In the following paragraphs, I will explain in great detail why the latter is clearly the case.

The “Look And Feel” Of The Race

In late September, I had a blog post that broke down what has happened since Obama took over, and why a 2008 turnout model is not realistic.  Of course, one month is a long time in politics – we’ve had four debates since then which had a pretty major impact on the race, among other things – so it is worth looking at the lay of the land as it stands right now.

• Enthusiasm clearly favors Romney.  The crowd sizes for Romney rallies in recent days have been staggering:  30,000 in West Chester, OH on Friday night, and another 30,000 in Bucks County, PA this afternoon.  Paul Ryan drew 6,500 people to a rally at the Minneapolis/St. Paul airport this afternoon.  Other recent rallies have been seeing similarly large levels of support across the country.  Obama, meanwhile drew a crowd of 4,000 in Cleveland yesterday, when he was drawing 80,000 there in 2008.  (For reference, Obama’s Ohio crowds yesterday are smaller than McCain’s were at a similar point in 2008.)  Enthusiasm is a good indicator of which side will get better turnout.  This indicator is definitely leaning Romney’s way.
• Confidence.  This measure is very subjective, of course, but watching both Romney and Obama speak, Romney looks like he’s very confident, and Obama does not.  Obama’s advisors aren’t helping him in this regard, either:  Moe Lane provided a pretty good analysis of David Axelrod’s obvious worry about the state of play at this point regarding stats about the current voting patterns in Ohio, which we’ll hit shortly.
• Endorsements of newspapers and others.  Of the top 100 newspapers by circulation in the country, 12 of them have flipped their endorsements to Romney, while only one flipped to Obama.  Obama still leads in endorsements, of course, but given the liberal leanings of most of the major newspapers, this shouldn’t surprise anyone.  Still, this is definitely an indicator that it isn’t 2008 anymore.  Even more telling are personal endorsements for Romney from surprising sources, such as lifelong Democrat Lee Iacocca, Hillary Clinton advisor David Frum and Intel CEO Paul Ottelini, who was on Obama’s Jobs Council.
• The current battlefield.  Another indicator of which way the race leans is to look at where the battle is currently being fought.  Clinton and Romney were both in Pennsylvania today, a state which everyone would have generally assumed would be blue.  Clinton has also traveled to Minnesota along with Paul Ryan, a state that hasn’t voted for a Republican Presidential nominee in my lifetime.  (I was born in 1975, while the last Republican to win Minnesota was Nixon in 1972.)  Other battleground states right now include Wisconsin and Michigan, both of which have been safely blue for some time.  We would expect battles in traditional “swing states” like Colorado, Florida and Ohio, but fighting on blue turf is another sign that this isn’t 2008.

Actual Math

So Romney appears to be doing better according to the “eyeball test”, but is there any math to back this up?  Absolutely.

• Early voting trends in Ohio and elsewhere.  Ali Akbar provides this excellent analysis of the early voting numbers and what they mean for the outlook in Ohio.  Jim Geraghty adds news from Virginia and Wisconsin on top of this.  These results are highly unlikely to be isolated to these states, but even if they were, that would be bad enough for Obama.  The important number is not who is leading in early voting, because Democrats always win early voting, and Republicans generally do better on Election Day (even most Democrat analysts will admit this).  The issue is how much Obama is winning by, and that seems to foretell bad things for Obama.  In the Axelrod clip linked earlier, it was noted to him that the swing in early voting is basically enough to wipe out Obama’s margin of victory in 2008 in Ohio, which means he’d have to do better there on Election Day itself than he did in 2008 in order to win it, which seems unlikely.
• Partisan identification, crossovers and independents.  The two most overlooked polls in this election are the partisan identification surveys done by Gallup and Rasmussen.   They pretty well break down every fairy tale that pollsters like Marist and Public Policy Polling try to tell Democrats about the state of the electorate.  While left-leaning polls suggest D+7 or higher turnouts, the actual partisan breakdown of the electorate is more likely along the lines of R+1 or R+2, according to the latest such polls from Gallup and Rasmussen.  In past elections, these indicators have been quite accurate.  It is also notable that even in the Marist and PPP polls, Romney has a healthy lead among independents, both nationwide and in swing states.  So let’s do some basic math:  Assume that the Gallup and Rasmussen polls are only slightly off and that the electorate is more or less balanced for Republicans and Democrats, i.e. D+0/R+0.  Let us also assume that there is no major crossover advantage (i.e. Democrats voting for the Republican or vice-versa), an assumption which is more favorable to Democrats than usual, as Republicans generally do slightly better in this metric (and will probably do better this year by all indications).  That would make votes by Democrats and votes by Republicans essentially even, which means that the independent vote would decide the election.  Even the left-wing pollsters appear to agree that this favors Romney; they merely cover it up with a Democrat-heavy sample.  The Left might note that this is fair nationwide, but what about state-to-state variations?  Well, bad news there, too, especially in Ohio.  Regardless of who wins in any given year, Ohio tends to be about one or two points more Republican than the national average.  Unless that changes this year, Romney is winning Ohio, and Obama cannot win the election without it.

Omens and Trivialities

If the Obama campaign is looking for any signs from above, they aren’t getting any help in that regard, either.

