Comes from the Heritage Foundation discussion of tonight's State of the Union speech by President Obama. Early on in the speech Mr. Obama proposed (yet another) jobs program. They address this idea here.
More Job Training Programs on Top of All the Other Redundant and Ineffective Programs – David B. Muhlhausen, Ph.D.
Tonight, President Obama called for the federal government to engage in new job training and employment initiatives, especially for the hard to employ.
Before Congress signs off on any new initiatives, we must recognize that President Obama wants to add several new programs on top of the 47 job-training programs already operated by the federal government. Further complicating the matter, the U.S. Government Accountability Office has concluded that there is little evidence that these programs are effective.
When federal job training programs have been evaluated using random assignment to job training and control groups, these scientifically rigorous evaluations overwhelmingly find that these programs are ineffective. For example, Job Corps, the federal government’s flagship program for hard-to-employ youth, has been found to be ineffective on several measures:
Compared to non-participants, Job Corps participants were less likely to earn a high school diploma (7.5 percent versus 5.3 percent);
Compared to non-participants, Job Corps participants were no more likely to attend or complete college;
Four years after participating in the evaluation, the average weekly earnings of Job Corps participants was only $22 more than the average weekly earnings of the control group; and
Employed Job Corps participants earned $0.22 more in hourly wages compared to employed control group members.
Instead of adding new programs to an already bloated job training system, the President and Congress should stop wasting taxpayer dollars by terminating these programs.
So the President proposed a jobs program, on top of the 47 that already exist, of a type and structure that hasn't been demonstrated effective. It sounds like a good idea superficially, if you're not paying attention, but he knows the data and proposed it anyway. Your tax dollars at work. Well, at least it'll create more government jobs running the program, so it's got that going for it.
His final point highlights the amazing reverse logic which seems to be in play here, once again comparing the Keystone XL project to California’s high speed rail line. In the latter, the White House is continuing to push a project which virtually nobody seemed to have wanted by tossing vast amounts of taxpayer money into a plan which seems almost predestined to fail. In the former, they are fighting tooth and nail to stop a project which would have been paid for by private investment and created jobs in states which desperately need them, costing the taxpayer nothing and resulting in a downstream flow of cash back into government coffers through increased commercial activity and employment.
What is to be gained from this general approach unless you’re actively looking to turn out the lights?
You can cue up Dandy Don Meredith from the early days of Monday Night Football at this point.
David Frum, ostensibly a Republican, asks in New York Magazine "When did the GOP lose touch with reality?" Judging by his composition it's a fair question to turn back on the inquisitor.
He starts out by trying to emphasize his Republican street cred.
I’ve been a Republican all my adult life. I have worked on the editorial page of The Wall Street Journal, at Forbes magazine, at the Manhattan and American Enterprise Institutes, as a speechwriter in the George W. Bush administration. I believe in free markets, low taxes, reasonable regulation, and limited government. I voted for John McCain in 2008, and I have strongly criticized the major policy decisions of the Obama administration.
Believes in free markets? Check. Low Taxes? Check. "Reasonable" regulation. Well, one man's reasonble is another man's unreasonable. Let's just file this one under "less regulation than Mr. Obama wants" and move on. Limited government? Check. Voted for McCain in '08? Given the other choice you'd kind of have to, so check. Criticized the major policy decisions of the Obama administration? Haven't we all, Mr. Frum.
So it's all good. Until we hit the next paragraph.
America desperately needs a responsible and compassionate alternative to the Obama administration’s path of bigger government at higher cost. And yet: This past summer, the GOP nearly forced America to the verge of default just to score a point in a budget debate. In the throes of the worst economic crisis since the Depression, Republican politicians demand massive budget cuts and shrug off the concerns of the unemployed. In the face of evidence of dwindling upward mobility and long-stagnating middle-class wages, my party’s economic ideas sometimes seem to have shrunk to just one: more tax cuts for the very highest earners.
Let's take these one at a time, and see how the square with his assertions of his limited government/low tax/free market declarations. First up: "the GOP nearly forced America to the verge of default just to score a point in a budget debate." The GOP did nothing of the kind. What the GOP did do was to insist on substantial budget cuts (limited government) and no tax increases (low tax) in exchange for increasing the debt ceiling. Mr. Obama, on the other hand, wanted a blank check. He was looking for a way to avoid any spending cuts while raising taxes on the upper earners - which analyses have shown is not enough to pay for such spending anyway, and which Mr. Obama himself admitted is the wrong medicine in a sluggish economy.
Next we have this: "In the throes of the worst economic crisis since the Depression, Republican politicians demand massive budget cuts and shrug off the concerns of the unemployed." Okay, I think we're in agreement about the economy. Where your reality testing is suspect, Mr. Frum, is in what follows that generally supportable statement. Republican politicians have never demanded "massive budget cuts," only a reduction in the growth of future spending. You've fallen into the baseline budgeting trap. "Massive cuts" to beltway insiders and liberal journalists means decreasing the rate of growth of government spending from 10% to 4%. To those of us in the real world that's a 4% increase in spending that would be a lot more affordable and reasonable than 10%.
I'm also concerned that you think Republicans "shrug off concerns of the unemployed". I suspect you are referring to those politicians resisting the call to provide endlessly flowing unemployment benefits. Already they've been extended to nearly 2 years, and Republicans are cruel to want to stop them there? Studies show that extending unemployment benefits extends unemployment. Or perhaps you're referring to the Republicans' insistance that Democrats who want this live by their "pay-go" standard and cut spending elsewhere to fund it. Or maybe you're living in pure fantasy land, and you believe, as apparently the president does, that extending unemployment benefits "creates jobs." Regardless, this is not "shrugging off concerns of the unemployed," and putting it that way is pure demagoguery of the sort I'd expect from Sen. Harry Reid, among others.
Let's move to your final preposterous assertion in that section, that Republicans simply want "more tax cuts for the very highest earners." Aside from presidential candidates and their proposals for various flat, flatter, and flattest tax reforms (which would help the struggling private economy, many believe), is there anyone in Congress who has proposed cutting only the top marginal rate? By the way, if you're going to suggest that preventing the rates from rising with expiration of the Bush cuts is a cut in marginal rates then you misunderstand the concept. That is preventing an increase, not pushing for a cut. Let's assume you really are for "low taxes," as you state. Then wouldn't blocking a tax increase be desireable?
But there are more puzzling assertions in this essay.
It was not so long ago that Texas governor Bush denounced attempts to cut the earned-income tax credit as “balancing the budget on the backs of the poor.” By 2011, Republican commentators were noisily complaining that the poorer half of society are “lucky duckies” because the EITC offsets their federal tax obligations—or because the recession had left them with such meager incomes that they had no tax to pay in the first place. In 2000, candidate Bush routinely invoked “churches, synagogues, and mosques.” By 2010, prominent Republicans were denouncing the construction of a mosque in lower Manhattan as an outrageous insult. In 2003, President Bush and a Republican majority in Congress enacted a new prescription-drug program in Medicare. By 2011, all but four Republicans in the House and five in the Senate were voting to withdraw the Medicare guarantee from everybody under age 55.
I'll have to move swiftly though this miasma, in order not to bore the readers, but this is nonsense.
The push to reform Medicare (by making it a grant program to buy insurance rather than a government provided insurance benefit) shows allegiance to private enterprise, to individual freedom of choice, but mostly to the principle of fixing future problems before they are unfixable. Medicare's future unfunded liability is nearly $100 Trillion. That's Trillion, with a T. Those under 55 are ten years away from qualifying for Medicare. Ten years.
The mosque in "lower Manhattan" was to be 2 blocks from Ground Zero of the 9-11 attacks, an understandably sensitive location. Rather than an example of Americans being insensitive to Muslim sensibilities, it is instead an example of Muslims being insensitive to non-Muslim sensibilities.
And Democrats (among others) have now so bastardized and warped the tax code that half of Americans pay no federal income tax. That's not good for America, and in particular it's not good, for those who want a growing and vibrant economy, to stifle those who would provide jobs and economic growth with a steadily heavier burden of taxation. You know what's at the end of the road of steadily more progressive taxation, don't you?
So Mr. Frum, what we have here is a non sequitur. You assert that you want limited governnment, less regulation, low taxes and that you oppose Mr. Obama's policies. Your objections show us, however, that you don't really want those things. You ask in this article whether you're crazy. You're not. You are, however, deluding yourself if you think that Republicans should and will support Democrat, or even Democrat-lite policies of centralized control, bigger government, higher taxes, more regulation and balkanization, all of which stifle economic growth and freedom.
The question isn't "when did the GOP lose touch with reality?" The question, Mr. Frum, is when did you become a Democrat?
*no time now, I hope to be adding some links later for reference.
11/21/11 2020: A ha! I got the links added - and a few grammatical corrections as well.
A little anecdote that may help explain some of the escalation in insurance premiums that people are about to find as year end approaches - for reasons other than the colossally intrusive and costly ObamaCare.
I saw a patient in the office a couple of weeks ago. A gentleman in his 40's, he had twisted his knee two months earlier and since had been bothered by knee swelling, pain along the joint line medially (the inside part of the knee), and a catching sensation which cause his knee to buckle when it occurred. He was unable to squat or kneel. I examined him after taking the history, finding an effusion in the knee (the swelling), sharply positive provocative testing for a meniscus tear (the McMurray and snap tests), and prominent joint line tenderness directly over the meniscus. Plain x-rays showed no degenerative changes. And there's one other thing. This patient had a very similar problem with the other knee four years ago, and I had arthroscoped that knee removing a torn medial meniscus with an excellent outcome.
So, clearly, this man had a symptomatic torn meniscus, with most probably an unstable flap tear (producing that catching/buckling sensation). This is about the most clearcut, obvious presentation you could have. He had had symptoms for two months, and anti-inflammatories had not helped. I, quite appropriately, suggested arthroscopic surgery to resect the torn meniscus. I've examined thousands of knees, and I had seen this many times before. Based on the plethora of findings given above I didn't need an MRI of this knee to confirm the diagnosis. I thought that was what the insurance company wanted, to save money by eliminating unnecessary testing. I was wrong.
The insurance company, a large HMO, refused to approve the surgery until the patient had an MRI to verify what I knew to be true. I didn't need one, I told them, but they insisted. The patient had the MRI, and of course it demonstrated the torn meniscus. We'll be going ahead with the surgery soon.
Trust the doctor? Not on your life. No, instead we need an expensive diagnostic study read by a radiologist who hasn't examined the patient, increasing the cost of care on this one patient. Now picture thousands of orthopaedic surgeons and hundreds of thousands of patients annually having the insurance company second-guessing the experienced surgeon. By the way, my practice has our own MRI, and I still tried not to use it.
I tried to save some health care dollars. I really tried. But the insurance company wouldn't let me.
You think this is bad? Wait until I tell you about PT for rotator cuff tears.
I've been watching with amusement the preposterous, unhelpful and ill-informed protests known as OWS, "Occupy Wall Street" as it were. There are "Occupy" protests in other cities, including our own Boston locally, as well as Toronto, Oakland, Sydney, LA and a host of others. Most are comprised of a relative few individuals, who claim, without justification, to represent the "99%", as in the 99% who aren't among the top 1% of annual income in the nation.
Every day there's another howler coming out of the movement. We'll go randomly through a few of the amusing and occasionally disturbing vignettes.
Both Ace of Spades and James Taranto today wrote about the discovery that if you appear to be giving out free food (or anything else, really, for free), freeloaders will want to partake. Imagine that. OWS is slapped with the realization that resentment and a feeling of being abused can result from someone usurping your property rights and taking your stuff. From Taranto a serious take:
In truth, the Obamavillians are learning why Obama is wrong--why socialism doesn't work. A society that makes a virtue of dependency ultimately encourages freeloading and grifting. The instinct to prevent it is a healthy one. A lot has been written about the similarities and differences between Obamaville and the Tea Party, and here is one: Whereas the latter arose out of the instinct to reward self-reliance and discourage dependency, the former is having it awakened by an encounter with the real world.
Ace's more humorous look at the dustup:
Yeah,what right do the homeless and prisoners have to represent themselves as society's downtrodden. Impostors! They're not oppressed like the college graduates with too much debt from pricey private colleges!...
Amazing... they don't want to share their own stuff with people they don't have any particular common bonds with. And they're resentful of Other people coming in and acting like they have the right to take their stuff...
But note within their little society, they themselves set up a hierarchy "those who belong" and "losers and derelicts we wish to exclude."
Do they not get that that's what they are to us?
Here Ace explains why money exists, a concept seemingly foreign to the occupiers. Short answer: it's a medium of exchange for items of value.
I think you guys (again, the guys in this video) are working for the same reason as Peter Schiff: Money. Which is, in turn, simply a convenient unit of exchange for the most precious commodity in the world: Time.
When you buy a loaf of bread, you are giving up some of your time, in the convenient unit of exchange called money, by which you were paid for your time, for someone else's time.
This is why virtually everybody works.
And have you heard about the drummers? The percussionists threatened to disrupt the occupation, as if identifying disruption were possible in such a ragtag organization.
The drummers’ refusal to be silenced has opened cracks in the leaderless movement. The general assembly that has formed to oversee the protests proposed to limit the drumming to two hours per day, but the drummers fought back.
The Heritage Foundation took a conservative's look at what are, as best as anyone can tell, the demands of the occupiers. Hijinks ensue. Here's a snippet, with Demand #9 and parts of its response, but the whole piece is worth a read.
9: Passage of a comprehensive job and job-training act like the American Jobs Act to employ our citizens in jobs that are available with specialized training and by putting People to work now by repairing America’s crumbling infrastructure. We also recommend the establishment of an online international job exchange to match employers with skilled workers or employers willing to train workers in 21st century skills.
