been various periods where Republicans or Democrats have controlled either one or both houses of congress. And during this time there have been eight Democrat presidents and 9 Republican presidents.

An argument might be made that government was too small 100, 80, or even 60 years ago to supply essential services to its citizens which are properly the purvey of the federal government and to be vigilant and protective of people’s rights against business interests, big and small. If that were ever true it certainly is not now. The question today and in the future is who is going to protect the public and preserve basic freedoms from what has become a too big, too intrusive, and overweening federal government?

In 1970 our national debt was 40% of GDP; in 2011 it is 100%; and the Congressional Budget Office (CBO) estimates that by 2030 it will be 200%. These trends are clearly unsustainable – we are on what Friedrich A. Hayek titled his 1944 economics book, The Road to Serfdom.

Don’t despair too much because there are some rational reasons for hope. As quoted by Arthur Brooks, the Virginia Declaration of Rights was written by Founding Father, George Mason, 30 days before the U.S. Declaration of Independence and contained the phrase, “Unalienable Rights of Life, Liberty, and the Means of Acquiring and Possessing Property.” The writers of our Declaration of Independence copied that phrase, but changed it to “…they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness…” because they believed there should be a moral rather than a material emphasis to the Declaration of Independence.

According to the Pew Research Center 76% of Americans favor free enterprise versus a more socialistic state and 69% want lower taxes and less government even if it means fewer services for themselves.

The Tea Party movement came into existence because Republican conservatives, independents, and moderate Democrats became alarmed that the country was on a road to an unsustainable and crippling national debt and a too big, too expense, and overly intrusive national government. The midterm 2010 elections marked these concerns with unmistaken finality. In the U.S. House of Representatives 63 seats changed from Democrat to Republican; in the state legislatures 680 seats changed from Democrat to Republican; and the governorships went from 23 being Republican to 29. Only an imaginary guru can know what will happen in 2012, however the signs are that Republicans will make additional gains at the expense of Democrats. If that eventuates does this means that the country will be out of the ditch and on the proper road as the image that politicians are so wont to put forth? Judging by the historical record, only if Republicans have at long last learned what the majority of rational voters have been demanding in the past couple of years. If not, then those miscreant politicos will be thrown out of office in turn.

Is wealth really what makes people happy? The correct answer is a resounding no. Really? Yes. Consider people who win a substantial lottery. They all put up their money in the hope (probabilistically insane) of winning the jackpot. Yet survey after survey finds that these same people by large majorities are less happy after they won than before for a variety of reasons. Again surveys reveal that people in relative wealthy countries are not happier than people in poorer countries so long as they are not starving and get a reasonable amount of healthcare. In 1972 31% of Americans said they were happy. Today still 31% of Americans say they are happy despite having, on average, 150% more purchasing power.

What then makes people happy? It is earned success. The money made from earned success is enjoyed, but it is the knowledge that one’s success was earned on merit that brings satisfaction and happiness to people. This should be a cautionary tale for those who want to take from those who produce and give to those who have not earned it.

I will close with the following comment: Societies that don’t believe in meritocracy and individual opportunity are motivated by envy and spite – this is characteristic of the hard left in America and elsewhere around the world.

THE BURGEONING NATIONAL DEBT-61

Given the burgeoning national debt which has now technically exceeded the $14.3 trillion debt limit mandated by congress I would like to ask the reader (1.) if you believe this country is on an unsustainable trajectory where the Obama administration projects the National Debt will be just under $21 trillion by 2016 if there are no changes in government policies and (2.) if the first answer is yes, then what should be done.

A few background data follow:

By mid 2011 the National Debt (ND) is now $14 ½ trillion and the Gross Domestic Product (GDP) is $14.7 trillion. By comparison the ND in 1946, at the end of WWII, was $269 billion ($3 trillion in inflation adjusted 2011 dollars) with a GDP of $222 billion ($2.5 trillion). In 1970, the first time the GDP reached a $ trillion, the figures were ND $371 billion ($2.1 trillion) and GDP $1.04 trillion ($5.8 trillion). In 2000 these figures were ND $5.7 trillion ($7.1 trillion) and GDP $9.8 trillion ($12.3 trillion).

Therefore for the first time since the understandably large spending by the federal government during WWII (after all the country was in a fight for survival) the ND will soon overtake the county’s GDP. Everyone, politician and layman alike, agrees that these large national deficits cannot continue to be piled up with the possible exception of hard left politicos such as Harry Reid, Nancy Pelosi, and other liberal loons in and out of congress. President Obama says he recognizes that the country cannot continue with these huge deficits, yet his actions, so far, belie his words. As I stated, the current National Debt is about $14 ½ trillion with the federal government currently running up a $4 ½ billion per day ($1.64 trillion per year) increase in the debt. Fortunately there is a brewing revolt of sensible Democrats in both the House and Senate, and not just the ones up for reelection in 2012, who are opting for meaningful federal budget cuts along with the Republicans.

