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Americans are facing an unprecedented $494 billion tax hike on Jan. 1, 2013. It’s been dubbed “Taxmageddon” given the economic devastation it would cause.

Conventional wisdom suggests lawmakers in Washington will wait until the 11th hour to come up with a solution. Fortunately, Speaker John Boehner (R-OH) announced last week he won’t wait for a lame-duck session of Congress. From his speech to the Peter G. Peterson Foundation’s 2012 Fiscal Summit:

Tax hikes destroy jobs – especially an increase on the magnitude set for January 1st. Small businesses need to plan. We shouldn’t wait until New Year’s Eve to give American job creators the confidence that they aren’t going to get hit with a tax hike on New Year’s Day. Any sudden tax hike would hurt our economy, so this fall – before the election – the House of Representatives will vote to stop the largest tax increase in American history.

The bulk of Taxmageddon comes from expiration of the 2001 and 2003 Bush tax cuts, but also means the child tax credit will be cut in half, the Alternative Minimum Tax patches end, the Death Tax returns to its 2001 level, and a handful of new Obamacare tax hikes take effect.

Here’s the outlook under Heritage’s Federal Budget in Pictures:

If this isn’t enough to scare you, then the prospect of waiting until after the November election should be. Here are five good reasons from Heritage’s J.D. Foster why Congress should act now:

1. Families and small businesses should not be threatened by their own government with a devastating tax hike.
2. A massive tax hike would obviously devastate the economy in 2013 and beyond, but the uncertainty about how, when, and even whether Congress will prevent Taxmageddon is already adding to the large cloud of uncertainties hanging over the economy, threatening to slow job growth even further.
3. Congress has no excuse for threatening families and the economy with this tax hike with the entire summer legislative schedule wide open for business.
4. Many Members of Congress of both parties agree with President Obama on the need for fundamental tax reform. Allowing Taxmageddon to go into effect would raise tax rates while increasing the tax on saving and investment—the opposite of tax reform’s results. Even though positive reforms are extremely unlikely in 2012, Congress can prevent a severe case of sound policy backsliding and create more opportunities for exploring positive options for tax reform in the balance of the year by preventing Taxmageddon quickly.
5. Elections are referendums on past decisions and on the future direction of the country. Voters should be able to judge performance of their Members on more than just vague assurances. Those favoring raising taxes should have the opportunity to vote their beliefs while challengers announce their fidelity to higher taxes, and likewise for those favoring low taxes and limited government. Citizens can vote their beliefs based on solid information.

Conservatives should applaud Boehner for seeking a solution sooner rather than later. But without action from the do-nothing Senate, there’s little hope of stopping this enormous and unprecedented tax increase before November.

During the NATO meeting in Chicago, the alliance will declare that it has an interim operational capability to defend itself against ballistic missile attacks. This is a major step forward for NATO and U.S. leadership within the alliance.

The declaration marks the achievement of the first phase in the Obama Administration’s European Phased Adaptive Approach missile defense plan. This interim capability is based on the Aegis missile defense system and its accompanying Standard missile defense interceptor called the Block IA, which is deployed on U.S. Navy cruisers and destroyers. This is a system that has demonstrated its capability in numerous intercept tests.

As the term “interim operational capability” implies, however, this system is very limited in scope and needs to be expanded both qualitatively and quantitatively. The major shortcoming is that the capability does not extend to defendingU.S.territory against long-range missile attack. An earlier architecture, proposed by the George W. Bush Administration, would have provided for a defense of U.S. as well as European territory by fielding ground-based midcourse defense interceptors inPolandand an accompanying radar in the Czech Republic.

This option, which also included the Aegis system, was canceled by President Obama in 2009 in order to appease Russian objections to it. This interim capability leaves U.S. allies more vulnerable to missile attacks than the technology would otherwise permit, because the Aegis missile defense system could have been made more capable than the one in place today by providing it the ability to counter long-range missiles in the late midcourse phase of flight.

