Obama and His Out Of Control and Expanded Government Is Our Greatest Enemy Not Isis! Deliver Me From The Characters in "Deliverence."

                                                                                 Weightiness of Government, inefficiency of                                                                                                                          bureaucracies
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It is as if you wanted to paint your house without scraping off six coats of decade's old paint.

Congressional laziness leads to bloat which leads to why so much of our growth is crippled and our economy under performs.

Will anything change?  Do not hold your breath.

Congress has no incentive to be efficient and certainly bureaucracies love wallowing in delay and practicing officiousness.

Rube Goldberg is laughing and we will continue to suffer, pay more taxes and watch our ship of state take on more water.

Politicians tell you they want to pass laws which require every new one to replace several old ones but it never happens and never will.

To make matters even worse, Obama tells us climate change is a greater threat than ISIS.  But the biggest threat we face is from his expanded and oppressive government.

Obama does not trust people to be free. He, along with most social progressives, believes government has the answers. To accomplish his/their nefarious goal he/they craft legislation that runs into thousands of pages which Congress passes without even reading.

Government is an out of control monster. I submit government is our greatest enemy and America is drowning. This is why a frustrated, angry and indolent citizenry has turned to outsiders as if the ones running are capable of solving the problem.  (See 1 below.)

The more optimistic view of our economy.  Posted for balance.

My market guru friend seems to have been correct.  The near term market did not want to correct and particularly after Yellin was more benign about raising rates. (See 1a below.)

Mauldin's  4th letter to the president. Another view. (See 1b below.)
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Have a piece of Danish with your gene pool.

Is Dr Sennels a racist?

What would America be like if the Hatfields and McCoys had intermarried with their first cousins as some did? What would America be like if the characters in "Deliverence" were allowed to govern? (See 2 below.)
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Dick
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1)

The Crippling Hold of Old Law

Congress rarely revises or repeals outdated legislation or obsolete programs

Congress is a lazy institution that postures instead of performing its constitutional job to make sure that our laws 

actually work, writes Philip K. Howard. PHOTO: ISTOCK

By 

PHILIP K. HOWARD

Government is broken. So what do we do about it? Angry voters are placing their hopes in outsider 

presidential candidates who promise to “make America great again” or lead a “political revolution.”

But new blood in the White House, by itself, is unlikely to fix things. Every president since

Jimmy Carter has promised to rein in bureaucratic excess and bring government 

under control, to no effect: The federal government just steamed ahead. Red tape got 

thicker, the special-interest spigot stayed open, and new laws got piled onto old ones.

What’s broken is American law—a man-made mountain of outdated statutes and 

regulations. Bad laws trap daily decisions in legal concrete and are largely responsible for 

the U.S. government’s clunky ineptitude.

The villain here is Congress—a lazy institution that postures instead of performing its constitutional 

job to make sure that our laws actually work. All laws have unintended negative consequences, but 

Congress accepts old programs as if they were immortal. The buildup of federal law since World War 

II has been massive—about 15-fold. The failure of Congress to adapt old laws to new realities 

predictably causes public programs to fail in significant ways.

The excessive cost of American health care, for example, is baked into legal mandates that encourage 

unnecessary care and divert 30% of a health-care dollar to administration. The 1965 law creating 

Medicare and Medicaid, which mandates fee-for-service reimbursement, has 140,000 reimbursement 

categories today and requires massive staffing to manage payment for each medical intervention, 

including giving an aspirin

In education, compliance requirements keep piling up, diverting school resources to filling out forms 

and away from teaching students. Almost half the states now have more administrators and support 

personnel than teachers. One congressional mandate from 1975, to provide special-education services, 

has mutated into a bureaucratic monster that sops up more than 25% of the total K-12 budget, with 

little left over for early education or gifted programs.

Why is it so difficult for the U.S. to rebuild its decrepit infrastructure? Because getting  permits for a 

project of any size requires hacking through a jungle of a dozen or more agencies with conflicting 

legal requirements. Environmental review should take a year, not a decade.

Most laws with budgetary impact eventually become obsolete, but Congress hardly ever reconsiders 

them. New Deal farm subsidies had outlived their usefulness by 1940 but are still in place, costing 

taxpayers about $15 billion a year. For any construction project with federal funding, the 1931 Davis-

Bacon law sets wages, as matter of law, for every category of worker.

Bringing U.S. law up-to-date would transform our society. Shedding unnecessary subsidies and 

ineffective regulations would enhance America’s competitiveness. 

