Youthful Success vs Aged Failure

The GOP is doing a good job of putting forward freshmen in leadership positions in the House. While the Republicans add youth and new ideas to their ranks, the Democrats have decided to pursue a rear-guard strategy of keeping the same leadership and blaming their losses in the House on everyone else but themselves.

The GOP leadership has created two new positions, both filled by freshmen. Kristi Noem of South Dakota will fill one. She is a fierce advocate for Second Amendment rights, the right to life, and of utmost importance for farmers and ranchers in her home state, an end to the parasitic and immoral estate tax. The estate tax has a long record of breaking up family farms and allowing giant corporate farms to swoop in like vultures on a dead carcass.

The other freshmen that will join GOP leadership is Tim Scott, who is an anti-tax advocate from South Carolina. South Carolina is putting together a great Congressional delegation including Jim DeMint, Joe Wilson and Tim Scott. If only they could ditch the cancer that is Lindsey Graham. Perhaps Mr. Wilson or Mr. Scott would like that job, 2014 is right around the corner.

While the GOP is adding fresh faces and voices, the Democrats have, in a Weekend at Bernie’s fashion, propped up Nancy Pelosi in her leadership post. The Wall Street Journal reports that the Democratic leadership are nearly all over 70 years old! During her time leading Congress, Nancy Pelosi’s unfavorable ratings have skyrocketed from 31% to 55% according to Quinnipiac.

Democrats can of course still decide to dump Pelosi, but only a few Blue Dogs want to. The Blue Dogs, who call themselves conservative Democrats, have had their number halved by the recent elections to 26 from 54. The worst defeats came to those Blue Dogs who joined up with Pelosi to push her radical agenda. Today the Blue Dogs are fighting back, for their lives. Heath Shuler is mounting a ceremonial campaign against Nancy Pelosi for the Minority Leader position. Unlikely to win, it appears Shuler is simply trying to set up a campaign slogan for 2012, “I ran against Nancy Pelosi.” That’s a good strategy.

The nation needs bold new leadership, not the same old, same olds that are leading the Democratic Party to its untimely expiration. The unemployment rate is going to be remaining structurally higher than it has been for the past few decades. America’s heavy industry/factory jobs are either heading abroad or are being replaced by technological advancement. The same can be said for clerical workers who have filled the ranks of bank and insurance company clerical staff. Some of those changes might include weakened unions, and a focus on high tech services and agriculture, two places where America still holds advantages. America needs major change to its governing principles if it plans to compete against the world.

Today Daniel Henninger calls for lower taxes in the Wall Street Journal. His call comes in response to the Bipartisan Deficit Commission’s calls for a rate structure that begins by lowering taxes to three rates, 8%, 14% and 23%, with a corporate tax rate of 26%. These are steps in the right direction, but as I have written, a complete elimination of the corporate tax rate, and the tax on dividends is a better idea. The two only contribute 10% of the nation’s revenues, but an elimination of the two could create substantial advantages for business in the U.S.

Another way to create advantages for American business is to not allow the continued devaluation of the dollar at the hands of the Federal Reserve. The call has been raised by Bob Corker and Mike Pence to eliminate the dual mandate of the Fed. If the Fed must exist, this would be a necessary alteration in its mission. The Federal Reserve, nor anyone, can control both the price and quantity of money. Hayek, as George Will writes at Washington Post, called the assumption that it could “the fatal conceit.”

As Will writes, “The Fed’s large, and sufficient, original mission was to maintain price stability – to preserve the currency as a store of value.” It didn’t even perform that mission very well, then Congress gave it a second mandate to maintain full employment. What was the logic of giving an organization that couldn’t perform its main function another mission?

The Federal Reserve has turned out to be a failed experiment. Can any American believe that it is right to allow Wall Street to borrow money at an interest rate of zero, leverage the borrowings to buy treasuries and capture billions in profits while America’s retirees are earning zero on their bank interest and short treasuries and CDs?