RTCS

Views on the News

December 6, 2008

 

Views on the News:

American voters tossed Republicans from Congressional power and handed both houses of Congress back over to Democrats, who had previously controlled them for forty years. Americans overlooked the reality that most of what has gone wrong in America over the last one hundred years went wrong while Democrats controlled Congress. The federal budget has only been balanced once in more than sixty years, during Clinton’s second administration, while Republicans controlled both houses of Congress. "Stimulus" spending is an oxymoron and an economic retardant for penalizing the work efforts of those from whom wealth is taken, while creating work disincentives for its alleged beneficiaries. When will the Republican leadership have the political courage to publicly fight the “Global Warming” hoax and its associated “Cap and Trade” anti-capitalism economic policies that are guaranteed to raise energy prices, slow economic growth and increase unemployment? Economic growth is always and everywhere the result of productive work effort, so rather than more economy-enervating handouts, the policies necessary to get our economy moving again must be focused on the removal of barriers to productivity.

 

Obama faces the inevitable disillusionment of his followers who invested in him their hopes and dreams and utterly unrealistic expectations. Hell truly hath no fury like that awaiting Obama as he fails to eradicate the worries and responsibilities of his delusional followers. The cult mystique of Barack Obama continues while his fawning supporters blindly accept every move he makes, proving their support for him in the general election was not based as much on policy as personality. So it should be no surprise that Obama's series of head-spinning reversals so far have been met not with outrage from his supporters (fringe leftists excepted), but with glib rationalizations. His newfound vacillation about Gitmo and NSA surveillance, his flip-flop on withdrawing from Iraq in 16 months, and his announced Cabinet appointments -- particularly Gates and Clinton -- are not being criticized as betrayals, but lauded as evidence that he is open-minded, adaptable, wise and, of course, presidential. He's facing nary a shred of accountability for his anticipatory breaches of campaign promises. That old, left-wing community organizer Barack Obama has suddenly veered toward the center, and his incoming administration is looking more and more like the Daley Machine in Chicago than Hugo Chavez’s administration down in Venezuela. As an ardent disciple of the late Saul Alinsky, Obama seems to have forgotten the iron-clad left-wing dictate - “no enemies to the left,” because with every Clintonite or Wall Streeter appointment, he makes a new enemy on the left. One area Obama has bought “hook, line, and sinker” is Global Warming and he believes despite copious evidence to the contrary that “the science is not in dispute” – he never learns! Obama believes that Global Warming will weaken the US economy and threaten national security, but this would only occur is he implemented his destructive environmental ideas. Tom Daschle, the proposed Health and Human Services Secretary, has already unveiled his idea for nationalizing health care, first for public health services, then expanding to cover the rest of the private-sector health car industry – “look how well it works” in Canada! One of the byproducts of naming Hillary Clinton and other Clintonistas to his Cabinet and other key appointments is potentially bloody but entertaining confirmation hearing! Hillary Clinton’s confirmation hearing will be interesting defending her own “serial fabrication” of her foreign policy experience and avoiding her husband’s history of corrupt dealings. What’s happening is Obama’s discovery that there is a big difference between running for president and being president. Obama’s foreign policy team is a far cry from the dream team that his leftist base had envisioned and foretells a future of dissatisfaction and disappointment. The second level appointments will be where the ideologues will be inserted to execute Obama’s real agenda to incrementally transition America to a socialist system. It’s amazing what a little dose of reality will do to a man who dreamt dreams before he encountered the inescapable facts of life. Why do we think that the same Democrats who enabled the financial crisis to happen by their government intervention are able to fix the economy with further government intervention?

 

Socialism is defined as the stage in Marxist-Leninist theory between capitalism and communism. Under the textbook definition of socialism, the proletariat has not yet achieved a dictatorship allowing for collective ownership of the economy. Meanwhile, in communism, the economy is state-controlled and state-planned. An authoritarian party often calls the shots, promising a future utopia in which property will be shared equally by the people. Under the Communist model, workers put aside their selfishness for the improvement of all. However both Socialist and Communist economic theories are based on people working. Our hypnotic fixation on change, on action to transform this in the world or that in the world is bound to lead not to the feeding of our real needs but rather to temporary fix of a heroin addict. Every monster of the last century which gave birth to an ugly new state (Mussolini, Lenin, Mao, Hitler, Castro) promised above all action, change, progress. Change for the sake of Change is destruction of value, which is why Marxist regimes were so enamored with permanent revolution, because the goal of Marxism and other variations of the same disease change society by making new miseries to justify an addiction to the narcotic of power. The National Bureau of Economic Research (NBER) has declared a US recession starting in December 2007, despite a lack of data meeting any of the traditional recession criteria, thus questioning the political rationale for their actions. Obama is advocating huge federal infrastructure projects to put people to work, even if these federal expenditures prolong the recession and slow economic growth even further. It is clear that Obama wants to use the economic meltdown as a rationale for accelerating the migration to a socialist economic system centrally controlled by government bureaucrats.

