Tuesday, May 28, 2013

Why the IRS Persecuted the Tea Party and How to Fix the Problem

Daniel J. Mitchell / Townhall Columnist 
Did President Obama and his team of Chicago cronies deliberately target the Tea Party in hopes of thwarting free speech and political participation?

Was this part of a campaign to win the 2012 election by suppressing Republican votes?

Perhaps, but I’ve warned that it’s never a good idea to assume top-down conspiracies when corruption, incompetence, politics, ideology, greed, and self-interest are better explanations for what happens in Washington.

Writing for the Washington Examiner, Tim Carney has a much more sober and realistic explanation of what happened at the IRS.

If you take a group of Democrats who are also unionized government employees, and put them in charge of policing political speech, it doesn’t matter how professional and well-intentioned they are. 

The result will be much like the debacle in the Cincinnati office of the IRS. …there’s no reason to even posit evil intent by the IRS officials who formulated, approved or executed the inappropriate guidelines for picking groups to scrutinize most closely. 

…The public servants figuring out which groups qualified for 501(c)4 “social welfare” non-profit status were mostly Democrats surrounded by mostly Democrats. 

…In the 2012 election, every donation traceable to this office went to President Obama or liberal Sen. Sherrod Brown. This is an environment where even those trying to be fair could develop a disproportionate distrust of the Tea Party. One IRS worker — a member of NTEU and contributor to its PAC, which gives 96 percent of its money to Democratic candidates — explained it this way: “The reason NTEU mostly supports Democratic candidates for office is because Democratic candidates are mostly more supportive of civil servants/government employees.”

Tim concludes with a wise observation.

As long as we have a civil service workforce that leans Left, and as long as we have an income tax system that requires the IRS to police political speech, conservative groups can always expect special IRS scrutiny.

And my colleague Doug Bandow, in an article for the American Spectator, adds his sage analysis.

The real issue is the expansive, expensive bureaucratic state and its inherent threat to any system of limited government, rule of law, and individual liberty. …the broader the government’s authority, the greater its need for revenue, the wider its enforcement power, the more expansive the bureaucracy’s discretion, the increasingly important the battle for political control, and the more bitter the partisan fight, the more likely government officials will abuse their positions, violate rules, laws, and Constitution, and sacrifice people’s liberties. The blame falls squarely on Congress, not the IRS.

I actually think he is letting the IRS off the hook too easily.
But Doug’s overall point obviously is true.

…the denizens of Capitol Hill also have created a tax code marked by outrageous complexity, special interest electioneering, and systematic social engineering. Legislators have intentionally created avenues for tax avoidance to win votes, and then complained about widespread tax avoidance to win votes.

So what’s the answer?

The most obvious response to the scandal — beyond punishing anyone who violated the law — is tax reform. Implement a flat tax and you’d still have an IRS, but the income tax would be less complex, there would be fewer “preferences” for the agency to police, and rates would be lower, leaving taxpayers with less incentive for aggressive tax avoidance. …Failing to address the broader underlying factors also would merely set the stage for a repeat performance in some form a few years hence. …More fundamentally, government, and especially the national government, should do less. 

Efficient social engineering may be slightly better than inefficient social engineering, but no social engineering would be far better.

Amen. Let’s rip out the internal revenue code and replace it with a simple and fair flat tax.

But here’s the challenge. We know the solution, but it will be almost impossible to implement good policy unless we figure out some way to restrain the spending side of the fiscal ledger.

At the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement reform.

Another Cost of Obamacare: Biotech

John Ransom / Townhall Finance Editor

Biotech company Excelixis CEO George Scangos likes to quote oil wildcatter JP Getty when asked about his philosophy for success: “Get up early; work hard; find oil,” he deadpans.

And under the direction of dry-humored Scangos, the San Francisco-based company is drilling a lot of research holes, so to speak.

They have to: Success in the biotech industry is measured incrementally, not in big steps. It’s a cash-and-time intensive industry where success is painstaking, rare and, because of Obamacare and other regulatory burdens from the administration, likely to become even rarer.

According to Plunkett Research, Ltd in 2010 it cost $1.2 billion to develop each and every biologic drug. That’s because while the government currently tracks 124,932 trials for new drug application in 179 foreign countries, only a tiny fraction of those drugs will ever see the marketplace.
In the United States, for example, there were only about 114 FDA approvals for new drugs last year.

