In a bombshell yesterday, Standard and Poor's downgraded America's credit rating for the first time in history. We've had a AAA credit rating since 1917. Through both World Wars, the Great Depression, the Cold War, several recessions, and the 9/11 terrorist attacks, nobody ever considered downgrading our AAA rating. Indeed, we are in an "unprecedented" time. This is the only time someone actually did it.
Yet is this really a bombshell? There are some who criticize the ratings agencies for their faulty analysis. (Indeed, President Obama has claimed they messed up their math by a whopping two trillion.) Yet the issue must be looked at objectively. Even S & P is right on occasion. Our debt now is 100% of the GDP. The medium-term projections are scary for entitlement spending (Medicare, Medicaid, Social Security), and the long-term projections are catastrophic. Sooner or later, we will have to end "Medicare as we know it" because we cannot afford it. Many people in my generation (at 28 years old) realize deep down what people try to deny: Social Security will not be available to us when we retire. To show our seriousness about paying for our existing entitlements we cannot afford as is, we then added yet another massively expensive entitlement under the pretense it would reduce costs, a claim the Administration no longer tries to make.
In addition to the massive spending problem, there is a weak economy. Whoever caused it for the moment I'll ignore. At the current rate of growth, it will take the majority of this decade just to get back to the level of growth seen before the crisis in 2008. Eventually, interest rates will have to be raised, and the outpouring of the money spigot will have to cease. This will damage our economic outlook, and make our debt crisis even more daunting.
Finally, there is the political polarization in Washington. Once again, I'm not going to comment on if this is a good or a bad thing. I simply recognize it for what it is. In previous times of crisis, politics was far more regional than ideological. You had conservative Democrats and liberal Republicans. Those days are done. Both parties are far more ideologically rigid. Overall, this might be a good thing. (It offers competing visions clearly defined for one.) Yet the downside is neither side is willing to compromise to get things done, because those visions are diametrically opposed to each other. A president who believes in "redistributive change" and "spreading the wealth around" will never find willing common ground with a party whose very existence today is to oppose the re-branding of America along the lines of the social democratic state. This stark polarization has also led to frequent changes in government. We are in between the formation of another political age, and everyone is trying to establish their own mandate like the ones of McKinley (who ushered in an era of Republican dominance in his era), FDR (whose New Deal Coalition set the tone of even Republicans for 30 years), and Reagan (whose vision and policies set the tone of American politics from 1980 to 2008.) Those expecting some "grand bargain" out of such conditions are deluding themselves.
Outside of a huge embarrassment, what does this mean? Ed Morrisey speculates that the economic damage might not be catastrophic. Maybe. Maybe not. We are in uncharted waters here. It could take us back into a double-dip recession, or it could not. One thing is for sure: there will be massive uncertainty. Uncertainty leads to unpredictability. Unpredictability, more often than not, leads to economic troubles.
All of this reinforces my previous view on the debt ceiling debate: there were no clear winners. Nobody "benefits" politically from this downgrade. Yet the blows are not shared equally. The buck stops with the President, as Harry Truman was so fond of saying. There is no way to spin this: President Barrack Obama is the first President of the United States to suffer a credit downgrade on his watch. He came to office promising radical change for America. That radical change has arrived, albeit not the change he had in mind. His solution (raise taxes) does nothing to actually address the problem. At the very least, it kicks the can down the road. Nothing short of fundamental tax reform (which lowers rates but ends most tax credits/deductions) will work on that front. Anyone think Obama has the ability to make that happen, even if he wants to? (Which I think part of him does.) I've been saying all year that Obama's chances for re-election were 50-55%. In light of today's events, that's no longer possible. At best, 45%. Realistically, 40%.
Yet what do Republicans do? Until Obama is out of office, there isn't much they can do. You can't get a balanced budget amendment. You can't enact the Ryan budget. The only thing you can do is hold the line, and score a few skirmish victories over coming continuing resolutions and the like. This puts added pressure to nominate a serious candidate in 2012. Sorry Ron Paul, Herman Cain and Michelle Bachmann. Much as some might deny it, that goes double for you Sarah Palin. Just in case, they better make room for Tim Pawlenty. Jon Huntsman? Did any Republican actually support him to begin with? The only serious candidate right now is Mitt Romney, and he is about to be joined by Rick Perry. They alone command the auctoritas necessary to lead a unified Republican Party behind a Republican President. They alone amongst the GOP crowd would be able to receive the Imperium from the American people to begin enacting real reform.
Yet out of those two, only Romney is actually running you say? If you want something different, then you better stop "praying for rain" and start "making it rain" at Perry for President HQ.
