DiFi dodges debate over Emken economic plan

DiFi dodges debate over Emken economic plan

Oct. 9, 2012

By John Seiler

Denying California voters an opportunity to see the two in action, Sen. Dianne Feinstein, D-Calif., refuses to debate her Republican opponent, Elizabeth Emken. This is what happens when one party takes over a state

Yet Feinstein needs to be confronted on her disastrous 20 years in the U.S. Senate. During the last 17 years, there has been no increase at all in household incomes. True, Republican Congresses of those years, as well as President George W. Bush, bear a great deal of responsibility.

And in the last four years of President Obama’s presidency, during which Feinstein and her fellow Democrats also controlled the U.S. Senate, U.S. household incomes crashed by 8.3 percent.

But consider this: Since DiFi went to the U.S. Senate 20 years ago, Democrats have controlled the White House 12 years (1993-2000; 2009-2012), Republicans eight years (2001-08).

Democrats have controlled DiFi’s U.S. Senate nine years (2003-04; 2002 — after the Jeffords defection; and 2007-12). Republicans have controlled the Senate 11 years (1995-2001; counting 2001 as Republican before the Jeffords defection; and 2003-06).

And Democrats have controlled the U.S. House of Representatives six years (1993-94; 2007-2010); while Republicans have controlled the U.S. House 14 years (1995-2006; 2011-12).

So, Democrats have had plenty of opportunity to fix the economy. In particular, in 2009-10, they controlled the whole kit and kaboodle: the presidency, the House and the Senate with a filibuster-proof supermajority of 60.

Democrats could have done anything they wanted. They could have cut the deficit to zero; instead we’ve had four years of $1 trillion-plus deficits. They could have reduced the national debt; instead they zoomed it up to $16 trillion. That’s $16,000,000,000,000.00.

Blaming Bush

The Democrats keep blaming Bush. Fine. He was a disaster. But he’s been gone four years.

Ronald Reagan inherited an economy worse in many ways. If you’re old enough, remember 13 percent annual inflation and 20 percent interest rates? The “misery index” — inflation plus unemployment — was way over 20 percent. Yet within two years of the Gipper’s inauguration, the economy was humming with growth above 5 percent.

And Democrats keep demanding that “the rich” pay more in taxes. They don’t tell you that, for them, “the rich” are those making $250,000 a year, including S-corporation businesses. These are the small businesses that are the engine of jobs growth. Due to the vagaries of the tax code, these corporations are charged at the personal tax rate. So jack up the “personal” rate and you take away the profits small businesses use to expand and create jobs.

I’m not a fan of Mitt Romney at all. And his tax cut plan doesn’t make any sense now that he says it will be “revenue neutral.” But one way he scored big time in last week’s debate with President Obama was by emphasizing that America needs to cut taxes to stimulate growth.

Feinstein probably figures that, in a debate with Emken, the same topics would come up. And DiFi might do as badly as the president — or worse. The president can’t avoid debates. DiFi apparently can. Maybe we need an initiative mandating debate participation.

So it’s left to me to analyze Emken’s economic plan. It’s actually pretty good, with some caveats. At least there’s no way it could make things worse than the past 20 years.

Tax cuts

The key to economic growth right now is tax cuts — with no offsetting increases like Romney wants (for now). Tax cuts increase economic activity, boosting investments and jobs creation. President Kennedy explained this in the early 1960s, back when Democrats still understood something about economics.

His tax cuts were enacted in 1964 after he was killed, producing a massive economic boom that only ended when his fool successor, President Johnson, imposed a surtax in 1968.

And unlike Bush’s stupid 2001 and 2003 tax cuts, which keep expiring and casting uncertainty over the economy, JFK’s tax cuts were permanent.

DiFi, of course, like Obama backs jacking up taxes on “the rich.” Under “Issues” on her Web site, I couldn’t find anything on economics. But she has a strong record in the Senate of increasing taxes.

By contrast, Emken says:

“I believe tax rates are already too high in this country. And, with the weakened economy, we cannot ask American families to pay more in taxes. I believe we need tax reform that makes our tax structure more competitive against overseas sources. By lowering the tax rates for businesses, corporate investment and capital will return to the country. That will stimulate growth and provide greater tax revenues.”

That’s pretty good. Her policy paper on tax reform goes further:

“For example, Dianne Feinstein joined her fellow Democrats in voting for the “Buffett Rule.” The Buffett Rule is a political gimmick. It promotes “fairness” by making an unfair comparison between income taxes and capital gains taxes. It also distracts from the truth that capital investment is actually taxed at least four separate times under our tax code….It’s no wonder that it seems like the only ones investing in America are the Chinese.”