That’s a success rate of 0.091256. If that were a batting average for a baseball player, it would belong to a player who would never see the minor leagues, yet alone the Biggies.

"That means that enormous fortunes are going to be made in the sector," Jonathon Lach, CEO of BlueStar Capital Management, a biotech hedge fund headquartered in Westport, Connecticut told me in 2006. He pointed out, however, that the industry’s staggering failure rate makes some other long-odds stock market sectors look like safe bets in comparison. "Conversely, that means that enormous fortunes will also be lost in the sector."

But under the greatest capital markets in the history of the world, biotechnology has thrived despite the long odds, because the enormous profit potential has attracted quite a bit of capital over the last 25 years. 

25 years ago there were roughly 700 biotech companies. Now, worldwide there are 3853 companies with about half of those concentrated in the United States. U.S. companies account for about 75 percent of all revenues in biotech. But not for long.

The combination of free markets and efficient capital markets compared to other countries has allowed the Unites States to lead the way despite some bumps and bruises along the way. Market crashes, like the ones experienced in 1987 and 2008 make even viable biotech companies with a good pipeline of drugs hard to finance because they always need money.         

Research and Development expenditures for new drug application in 2010 totaled $67.4 billion, according to Plunkett, in an industry that generated of about $81 billion in total revenues. That’s because biotech companies typically generate little revenue. Instead the companies rely on the stock markets to fund R&D. Then they usually sell out their discoveries to large pharmaceutical companies once they have successfully brought a drug to market, because biotechs are in the business of new research, not in the business of the distribution of new medicines. But, just like a wildcatter staking an oil claim, the profits are large for investors willing to be patient and work hard.

Lach once told me that investors who were willing to work hard to bring scientific insight into their investment model would necessarily do better than average.

But under Obamacare, and the other regulatory burdens on banking and investment, biotech will have a much harder time. In a quest to drive down costs in healthcare, there will be little tolerance for big profits, big losses or new discoveries in medicine under Obama’s prescription for single payer coverage for the entire universe.

Most other countries already operate under a system of nationalized healthcare and restricted capital markets.

Accordingly, investment banking activity for the biotech sector is much more robust in the United States than in the rest of the world. When the Atlantic’s Megan McArdle pointed this out, Obamacare shills like Ezra Klein of the Washington Post shouted her down, claiming that her hypothesis was a little more than a “thought experiment” because she lacked critical data to back up her assertion.

Well getting past the fact that most of Einstein’s most revolutionary concepts were little more than “thought experiments”- including the one for the photoelectric effect for which he won the Nobel Prize at a time when the Nobel Prize still meant something- here’s the hard data:

According to Indicium Data, LLC, a company that tracks biotechnology capital market trends, of the $6 billion in capital financings that happened worldwide for biotech in 2011 about $4.8 was raised in the United States. Twice as many dollars were raised in California and Massachusetts alone compared to the entire rest of the world. Of the 281 financings in biotech that happened worldwide, 211 of them happened in the US in 2011.

Experience from other countries has taught us that investors won’t continue to pour money into medical innovation when the incentive for innovation has disappeared.

Other countries like Australia can’t even raise a dime for biotech companies in capital markets.

It would be shame if the wonder drugs we rely on to help the elderly, the sick and our children stopped working wonders because a parochial and partisan prejudice against profits by liberals was allowed to outweigh the greater good.

When Cash Is King

by / Personal Liberty Digest

When Cash Is King
When I lived and worked in Spain under the regime of Generalissimo Francisco Franco, cash was king.

