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Steve Moore: Thank you so much. This is — I do a lot of conferences every year, and I always tell David Horowitz this is my favorite one of the year. I just love being with you. And David, you did a great job again this year.
So, thank you so much for the invitation to be here. I got quite a thrill yesterday. My son and I were — after the sessions were over yesterday, we went over to the pool. And this just beautiful woman — she was in about her mid-30s, in a red bikini — she just ran up to me, and she threw her arms around me.
And I thought she was with this conference, but she wasn’t. And she said — I know you, don’t I? And I said — well, ma’am, I’m not really sure. She said — don’t I see you on TV? And I said — well, I don’t know, what do you watch? And she was very adorable, she said — wait a minute, didn’t I see you on “Wheel of Fortune” last week?
I said — yes, ma’am, that was me.
But anyways, one other quick story — I am here with my son, David, who is in the yellow shirt over there. And last night –
Last night, we were watching a movie together after the dinner last night, and his tooth popped out. He’s 10. And so, you know, we cleaned it out and stuff. And then, right before he was about to go to sleep, he turned to me, and we had the lights turned out. And he said — Dad, is there a tooth fairy? And I said — well, Barack Obama thinks there is, right?
Because when you think about it, you know, everything we have done in the last three years in Washington has been this belief — right, Ed — that there’s a tooth fairy, right? That the federal government can spend money, and somehow that this money comes from a tooth fairy, and that it creates growth and it creates jobs. And I would make the case to you that what we’ve lived through in the last three years has been the greatest failure of Keynesian economics in the history of civilization, right?
It has been an incredible failure. And if anything good comes out of this, Ed, it should be that Keynesian economics does not work, right? We’ve had an incredible laboratory experiment.
John Fund mentioned, you know, the dimensions of the trillion dollars. These numbers are gigantic. Just to give you a sense of this — in the last three years, the US government — by the way, it was the last year of the Bush Administration, so we’re bipartisan here — the last year of the Bush Administration and the first two years of the Obama Administration, we have borrowed $4 trillion. $4 trillion. The debt — how many of you saw what happened this week — that the debt clock just passed $15 trillion for the first time in American history? If we stay on the course we’re on — you know these numbers, Ed — if we stay on the Obama baseline, we will borrow 10 more trillion dollars in the next 10 years. I mean, these are frightening numbers.
These are — I am aghast at how much our nation has faltered, quite frankly. This is the greatest episode of fiscal child abuse in the history of this country. And it’s not just going to be — you know, we used to talk, Ed, about — well, the next generation is going to have to pay these debts. It’s not the next generation. It’s not even our grandchildren’s generation that’s going to have to pay for our mistakes. It’s our grandchildren’s children’s generation that are going to have to unwind this enormous debt that we have built up.
And it is a very scary situation. If you look at that debt that I just mentioned — over 10 years, $10 trillion — that is more money than the United States government borrowed from 1776 through 2005. Think about that. We’re going to borrow more money in the next 10 years than we borrowed to finance the Revolutionary War, the Civil War, World War I, World War II, the Great Depression? Those are pretty horrendous numbers.
Now, here’s the point — I wouldn’t be so upset about all this borrowing if we got something in return for it. But we’ve gotten nothing in return for this.
Now, I had a piece in The Wall Street Journal a couple weeks ago that just infuriated my liberal and Democratic friends. And it was just innocently titled “Reaganomics vs. Obamanomics.” And what I pointed out in this piece — and you can Google it and see it — I was very proud of it, got a big response — and I basically said — look, Ronald Reagan and Barack Obama had something very much in common. They both came in during incredible economic crises. Right?
I mean, Reagan came in — you all remember the failure of the Carter years. How many of you remember 14 percent inflation and 20 percent mortgage interest rates, and the country was de-industrializing? I always say the reason I know that God smiles on America — that Jimmy Carter was not reelected in 1980. The economy was in a freefall.