• The “Redskins Rule”.  Since the inception of the Washington Redskins, the outcome of the Presidential election for the incumbent party has matched the outcome for the Redskins in their last home game prior to the election in all but one case.  In short, a Redskins win means the incumbent party wins, and vice-versa.  That game took place today.  Final score:  Carolina 21, Washington 13.  (The exception was 2004, when the Packers defeated the Redskins, but Bush won re-election.)
• The “Flip Rule”.  I don’t know if there is an official name for this rule, but it is nevertheless true:  No incumbent has ever won a second term without winning a state that he did not win in his first election.  For example, Bush “flipped” New Mexico and Iowa to his column in 2004, despite losing them in 2000.  Likewise, in 1984, Reagan won five of the six states that he lost in 1980.  What’s the outlook for Obama by this metric?  Frankly, he’s not even competitive in any state McCain won.  Granted, Obama hasn’t made much of an effort to win any of these states, and he would win if he could hold most of what he won in 2008, but the statistic holds nonetheless.
• Paul Krugman states that anyone reporting that Romney has a shot (including his own paper) is “lazy” and “stupid”.  Given that Krugman is right about something approximately three times per year, I will personally take this as a good sign.  Even more laughably, Jim Cramer of CNBC predicted that Obama would win 440 electoral votes.  No word on which McCain states he thinks Obama will win, of course; I suspect he pulled that number from his Lower Intestinal Database.  (Scott Adams of “Dilbert” fame – another unusual Romney endorser, by the way – once noted that the word “analysis” comes from the root word “anal”, and the Greek suffix “-ysis”, which means “to pull numbers from”.  That sums up Cramer’s analysis pretty well.)
• Obama’s campaign looks like the last days of George H.W. Bush.  A great piece by Andrew Ferguson in the Weekly Standard gives an inside look at what the last days of the Bush 41 campaign looked like, and how they eerily resemble Obama’s last couple of weeks.
• Obama’s first term looks a hell of a lot like Jimmy Carter’s.  Economic misery abounded throughout both terms in office, and liberals were mystified as to why their ideas weren’t working.  The first debate served as a turning point in both campaigns.  (Here is a link to the 1980 Reagan/Carter debate.  Carter looked like a deer in the headlights during the whole thing.)  In each election, Carter and Obama were dealing with an international crisis in which the U.S. looked weak to the world.  And, sadly but somehow appropriately, the finishing touch was put on the comparison this last week as we watch people in New York and New Jersey waiting in line for gasoline.  Funny thing:  the polls were supposedly “too close to call” in that one, too.

Summing It Up In Two Sentences

While all of the evidence above might be overwhelming, the “why it will be more like 2010 than 2008” argument can be summed up in two sentences:

The reasons that people voted for Barack Obama in 2008 – the sense of history, the hope that he would change Washington and end the partisan divide, the notion that he could accomplish great things with his powers of persuasion – have faded.

The reasons that people voted against Obama’s agenda and his party in 2010 – the unpopularity of Obamacare, the rising deficits and mounting debt, the bad economy, the ignorance of the Constitution – have not faded at all, and may even be stronger now.

For those two reasons alone, I predict a victory for Romney on Tuesday night by a margin that will be anywhere from “comfortable” to “resounding”.  As a bonus prediction, the party will unofficially start when Pennsylvania is called for Romney.

Cross-posted from Q’s Clues

As a note, if I don’t mention the race, you can assume I consider the incumbent safe.

Republican-Held Seats (10)

When a year goes as badly as 2006 did for the Republicans, any incumbent who survived it can be considered about as safe as can be.  Such is the case here, as no Republicans who won their races in 2006 are even on the radar to be knocked off.  There are still three races of interest for seats that are currently held by Republicans, though.

Reasonably Safe

Nevada (Dean Heller):  Jon Ensign resigned this seat, and Heller was appointed by Gov. Brian Sandoval to replace him.  His opponent in this race, Rep. Shelley Berkley, is currently involved in an ethics investigation in the House, and in this climate, I do not consider her a significant threat.  This one is on the watch list just to be safe, but I anticipate that Heller keeps the seat easily.

The Odd Race

Maine (Open):  Olympia Snowe is retiring, and conservatives everywhere are crying in our drinks of choice over that one.  OK, not really.  Anyway, the three candidates to replace her are Republican Charles Summers, Democrat Cynthia Dill and independent Angus King, the former Governor.  Odds are very good King wins this one.  By all accounts I’ve read, King is quite liberal, but he has not stated who he will caucus with as of yet.  On principle, it would seem he’d fit better with the Democrats, but he could also just be waiting to see who wins, or he could just be purely independent.  We’ll just have to wait and see.

The Big Showdown

Massachusetts (Scott Brown):  We all know by now how this came about:  Ted Kennedy died, Massachusetts had a special election to fill the seat during the heat of the Obamacare debate in 2010, and Scott Brown shocked Democrat Martha Coakley, who ran an uninspired campaign assuming that she’d win easily.  This should have been the “canary in the coal mine” for the Democrats in 2010, but they didn’t pay attention.

This time around, the Democrats are running the uber-liberal Elizabeth Warren, who is somehow managing to be an even worse candidate than Coakley.  Coakley’s laziness is continually trumped by Warren’s habit of opening her mouth solely to change feet.  Brown, meanwhile, is no Tea Partier by any means, and he’s liberal enough to represent Massachusetts, but he’s also conservative enough to provide a stark contrast to the uber-left Warren.  While polls still indicate the race to be close, it will boil down to this:  whatever you may believe about either of their views, Scott Brown is an excellent politician, and Elizabeth Warren is not.  That’s why I believe Brown will win.

——

So to wrap that up, there are only three Republican seats in play, and the Democrats’ best chance of gaining a vote appears to be hoping that Angus King sides with them despite being an independent.  I’ll say that he does, which means I project one Democrat pickup.