Saturday, August 6, 2011
Thursday, July 28, 2011
Dr. Sowell on the Debt Ceiling and the Tea Party
One of the greatest influences on my understanding as a conservative comes from Dr. Thomas Sowell. One of the few voices of the original conservative movement left, he has always laid out the case for limited government and the free market in economics. While people flock to the vitriolic blogs for their red meat, it falls to those like Dr. Sowell to actually make sure the conservative movement retains ideological coherence.
That is why I view his latest column important. Yesterday I had a discussion with a Tea Party advocate who claimed Dr. Sowell opposes not only the Boehner plan, but raising the debt ceiling at all. Being a student of Dr. Sowell's work, I was skeptical. I had reason to.
In the article, Sowell savages those conservatives who oppose the Boehner plan, and offers some timeless political wisdom. He recognizes, like everyone else, that you can't get everything you want in an imperfect world. Being unable to obtain the perfect, you then have to weigh your options against the competing goods. Simply liking something does not mean being able to obtain it. That isn't being a "sell-out." A sell-out is a complete abandoning of your previous worldview, and adopting the opposite. Calculating how to accomplish a goal is a nasty business. Some purists might not like it, but it isn't a sell-out.
A second major point is something that should be obvious but isn't: We live in a republic that has a democracy. A republic is built around an innate fear of one man amassing too much power. To limit that ability, structural checks are placed upon the leader. Two of those structural checks are elected by the popular vote. Due to the checks placed upon any one man (or group) becoming too powerful, you are forced to negotiate and compromise to enact something. The best legislative victories are those which move the country closer to the perfect ideal you advocate, yet still maintain a chance of passing.
The idea of not raising the debt ceiling is not an option. As much as Tea Partier's might hate to hear it, Cap, Cut, and Balance is not an option either. A balanced budget amendment doesn't solve a problem outright, and would take years to get enacted. What would we do until that point? Of equal anathema to conservatives are tax increases in both the realm of principle and practice. (Seriously, who really wants to raise taxes right now in this kind of economy?) Even though tax reform couldn't happen (and who seriously though it would during this debate), Republicans still scored a victory by removing tax increases from the table.
Those Tea Party members advocating opposition to the Boehner plan have no credible alternative. As mentioned before, CCB can't pass the Senate, and doesn't actually solve the problem. The idea you can force the executive branch to prioritize payments in a default to your liking is folly. If your default position is indeed default, then you are adopting what Dr. Sowell calls a "rule or ruin" philosophy. If you can't have all the power, you will do your best to ensure nobody has any power. When people act this way, they don't last very long in politics.
The final point made by Dr. Sowell is again something that should be obvious: there is a world of difference between the priorities of Rush Limbaugh and a Congressman. Rush Limbaugh first and foremost is worried about ratings. Any idiot can go on the air and spout conservative platitudes. (Indeed, turn on talk radio and you will hear precisely that more often than not.) It takes someone with true talent to make these views marketable. Yet it also requires being "principled" in taking absolutely no compromise ever. Who is going to turn into someone who advocates anything other than equating Barrack Obama as a mix between Sauron, Darth Vader, and Barney? Rush Limbaugh can safely do what he feels the need to do without worry. People won't vote him off EIB because they disagree with him.
Yet a Congressman can lose an election. If you want to detonate America's economy simply to make a point, voters will want to make an equally forceful point in the next election. Their priorities are about winning elections and advancing their ideologies. You can't do the latter without the former. The Tea Party was sent to Washington to act like adults as well as be stricter guardians of our finances.
This they have achieved. Who would've thought 2 years ago that going into the final stretch of his Presidency, we would have a Republican House and Democrats would officially abandon their love with high tax rates? Yet it has happened. In addition, we are actually cutting spending. We all wish it were more, but there are actual cuts, and those cuts magnify over the future as a smaller pie is available due to baseline changes.
Given the small amount of Tea Party members, that's quite an achievement. Yet they cannot let the perfect become the enemy of the good. If they do so, they will deserve everything they get, and Republicans will suffer greatly.
That is why I view his latest column important. Yesterday I had a discussion with a Tea Party advocate who claimed Dr. Sowell opposes not only the Boehner plan, but raising the debt ceiling at all. Being a student of Dr. Sowell's work, I was skeptical. I had reason to.
In the article, Sowell savages those conservatives who oppose the Boehner plan, and offers some timeless political wisdom. He recognizes, like everyone else, that you can't get everything you want in an imperfect world. Being unable to obtain the perfect, you then have to weigh your options against the competing goods. Simply liking something does not mean being able to obtain it. That isn't being a "sell-out." A sell-out is a complete abandoning of your previous worldview, and adopting the opposite. Calculating how to accomplish a goal is a nasty business. Some purists might not like it, but it isn't a sell-out.