 

Hasn’t the financial bailout sobered us about “throwing good money after bad” to solve economic problems that the free market will solve unimpeded by government intervention? There is a fitting symmetry about this financial crisis with a government-induced crisis receiving a government-insured resolution. The actual causes of our financial troubles were unusual monetary policy moves and novel federal regulatory interventions. Poorly chosen public policies distorted interest rates and asset prices, diverted loanable funds into the wrong investments, and twisted normally robust financial institutions into unsustainable positions. We can group most of the unfortunate policies under two main headings: (1) Federal Reserve credit expansion that provided the means for unsustainable mortgage financing, and (2) mandates and subsidies to write riskier mortgages. The excesses of Freddie Mac and Fannie Mae are being mopped up by huge federal spending, made all the more massive by all the reckless endeavors of the politicians, the regulators and the financiers who frivoled with the intemperance of Freddie and Fannie. The federal government is going for broke in an attempt to avert the type of calamitous financial collapse that led to the Great Depression. No one would fault the objective, but throwing money at the problem is becoming an end in itself. Moves to stabilize the system this year have put Americans in harm’s way from possible losses on nearly $8 trillion pledged in loans, guarantees and investments to financial firms. Even, as the rescue tab rises, taxpayers are not being adequately informed or protected. In all their reporting of how the sub-prime mortgage meltdown purportedly triggered the financial industry collapse, the MSM uttered hardly a word about Barney Frank and Gang’s push for financial institutions to provide mortgages to the woefully unqualified. Nobody mentioned the Clinton Administration’s push for home ownership as a God-given right to be facilitated at any cost, let alone the years of criminal conspiracy and obscene executive compensation at Fannie and Freddie. There is as yet no effort to deal effectively with the underlying causes of the problem, especially mass mortgage defaults that feed bank losses. Government officials seem to think urgency to act absolves them from considering the longer-term implications of the actions they take. TARP was originally sold to Congress as a mechanism for buying toxic securities, but subsequently changed to provide direct capital injections to financial institutions.  Then there was discussion of not spending part of TARP until the new Administration took office, followed shortly by a decision to spend a large chunk of the remaining funds to rescue Citigroup by guaranteeing billions of dollars of losses on toxic assets. Now the focus has apparently shifted to helping the non-bank financial sector, with last week’s announcement that $20 billion in TARP funds will be deployed to support a new Federal Reserve liquidity facility for consumer asset-backed paper.  Changing conditions can require agility in policymakers’ responses. However, the seemingly ad hoc implementation of TARP has led many to wonder if uncertainty is being added to markets at precisely the time when they are desperately seeking a sense of direction.  It has also intensified widespread skepticism about TARP among taxpayers, and prompted misgivings even among some who originally greeted the demands for the program's creation with an open mind. Last week’s plan from the Federal Reserve to jump-start mortgage lending also falls short because even if it loosens credit, it will do little to stem foreclosures. Most of the defaults that are destabilizing the system do not result from the loans that the Fed has targeted, as if the Fed, fixated on the flames of a fire, is ignoring the fire’s fuel source. Another danger is that in fighting today’s crises, the government is teeing up the next one. Auto company CEOs subjected themselves to “symbolic water-boarding” this week by requesting their own bailouts of $33 billion (or is it really $75 billion or $125 billion?), understanding that Congress will pretend they are reluctant. The remedy for private business mistakes is bankruptcy. The remedy for the mistaken government monetary and regulatory policies that have produced the current financial train wreck is to identify and undo policies that distort housing and financial markets, and dismantle failed agencies whose missions require them to distort markets. To finance the bailouts, the Treasury is borrowing money and the Fed is printing it. That bodes ill for a heavily indebted nation, presaging higher interest rates and higher prices. As our government moves to spend trillions, taking the unprecedented step of nationalizing the country’s consumer debt, it shouldn’t be lost on us that this crisis didn’t need to happen. What could have been a mild recession isolated largely in the housing and financial sectors of the economy has morphed into a full-blown economic tsunami. President-elect Obama, who says he is modeling himself after Franklin Roosevelt, may follow in FDR’s exact footsteps and may turn his recession into a decade-long “great depression.”