Democrat-Held Seats (24)

The situation here, of course, is precisely the opposite of the Republicans:  with as well as the Democrats did in 2006, you know there will be a few places where someone won in a place you wouldn’t have expected.  And if the circumstances are different six years later – which they undoubtedly are – then you can probably expect a bit of a “correction”.  Such is the case here.

Locks To Flip (Barring Scandal)

Nebraska (Open):  Ben Nelson signed his political death warrant by taking the infamous “Cornhusker Kickback” to break the Obamacare filibuster, and decided to retire instead of running again.  Tea Partier Deb Fischer represents the Republicans, while the Democrats are running the reanimated corpse of Bob Kerrey since they have no one better to run.  Polls have shown Fischer to be leading handily, and there’s no reason to think she won’t win.

North Dakota (Open):  Four-term incumbent Kent Conrad is vacating this seat.  The Republicans are running Rick Berg, while the Democrats offer up Heidi Heitkamp.  North Dakota is pretty solidly red, and outside of one outlier poll in June that showed Heitkamp up one, Berg has led the polls by solid margins and should win easily.

Missouri (Claire McCaskill):  Claire McCaskill appears to be the 2012 version of 2010’s Blanche Lincoln: the incumbent who should have bailed out, but decided to run again in what appears to be a futile effort.  Prior to the recent Republican primary, all three potential challengers were leading McCaskill by anywhere from 5 to 11 points, and primary winner Todd Akin is currently polling very well against McCaskill, who is basically dead meat if nothing drastic happens.

Wisconsin (Open):  Herb Kohl concludes his unremarkable Senate career by retiring this year.  The Democrats will run Tammy Baldwin, who plays well in Madison, but pretty much nowhere else, while the Republicans run popular former Governor Tommy Thompson.  While Thompson isn’t the guy the Tea Party folks wanted, it can safely be said that Thompson is more or less a lock to defeat Baldwin, while Eric Hovde or Mark Neumann would have a tougher road.  That’s not to say that either of them couldn’t have beaten Baldwin, but it would have been a tough race.  Thompson, however, will have no trouble at all.

The Course Correction

Montana (Jon Tester):  This is very much a case of, “Wait…that state has a Democratic Senator?” which falls into the category of “wins in odd places” from 2006 for the Democrats.  Unlike Ben Nelson, Tester hasn’t done anything to embarrass himself particularly, but he has been a fairly reliable liberal vote in a decidedly non-liberal state, and that will likely be enough to be his undoing. The Republicans are running Rep. Denny Rehberg, a very solid candidate.  The race hasn’t been heavily polled to this point, but most polls have Rehberg ahead by a small margin, and I anticipate that this will remain the case through Election Day, especially with Republicans being more enthusiastic about voting this time around.

Swing States And Coattails

Virginia (Open):  Jim Webb is retiring instead of running again, and the battle here is between former Governor and DNC chair Tim Kaine (Democrat) and former Senator George Allen (Republican). 

Ohio (Sherrod Brown):  Brown, the incumbent, is being opposed by Ohio state Treasurer Josh Mandel, a Tea Party favorite.

Florida (Bill Nelson):  Nelson is being challenged by U.S. Representative Connie Mack.

All three of these races are very close, two of the three challengers have won statewide election in the past, and all three are definite “swing states” in the Presidential election.  Personally, I believe all three of these races are likely to mirror the Presidential outcomes.  If Obama is to hold on, he probably needs to win two of these three states, and if he does, the incumbents probably remain.  On the other hand, if Romney gains momentum and wins handily, all three challengers could ride the wave to victory as well.

Other Possibilities

New Mexico (Open):  Jeff Bingaman is retiring, and the race to replace him is between Democrat Rep. Martin Heinrich and Republican former Rep. Heather Wilson.  Only two polling firms have had any polls on this race to this point:  Public Policy Polling (PPP), which tends to lean somewhat Democratic, has Heinrich up by about 5 points over average, while Rasmussen has Wilson within the margin of error.  New Mexico is a bit less of a swing state than the other three above, but certainly far from a lock for Obama, and New Mexico elected Tea Party favorite Susana Martinez as its Governor in 2010.  I’d place Heinrich as a slight favorite, but Wilson is by no means out of this race.

Hawaii (Open):  Daniel Akaka is retiring here, and while this would normally be a thoroughly safe Democratic seat, the popular former Republican Governor Linda Lingle is taking a run at this seat, which definitely puts it in play.  The Democrats offer up U.S. Rep. Mazie Hirono.  Polling data shows Hirono ahead by a fairly safe margin, but it hasn’t been polled by many places other than Honolulu newspapers and PPP, so it’s hard to be entirely sure.  Still, I predict this will likely be a Democrat hold, but it isn’t a safe one just yet.

Wild Card?:  If the Presidential race turns into a Romney rout, is there another candidate we’re not talking about that could come out of nowhere to win?  It’s possible.  Who saw Ron Johnson beating Russ Feingold in 2010 at this point, for example?  I can’t really name any names, precisely because we just don’t know them yet.  There are always possibilities, though, and such an upset is far more likely to happen to a Democrat than a Republican this year based both on numbers and the general mood.

——

To wrap up the above, I’ve got four “locks”, one more that I feel good about, three that will hinge on the Presidential outcome, and two more “in play”, though one much more so than the other.  That’s anywhere between five and nine Republican pickups (leaving out Hawaii), so we’ll split the difference and predict seven seats flipping for the Republicans.  Combine that with the one pseudo-Democrat pickup predicted above, and we’re looking at a 53-47 Republican majority.  That should be good enough to get things done.