Eliminating unnecessary paperwork and compliance activity would unleash individual initiative for 

making our schools, hospitals and businesses work better. Getting infrastructure projects going would 

add more than a million new jobs.

But Congress accepts these old laws as a state of nature. Once Democrats pass a new social program, 

they take offense at any suggestion to look back, conflating its virtuous purpose with the way it 

actually works. Republicans don’t talk much about fixing old laws either, except for symbolic votes to

repeal Obamacare. Mainly they just try to block new laws and regulations. Statutory overhauls occur 

so rarely as to be front-page news.

No one alive is making critical choices about managing the public sector. American democracy is

largely directed by dead people—past members of Congress and former regulators who wrote all the 

laws and rules that dictate choices today, whether or not they still make sense.

Why is Congress so incapable of fixing old laws? Blame the founding fathers. To deter legislative 

overreach, the Constitution makes it hard to enact new laws, but it doesn’t provide a convenient way 

to fix existing laws. The same onerous process for passing a new law is required to amend or repeal 

old laws, with one additional hurdle: Existing programs are defended by armies of special interests.

Today it is too much of a political struggle, with too little likelihood of success, for members of 

Congress to revisit any major policy choice of the past. That’s why Congresscan’t get rid of New Deal 

agricultural subsidies, 75 years after the crisis ended.

This isn’t the first time in history that law has gotten out of hand. Legal complexity tends to breed 

greater complexity, with paralytic effects. That is what happened with ancient Roman law, with 

European civil codes of the 18th century, with inconsistent contract laws in American states in the first 

half of the 20th century, and now with U.S. regulatory law.

The problem has always been solved, even in ancient times, by appointing a small group to propose 

simplified codes. Especially with our dysfunctional Congress, special commissions have the enormous 

political advantage of proposing complete new codes—with shared pain and common benefits—while 

providing legislators the plausible deniability of not themselves getting rid of some special-interest 

freebie.

History shows that these recodifications can have a transformative effect on society. That is what 

happened under the simplifying reforms of the Justinian code in Byzantium and the Napoleonic code 

after the French Revolution. In the U.S., the establishment of the Uniform Commercial Code in the 

1950's was an important pillar of the postwar economic boom.

But Congress also needs new structures and new incentives to fix old law. The best prod would be an 

amendment to the Constitution imposing a sunset—say, every 10 to 15 years—on all laws and 

regulations that have a budgetary impact. To prevent 

Congress from simply extending the law by blanket reauthorization, the amendment should also 

prohibit reauthorization until there has been a public review and recommendation by an independent 

commission of citizens.

Programs that are widely considered politically untouchable, such as Medicare and Social Security, are 

often the ones most in need of modernization—to adjust the age of eligibility for Social Security to 

account for longer life expectancy, for example, or to migrate public health care away from inefficient 

fee-for service reimbursement. The political sensitivity of these programs is why a mandatory sunset is

essential; it would prevent Congress from continuing to kick the can down the road.

The internal rules of Congress must also be overhauled. Streamlined deliberation should be encouraged

by making committee structures more coherent, and rules should be changed to let committees 

become mini-legislatures, with fewer procedural roadblocks, so that legislators can focus on keeping 

existing programs up-to-date.

Fixing broken government is already a central theme of this presidential campaign. It is what voters 

want and what our nation needs. A president who ran on a platform of clearing out obsolete law would

have a mandate hard for Congress to ignore.

— Mr. Howard is the founder of the advocacy group Common Good and the author, most recently, of 

“The Rule of Nobody.”


1a)

Playing Politics with the Economy?