How did this country get into this frightful financial mess? There is bipartisan blame and it will take a bipartisan solution to correct the problem. The George W. Bush administration increased the nation’s debt from approximately $5 ½ trillion to $10 ½ trillion in eight years. The two wars, Iraq and Afghanistan, the prescription drug program, and the No Child Left Behind initiative, all unfunded, were major causes. This damn “Nation building” effort under taken by Bush in Iraq and Afghanistan was a naïve policy destine to fail as any knowledgeable student of history could have surmised. I do not impugn the motives of President Bush. I believe the evidence shows that he was sincere and honorable in his actions. His intentions were good, but everyone knows what the road to hell is paved with.

How about the policies of President Obama where an approximate additional $4 trillion of debt has been run up in just 2 ½ years of his administration? His then chief-of-staff, Rahm Emanuel, infamously said “You never want a serious crisis to go to waste.” so after the colossal waste of the almost $1 trillion government stimulus package the next major item on the Obama and Democrat leadership in congress agenda was the health care overhaul representing 1/6 of the American economy. With no bipartisan support this increasingly unpopular legislation was rammed through congress. A sensible approach would have been to concentrate on improving the American economy and lowering unemployment.

What policies do I advocate? The following are a good start: Concentrate on lowering government spending in a major way rather than raising federal taxes (more on that later). It is axiomatic that most government spending tends to crowd out private spending thereby, on balance, increasing, not decreasing unemployment. Big Government advocates will never admit this fact even with the prime example of the greatly expanded federal government spending during the Great Depression of the 1930’s (first by President Hoover, then even more so by President Roosevelt) that contributed to the most protracted and severe economic downturn in American history.

Where the federal government can make positive contributions towards encouraging a robust economy is by not trying to overregulate private enterprise and by not imposing onerous individual and business taxes.

What am I referring to in particular? In West Texas there is an attempt by the EPA to curtail the exploration and production of oil & natural gas in order to save the habitat of one particular lizard that most people in that area have never even seen. The corporate tax rate is currently 35% in the United States. This is the highest rate in the industrialized world. There are myriad examples of these types of anti-business policies by congress and federal agencies. These noxious practices did not originate with the Obama administration or when Democrats gained control of congress, but they have been grossly expanded since 2008. In order to create a healthier economy the opposite should have occurred.

There is another positive aspect to downsizing government. There is and always has been waste, fraud, duplication, and inefficiencies in government; much more so than in the private sector of the economy where there is a self-correcting mechanism such that companies that are badly run or do not adapt to a changing business climate tend to go bankrupt. No such force exists with government agencies that always seem to grow like “Topsy” whether they are efficient or needed. Even given that waste, fraud, duplication, and inefficiencies are not palliated, these problems should, seemingly apodictically, be automatically reduced with significant shrinkage of government.

Apart from these decreases in government spending there should be $billions in savings for the government from better policing of their ubiquitous spending programs. For example, Medicare expenditures in 2010 were $528 billion with the Reuters News Agency estimating that $200 billion was due to fraud; the CBS “60 Minutes” TV program put this figure at $60 billion. New York State leads the nation in Medicaid expenditures with $44.5 billion spent in 2005 of which 40% or $18 billion was attributed to fraud or waste.

How about raising taxes to help lower the national debt? I previously suggested that our too high corporate tax rate has resulted in job loses by encouraging companies to transfer to other countries. The individual income tax rate is already heavily tilted towards upper income families such that, according to the latest data from the IRS, 51% of the lowest income families pay no federal income taxes. In fact, many of these families are paid by the federal and state governments (read tax payers) in the forms of the Income Tax Credit, food stamps (one in 7 families in the USA are currently receiving them), subsidies to dependent mothers, and other welfare programs. It is an unhealthy situation when half the population does not contribute to this major part of the financial maintenance of their country. There seems no better way to create a dependent and entitlement segment of the population with their temptation to encourage or at least not object to taxes being raised on everyone else. These people may fall into the trap of believing they would not be affected because they would still not pay taxes, but they would be affected in lost job opportunities.

Will congress and the president finally address this colossal national debt problem before the country fall into a second rate or worst financial and social status? The battle has been joined, but a definitive outcome will not be decided before the 2012 presidential and congressional elections by the voters of this still great country.

FDR & LBJ-60

I know that many people (mostly Democrats) believe Franklin Delano Roosevelt was a great president and they also believe that Lyndon Baines Johnson initiated or pushed many good government programs for the country. I may not dissuade them, but let me present a contrary view anyway, supported by facts, not just opinions and assertions.

