RTCS

Views on the News

December 13, 2008

 

Views on the News:          

Candidate Barack Obama promised "change we can believe in," but he never hinted that this change would all but circumvent Congress to impose on America the most dramatic liberal social transformation since the New Deal.  The Democrat orchestrated financial crisis was a political strategy to help elect Obama but has now had the unintended consequence called the “Obama Recession” which in turn has caused job cuts as businesses plan for the expected Obama economic changes.  Obama has warned that “things are going to get worse before they get better” to prepare the American public for his more dramatic attacks on the free market economy.  Winston Churchill once said, “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy; its inherent virtue is the equal sharing of misery.”  This is President-Elect Obama's most brilliant stealth strategy for implementing "change."  This involves not just a change in laws, but a change in the way laws are made and passed.  This "change" is as simple as it is revolutionary:  capitalizing on the economic crisis, Obama has challenged Congress to enact his near-trillion-dollar package of social changes -- disguised as a comprehensive stimulus/jobs bill -- and to have that legislation waiting to be signed immediately after his January 20th inaugural.  Obama would also use this jobs/stimulus package to put in a "down payment" on all of his planned domestic social initiatives, including infrastructure, education, energy and health care.  Obama would place tens of billions of dollars as down-payments for each of these new programs in his omnibus bail-out bill -- and that he would sign this bill into law as soon as he returns to the White House after his inauguration.  Watch for the stealth strategy to include abortion support transformed into a federal “right” and a government funded entitlement, during all nine months of the pregnancy.  Obama intends to launch most of his agenda on his first day in office, without debate, by ensuring that these initiatives all got funded in the names of jobs and economic stimulus.  Little to no dissent will be heard -- after all, it's a crisis, and there is no time for an orderly deliberative process.  This plan, using that crisis to pass a package of laws most Americans would object to, is President-Elect Obama's most brilliant stealth strategy.  This end-run around the deliberative process is revolutionary -- it is, perhaps, the closest America will ever come to a legal and constitutional Presidential coup d'etat

 

Liberal-progressive-socialists again eagerly anticipate returning to the disastrously failed economic policies of Franklin Roosevelt.  The standard liberal-progressive-socialist litany is that socialism, in the New Deal and subsequent years, would have succeeded, if only the government had spent more money for a longer time.  In addition to blind religious faith in the secular religion of socialism, liberal-progressives are beset by ignorance.  Presidents Hoover and Roosevelt turned an ordinary business recession, which should have lasted only about two years, into the worst economic downturn in our history.  They accomplished that feat by pursuing the same economic policies now urgently sought by liberal supporters of president-elect Obama:

·         First, by raising income taxes on individuals and businesses; taxing “the rich” and distributing receipts to favored economic and social classes.

·         Second, by condemning businessmen as social criminals.

·         Third, by promoting inflation and devaluation of the dollar.

·         Fourth, by clamping many rounds of new regulations upon business.

·         Fifth, by supporting socialist labor unions.

·         Sixth, by punishing businesses that sought to reduce costs enough to enable resuming production at a profit.

·         Seventh, by pursuing beggar-thy-neighbor protectionist policies (raising tariffs, or today rescinding and curbing free-trade agreements with foreign nations.

·         Eighth, by centralizing business management decisions in Washington bureaus.

·         Ninth, by making it impossible for banks to float bonds for long-term credit to support business expansion; uncertainty about what the Federal government would do next was the enemy of credit expansion.

·         Tenth, by making daily business decisions a matter of speculative chance.

Apparently religious faith in socialism outweighs rational consideration of evidence.

 

Paul Chesser remarked “If our government's economic experts really knew what they were doing, they wouldn't be frenetically experimenting with the people's money, treating billions like nickels.”  They wouldn't be so hell-bent on dampening expectations and instilling fear as if oblivious to the real impact of public psychology on the economy.  I'm just not buying their doomsaying anymore.  Even if they're right and we do end up in a full-scale financial meltdown, at least it will be finite and America's best days will still be ahead of us.  But if we don't stop this panic-driven government intervention madness now, the chances are we'll still face a major meltdown and pass the point of no return into the bottomless pit of socialism.  The auto bailout and future proposed gargantuan government interventions must be rejected.  Free market capitalism is obviously not perfect, but it's the least imperfect economic system, and its pricing mechanism does an infinitely better job of allocating resources and rationally picking winners and losers than government planners could do, even if they had the foresight of Nostradamus on his best day.  Indeed FDR's actions exacerbated and prolonged the Great Depression and Obama's planned New Deal will do likewise.  The financial meltdown was not caused primarily by too much capitalism but reckless government policies that interfered with the market's pricing mechanism, such as mandating un-creditworthy real estate loans.