The presidential primary season has hit full stride - cue the rhetoric on everything ‘wrong with the economy!’ In just about every presidential election year, the economy becomes a central issue underscoring its perceived weaknesses. We need more jobs! Raise the minimum wage! We need more tariffs to protect domestic industries! And so on. At Zacks Investment Management, what matters most are the proposed policies (tax codes, property rights, trade) that might affect overall demand and how the economy may respond to potential changes in the law. Separating Rhetoric from Reality  To be clear, the negative rhetoric on the economy is not totally unfounded. I won’t sit here and write that the U.S. economy is ‘peaches and cream’ and that growth is robust. It’s not – we’re late in this business cycle and growth rates are likely to ‘muddle through’ at 1.5% - 2.5% for the foreseeable future. But, for our presidential candidates to harp endlessly on the supposed dour state of our economy is extreme in my view. Many stump speeches portend disaster. Still, no candidate or political party is going to alter the course of the business cycle that dramatically. Business cycles largely have a mind of their own and the private sector knows how to adapt and adjust to policies that get implemented. Additionally, any policy too extreme is likely to get shut down in Congress.  What Is Really Happening to the Economy?  Zacks has just released its Economic Outlook: April, 2016 and it differs from what we hear from presidential candidates. Get specific answers to key questions that short and long-term investors are asking: • Where is GDP growth headed? • What about inflation? • When is the next Fed rate hike coming? • Are 10-year notes a good investment? Today, this new Special Report is provided as a complimentary service to Mitch on the Marketsreaders. Download it now ABSOLUTELY FREE  ------------------------------------------------------------------ So, while economic conditions may not be ‘goldilocks,’ they’re also very far from the ‘dreadful’ that is sold on the campaign trail. In Warren Buffet's annual letter to shareholders, he noted that 'babies being born in the U.S. today are the luckiest crop in history.' His is certainly not the most popular view, but in terms of looking at the macro, secular outlook, it is likely the most accurate one. Two Examples of Misguided Rhetoric  Again, I don’t want to make it seem as if everything is hunky dory with the U.S. economy. But, it’s not as bad as advertised – here’s why. Two of the biggest targets in election years are trade and manufacturing. Let’s start with manufacturing. Imagine a politician saying, “manufacturing output is at an all-time high for the United States and we’re producing more efficiently than at any time in history!” They’d be shown the door in a heartbeat – for telling the truth! The reality, and I say this from a historical perspective and not as a pessimist, is that we’ve been steadily shedding manufacturing jobs for 30 years and those jobs are almost certainly not coming back. Many of those jobs were lost to automation, but some of them became jobs in the service sector (in logistics, retail and management). There was a time when the United States was an agricultural economy. Then, later, our economy evolved to become industrial. Now, our economy has transitioned to become service oriented. At one point, a majority of U.S. jobs were in agriculture. Imagine the difficulty for many as the economy turned industrial. It wasn’t easy, but look where we are now. Agriculture is a tiny segment of total jobs and we are much better off today than we were in 1900. And, here’s another fact you won’t hear on the campaign trail – manufacturing output in the United States is at an all-time high. One of the main reasons, of course, is higher productivity. But, another is that the sectoral mix has shifted toward industries with higher value such as computers and electronics. Manufacturing Jobs Decline as Output Climbs  The Biggest Job Gains Have Been in the Service Industry  The other popular political argument on manufacturing is: we’re shipping all of our manufacturing jobs to China! That is true, to a degree, but China has also been shedding millions of manufacturing jobs over the last two decades as its industrial era starts to transition. Productivity gains globally reduce the amount of jobs needed to support the same output, but it is very unpopular politically to talk about productivity gains being a positive force for economic development long-term. Trade  This sets up a nice transition to talk about trade. The notion that we’re ‘shipping all of our manufacturing jobs to China’ ignores the reality of how the global supply chain works. Take an iPhone for example. Of the dozens of parts it takes to build an iPhone, some of them come from Japan, others from Italy and Taiwan, still others from South Korea and China. But, a large portion of those parts come from the United States. Apple sources the parts from the best places possible and then sends everything to China (Foxconn) for manufacturing. In this sense, the supply chain is critically global. Tough talk on trade only stands to disrupt the free flow of goods between these supply chains which will make the end products more expensive and, likely, of lower quality for the consumer. Is that what we really want? Additionally, if we were to raise tariffs on trading partners like Japan and Mexico and China in order to protect domestic industries, it will also hurt U.S. companies that are part of the supply chain for creating foreign products. Other countries will almost certainly respond with tariffs of their own and, now, input costs are higher for