First for the mensuration of FDR. Whenever government spends money there are bound to be recipients who benefit. Important questions to ask are: at the expense of whom and would there have been greater good done if the private sector of the economy had been allowed to operate in those areas instead of government? The TVA (Tennessee Valley Authority), initiated under FDR, brought electricity to many rural homes and businesses in that area – a good thing. The negative aspect is that it was done at the expense of other taxpayers who did not benefit at all. Private utility companies would have eventually provided electricity to that region as they did to other rural areas so it was just a matter of time for those people being electrified and how efficiently it was done.

The Great Depression was one of many depressions or recessions in the history of United States. There have been 47 defined recessions or depressions in the USA since 1790. The difference between a depression and recession is not well defined, but is simply its severity. An old joke is: A recession is when your neighbor loses his job; a depression is when you lose yours. The Great Depression of the 1930’s was the longest in American history. There has to be a reason for that, so the question is why. Never in previous economic downturns has the federal government intruded into the private economy nearly to the degree that, first President Hoover, then President Roosevelt did even much more so. There is a perception by some people that WWII brought us out of the depression. I do not subscribe to that position; it is too facile. What the war did was to effectively create full employment. When there is rationing or a scarcity of basic commodities such as autos, gasoline, tires, sugar, clothing, shoes, and many other items, in my opinion, that is hardly an economic boom one would expect coming out of an economic depression. After the war the pent up demand and money people had saved did cause an economic boom. When new automobiles started being sold, such was the demand that for a while customers were paying more than the auto companies suggested retail price. I remember one slogan from the period immediately following the war was “beer in cans will soon be back”, although for the life of me, why beer in cans was better than beer in bottles left me, and still leaves me, perplexed.

From 1934 to 1940 the median annual unemployment rate in the United States was 17.2%. At no point during the 1930’s did unemployment go below 14%. Year by year the unemployment rates were: 1931,15.9%; 1932, 23.6%; 1933, 24.9%; 1934, 21.7%; 1935, 20.1%; 1936, 16.9%; 1937, 14.3%; 1938, 19.0%; and 1939, 17.2%. Our current rate of unemployment seems a bit benign by comparison. While there was episodic recovery between 1933 and 1937, the 1937 peak was lower than the previous peak in 1929, a highly unusual occurrence. Progress had and has been the norm. In addition, the 1937 peak was followed by a crash. As economics Nobel laureate Milton Freidman observed, this was “the only occasion in our record when one deep recession was followed immediately on the heels of another.”

Owing to this intensifying of the recession in 1937 the stock market went into a nosedive and by November 1937 unemployment had soared to 11 million with another 3 million working only part time (the population of the country was approx. 130 million). Statistics showed that the United States was lagging far behind other countries in recovering from the depression. American national income in 1937 was 86% of the 1929 high water mark while Great Britain’s was 124%. Japan’s employment figure was 75% above the 1929 number. Chile, Sweden, and Australia had economic growth rates in the range of 20% compared to the United States’ dismal -7%.

During the Hoover administration congress passed the Smoot-Hawley Tariff Act – a bill that more accurately could be called the Smoot-Hawley-Hoover Act because Hoover not only signed it, but supported it all the way through congress. So when the United States imposed tariffs on foreign imported goods, surprise, guess what? Go to the head of the class, you are correct; these other countries retaliated by imposing tariffs on imported American goods thereby compounding the worldwide depression. While FDR cannot be blamed for passing this destructive piece of legislation he did nothing to attempt to repeal it.

What FDR did was triple taxes during the Great Depression, from $1.6 billion (when a $ billion was more than chump change) in 1933 to $5.3 billion in 1940. Federal taxes as a percentage of the gross domestic product (GDP) jumped from 3.5% in 1933 to 6.9% in 1940. FDR increased the tax burden with higher personnel income taxes, higher corporate income taxes, higher excise taxes, higher estate taxes, and higher gift taxes. He introduced the undistributed profits tax. Ordinary people were hit with higher liquor taxes and Social Security payroll taxes. All these taxes meant there was less capital for businesses to create jobs, and people had less money in their pockets.

At this point the well-known admonition of philosopher George Santayana (1863-1952) comes to mind: “Those who do not know history are condemned to repeat its mistakes.” Despite the deleterious effect of raising taxes during the Great Depression, Obama and the Democrat leadership in congress wanted to raise taxes in this current recession. Of course they only wanted to raise taxes on the wealthy; that is to say on the people who create jobs, so perhaps we can excuse them – not.