And similar, when Barack Obama came in, the economy was in a freefall. So they inherited very similar situations. But what they did to deal with the crisis was diametrically the opposite, right? Reagan came in. John worked for Reagan back then — you remember this, John. We cut the tax rates, we deregulated the economy, we cut domestic spending, we got inflation under control. We didn’t print money; we stopped printing money back in 1981, ’82. The information rate — remember, under Reagan — went from 14 percent in 1980 — under Reagan and Volker, it fell to 3 percent, you know, in a miracle that nobody thought could happen.
Meanwhile, look at what Obama’s come in — he’s come in and spent $3 trillion, we’ve had massive increases of money situation. The Keynesians have thrown everything they’ve got in their tool chest at this recession. Now let’s look at the results.
If you look at September of 1983 — almost exactly the same juncture of Reagan’s presidency versus where Obama is today — anybody want to take a guess, in September 1983, how many jobs were created by the US economy in that single month? Nobody’s going to believe the number. You can look this up, because I didn’t believe — I had to look it up three times to validate the number. In September of 1983, the US economy created 1.1 million jobs, in one month. That’s an awe-inspiring number, isn’t it, 1.1 million. We’re not going to create one million jobs this whole year. And we did it in one month. As you know, in September of 2011, we didn’t create 1.1 million jobs; we created less than 100,000, just to give you the dimensions.
Now, let’s look at the GDP growth rate. Under Obama, this year so far, we’ve been growing at just about a 1 percent rate of growth. I hesitate to even call this a recovery that we’re in right now. For most Americans, they don’t believe, Ed, that we’re in a recovery; they believe this recession has simply gone on. And it’s, as a recovery, almost without a pulse.
One percent under Obama. Third quarter 1983, under Reaganomics — anybody want to take a guess at what the economic growth rate was? Eight point two percent. Remember that, John? Eight point two percent. That’s unbelievable. And remember — John remembers this — remember all the talk back in ’83 and ’84 was the economy was overheating. Remember? We were creating so many jobs, and the economy was expanding so rapidly under Reaganomics, people thought there was too much growth, and we had to slow it down. That would be a wonderful problem to have right now. And so the only point I was making is one of these formulas worked, and the other has been a complete catastrophe.
Now, that brings me to the issue of the super-committee. And Ed, I guess I’m even more cynical than you are on this. I want the super-committee to fail. I think this thing is completely a train wreck, and Republicans should simply go for the automatic across-the-board sequester of spending. Right? Let’s just cut spending — if we can do this in 2013, we can cut every agency’s spending by 10 percent. Now, that does mean the defense budget.
But when is the last time we’ve cut the budget in this town? I mean, my goodness, I am so frustrated, obviously, with the Democrats. But I got to say this, Ed — I’m frustrated with the Republicans on the budget. I am frustrated –
– Republicans — they said they were going to cut $100 billion out of this budget, and we haven’t. Now, I know good people like Ed Royce and Mike Pence and Jeb Hensarling — you’re doing everything you can to get this. But why haven’t they kept their promise on this? The Republicans have a one-house veto. Why — at the end of this year, why are we still spending money on the Legal Services Corporation? Why are we still spending money on the EPA? Why are we still spending money on the National Public Radio?
I mean, my goodness, Ed, we can do this.
Ed Royce: You got me.
Steve Moore: Okay. I mean, look, ladies and gentlemen, can’t George Soros pay for National Public Radio himself?
I mean, why do we have to pay for this?
So I’m very frustrated about this pace of no progress on the budget. We cannot — the reason I think that this super-committee has got to blow up is because if Republicans agree to raise taxes, they will lose the election in 2012. It is simple as that.
John Fund: Absolutely.
Steve Moore: Am I right about this, John? I mean, this is why the Democrats keep insisting they want the Republicans to cave on this. When is the last time Republicans caved in on taxes? Do y’all remember? It was in Andrews Air Force Base in 1990?
John Fund: Read my lips.
Steve Moore: Read my lips. What happened? That’s, ladies and gentlemen, what got us eight years of Bill Clinton’s presidency. George Bush would’ve been reelected if he had not raised taxes. So Ed, I hope — I mean, I know you’re — you know, you’re as solid on this as anybody. Please tell these guys they cannot compromise on the no-tax position.
This is the most important position. Look, if you want to be a member of the Republican Party, you have to be against tax increases.