everyone. Whatever new jobs may be created locally in the process, demand for the end product is likely to fall due to higher prices. If you’re not selling more goods, you’ll lose the jobs needed to create them. Protectionism policies often hurt more than they help, in my view. In this way, the costs of free trade (loss of jobs, shutting factories) tend to be very microeconomic, localized and visible – giving them power on the campaign trail. But, the benefits of free trade are distributed across the entire economy through lower costs and efficient supply chains which supports long-term demand. But, these benefits are not as visible and are difficult to measure so they tend to be easily overlooked. What the government and private sector needs to do is a better job of helping those people who experience job loss from free trade to get the training they need to transition to another sector of the economy. The answer is not to try to protect the job in the first place by restricting trade. That approach is likely to backfire. The Bottom Line for Investors  Simple – fundamentals matter more than political rhetoric. And, while the campaign trail is certain to bring negative and exaggerated portrayals of the U.S. economy’s current state, don’t get too caught up in all of rhetoric – especially as you consider your investments. 1b) Open Letter to the Next President, Part 4 By John Mauldin  An Open Letter to the Next President, Part 4 Where to Find $1 Trillion of Free Money Making America Competitive Again New York, Dallas, and Abu Dhabi For the past three weeks I’ve been discussing the economic realities the new president will face when he or she takes office next January, using the device of an “open letter to the next president.” Mostly, we’ve been dealing with the economic realities that other countries face and with how difficult the global economic climate is going to be during the next president’s first four years. I briefly outlined last week the stark reality of what will happen to the deficit and national debt in the next four years, and I offered a chart of what would happen if (as I think likely) we have a recession within four years. The deficit would immediately blow out to $1 trillion. That figure is before any stimulus and in all likelihood does not include the significant amounts that will have to be spent on unemployment reserves, etc. Just to refresh your memory, let me reproduce the two key graphs. The first shows that entitlements, defense, and interest will consume all tax revenue by 2019. Thus, any spending beyond those three items will require the United States to borrow money and continue to grow its soon-to-be $20 trillion debt. This second chart shows what will happen if we have a recession in 2018 and if lost tax revenue is roughly what it was during past recessions (in terms of a percentage of overall spending). The deficit would quickly rise to $1.3 trillion a year and according to current CBO projections would not fall below $1 trillion over the following 10 years. Even at low interest rates, net interest expenses become bigger than defense spending during that period. And I should point out that the chart below does not increase net interest expense in line with what will be a much larger rise in debt. If anything, the chart below understates the amount of net interest that will accrue. Today we are going to look at what the next president might do in response to recession – and possibly even to prevent a recession. I actually think a positive path can be found, but following it will take an enormous political effort and a big shift in the current environment of noncooperation. In trying to outline how we might proceed, I am reminded of a story about a small Baptist church in a rural area of Eastern Kentucky. The preacher decided to talk to his congregation about the evils of sin. He started out by declaring that he was against the sin of lying, the sin of adultery, the sin of theft, and the particularly pernicious sins that accompany dancing. As he was warming to his topic, he was getting a steady chorus of amens from the assembled, which of course stoked his enthusiasm. So he decided to get to one of the real big sins on his list. He announced that he was against the sin of making and drinking moonshine. At which point five members of the congregation, including two of his deacons, stood up and started to walk out. Somewhat baffled, he asked, “Where are you gentlemen going?” “Well, pastor,” drawled one fellow as he walked out the door, “it seems to me that you done stopped preachin’ and gone to meddlin’.” (For my non-US readers who might be scratching their heads at this, the mountainous areas of the Southeastern US are famous for their “nonregulated” (read illegal) “moonshine” liquor production. In certain areas, the production of moonshine was widespread during prohibition and continues today. Those of us of a certain age can remember sipping such illegal contraband from fruit jars. For my French and European readers, think of your countries’ “Eau de Vie” (for my US readers, that’s “water of life,” and it’s every bit as potent as moonshine. Both can be used either as a beverage or as paint thinner. Back to the main plot.) This letter is definitely going to fall into the category of meddlin’. I can pretty much guarantee that no matter where on the political spectrum you fall or which economic philosophical camp you pitch your tent in, the policies that I’m going to recommend to the next president will horrify you. You will think that these are unbelievably bad choices. And the irony is that in some cases I’m even going to agree with you. But hard choices are what we have come to. We have a divided nation that’s