 

Already the Federal Reserve has invented more economic tools than in any comparable period of the Fed's 94-year history with the object being to prevent a broad credit collapse.  One of the root causes of the housing bubble and the resulting financial meltdown was the Community Reinvestment Act (CRA) passed by President Carter in 1977 to expand home ownership and expanded in 1995 by President Clinton as a tool for social engineering.  Four federal agencies enforce the CRA, a banking regulation whose original purpose of encouraging homeownership among the poor was well-intended.  Abused by the Clinton administration, however, the act triggered the subprime crisis by relaxing lending standards across both the primary and secondary mortgage markets.  These agencies, which over the years have become entrenched in pushing the act, include the FDIC, Office of Thrift Supervision, the Comptroller of the Currency and the Federal Reserve.  It is ironic that the same people, Senator Chris Dodd and Congressman Barney Frank, are the same people who shepherded Fannie Mae and Freddie Mac during its expansion and collapse, and are the same ones asserting their leadership on the required bailout actions.  Now the Fed wants to bail out the Big Three automakers, but Democrats grudgingly admit that their $15 billion quick fix will be the first of many infusions of taxpayer cash needed under their plan.  Chris Dodd and Barney Frank are calling for the CEOs of the Big Three automakers to resign, when a better solution would be to impeach Dodd and Frank based on their incompetence!  Luckily Republicans such as Senator Bob Corker were able to kill this Big Three bailout by offering an alternative that had some chance of success with less government intrusion.  Since late 2007, the Fed has found novel ways to lend to banks, to former investment banks, to money market funds and to issuers of commercial paper.  It has dramatically increased dollar loans, called "swaps," to other government central banks, which then lend the dollars to their commercial banks. All told, the Fed's new loans and credits easily exceed $1 trillion, which dwarfs the $335 billion committed by the Treasury Department under the better-known Troubled Asset Relief Program (TARP).  Until recently, most of these loans, including those used to rescue Bear Stearns, AIG and Citigroup, have been justified as fulfilling the Fed's traditional role of "lender of last resort."  To prevent panic, government central banks prop up financial institutions deemed "too big to fail" or acquire securities in markets where a sellers' stampede overwhelms buyers.  Now, even this justification is being jettisoned.  Unfortunately over half of borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments after six months.  In November, the Fed announced more new loans: purchases of up to $600 billion of home-mortgage related securities and $200 billion of securities consisting of auto, credit card, student, and small-business loans.  Since the bailouts are taking ownership of companies being bailed out, why not distribute this ownership perhaps as mutual funds in personal retirement accounts established in the name of every person in the country totally independent of Social Security?

 

Victory creates a new problem for Democrats, that of governing, since now Democrats won't be able to blame their failures on Republican scapegoats.  According to the wiretap Obama was “not willing to give (Blagojevich) anything except appreciation” for appointing his choice to the Illinois Senate seat – that is a good thing!  However Obama and his campaign team are now denying any knowledge or contacts with Democrat Governor Blagojevich – covering up activities and conversations is a bad thing!   The only way Obama can distance himself from corrupt Illinois politics is to fire his three key advisors with Chicago roots: Rahm Emanuel, David Axelrod, and Valerie Jarrett.  Failure is a foregone conclusion for the Democrats' economic agenda, and Republicans seeking a coherent conservative response can boil their message down to three words: It won't work.

·         Infrastructure "investments"? It won't work.

·         Pump-priming "stimulus" payments? It won't work.

·         More taxpayer-funded bailouts? It won't work.

·         Whatever policy Washington pursues, a quick and painless recovery is not going to happen, and the only real question is whether Democrats will delay recovery by implementing liberal policies that make a very bad situation even worse.

·         The arguments for a government health care takeover are particularly painful, since this move will do nothing to promote economic recovery. It won't work.

·         When Obama pursues the big-government interventions favored by liberal Democrats in Congress, the smart bet is that we won't see a recovery by 2012.

·         In the short term, Obama's charisma and a "honeymoon" with the Washington press corps will shield the new president from blame for the economic slump he inherited.

·         Yet not even the media's leg-tingling infatuation will protect Obama forever.

·         Just as the failure of the Democratic economic agenda is a foregone conclusion, their political agenda, expecting voters to wait patiently for the delivery of the promised Hope, will meet the same nuance-free fate: It won't work!

Japan had similar problems in the 1990s and tried to jolt their economy with infrastructure investments and traded their export complex for an edifice complex.  Between 1992 and 2000, the Japanese launched 10 stimulus packages that included public works and as a result they doubled their unemployment rate.  As global warming pathologists insist that increasing carbon dioxide drives planetary meltdown, scientists who actually watch the climate trends, as well as all the forces that affect it, see something different.  They observe unchanging (if not declining) temperatures over the last dozen years despite increased global CO2 emissions during the same time period.  There is both growing public reluctance to make personal sacrifices and a distinct lack of enthusiasm for the major international efforts now underway to battle climate change, according to findings of a poll of 12,000 citizens in 11 countries:

·         47% of those surveyed said they were prepared to make personal lifestyle changes to reduce carbon emissions, down from 58% last year.

·         Only 37% said they were willing to spend "extra time" on the effort, an 8% drop.