James Sherk, Senior Policy Analyst in Labor Economics at the Center for Data Analysis:
Public works projects will not reduce unemployment. Government spending does not create new wealth in the economy, it reallocates existing spending. Some workers get jobs on the public works project, at the expense of jobs that do not get created elsewhere in the economy...
Sadly, government job training programs also do not live up to their hype... The government has not learned how to do effective job training. Fortunately, OWS do not have to wait for the government to act. Private sector online job exchanges like Monster.com already match millions of employers with workers every year.
Read the whole list of demands. It's a giant Marxist wish-list. I particularly like the demand for student loan relief. Hey, no one held a gun to your head forcing you to go $150k in debt for your degree in primitive cultures, why should others be forced to pay it off for you? I paid off my student loans, you pay off yours. You know what else? My wealthiest friend started out owning a gas station and working construction jobs. Figure it out.
Finally, perhaps the most unintentinally amusing comment on the OWS protests comes from Massachusetts Democratic Senate candidate Elizabeth Warren, who claims, with curious pride, that
“I created much of the intellectual foundation for what they do,”
"Intellectual foundation." You keep using those words. I do not think they mean what you think they mean.
I caught a bit of this in the OR lounge on Friday morning.
Wow. 150,000 people signed the petition? Wow. And this 22 year-old woman with two part-time jobs started the ball rolling. Unbelievable. Wow. Bank of America must be shaking in their boots at this huge grassroots movement. Wow.
Molly Katchpole launched a petition against Bank of America, which was signed by more than 131,000 customers and counting, saying she would take her business elsewhere unless the company drops its plan to charge $5 for debit card purchases.
Katchpole closed her accounts, cut up her debit and credit card on the sidewalk, and left with $400 cash she says she intends to deposit in a credit union.
WASHINGTON -- Molly Katchpole has had it with Bank of America.
The 22-year-old cleared out her account, and cut up her debit card after the bank decided to charge customers five dollars a month just to use their debit card.
She's so mad that she started a petition to let the bank know the charge goes too far. In just one week, she's collected 150,000 signatures.
For his part, President Barack Obama said consumers were being "mistreated" by the bank.
"You can stop it because if you say to the banks, 'You don't have some inherent right just to, you know, get a certain amount of profit, if your customers are being mistreated, that you have to treat them fairly and transparently,'" he told ABC News.
"Bank of America customers, vote with your feet," Durbin urged in outraged reaction to the new "service charge."
"Get the heck out of that bank," Durbin exhorted. "They are overcharging their customers even for this new debit card reform. It is hard to believe that a bank would impose [such a fee] on customers who simply are trying to access their own money on deposit at the Bank of America."
Mr. Durbin mentions that Bank of America received bailout funds (conveniently omitting the forced assumption of the debt of the failing Countrywide Mortgage, Senator Dodd's lender of choice, and Merrill Lynch, preventing Merrrill from Lehman's fate). And Molly Katchpole, she's just an innocent 22 year old trying to earn a living at two part-time jobs. As sympathetic figure as you'll find. Just a young kid struggling to make ends meet. Well, maybe not.
Newly graduated gal looking to ruffle some feathers, change minds, and have great conversations with fellow professionals in labor and progressive politics advocacy. [emphasis mine]
Specialties
Persuasive writing and speaking, social media, leadership, research - labor and progressive politics, art and architectural history.
"Labor and progressive politics advocacy?" Whoa. She lists her employment as "Account Manager at Winning Over Washington". So I went and had a look at Winning Over Washington (WOW) to see just what they're up to. Turns out WOW is a communications and public relations firm. The list of clients? SEIU, NEA, AFL-CIO, Democratic National Committee, Democratic Governors Association, EMILY's List. You know, the usual broad spectrum of interests, from far left to farther left. Wow, indeed.
So Ms. Katchpole is an account manager at a far-left PR firm. A firm which might well be interested in demonizing banks in order to deflect blame from the failed policies of a Democratic administration, perhaps? Here's another website where she lists her job as: online organizing for progressive politics.
Now that took me almost no time at all. Wouldn't it seem that CNN, MSNBC, and the others that ran with this story could take a second to find out that this grassroots movement is the finest quality astroturf that money can buy rather than presenting it absent that important context?
Bank of America employs thousands and thousands of people. The cash they earn is how they pay those individuals. Or are we not all about jobs anymore? Oh, and about that $5 monthly fee. If you find that charge outrageous, then individually close your account and move it to a community bank or credit union. But remember, it's the equivalent of a monthly grande skinny vanilla latte with an extra shot. I'm fairly certain Ms. Katchpole knows that as well.
'Suddenly, liberal Democrats are making the same argument about the tax code that I've been making for 20 years," laughs former Republican House Majority Leader Dick Armey. "Welcome to the party." Mr. Armey, who along with Steve Forbes has been the torch bearer for the flat tax since the early 1990s, believes that the latest applause line from President Obama that "billionaires should pay the same tax rate as janitors" may be the political gateway to sweeping tax reform.
Mr. Forbes sees an opening here too and says: "The flat tax is the perfect issue for these times. It fixes the economy and doesn't cost a dime."
Mr. Moore outlines the essentials of a flat tax. A single rate. A carve out for the first $30,000-$40,000 of family income. And few if any deductions, limiting how low you can go on what you owe.
That's why the flat tax is the fairest tax of all. The combination of a single tax rate with a family-size allowance—shielding, say, the first $35,000 of income for a family of four—ensures that everyone would pay the same marginal tax rate above that level. A family of four with an income of $70,000 would pay an average tax rate of about 8.5%, whereas the members of the Buffett billionaire club would pay 17%...
"I keep waiting for a Republican candidate to take the plunge," says a half-frustrated Steve Forbes. Then he adds one more flat tax selling point: "You know it ends all this crony capitalism in Washington. From now on, if Obama invites you to the White House, you'd know it's because he really loves you."
Republican candidates are shy to "take the plunge" because they can see the false demagoguery of "tax cuts for the rich" a mile away, and they don't want to walk down that road. But at least if one does they can use Mr. Obama's own words to sell the idea, on the principle that "billionaires should pay the same tax rate as janitors."
Quoted in James Taranto's indispensible "Best Of The Web" today, Barack Obama does seem to be strongly endorsing a flat tax.*
"Yeah, right," I hear you say. "Don't mess with us, Giacomo. This guy's all about class warfare and redistribution and you expect us to believe he really wants a flat tax?"
"Now, the Republicans, when I talked about this earlier in the week, they said, well, this is class warfare. You know what, if asking a billionaire to pay their fair share of taxes, to pay the same tax rate as a plumber or a teacher is class warfare, then you know what, I'm a warrior for the middle class."
You see? He wants billionaires to pay the "same tax rate" as a plumber or teacher. The very same rate! Not only that, but he defines paying the same rate as a "fair share" of taxes. Look I think this is something we can all get behind. Let me hear you out there! O-ba-ma! O-ba-ma! O-ba-ma!
*A flat tax, in case you have forgotten, is an income tax system where all taxpayers at all income levels pay the same percentage of their income in taxes. For example, if the rate is 15% and you make $50,000 annually you would pay $7500 to the IRS. If you made $5 million annually you would pay $750,000.
**If you want to see graphically just how classless and undignified is the Obama White House, check out the transcript of those remarks in Cincinnati a little more completely. Here are two excerpts.
THE PRESIDENT: We've got some folks I just want to make sure are acknowledged here today. First of all, the Secretary of Transportation, Ray LaHood, is in the house. Give him a round of applause. (Applause.) We've got the mayor of the great city of Cincinnati -- Mark Mallory is here. (Applause.) We've got the mayor of Covington, Mayor Denny Bowman. (Applause.) Senator Rand Paul is here.
AUDIENCE: Booo --
And this one:
Behind us stands the Brent Spence Bridge. It’s located on one of the busiest trucking routes in North America. It sees about 150,000 vehicles every single day. And it’s in such poor condition that it's been labeled "functionally obsolete." Think about that -- functionally obsolete. That doesn’t sound good, does it?
AUDIENCE: Nooo!
THE PRESIDENT: It’s safe to --
AUDIENCE MEMBER: Kind of like John Boehner. (Laughter.)
Now this, mind you, is the official White House transcript of the remarks, and they think it's appropriate to document that the audience of Obama sycophants and union goons booed Senator Rand Paul, and that an audience member, not an official speaker at the event, made a joke about Speaker John Boehner being "functionally obsolete." As Russell used to say in Bill Cosby's "Fat Albert" cartoon, "You're from the NCAA. No Class At All."
From, of all places, an Associated Press Fact Check by Stephen Ohlemacher, discussing whether "millionaires and billionaires" really do pay less in taxes than secretaries. They start by quoting Mr. Obama who, to be fair, is only parroting the class warfare nonsense that Democratic politicians have been spouting since the advent of the late Ted Kennedy. (His older brother Jack didn't lead him down this particular path.)
"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," Obama said Monday. "That's pretty straightforward. It's hard to argue against that."
Now from the AP:
The data tells a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.
There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above $1 million.
The two questions that remain? One, someone explain to me again what "paying your fair share" really means, in dollars and cents. Two, how can Democratic politicians continually spout nonsense like this?
Mr. Obama says "It's hard to argue against that." Well, it would be hard to argue against if it were true.
9/20/11 1610: Oops...link to AP fact check added. My bad.
Right on cue, the Wall Street Journal editorial page features a summary of Mr. Obama's tax-raising plans I referred to in the last post. It's not pretty, and no matter what's in the American Jobs Act this collection of economic anchors isn't likely to let the American economic ship cruise freely.
Mr. Obama said last week that he wants $240 billion in new tax incentives for workers and small business, but the catch is that all of these tax breaks would expire at the end of next year. To pay for all this, White House budget director Jack Lew also proposed $467 billion in new taxes that would begin a mere 16 months from now. The tax list includes limiting deductions for those earning more than $200,000 ($250,000 for couples), limiting tax breaks for oil and gas companies, and a tax increase on carried interest earned by private equity firms. These tax increases would not be temporary.
What this means is that millions of small-business owners had better enjoy the next 16 months, because come January 2013 they are going to get hit with a giant tax bill...
The article itemizes the taxes
allowing Bush rates to expire, 2013, a programmed tax increase that includes an increase in the capital gains rates
elimination of itemization from "the wealthy," 2013
expiration of the proposed temporary tax credits for 2012, no longer available 2013
two new taxes hidden in ObamaCare, including a 2.9% surcharge on investment income
Yeah, small business owners will be crawling over each other to be first in line to increase their company expenses in personnel costs and health care costs by adding jobs with all that in their future.
All of this assumes that American business owners aren't smart enough to look beyond the next few months. They can surely see the new burdens they'll face in 2013, and they aren't about to load up on new employees or take new large risks if they aren't sure what their costs will be in 16 months. They can also reasonably wonder whether Mr. Obama's tax hike will hurt the overall economy in 2013—another reason to be cautious now.
It's painfully obvious at this point that for the President it's not about the economy. It's not about jobs. And it's not about unleashing the American entrepreneurial spirit. The president doesn't care a whit about the private economy, I'm sad to say. It's about the redistribution, stupid. And America, composed as it is of Americans, should just say no.
You can subtitle this one, "I'll get my tax increase yet, you wascawy Wepubwicans!"
Over at Powerline John Hinderaker publishes the text of a letter from Senator Jeff Sessions to Mr. Obama's Director of the Office of Management and Budget (OMB) Jacob Lew. If you thought that when President Obama took to the airwaves last Thursday in front of a joint session of Congress to introduce and sell his American Jobs Act that there a) actually was an American Jobs Act and b) that bill was ready for Congress to evaluate it's economic impact, well, think again. The letter reads in part:
When we received a copy of the legislation yesterday, we were expecting the Office of Management and Budget–which enjoys a five hundred person staff–to provide a precise and detailed estimate of the fiscal impact of the president’s proposal. But no such information was provided.
This is not satisfactory.
Perhaps even more troubling, however, is that despite the emphatic promise that we would learn yesterday how the bill would be offset, this information is missing too.
Given the depth of the economic crisis we now face–slow growth, high debt, and chronic unemployment–the lack of fiscal detail that has been provided to Congress is both disappointing and irresponsible...
When the president submitted his budget in February you declared: “our budget will get us, over the next several years, to the point where we can look the American people in the eye and say we’re not adding to the debt anymore.” In reality, the budget would have increased our debt by $13 trillion.
Read that last paragraph again. The budget submitted would increase over 10 years the cumulative national debt by $13 trillion. Recall that we just raised the debt ceiling due to passing $14.5 trillion cumulative debt - that amount accumulated over the course of 235 years. So when the OMB director states that their budget "will get us, over the next several years, to the point where we can look the American people in the eye and say we’re not adding to the debt anymore," it's not because of spending restraint. It's because of plans for much, much, much higher levels of taxation.
Mr. Hinderaker helpfully includes an excerpt from a Washington Examiner editorial making the ploy evident. The Examiner notes that Director Lew outlined some of the increased revenues the President is seeking in this bill - and they're the same ones he wanted as part of deficit reduction earlier in the summer. Wanted, but didn't get. The Examiner editorial asks a very pertinent question.
Pressed to explain how Obama could use the same tax hikes to both meet the debt deal’s deficit reduction targets and pay for his new stimulus plan, Lew admitted that even Obama can’t count the same tax increases for two separate purposes. Instead, Lew said that Obama would be introducing a whole new slate of tax hikes next week, when he plans to give yet another deficit reduction speech.
Obama again insisted Monday that his second stimulus will be “fully paid for.” This is problematic on several levels. If Stimulus II is fully paid for with immediate tax hikes, then it isn’t the kind of deficit spending that Obama’s Keynesian logic demands. If it is only paid for later, at the end of the 10-year horizon, then this amounts to a budget gimmick, because Obama will be long gone from office by then.