My old friend Bob Novak, who — I loved him — you used to work for Bob — said it so well. Remember this, John? He used to say — the only reason God put Republicans on this earth was to cut our taxes, right? If they’re not cutting our taxes, we don’t need Republicans. So this is a very important thing for the economy and politics.
I’ve only got a minute left. But let me just say this about the top 1 percent — you know, the evil top 1 percent, the people like, you know, Warren Buffett and Bill Gates, and Tiger Woods, Lady Gaga — all those terrible people like that. You know, if you look at these statistics — and I know you guys know this, because you read The Wall Street Journal Editorial Page — what percent do the top 1 percent pay in taxes right now? Forty-one percent. The top 10 percent pay 68 percent of the taxes. The bottom 50 percent in America today — they pay less than 2 percent of the taxes.
We have an incredibly highly progressive tax system already. In fact, I’m as anti-tax as anybody in this room. But I will say this — I think Michele Bachmann is exactly right — that if you are a citizen and a voter in this country, you should pay taxes, right?
Everyone who votes and is a citizen should pay some taxes.
One — can I just take 30 more seconds? Because I want to make one other point, if I could. On this energy issue — you are so right about this, Ed. And we have such an incredible opportunity right now on energy to be — we can, within the next 10 years — if we get our energy policies right, we can be an exporter of oil and natural gas. This is the most amazing story that nobody is talking about — why it’s so criminal that we’re not building that Keystone pipeline.
You look at what’s happening in the Marsalis Shale — we’ve got 60 years of natural gas in Pennsylvania, New York, Ohio, West Virginia. You look at what’s happening in North Dakota. I wrote a piece on Harold Hamm. He’s the one who discovered this Bakken shale in North Dakota. We have about 50 years of oil that we found in the great state of North Dakota. This is — we have twice as much oil that we found in North Dakota as we have in Prudhoe Bay in Alaska, which is our single-biggest, you know, current deposit of oil.
We can do this. We can be completely independent of OPEC oil. And here’s the point — Obama is doing everything he possibly can to stop United States production of oil and natural gas. It is almost criminal what is going on. And it’s not just Keystone, as you know, Ed. It’s in every project. When you talk to Harold Hamm, what he says — everything Obama’s trying to do — here we have this treasure chest of oil, right? I mean, this is like a gift from God. And Obama is doing everything he can to stop it from happening.
And my point about this, Ed — I’m even more cynical than you are on this. This doesn’t have anything to — why did they block the Keystone pipeline? It doesn’t have anything to do with the environmental impact of that pipeline. I mean, we built the Great Alaska pipeline. That didn’t have any negative effects on the environment. What this is about, ladies and gentlemen, is the Left doesn’t want America to produce fossil fuels. It’s as simple as that.
They want us to believe in this fairy tale of wind and solar power. I mean, my God, Barack Obama runs around the country saying that wind and solar power are the energy sources of the 21st century. Folks, wind and solar power are the energy sources of the 15th century, not the 21st century.
So we should be independent on our oil.
Finally, I want — one quick point on optimism. Because I think the only criticism I have — we’ve been a little too pessimistic. We are going to see — once we — I think, in 2013, we’re going to see the biggest expansion you ever saw in the economy. And when that is going to happen — I can tell you the exact date that is going to happen — November 5, 2012, when the American people trade in Barack Obama and Joe Biden under the Cash for Clunkers program.
Thank you very much.
Craig Snider: Everybody, we did leave a little time for questions. And I just want to — before we go to questions, I just want to say one thing — I think all of you should give yourselves a round of applause for being here at the last session, and being so engaged. You are amazing!
Nina, you’re going to have the first question.
I just also want to make a brief editorial, and that is this — Steve, you made a great point — Republicans versus conservatives. And I didn’t — I don’t know if Bernie Goldberg is still here. I had hoped to be able to make a comment yesterday on all that. But Bernie kind of seemed to disparage the Tea Party movement, and kind of brought in the Birther discussion. And I really felt that was unfair. I think that the Tea Party and people that are purists on the conservative side have really helped Republicans be conservative. And if they can’t be conservative, they need to be replaced.
