I’ve heard that phrase a lot, and I remember working in the Defense industry and noticing a big difference between funding under Presidents Reagan and Clinton.

But is it true? Turns out, mostly yes, in terms of funding National Defense.

I looked at US Defense Spending (Historical Tables, Budget of the U.S. Government, Table 4.1) from 1977 to the present. The data is presented by Federal Fiscal Year, so I associated the President and Congress with the appropriate fiscal year.  For example, President Bush and the First Session of the 110th Congress (Speaker Pelosi and the 2006 Democrats) started the budget process in February 2007 for FY2008 (Oct 1 2007 through Sept 30 2008) . The Fiscal Year 2009 budget (for the fiscal year that begins Oct 1 2008) is currently being discussed in the Second Session of the 110th Congress.

Let’s start with President Carter and the Democratic 95th and 96th Congresses. What I found is that after years of post-Vietnam Democratic cuts, President Carter and the Congress actually increased Defense Spending significantly (7.5%, 11%, 15%, 17.5%). In My (revised) Opinion, Carter is blamed somewhat unfairly for the ‘hollow military’, while prior Democratic Congresses deserve the blame (along with President Ford to some extent). Note that years of cuts had taken their toll on the military.

President Reagan swept in with a GOP Senate and Democratic House for six years: defense spending increased 17%, 13%, 8%, 11%, 8%, and 3%.  Reagan’s last two years and the Democratic 100th Congress saw a 3% and 5% increase. Reagan demanded that General Secretary Gorbachev “tear down this (Berlin) Wall” in 1987; the Wall fell in 1989.

President George H.W. Bush and the Democratic 101st Congress cut defense spending by 2% and 10% (the ‘Peace Dividend’).  Germany was unified in 1990; Soviet Communism collapsed in 1990. Bush and the Democratic 102nd Congress increased defense spending by 9% after the First Gulf War, then cut defense by 3% in his last budget.

President Clinton and the Democratic 103rd Congress cut defense by 4% and 3%, then the 1994 GOP 104th Congress cut defense by 2% then increased defense by 2%. Clinton’s second term and the GOP 105th Congress cut defense by 1% then increased defense by 2%.  The GOP 106th Congress and Clinton increased defense by 8% and 3%.

President George W. Bush got an increase of 14% in his first defense budget, with a GOP House and Democratic Senate (107th Congress). After the 9/11 attacks, Bush and the 107th Congress increased defense by another 17%.  Bush and the GOP 108th Congress increased defense by 12% and 9%, then Bush and the GOP 109th Congress increased defense by 5% and 10%.

I am concerned that a Democratic Congress, with a possible Democratic President, will gut the military just like it was gutted after Vietnam…

For a different view of this topic, the Heritage Foundation analyzed defense spending as a percentage of GDP, and shows that defense spending (at 4% of GDP) is below the 45-year average of 5.5% and well below Vietnam and Cold War levels.

Part 1

Many times for over a year I’ve decried the foolish headlong government plunge into ethanol. Basically anytime the government anoints a winner in the marketplace the government will be proven wrong for any number of reasons. One of the many predictable outcomes of increased governmental support for ethanol, higher food prices, has become a reality.

The Washington Post had a good column recently aptly titled “Ethanol’s Failed Promise” that outlined the many flaws with biofuels. I was particularly amused by the line, “Food-to-fuel mandates were created for the right reasons.” Ohhhh, the liberal’s lament. It’s always about good intentions with them, not sound, well reasoned policy. Any degree of government interference is justifiable if your heart is pure.

Seriously, who thought it was a good idea to use precious arable land for fuel production instead of food production while there are still people starving in the world?

Part 2

On a related topic, I recently wrote that John McCain’s proposal to eliminate the federal fuel tax for the summer revealed his lack of adherence to the global warming creed. Eliminating the tax would encourage more consumption of fuel, which is exactly the opposite of what a devout global warmitarian would want. Now the Wall Street Journal has come to the same conclusion. They state that proposals such as McCain’s make “a hash out of the climate-change policies that the candidate purports to favor.”

If such politicians were honestly concerned with the survival of our species their recourse would be simple and easy to make: artificially force up fuel prices. Tax it. Regulate it. Bludgeon it to death. Instead what we get are politicians who seem to be eager to just gain more power and control since their contradictory cocktail of policies belie their tenuous belief in the man-made global warming faith.

Update: More on McCain’s hypocrisy from Newsweek:

[A]ttorney and former GM exec Frank Dunne finds the climate-change hawk’s call for a gas-tax holiday “intellectually dishonest.”

