Views on the News

May 16, 2009


Views on the News*  

Obama is most partisan and divisive President whose main appeal is to manufactured “victim” groups and his promise is to punish their “oppressors” and make them pay!  Obama’s whole redistribution of wealth strategy is based on convincing everyone that they are “poor” and that the “rich” must pay more to “fix” this inequity of wealth.  It is clear that Obama has embarked on a “War on Business” with his populist-tinged, sometimes acid critiques of certain sectors, including large companies that keep some profits overseas to reduce their U.S. tax burden.  Obama's targets usually are unsympathetic and faceless corporations or hedge funds.  Progressives divide the world into victims and exploiters, and see themselves as saviors of the underdogs who are incapable of fending for themselves, and requires greater government power in their hands, to vanquish the exploiters.  Illegal immigration, like abortion is a cause célèbre, and Progressives will resist the smallest limitation on the grounds that it might lead to the idea that there are legitimate reasons to control borders.  That's the reason for in-state tuition rates, sanctuary cities, social security payments, housing, welfare, food-stamps, and free medical care for illegals, when they don't give a damn about the education, safety, health or financial security of illegal aliens.  Growing government is the real reason Progressives are pushing socialized medicine, since they know perfectly well it doesn't work.  They don't care about your health, or what healthcare costs you now, or about rationing or low quality care, so no arguments about the inadequacy of government-run healthcare will move them.  The reason for gun registration is not the safety of citizens, they know perfectly well that most legal gun owners are responsible and, in fact, have fewer accidents with firearms than most police departments.  They don't care about the "Earth," so controlling energy gives them total control of the means of production, which translates as total control over food, shelter, goods and services.  Progressives don't care about children, since today’s education indoctrinates the next generation of zombies to believe in, support and trust Big Government.  Progressives don't care about women, since the only 'liberation' they want for mothers, is from husbands who could keep them from being dependent on the state.  Women are victims when it comes to abortion, so letting live babies die unattended in broom closets after botched abortions must not be outlawed because it might lead to the further limitation of a woman's right to "choose."  Progressives don't care about blacks, since they only want to keep them on the plantation, voting for Progressives en masse while receiving just enough to keep them ignorant, broken, hungry and angry, so they'll believe they need their masters, the Federal Government, to eat, and despise and fear any path that would make them independent... like God, good marriages, children with fathers, pride of accomplishment, respect for education, or a focus beyond race.  Progressives don't care about gays, since they only want to break marriage, damage the culture, hurt the morals, virtues and culture of a strong and prosperous middle class.  They don't care about "social justice" or "fairness," since they just want cover to loot and cripple the productive, the independent, the individualists, the entrepreneurs.  The government Progressives' arguments, excuses, reasons and explanations seem stupid and irrational because they are false.  There is just one goal for Progressives and that is to grow the size and power of government. 


Obama has no intention or desire to grow the U.S. economy, but rather, wishes only to grow U.S. government dependency.  Dependency is on government welfare by U.S. citizens, and, ultimately, a dependency of our entire nation on China and other nations abroad.  The American liberal mindset is that economics is a “zero-sum game.”  Weakening America economically will allow other nations to be a little bit stronger, or so goes the theory, and if Obama can achieve this, he will have made the entire world a more ‘fair’ place.  The powers that the Obama administration claimed in order to arrest the financial crisis and mitigate the recession are being used and abused in ways that are undermining the legal and financial stability of the United States.  In the case of Chrysler, several of the institutions to which it owes money are banks that accepted government bail-out funds last year and earlier this year.  Those banks are now enslaved to whatever President Obama and the U.S. Treasury Department tell them to do.  So when Obama tells, say, “bank X” to “accept twenty-eight cents on the dollar as payment of the debt Chrysler owes you,” well, those banks are obliged to obey Obama, whether or not it makes financial sense to do so, and whether or not bankruptcy law allows that bank to demand more.  But the private sector economy got in the way of Obama’s plans to save the world, because some of Chrysler’s secured creditors are hedge funds, that, unlike the “bailed-out banks,“ are NOT under Obama’s control.  Several of the hedge fund managers involved in the situation did what they are permitted to do under bankruptcy law, and demanded more than the meager “pennies on the dollar” loan repayment that President Obama was ordering them to accept.  In barely four months, Barack Obama has nudged the United States toward a future in which government will be bigger and more assertive -- where taxes will be higher and government unions more powerful -- where legal rights are less secure and contracts more uncertain.  Does he really think that he will “save” the U.S. economy and get banks lending again and get people with money to invest in new businesses and begin producing new employment opportunities, by denying legal rights to investors?  President Obama has now demonstrated to the world’s investors that rules and laws don’t matter.  His personal and political preferences are what matters, and he will get his way, even if investors are denied their rights and damaged in the process.  If Obama’s objective is to weaken the U.S., so as to make a “more fair world,” he’s well on his way to achieving that goal.