I would add that Feinstein herself is immensely wealthy. Socking us with higher taxes just keeps the rest of us down, unable to rise up economically and politically.

Emken provides specifics:

* Simplify the tax code and make it flatter and fairer.

* Broaden the tax base by repealing loopholes and shelters.

* Make the 2001 tax cuts and the death tax repeal permanent.

* Reduce the corporate tax rate to make it competitive.

* Provide strong incentives to repatriate foreign earnings by adopting a territorial tax system.

* Create a domestic system that encourages savings and investment in America.

That’s all OK. Except it’s to complicated to close “loopholes and shelters,” and takes up to much political capital. If you reduce rates enough, then the “loopholes and shelters” don’t mean as much.

Tax reform is important, but can wait until a better time. For now, the country needs to get moving again — through simple tax cuts.

Tax rates

What tax rates does Emken want? Right now, the top U.S. tax rate is 35 percent; but that would rise to 39 percent should the Bush tax hikes expire in January, as Obama and DiFi want.

Emken says:

“The international average is 26 percent. The U.S. tax code should not contain any rate higher than 25 percent, with lowest rates reserved for domestic business.”

Excellent. But won’t that increase the deficit? Romney’s problem is that he wants his tax cuts to be “revenue neutral.” Meaning tax cuts for some would be offset by tax cuts for others.

Emken takes a different approach:

“Everything I’ve proposed adds to economic opportunity and market stability, two important factors in job creation and economic growth.  Any loss in revenue from the current tax base should be more than offset by the increase in job creation, which provides a greater number of taxpayers. Again, we’re not fighting over small slices of pie; we’re making a bigger pie. I’ve also called for a thorough review of every federal department and agency to see where we can save money. I will work relentlessly to reduce government spending.”

That’s exactly how things would work.


And she’s right, of course, that cuts to government must be made. Anybody who’s ever been in government knows that every department is larded with massive waste.

What agencies would Emken eliminate? Unfortunately, she’s vague here:

“My approach is different. I want a top to bottom review of every agency, requiring metrics that measure results and value for invested tax dollars. Those programs that aren’t producing need to be made to produce. And those that have no possibility of returning value for invested tax dollars should be discontinued. As a cost efficiency expert, I spent a good portion of my career implementing these practices in the private sector.”

But the private sector isn’t the government sector. Government exists to waste.

The best thing to do is to eliminate whole agencies. Otherwise, like cockroaches, the bureaus and their inhabitants just swarm back.

She should start by calling for eliminating the two agencies that Ronald Reagan promised to get rid of in 1980, but didn’t get around to doing because he was busy reviving the economy and winning the Cold War: the Department of Energy and De-Ed, the Department of de-Education. The free market provides us plenty of energy at a fair price; recent increases and distortions in oil and gas prices are caused by government interference.

And ever since the feds took over education policy in the late 1950s, test scores have fallen nationally, the kids becoming dumber by the minute. Programs like Bush’s No Child Left Behind and Obama’s Race to the Top only have made matters worse, with more government bureaucratic strings tied to every dollar “given” to local schools.

Conclusion: A decent plan

Emken’s economic plan is fundamentally sound, favoring pro-growth tax policies that would get the country moving again. As with most office seekers and holders, she doesn’t want to offend constituencies whose federal largess would be cut. But because of the massive deficits and debt, cuts will be coming no matter what.

If taxes are increased, as DiFi and Obama want, the economy would be smashed into another recession, perhaps worse than the last one. The deficits and debt would get even worse. A Greater Depression could hit, as businesses and jobs fled America for China, India and other countries that believe in caring and feeding businesses, instead of stepping on them.

Emken has close to zero chance of winning in November. That’s just the reality of California. But it’s unfortunate that her ideas on the economy, at least, aren’t being heard as part of the policy mix because a U.S. Senator in office too long refuses to step up to the podium and debate.




Write a comment
  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 9 October, 2012, 21:14

    I have not seen a single Sentae TV ad, not for difi or the challenger.

    Reply this comment
  2. SeeSaw
    SeeSaw 9 October, 2012, 22:55

    DiFi doesn’t need ads. She will be re-elected easily.

    Reply this comment
  3. Bob
    Bob 9 October, 2012, 23:06

    Crimestein has a lifetime gig in the Imperial Senate if she wants.