A second major point is something that should be obvious but isn't: We live in a republic that has a democracy. A republic is built around an innate fear of one man amassing too much power. To limit that ability, structural checks are placed upon the leader. Two of those structural checks are elected by the popular vote. Due to the checks placed upon any one man (or group) becoming too powerful, you are forced to negotiate and compromise to enact something. The best legislative victories are those which move the country closer to the perfect ideal you advocate, yet still maintain a chance of passing.
The idea of not raising the debt ceiling is not an option. As much as Tea Partier's might hate to hear it, Cap, Cut, and Balance is not an option either. A balanced budget amendment doesn't solve a problem outright, and would take years to get enacted. What would we do until that point? Of equal anathema to conservatives are tax increases in both the realm of principle and practice. (Seriously, who really wants to raise taxes right now in this kind of economy?) Even though tax reform couldn't happen (and who seriously though it would during this debate), Republicans still scored a victory by removing tax increases from the table.
Those Tea Party members advocating opposition to the Boehner plan have no credible alternative. As mentioned before, CCB can't pass the Senate, and doesn't actually solve the problem. The idea you can force the executive branch to prioritize payments in a default to your liking is folly. If your default position is indeed default, then you are adopting what Dr. Sowell calls a "rule or ruin" philosophy. If you can't have all the power, you will do your best to ensure nobody has any power. When people act this way, they don't last very long in politics.
The final point made by Dr. Sowell is again something that should be obvious: there is a world of difference between the priorities of Rush Limbaugh and a Congressman. Rush Limbaugh first and foremost is worried about ratings. Any idiot can go on the air and spout conservative platitudes. (Indeed, turn on talk radio and you will hear precisely that more often than not.) It takes someone with true talent to make these views marketable. Yet it also requires being "principled" in taking absolutely no compromise ever. Who is going to turn into someone who advocates anything other than equating Barrack Obama as a mix between Sauron, Darth Vader, and Barney? Rush Limbaugh can safely do what he feels the need to do without worry. People won't vote him off EIB because they disagree with him.
Yet a Congressman can lose an election. If you want to detonate America's economy simply to make a point, voters will want to make an equally forceful point in the next election. Their priorities are about winning elections and advancing their ideologies. You can't do the latter without the former. The Tea Party was sent to Washington to act like adults as well as be stricter guardians of our finances.
This they have achieved. Who would've thought 2 years ago that going into the final stretch of his Presidency, we would have a Republican House and Democrats would officially abandon their love with high tax rates? Yet it has happened. In addition, we are actually cutting spending. We all wish it were more, but there are actual cuts, and those cuts magnify over the future as a smaller pie is available due to baseline changes.
Given the small amount of Tea Party members, that's quite an achievement. Yet they cannot let the perfect become the enemy of the good. If they do so, they will deserve everything they get, and Republicans will suffer greatly.
Friday, July 15, 2011
@Obama: Your Move
When I wrote on this issue previously, I tried to make two points, which Republicans didn’t follow:
1.) The debt ceiling has to be raised.
There are many things that Obama is wrong about. Yet the President was right on one thing. Default isn’t an option. You have to raise the debt ceiling eventually. Some Republicans (especially Tea Party Freshman) seem to think you don’t have to honor your debts, that American can simply walk away from them. They are just like Obama in one aspect: both sides would sacrifice everything as long as it meant destroying the other. Rep. Paul Broun (R-GA) even said we should lower the debt ceiling, forcing Americans to make massive European-style austerity cuts. The entire point Republicans made when passing Paul Ryan’s budget was that forced austerity was bad, and that we can manage our finances without resorting to such economy-killing measures. Then again, Mr. Broun was one of the few open birthers in Congress, so this shouldn’t be surprising.
2.) Focus on the way money is spent in the future, not current spending
The temptation to demand huge spending cuts is indeed very tempting. We want to get something out of Obama right away. Yet spending cuts now do nothing to change the bad system currently in place where it is far too easy to raise spending. Republicans for the most part ignored this, and demanded serious spending cuts to current programs, including entitlement reform. Part of me admires their bravery. Yet I’m far more concerned about preventing future presidents, whether they be Democrats or Republicans, from going on spending benders the way the last two Presidents (one Democrat, one Republican) went on.
President Obama, give him credit, played his response nicely. He professed to offer serious spending cuts and entitlement reform, but offered tax increases alongside it. That tax increases would torpedo the economy is beside the point. Obama knew they wouldn’t back tax increases. Yet he understood that spending cuts and entitlement reform in exchange for raising the debt ceiling was a bad deal for him. Republicans need the debt ceiling raised just as much. (See #1.) Since they wouldn’t back tax increases, the entitlement reforms he was professing to propose would never occur, so he would never actually have to be specific. That must be remembered. To this date, nobody has offered any specifics of what is going to be done. President Obama figures his plan needs no substance.
