RTCS

Views on the News

July 18, 2009

 

Views on the News*

Barack Obama may redefine the term “flash in the pan” accomplishing the most in the shortest amount of time and become a lame duck President all in his first 100 days in office! Obama entered office with very high personal popularity ratings. He proceeded to scare the American public with doom and gloom predictions as a justification for a number of liberal spending programs to address apocalyptic crises. All of his programs “required immediate action” without sufficient time to even read the entire legislation, and asked the American people to “trust him” to fix the nation’s problems. Dick Morris suspects that the American public is already waking up to find that the “stimulus” program does not stimulate, the jobs program does not create long term private sector jobs, and only thing that grows is the size of government and our national debt. President Obama already finds himself in an economic box. For despite his aggressive and costly economic policy initiatives, the jobs market shows no sign of healing. At the same time, the housing market foreclosure crisis continues apace, while renewed questions are again surfacing about the soundness of the U.S. banking system. To complicate matters, financial markets are now starting to fret about the longer-run inflationary consequences of the unusually large budget deficits in prospect for as far as the eye can see.  Opposition to his policies is hardening and he is in a race to pass as much of his agenda before Democrats in the House get cold feet in advance of the 2010 mid-term elections. Obama's personal approval, in the Rasmussen Poll, has now dipped to 51%, one point less than his 2008 vote share of 52%. The true predictive measurement is a chief executive's and his party's ratings on specific issues. Rasmussen asked voters to compare which party was best on 10 issues, and found that Republicans have already been perceived as better in eight of the 10 categories. The most significant topic was, of course, the economy, with Rasmussen showing a GOP lead over the Democrats, this time by 46% to 41%, indicating that the incessant bad news and the collapse of the false hopes the stock market entertained this spring have taken their toll. Only 39% of voters say that Obama is doing an excellent or good job on the economy. As unemployment continues to rise, and even Obama predicts that times will get worse, this gap on economic issues will likely grow. On their competing health-care reform plans, Rasmussen finds Obama and the Republicans drawing equal support. Obama is rapidly losing support on health reform, his key issue, and if he stays behind on health care and the economy for long, nothing much will hold him and his party aloft. Finally people are questioning what health care problem is being fixed when 89% of Americans were happy with their own health care. Democrats led Republicans 41% to 38% on education. GOP led 49% to 40% on national security, 40% to 34% on immigration, 46% to 39% on abortion, 34% to 33% on ethics and corruption, and even 42% to 37% on Social Security. The issues that will dominate the next few months are all working for the Republicans. It's amazing how quickly Obama has lost his lead. Since April, his approval has been dropping fast, and his alarming losses on his central agenda issues portend further declines. Congressional elections are still more than a year off, but Obama needs strong approval ratings to steer his legislative package through Congress. Sadly, Obama’s chief legislative achievements may already be behind him.

 

If at first you don’t succeed, spend and spend again, which seems to be the Obama administration’s motto as it contemplates a new round of stimulus spending, a sequel to February’s American Recovery and Reinvestment Act, the staggering, $787-billion stimulus package that so far has delivered little in the way of economic recovery. The $789 billion stimulus doesn't fix what ails the economy and is doomed to fail. The chief selling point of the February stimulus was its alleged ability to create jobs. In pitching the stimulus package this January, President Obama promised that it would either save or create between 3 million and 4 million jobs by 2010, including some 600,000 jobs by this summer. Not one of these predictions has fared well. The administration’s hopeful job numbers notwithstanding, the economy has shed more than two million jobs since Obama took office, and the losses have continued through the summer. Nor has unemployment peaked. On the contrary, it is expected to climb to 10% by the end of this summer and 11% by 2010, numbers that are “well above historical standards for even severe recessions.” Such modest job growth as has occurred, meanwhile, has been anything but wide ranging, and the “only areas that showed any growth in employment were the already bloated sectors of education and health care.” The stimulus may not be increasing jobs, but something is growing as a result of the massive government spending: the budget deficit. The cause of the ballooning deficit is no mystery. The CBO notes that it “results primarily” from the February stimulus package and the Troubled Asset Relief Program, the administration’s bank stabilization program. Some economists are predicting a series of ripple effects, including rising inflation and interest rates, that may further stall economic growth. The economy is now in worse shape than when the February stimulus was passed – a sharp indictment of the president’s stewardship of an economy whose slump he has tried to blame squarely on his predecessor. With the failings of the current stimulus manifest, a second stimulus seems difficult to justify. Keith Hennessey published an excellent point by point rebuttal to President Obama’s economic message half truths and wishful thinking at http://keithhennessey.com/2009/07/12/responding-to-the-presidents-op-ed/ . Cap and trade will only make matters worse-economically and environmentally. Proposed changes in health care would increase the cost of insurance to businesses instead of lowering prices for drugs, doctor's visits and malpractice insurance, as true reform would accomplish. Just as President Bush's blind adherence to conservative ideology threw America into crisis, Obama must unshackle his policies from liberal group think to succeed.

