Views on the News

December 24, 2011

Views on the News*  

The parallels between now and 1776 are worrisome, even frightening in many ways, as people now living in the United States of America have returned to circumstances of our revolutionary forbears.  In 1776, there was an elite hereditary British aristocracy that was totally out of touch with the everyday class, in fact preying on it.  Today we have an elite class of professional politicians with apparently lifelong tenure in Congress and their minions in a massive bureaucracy that controls the populace by overseeing regulatory compliance.  In 1776, the ruling class protected and extended their power using a military often built through impressment.  Today, the power-elite fosters a class of government dependents who, in order to protect their government handouts or bailouts, keep the elite in power through the ballot box.  In 1776, King George III dictated to a group of colonies separated from him by great distance.  Today, we have a President who preaches at (not even to) us, who is totally out of touch with reality.  Like King George, the President is separated greatly from his subjects, but his isolation is due to ideological blinders.  The President blames the rich, not his policies, for all our national woes and wants to control the nation in order to redistribute its wealth.  We the People want to be independent and free and we, the creators of wealth, want to become the rich, not destroy them.  In 1765, the Stamp Act was imposed on us and it took our money without our consent.  Today, we have "ObamaCare," which is similar since it was imposed on us without our consent.  The cry of “taxation without representation” and resistance to the use of our own money against us seem all too appropriate today.  In 1776, we declared a Bill of Rights, which was not a list of rights at all, but instead was a list of constraints against the government imposing its will on us.  Our nation was founded in defense of one single right for Americans: to be free.  There is one huge difference between 1776 and today.  Then, we were powerless unless and until we took up arms.  Today, we do have power: the power of a single vote multiplied by hundreds of millions.  This is a cry for bloodless revolution, also known as democratic change.  We the People need to change our government by throwing out the current power-elite: 535 members of Congress plus the White House, and we need to depopulate the bureaucracy and force the regulators and overseers to do something productive instead of confiscatory.  

(“We Need Not Repeat 1776” by Deane Waldman dated December 17, 2011 published by American Thinker at http://www.americanthinker.com/2011/12/we_need_not_repeat_1776.html )

We are a little over 10 months from Election Day, and the Christmas hope of many conservatives is that voters next November will deliver a decisive rebuke to President Barack Obama and obviously, a lot can happen in 10 months, but many of the fundamentals of the race are already in place and the news is not good for the President.  Each Presidential election is fought over a series of shifting national concerns, and the issues of the 2012 cycle are the least favorable for an incumbent president since 1992, and maybe even since 1980.  Three issues in particular dominate the discussion, and none of them favors Obama.  The most important is the economy, which has been struggling through a decade of weak growth, which has generated an enormous “output gap”—the difference between what the economy would ideally produce and what it has actually done.  The average American has felt the effects in stubbornly high unemployment and stagnant real incomes, and the effort of the Federal Reserve to generate growth by cutting interest rates to the bone means that people who save their pennies earn virtually no interest for their scrimping.  Barack Obama certainly doesn’t deserve all the blame, but he will pay a high political price for 3 reasons:

·    First, Obama overpromised to an absurd degree when he entered office. He claimed that the stimulus bill would reignite the American economy and keep unemployment under 8%. Neither happened, so Obama will pay for his unjustified optimism.

·    Second, he failed to form a bipartisan coalition to tackle the economic problem. Because the stimulus manifestly failed to deliver the growth that he promised, Obama and congressional Democrats must bear the weight of that failure all by themselves.

·    Third, Obama turned his attention away from the economy far too quickly. Having passed their stimulus, this President and his allies in Congress turned their attention to grander social welfare ambitions, something FDR did not begin to do until 1935, when the economy had already started growing at a robust rate.

Thus, the only real question is how big a price Obama will pay.  Obama’s record on the economy is so dismal that, all by itself, it should be sufficient for an able Republican to defeat him.  Yet this President faces other daunting challenges.  The next big one is the Patient Protection and Affordable Care Act, aka ObamaCare.  It contributed mightily to the GOP wave of 2010, and if the Republicans play their cards right, it will defeat Obama next year.  The reason is reducible to a simple calculation of costs and benefits.  The President and his allies in Congress advertised their bill as a cost-reduction package, framing it as a win-win-win: People without insurance would get coverage, people with insurance would see their premiums reduced, and taxpayers would eventually enjoy a lower bill for it all.  However, this argument was a smokescreen.  ObamaCare focuses almost entirely on coverage expansion because the cost-reducing mechanisms are either very weak, politically impractical, or will eventually hit the middle class square in the jaw.  The bill is in fact a win-lose-lose: Those without insurance definitely win, but only because of a transfer of wealth from people with insurance as well as from taxpayers.  The final issue Obama will confront is the deficit.  Like the economy, this is an issue that Obama owns politically, even if he is only partly responsible for it.  Reduced tax revenues and greater demand for social welfare programs make deficits boom in a recession.  And the long-term deficit is almost entirely a function of the runaway cost of Medicare.  Still, the President is politically vulnerable for good reason: He never really tried to forge a bipartisan coalition to tackle deficit reduction.  His own deficit commission offered him a sensible, bipartisan plan, the “Simpson-Bowles” plan that he summarily rejected.  All in all, this election will be fought more on bread-and-butter issues than any since at least 1992.  Ronald Reagan’s question to the nation in the final debate against Jimmy Carter, “Are you better off today than you were four years ago?” will be the GOP’s mantra in 2012.  The answer is obviously no, and the Republicans will use the economy, ObamaCare, and the deficit to pin the blame squarely on the President.  Obama is going to gloss over the weak performance of the economy to emphasize all of the “important” things he has done to fix the problem.  The idea is to emphasize the energy and vigor of the president in tackling the problem, so people will at least believe he is trying.  The other major message will be pure demagoguery: The Republicans are the party of extremists who threaten the republic.  If things continue on the same trajectory as they have over the last three years, the President will face a near insuperable challenge for reelection provided that the GOP nominates a reasonably attractive candidate, it will truly be one for the history books if Obama can be reelected with a terribly weak economy, a massively unpopular health care bill, an obscenely large deficit, and no compelling case for a second term.