[Tom Kloza, energy analyst with the Oil Price Information Service] goes a bit further, calling a gas-tax holiday “caca.” “It represents pandering. You’re not leveling with the American public,” says Kloza.

I was reading through the Alabama General Fund budget as proposed by Rep. John Knight and thought I’d point out a few of the expenses (subject to change of course)…

$125,363 - “For expenses and awarding of prizes for fairs as provided in Section 2-7-21, Code of Alabama 1975, and other live stock shows and exhibits and other activities.” Why are taxpayers giving away prizes at fairs?

$441,300,652 - Total amount appropriated to the Department of Corrections, which doesn’t include $8,500,000 for feeding of prisoners in county jails. That’s right, nearly half a billion dollars to house prisoners.

$2,665,265 - Total amount appropriated to the board that regulates cosmetology, which doesn’t include another $150,000 to license and regulate massage therapists. Compare that to…

• $1,697,000 - Credit Union Administration
• $1,677,945 - State Board of Licensure for Professional Engineers and Land Surveyors
• $1,532,800 - Alabama Ethics Comission
• $2,286,996 - Plumbers and Gas Fitters Examining Board
• $445,000 - State Board of Veterinary Medical Examiners
• $505,000 - Board for Registration of Architects
• $86,400 - Board of Examiners of Assisted Living Administrators
• $1,919,028 - State Licensing Board for General Contractors

Seems a bit out of whack for the government to spend more money regulating the people who cut your hair than they do on those who build and work on our homes, take care of the aged, and tending to Fido.

$69,360,826 - Total debt service

$4,507,807,143 - Medicaid Agency (Most of the money comes from the “federal and local funds”)

$50,000 - “Employment and Social Opportunities Program” for Women

$514,000 - Various Halls of Fame:

• $19,500 - Men’s Hall of Fame
• $19,500 - Women’s Hall of Fame
• $100,000 - Motorsports Hall of Fame
• $250,000 - Music Hall of Fame
• $125,000 - Sports Hall of Fame

Who knew there were men’s and women’s halls of fame?

And just wait until the various legislators try to insert pork projects (i.e. Phil Poole) and add health insurance coverage for themselves.

The Wall Street Journal ran an op-ed today roundly condemning the Fed’s actions in the evolving JPMorgan purchase of Bear Stearns.  It does a much better job of making the same points I fumbled about with yesterday.

J.P. Morgan CEO Jamie Dimon is a tough customer, but the way he’s rolling over the U.S. Treasury and Federal Reserve is getting to be embarrassing. Too bad our public officials aren’t as stalwart in standing up for taxpayers as Mr. Dimon is in defending his bank’s commercial interests.

Yesterday, Mr. Dimon called the Beltway’s bluff one more time as he renegotiated the terms of last week’s merger accord with Bear Stearns. J.P. Morgan agreed to quintuple his price, to $10 a share from the firesale value of $2, in return for enough shares to guarantee that the merger will now be approved by Bear shareholders. So Bear Stearns holders get more money, Mr. Dimon gets more certainty, but the Fed still gets left guaranteeing $29 billion worth of troubled Bear mortgage-related securities.

Read the rest for yourself.

From the NY Times:

JPMorgan Chase was in talks on Sunday night for a deal that would quintuple its offer for Bear Stearns, the beleaguered investment bank, in an effort to pacify angry Bear shareholders, according to people involved in the negotiations.

The sweetened offer is intended to win over stockholders who vowed to fight the original fire-sale deal, struck only a week ago at the behest of the Federal Reserve and Treasury Department.

Under the terms being discussed, JPMorgan would pay $10 a share in stock for Bear, up from its initial offer of $2 a share — a figure that represented a mere one-fifteenth of Bear’s going market price.

More from MarketWatch:

In the latest groundbreaking move from the central bank, the New York Federal Reserve Bank will manage and dispose of the high-risk securities that helped push Bear Stearns Cos. (BSC:The Bear Stearns Companies Inc
News, chart, profile, more over the brink and into the arms of J.P. Morgan.

If the securities, valued at $30 billion on March 14, sell for more than $30 billion, the Fed will take the profit. If they sell for less, J.P. Morgan will assume the first $1 billion in losses, with the Fed on the hook for the remaining $29 billion.

It was bad enough that the Federal Reserve first agreed to assume responsibility for up to $30 billion in the worst mortgage securities in the Bear Stearns portfolio.  At least then the Bear Stearns shareholders - who played a key role in the subprime fiasco - were essentially wiped out.  I still think they should have been allowed to lapse into bankruptcy, but that is another story.  Now the Fed has only minimized the exposure of taxpayers to this toxic debt by a mere $1 billion, while allowing the Bear Stearns shareholders to quintuple their take away cash.