This is all about politics. He wants the debt ceiling raised just long enough to get him through the election. Part of him I am sure would not mind a default, if it meant Republicans were damaged. Such a default wouldn’t be long, and once Republicans capitulated, he would get his way. Sam Nunn famously said about politics “Never take a hostage you aren’t willing to shoot.” President Obama has proven time and time again, he is not afraid to shoot the hostage. In a fight between the President and Congress, the President has the advantage.
This became apparent when Senator Mitch McConnell (R-KY) offered a very convoluted plan in response to Obama’s act. In short, it would give Obama the authority to raise the debt ceiling unilaterally. Democrats could vote against it or for it, but in the end, Obama would get what he wanted. This was a retreat. Republicans weren’t surrendering, but they clearly wanted out of the situation they dug themselves into.
Then Obama got sloppy.
Part of the entire charade was to have a sense of calm and coolness that is befitting the President. Since he holds all the power, he needs to act like it. He forfeited this earlier this week. During negotiations at the White House with congressional leaders, he became visibly enraged by House Majority Leader Eric Cantor. (R-VA) Cantor offered a short-term debt ceiling increase that gave them the breathing room to work out a long-term deal and debt reduction thrown in. The reasoning made sense. President Obama had been stating that not only must we raise the debt ceiling, but we must also put forth a credible deficit reduction package, otherwise the debt ceiling won’t matter, our credit would still get downgraded.
President Obama boldly refused, stating a deal must have tax increases, and must get him through the election. Announcing he would hang his Presidency on the issue, he vowed to veto a short-term move. Threatening that Republicans better not “call his bluff”, he angrily stormed out of the room. With this move, Republicans suddenly had life again. The President dismisses you from a meeting. He doesn’t storm out of his own meeting. Why was he so angry with a move that would’ve given him everything he needed? Simply put, the move wasn’t politically expedient. Once Republicans saw this, they knew what they had long suspected: Obama had no plan.
The past two days have only confirmed that. During a press briefing, Press Secretary Jay Carney explicitly said he couldn’t figure out what was worse: a default or having to vote on the debt ceiling again in six months. The answer to this question is: of course a default is worse, that is why we are doing our best to prevent it! The question became, worse for the country, or Obama’s re-election prospects? This image was reinforced during today’s press conference. Given ample opportunity to do so, Obama refused to reveal one dollar or one program he would cut. This was the perfect time to at least show a little bit of what he wanted to do, putting pressure on Republicans.
Since he has no plan, events are moving on without him. As of right now, Barrack Obama is irrelevant in the debt ceiling debate. Sensing the moment, Speaker Boehner and Majority Leader Cantor have announced they will vote next week on the finally revealed House Plan to raise the debt ceiling. The plan would raise the ceiling by 2.4 trillion dollars, but also include 2.4 trillion in spending cuts. A vote on a balanced budget amendment would be held right after. (To prevent the two from being coupled.) Are they bluffing? I am led to believe that if they are bringing forth a plan, they have the votes to pass it.
The Democrats in the Senate are in the works for offering their own plan in the absence of leadership from Obama. Senate Majority Leader Harry Reid has announced he has entered into negotiations with Senator McConnell over his plan on the debt ceiling. He does so out of naked self-interest, and I’m okay with that. He sees how vulnerable his colleagues are in 2012. They need to say they voted to increase the debt ceiling, as well as offering spending cuts. So far, it appears that 1.5 trillion in spending cuts have been attached to McConnell’s plan. Both raise the debt ceiling by 2.4 trillion. McConnell’s plan does it over 3 installments, whereas the House does it all at once. Either way, tax increases are off the table, and spending is cut.
If the house plan passes (which is likely) then Democrats are faced with a choice. The Senate Republicans will support the House measure first. (McConnell’s plan is a last resort.) Does Harry Reid obstruct it or permit it to a vote? If it comes to a vote, it will pass. If he blocks it without an alternative, Democrats have chosen default. Or he can choose to cut 1.5 trillion instead. This isn’t a compromise between the Republican Party and the White House. It’s a compromise between the Senate GOP and the House GOP. Does Obama dare veto it? He would have to offer a plan of substance instead. Reveal that plan, and he faces a revolt from his base. Admit you don’t have a plan, and he has no credibility. Pass the plan, and you must sell to your base that Republicans beat you a third time since December 2010. He would come out of this with nothing. Republicans will have thwarted his goal of raising taxes, and they managed to enact serious spending cuts.