Okay, we’re going to open up some questions. Nina Rosenwald?
Do we have a microphone, or not?
Unidentified Audience Member: I’ve got one, and I have a question. I have got a question and a comment for Steve.
Steve, you had an editorial in the Journal within the last probably eight or nine months, talking about — and you did a lot of legwork and a lot of study that tax increases never seem to help the spending situation. And this is so critical, now that we’ve got the super-committee. And as you very well point out, the worst thing in the world the Republicans can do is cave on tax increases. Maybe you want to just make a couple of comments about some of the studies that were included in that editorial?
Steve Moore: Just a quick response on that. Yeah, I mean, you’re exactly right. We looked at data over the last 65 years. I did this with Professor Richard Vedder of Ohio University. And what we found is that for every one dollar of additional tax revenues that was raised in taxes, the federal government spent $1.50. So in other words, the deficit went up after tax increases, not down. And Ed, that’s a message I think you all — and you know what, Ed? The public is with us. In other words, they understand that.
Ed Royce: I’ve got your editorial right here. I’m with you.
Steve Moore: So (inaudible).
Craig Snider: Okay, Nina Rosenwald?
Nina Rosenwald: John, I was wondering — based on everything that was said today, it sounds as if, you know, Osama bin Laden said we want to bring down the American economy. It sounds like Obama wants to bring down the American economy by sort of saying — how can we waste more money to, you know, crash the Treasury? To be able to have us taken over by Islamists, or who? Or am I being a little bit over the pale?
John Fund: Well, it all goes back to Saul Alinsky. And one of the most astonishing things about the new Left in this country is — we had a 2008 election which, on the Democratic side, completely marginalized the moderates. I mean, they ran Joe Lieberman out of the Democratic Party, they forced Evan Bayh to leave the Democratic Party and retire.
And the Democratic nomination contest in 2008 was between Hillary Clinton, whose graduate thesis at Wellesley was on Saul Alinsky, in which she compared him to Martin Luther King, Jr.; and who was offered a job by Saul Alinsky, and she turned it down — only because the only law firm in my home area, the Bay Area of San Francisco — the only law firm in which every partner was a member of the Communist Party offered her an internship.
Now, Hillary is not the same Hillary as she was back then. But she certainly remembers Saul Alinsky.
Unidentified Participant: She better, or worse?
John Fund: That’s bait I’m not going to take.
But she was running against Barack Obama, who told the Washington Post a few years ago — the biggest and most important education I ever got was reading Saul Alinsky. So that was the contest in the Democratic Party.
So given that they want redistribution of wealth, given that they want at best a socialist system, and at worst something even more insidious, it shouldn’t surprise us that they are completely indifferent. Because remember, if you inherit the ruins, it’s sometimes more important than if the ruins have any value to them. It’s important to inherit the ruins.
One final point — even Hillary Clinton has had enough of this administration. I’m told she wakes up every morning and says — I lost to this guy?
Mark Penn, who was her consultant and pollster, was at a recent dinner party in Washington, sitting next to a friend of mine. And my friend said, you know, the whole table was just filled with complaints about the Obama Administration, its incompetence — they don’t know what they’re doing, you could walk through their deepest thoughts and not get your ankles wet — all of that.
And my friend turned to Mark Penn and said — you know, you had a great TV commercial against Barack Obama in 2008. It was that 3:00 a.m. phone call commercial. It’s late at night in the White House, the phone is ringing at 3:00 a.m., there’s a big crisis somewhere. And who do you want to answer that phone? Hillary Clinton, or the completely unseasoned Barack Obama? If you were doing this campaign again, knowing what we now know about Barack Obama, how would you — what kind of commercials would you run? And Mark Penn sort of stroked his chin a little bit, and he said — you know, I kind of liked the 3:00 a.m. commercial. If I were doing to the 2008 campaign over again, I think I’d run exactly the same commercial. Except this time, I’d make the phone call come in at 3:00 p.m.
Craig Snider: Okay. We’re going to get — I see a few of you in the back. We’re going to get one here, Barry Wolfe; and then Steven Stern, and then we’ll head to the back for a few more. And then we got to wrap it up.