 

There is still an opportunity to introduce a Real Stimulus that is designed to grow the economy and create long term, private sector jobs to help this country recover from this recession. The same people who brought us Stimulus One think another big-government, pork-laden bill that would do little for economic growth and drive us deeper in debt is needed.  Newt Gingrich has again articulated a pragmatic vision for a Real Stimulus that would address the underlying economic problems and offers specific solutions to specific problems. The Real Stimulus alternative vision to the Left’s big spending, lobbyist- and politician-dominated spending bill should have five goals:

1. Build on the 59-21 majority of Americans who believe cutting business taxes will produce more jobs than increased government spending;

2. Offer tax changes which are big enough and bold enough to work;

3. Make the specifics of the tax cuts vivid enough that people understand how it will affect their economic security;

4. Return economic freedom to the American people—and not centralized in Washington; 

5. Pay for tax cuts with serious cuts in spending and economic growth. 

With these goals in mind, the following tax cuts should be the heart of this alternative vision that would achieve a fundamental shift from politicians to small business, from lobbyists to entrepreneurs, and from bureaucrats to investors:

o A two-year, 50% reduction in the Social Security and Medicare tax for both the employee and the employer;

o Permanently match the Chinese capital gains rate, which is zero;

o Match the Irish corporate tax rate of 12.5%;

o Eliminate the death tax permanently;

o Give President Obama the Opportunity to Keep His Word (adopt the best of the small business tax proposals announced by candidate Obama in October 2008).

Real change will require dramatic even wrenching change for the current bureaucracies, politicians and lobbyists. However those changes will be applauded by most Americans.  The following strategies are some strategies that should be used to pay for the robust tax cuts that are the centerpiece of our Real Stimulus bill:

o Capture as much of the TARP money as remains unexpended;

o Carefully go through the uncommitted portion of the $787 billion politician pay off bill from February and redirect $300 billion to $400 billion to pay for the tax cuts;

o Incorporate into the bill offshore drilling and other pro energy measures;

o Sell the private sector assets (GM, Chrysler, AIG, etc.) the government has unwisely acquired during the last year;

o Have a one time recapture of frozen corporate assets currently held offshore with a one or two year window for returning them to the United States;

o Have a six month amnesty for back taxes to generate voluntary self policing;

o Estimate value of jobs with people off of unemployment, off of welfare, reduced dependence on Medicaid and other government programs. 

This Real Stimulus can restart the American economy with bold ideas that put an end to Washington’s political handouts and irresponsible spending.

 