That is, if the tax hikes go into effect now for the jobs bill, then the bill is "paid for" with tax increases - tax increases on job producers in the middle of a stagnant economy with no job growth. If the tax increase are delayed, and Keynesian "spend now, settle up later" is the plan, then it amounts to kicking the can down the road, burdening future congresses, future presidents, and future taxpayers with irrationally exhuberant debt. $13 trillion in 10 years indeed.
But look again at the statements of Mr. Lew. "Instead, Lew said that Obama would be introducing a whole new slate of tax hikes next week." I assume these would be in addition to those listed already. Ugh. These will be once again proposed with a prominent class warfare backdrop, and the word "fairness" will figure prominently, I'll bet. There won't, of course, be any definition of "fairness," and there won't be any mention of the fact that such tax increases burden businesses, investors, and job producers at the very point in time that they're needed most.
And if the "wascawy Wepubwicans" fail to raise the taxes that Mr. Obama's filibuster-proof Democratic congress previously refused to raise during a time of economic uncertainty? I can see the demagoguery coming, it's coming 'round the bend. And we won't see the sunshine since I don't know when.
I only have two questions. First, if this proposed bill is all that, why wasn't it proposed a long, long time ago? Second, what makes this bill so much different from the utterly failed 'Stimulus' I?
As an aside, did you catch the snickers and murmurs when he said that this isn't political grandstanding or class warfare - immediately after accusing Republicans of protecting "the most affluent citizens and corporations." Pfffft. Here's a link to CNN's "Live Blog," which has a transcript, more or less.
By the way, I think he's becoming Don Quixote, tilting at windmills that aren't there. For example:
I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy.
Nobody has ever asked people to choose between jobs and safety. Nobody has proposed that credit card companies can hide their fees (hint: even before reforms were instituted they informed you, in the junk mail you usually threw away unopened.) Nobody wants kids gulping down mercury. And the last two are simply his defenses for ObamaCare and unions, both of which are stifling job growth and harming economic competitiveness.
There are no new ideas in this speech. The game is up. This president is all about redistribution, government control, union power, and environmental shackles on the productive sectors of America. He's not about economic growth, global competitiveness, energy security, individual rights and individual freedoms. I have yet to hear anything that would change that.
The U.S. Postal Service posted a net loss of $3.1 billion in its third quarter and warned again it would default on payments to the federal government if Congress did not step in.
Total mail volume for the quarter that ended June 30 fell to 39.8 billion pieces, a 2.6 percent drop from the same period a year earlier, as consumers turn to email and pay bills online.
The mail carrier, which does not get taxpayer funds, has struggled to overhaul its business as mail volumes fall. It has said personnel costs weigh heavily and is facing a massive retiree health benefit prepayment next month.
"We are experiencing a severe cash crisis and are unable to continue to maintain the aggressive prepayment schedule," Joseph Corbett, the agency's chief financial officer, said in a statement.
"Without changes in the law, the Postal Service will be unable to make the $5.5 billion mandated prepayment due in September."
Does the USPS want to survive? Well, then drop your personnel costs dramatically. Deliver mail only twice or thrice weekly, and cut your bloated carrier staff. And reform your pensions. Act like a private company - you know, one that doesn't get taxpayer funds - by going to defined contribution pensions and reforming the retiree health plan.
Technology changes everything. The Pony Express isn't still in business.
Laura Ingraham juxtaposing Obama and Carter. Brilliant. Shhhh ... don't tell anyone, but do you think there might be a theme, some sort of underlying principle, that guides misguided Democratic policy choices?
Chris Matthews thinks the screeching kids in the back seat are now trying to drive the car. Don't tell him, but the problem is that the screeching kids have been driving since January 2007*, and the adults, realizing we're lost, are trying to claw their way back into the front seat and behind the wheel.
The heart of Mr. Obama's press conference today, via The Hill:
President Obama on Friday kept up the pressure on Republicans to agree to revenue increases in a deal to raise the debt ceiling, claiming 80 percent of the public supports Democrats' demand for tax increases.
"The American people are sold," Obama said. "The problem is members of Congress are dug in ideologically."
Throughout the press conference, Obama blasted Republicans for ignoring what he said is the will of the American people by rejecting tax increases that would balance out spending cuts in a debt package.
Let's leave aside the assertion that "the American people are sold" on increasing taxes. (They're not.) Why, particularly, do spending cuts need to be "balanced" by tax increases? There are three reasons I can imagine, and none of them have anything to do with what's "best" for the country.
because in the interest of "fairness" more money needs to be collected and distributed from those who have
because in the interest of "compromise" Mr. Obama expects Republicans to roll over and give him the tax increase his filibuster-proof Democratic Congress wouldn't give him, even with low GDP growth and high-unemployment
because by demagoguing Republicans into agreeing to raise taxes he hopes to turn them all into George H. W. "read my lips" Bush before the next election.
I think the first reason is the driving force, but the third, with the President already in full re-election lockdown, is definitely a major consideration. Funny, none of those reasons involve actually helping economy grow and create jobs. Or perhaps in his next press conference Mr. Obama could explain how raising taxes will do that.
The so-called "Blue Dog" Democrats, the "centrist" Democrats who are just so much more conservative than those fire-breathing liberals who lead the Democratic party (and for whom these Blue Dogs voted, I might add) are upset at Republicans over the debt-ceiling negotiations.
But this time around, moderate Democrats are starting to sour on the process, arguing that the intractability among Republican rank and file is threatening their support.
“I’ve been for cutting the deficit for a long time, that’s what the Blue Dog mantra is about — but not in a radical way and not in the way that harms the economy. These folks are hijacking the issue as a way that is very unfortunate, and they’re voting ideology versus what I think is in the best interest of the country,” said Rep. Dennis Cardoza (D-Calif.), a member of the moderate Blue Dog Caucus.
You know, Representative Cardoz, (D-Calif.), maybe they're just voting for what they think is in the best interest of the country. You know, voting their conscience, as opposed to yours. But if you think it's better to sharply raise taxes on the job creators in America's private economy, in the middle of history's most-sluggish recovery and a stagnant job market, then by all means join with Mr. Obama and denigrate the intentions of the Republicans, and demagogue the issue in class warfare terms.
The Daily Caller, in the person of reporter Amanda Carey, gets it wrong in a story trumpeting the "offer" from President Obama to "put Medicare and Social Security cuts" on the negotiating table. That's the headline, at least. In the story she phrases it somewhat more eloquently, as "major changes to Social Security and Medicare."
The Obama administration, in seeking $4 trillion in spending cuts in a debt limit deal, has put major changes to Social Security and Medicare on the table if Republicans agree to increased tax revenues.
The offer caters to both sides in the debt limit negotiations and according to the Washington Post, President Obama will urge congressional leaders on Thursday to seize the opportunity to act. The compromise, however, still puts both Republicans and Democrats in tough spots.
Democrats have vowed to protect Medicare and Social Security, while Republicans still argue that tax increases are not realistic legislative proposals. If leadership from both parties agree to the Obama’s compromise, the next move will be to sell the plan to their respective bases and to members of Congress.
Ms. Carey, judging by her thumbnail photo that accompanies the story, is way too young and recently graduated from J school to understand why her formulation in the third paragraph is so inaccurate, so I'll outline it for her here.
Republicans primary argument is not that "tax increases are not realistic legislative proposals," though indeed they are not. Their primary argument is that tax increases will take money from the private economy that is necessary for future economic growth. If your primary goal is job creation and a GDP growth then you don't siphon capital from the job creators. (If your goal is redistribution then fine, have at it.)
Finally, Mr. Obama is desperately seeking to be seen as the adult offering reasonable compromise between the sniping children in party leadership. He's not. If he were, we wouldn't have seen the harmful 'stimulus' outsourced to the Democratic leadership of Pelosi/Reid, we wouldn't have seen the moronic cash for clunkers program, we wouldn't have seen ObamaCare pushed through on a one party vote while a recovery was attempting to take hold, we wouldn't have seen no Democratic budget proposal for two years (other than Mr. Obama's - which was voted down 97-0 earlier this year), we wouldn't have seen the drilling moratorium and pushes for carbon taxes that would both increase the price of fossil fuels and siphon more money from the economy, and we wouldn't have seen repeated demands for "tax increases on the wealthy" and the ridiculous sniping over corporate jets. He still is looking for "increased tax revenue" despite previously admitting that increasing taxes in the midst of economic malaise is not helpful.
If Democrats wanted to solve the problem their "compromise" should consist of a) admission that our current tax structure is quite progressive already and that any tax rate increase for the foreseeable future is harmful, b) admission that both Medicare and Social Security need reform, not "cuts," and not demagoguery, and c) admission that ObamaCare was a bad idea that will only make matters worse both economically and in terms of personal freedom and choice. The country needs to make the safety net programs sustainable and promote economic growth, and not use them for political gain and redistribution.
By the way, Ms. Carey can be excused a bit, for she is young. NYT Columnist David Brooks, on the other hand, has no excuse. In this tantrum of a column he both misrepresents the position of the Republican opposition and then denigrates them, for good measure.
The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them...
"The legitimacy of scholars and intellectual authorities?" "A thousand impartial experts?" Surely, he must be joking. Mr. Brooks is referring to his tribe as "intellectual authorities," and being in agreement with him they are therefore "impartial." But Mr. Brooks, I think, is well aware that there are, of course, other tribes, other "intellectual authorities" equally "impartial" in the eyes of others.
7/7/11 1205: Ed Morrissey: it's not a revenue problem, its a spending and recession problem. So fix the spending and the recession - the revenue will follow.
Over at Legal Insurrection Michael Alan recognizes the signs. He embedded a video from Mary Katherine Ham that contains more evidence that "spreading the wealth around" is the real goal. I'll follow his lead and embed the video also.
Gee, and to think, you all could have found that here 5 days ago. And I don't think he's thinking just about removing corporate jet subsidies.
He has, in his unscripted moments, a thoroughly redistributionist soul.
Fast forward. With the 'stimulus' that cost the country over $800 billion dollars in deficit spending (which did not, incidentally, keep the unemployment level under 8%), combined with keeping that additional spending on into the future, combined with the trillion-dollar ten-year cost of ObamaCare, combined with annual deficits of $1.4 to 1.7 trillion and the failure to address the not-so-long term problems with funding Social Security and Medicare, combined with the demagoguing of "the rich," "oil companies," "business" (and, frankly, anyone who isn't a union member or a registered Democrat), let's see if you can guess what Mr. Obama wants out of the talks to raise the debt ceiling.
The key disagreement is over taxes. Democrats, including Obama, say a major deficit-reduction agreement must include tax increases or the elimination of tax breaks for big companies and wealthy individuals. Republicans are demanding huge cuts in government spending and insisting there be no tax increases.
Let's remember that, first, it is possible to see steadily decreasing deficits even without tax increases and "huge cuts" in spending, to use the phraseology of the AP report. Here's Cato's Dan Mitchell, and he'll inform you in this video about the "current services baseline" that puts the lie to those "huge cuts."
Second, remember Mr. Obama's tendency to look at the economy as a political tool for rewarding his supporters and punishing those who are not, a tendency which largely explains why he has failed to help it recover. He's been too busy rewarding the UAW and unionized Boeing employees, among others, and punishing non-unionized workers in red South Carolina, Boeing itself, and GM and Chrysler bond-holders. Who could possibly object to job-killing, economy-stifling tax increases if they're hitting the "right" people?
Who indeed. Mr. Obama doesn't just want the UAW to have a large stake in GM. He'd like his administration to have its own large stake in the entire U.S. economy, so that the wealth can best be "spread around." There is, after all, a point where "you've made enough money," and apparently he and the Democrats in Washington know just where that is.
The debt ceiling will need to go up, but taxes shouldn't, and spending cuts should be the focus of everyone in the room. If Mr. Obama wants tax increases, make him propose them for 2012. He won't do that, of course. There's an election later that year.
6/26/11 1515: Via The Corner, Sen. John Kyl lays it out.
Senate Minority Whip Jon Kyl (R., Ariz.) says a deal to raise the debt ceiling will come down to whether or not President Obama abandons his “ideological bent” to raise taxes on the American people.
“The president has to make a decision,” Kyl said on Fox News Sunday. “Which is more important to him, solving this problem reducing spending somewhat or making sure that we raise taxes on the American economy? If that’s his ideological bent here and under all circumstances that’s what he is going to insist on, we’ve got a big problem.”
"Ideological bent," "redistributionist soul," whatever. The point here is that it's apparent that Mr. Obama has a belief that higher tax rates on the producers and job-creators in and of itself is good, regardless of the economic disincentives and contraction that might occur. I shouldn't have to point this out, but there is a name for someone with such an ideological bent.
At the end of the day, President Obama must decide how the country will proceed. “He’s got to make that choice,” Kyl said. “And the best choice, I think, is not doing anything to harm the economy.”
From the Wall Street Journal editorial page, discussing the 'hard choices' Mr. Obama made in reducing spending with his proposed budget.
The White House actually touts as tight-fisted a budget proposing a record $1.645 trillion deficit for fiscal 2011, due largely to a new surge in spending to 25.3% of GDP. That's more spending than in any year since 1945. Federal debt held by the public—the kind we have to pay back—will rise to 75.1% [of GDP] in 2012, which is the highest since 1951 and more than double what it was as recently as 2007. [chart at the link]
This $3.73 trillion budget does a Cee Lo Green ("Forget You," as cleaned up for the Grammys) to the voter mandate in November to control spending. It leaves every hard decision to the new House Republican majority. And it ignores almost entirely the recommendations of Mr. Obama's own deficit commission. No wonder the commission's Democratic co-chairman, Erskine Bowles, said Monday that this budget goes "nowhere near where they will have to go to resolve our fiscal nightmare." And he's an ally.