not going to be any less divided after the coming election, and no one is going to get what they want. An Open Letter to the Next President, Part 4 Dear Mr. or Ms. Future President, Last week we looked at what will happen to the budget deficit and national debt if we enter into a recession during your first term in office. I think you will agree that the picture looks ugly. As it happens, a whole host of economic analysts are worried about just that possibility. Their concern is summed up by this statement from Bill Gross: The reality is this. Central bank polices consisting of QE’s and negative/artificially low interest rates must successfully reflate global economies or else. They are running out of time. To me, in the U.S. for instance, that means nominal GDP growth rates of 4–5% by 2017 – or else. They are now at 3.0%. In Euroland 2–3% – or else. In Japan 1–2% – or else. In China 5–6% – or else. Or else what? Or else markets and the capitalistic business models based upon them and priced for them will begin to go south. Capital gains and the expectations for future gains will become Giant Pandas – very rare and sort of inefficient at reproduction. I’m not saying this will happen. I’m saying that developed and emerging economies are flying at stall speed, and they’ve got to bump up nominal GDP growth rates or else. You, as the next president, can help get GDP moving again. But let’s be clear, if we slog along in the same general direction, entrusting our national future to the same general policies we follow today, there will be a recession on your watch. If you wait until there’s a recession and then hope the Federal Reserve will do something to pull us out of a nosedive, it will already be too late. The good news is that there are policies you can enact during your first 100 days in office to radically alter the growth path of the United States. The bad news is that those policies are going to be politically difficult to effect and you are going to have to spend a great deal of the new political capital you have to do so. But it will be the most important thing you do in your first term. (If, on the other hand, you don’t act decisively, it may be your only term.) It is not news to you that there is political gridlock in Washington. Republicans and Democrats in Congress don’t agree on the economic policies I’m going to suggest. There are entrenched ideas on both sides of the aisle about the best way forward; and, to be generous, those ideas are mutually exclusive. Your problem is that you need to balance the budget. One side wants to do it by cutting spending, and the other side wants to do it by raising taxes and spending even more. The country seems to want a great deal more healthcare but doesn’t want to actually pay for it. How can you satisfy both Republicans and Democrats while at the same time creating a few million jobs in the very short term to forestall a recession? You are going to get Congress to compromise. That means giving each side something it wants badly enough to be willing to let the other side get something it wants and needs. Here is what I think you could do. Let me note that numerous economists and politicians will tell you that different pieces of what I am suggesting are impractical or are philosophically just plain wrong. It’s just that they won’t agree as to which pieces are the problem. Your task is to get them to compromise so that something can actually be done. Where to Find $1 Trillion of Free Money When there is another recession, the Federal Reserve is going to cut rates back to 0% and will likely enter into another round of aggressive quantitative easing. (Interest rates and QE are just the tools they have left in their bag.) They will do this even though their own economists don’t think quantitative easing works all that well as far as Main Street is concerned. QE is very good at propping up stock prices, but it didn’t do much for the economy and just made the rich richer, breeding a lot of resentment. The problem from the Federal Reserve’s standpoint is that they would like to pursue a different type of quantitative easing, but they are actually quite limited in what they can do by the Federal Reserve Act. In order for the Fed to buy other types of assets or move money more directly into the economy, Congress would have to amend that act. You may not have been paying much attention to the debate going on about the Federal Reserve, but I can tell you, there is zero appetite among the Congressional leadership to bring up anything like the Federal Reserve Act. Doing so has the potential to be a real circus. But you need Congressional leadership to do this so that you can accomplish your agenda, so you’re going to have to sit on the leadership and tell them to control their members. You need some amendments to the Federal Reserve Act. Specifically, what you want to do is to authorize the Federal Reserve, the next time they feel they need to use quantitative easing to stimulate the economy, to be able to issue 40-year 1% bonds that can be used to repair the infrastructure of states and municipalities all across the nation. These should be projects that would be self-liquidating and capable of paying off the bonds, just as any general revenue bond issuer would, over the 40 years. No boondoggles and no bridges to nowhere. Focus on water systems, electric grids, bridges, roads, public transportation, airports – things that everybody understands as basic infrastructure. Estimates are that we need to spend about $2 trillion (on the low side) to bring our infrastructure up to date. Understand, you don’t want to be seen as dictating policy to the Fed, which is supposed to be an independent entity. The Fed