Tuesday, June 3, 2014

"Sometimes I think that this is an era when sanity has become controversial."

By Thomas Sowell

Random thoughts on the passing scene:

Will the Veterans Administration scandal wake up those people who have been blithely saying that what we need is a "single payer" system for medical care? Delays in getting to see a doctor have been a common denominator in government-run medical systems in England, Canada and Australia, among other places.

Class warfare rhetoric would have us resenting "the top ten percent" in income. But that would be a farce, because
most of us would be resenting ourselves, since more than half of all Americans — 54 percent — are in the top ten percent at some stage of their lives.

Some people act as if the answer to every problem is to put more money and power in the hands of politicians.

Freedom means nothing if it does not mean the freedom to do what other people don't like. Everyone was free to be a Communist under the Stalin dictatorship, and everyone is free to be a Muslim in Saudi Arabia. Yet whole generations are coming out of our colleges where only those who are politically correct are free to speak their minds. What kind of America will they create?

In Thomas Piketty's highly-praised new book, "Capital in the Twenty-First Century" he asserts that the top tax rate under President Herbert Hoover was 25 percent. But Internal Revenue Service records show that it was 63 percent in 1932. If Piketty can't even get his facts straight, why should his grandiose plans for confiscatory global taxation be taken seriously?

Sometimes I think that this is an era when sanity has become controversial.

Republicans in Congress seem to be drawn toward the immigration issue like a moth toward a flame. How turning illegal immigrants into Democratic voters, while demoralizing the Republican base, will help either the country or the Republicans is a mystery. If ever there was a high-risk, low-yield investment, this is it.

President Theodore Roosevelt said that his foreign policy was to "speak softly and carry a big stick." President Barack Obama's foreign policy is to speak loudly and carry a little stick. They say talk is cheap, but loose talk by a President of the United States can be very expensive in both blood and treasure.

One of the scariest aspects of our times is how seldom either people or policies are judged by their track record.

Why in the world are the Baltic states in NATO? The Russian army could overrun them before NATO could get a meeting together to decide what to do.

If the Democrats retain control of the Senate after this year's election, Barack Obama can load the federal courts from top to bottom with judges who will ignore the Constitution, as he does, and promote his far-left political agenda instead, long after he is gone.

I get nervous every time I see Mitt Romney showing up in the media. He seems to be maintaining his visibility, in hopes of another run for the White House in 2016. He might well get a second chance to fail. Romney is the Republican establishment's idea of the perfect candidate for president — no matter how many times such candidates lose, even under promising conditions.

Anti-Semitism may have the dubious distinction of being the oldest of the group hatreds. You might think that the world would have gotten over anti-Semitism by now, but Jews have been singled out for separate treatment by the Russian insurgents in Ukraine.

"We cannot insure to the vicious the fruits of a virtuous life; we would not invade the home of the provident in order to supply the wants of the spendthrift; we do not propose to transfer the rewards of industry to the lap of indolence." Democratic presidential nominee William Jennings Bryan said that in 1896. Today's Democrats do all those things that Bryan rejected.

Any fool can say the word "racism." In fact, quite a few fools do say it. But clever people can also say "racism," in order to get fools to vote their way.

Those people who want Hillary Clinton elected president, so that we could have our first woman president, seem to have learned absolutely nothing from the current disaster of choosing a president on the basis of demographics and symbolism.

The old saying that taxes are the price we pay for civilization has long since become obsolete. The amount that the government spends to defend us from foreign attack, or to maintain law and order at home, has been overtaken by the money it spends just to transfer some people's money to other people who are more likely to vote for the reelection of incumbents.

Government policies to "bring down the cost of medical care" almost never bring down those costs, and often increase the costs. These policies simply refuse to pay the full costs of medical care. Any one of us can do that, but we know there will be consequences. There will also be consequences when the government refuses to pay the costs, but these consequences will be concealed and/or denied.

The old saying that "politics is the art of the possible" is dead wrong. Politics is the art of making the impossible seem possible, and even plausible and desirable. That is how ObamaCare got passed.

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University. He is author of Intellectuals and Raceand Economic Facts and Fallacies.


  1. My man, Thomas Sowell. Cool beans.

    1. I wish Sowell and Walter Wms and Will Grigg and Victor Ward and Bill Cosby were the "face" of black America. Racism would be a smaller problem if men like these were the "moral centers" because they refuse to embrace the victim mentality, and expect everyone- white, black, brown, taupe, lavender- to be held to the same standards.

      Sowell was syndicated in my local newspaper as a teen, and I credit him with stirring my libertarian beliefs and challenging my "socialist" mindset. I hope writes until he's 120 years old- he might live to see a libertarian world!

  2. Debunking the Myth of Private Equity’s Superior Returns

    As readers no doubt have noticed, we’ve been drilling into the private equity industry of late, focusing more on investor issues than on the industry’s impact on companies, industries, and wage rates. Supposedly savvy limited partners being ripped off does, at first blush, appear to be far less pressing than buyout firms using financial engineering and cost cutting to reap mind-bogggling riches for the general partners’ top players, leaving the more than occasional bankrupt company in their wake.

    Make no mistake: Private equity general partners are the biggest rentiers in the economy. They control large swathes of the real wealth of America, which is its companies. Yes, there is a sector of the industry that actually tries and for the most part does earn its returns by focusing on operating improvements in companies. These are businesses that are not managed professionally and need to implement better systems and procedures or add new capabilities to grow further. But these deals are on the mid to small end of the industry, generally topping out at acquisition sizes of $350 million. They represent a minority of total dollars committed to private equity.

    And even these “better” operators still make use of leverage (although not as much as the financially-oriented buyers) and other tax strategies that reduce the tax bill of their investee companies to far lower levels than before the acquisition.

    In other words, their returns depend to a not-trivial degree on transfers from taxpayers to private equity investors.

    So why our concern with the investor side? The power of the private equity industry rests on its access to investment dollars.

    A must-read book new book on private equity, Private Equity at Work, by Eileen Appelbaum and Rosemary Batt, has made an exhaustive examination of the academic literature on numerous aspects of private equity, as well as examining important legal issues and providing numerous well-researched case studies. Their chapter on private equity returns is particularly troubling, and they’ve supplemented that with a new paper at the Center for Economic and Policy Research, part of a series related to their book.


    nah, tom, i think most people just don't want to be gamed...

  3. County agrees to help billionaire Koch with $35 million bond for Oxbridge Academy

    By Christine Stapleton

    Palm Beach Post Staff Writer

    The Palm Beach County Commission agreed this morning to issue a $35 million, mostly tax-exempt bond to help the private school expand.

    The commission approved the bond issue without discussion and there were no comments by the public.

    The school, where tuition costs $25,000 a year, intends to use the money to buy the 54.3-acre school site it now leases. The money would also be used to improve and expand the four buildings and sports venues on the campus.

    The school would be responsible for paying off the debt principal and interest. Taxpayers would not be on the hook, even if the school defaults on the bonds.

    The benefit to the school of the county issuing the bonds is that the vast majority will be tax-exempt, meaning that investors don’t have to pay federal taxes on the dividends or any capital gains, which makes the bonds more attractive to investors.

    An economic impact analysis conducted by the county staff shows a positive impact of $59.2 million over five years, according to the documents. However, details of the financial benefits were not included or presented during today’s meeting.


    nice subsidy