Crosspost

I’m here to help.  A little background:  My father and grandfather were both small businessmen.  I worked for my father’s business during the summers when I was in college to help get me through college.  I currently work for a bigger corporation, but I will be getting laid off in a few months, after which I am going to join a new small business in which I will have a greater stake in the business’s success.  I do not have any degrees in business — I am an engineer by trade — but I understand the basics of business and why liberal policy is killing it.  I want to explain it as simply as I can, in the hopes of educating others who live under various misconceptions about how our capitalist system works.  The basic motto here is, “I figured this out on my own.  You can, too.”

Let’s just start right off with a simple multiple-choice question:

You are a woodworker who decides to start a furniture business. You take out a loan from the bank, purchase some retail space, hire a couple of employees, and start your business. You are successful. Twenty years later, you have paid off the original loan with interest, increased your staff to 20, opened a branch across town, and have thousands of satisfied customers.

Economically, you came out ahead in this scenario. Who lost?

a) your customers

b) your suppliers

c) your employees

d) the bank

e) the government

f) nobody

The answer, of course, is “f”. Your customers got a fair value for their money in their judgment, or else they would not have purchased your furniture. Same goes in reverse for your purchase of materials from your suppliers. You employed 20 people who may not have otherwise been employed, so they came out ahead. The bank got back more money than they lent, so they came out ahead. Even the government came out ahead, assuming that everyone involved in the process paid the various taxes involved.

So how does this happen? It’s quite simple, really: you and your employees take items of a certain value (such as wood, paint, etc.), and use your time and expertise to combine them into items which your customers determined have a value greater than the sums of their parts.  In other words, you and your employees are engaging in wealth creation.

This disproves the greatest liberal fallacy about the economy:  The economy is not a zero-sum game.  Business owners and investors do not get rich at theexpense of their employees and customers; they share the wealth they create with the help of their employees.  The only sector of our economy that doesn’t create wealth of its own is the government.  It can transfer wealth around, but it doesn’t grow it.  This is why we want the government to be as small as it can reasonably be: the more people who are participating in the wealth-creating sector of our economy, the more growth there will be.  Obviously, we need roads and bridges (to help move the wealth around) and cops and firefighters and a military (to protect that wealth from being destroyed), but the pencil-pushers and bureaucrats that our government is loaded with do nothing to make our economy work and grow.

How Business Works 

Here’s an even simpler question than the first one:  What is the primary purpose of a business?

The answer:  To make a profit for its owner(s).

Many liberals believe that “making a profit“ should maybe be in the top ten behind “employing people”, “making sure they have health care”, “improving their communities”, et cetera, but in the real world, a business must make a profit in order to survive.  If a business does not make a profit (especially a small business), it dies, in which case it doesn’t give anybody a job or health care.

So how is profit made?  Well, that’s simple, too:  The amount of wealth a business creates and sells must be greater than the cost of the materials and labor necessary to make it.  Both ends of this have many factors that blend in to the overall equation.  The biggest factor on the “wealth created” side is whether or not there is a demand for the product being created and what the market judges that value to be relative to what it costs to make it.  If the market judges a product to be of little worth, then there is little profit (and thus little point) in making it.  You also have to be able to create and sell enough of it to meet the costs of making it.  In most cases, the more of something is made, the less it costs to make it, so if there is a high demand, that demand can be satisfied more cost-effectively, and thus more profitably.

On the “cost” side, when it comes to raw materials, you have to find the least expensive materials you can to make the quality of product you want.  There are also “overhead” expenses:  renting or buying a space to run the business, lights, heat, etc.  The most complicated part, however, is labor.  Not all employees are of equal value, and their value varies over time.  Some are going to be more useful  — and thus more valuable — than others depending on their skills and experience.  Some jobs require a level of on-the-job training, which means taking an initial loss on the employee when they are hired in the hopes that they will be more profitable later.  There also has to be work for those employees to do – if there isn’t enough demand for the product, an idle employee is costly.

Business decisions are generally made based on whatever maximizes profits.  If a business is losing money and some of its employees cost more to employ than they add to the profitability, then those employees get cut.  On the other hand, if adding more employees or buying more operating space (either a bigger site or multiple locations) can help create more products and/or serve more customers, then a business will grow. Growth is the goal of almost all business, and growth is good.  Growth means more people are employed, and more wealth is being created, which means more people are making more money.

Reminder:  Government doesn’t work this way.  The primary reason that it doesn’t is that it doesn’t require making a profit to survive.  It simply tends to grow without regard to costs.

So how does government policy affect businesses?  Two primary ways:

• Taxes.  Businesses must not only make a profit, but they have to make enough profit for anyone depending on that profit to survive.  This is especially true of small business, where those profits are the owner’s pay.  When government raises taxes, it raises the amount of profit required to meet that threshold.  This forces prices for goods and services up, and in some cases, it drives customers to competitors or to drop optional goods or services altogether.  If raising prices doesn’t work, then employees may have to take pay cuts, but this can cause some of them to leave for other jobs.  If neither of these methods solves the problem, then the business will not be profitable enough, and it will cease to exist.
• Regulations.  Regulations force costs up.  For example, mandating that employers provide health care for their employees while doing nothing that actually makes the cost of health care go down (which can be summed up with the term “Obamacare”) makes it more expensive to employ people.  In many cases, it takes employees who are more productive than it costs to employ them and make the exact opposite true.  And as noted above, if an employee costs more than they produce, then they usually get cut loose.  Regulations also play a very large role in hindering the growth or even the initiation of a business.  Arcane building codes, costly permits, complicated tax laws that require professionals to help solve, compliance training and all sorts of other things pile on top of each other to cut into people’s productivity or add costs to businesses which can either make them unprofitable or make attempting to grow not worth the inherent risks.