Barry Wolfe: Okay, two questions — Ed Royce, is it too late to stop the pipeline going to China? I mean, do we still have a chance here? And number two, Steve — the deal is, if this committee doesn’t work, it’s not a 10 percent across-the-board; it’s 50-50, 50 percent cut in military defense. You were talking about 10 percent across-the-board. Help me understand that.
Ed Royce: Barry, to respond to your first question — the only thing we could do now — we have passed legislation into the Senate to try to force the President’s hand. But it would take Harry Reid supporting our legislation. So perhaps a massive countrywide effort to get the Senate onboard. If we don’t act soon, the Chinese will seal a deal. This is at the top of their priority list.
Steve Moore: You know, on this sequester issue — it’s a great question about how it works. And it looks like it’s going to come to this. And basically, starting in 2013, half of the savings would have to come from the defense budget, and half of them would have to come from nondefense. Now, that’s not really fair, because defense is only 20 percent of our budget, but they’d have to take 50 percent of the cuts.
Now, my feeling is, first of all, we should definitely do the automatic across-the-board cut in the domestic programs. I mean, after all, they got — what was it, Ed — 30, 40 percent increases under Obama, so they can certainly live with a 10 percent cut.
The big issue — and maybe Ed can even speak to this — is what happens if we have to go this — you know, what — even Leon Pennetta, Barack Obama’s own Defense Secretary, says it would be catastrophic to do these cuts. Now, I’m not so sure about that. Look, I think the Pentagon — there’s a lot of waste in the Pentagon — I think can absorb some cuts. Whether it can take 10 percent, I don’t know.
But here’s the — I was on with one of your colleagues on Fox this week. I forget which congressman it was, but he was one of the Democrats. And I pointed this out to him. And I said — Congressman — I said — are you willing to take a cut of 10 percent in the national security budget if it imperils our ability to protect this country, and to protect our national security? And he said to me — Congressman, on the air, you can look this up — he said yes. He said — I’m willing to do that.
Now, think about this. I mean, you all know the Constitution — the single most important priority for the United States government, and one of the few things the federal government is actually chartered to do, is to provide for the national defense. Right? And these guys want to take this massive cut out of the defense budget, so they can preserve Medicare or Social Security, Medicaid — tiny slivers in these cuts.
I mean, to give you a sense of what Republicans have put on the table — if we did the Republican plan for entitlements for these big programs, which are the big boulders that are driving the debt — you know these numbers, Ed — even under the budget you guys pass, these programs still over the next 10 years grow by 50 percent. Right? So you’re just saying — we’re not going to not let them grow by 80 percent; we’re going to let them grow by 50 percent, and the Democrats won’t do that.
I think it is unpatriotic for the Democrats to basically say — we want to take the biggest whack out of defense in American history so we can protect these programs. I just think it’s outrageous.
Barry Wolfe: Are we going to do that, Ed? I mean –
Craig Snider: Okay, listen, with charity to all and malice towards none –
– we’re going to only have time for one question. You two guys in the back, please come up right when it ends, so you can get your questions asked. But — oh, I’m sorry. I thought you already did answer.
Ed Royce: Well, of course — and this is the whole point of avoiding the sequestration process. If it goes to that process, that 50 percent is in security. So if it goes to that, then it’s defense or Homeland Security, or the security portion in addition, of the State Department budget. So if we find ourselves in that position, Barry, then what we’ve got to do is to try to cut Homeland Security and reorganize that, right? And the Secretary of State’s budget, you know, and so forth.
But there’s no doubt that the better process is to reach an agreement on all of these issues that I discuss, like ending crop subsidies, you know, drawing down the size of the federal bureaucracy, so that we don’t have to go there on the defense side.
Unidentified Participant: But Ed –
Craig Snider: Guys, guys –
Ed Royce: And entitlement reform, and what know what those are.
Steve Moore: Ed, you know, you’ve talked to these guys. I’ve talked to Toomey, I’ve talk to Jon Kyl.
Ed Royce: Right.