Despite this decision, the Russians continue to object to U.S. and NATO missile defense capabilities. The Obama Administration in particular has responded to Russian objections by attempting to persuadeRussiathatU.S.and NATO missile defense will not pose a threat to Russian missile-based nuclear forces. This approach to diplomacy toward Russia is misguided for at least the following four reasons:

1. The purpose of any missile defense system is to counter an offensive missiles only after they have been have been fired. They are inherently defensive and do not pose a threat to anyone.
2. The U.S. in particular has described its diplomacy toward Russia regarding missile defense as an attempt to find a cooperative arrangement where Russia will participate in a broader missile defense system. Genuine missile defense cooperation withRussiawould be desirable, but the current approach is about cooperating to limit the overall capabilities of the missile defense system. The Russians have made it clear that this is how they view it, and U.S. diplomacy has only served to reinforce this view.
3. Missile defense itself is not at the crux of the impasse withRussia; it really stems from Russia’s view that its national security depends on its ability to threaten the U.S. and its NATO partners with nuclear-armed ballistic missiles—and most particularly those NATO countries that reside within its asserted zone of privileged interests. This Russian view should be unacceptable to all NATO countries under any circumstances, and the alliance should not be shy about stating this to the Russians.
4. This diplomatic approach fails to recognize that the proper way out of the current impasse is to persuade Russia that fundamentally defensive strategic postures are in everybody’s interest. The U.S. and NATO should have no objections toRussiamaintaining a capability to defend itself, even in the context of an unjustified perception byRussiathat the U.S. and other NATO countries are intent on committing acts of aggression. This is because the U.S. and NATO have no such intention and do not build their forces for such a purpose. The success of this diplomatic approach depends on Russia renouncing any aggressive intent toward the U.S. and NATO.

Given present circumstances, NATO leaders should use the Chicago meeting to affirm that alliance members, both individually and collectively, intend to defend themselves against missile attack by pursuing the most capable missile defense system technology permits. They should also challenge the Russians to join them in adopting fundamentally defensive strategic postures, where genuine cooperation in the field of missile defense will naturally be a central component.

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George Soros is the founder and chairman of hedge fund Soros Fund Management LLC. According to Ahmed Azam, Soros Fund Management LLC is one of the most profitable hedge funds, averaging a 20% annual rate of return over four decades.

Even though they may be chasing many of the same Western brands, the motivations driving Chinese consumers to buy is not the same as it is in the United States. There was a fascinating article in yesterday's WSJ called What Chinese Consumers Want:

Luxury items are desired more as status investments than for their inherent beauty or craftsmanship. The Chinese are now the world's most avid luxury shoppers, at least if trips abroad to cities like Hong Kong and Paris are taken into account. According to Global Refund, a company specializing in tax-free shopping for tourists, the Chinese account for 15% of all luxury items purchased in France but less than 2% of its visitors.

Public display is also a critical consideration in how global brands are repositioning themselves to attract Chinese consumers. Despite China's tea culture, Starbucks successfully established itself as a public venue in which professional tribes gather to proclaim their affiliation with the new-generation elite. Both Pizza Hut and Häagen Dazs have built mega-franchises in China rooted in out-of-home consumption. (The $5 carton of vanilla to be eaten at home is a tough sell in China.)

The second rule is that the benefits of a product should be external, not internal. Even for luxury goods, celebrating individualism—with familiar Western notions like "what I want" and "how I feel"—doesn't work in China. Automobiles need to make a statement about a man on his way up. BMW, for example, has successfully fused its global slogan of the "ultimate driving machine" with a Chinese-style declaration of ambition.

Sometimes the difference between internal versus external payoffs can be quite subtle. Spas and resorts do better when they promise not only relaxation but also recharged batteries. Infant formulas must promote intelligence, not happiness. Kids aren't taken to Pizza Hut so that they can enjoy pizza; they are rewarded with academic "triumph feasts." Beauty products must help a woman "move forward." Even beer must do something. In Western countries, letting the good times roll is enough; in China, pilsner must bring people together, reinforce trust and promote mutual financial gain.

I've noticed this pattern in the past when Chinese acquaintances would purchase cell phones that cost the equivalent of a month’s salary. I found such outlays puzzling, but when understood in the context of the importance of public display in Chinese consumer culture they become easier to understand.

Unless there's a Memorial Day equivalent of the October Surprise, it's difficult to imagine that Wisconsin Gov. Scott Walker is going to be ousted in the recall election taking place on June 5. He even got the tepid endorsement of the Milwaukee Journal Sentinel today:


But this election isn't about Tom Barrett. It's about Scott Walker.