In both cases, these factors have a disproportionate impact on small business as opposed to big business.  Big businesses can generally cut costs more easily and can often handle losses in the short-term, whereas a small business must constantly be profitable.  When people complain about big business running everything and demand more regulation, they make the problem worse, because today’s small businesses are tomorrow’s competitors for those big businesses, and if that small business cannot survive and grow, then the big business can do whatever it wants without the risk of losing business.  Competition is what keeps a big business in line, but that competition must come from somewhere.

It is also worth noting here that most businesses do not wait for things to happen, but will react to what they see on the horizon.  Many businesses see tax increases on the way (both via Obamacare and the expiration of the Bush tax cuts), and they are preparing for that now to soften the blow and avoid big losses later.  Stability is important, while uncertainty is bad.  So even though taxes haven’t gone up yet, the mere threat of it is an obstacle to growth.

That’s the short version of how business works.  Now let’s take a quick peek at why Obama’s economic policies aren’t working, because all of them are pretty quickly and easily deduced from the above.

Why Obama Doesn’t Work 

We’ve already discussed above the general impacts of taxes and regulations.  Obama wants to raise taxes on the “rich”, but two-thirds of the so-called “rich” are actually small business owners who file as individuals.  Pile Obamacare on top of that, and you’ve got a piano on the chest of small businesses attempting to make the necessary profit to survive, let alone grow.  Those in and of themselves are pretty obvious, but let’s take a look at some more specific areas that the Obama regime has invested resources and see why they don’t work:

• General Motors.  GM has two major issues aside from the general ones.  The first is that their labor contracts demand that many former workers are paid at similar rates to people actually working.  Some of these are people who were laid off, and some of these are retirees.  Many of them are getting full health benefits as well.  From the employer perspective, it’s like having a whole bunch of extra employees on your payroll that create no wealth and that you can’t fire.  This forces costs way up, and foreign competitors can make less expensive products of similar quality, even considering the costs of exporting them here.  This in turn reduces the demand for GM’s products, so it’s a double whammy.  It also forces GM to build their cars outside the U.S., which is yet another problem for American workers.  The second problem is that various environmental regulations are forcing American auto companies to produce cars that there is no demand for.  People don’t want Chevy Volts, for instance, but they exist.  The consumer doesn’t judge the Volt to be of much value, so the people building them aren’t creating enough wealth to cover the costs of making it.  Removing these regulations and allowing auto companies to build the cars people actually want does wonders to increase profitability.
• Solyndra and other “Green Jobs”.  This is another case where there is simply no demand for the product being created, because there are plenty of inexpensive alternatives already there, which means the company produces nothing of value.  The theory is that people would trade inexpensive energy that is supposedly damaging to the environment for more expensive energy that won’t damage the planet as much, but that theory is catastrophically wrong.  Most people prefer cheaper energy, and they don’t buy into the notion that using that cheaper energy is going to destroy us.  Obama and the environmental advocates believe that if they can throw enough propaganda at us about “global warming” or “climate change” or the like that they can artificially create a market for these products, but they can’t, chiefly because even if people believe the “science” behind it, they don’t see it as catastrophic enough to give up the cheaper energy.  (This is all on top of the fact that Solyndra couldn’t even produce anything close to what they were hoping to produce as far as energy generation went.  Even if Solyndra could have produced what they promised, it would have failed.)
• Coal, gas and oil industries.  Here is a case where Obama is doing the exact opposite:  you have inexpensive and abundant sources of energy for which there is a very large market, but he regulates the industries to the degree where it makes it prohibitively expensive to hire people and start mining or drilling.  He then compounds the problem by limiting the amount of wealth that can be created in these industries by limiting where and how much energy can be produced.  Again, this is an attempt to artificially create a market for “green energy”, but it’s not working, and it’s not going to work anytime soon.  Smaller operations in these sectors cannot produce enough wealth to offset the cost of producing it, and it is costing America jobs and creating higher overhead costs for all other businesses.

What America needs right now is a leader who understands these basic principles of how businesses work and understands the concept of wealth creation.  That leader must understand that government does not create wealth-creating jobs that grow our economy. That leader is not Barack Obama.

Crosspost

It echoes nicely with Romney’s comments in Israel this past week comparing Israel’s economic culture to the Palestinians.

Don’t get me wrong:  there are plenty of homophobic* people out there.  Far more than the number of racists, despite attempts by the Left to assign that status to anyone who disagrees with Obama on anything.  That said, it is quite possible to be against same-sex marriage for perfectly logical and non-bigoted reasons**.

Personally, there is only one group of people whose sexual orientation I give one-tenth of one crap about, and that would be women I am interested in dating.  Obviously, if I am going to date a female, she has to be heterosexual.  Otherwise, it is completely irrelevant to me.  I would like to think that this is the goal of most homosexuals:  to simply be treated like everyone else, especially in aspects of life where their sexual orientation is irrelevant.

That said, there is one statement of fact that must be made:  Same-sex couples and opposite-sex couples are different.

I’d hope the reaction of most people to that statement would be, “Duh.  Of course, they’re different.”  However, there are some who cannot read that without thinking that I am automatically assigning an inferior status to the former with that statement.

A brief digression:  In geometry, if one plots points along a vector and labels the origin to be zero, then each other point plotted can be given a value relative to its distance from the origin.  So if I pick two points along the vector, one can interpret one point as being “greater than” another based on its distance from the origin.