Of course, the House could fail to pass the plan, doubtful as that may be. If they pass it, they called Obama’s bluff, and realized he had nothing. Your move, Mr. President.
Sunday, July 10, 2011
The Problem of Obama's Inner Circle
It is said that a man can be defined by those he associates themselves with. If this is true, then we have a great understanding of the measure of a man that is President Barrack Obama.
One the one hand, he has the rigid ideologues. Some of these were "czars" like Donald Berwick (who wants to do whatever he can to provide us with socialized medicine) or Van Jones (the disgraced 9/11 truther/hard leftist), who was canned by the administration for the crime of being liberal in public. For the ideologue, their worldview trumps everything else, including reality. They are not as interested in equitable results for all, as the imposition of their worldview. It is a very power hungry nature.
As he heads into re-election, President Obama has tried hard to present himself as the one sensible adult in Washington and a pragmatist. Yet you cannot be what you cannot be. Obama is neither sensible or a pragmatist, and this is demonstrated by his advisors.
Take the National Labor Relations Board and their demonizing of Boeing. Boeing decided to build a new plant in South Carolina. In a struggling economy, a big company decides to give considerable investment. What's the problem? The problem is that South Carolina allows workers to decide for themselves if they should be in a labor union. Labor unions hate the complexities of giving workers the freedom to be represented by the union, or (more importantly) someone else, themself. The NLRB claims that since Boeing has a compulsory union plant in Washington State, it is wrong for them to build in one in a right to work state. Worse, it is engaging in "retaliation" against those Washington workers for joining a union. That the Washington plant is seeing its producitivty and employment increase is irrelevant.
What could be behind such a mindset? In a seemingly unrelated story, Energy Secretary Steven Chu. In an effort to promote the environmental movement, a Democratic Congress banned older light bulbs in exchange for new "energy efficient" lightbulbs that are costlier, give less light, and are a toxic hazard if they break. Mr. Chu justified this rationale as follows:
When one looks at all the regulations President Obama has passed or favored, the same arrogance comes into play. People in distant places will be able to decide for you if you are wasting money on health care. If they think you are, they will simply take away the choice of that healthcare. Distant "enlightened" men in Washington will decide for your business if the location you are wanting to set up shop in is "wasteful." If they deem it so, they will do whatever they can to take away the choice of where to have your business located.
This is inherently dangerous. What if a certain state is key to a President's re-election campaign, and he decides to use regulation to prevent a business from relocating to a state that he is already going to lose? What if a company does a lobbying effort to promote their product as the most "efficient" and their competitor as "wasteful." Who is to decide? Some people might place a premium on safety. Therefore, the newer lightbulbs are not worth the cost. What criteria does Mr. Chu place on those competing factors to determine what is and isn't "wasteful?" Should companies be allowed to influence that decision with their money?
This is how corruption in government spreads. You get someone who thinks they know best, or at least that they should be in the position to know best and decide the most minute of matters for everyone else. There is nothing pragmatic or moderate about it.
One the one hand, he has the rigid ideologues. Some of these were "czars" like Donald Berwick (who wants to do whatever he can to provide us with socialized medicine) or Van Jones (the disgraced 9/11 truther/hard leftist), who was canned by the administration for the crime of being liberal in public. For the ideologue, their worldview trumps everything else, including reality. They are not as interested in equitable results for all, as the imposition of their worldview. It is a very power hungry nature.
As he heads into re-election, President Obama has tried hard to present himself as the one sensible adult in Washington and a pragmatist. Yet you cannot be what you cannot be. Obama is neither sensible or a pragmatist, and this is demonstrated by his advisors.
Take the National Labor Relations Board and their demonizing of Boeing. Boeing decided to build a new plant in South Carolina. In a struggling economy, a big company decides to give considerable investment. What's the problem? The problem is that South Carolina allows workers to decide for themselves if they should be in a labor union. Labor unions hate the complexities of giving workers the freedom to be represented by the union, or (more importantly) someone else, themself. The NLRB claims that since Boeing has a compulsory union plant in Washington State, it is wrong for them to build in one in a right to work state. Worse, it is engaging in "retaliation" against those Washington workers for joining a union. That the Washington plant is seeing its producitivty and employment increase is irrelevant.