When I later moved back to North America, I continued to use cash whenever possible. You will not find me downtown with less than $500 on my person; and if I’m on a flight overseas, I’ll have much more. Here are a few advantages to paying cash:
  • Temptation avoidance: You will not make impulse purchases that you cannot afford. (It is much more difficult to make an “impulse” buy if you have to take cash out of your pocket to pay for it.)
  • Savings: You will pay no monthly payments on loans, no credit card interest and no overdraft fees from your bank.
  • Lower prices: You’d be surprised at how much you can save by asking for a discount in return for paying with cash. For example, the next time a self-employed mechanic, plumber or electrician quotes you a price of, say, $1,200 plus sales tax, make a counter offer of $1,000 cash. More often than not, you’ll get that discount.
  • Protection against identity theft: Obviously, if you don’t use a credit or debit card, you won’t be asked for a driver’s license that may (horror of horrors!) display your home address.
Furthermore, here are five reasons to secretly (repeat: secretly) keep major amounts of cash on hand:
  1. When the banks in your area eventually shut down due to a power outage, terrorist attack, catastrophic computer malfunction or any other reason, you’ll be like the one-eyed man in the Kingdom of the Blind.
  2. If you spot the used car of your dreams at night or on a weekend, you’ll be able to beat out any other prospective buyers by offering cash on the spot.
  3. Should you be caught far from home when all airports shut down (as they did on 9/11), rent-a-car agencies will run out of vehicles in a flash. But with cash you can pay a taxi driver whatever it takes to get to your destination, or you can even buy a used car and get there on your own.
  4. If your former or current live-in lover turns against you (yes, Virginia, this has been known to happen), he won’t be able to go after your cash when there is no clue that it exists.
  5. Suppose you get a heads-up call from a friend at 2 a.m., telling you that someone is out to get you. Time to get outta Dodge! You grab your passport, all the cash you’ll need, laptop, cellphone and hit the road. (Don’t forget to either remove the cellphone’s battery or wrap it in aluminum foil that so it cannot be pinged.)
As long as you can maintain silence, you should keep some major cash at home for any coming emergency. There is, of course, no such thing as a burglar-proof home, nor is there a security system that cannot be bypassed. However, the average burglar is inside a house for less than 10 minutes.

Your goal will be to prevent your cash from being found for more — much more — than that length of time. Burglars will almost invariably head straight for the master bedroom, so I suggest you keep a small amount of cash there, perhaps hidden beneath some underclothes in the bottom of a chest of drawers. Leave enough to pay for a drug fix or to make the intruder think that he’s already found whatever cash you keep in the house.

Burglars aside, your goal should be to hide money from anyone who might be after it — whether visiting relatives, party guests, repairmen, babysitters, a kleptomaniac parent, a teenage son or daughter on drugs, or a spouse who attempts to exercise iron control over every dollar you spend.

Can safes are a great way to hide money from all such persons.

Can safes, also called diversion safes, are for sale all over the Internet. They are manufactured from actual cans of such items as Yuban coffee, Heinz Baked Beans, Bon Ami, Ajax, VP Spray Starch, Scotch Guard, Pledge, STP Oil Treatment and JB Radiator Stop-Leak. The bottom of each can unscrews.

In addition, if you have a tightly-packed three-drawer file cabinet, use one or more of the file folders for holding cash. Title them with dull names such as “old tax receipts” or “travel brochures.” Or if you have a lot of books, use a box cutter or a single-edge razor blade to cut the center out of some dull book you no longer want. (Outdated computer books or AAA travel books are ideal for this.) Mix them in with others in your bookcase, or store them in a box of books kept out in the garage.

For smaller amounts of money, bills can just be scattered among the pages of a heavy and uninteresting book. Here’s an interesting example provided by Ellen who is 88 and lives in Kalispell, Mont.

“I have a grandson who used to come and visit me in my apartment sometimes, but I couldn’t trust him because he’d once stolen some money from me. I had a very old Bible, one of those big ones that take up half a coffee table. I knew my grandson would never open a Bible, so I hid a dozen $100 bills in the pages of Psalms, Proverbs and Ecclesiastes. One night, some crazy old coot in the building fell asleep while smoking and the whole building caught fire. By the time the fire was put out, everything was damaged by fire or water. My old Bible was scorched around the edges and waterlogged, but my money was still OK.”

If you have a freezer, another great way to protect your cash is to open a bag of frozen vegetables. Stuff the empty container with rolled-up bills, glue the opening shut and put it in the bottom of the freezer.

You can also hide bills inside window shades, water hoses, fuse boxes, fire-alarm bells, dog houses, abandoned plumbing fixtures, ironing board covers, plastic rolling pins, wall clocks, paper towel tubes, clothes hampers, kitchen containers, wall phones, clothespin bags, bed posts, upholstery, golf bags, toys, stuffed animals, board game boxes, false-bottom baby carriages, Christmas decorations boxes, trophies or even hollowed-out stairway posts.