However, if we start graphing with a second dimension, the ability to determine value changes.  If I plot the points (x,y) = (3,4) and (x,y) = (4,3) on a standard two-dimensional grid, these sorts of relations make no sense.  Both points are the same distance from the origin (0,0), but are they equal?  No.  They’re different points.  One’s x component is greater, the other’s ycomponent is greater, but there is no way to judge one point as being “greater than” the other.

The point of this digression is that the inference of the inferiority of one type of coupling based on the observation that they are different is very much one-dimensional thinking.***

Two questions follow from this:  “Why are they different?” and “Is that difference relevant to the concept of marriage?”

The answer to the first question is simple:  The primary difference between a same-sex couple and an opposite-sex couple is that the latter can procreate and have a natural family.  To people like me who are against same-sex marriage, this means that the answer to the second question is, “Yes,” because we believe this ability to be very special and very important.  While a same-sex couple can adopt a child, this isn’t really any different from a single person adopting a child; it requires no union of any kind to do that.  Actually creating a child that is part you and part your partner is special, and unfortunately for the homosexuals, they were not granted that ability by our creator.

That being said, I personally do not see this distinction as a reason to deny same-sex couples the same sorts of legal rights that married couples enjoy.  The legal aspects of marriage such as insurance coverage and hospital visitation rights and the like are perfectly applicable to a same-sex couple, and this is why I support the concept of a “civil union” or a “domestic partnership” or whatever term you wish to use.

So why not just call it “marriage”, you ask?

Time for another digression:  Let’s say that you recently decided to become a vegetarian, but you are at a barbecue and the host (who is unaware of your recent conversion) asks if you want a cheeseburger****.  You reply, “Sure, I’ll have a cheeseburger, but it will have to be without the meat.”  If you do that, then you aren’t having a cheeseburger; you are having a cheese sandwich.  There is absolutely nothing wrong with a cheese sandwich, of course, but you’re missing a rather vital ingredient if you want to call it a “cheeseburger”.  Being a vegetarian means you can’t have a cheeseburger, and calling a cheese sandwich a “cheeseburger” doesn’t make it one.  Likewise, the societal construct of marriage (as opposed to the legal construct) is simply not relevant in the context of a same-sex relationship, and as a result, people like me don’t believe that such a union should be called “marriage”, because it is missing a very important component.

Same-sex marriage advocates may disagree with the importance of the ability to procreate, but this distinction we make does not come from hate.  As I like to say, “It’s not bigotry; it’s just biology.”  I (and many others like me) want same-sex couples to have the legal rights that apply to them, but we don’t want the term “marriage” to be redefined just because it doesn’t happen to fit their biological abilities.

If you read the above and disagree with my opinion, that’s perfectly OK.  If you read the above and declare me to be a “homophobe”…well, then you’re an idiot and I can’t help you.  Sorry.  (Sometimes you just have to call it like it is.)  :-)

(Crosspost.  Just established this blog…feel free to drop on by if you liked this post.)

——

* — Frankly, I’ve never liked the term “homophobe”, because I find it misrepresentative.  The term implies fear of homosexuals as opposed to prejudice against them, but those who coined the term wanted that equivalence, incorrect though it may be.  It’s very clever on their part, but incorrect.  That said, it has become the accepted term, and we have to roll with it.

** — Polling relative to same-sex marriage has always been generally flawed in that it only offers two options.  I would like to see the results of a poll that asked whether people were either: a) against same-sex unions entirely, b) for same-sex marriage, or c) for same-sex unions but against calling them “marriage”.  That would be more useful in the discussion.

*** — This is much the same problem that the feminists ran into, which is why feminism hit a wall and has regressed to a fringe movement over the years:  People recognize deep down that men and women are different, and trying to make them equal doesn’t work, yet the feminists can’t grasp that this doesn’t mean that we see women as inferior.

**** — Yes, I know that in light of current developments, a chicken sandwich reference may have been apropos, but the cheeseburger/cheese sandwich analogy just worked better.  :-)

1)  I am *very* skeptical that Obama has actually changed his mind on this in any way, shape or form.  Either this is what he felt all along, but didn’t think it would help him to say it, or he is still against it but felt this change would help him politically.

2)  I highly doubt that this is going to have any real impact on the electorate one way or another.  If you are someone who views Obama’s stance on same-sex marriage as being more relevant to your life than, say, anything else Obama has done in the last 3.5 years, then let’s just say that you are in a very small demographic.

3)  This is the key one:  Obama just moved to the left on an issue six months before the election.  Why would he feel the need to do this?  Perhaps he felt the need to “shore up his base”?  If he actually feels that he has to do that at this point, he’s in heap-big doo-doo.

4)  If he was going to choose an issue to move to the left on, this wouldn’t seem to be the most sensible choice, given the way North Carolina voted last night, and the way that almost every state has voted for the last several years.  It’s certainly not going to help with independents, which only reinforces thought #3.  But then again…

5)  …what other issue can he move more to the left on?  If he thinks that this will satisfy his base when everything else he’s done hasn’t worked, well, then see the end of point #3.

Among the crowd, however, is a subset of people who are genuinely scared for their own personal futures.  Many of them are recent college graduates, who have now have student loans coming due, but have no way of paying for them.  Tea Party people can identify with that sort of thing, since we have that sort of fear for the country with its mounting debt, and in some cases, personally as well.  (For the moment, I am thankfully not among that crowd with personal financial worries.)