What could be behind such a mindset? In a seemingly unrelated story, Energy Secretary Steven Chu. In an effort to promote the environmental movement, a Democratic Congress banned older light bulbs in exchange for new "energy efficient" lightbulbs that are costlier, give less light, and are a toxic hazard if they break. Mr. Chu justified this rationale as follows:
"We are taking away a choice that continues to let people waste their own money,"In their mind, they can decide best if you are wasting your money. Ergo, they should be able to limit your choice so you do not waste your money. Despots normally do not speak in such naked terms of control. Traditionally, it has been understood that in America, you can use your money how you see fit, provided it is not for criminal means. Money is the fruit of private property. In order for it to be private, one must have discretion over it. What qualifications does Mr. Chu have to dictate how people can best spend their money?
When one looks at all the regulations President Obama has passed or favored, the same arrogance comes into play. People in distant places will be able to decide for you if you are wasting money on health care. If they think you are, they will simply take away the choice of that healthcare. Distant "enlightened" men in Washington will decide for your business if the location you are wanting to set up shop in is "wasteful." If they deem it so, they will do whatever they can to take away the choice of where to have your business located.
This is inherently dangerous. What if a certain state is key to a President's re-election campaign, and he decides to use regulation to prevent a business from relocating to a state that he is already going to lose? What if a company does a lobbying effort to promote their product as the most "efficient" and their competitor as "wasteful." Who is to decide? Some people might place a premium on safety. Therefore, the newer lightbulbs are not worth the cost. What criteria does Mr. Chu place on those competing factors to determine what is and isn't "wasteful?" Should companies be allowed to influence that decision with their money?
This is how corruption in government spreads. You get someone who thinks they know best, or at least that they should be in the position to know best and decide the most minute of matters for everyone else. There is nothing pragmatic or moderate about it.
Friday, June 17, 2011
The Malaise Week
When his son stated that he had the "worst day of his life", that sage of Springfield we know as Homer Simpson replied "worst day of your life so far." I think history will judge this as the worst week of the Presidency for Barrack Obama (even should he be re-elected which I am skeptical of). During this week, Obama revealed much without realizing it.
Surrounded by his Council of Economic Advisers on Monday (video linked at The Corner), Obama was asked questions about the stimulus, specifically about "shovel ready" projects. The questioner pointed out all the regulation that prevents something from being "shovel ready" and then (admittedly snidely) mocks the president by asserting of course the President was aware of these things.
The President responded by saying that "shovel ready was not as..... uh..... shovel ready as we expected." He was trying to make a joke. Instead, he revealed a lot more than he realized. In short, he answered the question that no, he was not aware how much bureaucracy there is. He just seemed to think that if you threw enough money at a public works project, it would complete itself automatically. He neglected to remember the zoning approvals, the permit approvals, the environmental impact statements, the frequent "investments" (i.e. bribes) a company has to pay the city council in other public works projects, etc. Then he failed to remember the inevitable court challenges, appeals, re-zoning, re-acquiring of permits, more environmental impact statements, and more "investments" to the newly elected city councilman to fund a motorized merry-go-round in the local park, which will require even more paperwork.
If it requires this much paperwork to fixed cracked cement, just wait til we see how much paperwork is required when it comes to managing health care! President Obama has spent 3 years talking about the wonders of government, and how only government control can "win the future." Yet government control provided the mess we currently see and Obama decries.
In a Tuesday morning Interview with the Today show, President Obama decided it was time to pander to the Luddite constituency:
It also shows how colossally ignorant he is about economics. He is correct, most of the time you withdraw money, you do so electronically. This reduces the time tellers spend withdrawing money. Yet before the recession, there were more bank tellers employed than before ATM's were introduced, and the amount of bank branches exploded. Why? If you want an ATM card, you have to sign up with that bank still. More people signing up for this convenience means you need more banks. In addition to using the services of ATM's, people also use banks for other purposes. In order to facilitate those purposes, you need more human tellers. The same goes for the kiosks at airports. Instead of waiting in line for hours (outside of security) to check in, now you can simply sign in yourself and be cleared in under 30 seconds as checked in. This gives us less waiting at the airport, allows enhanced productivity outside of the airport, or allows us to spend absurd amounts in the airport gift shop, whatever. Since flying was made easier, more people were flying.
You could in theory increase employment in those industries by wishing away these technological advances, just as candle makers would benefit from abolishing the sun and horse drivers would benefit from eliminating the automobile. Yet this wouldn't cause economic growth. We would be a lot less efficient. If ATM's were abolished, consumer spending would plummet and banking enrollment would decline. Like the shovel ready "joke", it shows a President so out of touch with reality it is painful. Yet this mindset drives this blatantly anti-market administration.