Democrats probably won't be able to pass the healthcare plan by Congress's August recess because Americans won't stand for the massive tax increases it will entail. The Congressional Budget Office put the price tag of the House Democrats' health care takeover plans at $1.5 trillion over 10 years. But the CBO's fine print included a telltale caveat: "We have not yet estimated the administrative costs to the federal government of implementing the specified policies, nor have we accounted for all of the proposal's likely effects on spending for other federal programs." House Democrats are seeking a massive increase of $540 Billion in federal income taxes to help pay for the national health-care reform proposal that President Obama is urging Congress to enact this summer. These proposing health care measures will also add hundreds of billions of dollars of spending to state budgets. Unfortunately there is still a $1 Trillion gap that can’t be met by any savings thus requiring a massive tax increase to pay for it. This of course does not include the massive subsidies to make the so-called public option more attractive to consumers than private plans. Democratic plans to extend health care coverage to all Americans are contingent on a massive expansion of Medicaid. The program, which covers about 40 million people now, would gain 15 million to 20 million new beneficiaries if Democrats get their way. Under the current arrangement, Washington picks up about 57% of the cost of Medicaid and states pay for 43%. Look at how deep the disagreement is, even within the Democratic Party, between those who are worried about the deficit and worried about the economy and those who want to move toward a government-run health plan at any cost. A proposal was made to mandate that every member of Congress and every congressional staffer should be required to get their health insurance in the public plan, since it is so good!. This plan is obviously the first step toward a national health insurance program like Britain or Canada. The government will subsidize and create special rules, causing people to be enrolled automatically. The public plan will inevitably crowd out every private sector competitor, and we'll end up with the whole country in a bureaucratic-led, government-run, red-tape-ridden system. Eventually, Medicare, Medicaid and the new "public option" will morph into one giant health care program consuming 17% or more of our GDP. Medicare and Medicaid are in fact bankrupt. Should we now let the same people who run those programs run all of health care and inoculate it from reform? The people who have experienced the kind of long waiting lines, the lack of access to specialized care, the lack of access to the most modern drugs and the most modern technology, generally feel that while there are many things we should do to improve the American system, going to a government bureaucratic model is one of the worst alternatives. If the prognosis for ObamaCare would wait on the evidence in Massachusetts, given that the commonwealth's 2006 program closely resembles what Democrats are trying to do in Washington, then the results would guaranteed to be dead on arrival.

 

President Obama claims the “cap and trade” bill will "spark a clear energy transformation that will reduce our dependence on foreign oil and confront the carbon pollution that threatens our planet," but the reality is that the bill will have no impact whatsoever on global warming. The purpose of “Cap and Trade” legislation is to reduce Americans’ consumption of fossil fuels, coal, oil, and natural gas, and to speed up the transition to alternate forms of energy, such as wind and solar power. The stated overarching goal of proposed “Cap and Trade” is to save the planet from human-caused climate change, which “Cap and Trade” proponents attribute to human emissions of greenhouse gases, primarily CO2 from fossil fuels. These proponents truly believe (despite considerable scientific disagreement) that such measures are necessary to save the earth. Others have a political agenda: If government can regulate energy consumption, then government has great control over economic activity and people’s lives—an irresistible lure to central planners, social engineers, utopian visionaries, and megalomaniacs. Any local effort, whether by well-meaning individuals or governments, makes no sense. When the U.S. or Western Europe takes steps to reduce carbon emissions, the impact on the climate will be negligible unless the whole world follows suit. In January 2008, candidate Barack Obama stated plainly that under his “Cap and Trade” plan, electricity prices would “necessarily skyrocket” as utilities using fossil fuels would pass along the costs of CO2 permits to consumers. Job losses are so certain under this new “cap-and-tax” plan that it includes a provision accommodating newly unemployed workers from the resulting dried-up energy sector, to the tune of $4.2 billion over eight years. If global warming is a real threat, such political posturing is deeply irresponsible, if it is not, then such postures can be safely ignored. In either case, however, in the name of global warming, it appears that we'll have to pay for a bureaucratic army of green zealots in charge of useless regulation.