For the people in that group who are currently directing their angst at corporate America, I have one simple question:  Has any corporation ever taken tens of thousands of dollars directly from you, and made you spend four or more years of your life essentially working for them, and then given you absolutely nothing in return?  Corporate America didn’t do that to you, but it’s quite possible that your college did exactly that.

For decades, people have been sold on the necessity of getting a four-year degree.  It doesn’t even matter in what, they say, just get a degree and you’re set for the real world.  Well, it isn’t proving to be quite that simple in the real world.  Many of these recent grads are finding out that there isn’t much call for philosophers at Proctor and Gamble.  3M doesn’t exactly have a division where that Women’s Studies degree is going to get you a leg up on the other applicants, either.  Art History is a great degree if you want to be a museum curator, but not so much if you want to be — well, anything else, really.  It isn’t the fault of corporate America that they don’t have use for these skills; it’s the fault of the school that didn’t bother to tell you that part.

College is supposed to prepare a person for the real world, but many are failing to do so.  They are perfectly willing to let people throw money at them, and give them completely worthless degrees in return.  It’s not like they particularly care, as long as they get your money.  Kinda sounds like the protesters’ view of corporate America, doesn’t it?

The only thing worse than getting a worthless degree is getting one in Economics or Political Science; instead of teaching people how to survive and thrive in a capitalist economy such as ours, they teach the students to hate it instead, for all the good that will do. As a software developer, I would liken it to taking a two-week course in Java programming, and having the instructor for the class spend the entire two weeks telling me that Java is worthless and teaching me Cobol instead.  If the instructor did that, I’d demand my money back.  Getting an Econ or PoliSci degree is just that on a larger scale.  The students may leave understanding why socialism is such a great system in theory (never mind that it all falls apart once reality creeps into it), but much to their chagrin, they are still being let loose into a capitalist world with nothing to build on.

So to those students with degrees and no jobs, I would suggest that maybe they leave Wall Street alone and protest Harvard instead.  They are the ones who are taking people’s money and not delivering on their end of the deal.

Here’s the quote:

Ummm…no.

For now, let’s not worry about what would happen to the money once it gets in government’s hands, because that actually isn’t the issue here.  The question is:  Is this actually going to result in more tax revenue coming into the government in the first place?

In examining this, we have to keep one thing in mind:  Not all millionaires are alike.  The people that would be affected by the “Buffett Rule” can generally be grouped into five different categories, although there is much crossover from one to another.  Let’s go down the list…

1)     Small Business Owners

Small business owners often file as a “Subchapter S Corporation” which allows the owner to pay the company’s taxes as though the business were an individual and the business’s profits were its income.  This allows them to pay less than if they had to pay at the corporate tax rate.  Generally speaking, a small business’s profits aren’t just going into the owner’s pockets, though; that money is used to either grow or sustain the business into the future.

So what happens if we raise taxes on them?  Well, businesses that want to use profits to grow won’t be able to grow as much, and businesses that use their profits to sustain won’t be able to sustain as much.  The latter results in reductions in employee benefits or reductions in employees, and in some cases, businesses go under altogether.  It also increases the risk involved in starting a business, which may prevent some from starting to begin with.  These things result in less competition, which is bad for the consumer.

Basically, any good you get out of more taxes from these companies is offset by the lack of taxes you’ll get from the laid-off employees and no-longer-existing businesses.  And you can forget about more jobs or economic growth.  So that’s one strike against the “Buffett Rule”.

2)     Tax Shelterers / Pre-Tax Investors

Most people who make large amounts of money per year don’t live a “playboy” sort of lifestyle.  Most of the time, those who earn large amounts of money put aside what they don’t need for later, and when they do so, they want to keep that amount of money as large as possible.

When the concept of “tax shelters” come up, these are generally derided as “loopholes” that rich people use to keep from “paying their fair share” of taxes.  This isn’t quite true, however.  Pre-tax investments and “tax shelters” don’t mean that the person doesn’t pay taxes on their income; it only means that they don’t do so right now.  A 401(k) is a pre-tax investment:  you haven’t paid taxes on it when you make the investment, but you also don’t have immediate access to that money.  When you withdraw that money, it is then subject to income tax at whatever the rate is then.  Other pre-tax investments work the same way.  The investor is betting that at some point in the future, tax rates will be lower than they are now, which will save them money.  It also has the benefit of giving them more money at the start, which as anyone who understands the concept of “compound interest” knows, will result in a bigger number at the end.

So what effect would the “Buffett Rule” have here?  The people who have no choice but to withdraw money from their investments at this point, i.e. retired seniors, might have to pay more, but most of them aren’t going to withdraw enough to have this rate change apply to them.  For the rest, it just means more people using these methods to defer payment of taxes until such a time as the rates are lower or they simply don’t have a choice.  In other words, you’re not going to gain much of anything from this group, either.  Strike two.

3)     The Investor Class

This is the group of people that includes Warren Buffett himself, and I should take a moment to shoot down his anecdotal defense of this plan.

Buffett notes that since most of his “income” comes from capital gains (which are taxed at 15%), and he pays himself $100,000 per year from his investments (taxed at the top marginal rate of 36%), the end result is that his “effective tax rate” is less than that of his secretary.

Here’s the problem with that argument (and why I use the word “income” in quotations above):  You can’t spend capital gains.  An increase in your net worth does not translate to income until you sell a position and convert it to cash…at which point you are subject to income tax on any earnings.  If he converted that net worth to cash, he most certainly would be paying a higher tax rate than his secretary would, though he’d be too busy swimming in a pool full of cash to care.  It’s also worth noting that any stocks or funds that we buy on the market are generally bought with money that we’ve already paid income taxes on.