Even if you disagree with Walker's policies, does that justify cutting short his term as governor? And if so, where does such logic lead? To more recall elections? More turmoil?

It's time to end the bickering and get back to the business of the state. We've had our differences with the governor, but he deserves a chance to complete his term. We recommended him in 2010. We see no reason to change that recommendation. We urge voters to support Walker in the June 5 recall election.It's sometimes difficult to see what's happening in Wisconsin from across the St. Croix, but it seems pretty evident from the anecdotal sources I have at my disposal, especially my Facebook feed, that the Walker supporters are fired up and that there's not a lot of enthusiasm for the challenger, Tom Barrett. This election is a rematch of 2010 and Walker won that election pretty easily.

It's always been difficult to see what's happened since then as anything other than a tantrum. A commenter on Ann Althouse's blog summed it up neatly, if in a PG-13/R fashion. Since we try to keep this blog PG, I'm going to do a little cleanup, but alert readers will be able to guess the replaced Anglo-Saxon terminology:

Because the Democrats know that it's a losing proposition. "Hey Wisconsin, I think you should pay pay for my lavish pension, which you don't have, and my lavish benefits, which you don't have, and my gold plated health insurance, which you don't have, and be able to retire at 55, which you'll never do" is not going to win a lot of hearts and minds. No one is buying this "workers rights" and "save the middle class" #@%#@. And this "It's about the kids" crap from teachers...no, @$%#@, it's about you.

Barrett cannot talk about Act 10 without talking about how he would pay for things if Act 10 went away....and the only way is higher taxation. Good. %@&@#. Luck.

Jobs? Ha ha. The Dems just #%@# canned the mine out of spite, costing the state hundreds of good paying jobs, many of them union.

This election is over. But Walker's campaign and it's volunteers are energized and are going to sprint through the finish line. Anecdotal, but friends and family who are anti-Walker are pretty silent on the recall. The daily ugliness on my Facebook page is gone. They know.

The daily ugliness on my Facebook page is gone, too. Last year was a fiesta of Walker-bashing and fist iconography, but no more. The recall hasn't turned out the way my lefty friends and family members had envisioned, and while the spectacle has been cause for a lot of heartburn, it shouldn't be surprising. The commenter on Althouse's blog summed it up nicely -- what the unions and their Democratic allies want is, in the end, a losing proposition. The public employee union model eventually costs more than the citizenry can afford. Scott Walker recognized this and took action.

There's a lesson in what's happening that has application in Minnesota, of course. Minnesota faces the same issues that Wisconsin has faced. Education Minnesota and WEAC are equivalent organizations, making the same arguments, using the same techniques. Because Mark Dayton was able to scrape together a plurality in the last election, we've been spared the drama up to this point. But it's coming. Minnesota's version of Scott Walker waits in the wings. The only real question is whether the avenging angel arrives in 2015 or later on.

Activist Chen Guangcheng and his immediate family are out of China. This is a good thing, and the Obama Administration deserves credit for making it happen.

There will be plenty of opportunity for the American political system to assess the Administration’s initial handling of the matter and what it says about its foreign policy priorities. There are certainly lessons there to be learned.

Today, however, is not an occasion for a policy debate. It is a time for Americans to welcome Chen and his family to freedom in America, to pray for the safety of his extended family and friends back in China, and rededicate themselves to a foreign policy focused on liberty.

It is also time to see the People’s Republic of China for what it is. China is a place that economic development has materially transformed over the last 30 years, a real player in the global economy, and a force to be reckoned with in international politics. China is America’s rival for influence in East and South Asia; it is also occasionally a collaborator in containing the impact of the rivalry.

China is also, however, a place that has not changed since the Tiananmen Square Massacre in 1989 when it comes to respect for the fundamental rights of its people. This is sometimes hard for the diplomats, scholars, businessmen, and tourists who spend time there to believe. Likewise, there are many privileged, worldly Chinese who fail to see it.

Chen Guangcheng, blind since childhood, sees the truth. The cause he has risked his life for—ending state-enforced abortions pursuant to China’s one-child policy—is one of its most horrid manifestations of China’s debasement of individual liberty.