Lyndon Baines Johnson won a Democrat primary election (which was tantamount to the general election in Texas at that time) as a United States Senator in 1948 by a margin of 87 votes over former Texas Governor Coke Stevenson. It has been widely believed since and documented by Democrat leaning LBJ biographers Robert Caro and Robert Dallek that there were more than 200 fraudulent votes, and in some estimates double that given to Johnson. For this extremely slim and questionable margin of victory, Johnson acquired the moniker ‘Landslide Lyndon’.

The Gulf of Tonkin Resolution was passed by congress in 1964 to allow President Johnson to carry the Vietnam War to North Vietnam. Even Johnson himself later admitted that the circumstance of the military naval incident with North Vietnam was misrepresented to congress at the time. Do you get the idea that LBJ was far more dishonest than the average American politician?

To his credit President Johnson pushed through the Civil Rights Act in 1964 and the Voting Rights Act in 1965, both initiatives of President Kennedy, with the help of Northern Republicans – many of Johnson’s fellow Southern Democrats opposed him on these pieces of legislation.

So much for the good legislation Johnson passed. How about the rest? His overarching anti-poverty programs such as the Food Stamp Act and Revenue Act in 1964 and the Economic Opportunity Act, Head Start Act, and the Vista program in 1965 were all intended to eliminate poverty in America. Over the decades these programs have cost $ trillions, but is poverty a condition of the past? Not according to official statistics and the definition of poverty in this country. All of the federal aid to single mothers has done one thing – it has created more of them. Bill Bennett did a study of single motherhood in the 1960’s and declared there was a crisis in the big inter-cities. That rate of single mothers in now similar to the average of all populations in this country with the rate in the big inter-cities approaching 90%. It is the old, old story of the best of intentions being negated by unintended consequences.

And speaking of unintended consequences, let us consider one of FDR’s social programs, Social Security (created in 1935) and two of LBJ’s, Medicare and Medicaid (created in 1965). One could argue that millions of Americans (and some illegal immigrants) have benefited from these programs. However, let us consider what are the biggest threats to the financial wellbeing of this country today. Yes indeed, these are the ever-increasing unfunded liabilities of those three federal programs. When these benevolent programs were initiated it seems nobody anticipated the overwhelming financial burden that would accrue for the country in the future. There is considerable debate over how big the unfunded liabilities of Social Security, Medicare, and Medicaid are and over what time period, but all agree that the number is in the 10’s of $trillions. Medicare and Medicaid are creating more than 5 times the unfunded liabilities than Social Security so they are the bigger problem. According to the nonpartisan CBO (Congressional Budget Office) if these three programs continuing growing 2.5% greater than the GDP then they will consume nearly the entire federal budget by 2050!

There are now only two choices: (1) significantly reduce the payouts and increase the pay-ins of the participants in these programs or, (2) let the country collapse economically and socially. Anyone game for that? It is a truism that once entitlement programs are given curtailment of the benefits are greatly resisted. But done it must be, whether by so called “means testing” or across the board cuts in payouts, or reduced or withheld services, or all of these. The solution will not be pleasant or welcomed by the public. By all means let us give thanks to FDR and LBJ for the unavoidable coming pain.

If anyone either agrees or disagrees with my thesis in this essay I would welcome hearing it. Just remember the oft quoted words of the late Democrat U.S. Senator from New York, Daniel Patrick Moynihan (1927-2003), “Everyone is entitled to their own opinion, but not their own facts.”

UNITED STATES PRESIDENTS IN MY LIFETIME-59

The following is a thumbnail sketch of my evaluations of all the U.S. presidents in my lifetime. I trust that any reasonable reader will render the conclusion that my opinions of the individual presidents are neither overly censorious nor too encomiastic:

Franklin Delano Roosevelt (1933-1945) is widely credited by the public for ending the Great Depression with his greatly expanded federal spending by creating myriad of what were called “alphabet soup” agencies and programs (SEC, WLRB, TVA, NLRB, FHA, HOLC, PWA, CCC, LWA, WPA, NRA, AAA, USHA, etc.). Historians are increasingly coming to the conclusion that not only did this pythonically increased federal spending, regulation, and intrusion into the private sector (again contrary to population perception, this big government answer to the depression was started by Herbert Hoover) did not help to ameliorate the economic depression, but prolonged and deepened it. A recent historian of this persuasion is Amity Shlaes, a self described liberal, with her 2008 book, The Forgotten Man.