How unserious is this budget? Although the White House trumpets $2.18 trillion in deficit reduction over the next decade, those savings are so far off in the magical "out years" that you can barely see them from here. More than 95% of the savings would happen after Mr. Obama's first term in the White House is over, and almost two-thirds of the promised deficit reduction would arrive after 2016. Pretending to cut deficits by pushing all real cuts into the future is Budget Flimflam 101.
Mr. Obama's budget put him in the position of back-bencher, not national leader. By letting the House Republican majority make all of the hard choices on programs and entitlements he and his minions in the media will be able to demagogue the 'cuts' and cruelty of the needed spending restraint. Well, back to what worked. He cut his teeth in politics by railing against the evil George Bush administration; why not rail some more against the evil Republican budget plan?
And don't give me these meaningless ten year totals, designed simply to make the sum total sound impressive. The out-years always change. There's no obligation on future congresses and future presidents to even use those projections as guidelines. And this budget has little if any spending reductions. The tax increases ("expiration of the Bush tax cuts" in liberal-speak) Mr. Obama is counting on for 2013 will probably be just as bad an idea then and won't pass a Republican House.
He's abdicating responsibility on spending restraint because, frankly, spending restraint is hard. Better just to vote "present" and let grown-ups make the hard choices. And then denounce them.
The NY Times' Paul Krugman clearly believes that growing the economy and job growth should be secondary concerns to class warfare and redistribution. That seems to be the take-away message from this column on the wrangling over January's coming tax increases. (note: he routinely employs the "let the tax cuts expire" dodge that liberal prefer)
Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?
The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.
So Mr. Krugman's answer, then, is this: If the price of avoiding a tax increase for the "middle class" is a tax increase for job creators and investors, then let them all eat cake. To hell with economic growth and reduced unemployment! Mr. Krugman tries to hide the significant differences in job creation like this:
...To be sure, letting taxes rise in a depressed economy would do damage — but not as much as many people seem to think.
A few months ago, the Congressional Budget Office released a report on the impact of various tax options. A two-year extension of the Bush tax cuts, it estimated, would lower the unemployment rate next year by between 0.1 and 0.3 percentage points compared with what it would be if the tax cuts were allowed to expire; the effect would be about twice as large in 2012. Those are significant numbers, but not huge — certainly not enough to justify the apocalyptic rhetoric one often hears about what will happen if the tax cuts are allowed to end on schedule.
Let's leave aside the fact that economic projections are mere fantasy, or don't you recall that the White House Budget Director predicted that the 'stimulus' would keep employment to 8% or less? Let's assume that there'll be a drop of 0.3% if the current rates are continued, the upper end of CBO projections. That translates to about 500,000 additional employed by year end 2011. The projection is that the effect would double for 2012, perhaps an additional 0.5% drop. Mr. Krugman would like you to believe that a 0.8% fall in unemployment by year end 2012, or an additional 1,500,000 jobs isn't worth it. It's far preferable for him to encourage Mr. Obama to stand up to those evil Republicans, the greedy SOB's.
I'm sorry, but I think it is is preferable to pursue policies that spur economic growth and job creation. I suspect you do also.
As an aside, in making his case Mr. Krugman also pretends that gutting social security and Medicare are necessary if the tax increases fail to go into effect. Again, speaking of gutting entitlements, I won't deal right now with ObamaCare's directive to cut $500B from Medicare and to set up a rationing board. But I will let Cato's Dan Mitchell tell him how the budget deficit can decline through spending control and economic growth.
Newsweek magazine was on such a downward spiral that recently it sold - the entire national newsmagazine - for the princely sum of $1. We can argue over what was ultimately the cause of the magazine's decline - the growth of the internet and online publishing, a pathologically leftist bent, or simple intellectual inadequacy by those charged with making the publication worth reading (the writers and editors). Perhaps it was really a combination of all three, although it should be noted that some publications seem to be thriving. Here's a story by Andrew Romano, courtesy of the headlines at Hot Air, that adds weight to the third hypothesis.
"The Professor And The Prosecutor" discusses the steady decline of Barack Obama's popularity and effectiveness and contrasts it with the steady improvement in those same characteristics for New Jersey Governor Chris Christie. And the head-scratching starts right away.
...with economic growth in a near stall, unemployment approaching 10 percent, and experts warning of a double-dip recession, Obama is struggling to recover from the worst midterm rout in 65 years—while Christie, 48, is more popular than ever...
There are many reasons Christie is outpacing Obama. In the Garden State, a governor can pass his agenda without a Senate supermajority, and he doesn’t have to endure the same radioactive levels of scrutiny and vitriol as the commander in chief. But Christie’s success isn’t solely circumstantial. As his time in Trenton has proved, and as last week’s event in Hackettstown confirmed, it’s also the product of his distinctive approach to governing.
The Senate supermajority hasn't got a thing to do with it. With 60 Senators during much of the last two years Mr. Obama could pass most anything he wanted - if he could convince Democrats it was worth passing. Fortunately there were just enough thinking Democrats in the Senate to stop at least some of his most egregious excesses, like Cap & Trade. Unfortunately some tricky parliamentary maneuvers got the health care reform bill around those final road blocks. Recall that all of these things that didn't work (like the 'stimulus'), and won't work (like the health care bill), were passed with no Republican votes. Yet they were passed, Democrats own them, and they haven't worked.
The easiest way to understand why Christie has flourished and why Obama has faltered is to look at the jobs they held before entering politics. From January 2002 to December 2008, Christie served as New Jersey’s top federal prosecutor; earlier, Obama spent 12 years as a constitutional-law professor at the University of Chicago. Today, Christie leads like the prosecutor he once was, identifying the crime, fingering the culprit, and methodically building a case designed to convince a jury of his peers.
In other words, Mr. Christie collects and organizes the facts, presents them coherently and as a result wins arguments. And Mr. Obama? It is said that when you have the facts on your side, argue the facts. When you have the law on your side, argue the law. When you have neither, attack the opposition. Mr. Obama has done way too much attacking of his Republican opposition for anyone to now think the facts or the law support his positions.
The first lesson of Christie’s success: keep it simple. Within minutes of lumbering into Hackettstown’s American Legion Blue Ridge Post 164, Christie has managed to sum up his agenda in less than 140 characters. “We’re spending too much, borrowing too much, and taxing too much,” he says. “We need to spend less, borrow less, and tax less.” The capacity crowd applauds. It’s an easy message to grasp. After all, who’s to say Trenton shouldn’t respond to the fiscal crisis the same way families do?
That's not the first lesson, Mr. Romano. The first lesson is that Mr. Christie accurately identified the problems. Mr. Obama has not yet accurately identified the problems. Perhaps he should listen to Mr. Christie's summation above, the simple one.
Of course, the policy reality is more complex; most economists agree, for example, that government should spend more during a recession, not less.
Let me re-write that for Mr. Romano. "I believe that government should spend more, not less, during a recession and I know of some economists who agree with that (cough - Paul Krugman - cough)." However "most" economists don't agree, or rather, no one really knows if most economists agree on this. In fact, here's one who doesn't (again courtesy Hot Air).
Now comes a real howler.
Like any good prosecutor, however, the real engine of Christie’s success has been his calculated pursuit of enemies. While Obama takes pains to acknowledge the validity of his critics’ concerns in an effort to find common ground, Christie’s strategy is to use the power of the bully pulpit to make his opponents look foolish...
With Christie, someone always deserves the blame—a conviction his aggrieved constituents seem, for now, to share...It’s hard to imagine the professorial Obama pursuing or promoting smackdowns with as much gusto as the Garden State governor—especially now, with a GOP House forcing him to moderate his agenda.
Here is where I pause for effect. ... After a bloody campaign season, and just 4 weeks after the election, that something this clueless about the statements of Mr. Obama about the Republican opposition can be written is breathtaking. Here are just a couple of examples. From the former:
On Monday, the president dismissed Republicans as "not serious." At a rally before more than 20,000 people in Madison, Wis., on Tuesday night, Obama accused the GOP of working to "hoodwink a whole bunch of folks all across the country" about his governmental philosophy. And he twice sarcastically dismissed Republicans as not "interested in facts."
And I could cite others. But back to Newsweek.
But in the weeks and months ahead, Republicans will undoubtedly indulge in a little hypocrisy—by calling for tax cuts estimated to add $700 billion to the deficit over 10 years, for example, then refusing to raise the debt ceiling. The president shouldn’t be afraid to isolate, ridicule, and conquer.
I shouldn't have to point this out, but Republicans are not arguing for a tax cut. They are arguing for preventing a scheduled tax increase. Mr. Romano doesn't even couch this in the familiar dodge of referring to "letting the tax cuts expire," synonymous with raising taxes, yet avoids that phrase entirely. Does anyone really think it's a good idea to raise taxes in a stagnant economy?
You might think that's enough, but there's one final bit of nonsense in the article.
But while Christie has framed the debate for maximum maneuverability—like his tough-talking but eminently practical hero, Ronald Reagan, who has been canonized by conservatives even though he raised taxes 12 times as president—Obama has received little credit for even his most impressive accomplishments.
Okay, I'll bite. Accomplishments like what? Health care? A disaster in the making - fiscally, medically, and bureaucratically. The 'stimulus'? Hardly. Foreign policy? He's alienated Britain, our staunchest, longest-serving ally. He's demonstrated ineptitude with China, South Korea, North Korea, Poland, Iran, among others. Israel & the Palestinians? Free trade with Columbia?
This is not going to enlighten and inform public debate. Mr. Romano glosses over the 'accomplishments' of the administration while attributing literally all of Mr. Christie's success to style and style alone. Perhaps, to borrow the author's construct, he should keep it simple. Mr. Christie's successes stem from identifying the problems and proposing clear solutions. Mr. Obama's lesson should be to start at step one, and to correctly identify the problem. Here's a hint: it's not the Republican opposition.
George Will has a very well-researched, and very accurate, column describing in painstaking detail the government-pushed folly that is the Chevy Volt. It's all there:
it's not electric, it's a hybrid
the government is using taxpayer dollars to bribe people to buy it
bankrupt California is tacking on its own bribe ... for the Nissan Leaf only, as the Volt is a hybrid
Even with the bribe it's pricey
to charge it you use home electricity - produced largely by coal-fired plants
it's battery has a range of 40 miles - or less
it seats only four - the battery is quite large
GM is still 61% government-owned, and paid back some of it's government debt with more government debt.
Alas, this is yet more evidence that the government does not know best - but you already knew that. The hosannas from green-thinking people notwithstanding, the Volt is not the automotive equivalent of Reardon Metal.
Unwilling to delay until tomorrow mistakes that could be made immediately, Democrats used 2010 to begin losing 2012. Trying to preemptively drain the election of its dangerous (to Democrats) meaning, all autumn Democrats described the electorate as suffering a brain cramp, an apoplexy of fear, rage, paranoia, cupidity - something. Any explanation would suffice as long as it cast what voters were about to say as perhaps contemptible and certainly too trivial to be taken seriously by the serious.
It is amazing the ingenuity Democrats invest in concocting explanations of voter behavior that erase what voters always care about, and this year more than ever - ideas. This election was a nationwide recoil against Barack Obama's idea of unlimited government.
The more he denounced Republicans as the party of "no," the better Republicans did. His denunciations enabled people to support Republicans without embracing them as anything other than impediments to him.
Some liberals got it, but not Mr. Obama. No, he insisted in his first press conference that it was really that he didn't move quickly enough to enact his central control over even more areas of American lives. No, what Americans were really asking for was to get that Cap & Trade passed, and to let them have ObamaCare in full now, rather than in 2014.* Charles Krauthammer nailed this on Fox News last night, after the press conference.
When he was asked about three times at the beginning of the press conference, ‘Do you think people were repudiating you or voting against the health-care plan?’ And he acted as if he was being questioned about the natural order of stuff, as if the reporters were questioning the elliptical orbit of the planets. He couldn’t understand how anybody could not see the beneficence of health-care reform. …
He gets this incredible landslide against him and his policies — and he believes … that the progress isn’t rapid enough. He’s just had a refutation of two years of his agenda and his ideology, and he pretends as if nothing has happened.
Some liberals see it, though. Doyle McManus in the LA Times:
When the Democrats lost in 1994, Clinton's reaction the next day was: "They sent us a clear message. I got it."
You didn't hear words like that from Obama on Wednesday. He blamed his party's reverses on the slow pace of economic recovery, on the "ugly mess" of deal-making in Congress and on the White House bubble that makes him look isolated. The only specific failing the president acknowledged on his part was his failure to keep the business community on his side. Where Clinton accepted — grudgingly — that his party had overreached and needed to move toward the center, Obama insisted that everything his administration had done was right, even if some of it was misunderstood.
It's the policies, stupid. It doesn't seem that Mr. Obama will ever admit that any of the policies he pursued were mistaken. It bodes poorly for rolling back some of these mistaken efforts, it bodes poorly for economic growth and recovery over the next two years, and it bodes poorly for Mr. Obama's chances in 2012. I don't think he's concerned about that if he can put in place sufficient immovable nanny-stateism before that day of reckoning arrives. It'll be the task of the Republican House in 2011 to do what they can to stabilize the damage, and preserve options for moving the immovable in the future.
*Note: The only reason the numbers came close to showing that it was paid for was because of that 2014 start date, 10 years of taxes for 6 years of government healthcare.
Not only is Krugman’s article one of the most ridiculous pieces of scare-mongering in the history of modern American journalism, but it is the pathetic whimper of a decaying liberal Ancien Regime that is spectacularly crumbling. It also illustrates just how out of touch liberal elites are with public opinion, as well as economic reality. The tired old blame Bush line no longer works, and as a recent poll showed, the former president’s popularity is rising again.