will guard that independence quite fiercely. No, you are merely giving them another tool to use. Now, they can still do QE in the same way they’ve done it in the past and never take up the new tool you’ve given them – that would be their decision – but I believe they are politically smart enough to take a hint. Of course, that doesn’t help you right away. We all remember the last time we tried to find “shovel-ready projects” in order to do stimulus. Turned out there weren’t so many. So what can we do in the meantime? We get creative. It turns out the Federal Reserve has added about $3 trillion to its balance sheet in the past few years. That money is sitting in US government bonds and government-guaranteed mortgage assets. As those assets are paid off, the Fed is reinvesting the money back into other bonds and mortgage assets. So-o-o-o, when you are authorizing those new infrastructure bonds, you give the Fed the right to begin to buy them today. As soon as the commission you create to oversee the issuance of the bonds is up and running, cities, counties, and states can begin to offer their projects for immediate funding. And those projects are going to create hundreds of thousands if not millions of jobs as they come online during the first few years of your first term. That is stimulus we can believe in, and it will help forestall a recession. Further, all those new jobs will carry salaries that will increase consumer spending in local communities and generate a wave of related private investment. From a political standpoint, this is probably the easiest thing you will get to do. You are starting with a few trillion dollars already available to boost the economy without raising that money by taxing US citizens. What politician is not going to love that? All you are doing is taking an asset that the Federal Reserve already has and that is basically useless and turning it into a productive asset. If only the rest of my suggestions were as easy. Making America Competitive Again The second easiest part of my proposal is to cut the corporate tax rate. Everyone in Washington, DC, on both sides of the aisle, pretty much agrees that US corporate tax rates are too high. The reason they haven’t cut them is that politicians want to make corporate tax cuts part of a larger tax reform plan. They all feel they’re being pushed to give up something on taxes, and they want corporate taxes to be part of the deal. Understandable, and you are going to have to offer them a bigger tax reform package, but this is the easy part. The hard part is that you need to go farther than they are thinking of going today. You need to get bold. Looking around the world, companies try to locate in countries that are the most tax friendly to their profits. That is why Apple, Google, and thousands of other American businesses have trillions of dollars in cash accounts overseas: if they brought the money back they would have to pay an outrageous 35% tax on it. What businessman in his right mind wants to reduce his working capital by 35%? Further, as nearly all of you candidates have noted, too many very large corporations in the US (and many more not-so-large ones that fly beneath the radar) are allowing themselves to be “acquired” by foreign competitors, because to do so significantly reduces their taxes and benefits their shareholders. Some of you have sat on the boards of public companies, and you know that you are supposed to put the shareholders at the top of the list of people you serve. Your job is to make sure they get the maximum benefit from their investment in the company. Reducing US taxes is regrettably one way to do so. Right now, the corporate tax rate in Ireland is 15%. The rest of Europe is pretty annoyed with Ireland for charging such a low rate, but their reaction hasn’t stopped Ireland from doing so. The country is seeing a massive benefit in terms of income and job growth, not to mention the increased travel- and housing-related income that comes with so many businesses locating in Ireland. Now, I have nothing against Ireland – the country of my forebears – but the reality is that, all things being unequal, the US would be a better place to locate your business. And the thing to do, then, is to make all things even better than equal. Why not propose and enact a 15% US corporate tax rate? Yes you could propose 20% or 25% and it would be better than what we have, but what we want is for all of those companies that left the United States and are no longer paying taxes to decide to come back and pay us that 15% tax. And that should be 15% on every dime they make above $100,000. The tax form should be very simple. Put the amount of money you made in Box A, subtract $100,000, and pay 15% of the amount in Box B. As a way to get politicians to go along with such a low rate, offer to enact a 10% rate on the international profits of all these companies, so that no matter where US corporations make their money, they are paying something to the US. A 10% rate isn’t going to change their investment decisions, and they are likely to just bring the money home at that point, putting it to work in our institutions and infrastructure (especially if we improve our infrastructure so that we are more competitive.) As part of this program, you’re going to offer to get rid of all deductions. Period. End of story. If it doesn’t fall under normal GAAP accounting guidelines as a deduction, it’s a profit and needs to be taxed. Get rid of the 3,000 or so special tax benefits for various and sundry corporations and industries. That means hedge funds don’t get carried interest, oil depletion allowances become subject to normal depreciation, new assets are written off over the