I rate the wartime Roosevelt differently. Leading up to WW II the country was in an isolationist mood, yet Roosevelt recognized that the totalitarian and expansionist regimes of Nazi Germany and Imperial Japan had to be confronted if the democratic nations were to preserve their freedoms. Roosevelt did as much as domestic politics would allow to aid Great Britain in its war with Germany. And once the USA got into the war, Roosevelt was an effective war time leader even if he trusted the Soviet Union, then an ally against Germany, a bit too much. By the summer of 1944 Roosevelt had serious heart disease and should not have run for a 4th term. After all, by that time the outcome of the 2nd World War was not really in doubt so he could have allowed another Democrat candidate to run for the presidency knowing that the war was essentially won. However, the downside was the likely outcome that the country would have been deprived of the services of Harry Truman as president (for much more on Roosevelt see my blog essay #23 titled FDR).

Harry S. Truman (1945-1953) left office with about a 25% approval rate owing mostly to the stalemated Korean War. Over the subsequent decades his rating has risen until now he is generally considered one of the best presidents of the 20th century. Truman’s recognition of the threat to the West from the Soviet Union and his Marshall Plan massive aid to Western Europe as well as his assistance to Greece in successfully opposing the Communists attempted takeover of that country have contributed substantially to his increased stature. Truman is now given more credit than formerly for being an honest plain speaking politician who said what he meant and meant what he said.

Dwight David Eisenhower (1953-1961) People really did “like Ike” not only in this country, but generally around the world, especially in Western Europe because of his position as Allied Commander in Europe during WWII. It has been suggested that his administration was a calm and tranquil one, which was exactly what the American people wanted after the dislocation and frenetic activity of WWII and the Korean War. Wartime taxes, especially individual income taxes, were kept too high during the Eisenhower years, a condition which would be corrected in the next administration. At the finish of his administration Eisenhower issued a valid warning about the “industrial – military complex.” Overall I would rate the Eisenhower administration a success, but not a particularly distinguished one.

John Fitzgerald Kennedy (1961-1963), the first U.S. president born in the 20th century, was one of the least experienced (although as we shall see experience is a necessary, but not sufficient condition for a completely successful presidency), certainly of the more modern presidents. The Bay of Pigs fiasco was a near disaster; then there were the comedic plans and even attempts to assassinate Fidel Castro, the dictator of Cuba. Also early in his administration Kennedy had a summit meeting in Vienna, Austria with the leader of the Soviet Union, Nikita Khrushchev, who came away with the impression that Kennedy was weak which led him to make the irrational decision to put missiles in Cuba capable of launching nukes. Kennedy faced down the Soviets, forcing them to remove the missiles. For that reckless action it was Khrushchev who was replaced by the Politburo and sent into involuntary retirement.

Kennedy was a fast learner and recovered quickly after this shaky start of his administration. He pushed for much needed civil rights legislation for minorities, especially blacks, cut the high tax rates, and through his brother, Robert, who he had appointed Attorney General (JFK jokingly said to give his brother legal experience), took on organized crime with a good deal of success. JFK’s charisma (as well as Jackie’s) not only made him increasingly popular in this country, but also around the world, thereby enhancing the image and prestige of the United States. Despite his personal peccadilloes (not unlike Bill Clinton) I would rate Kennedy as a good president who might have become a great one had he not been so tragically assassinated by that loser and cretin, Lee Harvey Oswald.

Lyndon Baines Johnson (1963-1969) was an archetypal political hack. The Vietnam War did his presidency in, but not before he had damaged this country socially, economically, and in worldwide prestige. The sooner he is forgotten the better.

Richard Milhous Nixon (1969-1974). If he had not resigned in disgrace he would have been the only U.S. president to have been impeached and convicted – the votes were there in the House and the Senate. Nixon said that the American people had a right to know if their president was a crook and he said he was not a crook, which proved that he was a liar as well as a crook.

Gerald Rudolph Ford (1974-1977) was the only president of the USA not elected president or vice-president. Mediocrity seemed to be the watchword of his administration. One plus was that he was an innocuous person who was able to heal some of the ill will, which was extant in the country after the disaster of Richard Nixon.

James Earl Carter, jr. (1977-1981). Incredibly Jimmy Carter recently said that he considered his presidential administration a success based upon the amount of legislation he was able to get passed by Congress. Few Americans agree nor agreed at the time of his attempted reelected. Carter won only 6 of the 50 states and 49 electoral votes to 44 states and 489 electoral votes for Ronald Reagan in the election of 1980.

Not every position or decision Carter took was wrong headed. He led the effort to give sovereignty of the Panama Canal to Panama, which Reagan opposed. And the treaty even gave the United States government the right to keep the canal open, by force if necessary. Thus in turning over the canal to Panama one more contretemps with Latin America was avoided. Carter brokered an important peace agreement between Egypt and Israel that has stood up to this day, and for which he should have been given, but was not, the Nobel Peace Prize similar to President Theodore Roosevelt being awarded the Nobel Peace Prize in 1906 for his part in brokering peace in the Russo-Japanese War.