 

When President Obama announced on June 9 that some financial institutions would be allowed to repay Troubled Asset Relief Program dollars, he said the massively expensive TARP bailout had made money for the federal government.  Indeed, TARP supporters have long held out the hope that the program might be profitable. But now Congressman. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers.  Frank introduced a bill that would take profits from the program and treat them like a personal slush fund for Democrat political spending ideas. First, the "TARP for Main Street" proposal would take $1 billion "from dividends paid by financial institutions that have received financial assistance provided under…the Emergency Economic Stabilization Act" and apply it to a trust fund that Frank has long wanted to create for low-income rental housing.  Next, Frank would take $1.5 billion from TARP dividends for a so-called "neighborhood stabilization" fund, allowing federal dollars to be distributed to activist groups like the Association of Community Organizers for Reform Now (ACORN). The "TARP for Main Street" bill would also spend $2 billion, apparently from remaining TARP funds, to subsidize people who are delinquent on their mortgages, and another $2 billion to "stabilize multifamily properties that are in default or foreclosure." Republicans recently introduced a bill that would require that TARP money goes back to the Treasury for debt reduction. Spending the dividend payments now, as Frank proposes, would reduce the chance that TARP might ever be a break-even deal for the taxpayers. 

 

When General Motors was owned by private shareholders, it operated as if it were a government bureaucracy causing its downfall. It was inefficient, bloated, slow to act and placed pleasing the customer near the bottom of its priority list. Now that it's owned by the government, GM's goal is to operate as if it were an entrepreneurial start-up. CEO Fritz Henderson outlined the automaker's post-bankruptcy mission as becoming leaner at all levels, streamlining the decision-making process and focusing on customers. If GM can execute the strategy while under the thumb of the federal government, it will be productive and profitable. It's not the marketplace he has to please, but the politicians who run the federal government, which now owns GM. It would be very unlike the political class not to meddle with the automaker if there is some advantage to be gained, and it's already happening. It's impossible to believe that a president who is so thoroughly invested in reversing climate change will allow an automaker he controls to respond to consumer demand for pickup trucks and sport-utility vehicles. That's where the profits are, but GM's focus will have to be on the smaller, fuel-efficient cars Obama desires. GM has an excellent plan for returning to profitability and private ownership, but the question is whether the federal government will ever allow the automaker to implement it.

 

Supreme Court nominee Sonia Sotomayor’s confirmation strategy appears to contradict herself at every turn, claiming not to have meant the things she actually said or not to have ruled the way she actually ruled. For the first time, therefore, it is not just her judgment but also her integrity that is in question. Rarely has a high court nominee ever been forced so often to contradict herself or the clear record in order to avoid being denied confirmation. It is not a pretty sight. Mike Seidman, an unambiguously liberal Georgetown University law professor, fumed that he “was completely disgusted by Judge Sotomayor's testimony. If she was not perjuring herself, she is intellectually unqualified to be on the Supreme Court. If she was perjuring herself, she is morally unqualified.” Three principles ought to frame the Sonia Sotomayor confirmation hearing:

o The first is the judicial obligation of impartiality, memorably captured by Chief Justice Roberts’s umpire metaphor, where an umpire conveys the principle that judges are to be neutral and dispassionate. That’s a principle that President Obama clearly rejects. Never mind the statutory oath of office for justices, which requires them to commit to “administer justice without respect to persons, and to do equal right to the poor and to the rich, and… impartially discharge and perform all the duties” of the judicial office. Unfortunately, Judge Sotomayor gives ample sign of living down to Obama’s promise.

o The second defining principle is that judicial decision-making is, or at least ought to be, a craft distinct from policy-making, that it is bounded by traditional interpretive principles that confine judges to saying what the law is. It’s far from clear that Sotomayor recognizes any limit on the judicial role. She has feebly defended wholesale resort to foreign and international law on the ground that American judges shouldn’t “close their minds to good ideas.”

o Third is the American ideal of colorblindness, the ideal of equal opportunity for all citizens in a legal regime that does not practice racial discrimination. Sotomayor, however, rejects the ideal of colorblindness in favor of a fervent and crude quota mentality, a mentality that is unpopular with wide swaths of the American public, including Hispanics.

Within the framework defined by these principles, Senate Republicans can profitably pursue various other important issues — national security, abortion, same-sex marriage, campaign-finance restrictions on political speech, gun rights, and property rights, to name a few. The judge’s only proper role at all levels is to apply “settled” law to the facts of the case; not to make a new law, much less make social policy. According to the oath of office, the final arbiter is the United States Constitution as written – not the use of foreign laws or international laws. Senate Republicans have a powerful case to make against the Sotomayor nomination, and when they make their case vigorously and effectively, they will advance the overall battle over the role of the courts. Sotomayor’s record shows her being overruled 60% of the time in higher court appeals, and her words show her in ability to rule with impartiality, so how can a confirmation vote be anything other than NO?