The federal government published two important reports on long-term budgetary trends and they both show that we are on an unsustainable path that will almost certainly result in massively higher taxes.  This ambitious administration plans to grow the federal government to unprecedented levels through gigantic spending increases that will result in an exponential explosion of the federal deficit.  Not a single credible explanation has emerged, even from the vaunted Obama team of economic advisors of how all of this will be paid for.  Not one administration official has explained why this spending orgy is not certain to encumber future generations with a dreadful financial burden.  We have yet to hear why this adventure will not bankrupt the nation.  However, just like gravity, the laws of economics are insurmountable.  Nearly four months into his presidency, Obama has begun to describe a pivot from economic crisis to economic recovery.  Much of a recovery will rest on a growth in consumer demand, but the most recent figures show a 0.4% decline in retail spending from March to April--and an 11.4% decline from the previous April.  The White House envisions renewed economic growth by this summer, but the unemployment rate will continue rising for perhaps another year.  One of President Obama's campaign pledges was to "create or save" more than three million jobs in his first two years in office, not all that ambitious considering the economy has created 1.5 million jobs annually since 1980.  Well, so far this year, 1.9 million jobs have been swallowed by the recession, so he's already nearly five million jobs in the hole.  The lag between recovery and falling unemployment carries multiple potential consequences for Obama’s agenda, to include eroding his popularity.  How bad future inflation will be is unknown.  The New York Times published on Thursday an editorial declaring the end of the U.S. dollar is at hand.  It could be a normal inflation of 3% to 4% a year or it could also be a banana-republic 10% a month.  Even Obama declared Thursday that the current level of federal deficit spending was "unsustainable" and warned of skyrocketing interest rates if the U.S. government continues to finance government by borrowing from other countries.  What we know is that all governments make promises they can't fulfill and both political parties have taken promise making to a high art.


The barrage of tax increases proposed in President Barack Obama's budget could, if enacted by Congress, kill any chance of an early and sustained recovery.  Historians and economists who've studied the 1930s conclude that the tax increases passed during that decade derailed the recovery and slowed the decline in unemployment.  That was true of the 1935 tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1997.  This is no time for tax increases that will reduce spending by households and businesses.  The Obama budget calls for tax increases of more than $1.1 trillion over the next decade.  Obama's biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits.  The nonpartisan Congressional Budget Office (CBO) estimates that the proposed permit auctions would raise about $80 billion a year and that these extra taxes would be passed along in higher prices to consumers.  The next-largest tax increase -- with a projected rise in revenue of more than $300 billion between 2011 and 2019 -- comes from increasing the tax rates on the very small number of taxpayers with incomes over $250,000.  The third major tax increase is the plan to raise $220 billion over the next nine years by changing the taxation of foreign-source income.  In the end, the corrosive consequences of oppressive taxation and the grim reality of governmental central planning will weigh heavily on a suddenly-wiser American people as it awakens from its trancelike infatuation.  Federal income taxes for every taxpayer will have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.




We can no longer ignore Social Security and Medicare funding problems since the recession has moved their date of insolvency even closer than predicted.  In the four years from January 2004 to January 2008, the Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion, and the average annual growth topped $2.5 trillion.

The Social Security Board of Trustees reported Tuesday that costs will exceed revenues in 2016, a full year sooner than expected just last year.  Total Social Security assets, including more than 70 years of "surpluses" built up in the "trust fund," will be completely gone by 2037, four years earlier than in last year's report.  The deficit over the next 50 years is expected to be about 2% of taxable payrolls, up from 1.7% last year.  Long-term, unfunded liabilities for Social Security and Medicare top $53 trillion, about four times the size of current GDP.  Taxes must either rise or benefits shrink by that amount to close that gap.  The long-term outlook is made much worse by the recession.  The problems of Social Security and Medicare are structural, requiring a massive, root-and-branch reform that Washington seems unwilling to do.  Taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP which adds up to 8.1% of GDP.