Carter’s being awarded the Nobel Peace Prize by the Norwegian Nobel Peace Price Committee during the George W. Bush presidency was more a repudiation of Bush and embracing of Carter because of his criticism of Bush than it was anything that Carter had accomplished in promoting peace around the world. In fact Carter has made it a habit of publically criticizing Republican presidents after he left office. This breaks with the tradition of former presidents not speaking ill of their successors and shows a distinct lack of character by Carter. Whatever faults one finds with Bush I & II, and that will be evident in what I have written further on, both of them had the class not to publically uttered any criticism of their successors.

Carter’s answer to the high inflationary conditions during his administration and accompanying high energy costs and shortages was to advise people to put on sweaters and to declare that the country was in a deep malaise. That was not what people wanted to hear or accepted. Carter’s inept and inherent weakness in responding to the Iran Hostage Crisis was the final dénouement in his defeat for reelection in 1980.

Ronald Wilson Reagan (1981-1989), similar to Barack Obama, inherited a horrible economic condition when he took office. Unlike Obama, however, Reagan reacted in an effective way to lead the country back to prosperity such that he was reelected by one of largest mandates in history, winning 49 out of 50 states and 525 electoral votes to one state and 13 electoral votes for Walter Mondale.

Reagan made people feel good about themselves and their economic future and proud of their country after the dour economic outlook and loss of standing in the in the world following the Nixon debacle and uncertainty of the Ford and, especially, Carter administrations.

One might argue, as I do, that Reagan convinced congress to spend too much money rebuilding our military, but what is abundantly clear is that the attempt to keep up with the United States spending on military preparedness, contributed mightily to the Soviet Union dissolution. Some credit also has to go to the Soviet leader and reformer, Mikhail Gorbachev, but clearly not all of the credit as the news media in the United States and elsewhere were wont to do.

I rate Reagan the greatest president of the 20th century. It is interesting that in the attempt to rebuild the reduced image of President Obama, the Main Stream Media have been describing Obama as “Reaganesque”, using it as a positive. Give me a break. During his presidency and for years after, the liberal media trashed Reagan, calling him a “dunce”, saying he delegated way too much, slept half the time he was in office, and was not very bright. Certainly not as bright as they were. These clowns must believe we will not remember what their description of Reagan was in the past.

George Herbert Walker Bush (1989-1993) convincingly proves my assertion that experience is a necessary, but not sufficient condition for a successful presidency from start to finish. Bush was a U.S. Representative in Congress; the Director of the CIA; Ambassador to China; Ambassador to the United Nations; Chairman of the Republican National Committee; and two term Vice-President of the United States. How much more government experience could a person have? I would rate Bush a mediocre president. He was not defeated for reelection for nothing. Yes, Bush was brilliant in putting together a coalition of many countries including the Europeans, and the Arab countries of Saudi Arabia, Syria, and the United Arab Emirates to expel the Iraqi army under Saddam Hussein from Kuwait. Even with this great success, Bush committed a grave error by not giving his commanding general, Norman Schwarzkopf, 48 more hours to destroy Hussein’s army and thereby driving that brutal dictator from power. Bush compounded his error after the armistice by giving Hussein permission to fly his helicopters in the South of Iraq ostensibly to supply Iraqis with essential supplies, but actually to suppress the rebellious Shiites who were opposed to the regime of Hussein. Seemingly the Bush administration allowed Hussein’s army to do this because of the fear that the Shiites in the South of Iraq would align with the Shiite government of Iran to the detriment of the United States.

Then who can forget Bush’s infamous “Read my lips – no new taxes” statement? After getting the Democrat controlled congress to promise they would significantly cut expenditures, Bush agreed to raise taxes on the American people. Of course congress did no such thing as cut government spending. What good does all of that experience do if one can be fooled so easily?

William Jefferson Clinton (1993-2001) Unlike the previous Democrat president, Clinton was reelected. Presidents are doing something right if they get reelected. True, one could fault Clinton for not taking the threat of Islamic Terrorism seriously enough, but at least he did not get this country bogged down in foreign wars the way his successor did. After the midterm election defeats in 1994 suffered by Democrats, and therefore which reflected a repudiation of his policies, President Clinton made a course change to the right. Co-operating with the then Republican Congress, Clinton cut federal spending, including welfare reform and continued his cutting of military spending. Most conservatives were opposed to that;
not me however (for an explanatory view of my position on the United States military read my blog essay #55 The USA Military). Without factoring in the liabilities of Social Security, Medicare, or Medicaid, in Clinton’s first five years the budget deficits were relatively low and in his last three years and in the first year of Bush’s administration there were budget surpluses. In his entire eight years there was a modest $700 billion increase in the national dept. Owing to the growth of the GDP (gross domestic product) during that time this $700 billion deficit actually became a smaller percentage in relation to the GDP than previously. How appealing does that sound now in our current fiscal funk?