Whether Krugman likes it or not, the American people are turning overwhelmingly against Barack Obama’s Big Government agenda, and are looking for free market solutions to getting the country back on its feet, creating jobs and cutting the nation’s debt. As poll after poll shows, Americans are rejecting the liberal status quo and embracing the political revolution sweeping the country. My guess is that historians will look back on November 2010 not as a “catastrophe”, as Krugman declares, but as the beginning of a powerful new era for the United States, when conservatism and the cause of freedom made a striking comeback.
Indeed, Virginia, there can be a Republican renaissance. Given his NY Times opinion today, among other nonsense Mr. Krugman has written, I think it far more likely that he will be forced in the future to admit he knows little about real-world capitalist economics than that his predictions of Republican-caused disaster (as if we're not already experiencing a Democrat-enhanced disaster) come to fruition. For example, see quote #2, from Harvard's Jeffrey Miron. He writes that the 'stimulus' was badly designed and badly executed. No kidding. (pdf)
I argue here, however, that the structure of a fiscal stimulus is crucially important and that the package Congress adopted was far from ideal, regardless of the merits of the Keynesian model...
That the Administration and Congress chose the particular stimulus adopted suggests that stimulating the economy was not their only objective. Instead, the Administration used the recession and the financial crisis to redistribute resources to favored interest groups (unions, the green lobby, and public education) and to increase the size and scope of government.4 This redistribution does not make every element of the package indefensible, but even the components with a plausible justification were designed in the least productive and most redistributionist way possible.
Mr. Krugman continues to write the first 'stimulus' should have been much larger (i.e., more debt), and advocates a second 'stimulus' now. I ask you, should we take Mr. Krugman's advice and let the corrupt Democrat simpletons who wrote the first one to "redistribute resources to favored interest groups" and "to increase the size and scope of government" have another go at it?
The vice president said “if I hear one more Republican tell me about balancing the budget, I am going to strangle them. To the press: that’s a figure of speech.”
The Republicans’ new “Pledge to America,” he said, will increase the debt by $1 trillion.
“These guys have absolutely no credibility, no credibility on debt,” he said. “Folks, look, we’ve seen this movie before. We’ve seen this movie. We know how it ends”
At the risk of my personal safety, I'm going to recommend that the Vice President have a look at Dan Mitchell's most recent video. (via Hot Air)
In reality, I don't think the VP is much of a threat to me. I tested for and received 2nd Brown belt in Kenpo Karate this weekend. I know several effective (and painful) escapes from choke holds.
Former Senator Phil Gramm has in today's Wall Street Journal an interesting look at the Great Depression, and the echoes of FDR's policy choices that he sees in President Obama's policies. He notes that if employment is the measure, the U.S. has done worse with the 'stimulus' than most other countries affected by the financial crisis and recession.
Obama administration officials such as Treasury Secretary Tim Geithner have argued that without their policies the economy would be worse, and we might have fallen "off a cliff." While this assertion cannot be tested, we can compare the recent experience of other countries to our own.
The chart nearby compares total 2007 employment levels in the United States, the United Kingdom, the 16 euro zone countries, the G-7 countries and all OECD (Organization for Economic Cooperation and Development) countries with those of the second quarter of 2010. There are 4.6% fewer people employed in the U.S. today than at the start of the recession. Euro zone countries have lost 1.7% of their jobs. Total employment in the U.K. is down 0.6%, G-7 average employment is down 2.4%, and OECD employment has fallen 1.9%.
This simple comparison suggests two things. First, that American economic policy has been less effective in increasing employment than the policies of other developed nations. Second, that if there was a cliff out there, no country fell off. Those that suffered the most were the most profligate...
Indeed. But Mr. Gramm's look back at the depression-era policies of Mr. Roosevelt finds dramatic increases in spending - which started under Pres. Hoover - and in taxes, that did little to stem the depression, but rather prolonged it. He also finds much of the same tax-the-rich class warfare that we hear from Mr. Obama. This quote from Winston Churchill is instructive.
The Roosevelt administration also conducted a seven-year populist tirade against private business, which FDR denounced as the province of "economic royalists" and "malefactors of great wealth." The war on business and wealth was so traumatic that the League of Nations' 1939 World Economic Survey attributed part of the poor U.S. economic performance to it: "The relations between the leaders of business and the Administration were uneasy, and this uneasiness accentuated the unwillingness of private enterprise to embark on further projects of capital expenditure which might have helped to sustain the economy."
Churchill, who was generally guarded when criticizing New Deal policies, could not hold back. "The disposition to hunt down rich men as if they were noxious beasts," he noted in "Great Contemporaries" (1939), is "a very attractive sport." But "confidence is shaken and enterprise chilled, and the unemployed queue up at the soup kitchens or march out to the public works with ever growing expense to the taxpayer and nothing more appetizing to take home to their families than the leg or wing of what was once a millionaire. . . It is indispensable to the wealth of nations and to the wage and life standards of labour, that capital and credit should be honoured and cherished partners in the economic system. . . ."
Sharp guy, that Churchill. It's too bad his bust is no longer in the White House. Mr. Obama and his fellow Democrats would rather tilt at the windmill of "the wealthy" (otherwise known as "those who employ") for what they perceive as their traditional political gain than pursue policy that would grow the economy. Most economists, and most politicians, in fact, will tell you that it's a bad idea to raise taxes in a struggling economy. Last quarter growth was 1.7%. Positive, but barely so, and in no way indicative of a "robust recovery."
The Boston Globe, no friend of Republicans, finds fault with Obama's Democrats for failing to address the pending tax increase issue before adjourning for midterm campaigning. Predictably, it wanted the tax increase to be blocked for middle class taxpayers but still to take place for the job creators. But nothing was done, and that in itself is a problem.
Democrats worry that they have been robbed of their most valuable populist talking point: that cuts on income taxes should be extended for the middle class, but not for the wealthy.
“It is both a political and a governmental mistake,’’ said Representative Michael Capuano, a Somerville Democrat, of the delayed vote. He pushed for a vote this week and tried floating an alternate proposal — to no avail. “To me, it is a classic example of what’s wrong with Washington.’’
The tax cut extension is expected to remain a political issue over the next few weeks, but not in the way Democrats had initially intended. Rather than using it on the campaign trail against Republicans, Democrats could find themselves on the defensive as the GOP yesterday began framing the vote delay as an example of government ineptitude and cowardice.
Democrats have only themselves to blame for the mess they will see one month from tomorrow. They could have pursued policies that would allow recovery to take place. (Note: government does not create recovery, but it can create the environment for it.) Then, able to point to that accomplishment with pride, with employment once more growing, Mr. Obama and his hyper-partisan, hyper-liberal congressional leadership would have had the political capital necessary to try to pass their agenda with support not just from newspaper editors and CNN/MSNBC talking heads but with some of the 53% that voted for him. Now, however, they chose in their policies the triple binds of hamstringing recovery, robbing Americans of freedom in the healthcare bill, and creating unsustainable debt while threatening tax increases.
Over at Newsbusters, this gem just made me roll my eyes and shake my head. This is either astonishing intellectual dishonesty, or Ms. Behar is a moron. I gave her the benefit of the doubt.
Ms Behar had an exchange with Elizabeth Hasselbeck over the upcoming tax increases. The Wall StreetJournal's maestro of the "Best of the Web" column, James Taranto, calls them the Bush Tax Increases, reasoning that they were built into the bill Mr. Bush signed. I beg to differ. Democrats insisted on including them in the bill, for just this reason. They could now be stopped; if they occur, it will be because a Democratic House, a Democratic Senate, and a Democratic President wanted them to.
Let me set this up just a bit: Tax rates have been at the current levels since 2003, for seven years. The bill that set the tax rates at those levels carried an "expiration date," a time when rates would revert to the levels from which they were adjusted. Those earlier rates were higher. Thus, when the "expiration date" is reached, tax rates will increase. Now, some of those increases apply at lower levels of income, while other increases affect higher income levels. The argument has been whether to allow the rates to increase for all, none, or some taxpayers. Note well: in none of the scenarios are tax rates due to decrease. But I've explained all this before.
Remember, if nothing is done, taxes will increase on all Americans in
January. If Mr. Obama's plan is passed taxes will increase only on
those with incomes above $250,000, including many small businesses. And
if all of the increases are blocked then tax rates will remain
constant. Note that in none of those formulations - which are
completely accurate - is anyone anywhere receiving a "cut in tax rates."
Okay, so now check out this from Newsbusters, reviewing the transcript of the discussion from ABC's "The View":
HASSELBECK:
It’s a different issue because what’s going to happen now with the tax
increase is it is actually going to affect senior citizens more than
anybody else right now.
BEHAR: It’s not an increase, Elisabeth. It is not an increase.
HASSELBECK: Let me tell you something, it is going to be an increase, and they are changing the terms-
BEHAR: They are not, stop saying it’s an increase because it’s not.
HASSELBECK: Okay, we’ll talk in January.
BEHAR: The Democrats want to eliminate the tax cuts for the rich. That’s all. Stop doing that.
Ms. Behar is either dishonest or obtuse. In either event, she does no credit to herself, nor to "The View." Apparently screechy and inane is what sells in that format and in that time slot. Does being a liberal do this to you, or do you become a liberal once this becomes acceptable to you?
9/25/10 2145: Dave in Texas, writing at Ace of Spades, catches another one. Massachusetts Senator John Kerry wants you to pay attention, now, because you haven't been so far, or maybe you're too stupid to understand what the Democrats are doing. Dave's theory - and I'm willing to accept it - is that it's not you, but that the Democrats are too stupid to explain adequately how wonderful their plans are. Maybe it's because, like Ms. Behar, using their chosen Demospeak, rather than plain language, simply confuses them.
And so brave Sir Barack set forth into the dark forest of consumer financial protection, accompanied by his favorite sycophants in the media.
WASHINGTON (AP) - President Barack Obama named Wall Street critic
Elizabeth Warren a special adviser Friday and tasked her with setting up
a new agency to look out for consumers in their dealings with banks,
mortgage companies and other financial institutions.
Calling Warren "one of the country's fiercest advocates for the middle
class," Obama said she would ensure the Consumer Financial Protection
Bureau ends abusive practices.
"Never again will folks be confused or misled by pages of barely
understandable fine print that you find in agreements for credit cards
or mortgages or student loans," he said, standing alongside Warren and
Treasury Secretary Timothy Geithner in the White House Rose Garden.
Obama credited Warren with developing the concept of the new consumer
agency, and he said, "It only makes sense that she should be the
architect."
But the dreaded three-headed Republican knight loomed ahead, vowing to cut off Sir Barack's head of the consumer protection unit using the most terrifying weapon yet devised, the Senate confirmation hearing. Could brave Sir Barack fight the knight, debating him openly in the court of public opinion, and winning the day for his comely appointee?
As the specter of the Republican knight preparing for battle loomed, brave Sir Barack found a different path. One which avoided the awesome confrontation entirely.
Obama
did not nominate Warren to be the bureau's director, however. Instead
he is creating a role that allows her to avoid a lengthy confirmation
fight with Senate Republicans who view her as too critical of Wall
Street and big banks. The business and banking community opposed Warren
as director, contending she would make the agency too aggressive
He shall have Power, by and with the Advice and
Consent of the Senate, to make Treaties, provided two thirds of the Senators
present concur; and he shall nominate, and
by and with the Advice and Consent of the Senate, shall appoint Ambassadors,
other public Ministers and Consuls, Judges of the supreme Court, and all other
Officers of the United States, whose Appointments are not herein otherwise
provided for, and which shall be established by Law: but the Congress may by
Law vest the Appointment of such inferior Officers, as they think proper, in
the President alone, in the Courts of Law, or in the Heads of Departments
Brave Sir Barack was not dissuaded, nor was he humbled by his avoidance of the public joust, the open debate as prescribed by the rules of engagement, and chivalry. He proudly thought himself the clever victor in this now-nonexistent confrontation, having avoided being killed in nasty ways. Brave, brave, brave Sir Barack.
Kimberley Strassel at the Wall Street Journal writes today of the dilemma facing congressional Democrats as they decide what to do about the looming built-in tax increase due to hit in January, in the middle of this struggling economy. She accurately characterizes the situation, that Democrats had hoped to have a strong recovery going now so that tax increases could be argued as the "responsible" position. But without that strong recovery they are left arguing for an increase in the middle of a recession, and wanting to hit the job creators hardest.
She gives them three options. Option 1 is to raise taxes only on those job creators, the "wealthy," which is Mr. Obama's position. Unfortunately she chooses the language of Mr. Obama and his marketers to frame the debate.
Option No. 1 is for congressional leaders to plunge once again into the
legislative breach, this time to threaten and bribe their caucus into
passing the Obama plan, which extends tax cuts only for those making
less than $250,000. This is a heavy lift, partly because it is hard to
find a Democrat who likes the Obama plan.
This is not "extending tax cuts only for those making less than $250,000." This is "preventing a tax increase on those making less than $250,000, but allowing an increase in rates on those above that marker." Tax rates are what they are (and have been for some time now). If rates go up, they go up. If rates are held at the same levels then the increase is prevented. It's easy to get caught up in Demospeak, but they use the "allow tax cuts to expire" imagery to paint a picture of the "proper" level for tax rates being somewhat higher than they currently are, and those who rightly oppose the increase should speak and write in a way that wipes away that foggy imagery and turns it into a crystal clear snapshot.
She does it a couple more times in the column, and each time I cringe. Remember, if nothing is done, taxes will increase on all Americans in January. If Mr. Obama's plan is passed taxes will increase only on those with incomes above $250,000, including many small businesses. And if all of the increases are blocked then tax rates will remain constant. Note that in none of those formulations - which are completely accurate - is anyone anywhere receiving a "cut in tax rates."