This is not how capitalism works.

Apparently there is a push in parts of the country, Vermont in this particular story, to privatize state lotteries.  The move gives governments a quick cash payment - something many are in desperate need of right now - as well as “a guaranteed revenue stream.”  The downside is that with private entities controlling the lotteries the marketing campaigns will most certainly be more vigorous, which could lead to increased numbers of problem gamblers.

I say privatize the lotteries in states where they are legal.  Governments have no business whatsoever engaging in for profit endeavors, including lotteries and alcoholic beverage sales.  Those activities are best left to the private sector where the pressures of competition yield the most desirable product offerings in a way that monopolies, or at least entities with a built in advantage, cannot.

Related:

• A fresh look at state run education lotteries

From Time (emphasis mine):

Parents of the approximately 200,000 home schooled children in California are reeling from the possibility that they may have to shutter their classrooms — and go back to school themselves, if they want to continue teaching their own kids. On Feb. 28, Judge H. Walter Croskey of the Second District Court of Appeals in Los Angeles ruled that children ages six to 18 may be taught only by credentialed teachers in public or private schools — or at home by mom and dad but only if they have a teaching degree. Citing state law that goes back to the early 1950s, Croskey declared that “California courts have held that under provisions in the Education Code, parents do not have a constitutional right to home school their children.” Furthermore, the judge wrote, if instructors teach without credentials they will be subject to criminal action.

Wow.

I haven’t given the Liberty Dollar raid too much thought.  Personally, I think folks that use an alternate currency are kooky.

The impetus for the raid went beyond just circulating alternative currency.  Mail fraud, wire fraud, and money laundering are also alleged.  I obviously have no idea whether or not the latter three charges can be substantiated, but just what law are they violating by circulating their Liberty Dollars?  Furthermore, why isn’t that law being enforced equally?

As far as I know the Liberty Dollar folks weren’t trying to pass their currency as U.S. dollars, i.e. they weren’t counterfeiting.  At its core what they were doing were trading one thing of value for another thing of value, which is still legal in our country as far as I know.

The case jogged my memory and reminded me of a story I heard on NPR many moons ago about some little town in Massachusetts that was circulating its own currency.

GREAT BARRINGTON, Massachusetts (Reuters) - A walk down Main Street in this New England town calls to mind the pictures of Norman Rockwell, who lived nearby and chronicled small-town American life in the mid-20th Century.

So it is fitting that the artist’s face adorns the 50 BerkShares note, one of five denominations in a currency adopted by towns in western Massachusetts to support locally owned businesses over national chains.

…

There are about 844,000 BerkShares in circulation, worth $759,600 at the fixed exchange rate of 1 BerkShare to 90 U.S. cents, according to program organizers. The paper scrip is available in denominations of one, five, 10, 20 and 50.

In their 10 months of circulation, they’ve become a regular feature of the local economy. Businesses that accept BerkShares treat them interchangeably with dollars: a $1 cup of coffee sells for 1 BerkShare, a 10 percent discount for people paying in BerkShares.

So, if one of the reasons cited for raiding the Liberty Dollar operation was that they were circulating an alternative currency then why aren’t the Feds raiding tiny Great Barrington?

Don’t laugh all you smokers, it may not be too far away.

New figures today show England is the fattest country in the EU. Now Professor Julian Le Grand, chairman of Health England, hopes to encourage people to improve their diets, give up smoking and exercise more.

He proposed the introduction of a smoking permit, which smokers would be required to show each time they bought tobacco. It is then their choice to go smoke free and not buy a permit.

Le Grand is not just some fringe wacko - he’s a wacko who used to be an aide to Tony Blair. 

This is what you get when you cede control of your body to the government.  The government then controls you and your body - because they know what is best for you and the collective.  It is starting to sound like the Borg.

From the AP:

Three telecommunications companies have declined to tell Congress whether they gave U.S. intelligence agencies access to Americans’ phone and computer records without court orders, citing White House objections and national security.

Director of National Intelligence Mike McConnell “formally invoked the state secrets privilege to prevent AT&T from either confirming or denying” any details about intelligence programs, AT&T general counsel Wayne Watts wrote in a letter to the House Energy and Commerce Committee.

Qwest and Verizon also declined to answer, saying the federal government has prohibited them from providing information, discussing or referring to any classified intelligence activities.

So, the companies told Congress, which is part of the federal government, that the federal government has prohibited it from telling the federal government what the federal government told them to do or not do.  That makes perfect sense.