useful life of the asset, and so on. You’re dropping their taxes to a point where companies will probably be just as well off and maybe even better off without the deductions, as they will no longer need to pay their lobbyists to work so hard to wheedle special favors out of Congress. Not only will this tax program make our companies more able to compete in an increasingly global environment, it will actually encourage them to bring a lot of their manufacturing back to the United States, thereby boosting our employment with jobs that pay well. And I know that dropping taxes from 35% to 15% might seem like it would result in a big loss of revenue; however, if you add in my proposed 10% corporate tax on international earnings, I think there will actually be an increase in revenue. In any event, the program will be much closer to revenue-neutral than you might imagine. Current corporate practices of maximizing deductions and squirreling money offshore really do make a difference. The above two suggestions are the “easy” parts of the proposal. Now we have to figure out how to cut income taxes to a low personal flat rate, make sure that you get enough increased revenue to balance the budget and still be able to fund the healthcare we want, and figure out how to get the lower-income portion of the population a big boost in their take-home pay. But let’s take up those stimulating challenges next week – along with a few structural changes we’ll need in order to make sure everybody decides to hold hands and cooperate. New York, Dallas, and Abu Dhabi I leave on Sunday for a meeting with my Mauldin Economics partners, Olivier Garret and Ed D’Agostino. There are lots of things happening; New York is kind of a middle ground where we can all find ourselves in the same room. Then I change hotels to head towards Wall Street, where I will be on CNBC Monday afternoon, then jump over after the NYSE closing to share some libations with Art Cashin and the rest of the Friends of Fermentation. I think even Jeff Saut, chief muckety-muck of something important at Raymond James, will be there, as we are both scheduled to present the next day at Chip Romer’s Tiburon Conference. Chip brings investment industry executives together once or twice a year to talk about the state of the industry. And right now we’re talking about an industry that is in a big state of flux. I look forward to sitting with other people and learning. (Check with me on Twitter for specific media times next week.) Afterward, I am home for a month, where I will focus on writing my book and losing that last 10 pounds of superfluous weight prior to my conference in late May. The week before the conference I will be going to speak in Abu Dhabi. I was delighted to find out that you can actually take a direct flight from Dallas to Abu Dhabi. I started playing around a little bit and found out that there are several direct flights to the Middle East on various carriers. Dallas is a remarkably convenient town to get in and out of if you have to travel a lot. The Strategic Investment Conference is coming along nicely. I have only a few more speaking and/or panel slots to figure out. I think we are going to maintain our tradition of making each year better than the last. If you haven’t registered yet, we are very close to sold out, as we expanded the space slightly and were able to take those who were on the waiting list. If you’re interested in coming, I suggest you get on the waiting list, as there are always people who cancel in the last few weeks. You can get on the list by clicking here. And I know a broken headset is not a life-changing event, but yesterday the microphone I use to dictate into the computer as I write these letters finally broke. It’s not Logitech’s fault, because it lasted much longer than it should have, given the abuse I heap upon it in my travels, stuffing it into my bags. I had kinda, sorta taped it together so that I could still work, until finally I realized that I could just go to Amazon and order one and it would be here in a couple days. I was surprised to find out that I could get the microphone delivered the same day I ordered it – for free. I have to admit that I was skeptical, even though I’ve read about Jeff Bezos working on delivery times. I wondered if a drone would appear on my balcony with my packages! So I just clicked the button and forgot about it until I got a call from the front desk a few hours later, saying that my package had arrived. I think I know what the margin was on the inexpensive headset, so I’m not sure how Amazon can afford to deliver. It would have taken me the better part of two hours to drive to the store, find and buy the product, and get back, plus pay for the gas. I just find the whole business rather amazing. I know, it’s a bit ironic that somebody who’s writing a book on what the world will look like in 20 years can be surprised by fact that the changes he’s predicting are already happening. By the way, I was able to get the latest, wireless version of my microphone, which was a lot cheaper than my old, tethered microphone was when I bought it. In theory I can even tap a button and shift from my computer to my iPad, listen to music, or talk on the telephone. I wonder if I can order the new Tesla from Amazon. I’m not certain if it comes with one-day delivery…. You have a great week as we ponder whether Washington, DC, can actually break through its terminal gridlock next year. If it doesn’t, then, as Bill says, “Or else what? Or else markets and the capitalistic business models based upon them and priced for them will begin to go south.” Your hoping we can avoid that southern drop analyst, John Mauldin subscribers@MauldinEconomics.com