Today's Wall Street Journal carries an op-ed by a Harvard political economist, Alberto Alesina, who looked at the relative worth of tax cuts and spending cuts vs. "stimulus" spending and tax increases in dealing with both economic recovery and deficits. If you're an Obama economic model believer, a liberal who trusts that the government can generate economic growth through extraction of cash from the economy redistributing it to favored projects and constituencies the results are not pretty.
In the U.S., meanwhile, recent stimulus packages have proven that the
"multiplier"—the effect on GDP per one dollar of increased government
spending—is small. Stimulus spending also means that tax increases are
coming in the future; such increases will further threaten economic
growth.
Economic history shows
that even large adjustments in fiscal policy, if based on well-targeted
spending cuts, have often led to expansions, not recessions. Fiscal
adjustments based on higher taxes, on the other hand, have generally
been recessionary...
The composition of fiscal adjustments is therefore
critical. Based on what we know, the U.S. and Europe are currently at
greater risk from increased stimulus spending than from gradual but
credible spending cuts.
Europe
seems to have learned the lessons of the past decades: In fact, all the
countries currently adjusting their fiscal policy are focusing on
spending cuts, not tax hikes. Yet fiscal policy in the U.S. will sooner
or later imply higher taxes if spending is not soon reduced.
The
evidence from the last 40 years suggests that spending increases meant
to stimulate the economy and tax increases meant to reduce deficits are
unlikely to achieve their goals. The opposite combination might.
Now the Obama administration is considering whether to maintain the
Bush tax cuts or let them expire. Unfortunately, little of the
administration's analysis refers to incentives. Rather the discussion is
mainly about whether the poor or the rich spend a greater fraction of
added disposable income, whether the rich can afford to pay more taxes,
and so on.
From the standpoint of incentives, the important point
is that higher marginal tax rates harm the economy. For example, if all
of the 2003 Bush tax cuts (which alone reduced the average marginal
rate by two percentage points) were undone for 2011, I estimate that GDP
growth for 2011-12 would be reduced by 1.1 percentage points...
My
hope is that the administration will shift away from programs based on
Keynesian reasoning and toward policies that emphasize favorable
economic incentives. Extension of the full tax cuts of 2001-03 and a
reduction in the period of eligibility for unemployment insurance would
be good starts.
You know, some of those guys from Harvard are pretty smart. You'd think a guy from Harvard would know that, but unfortunately Mr. Obama's experience at America's oldest university was limited to its Law School.
I just love the formulation of the headline, contrived to maintain the "tax cuts for the rich" demagoguery. But it's inside the story that the truth gets told. A truth, I might add, that we, among others, have been telling you for quite some time.
WASHINGTON — Democrats in Congress are poised to play a leading role this month in thwarting their party's effort to raise income tax rates on the wealthy.
Tax cuts enacted in 2001 and 2003 expire at the end of this year. President Barack Obama and Democratic congressional leaders have been eager to extend the breaks for individuals who earn less than $200,000 annually and joint filers who make less than $250,000. Those who earn more would pay higher, pre-2001 rates starting next year.
However, a small but growing number of moderate Democrats are balking at boosting taxes on the rich. Many face electorates that recoil at the mention of any tax increase. Some represent areas that are loaded with wealthier taxpayers. Further, some incumbent senators who don't face voters this fall are reluctant to increase taxes on anyone while the economy remains sluggish.
Without their support, the push to raise rates on the rich probably will fail.
"The economy is very weak right now. Raising taxes will lower consumer demand at a time when we want people putting more money into the economy," said Sen. Evan Bayh, D-Ind., who isn't seeking re-election.
When you've lost Senator Bayh you've lost ... Senator Bayh, who's retiring at the conclusion of this Congress. But you know who else thinks lowering taxes might just help a struggling economy?
Democrats play a funny game on taxes. The game is called "let's pretend the economy is a frictionless plane," wherein taxes have no effect on behavior. You can raise taxes on the wealthy and it'll have no effect on the financial behavior of those wealthier individuals. You can run up huge deficits with bogus "stimulus" spending, but there's no economic drag from the "revenue enhancements" that everyone will then see down the road. But here we are, with the economy bogged down, economic uncertainty causing the withholding of business investment and job creation, and the more honest Democrats speak up, not only demonstrating that they really do know a little economics, but demonstrating that their previous statements were political bluster. Sen. Bayh, after all, did vote for both the "stimulus" and ObamaCare.
There's one member of the administration's economic team who remains in denial, however. Or, rather, make that former member.
Our prediction? In desperation Democrats will eventually support extending tax rates at their current levels, and business will breathe a sigh of relief and capital investment and hiring will begin to pick up. This may or may not save them some seats in the House and Senate, but with improving economic numbers Democrats will proudly face the cameras and pronounce that ...
...the "stimulus" is finally working, and that another stimulus would be even better.
...the now-Republican led Congress should raise taxes to close the deficit.
Hey, paraphrasing Dennis Green, they are who they are.
9/3/10 1300: Whoa. The WSJ editorial staff looked at the clues and drew the same conclusion.
With the economy struggling and the polls turning sharply against them, Democrats are at sea about how to prevent an electoral rout in November. Reports yesterday said the White House may be panicked enough to contemplate new tax cuts. Allow us to suggest a salvage plan that would help the economy and perhaps also save the Democratic majorities on Capitol Hill: Return after Labor Day, extend all of the 2001 and 2003 tax rates at least through 2013, and then go home.
The editorial doesn't actually suggest that that's what'll happen, but what should happen if Democrats are concerned with either a) the economy of b) their own majorities.
Also, AEI's Kevin Hassett and Alan Viard, also writing in the WSJ, who note that taxing businesses as well as those who invest in business will propagate the problems of poor job growth.
For those who are determined to tax the rich at all costs, and are therefore willing to accept the claims of the Obama administration without scrutiny, the tax hikes may well make sense. But the evidence is clear that lifting the top rates will hamper the business investment upon which our nation's prosperity depends. That affects all Americans, not just 3%
From Reuters, President Obama discusses the sagging economy, and what can be done about it. And, you know, he knew all along there were going to be problems this summer.
(Reuters) -
President Barack Obama said on Sunday the U.S. economy was expanding,
but not quickly enough, and there was no "magic bullet" that will fix
its problems.
Obama said in an NBC
interview that the batch of grim economic data over the past few weeks
was something his administration had anticipated.
The growth rate revision late last week was for the second quarter. But near the end of that second quarter both Mr. Obama and VP Joe Biden assured us that this was "recovery surrmer." And now they tell us that they anticipated this "grim economic data. What was that about "blasts lies, disinformation."
Obama gave little
indication in the interview of any new proposals that might be unveiled
in the near future. He noted that that the "short-term politics" of the
election season might make it hard to get such measures passed.
"We're in the silly season -- political season, which means that for
the next two months there's gonna be constantly a contest in the minds
of members of Congress," he said
No, Mr. Obama, "silly season" was your first 15 months, when you frittered away the chance to have a return to economic normalcy by allowing congressional Democrats to write a blank check on their spending projects with the non-stimulating "stimulus," by focusing on ramming a lousy and costly health care package through against better judgement of the majority of the American people, and by waffling on the pending January 2011 tax increase. (And no, I'm not going to go Big Media and call it "allowing the Bush tax cuts to expire." An expiring tax cut is a tax increase.) Economic certainty creates economic optimism. And economic optimism, along with availability of capital in the private economy, creates jobs and growth.
The economy will not grow until strong pro-growth policies create economic certainty. And that won't happen until the current tax rates are extended, until health care reform is repealed and replaced, until ridiculous government spending is curbed, until government salaries and pensions are reined in.
And that won't occur until there's a Republican Congress.
We certainly have seen that latter impulse from the progressive
commentariat in the wake of the failure of the Democratic agenda, and
the resistance to its more radical elements from the American people.
How many times since town-hall meetings became forums of voter anger
last year have we heard from mainstream opinion journalists that the US
has become “ungovernable”? Voters made clear that Obama, Nancy Pelosi,
and Harry Reid were not qualified to make their personal choices for
them on health care in particular, and their failed Obamanomics showed
that they’re incompetent at running a top-down command economy.
As it pours outside my home this morning, on a vacation day that I had planned to take my family to Fenway Park for the afternoon Red Sox game against the Seattle Mariners (perhaps the rain is fitting?), I note that the so-called "recovery summer" is currently neither. Read that Mike Allen report at Politico.com. It is best seen as a work of fancy, wishful thinking that clicking your heels together like Dorothy and chanting "there's no place like a growing economy" will doubtless make it so. The actions of the government have, with the exception of stabilizing some giant financial institutions with money that is being paid back, failed rather dramatically.
There's the efforts in housing, including HAMP and the home-buyers tax credit. Result? A plunge in home sales now that the credit has expired, and government-assisted mortgage restructuring that has helped one-tenth of the number it was alleged to help, has interfered with more successful private efforts,is leading to a second round of defaults, and (I'm sure) is more costly than it ever was projected to be.
In order to stabilize the residential markets, jobs have to return and
prices have to stabilize. The Obama administration has gotten in the
way of both processes. Thanks to ill-advised taxpayer-subsidized
interventions, prices have remained unrealistically high, and no one
wants to buy until they pay the right amount for the value of their
investment. And until we quit penalizing capital and introducing
massive ambiguities into regulatory regimes and expanding them, jobs
won’t get created and new buyers won’t materialize anyway.
There's the uncertainty over the looming tax increase due to the unwise expiration date on the Bush-era tax cuts. Here it is, nearly September, two months before the mid-term elections on which Congress-folk will be focusing, and for all we know in this down economy everyone, or perhaps only the producers and job-creators, will be facing a sizable stifling tax increase.
Then there's Obama-care, with its court-challenged individual mandate, its burdens on small businesses that produce most of the jobs, and its cost-cutting fantasies that everyone now understands were more wishful fancy on the part of those who passed it. Notably, those who passed it touting those savings now no longer make that case.
Yesterday Republican John Boehner of Ohio, the minority leader, called (among other things) for a reversal of many of these harmful policies. Ruth Marcus in the Washington Post proves to be scared of the mythical boogieman in the closet, rather than the actual monster in the room.
Let's take Boehner's prescriptions seriously for a moment. Dispense
with the most obviously political parts -- firing the economic team, as
if that would change the underlying policy
Perhaps not, but that''s an Obama problem, not a Boehner problem.
Leave out, also, the phony
controversy. Boehner denounced an obscure provision of the health care
law that requires businesses to report expenditures greater than $600.
It was a good idea -- cracking down on tax cheats -- poorly executed.
Both sides want to change it.
It's not clear that both sides want to change it - if so, it could easily have happened already as the problem is now well known and Republicans are squarely behind removing it. This is not a "phony" controversy at all. It'll be very real to the businesses that have to abide it.
And forget the Republican's favorite legislative bogeymen -- measures
to enact cap-and-trade, or to make it easier for unions to organize.
Those aren't likely to pass.
Yes, but these further burdens to the struggling economy are not likely to pass primarily because of Republican opposition. Ms. Marcus thus gives no credit to Republicans for their "good" (in her estimation) ideas. She appears, however, to be agreeing that Cap & Trade and card check are indeed bad ideas, and that is a useful admission. Step One, perhaps.
So the Boehner plan boils down to the internally inconsistent demands
that the president forswear any plan to increase taxes during a
recession and that he immediately put the brakes on spending -- during that very recession.
These are not internally inconsistent. It will be detrimental to raise taxes in a recession - that much you can count on. And the Obama spending has been on "stimulus" projects that have not stimulated and on protection (and expansion) of government employees, many of whom have both excessive salaries (e.g., Bell, CA) now and unsustainable pensions to come. Cut their pay by 20%? Why not?It's not as if their pay is lower than private sector comparative jobs. And, while you're at it, eliminate any unnecessary or redundant jobs. And give them the same retirement options the rest of us have - 401k, Social Security, and IRAs.
Economic uncertainty is built into the Obama economic program. If Mr. Obama were truly concerned about recovery he certainly wouldn't have pursued the mother of all uncertainties and bigger government boondoggles, which only adds to the uncertainty. And the debt.
The entire article in today's Wall Street Journal by a former Fannie Mae VP is well worth reading. Edward Pinto calls some of the paths under consideration today nonsense, and explains why. Most important, particularly if you don't want to wrap your brain around the policy choices, is this little history lesson.
In 1991, the Senate Committee on Banking, Housing, and Urban Affairs
was advised by community groups such as Acorn that "Lenders will respond
to the most conservative standards unless [Fannie Mae and Freddie Mac]
are aggressive and convincing in their efforts to expand historically
narrow underwriting."
Congress made this advice the law of the
land when it passed the inaptly named Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (GSE Act of 1992). This law
imposed affordable housing mandates on Fannie Mae and Freddie Mac.
Thus,
beginning in 1993, regulators started to abandon the common sense
underwriting principles of adequate down payments, good credit, and an
ability to handle the mortgage debt. Substituted were liberalized
lending standards that led to an unprecedented number of no down
payment, minimal down payment and other weak loans, and a housing
finance system ill-prepared to absorb the shock of declining prices.
In
1995, HUD announced a National Homeownership Strategy built upon the
liberalization of underwriting standards nationally. It entered into a
partnership with most of the private mortgage industry, announcing that
"Lending institutions, secondary market investors, mortgage insurers,
and other members of the partnership [including Countrywide] should work
collaboratively to reduce homebuyer downpayment requirements."
The
upshot? In 1990, one in 200 home purchase loans (all government
insured) had a down payment of less than or equal to 3%. By 2006 an
estimated 30% of all home buyers put no money down.