All of the foregoing assumes, of course, that you have some cash to hide. If you normally live from paycheck to paycheck, something is terribly wrong. But that’s a subject for another day.

British officials knew for two years that London jihad murderer had ties to al-Qaeda

From Jihad Watch / Posted by Robert Spencer

But don't be concerned: his rights weren't infringed upon. He was still able to roam London streets with a meat cleaver, looking for a kaffir to hack to death.

"British Officials Knew Suspect in Soldier’s Death Had Ties to Al Qaeda," by John F. Burns in the New York Times, May 26 (thanks to Kenneth):
LONDON — Britain’s security agencies appeared headed for a period of deeply uncomfortable scrutiny after the government said Sunday that it had been aware for more than two years that one of the two men suspected of hacking an off-duty British soldier to death on a London street had ties to Al Qaeda. 
A Foreign Office spokesman confirmed that the ministry had provided “consular assistance” in Kenya in 2010 to the man, Michael Adebolajo, 28, a British citizen of Nigerian descent. He had been arrested by the Kenyan police on suspicion of planning to join Al Shabab, an extremist group in Somalia that Britain has classified as a terrorist organization.
Mr. Adebolajo and the other suspect in the London attack — Michael Adebowale, 22, also of Nigerian origin — have been under armed police guard in separate London hospitals since the attack last Wednesday. The soldier — Lee Rigby, 25 — was run down by a car on the sidewalk outside an army barracks, then attacked with meat cleavers. Police officers arriving on the scene shot and wounded the two suspects.
The grisly brutality of the attack shocked Britain as few events have since the bombings on the London transit system on July 7, 2005, which killed 52 passengers and the four bombers. Sunday newspaper headlines about the case focused on what the government knew about Mr. Adebolajo and Mr. Adebowale and why no action was taken that might have prevented Mr. Rigby’s death.
In a statement on Sunday, the Foreign Office spokesman sought to tamp down the controversy, saying that the office’s role in the events in Kenya in November 2010 was limited to consular assistance to Mr. Adebolajo, “as normal for British nationals.” It did not address the Kenyan government’s statements that Mr. Adebolajo, using a false name, had been arrested near the Somali border with five Kenyan nationals while carrying Shabab literature.
The statement also did not address a claim made on BBC television on Friday night that Mr. Adebolajo spoke of rebuffing an attempt by MI5, the British domestic security agency, to recruit him. The claim was made by Ibrahim Hassan, a man who says he has links to Islamic extremist groups. Mr. Hassan said Mr. Adebolajo had told him that the recruitment attempt was made after he was deported from Kenya. British security officials quoted in the Sunday newspapers said that efforts to recruit Islamic extremists in such circumstances were common.
Mr. Hassan himself was arrested in the BBC studio immediately after the interview by Scotland Yard counterterrorism detectives, who said that the arrest was not connected to the killing of Mr. Rigby.
Mr. Hassan’s claims and his arrest added to a growing sense that inquiries into Mr. Rigby’s death are likely to delve into the murky world of the security agencies and their dealings with Islamic extremists.
A Parliamentary panel, the Intelligence and Security Committee, has said it expects to receive a preliminary report from the government on the attack this week.
Among the issues that the panel’s leading members have said they want to explore is whether MI5’s desire to penetrate groups with suspected terrorist ties had led to decisions not to prosecute people like Mr. Adebolajo under laws that bar Britons from engaging with terrorist organizations overseas. Security officials have said that MI5 viewed Mr. Adebolajo as posing a “low risk” of potential terrorism and did not think he needed close monitoring.
Security officials have also confirmed that Mr. Adebolajo, and to a more limited extent Mr. Adebowale, had been known to British security officials for several years because they took part in protests in Britain that were organized by extremist groups, some of which involved violent clashes with the police.
Newspapers in Britain have carried accounts saying that Mr. Adebolajo had been heard in mosques and community centers in south London calling for jihadist attacks in Britain....
Yet the mosques didn't report him to authorities.

islam is NOT a race...

The Obama/Holder Theater of the Absurd
By: Diane Sori

Barack HUSSEIN Obama must really think that the American people are stupid...I mean sure the 50.5% who voted (and voted over and over) for him are...but the other 48% who didn't vote for him sure aren't. And for Obama to even try to pull his latest stunt is sure to have even some of those 50.5% saying he's gone a bit too far this time.