 

Obama has now traveled the world, from Riyadh to Cairo and from London to Moscow offering up his international vision, a hodgepodge of classic realpolitik, diplomatic determination, community-organizer idealism and charismatic leadership. He has presented what he hopes will become a new public identity for the U.S., less global leader than global facilitator, less savior than responsible partner. What is known now, however, is the outline of Obama's operating philosophy of world affairs, a set of principles and assumptions that were only hinted at during the protracted presidential campaign. Here is the emerging Obama Doctrine:

o   Biography Matters – advertises himself as the first black President of goatherd ancestry and foreign upbringing.

o   If It's Good for the South Side, It's Good for the World - listens to different views, understand the various motivations and then focus on the commonalities, not the differences.

o   Pragmatism Should Often Trump Idealism – sets the bar high when to intervene in defense of universal rights of oppressed people, but hopes the nation's leaders will meet with him at the negotiating table.

o   America Is One of Many Nations – does not seek to impose its views or form of governance on other countries, offering compromise as a strategy.

o   Young People Matter - adopts the mantle of chief youth inspirer, appealing directly to young people, offering generational changes.

The Democrats’ war against our spies has two main motivations: first to satiate the latent Bush Derangement Syndrome tendencies and second to distract and protect House Speaker Pelosi.

 

Next year's elections have the potential to produce a political earthquake, because of the damage done by the most left-wing government in our nation's history. After just 6 months in office, the flower children that rule Washington in overwhelming numbers are already smashing through all records regarding federal taxes, spending, deficits, and debt. The latest Rasmussen daily Presidential tracking poll shows that only 28% of voters now strongly approve of Obama's performance as President, while 36% strongly disapprove, a negative 8% margin. Rasmussen's polling also shows that only 30% now trust Obama on the economy, which 84% say is the most important issue. A large majority, 61%, believes America is on the wrong track. But it is not just Barack Obama. House Speaker Nancy Pelosi from San Francisco is just as far left, and seems to be even more dreamy and unrealistic on national defense. Barney Frank from Boston is equally loony left, yet serves as Chairman of the House Banking Committee, where he continues to promote the same easy mortgage credit policies that caused the financial crisis. Henry Waxman, the Congressman from Hollywood, is another left-wing extremist, serving as Chairman of the House Energy and Commerce Committee, where he wrote the unjustifiable cap and trade tax legislation. Charley Rangel, the Congressman from Harlem, serves as Chairman of the House Ways and Means Committee, where he is preparing tax increases that will cause capital flight from our economy, befitting a banana republic. John Conyers, Congressman from Detroit, is so far left he has flirted in the past with the Communist Party USA, yet, he serves as Chairman of the House Judiciary Committee, where he regularly calls for prosecution of former Bush Administration officials. One specific target of opportunity for next year is Senate Majority Leader Harry Reid of Nevada, where 62% of voters are telling pollsters they want someone other than Reid as their Senator next year. Turncoat Arlen Specter from Pennsylvania will also be retired next year, when he will find that an 80-year-old opportunist, RINO Republican is not going to appeal to Democrat primary voters any more than to Republican primary voters. Specter's craven lust for power over any principle reflects all that is wrong with our politics. Look for Republican Ebay CEO Meg Whitman to win the California Governor's race next year, and for Republicans to win at least one house of the California legislature. Ditto that for New York State, where Republican majorities may well take over the entire legislature next year. Next year would be a Republican year just because it is a midterm election with a Democrat in the White House. Next year's campaigns will involve a crusade to restore policies to rebuild traditional American freedom and prosperity. Since federal, state and local Democrats have been so extreme left, that is why this time the election is likely to be an earthquake.

 

* 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:

 

Week’s Best Articles:

 

David Coughlin

Hawthorne, NY

www.returntocommonsensesite.com