    And she’s what, 100 years old? And will live for another 100 at least.

    Reply this comment
  4. Ulysses Uhaul
    Ulysses Uhaul 10 October, 2012, 07:54

    Next subject!

    Reply this comment
  5. Dyspeptic
    Dyspeptic 10 October, 2012, 10:53

    Someday soon Feinswine will need to hire a personal embalmer to give her a more lifelike appearance. We know one thing about her though. After she achieves room temperature she will still have more measurable brainwave activity than the zombies who vote for her.

    Reply this comment
  6. BobA
    BobA 10 October, 2012, 11:30


    Good one!! In the state of California, Democrats needn’t bother to campaign for reelection. The D next to their name all buy guarantees them reelection.

    It would send shock waves throughout the the country and make the national headlines to hear that a democrat lost an election in California.

    Democrats own California and nearly everything in it. Republicans and Libertarians are nothing more than the lowly riff-raff that fights for the crumbs and table scraps the democrats leave behind.

    Reply this comment
  7. barb
    barb 10 October, 2012, 13:40

    I agree with your analysis entirely but I just wonder if there might be a glimmer of hope that the 80 yr old senator could lose. I find her arrogance appalling!

    Reply this comment
  8. Douglas
    Douglas 10 October, 2012, 15:19

    “Any loss in revenue from the current tax base should be more than offset by the increase in job creation, which provides a greater number of taxpayers.”


    Not according to the Center for Freedom and Prosperity

    “Not all tax cuts pay for themselves.”

    “Indeed, it is only in very rare cases that this happens.”

    “In the vast majority of cases, tax cuts will increase economic activity, but the increase in taxable income will not be enough to offset the lower tax rate.”

    Reply this comment
  9. Rex the Wonder Dog!
    Rex the Wonder Dog! 10 October, 2012, 15:21

    Not according to the Center for Freedom and Prosperity
    Troughie Doug quotng yet another ogs left wing commie mouthpiece…….

    Reply this comment
  10. Douglas
    Douglas 10 October, 2012, 16:06

    Kennedy tax cuts, 63-69:

    “His tax cuts were enacted in 1964 after he was killed, producing a massive economic boom that only ended when his fool successor, President Johnson, imposed a surtax in 1968.”

    OR, as Paul Harvey used to say: “The REST of the story”

    “Military spending also increased as American’s presence in Vietnam grew. What had started as a small military action under Kennedy mushroomed into a major military initiative during Johnson’s presidency. Ironically, spending on both wars — the war on poverty and the fighting war in Vietnam — contributed to prosperity in the short term. But by the end of the 1960s, the government’s failure to raise taxes to pay for these efforts led to accelerating inflation, which eroded this prosperity.”
    (Years of Change: The 1960s and 1970s)

    Two words: Ceteris paribus

    Reply this comment
  11. BobA
    BobA 10 October, 2012, 18:18


    “Not all tax cuts pay for themselves.”

    The simplified interpretation of that statement can be put this way: if the government cuts taxes they will have to balance it with cuts to spending. Tax cuts are a constraint to the basic nature of government which is to grow. To grow, the government must spend; to spend, the government must tax; to grow bigger, the government more spend more and tax more.

    Allowing you to keep more of what you earn costs the government in its ability to spend and grow. The fact that government is to big, spends to much and taxes to much is inconsequential to it’s inherent desire to grow.

    The problems we face can best be summed up this way: The size of government is inversely proportional to the size of our paychecks and as government expands, liberty contracts.

    Reply this comment
  12. Douglas
    Douglas 10 October, 2012, 18:50

    That’s one choice, to starve the beast, or make government so small you can drown it in a tub.

    But that’s not what Emken said. She said any loss in revenue would be more than offset by the increase in job creation.

    I was merely pointing out that that was incorrect. It’s a common misconception repeated often.

    Decreasing the tax rate does NOT increase tax revenue, and increasing tax rates does NOT decrease tax revenue, except in VERY rare cases.

    Reply this comment
  13. The Africanized Swarm of Ted Steele System
    The Africanized Swarm of Ted Steele System 10 October, 2012, 20:40

    Well said Douglas.

    Reply this comment
  14. SactoSilly
    SactoSilly 10 October, 2012, 22:37

    Elizabeth Emken is a joke! Fiscal conservative? Both the right-wing FlashReport AND the left-wing LATimes report that she is being sued, for fraud, by a veteran GOP mailhouse because she stiffed them on her $65,000 bill. If she were a true fiscal conservative, she would walk the walk, not just talk the talk.