On Thursday, the members of that market (many of them rich businessmen Obama hopes to court) had a meeting with Chief of Staff William Daley. Daley was supposed to be the smart businessman who would restore Obama's relationship with the business community after their trial separation in November of 2010. If Marriage Counselor Daley wants to save this marriage, it will require a lot of work. After highlighting all of the anti-business regulation the government has, Daley simply threw his hands up and said screw it when he declared "some things you just can't defend." Not very reassuring to the business community, or anyone else. The government is hopelessly bloated, and many of the policies (some even championed by his boss) just aren't defensible. First it was the economy that is out of control. Then it was technology. Now it is the federal government itself. The Obama administration has resigned itself to these three apparent facts.
Which begs the question: if the President is resigned to these facts, will he please make way for someone who isn't?
Surrounded by his Council of Economic Advisers on Monday (video linked at The Corner), Obama was asked questions about the stimulus, specifically about "shovel ready" projects. The questioner pointed out all the regulation that prevents something from being "shovel ready" and then (admittedly snidely) mocks the president by asserting of course the President was aware of these things.
The President responded by saying that "shovel ready was not as..... uh..... shovel ready as we expected." He was trying to make a joke. Instead, he revealed a lot more than he realized. In short, he answered the question that no, he was not aware how much bureaucracy there is. He just seemed to think that if you threw enough money at a public works project, it would complete itself automatically. He neglected to remember the zoning approvals, the permit approvals, the environmental impact statements, the frequent "investments" (i.e. bribes) a company has to pay the city council in other public works projects, etc. Then he failed to remember the inevitable court challenges, appeals, re-zoning, re-acquiring of permits, more environmental impact statements, and more "investments" to the newly elected city councilman to fund a motorized merry-go-round in the local park, which will require even more paperwork.
If it requires this much paperwork to fixed cracked cement, just wait til we see how much paperwork is required when it comes to managing health care! President Obama has spent 3 years talking about the wonders of government, and how only government control can "win the future." Yet government control provided the mess we currently see and Obama decries.
In a Tuesday morning Interview with the Today show, President Obama decided it was time to pander to the Luddite constituency:
"There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don't go to a bank teller, or you go to the airport and you're using a kiosk instead of checking in at the gate."We can ignore the fact that both the ATM and kiosk have been used for at least the past two decades, and they didn't seem to hinder unemployment. In this statement is a weary resignation that the modern world has overtaken America, and there is nothing she can do about it. Jimmy Carter could not have said it better himself. Rather than viewing technology as a problem to be avoided, smart economies embrace technology as ways to drive innovation. For Mr. Hope and Change, innovation (change) is now the enemy.
It also shows how colossally ignorant he is about economics. He is correct, most of the time you withdraw money, you do so electronically. This reduces the time tellers spend withdrawing money. Yet before the recession, there were more bank tellers employed than before ATM's were introduced, and the amount of bank branches exploded. Why? If you want an ATM card, you have to sign up with that bank still. More people signing up for this convenience means you need more banks. In addition to using the services of ATM's, people also use banks for other purposes. In order to facilitate those purposes, you need more human tellers. The same goes for the kiosks at airports. Instead of waiting in line for hours (outside of security) to check in, now you can simply sign in yourself and be cleared in under 30 seconds as checked in. This gives us less waiting at the airport, allows enhanced productivity outside of the airport, or allows us to spend absurd amounts in the airport gift shop, whatever. Since flying was made easier, more people were flying.
You could in theory increase employment in those industries by wishing away these technological advances, just as candle makers would benefit from abolishing the sun and horse drivers would benefit from eliminating the automobile. Yet this wouldn't cause economic growth. We would be a lot less efficient. If ATM's were abolished, consumer spending would plummet and banking enrollment would decline. Like the shovel ready "joke", it shows a President so out of touch with reality it is painful. Yet this mindset drives this blatantly anti-market administration.
On Thursday, the members of that market (many of them rich businessmen Obama hopes to court) had a meeting with Chief of Staff William Daley. Daley was supposed to be the smart businessman who would restore Obama's relationship with the business community after their trial separation in November of 2010. If Marriage Counselor Daley wants to save this marriage, it will require a lot of work. After highlighting all of the anti-business regulation the government has, Daley simply threw his hands up and said screw it when he declared "some things you just can't defend." Not very reassuring to the business community, or anyone else. The government is hopelessly bloated, and many of the policies (some even championed by his boss) just aren't defensible. First it was the economy that is out of control. Then it was technology. Now it is the federal government itself. The Obama administration has resigned itself to these three apparent facts.
Which begs the question: if the President is resigned to these facts, will he please make way for someone who isn't?
Thursday, June 16, 2011
Barrack the Invincible?
When you listen to the political landscape today, you hear about how “unbeatable” Barrack Obama is. I can understand why the left and Obama are doing this. They want to make the appearance so terrifying nobody dare oppose him. What I don’t understand is why anyone else would buy these delusions.