The People’s Republic of China is an authoritarian, yes, “communist” nation. This China is Chen’s day-to-day reality. And it is a brutal reality for many hundreds of millions more. U.S.–China relations will never be normal as long as the Chinese regime is what it is.

But there is another truth involved here. It is America’s. The reality is that, contrary to officials’ assertions, Americans’ love of liberty means that the gears of U.S.–China relations—or relations with any other country, for that matter—can and should be shut down over concern for the plight of one man. And if at any point it is not clear that the United States still remains the world’s greatest hope for the oppressed, both our friends and rivals should know that it is only a temporary state of affairs.

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By Guan Wang Soros Fund Management, an investment management firm founded by legendary investor George Soros, has a stunning track record. He returned 30.5% annually on the average between 1969 and 2000. He even managed to return 8% in 2008, ...

NPR, PBS and other public broadcasting outlets are asking taxpayers to fork over $445 million in funding for the next fiscal year. But not if Sen. Jim DeMint (R-SC) and Rep. Doug Lamborn (R-CO) have anything to say about it.

The conservative lawmakers want to defund the Corporation for Public Broadcasting, the steward of the federal government’s “investment” in public radio and TV. Congress created CPB in 1967, and DeMint and Lamborn think it’s time to cut it off from the federal trough. Their move comes as the agency prepares to report to Congress how it could operate without a federal subsidy.

“While so many Americans are making sacrifices around the country to make ends meet, CPB appears unwilling to do the same,” DeMint and Lamborn wrote in a letter to Senate and House appropriators. “Now is the appropriate and necessary time for the government to end taxpayer subsidies for CPB.”

Liberals are fighting back to keep the money flowing. The special-interest group Free Press, which advocates for greater government control over media and the Internet, claims the federal subsidy is necessary to save public-broadcasting jobs.

This tiny federal investment is vital to helping support programming that commercial media won’t showcase and provides an important foundation for stations around the country to build on.

DeMint and Lamborn don’t consider it such a “tiny federal investment,” particularly given the rapid growth of public broadcasting’s federal subsidy in the past decade. Writing on DeMint’s new Pickpocket blog, Amanda Carpenter noted:

Even though media has become more accessible than ever, funding for CPB has exploded. Between 2001 and 2012, the CPB’s appropriated funding escalated by nearly 31 percent, from $340 million to $444.1 million.

This, of course, isn’t the first time public broadcasting faced a fight over its federal subsidy. Previous attempts to cut off funding came in the wake of Juan Williams’ firing from NPRand James O’Keefe’s exposé of an NPR executive’s disparaging remarks about conservatives and Tea Party activists. The funding cut was also part of House Majority Leader Eric Cantor’s YouCut initiative.

The O’Keefe exposé also revealed that NRP’s own senior vice president for fundraising admitted that NPR “would be better off in the long run without federal funding.” More than a year later, the American people are still on the hook.

HD54A candidate

Join Mitch Berg, Brad Carlson and Ed Morrissey live on the Northern Alliance Radio Network at the Minnesota State GOP Convention in St. Cloud. We’ll be talking with…: Chris Fields, MNGOP candidate against Keith Ellison in CD5 Marianna Stebbins, architect … Continue reading →

The die is cast:


In lightning speed for a political convention, Rosemount economics teacher Kurt Bills was endorsed Friday as the Republican candidate for U.S. Senate on the second ballot at the Minnesota Republican convention in St. Cloud.

Bills, a first-term state representative, prevailed with 64 percent of the vote of 2,100 delegates.