Does anybody really believe that adding 50 million people to the public health-care rolls will not cost the government more money?  Obama’s goal of universal health care, and the idea that it’s a cost-cutter will actually cause costs to explode.  This new entitlement, like Medicare but open to all ages and all incomes, would quickly crowd out private insurance as people gravitated to heavily subsidized policies, eventually leading to a single-payer system.  So Democrats are trying to seduce diffident Republicans with a Potemkin compromise.  A "soft" public option would limit enrollment only to the uninsured or those employed by small businesses, or include promises that the plan will pay market rates.  The truth is Democrats know that any policy guardrails built this year can be dismantled once the basic public option architecture is in place.  That is what has always happened with government health programs.  Federal boards are going to decide what’s good for you and me, which will drive a wedge between doctors and patients.  Any law that empowers government to provide individual coverage in the public interest implicitly empowers government to deny individual coverage for the same reason.  When Medicare was created in 1965, benefits were relatively limited and retirees paid a substantial percentage of the costs of their own care.  The clout of retirees has always led to expanding benefits for seniors while raising taxes on younger workers.  In 1965, Congressional actuaries expected Medicare to cost $3.1 billion by 1970.  In 1969, that estimate was revised to $5 billion, and it actually came in at $6.8 billion.  That same year, the Senate Finance Committee declared a Medicare cost emergency.  In 1979, Jimmy Carter proposed limiting benefits, only to have the bill killed by fellow Democrats.   Things have gotten worse since, and Medicare today costs $455 billion and rising.  Medicaid was intended as a last resort for the poor but now covers one-third of all long-term care expenses in the U.S., because it has become a middle-class subsidy for aging parents of the Baby Boomers.  Its annual bill is $227 billion, and so far this fiscal year is rising by 17%.  SCHIP was pitched a decade ago as a safety net for poor kids, and some Republicans helped sell it as a free-market reform.  But SCHIP is now open to families that earn up to 300% of the poverty level, or $63,081 for a family of four.  Any new federal health plan will inevitably follow the same trajectory, no matter how much Republican Senators might claim they've guaranteed otherwise.  The Lewin Group consultants estimate that 119 million people who now have private insurance could potentially be captured by the government under the Obama public option, and this is on top of the 90 million already in Medicare or Medicaid.  This would guarantee a spending explosion that would over time lift federal health care outlays as a share of GDP into the upper 20% range or higher.




Selecting a justice to serve on the Supreme Court is a weighty responsibility, and so is the decision by the Senate to confirm or reject the nomination.  Empathy is the opposite of equality before the law.  The proper criteria for choosing a Supreme Court Justice are poorly understood by many Americans:

·    Impartiality. The nominee should demonstrate an ability to fulfill the oath to "administer justice without respect to persons, and do equal right to the poor and to the rich," regardless of the judge's personal feelings toward the parties in the case or the political groups to which they belong.

·    Commitment to the Rule of Law. The nominee should demonstrate a commitment to the design of our Constitution, under which the people's elected representatives in Congress make the laws and judges interpret the laws as written and intended. It is a judge's consistent adherence to the written law -- serving as a neutral umpire, calling balls and strikes fairly, regardless of personal feelings -- that protects our property, our families and our very freedom.

·    Integrity. The nominee should demonstrate unquestioned personal and professional integrity. If confirmed, the nominee will be honored with a lifetime appointment, checked almost exclusively by his or her personal discipline and restraint. Unimpeachable character is an indispensable prerequisite for the job.

·    Legal Expertise and Judicial Temperament. The nominee should demonstrate a mastery of the law, an ability to apply the law to complex facts, and the skill to craft plain and enduring opinions that lower courts, lawyers and the people can understand. The nominee must also demonstrate the humility necessary to be subordinate to the law that he or she will interpret. Great justices recognize the limits of their own power and defer to the wisdom of the people, effectuated through elected representatives and expressed in the written law.

Politics should be set aside and a careful analysis of the nominee's suitability to serve should be carried out using appropriate criteria. .