First, let’s look at the Republican field. Let us forget about Herman Cain, Michelle Bachmann, and Ron Paul. They aren’t going to win, and won’t be around. So forget about it. They are either too inexperienced, too gaffe prone, too insane, or a combination of all three. Sarah Palin isn’t running for President, and I’ve been saying that forever. Nothing has changed.
This leaves Mitt Romney, Tim Pawlenty, John Huntsman (an odd pick but I think he will do better than the clowns above), and maybe a spoiler like Rick Perry. All were (or are) Governors. All with successful track records in their states. Two of them have had success in blue states. Yes, Romney has a problem with Romneycare. It is for that reason I oppose him. Yet I’m not going to think that this is the only weapon we have in our arsenal for 2012. In short, all these candidates could beat Obama, since there is some serious cross-over appeal.
Then let us look at Obama’s current standing in the polls and influence. His polling goes back and forth between 45 and 50 percent. Heading into re-election, you do not want to be lower than 50%. If he wants to reach that vaunted billionaire campaign spot, he had better get moving. (His current fundraising numbers are way below that clip.) This will be a referendum on Obama, just as the 2010 elections were. There are only so many voices you can convince. His numbers amongst those not affiliated with either party (the people he needs), those numbers are downright dreadful. He faces an extremely energetic Republican Party, especially in states where there are Senate elections. Republicans are poised to take the Senate. (Even now it is essentially a fait accompli Republicans will take the Senate.) In order to win, he will need a united party.
Yet right now, the Democrats are nowhere close to united. On the recent call to continue borrowing as usual without thinking about how to manage the debt/pay it off, House Democrats split in voting alongside every Republican in saying no. Those such as Senator Ben Nelson will almost certainly have leave to prove back home to their red-state citizens that they will “stand up” to Obama. President Obama has tried three times in rolling out a budget. His recent attempt at doing so was defeated in the Senate 97-0. For all the controversy, Paul Ryan’s plan received 40 votes (and several of the no’s would have been a yes had they been required.)
Harry Reid has literally given up on attempting producing a budget, no matter what. He understands such a budget debate would showcase how ruptured the party really is. The wounds that first began surfacing in 2004 would be clear for all to see: The Democratic Party, when not united by Bush-hatred, is coming apart at the seams. Bush has been out of office 3 years now. They are hoping, as the majority party, to be the ones who engage in demonizing the minority and using obstructionist tactics to block votes. In short, despite having the advantage in the Senate and the Presidency, the Democrats are acting as the minority party.
If the Senate and White House hope to stay in Democratic hands, they will eventually have to put forth a budget. Yet given the deep divisions in the Democratic Party right now (witness the spat between normally budget hawkish Kent Conrad and Socialist Bernie Sanders), there can be no budget. Obama will be the head of the party that by election time has not produced a budget in three out of four years of his presidency. The campaign ad writes itself.
Hard reality number two is the debt ceiling. We aren’t going to default on our debt, and we have to raise the debt ceiling. Yet we also cannot raise the debt ceiling without having a plan in place to seriously address the out of control spending in Washington. Just like with the extension of the current tax rates for 100% of Americans during the winter of 2010, Obama is going to have to put through real spending reforms in exchange for raising the debt ceiling. Reforms his party for the most part still stresses are pointless to do.
Hard reality number three is on energy policy. People remember high gas prices more than anything else. Remember back in 2000 when Republicans were calling for increased oil drilling? We said that it might not make a difference for 10 years, but once that time came, we would find ourselves in a position to handle then outrageous two dollar a gallon gasoline. We haven’t done much of anything in regards to oil production. Indeed, Obama has suspended it in many key areas. Gas prices are high and will most likely remain over three dollars by the time November 2012 comes. (This is to say nothing of inflation lurking around the corner.) People pay attention to gas prices.
Then there are the economic numbers. This is the most devastating reality of all for the Obama administration. The recent numbers are, how do I put this nicely, awful. We essentially created no new jobs last month, and unemployment rose. It would have risen even higher, had people not dropped out of the labor force altogether. (Those numbers are the lowest in 40 years!) Everyone is beginning to come to a realization: we aren’t going to experience a “double dip” recession. We have never really left the recession. We didn’t create jobs. We simply slowed the rate at which we lay people off. The stock markets are high only because of the Fed injecting a massive amount of cash into the economy. (Which everyone realizes will have to end one day.) Despite all the manipulation of the housing market by the government, it still looks atrocious. President Obama was elected to “fix the mess.” By what empirical standard was anything fixed?
One looks at all these facts and indicators, and a question comes to mind: How is Barrack Obama “certain” to win re-election?
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