 

A recent Pew Research Center study verified that America is still right of center as a country. More Americans today call themselves conservative than liberal, and the relative percentages in each category have hardly changed since 2000. 38% of Americans self-identify as conservative, 21% as liberal, and 36% as moderate, which compares to 36%, 18% and 38%, respectively, in 2000. 68% of Republicans call themselves conservative and 25% of Democrats call themselves conservative. Like 2000, 2002, 2004 and 2006, the 2008 election map is almost completely red on a county by country basis. Democrats are elected by a handful of high population metro centers which hold a very different view of American life than the balance of the nation, which is mostly suburban and rural. A Republican platform must include as a minimum: 1) walk the walk on the ethics stuff; 2) get creative on the energy issue; 3) develop new technological methodologies for communicating with voters; and 4) develop a workable, positive immigration policy. The single most important factor that determines where American politics will go over the next two years is how Obama fares in office. If he makes more than a few strategic or tactical miscues, his honeymoon will be abbreviated and Republicans will have the opportunity to bounce back from two consecutive disastrous elections. A key question to consider is whether Republicans can quickly address the fundamental problems facing their party, or whether they ignore or misdiagnose their problems and wait for Democrats to self-destruct.

 

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

 

This Week’s Best Articles:

·        Obama Personnel Picks Reflect Chump Change” dated November 24, 2008 published by News Max at http://www.newsmax.com/metcalf/obama_cabinet_choices/2008/11/24/154634.html .

·        Obama on the ‘urgency’ of combating ‘global warming’” by Viscount Munckton of Brenchley dated November 26, 2008 published by American Thinker at http://www.americanthinker.com/2008/11/obama_on_the_urgency_of_combat.html .

·        Daschle-Obama Health Care Possibilities” by Tony Blankley dated November 26, 2008 published by Town Hall at http://townhall.com/columnists/TonyBlankley/2008/11/26/daschle-obama_health_care_possibilities .

·        The Gravest Threat to Obamaland: Disillusionment” by Kyle-Anne Shiver dated November 29, 2008 published by Pajamas Media at http://pajamasmedia.com/blog/gravest-threat-to-obamaland-disillusionment/ .

·        Bailing Away” dated November 29, 2008 published by The New York Times at http://www.nytimes.com/2008/11/30/opinion/30sun1.html?ref=opinion .

·        The Blood of Patriots and Tyrants” by JB Williams dated November 30, 2008 published by American Daily at http://bwww.americandaily.com/article/23660 .

·        When the Warmest in History Isn’t” by Debra Saunders dated November 30, 2008 published by Real Clear Politics at http://www.realclearpolitics.com/articles/2008/11/when_the_warmest_in_history_is.html .

·        Public Nuisances” by Emmett Tyrrell dated December 1, 2008 published by Town Hall at http://townhall.com/columnists/EmmettTyrrell/2008/12/01/public_nuisances .

·        What Really Happened?” by Lawrence H. White dated December 2, 2008 published by The CATO Institute at http://www.cato-unbound.org/2008/12/02/lawrence-h-white/what-really-happened/ .

·        How To Right The GOP” by Charlie Cook dated December 2, 2008 published by National Journal at http://www.nationaljournal.com/njonline/ot_20081201_3322.php .

·        NBER’s Anomalous Recession Calls” by Randall Hoven dated December 3, 2008 published by American Daily at http://www.americanthinker.com/2008/12/nbers_anomalous_recession_call.html .

·        Products that Nobody Wants” by Randy Fardal dated December 4, 2008 published by American Daily at http://www.americanthinker.com/2008/12/products_that_nobody_wants.html .

·        A Hillary in Your Cabinet” by Emmett Tyrrell dated December 4, 2008 published by Town Hall at http://townhall.com/columnists/EmmettTyrrell/2008/12/04/a_hillary_in_your_cabinet .

·        No Left Turns on the War?” by Jacob Laksin dated December 4, 2008 published by Front Page Magazine at http://www.frontpagemagazine.com/Articles/Read.aspx?GUID=BF280EE5-D512-45AB-B6A4-3ABFCAAFEF2C .

 

David Coughlin

Hawthorne, NY