Steve Moore: Here is the truth of what’s happening on that super-committee that you’re not going to read in the New York Times. The New York Times had a big article — oh, this is going to blow up because Republicans won’t raise taxes. Folks, the Democrats have not put a single dollar of spending cuts on the table.
Ed Royce: There’s not one plan from the Democrats.
Steve Moore: It is amazing. They don’t want to cut anything.
Ed Royce: They have no plan.
Steve Moore: Right.
Ed Royce: And the plan we’re talking about lowers the corporate tax rate in exchange — marginal rate, in exchange for closing some loopholes to get economic growth. That’s where we’re coming from, just so you know. And what we’re trying to get them to do is to buy into entitlement reform. And that’s where the AARP are out there running ads against it.
John Fund: Actually, Steve, I’d have to disagree with you there. The Obama Administration has done one budget cut very successfully and very surgically. If you go to the Department of Labor, there is a budget for monitoring union corruption –
– and looking at all these forms that unions fill out –
Craig Snider: Okay, look, we got –
John Fund: And we got to –
Craig Snider: I promised — I got –
John Fund: — cut that budget by 70 percent.
Craig Snider: I’ve got to interrupt. We got one more question, from Steven Stern. And then, we’re going to wrap it up.
Steven Stern: This question is for John Fund. They were successful at rolling the unions out of the taxpayers’ lives in Wisconsin. They failed in Ohio. Could you enlighten us as exactly what went wrong, and what should be done right the next time?
John Fund: Well, part of it — and this is a little painful, because John Kasich is a former colleague of mine at Fox News — John Kasich’s personality is not always Mr. Sunshine. Scott Walker is a happy warrior in Wisconsin; John Kasich can often get a little petulant.
There was a famous incident during the 2008 campaign for governor in which John Kasich was stopped by a state trooper for speeding. And the state trooper had his video camera on and captured John Kasich calling the state trooper an idiot and various other things. You know, calling law enforcement stupid didn’t work for Barack Obama; it certainly doesn’t work for John Kasich.
John Kasich also included firefighters and cops in his anti-union restrictions, and that perhaps was a tactical mistake. Because police and firefighters are often willing to vote in behalf of more conservative causes.
And lastly, Wisconsin did not have this unusual voter referendum, where you can call a snap referendum on anything the legislature passes, and pick a very unusual election time, November of an off, off-year election. The turnout can be skewed by massive union spending far more than it can in other places, when the election is held at a more normal time.
For that and other reasons, in addition to the fact that John Kasich spent a whole lot of money on television and media consultants — and the Wisconsin Republicans in those recall elections spent a lot more money on grassroots and get-out-the-vote effort at the local level — never, never give your money over to consultants. They make 15 percent on media buys, they make 0 percent on get-out-the-vote efforts.
Craig Snider: Okay. I want everybody to give a great round of applause to yourselves and this panel.
And if you would, just one moment — David Horowitz is going to say one last couple of words to all of you. Thank you.
John Fund: Thank you. And I’ll be signing my new pamphlet.
David Horowitz: Just wanted to make one comment in Nina’s question about Barack Obama and bankrupting the country.
Barack Obama is a radical. Came from my radical Left that I came out of, only the worst part of it. This is the Billy Ayers part. Anybody who’s a radical wants to bankrupt America. Because America’s the Great Satan. And if you bring America down, you raise all those people that we oppress up. It’s very simple. So he wants — the bankruptcy of America is a good thing. That’s the mentality.
And I think the super-committee — there’s also this element of — I don’t pay attention to the super-committee, because — just too depressing. So I don’t know the individuals. But there’s a very large element in the Democratic Party, which is a communist element, that has been salivating over bringing the American military down.
John Kerry — didn’t he propose 25 percent cuts when he was a senator, or 50 percent cuts? So they’re very happy. They have no incentive to settle when they see the prospect of taking the American military down. That’s — you have to focus on who this enemy is, how malicious they are. And then you can — and Republicans are always doing the right thing. And it’s always — you know, let’s make a reasonable deal. These people aren’t reasonable.
Anyway, I’m exhausted from this weekend.
So I want to thank you all for coming. Your support is hugely important to what we do. And I hope that we have given you something yourselves back for the support that you give us. Thank you.
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