·         Only 20% said they'd spend extra money to reduce climate change, down from 28% a year ago.

A cap-and-trade bill like Warner-Lieberman would cost 3 million U.S. manufacturing jobs and $7 trillion in lost GDP, as the bills slap increasingly heavy taxes on hydrocarbon energy, while the EPA regulatory regime would be even more onerous and costly.  The three major themes of health care reform under the new administration will likely be (1) mandatory national health care coverage, (2) additional power and responsibilities for the FDA, ostensibly to ensure greater drug safety, and (3) reduction of health care costs.  Don’t be fooled by the Mainstream Media spin on Obama’s appointments because he is assembling a team of intellectual clones, not a “team of rivals.”

 

Even before taking office Obama is backing off from many of his promises, culled from his "Blueprint for Change," his campaign speeches and advertisements, and can be used to track his actual performance:

o   Give a tax break to 95% of Americans.

o   Restore Clinton-era tax rates on top income earners.

o   "If you make under $250,000, you will not see your taxes increase by a single dime. Not your income taxes, not your payroll taxes, not your capital gains taxes. Nothing."

o   Dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes.

o   Give American businesses a $3,000 tax credit for every job they create in the U.S.

o   Eliminate capital gains taxes for small business and startup companies.

o   Eliminate income taxes for seniors making under $50,000.

o   Expand the child and dependent care tax credit.

o   Expand the earned income tax credit.

o   Create a universal mortgage credit.

o   Create a small business health tax credit.

o   Provide a $500 "make work pay" tax credit to small businesses.

o   Provide a $1,000 emergency energy rebate to families.

o   Tax windfall profits of oil companies.

o   Spend $15 billion a year on renewable sources of energy.

o   Eliminate oil imports from the Middle East in 10 years.

o   Increase fuel economy standards by 4% a year.

o   Weatherize 1 million homes annually.

o   Ensure that 10% of our electricity comes from renewable sources by 2012.

o   Create 5 million green jobs.

o   Implement a cap-and-trade program to reduce greenhouse gas emissions.

o   Get 1 million plug-in hybrids on the road by 2015.

o   Sign a fair pay restoration act, which would overturn the Supreme Court's pay discrimination ruling.

o   Sign into law an employee free choice act — aka card check — to make it easier for unions to organize.

o   Make employers offer seven paid sick days per year.

o   Increase the minimum wage to $9.50 an hour by 2009.

o   Eliminate warrantless wiretapping on U.S. soil.

o   Remove troops from Iraq by the summer of 2010.

o   Repeal the military’s “don’t ask, don’t tell” policy.

o   Close Guantanamo Bay custody facility.

o   Cut spending on unproven missile defense systems.

o   No more homeless veterans.

o   Stop spending $10 billion a month in Iraq.

o   Finish the fight against Osama bin Laden and the al-Qaida terrorists.

o   Work in a "bipartisan way to preserve Social Security for future generations."

o   Impose a Social Security payroll tax on incomes above $250,000.

o   Match 50% of retirement savings up to $1,000 for families earning less than $75,000.

o   Demand higher standards and more accountability from our teachers.

o   Go through the budget, line by line, ending programs we don't need and making the ones we do need work better and cost less.

o   Slash earmarks.

o   Lower health care costs for the typical family by $2,500 a year.

o   Let the uninsured get the same kind of health insurance that members of Congress get.

o   Stop insurance companies from discriminating against those who are sick and need care the most.

o   Spend $10 billion over five years on health care information technology.

 

Developing new ideas and more effective ways to talk about them, not changing ideology, is part of the solution for the GOP.  Elections are won through a mix of messages, messengers and money.  First thing that the GOP must improve is their party messaging, the narrative and ideas that inspire winning campaigns and political parties.  Too often Republicans begin by talking ideology as opposed to solutions.  They start with cutting taxes, balancing the budget and less government, but forget to say, "why?"  Instead, begin with outcomes - more jobs, affordable health care and better education.  Ideology is a means to these ends - not the end itself.  Republicans should apply this outcomes-based approach across the policy spectrum: promoting exceptional schools, providing better jobs, raising stagnant wages, creating independence from foreign oil.  This can be achieved through competition, markets that spur innovation and lower prices, a government closer to the people, and modernizing bureaucracy.  Note the conservative ideological underpinnings are the period in the sentence, not the opening line in the Republican message.

 

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:

·         The New Deal Would Have Worked, If… ” by Thomas Brewton dated December 7, 2008 published by Thomas Brewton at http://www.thomasbrewton.com/index.php/weblog/weblog_printerFriendly/1727/ .

·         Liberals voice concerns about Obama” by Carol E. Lee and Nia-Malika Henderson dated December 7, 2008 published by Politico at http://www.politico.com/news/stories/1208/16292.html .

·         It Won’t Work” by Robert Stacy McCain dated December 8, 2008 published by The American Spectator at http://www.spectator.org/archives/2008/12/08/it-wont-work .

 

David Coughlin

Hawthorne, NY