On the negative side Bill Clinton had the sexual morals of an alley cat (If one can attribute moral standards to animals.). For lying under oath about his escapades with “that woman”, Monica Lewinsky, the House of Representatives impeached Clinton – the Senate then proceeded to find him not guilty, at least his crime (lying under oath about a personal matter) was not considered significantly serious to remove him from the elected office of president. Republicans should give thanks for this outcome because it would have been highly likely that as the succeeding president, the insufferable Al Gone would have been elected president in his own right in 2000. What grade do I give the boy president (as R. Emmitt Tyrrell, jr. called him)? A low one for his first two years (again there is the inexperience factor owing to Clinton’s relative youth); considerably higher for the last 5 or 6 years thanks to the repudiation voters gave the Democrats in the mid term elections and the change of course for the president, even taking into account the impeachment verdict meted out to Clinton by congress.

George Walker Bush (2001-2009). Before I excoriate this president, justifiably in my opinion, I will recount a couple of positives for him. His income tax cuts, which he convinced congress to pass, were justified and highly stimulative for the economy through the proper mode; that is through the private sector rather than the government. Bush wanted to make the cuts permanent, but had to settle for a 10-year period in a compromise with congress. At least from a conservative viewpoint the appointments of John Roberts and Samuel Alito to SCOTUS were excellent choices, but who can forget the abortive nomination of his White House Counsel, the unqualified Harriet Miers to the Supreme Court where even Republicans in congress rebelled and forced Bush to withdraw his candidate.

Now to the objurgatory part of the evaluation of President Bush – and where to start? How about the circa $5 trillion increase in the national debt, from $5 ½ trillion to $10 ½ trillion, that occurred in the eight years of the Bush presidency? What caused this colossal doubling of the national debt? It was federal spending of course. The unfunded wars in Iraq and Afghanistan and the unfunded prescription drug program contributed mightily to this debt and there were other expansions of federal spending. Many on the left are wont to say that the “Bush tax cuts” added to the debt because they look at it as a zero sum game. This is disingenuous and wrong. Every time federal taxes are cut the revenues to the government go up. You do not have to take my word for this – read what two of the preeminent economists in the country today, Drs. Thomas Sowell (for more on Dr. Sowell read my blog essay #20 titled Thomas Sowell) and Walter Williams, have written.

From about the year 2000 there was a housing boom where unrealistic prices for housing rose at an unsustainable rate and it should have been inevitable and predictable that a correction was overdue, but the correction, a housing bust, when it came, seemed to have been a Black Swan (for a definition and examples of a Black Swan see my blog #42, Black Swans). The worldwide economic downturn starting in 2007 was triggered by the housing bust and led to banks, other lending institutions, auto companies, Wall Street financial firms, and other businesses ostensibly to need government bailouts to keep them from going bankrupt and causing an even much more ruinous economic and social catastrophe. What would have happened without government intervention is a matter of speculation, so perhaps intervention was the better option to have taken. Was this economic collapse avoidable? I believe it was, but there were multi-varied factors involved in its cause too numerous to comment on here. For a cogent explanation and quick read of the whole mess I refer you to a 2009 book by Thomas Sowell titled The Housing Boom and Bust.

The charge by the far left that Bush (and Cheney, Rumsfeld, et. al) had evil and rapacious intentions in invading and occupying Iraq and Afghanistan is absolutely bogus. Bush is and was a good and decent man who, in my opinion and many others, was tragically wrong in his attempt at “nation building” by use of military force. Although a final verdict is not in on the outcome of the type of societies and governments which will eventuate in Iraq, Afghanistan, and other counties in the Muslim world and therefore whether stability will ensue, at this juncture it appears that the sacrifice in blood and treasure was not nearly worth it. George W. Bush will not be considered a mediocre president like his father; he will be either a resounding success or a dismal failure.

Barack Hussein Obama (2009 - ?). As with his presidential predecessor, it is too soon to give Obama a final evaluation on his presidency, however, based upon what he has done so far, midway through his term, it does not portend positive for him. During his campaign for the presidency, Obama characterized himself as a new style politician, one that evoked the slogan of “hope and change” and he sold himself as a unifier, not a divider; bipartisan not partisan, and a post racial president (He did not say that, but his acolytes did). True, the president inherited a financial mess, none of which was his fault. Unlike Reagan, Obama chose the strategy of using the coffers of the federal government to bring the country out of the recession with massive (nearly a trillion dollars) stimulus spending, with no more success than FDR had in the 1930’s.