    Reply this comment
  15. Barb
    Barb 11 October, 2012, 07:25

    Nicely said BobA! Empirical data does exist to show that by decreasing taxes does the government enjoy higher tax revenue. But facts can be a tough act to follow for those who choose to ignore them. The Harding, Kennedy, Reagan, and Bush administrations are the best examples of these.

    “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.” John Adams

    Reply this comment
  16. BobA
    BobA 11 October, 2012, 07:42


    “That’s one choice, to starve the beast, or make government so small you can drown it in a tub.”

    You’re right in that it is a choice although, not a realistic choice. The government is a top of the food chain predator and you don’t starve that type of predator without first eliminating it’s food supply.

    In other words, to starve the government beast you must starve it of revenues and the only that’s possible is via an untenably high unemployment rate coupled with the shuttering of a significant portion of small and medium sized businesses.

    Until that happens, there is no incentive for government to reduce its spending. Those conditions do not yet exist so until then it’s business as usual.

    Reply this comment
  17. BobA
    BobA 11 October, 2012, 07:51


    Facts are indeed stubborn things but the government has a habit of cherry picking the facts to fit their narratives. Any and all facts to the contrary are buried in small print on page 6592 of a government report. Much like the ostensibly “Affordable Healthcare Act” (aka, Obamacare.)

    Reply this comment
  18. BobA
    BobA 11 October, 2012, 07:56


    The only true fiscal conservatives are those of us who have to manage our lives on a limited income.

    In my humble opinion, it is the height of hypocrisy and down right silly for any politician of any political persuasion to call themselves a fiscal conservative when it’s “other peoples money” they are spending.

    Reply this comment
  19. SeeSaw
    SeeSaw 11 October, 2012, 09:17

    Public sector haters have a habit of cherry picking the facts to fit their narratives.

    Reply this comment
  20. Barb
    Barb 11 October, 2012, 10:45

    BobA: So true! As of late and in particular, the Obama administration is doing a lot of cherry picking. Case in point: (Just out today) http://www.cnbc.com/id/49372827 “One large state didn’t report quarterly figures”. Really? So California happens to forget to submit jobless claims! Oh man! These people have no scruples!

    Reply this comment
  21. Barb
    Barb 11 October, 2012, 10:48

    California would have added 15,000 to 25,000 to the jobless claim number could probably be twice as high than what they are reporting!

    This is pure deception!

    Reply this comment
  22. Barb
    Barb 11 October, 2012, 10:49

    BobA: Ummmm…..page 6592 of Obamacare? Enlighten me!

    Reply this comment
  23. BobA
    BobA 11 October, 2012, 12:24


    It’s a made up number. The actual Obamacare bill plus statutes is over 2000 pages. My made up number is not some without justification albeit it probably on the high side.

    Our government is famous for putting out reams of paper work. For example:
    the IRS tax code alone is over 72000 pages and new pages are being added with every congress.

    The largest document ever published in the federal register was the 2002 Justice Department’s proposed settlement with Microsoft ( some 6653 pages.)

    The 2009 edition of the Code of Federal Regulations alone was over 163333 pages in 226 volumes. Imagine how many pages are in the 2012 edition.

    Remember this: the nearest thing to eternity is government bureaucracy.

    Reply this comment
  24. barb
    barb 11 October, 2012, 12:49

    oh! lol! yeah, its disgraceful to be sure. thks bob

    Reply this comment
  25. BobA
    BobA 11 October, 2012, 15:56


    disgraceful indeed. And we get the “privilege” of paying for all that paper work that nobody reads, wants or needs. It’s only utility is in keeping the maximum number of government bureaucrats employed and collecting generous salaries and pensions at out expense.

    Reply this comment
  26. Ted Steele, CEO
    Ted Steele, CEO 11 October, 2012, 20:15

    VP Biden nailed the young lad tonight!!!!!!!!!!!!!!!! I LOVED that debate! It is now crystal clear that if Romney gets in abortion will once again be a crime——Romney has tried to dodge that for months!!!! Romney just lost.

    Reply this comment
  27. Ron Kilmartin
    Ron Kilmartin 11 October, 2012, 20:56

    I posted Jon’s article on the East Bay Tea Party facebook site. Several commentors suggested that Emken debate an empty chair. Seems appropriate! Hey Watchdog, why not sponsor it and put the video on U-tube?

    Reply this comment

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