"[T]he
financial crisis was triggered by a reckless departure from tried and
true, common-sense loan underwriting practices," Sheila Bair, chair of
the Federal Deposit Insurance Corporation, noted this June. One needs to
look no further than HUD's affordable housing policies for the source
of this "reckless departure." If the mortgage finance industry hadn't
been forced to abandon traditional underwriting standards on behalf of
an affordable housing policy, the mortgage meltdown and taxpayer
bailouts would not have occurred.
And when were these policies put in place? I'll give you a hint - it wasn't during the tenure of George W. Bush. And who was one of the most vocal (and protective) proponents of the policies? Why, none other than Rep. Barney Frank, (D-MA).
Rep. Frank: I do think I do not want the same kind of focus
on safety and soundness that we have in OCC [Office of the Comptroller
of the Currency] and OTS [Office of Thrift Supervision]. I want to roll
the dice a little bit more in this situation towards subsidized housing. . . .
Right, best we not focus on "safety and soundness," and instead just roll the dice. That was in 2003, the same year that Mr. Bush's administration proposed reining in the GSE's. This from the same guy who thinks President Obama is having problems politically because he didn't blame Republicans enough upon taking over.
Treasury Secretary Tim Geithner, via the Associated Press, on "extending the Bush Tax Cuts," otherwise known as preventing a tax increase in the middle of an economic recession and struggling recovery.
Treasury Secretary Timothy Geithner said Tuesday it would be "deeply irresponsible" for the Obama administration to support a wholesale extension of Bush era tax cuts, including breaks for the wealthy.
Geithner said in a nationally broadcast interview that President Barack Obama strongly believes those reductions should be retained for the "95
percent" of taxpayers with individual incomes under $200,000 a year and
families below $250,000.
Nobody likes a know-it-all, so perhaps there was some useful humanity in
Tim Geithner's imperfect answers during yesterday's Senate confirmation
hearings. The Treasury nominee faced questions about his failure to pay
payroll taxes for several years, and he's lucky the votes on his
confirmation will come from Senators, and during a financial panic,
rather than from a jury of his taxpaying peers.
Perhaps the most embarrassing moment for Mr. Geithner was his attempt
to evade the questions by Arizona Senator Jon Kyl on why he had only
remedied the error on back taxes for two of the four years. Because the
statute of limitations had run out on the 2001-2002 tax payments, Mr.
Geithner was not legally required to pay them -- and didn't until a
Treasury confirmation hearing seemed possible.
But instead of
fessing up that he had obeyed only the letter of the law, he insisted
yesterday that, gee whiz, the earlier tax dodge didn't even occur to him
-- an excuse that came off as legalistic and implausible. His replies
finally brought Mr. Kyl to insist, "Would you answer my question rather
than dancing around it -- please?"
Mr. Geithner replied
that "I did not believe I was avoiding my liability," and that he had
worked in government his entire life and "would never put myself in the
position where I was deliberately not meeting my obligation as a
taxpayer."
Right. Mr. Geithner, allow me to advise you on some terminology that may help your concept of responsibility, both governmental and personal. "Allowing the Bush Tax Cuts to expire," after the current tax rates have now been in place for 7 years, is in reality a tax increase. "Extending the Bush Tax Cuts" is really preventing said tax increase. Most importantly, "meeting your obligation as a taxpayer" means paying what you owe. And I shouldn't have to tell a treasury secretary that.
You want to be responsible? Don't raise taxes during a recession. Instead, ease back on the clearly non-stimulative governmental spending. That would be responsible government.
Policy makers ignored such disparities within America's white
cultures when, in advancing minority diversity programs, they treated
whites as a fungible monolith. Also lost on these policy makers were the
differences in economic and educational attainment among nonwhite
cultures. Thus nonwhite groups received special consideration in a wide
variety of areas including business startups, academic admissions, job
promotions and lucrative government contracts
Which is both inexplicable and inexcusable, I might add.
Where
should we go from here? Beyond our continuing obligation to assist those
African-Americans still in need, government-directed diversity programs
should end.
Nondiscrimination laws should be applied equally
among all citizens, including those who happen to be white. The need for
inclusiveness in our society is undeniable and irreversible, both in
our markets and in our communities. Our government should be in the
business of enabling opportunity for all, not in picking winners. It can
do so by ensuring that artificial distinctions such as race do not
determine outcomes.
Okay, so the video does give it away. Sen. Webb doesn't quite go as far as Lt. Col. Allen, preferring to maintain the framework of affirmative action, but willing to limit and more carefully tailor the programs. I think that the government, as Sen. Webb writes, should not be in the business of picking winners in any capacity but rather ensuring equality and opportunity. If you're going to give extra beans to some then you've got to count those beans. Which of course leads to quotas, whether you call it that or not. Yet after reading one, and listening to the other, I can really only add one word.
The revelation that tax increases could hurt the economy has recently
been heard from Senators Evan Bayh of Indiana, Ben Nelson of Nebraska,
and, most surprising, even from Kent Conrad of North Dakota. On a scale
of unlikely events, this is like the Pope coming out against celibacy.
As Senate Budget Chairman, Mr. Conrad has rarely seen a tax increase he
didn't like, but this week he averred that "As a general rule, you don't
want to be cutting spending or raising taxes in the midst of a
downturn."
Some revelation. To which economists were you not paying attention, gentlemen? Or maybe it's just what Democrats do when they fear for their majorities. Actually, I would quibble with the admonition against cutting spending. I have absolutely no problem whatsoever trimming unnecessary spending; we can start with a trillion dollars of Obamacare, if you like. Look how much money I just saved the economy!
But it is certainly the case that increasing taxes in a downturn, particularly with the heaviest hit coming against the primary drivers of the economy - small businesses and those with capital to invest - has the potential to give that deadly double dip a nice leg up, or rather, down. They'll hunker down until they see the effect that the new levels have on their businesses and personal finances, hunkering down that will have deleterious ripple effect. In fact, it could certainly be argued that having the Sword of Damocles of tax increases come 2011 hanging over the economy's neck has itself been detrimental. Unfortunately, as Allah notes, there's no evidence that awareness of this "revelation" has not been noted in the office of the Speaker of the House, or in the White House.
“If you’re asking if the United States is about to become a socialist
state, I’d say it’s actually about to become a European state, with the
expansiveness of the welfare system and the progressive tax system like
what we’ve already experienced in Western Europe,” Harvard business and
history professor Niall Ferguson declared during Monday’s
kickoff session, offering a withering critique of Obama’s economic
policies, which he claimed were encouraging laziness.
“The curse of longterm unemployment is that if you pay people to do
nothing, they’ll find themselves doing nothing for very long periods of
time,” Ferguson said. “Long-term unemployment is at an all-time high in
the United States, and it is a direct consequence of a misconceived
public policy.”
Coincidentally, this agrees with Paul Krugman's economics textbook, though not so much with Mr. Krugman's curious current economic analysis.
So I do not understand why Krugman the textbook writer would argue
unemployment benefits is a significant explanation for Eurosclerosis
while Krugman the op-ed writer would encourage us to adopt those
European policies. Nothing changed in the results.
So goes the USA? Megan McArdle at The Atlantic has a look at the scrambling being done in the Bay State to cover, jerry-rig or otherwise manipulate the problems that plague the state's health reform/universal coverage plan into something marginally tolerable.
Even if you're in favor of the healthy reform, this is a lousy,
desperate way to go about it. This kinds of mandatory "contributions"
are essentially a punishment for past, legal behavior. Practically,
they tend to be vulnerable to regulatory takings challenges.
Economically, they dramatically ratchet up the risks of doing business
in Massachusetts...
The quality of legislation coming out of Massachusetts on this stuff
right now is really frighteningly bad. There's none of the technocratic
fine tuning that we were assured was the greatest reward of this sort
of program, just crude, blanket rules that do much reflect the realities
of the market. Rather, they're a cathartic outlet for legislators
frustration that any reality exists outside of the power of their pens.
Just wait until we see these kinds of gamesmanship, punitive fines, regulations and takings on a national basis when the audaciously promised "savings" from health care reform fail to materialize, along with the loss of private insurance, the loss of your doctor, and the loss of the quality that was personified in the American medical system.
The legislature, in order to stick a finger in the dike of insurance losses, is trying to siphon $100M from successful profits. Call it a "windfall profits" tax, a one-time taking. Just to, you know, solve the problem.
But that won't solve the problem, merely postpone it. And when it has to be done again, they'll call it one-and-done once more, won't they?
There is a version of Murphy's Law that says that no system can be foolproof because fools are so ingenious. The corollary is that no foolproof system can be devised by fools. And what is a legislature if not foolish for thinking that such a system is even possible?
From Mort Zuckerman in US News and World Report, discussing the financially ruinous effect of the nation's "Axis of Evil" (characterization mine), Big Public Labor and the politicians who court their support.
What we suffer is a ruinously expensive collaboration between elected
officials and unionized state and local workers, purchased with taxpayer
money. "Scratch my back and I'll scratch yours."
Read the whole thing, it's all there. From gold-plated or even platinum defined-benefit pensions to early retirements with same (at 50?!) to health care coverage and expenses that dwarf those of the real "working class," Mr. Zuckerman tells you where your tax dollars are going - and where even more of them will go in the future.
First, Obama's implicit claim throughout his candidacy was that
public divisiveness was somehow a failure of leadership. This was
mostly nonsense. This country has been divided over cultural issues
since at least 1973 and Roe v. Wade. It has been divided on
fiscal issues since Reagan cut taxes in 1981; this ended the hidden tax
of bracket creep, but meant that legislators had to make hard choices
between more spending and lower taxes. It has been divided on foreign
policy issues since the Bush Administration's response to 9/11.
These are all real things. They are not rhetorical wrinkles that a
Jon Favreau speech can iron out. Obama's choices have mostly been
liberal (with the notable exceptions of dealing with Iraq and
Afghanistan). His speechwriters have endeavored to present his choices
as win-wins, but their words have failed to persuade because the
President's choices are rarely in fact win-wins. They usually favor one
worldview or set of interests over others. Favor one side enough times
and the losers will start to see what's going on, "eloquent" speeches
aside.
This now seems so obvious that what's really astonishing is that so many in the media continue to try to paint the President as a uniting centrist, something he's never been, not ever. Some of us had this nailed. For instance, on economics, October 2008:
LBJ's war on poverty and the mountain of transfer payments it spawned
didn't 'solve' poverty, and decreasing the competitiveness of American
business in the global economy and punishing success at home won't solve
it now. Mr. Obama's plan is more likely to mollify poor Americans with
its class warfare undercurrent temporarily. But as unemployment rises
and GDP growth stagnates the reality of this house of cards will set in
across America.
Or you could have a look at the JTF endorsement from prior to the 2008 election, replete with links galore. Or here, where we noted Mr. Obama's musings on the difficulty in trying to redistribute wealth.
Mr. Obama in 2001 thought it one of the "tragedies" that the
Constitution and, you know, laws and stuff prevented redistribution of
wealth in America as a solution for "political and economic justice."
Well, it's about a week away from the election. The media almost made
it. True, he doesn't state that courts were wrong not to enforce
redress, but it's also clear from his statement that he believes it
should occur through the political process. And lo and behold, he is
pursuing that political process to a position where he may be able to
impose it. [ed: emphasis added now]
Well, y'all can't say you weren't warned. I had a brief conversation this morning with a physician who voted for Mr. Obama and now is carrying an 18 wheeler full of voter's remorse. I explained that "hope and change" means you'll get change, and you'll hope it's for the better, but change can just as easily be for the worse, particularly so when it's based on socialist pap, and it's sad that so many forgot that possibility.
From Megan McArdle, discussing Rep. Henry Waxman (D-CA) and his call for CEO's of companies altering their earnings picture on the basis of changes to tax law in the health reform law:
Waxman is incensed because this seems to put the lie to the promise that
if you like your current plan, nothing will change. But this was never
true. Medicare Advantage beneficiaries are basically going to see
their generous benefits slashed, retiree drug benefits suddenly cost
more and may now be discontinued, and ultimately, more than a few
employers will almost certainly find it cheaper to shut down their
plans. If Congress didn't want those things to happen, it should have
passed a different law.
In fact, it was never true that "if you like your current plan you can keep it." So why did someone prominenet keep telling us that over, and over, and over? And why did our vigilant media refuse to refute that lie every time it was uttered?
A screenshot from Yahoo!'s homepage this morning: (ckick to enlarge)
"The landmark health care vote may backfire if Obama can't sell the plan to angry voters."
Shouldn't the plan have been sold to the people - wait, scratch that - shouldn't the people have been fully informed about the plan, and it's detrimental consequences, before it was passed? Actually, the question is, shouldn't a plan have been devised that could be supported by a majority of the American people and representatives from both the Democrat and Republican sides?
Lefty Matthew Yglesias blames the GOP, by propagating the fiction that liberals were ready to compromise on the bill. If so, they had the opportunity immediately after the Obama healthcare summit, wherein it became clear that Republicans had principled objections, including the fact that increasing taxes in the middle of a recession with high unemployment numbers is a bad idea, according to every honest economist (obviously I'm leaving Paul Krugman out of this).
Exit question number 1: How many doctors began anticipating and timing their retirement today?
Exit question number 2: What's the over/under on Democrat losses in the House this November?
Kimberley Strassel in the Wall Street Journal writes of the Alinsky "Rules for Radicals" treatment of Rep. Paul Ryan (R-WI), who had the temerity to propose solutions to some of the problems facing America. For his trouble, the Democrats have selected him as the target, locked in on him, and are personalizing his proposals in an effort to polarize popular opinion.
So imagine the surprise when, after Mr. Ryan re-released his plan in late January, it became a sudden sensation. Two days later Mr. Obama used his visit to the Republican retreat to thrust it into the national spotlight. The cameras rolling, the president praised Mr. Ryan for putting forward a "serious proposal." He in fact singled out the congressman at least three times. Having done his spotlight bit, Mr. Obama then left it to the rest of the Democratic Party to systematically distort and trash the road map.