And this time translates into Obama appointing Attorney General Eric 'Fast & Furious' Holder to investigate his own Justice Department in regards to the FOX News reporter scandal. I mean come on, even Obama can't believe that 48% of America will just sit back and allow this to happen without a fight...NO way...NO how.

Last week during a major speech on national security (where he still could NOT say the words 'muslim terrorists'), Obama announced that Holder had 'agreed' (ain't that so nice of him) to investigate how the Justice Department conducted investigations involving journalists, most specifically the case involving FOX News reporter James Rosen, who was named as a potential 'criminal co-conspirator' in a leaks investigation...that being the only way the Justice Department could justify gaining access to his records.

And there's more that's just come to light including that Holder received approval from a federal judge to keep the Rosen surveillance secret by arguing that secrecy was needed because he or the Justice Department might need to return to the tapped e-mail account in the future.

In other words, even with all this, Holder has graciously (gag) agreed to investigate himself even though he was the very one who, in his capacity as Attorney General of the United States, personally signed off on and OK-ed the investigation into Rosen's activities, helped secure the search warrant for Rosen's personal e-mail and five different phone lines used by Fox News, and discussed the entire investigation with his staff, which is in direct contradiction to his under oath previously made statements.

Perjury has a nice ring to it right now doesn't it.

Oh yeah, that investigation will really be investigated fairly and impartially now won't it...so fairly that I can give you the final report before the investigation even starts...on July 12th, when Holder's report is due to be placed into Obama's hands, NO unethical behavior will have been found...all will be kosher as they say, and all will have been done within the parameters of the law. And if anyone says that won't be the outcome then Barack HUSSEIN Obama isn't the enemy within...which all know he is.

And while all this is happening, Obama sits back untouched and unscathed, for now at least, as all his little minions are circling the wagons to protect him. But you know what, I'm just sick and tired of hearing Obama's lie that he knows NOTHING and has NOTHING to do with how his own administration is run. Remember, he is Holder's boss yet he claims he knows NOTHING about what Holder does...yeah right (sarcastically said) as Eric Holder is Obama's flunky, and there's NO way he did any of this without Obama's knowledge and go-ahead.

But for the media all this is lights, camera, action and ratings as Obama play acts the role of a 'troubled and outraged' president who is stunned over what his own appointees and employees are doing yet refusing to hold anyone accountable for anything. Instead he bloviates with a straight face that he has full faith and confidence in Eric Holder to conduct a full and fair investigation into himself and his department.

Oh really...just how can you fairly and without prejudice investigate yourself without it being a total conflict of interest....you can't...so full well knowing this what does Holder do...he recuses himself from investigation...oh the absurdity of it all.

But what Obama so calculatingly and deliberately hides is that Holder and his people are doing exactly what he's orchestrated them to do, for all department personnel ultimately answer to him and him alone, and all will be protected by him if need be. And like with Benghai, where I believe Obama gave the order to 'stand down' as that order could have only come from the top, Obama has in place those who are willing to sacrifice themselves for him...and God only knows why someone would put themselves and their careers on the line for this miserable, traitorous excuse of a president.

I wonder what Obama either has on them or what he is paying them to take the fall for his dirty work.

But NO matter as I think that very shortly Eric Holder will willingly take the ultimate fall and will sacrifice himself by announcing his resignation as Attorney General, just as Obama will pretend to throw Holder under the bus to appease the media so they will go back and revel in their blissful ignorance and stop asking questions about the IRS, the AP, and most importantly about Benghazi.

And while investigations about reporters is fodder for media headlines and airtime, and helps keep the media busy so there's NO time to try and find out the truth about what was going on before the embassy attack (gun and weapons running I have always said), this Justice Department investigation, along with the theater of the absurd that comes with it, helps to keep "We the People' diverted from and takes the focus off the scandal to end all scandals...the MURDER of four Americans on this president's watch...MURDER carried out on (what I believe are) the orders of this president...MURDER as a side bar to aiding and abetting the enemy...a treasonable offense...that must be covered-up at all costs, and the press and IRS scandals are Obama's hoped for solutions for getting Benghazi to just go away.

And the 48% must NOT allow that to happen for the word 'treason' said in the same breath as the name Obama has a ring of truth to it if I say so myself.