The world's terrorists and rogue nations have clearly become more dangerous since President Obama took office, and analysts say they're testing him to see how much they can get away with.  North Korea, Iran, al Qaeda in Iraq and the Afghan Taliban have gotten much more threatening in recent months, while the administration pursues a new foreign policy based on the belief that they can achieve much more through soft diplomacy - sitting down with our adversaries and having a "dialogue" with them.  In an ever-more-dangerous world, the Obama administration says it is practicing "smart power" instead of "hard power."  "With smart power, diplomacy will be the vanguard of foreign policy," Secretary of State Hillary Rodham Clinton told senators at her confirmation hearings.  That's the message Mr. Obama has sent since his swearing-in, but so far, it doesn't seem to be working.  On the contrary, it seems to be encouraging further bad behavior.  Communist North Korea has brazenly stepped up its development and testing of medium-range missiles and nuclear weapons that threaten its neighbors and, eventually, us.  Taliban forces have grown more aggressive, threatening Afghanistan's weakened government and taking control of the Swat Valley and neighboring areas in Pakistan, where they have moved their troops to within 60 miles of Islamabad.  Al Qaeda has ramped up its deadly suicide bombings in Baghdad and elsewhere in Iraq amid reports the United States may slow its withdrawal plans if conditions worsen there.  Iran, too, is working overtime to support terrorists while pursuing its own nuclear programs in defiance of United Nations resolutions and economic sanctions.  A CIA report to Congress says it has dramatically increased its uranium-enrichment program.  "This has to do with testing him.  Our adversaries and friends alike perceive a potential U.S. vacuum of leadership and international leadership abhors a vacuum, and other people are going to do things to fill that vacuum.  In the case of North Korea, we are clearly worse off than we were a few months ago," he told me.  What have we got by reaching out to the Iranians… not much.  They are working on their missiles; there's not much change in their posture.  Pakistan is certainly more of a worry now, not just in the tribal areas, but in Pakistan proper, and the danger of getting control of nuclear weapons, which would be a nightmare."  No change in America's foreign policy is more troubling than Mr. Obama's approach to Iran, where his olive-branch diplomacy has done nothing to change that country's path toward war.  Recent events show that even as the Obama administration seeks to engage Tehran, the Islamic Republic has continued to work to undermine U.S. interests and to support anti-American elements around the world, as demonstrated by its ongoing efforts to resupply Hamas, support Hezbollah's efforts to destabilize Egypt, and assist Iraqi insurgents.  Mr. Obama, of course, has many defenders in the foreign-policy community here, but they have growing concerns, too.  In some ways, I worry about Pakistan the most because it has nuclear weapons, but that's a long-term challenge.  What the administration does not seem to grasp is that the battle against the Taliban in Pakistan and the nuclear threats posed by Iran are not going to be solved through soft power or good-faith engagement.  The Taliban and the Iranian leadership are motivated not by earthly desires but by a religious ideology, one that brands any government unwilling to bow to their demands as illegitimate and Satanic.  Eagerness to compromise with the Taliban such as the Pakistani government turning over the Swat Valley to them in the hopes of a brokered peace or attempting to buy off Iran or North Korea again only whets their demands for more concessions.  In the end, that always results in more dangerous consequences.


Economic results are coming in and they don’t meet American voter expectations.  The Democrat borrow and spend and spend and spend “stimulus” plan is not working now and will not work in the long run.  They are accomplishing nothing more than bankrupting our children and grandchildren’s futures.  The unemployment rate has now reached 8.9%, up a full percentage point since the passage of the so-called stimulus bill.  The unemployment rate fell short of the expectations set by the Obama administration, even falling short of the unemployment numbers they projected would result from passing no “stimulus” legislation at all.  The Obama administration is either making up their numbers outright or their so-called solutions aren’t working.  As American families struggle to get through these troubled times, the Obama administration and Democrats in Congress are not delivering on the promises they made when they borrowed in the name of the American taxpayer $1 trillion dollars to spend on 50 years’ worth of liberal pet projects.  The Medicare report also issues a fourth consecutive warning about the amount of funding the program is drawing from resources other than its dedicated revenue.  Congress has known for years that our largest entitlement programs, particularly Social Security and Medicare, simply cannot survive as currently structured.  Regrettably, the President’s budget makes the problem worse by expanding entitlement spending by $1.4 trillion over the next ten years.


The last thirteen non-partisan Battleground Polls over a period stretching from early 2002 to late 2008 continue to show 60% of the American people described themselves as "conservative" or "very conservative."  26% of Americans call themselves "very conservative" on fiscal issues and 43% consider themselves "somewhat conservative" on fiscal issues.  34% of America, more than one person in three, is "very conservative" on social issues and 19% are "somewhat conservative" on social issues.  It is too bad that Dick Cheney, with nothing to lose, is the only one publicly defending Bush decisions and conservative values, while the democrats continue to blame everything on the previous administration.  A movement to reclaim for states all rights not specifically designated to the federal government in the U.S. Constitution is exploding across the nation, with 35 states already acting or at least considering such proposals.  The grass-roots "Tea Party" movement that swept across the country April 15 to protest federal tax and spending hikes will hold demonstrations in Washington on September 12th when Congress will be battling over President Obama's biggest budget proposals.  When policy ideas from the Democrats will harm the country, Republicans should embrace being the “Party of No” and offer their own “Party of Yes” positive alternatives.


* There is so much published each week that unless you go out of your way to find it, you will miss important breaking events.  I package the best of this information into my “Views on the News” each Saturday morning for your reading pleasure and to fill in factual vacuums. 


If you are sick and tired of government and politics as usual, read my web site with its individual issue analysis and recommendations sections at: http://www.returntocommonsensesite.com .  Individual issue updates this week include:


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David Coughlin

Hawthorne, NY