Within two days of the retreat, Obama budget director Peter Orszag had begun deflecting questions about the White House's ugly budget by hammering on Mr. Ryan's plan, claiming it "shifted costs" to families. Congressional Democrats held a conference call with reporters devoted to road map trashing, howling that it showed that Republicans would privatize Social Security, voucherize Medicare, and give tax breaks to the wealthy. Speaker Nancy Pelosi lambasted the Ryan plan in a speech to the Democratic National Committee...
Better yet for Democrats, some Republicans are falling into the trap. As with its campaign last year to smear Republican Whip Eric Cantor, the White House's attack on Mr. Ryan is designed to isolate and discredit one of the GOP's brightest thinkers. So it only aids the White House when "anonymous" Republican members—annoyed that they must have this debate—gripe to the press that Mr. Ryan doesn't "speak" for them.
Mr. Ryan, by contrast, isn't apologizing for offering ideas to the very president who keeps claiming Republicans are the party of "no" and who claims to want entitlement reform. A handful of House reformers are calling the Democrats' ruse—reminding voters that what makes this surreal is that the only choice right now is between bad Democratic ideas and worse ones.
The corollary is that, because the media tilts so far left, Democrats seemingly always get the last word. The current fuss on Capital Hill over a "jobs" bill is similar to the fuss at the beginning of last year over a "stimulus" bill. Neither do what they purport to do. The "stimulus" bill didn't stimulate the economy, last quarter's growth notwithstanding (a roller coaster plummeting down a drop must reach the bottom at some point, and start back up). This latest "jobs" bill is just more deficit spending that will create few jobs.
As a result of Democratic spokesmen and Congressmen/women routinely getting the final word, the trashing of Republican proposals - sentiments with which the MSM largely agree - ends up as the conventional wisdom in the press. See if that doesn't happen with the proposed health care summit. The goal there is obviously to get Republicans to propose and discuss openly, then to trash Republican proposals with a sympathetic press. Hey, if you can't get people to like your own proposals, maybe you can convince them to hate the opposition's.
It may not work this year. The people don't like Mr. Obama's policies. They see mountains of deficit spending and mounting debt far into the future. They see health care proposals involving a government takeover with spiraling costs, including phantom Medicare cuts and forever entitlements. They know they'll either pay for it through economy-killing tax increases, which will stifle job creation and growth, and through the mortgaging of their children's future. The one way that it won't be paid for is through actual reductions in spending, reductions in the numbers and compensation of federal employees, or through policies that actually stimulate economic growth instead of government growth.
2/12/10 1530: More on Mr. Ryan's proposals from Robert Samuelson here.
But the larger point is that Ryan is trying to start a conversation on the desirable role and limits of government. He's trying to make it possible to talk about sensitive issues -- mainly Social Security and Medicare -- without being vilified. President Obama recognized that when he called Ryan's plan a "serious proposal." But since then, Democrats have resorted to ritualistic denunciations of him as pillaging Social Security and Medicare. Legitimate debate becomes impossible. If Democrats don't like Ryan's vision, the proper response is to design and defend their own plan. The fact that they don't have one is a national embarrassment.
That's because it's a lot easier to demagogue your opponent's ideas than to come up with and defend your own. And safer. However, as America is looking for leadership, the party with large majorities in both houses of Congress and the President in the White House may need to actually be up front with their ideas instead of springing 2000 page bills at the last minute, saying that once it passes we'll find out what's inside. And if not, the people will notice.
From Megan McArdle, discussing deficits, responsibility, and deficits of responsibility:
Whatever George W. Bush did or did not do, he's no longer in office,
and doesn't have the power to do a damn thing about the budget. Obama
is the one who is president with the really humongous deficits.
Deficits of the size Bush ran are basically sustainable indefinitely;
deficits of the size that Obama is apparently planning to run, aren't.
If he doesn't change those plans, he will be the one who led the
government into fiscal crisis, even if changing them would be [sob!]
politically difficult.
Newsbusters highlights a little of "Morning Joe" Scarborough's interview with New Hampshire's Democratic Senator and former Governor, Jeanne Shaheen, discussing why New Hampshire might be better off economically at this time than other areas of the country, or even other New England states. As I live and work in New Hampshire, the discussion caught my eye.
On
the Feb. 2 broadcast of his MSNBC program, Scarborough interviewed Sen.
Jeanne Shaheen, D-N.H. Shaheen’s home state was hosting a jobs town
hall put on by President Barack Obama and Scarborough used the occasion for a teachable moment.
“Now, usually none of us would celebrate unemployment rates of 7 percent,” Scarborough said. “But that is not only well below the national average, but your neighbor, Rhode Island, to the south of you now sitting with a 13 percent unemployment rate. What's New Hampshire doing right?”
According to Shaheen, it was a diversified economy and a sound climate for business, where regulation doesn’t interfere.
“Well,
hopefully, as you say, we're going to be able to reduce that 7 percent
even lower,” Shaheen said. “But I think we've got a diversified
economy. We've got a place where people want to live. We've got a
wonderful quality of life. It's a beautiful state. It's a state where
we've tried to limit regulation, where we've tried to make the cost of
doing business affordable for businesses.”
However, Scarborough pointed out one key difference in New Hampshire compared to other states – no state income tax and no sales tax.
No income tax*. No sales tax. A business friendly climate. Reduced regulation.
True, the property taxes (state and local) are among the nation's highest percentage-wise, but without the other taxes overall it's a very low tax state. New Hampshire ranks 7th for business-friendliness. And the state ranks 46th in overall tax burden.
But Ms. Shaheen doesn't really believe in that successful formula, however. Or if she does, she's been muscled by the Administration and the Senate leadership to fall in line with antithetical policies. Her stances on the issues are vanilla Democratic Senator positions - pro- cap and trade, pro- "comprehensive" health care reform, pro- "green jobs" (read: higher energy costs), And if she's in favor of the Obama budget proposal, as her statement on the SOTU address would suggest, she's in favor of a tax increase on "the wealthy," the standard liberal class warfare and economy-dampening position.
So, Ms. Shaheen, the question is, do you really believe in New Hampshire's advantage?
*There is a 5% dividend and interest tax, which generates all of $62 per person annually.
President Obama spoke to and with the GOP caucus yesterday, and while the invitation and its acceptance is heartening, it's difficult for the Republicans to look good in this situation. The President, as he should, will always have the last word. It's not a debate, it's the equivalent of a press conference where the press has to be even more deferential to the speaker due to their position and the television cameras. I've linked to the transcript above.
Mr. Obama spoke a lot about responsibility for the economic difficulties, claiming essentially none of it for himself. One claim, or rather a declaration, bears a closer look.
OBAMA: Let's talk about just the jobs environment generally.
You're
absolutely right than when I was sworn in, the hope was that
unemployment would remain around 8 -- or in the 8 percent range. That
was just based on the estimates made by both conservative and liberal
economists because at that point not all the data had trickled in.
We
had lost 650,000 jobs in December. I'm assuming you're not faulting my
policies for that. We had lost, it turns out, 700,000 jobs in January,
the month I was sworn in. I'm assuming it wasn't my administration
policies that accounted for that. We lost another 650,000 jobs the
subsequent month, before any of my policies had gone in to effect. So
I'm assuming that wasn't as a consequence of our policies. That doesn't
reflect the failure of the Recovery Act.
The point being that
what ended up happening was that the job losses from this recession
proved to be much more severe in the first quarter of last year going
into the second quarter of last year than anybody anticipated.
So,
I mean, I think we -- we can score political points on the basis of the
fact that we underestimated how severe the job losses were going to be,
but those job losses took place before any stimulus, whether it was the
ones that you guys have proposed or the ones that we proposed, could
have ever taken to effect.
So the job losses were mounting before Mr. Obama took office, and continued to mount in the first quarter of his presidency (and the second quarter as well, though he didn't mention it). He claims that these should be attributed to the prior president's economic record as none of his policies had taken effect.
Point taken. Now I assume he and the rest of the Democratic caucus will stop crediting the negative GDP growth that occurred at the end of 2000 and during the first three quarters of 2001 to George W. Bush and begin calling that the Clinton recession.
Recall that Mr. Bush was unable to get his tax cuts to kick in until 2003 (see the 8% growth in Q3 of that year). Also, with the negative economic growth he inherited job creation lags, explaining the "where are the jobs" attacks he had to endure. This is the same argument that Mr. Obama is making now.
And I'm certain that Mr. Bush will no longer be blamed for the loss of wealth that occurred in the second two quarters of '00 and the first two of '01 with the market collapse.
Right? We're going to see a level playing field here, aren't we? Or is political point scoring only legitimate against Republicans?
Abolish Fannie Mae and Freddie Mac, and rebuild government financing of housing from scratch? Barney Frank, D-MA, the chairman of the House Financial services committee, thinks it's a good idea.
A top House Democrat on Friday said his committee was preparing to
recommend "abolishing" mortgage-finance giants Fannie Mae and Freddie
Mac and rebuilding the U.S. housing-finance system from scratch.
"The remedy here is...as I believe this committee will be recommending,
abolishing Fannie Mae and Freddie Mac in their current form and coming
up with a whole new system of housing finance," said Rep. Barney Frank
(D., Mass.), the chairman of the House Financial Services Committee.
Mr. Frank's history with Fannie Mae and Freddie Mac does not inspire confidence in his competence to oversee the job. Let's review.
Taxpayers are now on the hook for as much as $200 billion to rescue
Fannie Mae and Freddie Mac, and if you want to know why, look no
further than the rapid response to this bailout from House baron Barney
Frank. Asked about Treasury's modest bailout condition that the
companies reduce the size of their high-risk mortgage-backed securities
(MBS) portfolios starting in 2010, Mr. Frank was quoted on Monday as
saying, "Good luck on that," and that it would never happen.
There you have the Fannie Mae problem in profile. Mr. Frank wants
you to pick up the tab for its failures, while he still vows to block a
reform that might prevent the same disaster from happening again.
At least the Massachusetts Democrat is consistent. His record is
close to perfect as a stalwart opponent of reforming the two companies,
going back more than a decade. The first concerted push to rein in Fan
and Fred in Congress came as far back as 1992, and Mr. Frank was right
there, standing athwart. But things really picked up this decade, and
Barney was there at every turn.
Please go read the Wall Street Journal's concise summary of his involvement, none of it helpful, in the mortgage giants. Here's more from the WSJ, circa 2004. Here's the NY Times, in 2003, discussing the Bush Administration - yes, that evil and incompetent Bush Administration - proposal to reform the GSEs:
WASHINGTON, Sept. 10— The Bush
administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan
crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new
agency would be created within the Treasury Department to assume
supervision of Fannie Mae and Freddie Mac, the government-sponsored
companies that are the two largest players in the mortgage lending
industry.
The new agency would have the authority, which now rests with Congress,
to set one of the two capital-reserve requirements for the companies.
It would exercise authority over any new lines of business. And it
would determine whether the two are adequately managing the risks of
their ballooning portfolios.
Mr. Frank's response then?:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing
any kind of financial crisis,'' said Representative Barney Frank of
Massachusetts, the ranking Democrat on the Financial Services
Committee. ''The more people exaggerate these problems, the more
pressure there is on these companies, the less we will see in terms of
affordable housing.''
Perceptive. And here's the Boston Globe's Jeff Jacoby, in 2008, with a further indictment.
'THE PRIVATE SECTOR got us into this mess. The government has to get us out of it."
That's Barney Frank's story, and he's sticking to it. ... The Wall Street meltdown was caused by "bad decisions that were
made by people in the private sector," Frank said; the country is in
dire straits today "thanks to a conservative philosophy that says the
market knows best." And that philosophy goes "back to Ronald Reagan,
when at his inauguration he said, 'Government is not the answer to our
problems; government is the problem.' "
In fact, that isn't what Reagan said. His actual words were:
"In this present crisis, government is not the solution to our problem;
government is the problem." Were he president today, he would be saying
much the same thing.
Because while the mortgage crisis convulsing
Wall Street has its share of private-sector culprits -- many of whom
have been learning lately just how pitiless the
private sector’s discipline can be -- they weren't the ones who "got us
into this mess." Barney Frank's talking points notwithstanding,
mortgage lenders didn't wake up one fine day deciding to junk long-held
standards of creditworthiness in order to make ill-advised loans to
unqualified borrowers. It would be closer to the truth to say they woke
up to find the government twisting their arms and demanding that they
do so - or else.
All of this from Mr. Frank now is happening because his knees are shaking over the election of Sen. Scott Brown on Tuesday. Independent voters in Massachusetts are in a mood to turn the bums out, and one of those bums, if you've absorbed anything at all from the stories above, is Mr. Frank. So he proposes abolishing and reforming mortgage financing, and now he'll present himself to the voters later this year as a white knight, riding to the rescue. Rather cynical, I'd say.
So definitely, let's reform the companies, or abolish them, it matters not. What matters is setting appropriate lending standards, ones that do not expose banks, then GSEs, then eventually taxpayers to excessive and unaffordable risk.
Just don't let Barney do it. And don't let him get away with avoiding his responsibility for the crisis. As Jeff Jacoby writes, his fingerprints are all over it.
Earlier I noted that a lot of what Copenhagen was about was the redistribution of wealth, primarily that of America, which our Fearless Leader was only too happy to agree to, even if in a "non-binding" way. And really not so much about the actual "health" of the planet.
It seems that this "redistribution" was a motivating factor for many there.
It isn't the climate that bugs "the world," or concerns about CO2, but rather the dynamism (and, as a result, unpredictability) of capitalist economies. How easy is it to handicap a juggernaut as the American economy is, or rather, was? Simple. Convince a simpatico American leader to handicap it for you.