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2)THIS ARTICLE, WRITTEN BY A DANISH PSYCHOLOGIST, PRESENTS A POINT OF VIEW..

Dr. Nicolai Sennels is a Danish psychologist who has done extensive research into a little-known problem in the 

Muslim world: the disastrous results of Muslim inbreeding brought about by the marriage of first-cousins.

This practice, which has been prohibited in the Judeo-Christian tradition since the days of Moses, was 

sanctioned by Muhammad and has been going on now for 50 generations (1,400 years) in the Muslim world.

This practice of inbreeding will never go away in the Muslim world, since Muhammad is the ultimate example 

and authority on all matters, including marriage.

The massive inbreeding in Muslim culture may well have done virtually irreversible damage to the Muslim gene 

pool, including extensive damage to its intelligence, sanity, and health.

According to Sennels, close to half of all Muslims in the world are inbred.  In Pakistan , the numbers approach 

70%.

Even in England , more than half of Pakistani immigrants are married to their first cousins.In Denmark the 

number of inbred Pakistani immigrants is around 40%.

The numbers are equally devastating in other important Muslim countries:

67% in Saudi Arabia ;

64% in Jordan ;and Kuwait ;

63% in Sudan ;

60% in Iraq ; and

54% in the United Arab Emirates and Qatar

According to the BBC, this Pakistani, Muslim-inspired inbreeding is thought to explain the probability that a 

British Pakistani family is more than 13 X's as likely to have children with recessive genetic disorders.

While Pakistanis are responsible for 3% of the births in the UK , they account for 33% of children with genetic 

birth defects.

The risk of what are called autosomal recessive disorders such as cystic fibrosis and spinal muscular atrophy is

18 times higher and the risk of death due to malformations is 10 times higher.

Other negative consequences of inbreeding include a 100% increase in the risk of still births and a 50% 

increase in the possibility that a child will die during labour.

Lowered intellectual capacity is another devastating consequence of Muslim marriage patterns.

According to Dr. Sennels, research shows that children of consanguineous marriages lose 10-16 points off their 

IQ and that social abilities develop much slower in inbred babies.

The risk of having an IQ lower than 70, the official demarcation for being classified as "retarded",increases by an

 astonishing 400% among children of cousin marriages.

(Similar effects were seen in the Pharaonic dynasties in ancient Egypt and in the British royal family, where 

inbreeding was the norm for a significant period of time.)

In Denmark , non-Western immigrants are more than 300% more likely to fail the intelligence test required for 

entrance into the Danish army

Dr. Sennels says that "the ability to enjoy and produce knowledge and abstract thinking is simply lower in the 

Islamic world."

He points out that the Arab world translates just 330 books every year, about 20% of what Greece alone does.

In the last 1,200 years of Islam, just 100,000 books have been translated into Arabic, about what Spain does in 

a single year. Seven out of 10 Turks have never even read a book

Dr. Sennels points out the difficulties this creates for Muslims seeking to succeed in the West. "A lower IQ, 

together with a religion that denounces critical thinking, surely makes it harder for many Muslims to have 

success in our high-tech knowledge societies."

Only nine Muslims have ever won the Nobel Prize, and five of those were for the "Peace Prize." According to 

Nature magazine, Muslim countries produce just 10% of the world average when it comes to scientific research 

(measured by articles per million inhabitants).

In Denmark ,(Dr. Sennels' native country) Muslim children are grossly over-represented among children with 

special needs.

One-third (33%) of the budget for Danish schools is consumed by special education, and anywhere from 51% 

to 70% of retarded children with physical handicaps in Copenhagen have an immigrant background.

Learning ability is severely affected as well. Studies indicated that 64% of school children with Arabic parents 

are still illiterate after 10 years in the Danish school system. The immigrant drop-out rate in Danish high schools

is twice that of the native-born.

Mental illness is also a product. The closer the blood relative, the higher the risk of schizophrenic illness. The 

increased risk of insanity may explain why more than 40% of the patients in Denmark's biggest ward for 

clinically insane criminals have an immigrant background.

The U.S. is not immune. According to Sennels, "One study based on 300,000 Americans shows that the 

majority of Muslims in the USA have a lower income, are less educated, and have worse jobs than the 

population as a whole."

Dr. Sennels concludes:

"There is no doubt that the wide spread tradition of first cousin marriages among Muslims has harmed the gene

 pool among Muslims.

Because Muslims' religious beliefs prohibit marrying non-Muslims and thus prevents them from adding fresh 

genetic material to their population, the genetic damage done to their gene pool since their prophet allowed first 

cousin marriages 1,400 years ago are most likely massive. [This has produced] overwhelming direct and 

indirect human and societal consequences."

Bottom line: Islam is not simply a benign and morally equivalent alternative to the Judeo-Christian tradition.

As Dr. Sennels points out, the first and biggest victims of Islam are Muslims.

Simple Christian compassion for Muslims and a common-sense desire to protect Western civilization from the 

ravages of Islam dictate a vigorous opposition to the spread of this dark and dangerous religion.

These stark realities must be taken into account when we establish public polices dealing with immigration from 

Muslim countries.

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