Within minutes after thanking his supporters, his family and his competitors, Bills was telling reporters of his plan for the days ahead. “I’m going to show up Monday morning for my advanced economics class,” he said. “After that we are going to riding this bus that will be touring around the state.” His theme, he said, is to bring “econ 101” to Washington.
A few thoughts:

• I didn't endorse anyone, because my view didn't particularly matter. I would have ranked Bills third of the three contenders. I thought that Doc Severson had more experience and it's been clear that Pete Hegseth has some amazing political skills and a compelling personal narrative. Bills has neither of these things, but he does have enthusiastic supporters and a good, if somewhat limited, message. More about that anon.
• The victory, as should be obvious, is very much a victory for the Ron Paul supporters who have effectively taken over the apparatus of the Minnesota GOP. Paul's libertarian variant of conservatism hasn't necessarily earned him the support of the rank-and-file GOP members, but his supporters had a plan and have executed it brilliantly, with Bills as the beneficiary.
• I support the notion of bringing "Econ 101" to Washington. Really, I do. The notion that a principled economist could make a difference in the Senate is appealing to me. But if we really want to send an economist to Washington, the GOP should have endorsed King Banaian instead. I'm not sure that the electorate is going to want to listen to an economist, especially when Amy Klobuchar is going to run a soft-focus, I-Care-About-You sort of campaign. Bills will have to figure out how to puncture that balloon without coming off as a purveyor of "eat your spinach" or somesuch.
• Now that the Paul folks have won, they need to start being a little more conciliatory. I have no sympathy for a lot of the moderate Republican political types who were pushed to the side, but they did and do represent a constituency. There are a lot of Minnesotans who are broadly conservative, but not especially focused on the issues that Paul supporters typically cite. I see a lot of disdain among certain Paul supporters for such people, especially in the "warmonger" and "neocon" taunts that get thrown around. Winning an argument and winning an election are separate things and in order to get Bills elected, some of that sort of rhetoric needs to be, ahem, ratcheted down. Remember, "neocons" vote.
• On that score, remember this -- while Severson and Hegseth will abide by the earlier pledges not to run against Bills in the primary, that doesn't preclude another candidate from entering the race. We won't really know if Bills has a clear path until June 5. So I'd strongly encourage the Bills campaign to get busy with the fence-mending.

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New York-based Soros Fund Management LLC, founded by George Soros in 1969 with legendary investor Jim Rogers, manages over $24 billion, including $6.84 billion in 13-F assets per its latest Q1 filing this week, on Tuesday. A frequent commentator on ...

When NATO leaders meet this weekend in Chicago, they are expected to announce an Interim Missile Defense Capability in Europe.

This announcement might read well in the summit’s declaration, but a lot more will need to be done before the members of the alliance will be protected from the ever-increasing missile threat.

According to NATO’s strategic concept, “The greatest responsibility of the Alliance is to protect and defend our territory and our populations against attack, as set out in Article 5 of the Washington Treaty.” This core tenant is what has made NATO the most successful military alliance in history. As global threats change, NATO must adapt too. As ballistic missile technologies proliferate, ballistic missile defense (BMD) is not a luxury for NATO but a necessity.

NATO has made some progress, but it still has a long way to go. It has expanded its Active Layered Theater Ballistic Missile Defense program, a command-and-control backbone of the alliance’s theater missile defense system and future layered missile defense system.

At the Chicago summit, the U.S. and its allies plan to declare that NATO has achieved an interim capability in ballistic missile defense. The first steps in implementing the Phased Adaptive Approach, President Obama’s missile defense plan for Europe, will be part of this capability.

In the past year, Turkey agreed to host the X-band radar on its territory, and the radar is already operational. Romania and Poland agreed to host land-based interceptor sites in the future, and Spain will host U.S. BMD-capable ships.

Missile defense is an area where NATO’s Smart Defense initiative could actually produce benefits for the alliance as a whole. France, Germany, Greece, Italy, the Netherlands, and Spain have their own short-range missile defense systems. The Netherlands, Germany, and France are also exploring options to contribute sensor capabilities and early warning. With relatively modest investment and adaptation, these platforms could eventually form part of NATO missile defense capability.

NATO should continue to advance its missile defense program. This could include jointly developing missile defense systems, establishing interoperable command-and-control systems, resolving political and military issues associated with command-and-control, and preparing operational plans in case the alliance is attacked. NATO will need to further define key missile defense capability requirements and the assets required to achieve them.

In addition, NATO will need to explore options to field a variety of land-, air-, sea-, and space-based systems capable of intercepting ballistic missiles in all three stages of flight: boost, midcourse, and terminal.

While the announcement of NATO’s Interim Missile Defense Capability in Europe is welcome, this is only the first step in a longer process. NATO leaders need to stay committed to missile defense for the long haul. The security of the alliance depends on it.