On top of that, his anecdote seems to suggest that he thinks the capital gains rate should be increased, which isn’t what is being proposed.  An increase in the top income tax rate wouldn’t really affect him much, since he could always give himself a raise to cover for it.  Most people don’t have those sorts of options, of course.

So why exactly is the capital gains rate lower than the income tax rate?  Two reasons:

1)  The capital gains tax is really an “intermediate tax” – as noted earlier, you still pay income tax on any earnings once the position is sold.  This just gives the government some income in the meantime, since many people hold positions for years or decades.

2)  It is kept lower to give people incentive to take risk and invest in the first place.  As most amateur stock traders can tell you, investing involves risk, and more often than not, you end up losing instead of winning.  If the risk is not worth the potential reward, there’s less reason to take the risk.  (As both a former amateur – very amateur – stock trader and someone with a math degree and an emphasis in probability, I can back this assertion up.)

So raising the capital gains rate would only stifle investing, which runs counter to the whole idea of trying to create jobs.  Then again, that’s not what is being proposed by the White House.

The actual proposal, as noted, would have practically no impact on someone like Buffett at all.  You’d get a bit more from the $100,000 he pays himself, but you’re not getting any more of his capital gains unless he sells them (and why would he?).  What it would do is keep people from selling or moving stocks unless they had to, because those transactions (if they resulted in gains) would get taxed at a higher rate.  Again, this isn’t going to help economic growth any.  The likely result is that many of these people will transition themselves to some degree into group two, which as we’ve noted, simply means less tax revenue being paid now.

4)     The “Someone Else Pays Me” Group

Generally speaking, most of the people that are earning a million dollars per year or more are doing so either by investing or running their own businesses, and are thus profiting from the growth they are creating.  There are very few people who are actually paid a million dollars or more per year by someone else simply for performing a particular service, but there are a few:  professional athletes, Hollywood actors, and a few in the higher levels of large companies are some examples.

For the most part, the latter group are people who understand business well enough to know what to do with that money once they earn it, i.e. they join groups two or three.  Most of the others also have some sort of financial advisors or agents helping them figure out what to do with their money (which again means they join groups two or three), but there are a few who actually act exactly like liberals seem to expect every millionaire to act:  they don’t pay any attention to what is happening to their money and just pay the higher tax rate, thinking that they’ll always get more.  These are the people living the “playboy” lifestyle that was mentioned earlier.  Often times, these are the people you see in documentaries on “E!” ten years after their fame has dried up, where we learn about how they squandered their wealth and are broke now.   (And if drugs were involved – which they often are — you can bet that the dealers weren’t paying sales or income taxes on those transactions, either.)

All speculation aside, the “Buffett Rule” would have the intended effect on these people, but they are few and far between, because as noted, the smarter members of this set put themselves in groups two or three.

5)     The “How Did I Get So Lucky?” Group

These are people whose income is insignificant next to their wealth, which they generally came into through no effort of their own.  Either they inherit it (like Mark Dayton or any Kennedy at random), or they marry into it (like John Kerry).  These people often end up being liberal politicians or activists, sometimes because they don’t know how the money was made in the first place, and sometimes because they feel guilty that they got so lucky and like to assume or pretend that every other rich person got lucky, too.

So out of these five groups, we have the first three who you aren’t going to get a net gain from, and two others which are smaller than they appear, since the smarter members of those groups cross over into the other groups.

So what good would the “Buffett Rule” do?  Well, it would make some liberals feel better.  That’s about all, though.

Well, I’d like to offer a new plan.  Let’s call it the “Q’s Clues Options Plan”.  It goes like this:

Step 1 is already complete.  We’ve passed a debt ceiling increase in exchange for “Cut, Cap and Balance”.  The Senate doesn’t like it.  Big whoop.  So we’ll give them two more options.

Step 2 is simple.  Pass another bill that would put forth the exact same debt limit increase in exchange for a full repeal of Obamacare.  Of course, we know the Senate would crap on that, too, despite the fact that the American people are in favor of getting rid of that as well.

Step 3 is also simple.  Pass one more bill that would provide the same debt ceiling increase in exchange for a cap on expenditure increases of no more than 2% of the previous year through 2020.  In short, from 2012 until 2020, each department gets a straight 2% increase, and nothing more.  Spending can be rearranged if needed, but the total growth can only be 2 percent.

How will this help, you ask?  Well, using the FY 2011 budget analysis document’s (http://www.gpoaccess.gov/usbudget/fy11/pdf/budget.pdf) summary table on page 146, here’s what we’re looking at for budgets and increases from 2012 through 2010 (numbers in billions):

(I am choosing to start with FY 2012 as the base instead of FY 2011 because the document indicates that the FY 2012 outlays are actually less than the FY 2011 ones.  Frankly, I’m not sure I believe that, but that’s what it says, and one has to work with the data available.)

So let’s reduce those percentage increases to 2% and nothing more and leave everything else the same.  Here’s what we get:

See, that’s not so hard.  We have a surplus by 2018, $5.3 trillion in total reductions over 10 years, and nothing actually gets truly “cut”, except in the minds of Democratic demagogues who are bad at math.

So we pass those three bills and leave it at that.  Those are the options for the Senate and President.  We already know the first two are supported by the majority of Americans, and one would expect that the third would also be widely supported given that it balances the budget without truly cutting anything.  The Republicans look reasonable by offering flexibility with three perfectly good options that the American people support, and if Obama and Reid want to reject all three, then they look like even bigger fools than they do now.

That’s my plan.