Obama’s first important legislative program after the abortive stimulus package was an effective federal takeover of the healthcare system in this country, representing approx. 1/6 of the U.S. economy. With the country stuck in an economic morass, Obama’s Chief of Staff, Rahm Emanuel, candidly said, “Never let a crisis go to waste.” Using overwhelming majorities in both the House and Senate, Obama and the Democrat leadership were able to pass this legislation against the will of a majority of the American voters and increasingly so as more became known about this monstrosity of a healthcare bill. Much of the first year and one-half of Obama’s term was devoted to selling and passing healthcare legislation that has become the centerpiece of the first two years of the president’s term. The unpopularity this and the stimulus, as well as unrelenting deficits contributing to an ever burgeoning national debt combined with a high and intransigent unemployment rate were resoundingly reflected in the mid-term elections where Republicans easily recaptured the majority in the House and closed the gap in the Senate. Obama himself said that he and the congressional Democrats took a “shellacking.”

So has Obama learned anything from his historic midterm election defeat? Despite some early sounds that he had; apparently not. His proposed fiscal budget was a joke as far a trying to curtail spending thereby shrinking the deficit and lowering the national debt. Instead spending increases were the order of the day (what Obama and Democrats refer to as “investments”). In the four years of the Obama administration the national debt has expanded from $10 ½ trillion to over 16 trillion with yearly deficits of over $1 trillion as far down the road as can be forecasted. During the Obama presidency 200,000 federal jobs have been added while total employment jobs have diminished by 3.3 million. The Obama budget for the coming fiscal year is $3.7 trillion. “….O, that way madness lies; let me shun that; No more of that.” King Lear Act III, scene IV. Truly, the direction the country is going is madness. Further if this trend is not reversed the country will slide into second rate and worst status. The way Obama and the left wing Democrats in Congress (led by Nancy Pelosi and Harry Reid) are reacting it seems as if the mid-term elections never happened.

President Obama inherited the wars in Iraq and Afghanistan and in a responsible way is trying to extricate the United States from these unfortunately conflicts after making naïve and unrealistic promises to do so during the election campaign and in the embryonic days of his administration. Personally I wish he would get on with the withdrawal, but I understand the political and security factors that have to be considered.

Nowhere, except perhaps with the economy, has Obama’s inexperience, arrogance, and naiveté shown itself more clearly than his attempts to negotiate with America’s enemies such as Iran and North Korea. Clinton was played for a fool in trying (partly through the uninvited auspices of the meddlesome Jimmy Carter) to deal unsuccessfully with North Korea and Obama learned nothing from that failure. When it comes to Iran, Obama failed even more miserably and with even greater negative consequences. Apparently fancying himself the anti-Bush, Obama seemed convinced he could successfully talk Iran into giving up their nuclear bomb ambitions. Of course he could not as any sensible person would have fathomed. The outcome was even more potentially disastrous than his dealings with North Korea. In an attempt to curry favor with the Iranian régime, Obama did not wholeheartedly support the Iranian people when they came out in the streets in the summer of 2009 to protest against the repressive, brutal, and fanatically fundamental Islamic government. Perhaps the overthrow of the Iranian government still would not have occurred even if the Obama administration had given overt and covert support to the rebellious Iranian people, but that is an outcome that will forever be unknown.

Starting in the presidential campaign and continuing into his presidency, Obama criticized past actions of the United States in a series of speeches in Cairo, Istanbul, London, and at the United Nations. When asked if he thought the United States was an exceptional country he replied that many countries believe they are, thereby strongly suggesting that he did not consider the United States exceptional. And as if to cement that belief he made a number of bows to foreign leaders from around the world when he first met them: He made a deep bow to King Abdullah of Saudi Arabia in April 2009 (It is true that President Bush held the hand of then Crown Prince Abdullah, who was the actual ruler of Saudi Arabia, at his Crawford ranch in April 2005, which was dopey, but not demeaning); He made a slight bow to Russian Prime Minister Putin in July 2009; another deep bow to Emperor Akihito of Japan in November 2009; and a pronounced bow to President Hu Jintao of China in April 2010. This obeisance by the president of the United States is demeaning to the presidency, the country, and to Obama himself. Why did he repeatedly do it? The answer may lie in Obama’s attitude toward this country as he implied in his statement about the USA not being exceptional which is in sharp contrast to President Reagan’s characterizing the United States as a “Shining City Upon a Hill.”

I will close with this quote from over 2000 years ago to show that the fiscal problems and their solutions we face at this time are hardly new or original:

“The budget should be balanced; the treasury should be refilled; public debt should be reduced; and the arrogance of public officials should be controlled.”

Marcus Tullius Cicero (106 – 43 BC)