(“A Very Beatable President” by Jay Cost dated December 26, 2011 published by The Weekly Standard at http://www.weeklystandard.com/articles/very-beatable-president_613473.html )

President Obama has a trait that Republicans should appreciate and that is transparency, because his motives are anything but hidden and no matter what he says, it’s abundantly clear that he has one thing in mind these days: getting reelected.  Obama wasn’t so transparent when he first emerged as a prominent political figure with his speech at the 2004 Democratic national convention.  In the 2008 campaign, he sought to transcend politics with his talk of hope and change and reforming the way Washington does business.  Now he’s obsessed with politics, the politics of reelection, and not much else.  Obama once fancied himself a uniter, but for reelection purposes, he’s become a divider.  Short of an economic turnaround and a suddenly booming housing market, Obama is wary of running on his record.  Instead, he’s trying to turn middle class Americans against Republicans, accusing them of defending the interests of the rich.  He’s shaped his policies, on taxes, especially, and his speeches to promote this division.  His “jobs bill” was unveiled in September not in the expectation it would be enacted, but to deploy as a weapon against Republicans.  Now that it’s failed, he’s poised to blame Republicans for allegedly blocking the creation of thousands of jobs and impeding the economic recovery.  Political transference is a crass tactic that shouldn’t surprise Republicans, since Obama’s transparency has let them know what’s coming and what he will do next.

(“Obama’s Transparency” by Fred Barnes dated December 21, 2011 published by The Weekly Standard at http://www.weeklystandard.com/blogs/obama-s-transparency_614539.html )


Some observers think that President Obama’s awful record should make it easy for any of the GOP candidates to beat him, but that’s a dangerous delusionNo incumbent should ever be underestimated, especially one the media loves.  Republican candidates has proven highly adept at techniques for losing the 2012 election and here are a few of their favorites:

·    Engaging in academic discussions on the campaign trail:  Dwelling at length upon the past is a good way to seem out of touch.

·    Forgetting about your own platform:  Attacking current performance is an excellent setup for promoting their own platform, some of which are quite dramatic (i.e. flat tax, energy independence, and government downsizing).

·    Picking fights with the Republican base:  There is more value to educating the voters on one’s vision, rather than attacking the other Republican candidates.

·    Opposing Obama’s policies without understanding why they’re wrong:  When promoting needed changes, it is most important to explain why the current system is bad and why your changes will improve the voter’s lives.

·    Getting carried away:  One shortcoming of many of the Republican candidates is the tendency to oversell proposals by diving into the implementation details, and thus distracting from articulating the bi picture, cost benefit of the needed changes.

·    Losing control of the narrative:  The great danger of media bias is narrative control, allowing the media to decide on a plot line for the election which then guides their coverage, because this plot line will not be friendly to the GOP nominee. A big part of narrative control is understanding how to engage the media, draw them along a desired path, and give them something positive they can’t help talking about.

·    Freezing up: Confusion and disarray among campaign operatives can be disastrous, and responses must be swift and coordinated.  Both style and substance will be part of this campaign, and the Republican’s style will inevitably be judged more harshly.

President Obama is very beatable, but losing is easy too.  Far too many post-mortems for failed campaigns begin with the observation that the candidate never really understood the forces aligned against him.  The result of the 2012 campaign needs to be something better than a best-selling 2013 book by a defeated candidate, reviewing all the ways he or she was treated unfairly, so Republican need to write that book in your heads right now, and then run a campaign that tears it to shreds.

(“How to Lose to Obama” by John Hayward dated December 22, 2011 published by Human Events at http://www.humanevents.com/article.php?id=48292 )


Newt Gingrich will fight Barack Obama; he will challenge him on every fact, and point out every failure and since the man likes to hear himself talk, which, in this case, is a good thing.  Some credit his recent surge in the polls to his debating skills.  They say Gingrich is an idea man, but has Barack Obama ever come up with a new idea, or a new approach?  No, it's always the same thing, spend, spend, spend, with him deciding where, which is why 80% of the many billions we threw at green energy went to Obama supporters.  Obama’s stimulus legislation, written by others, and including every liberal lunacy of the last half century, also rewarded backers of Barack.  Clinton called the 80s the "decade of greed;" Obama rails against the greedy 1%; and he claims America has been in decline for decades.  Despite his brilliance, he hasn't had enough time to cure this calamity, but Newt Gingrich will call this argument the lie it is; he will tell the President, that the problem is him.  America needs a candidate who will fight, and Newt Gingrich is a fighter.  He is also one of 2 candidates Barack Obama does not want to run against, and the other is Herman Cain.  To Barack Obama, America's best days are behind her and he wants to divvy up during the decline, the spoils of our previous success, in a fair and balanced way.  In other words, his supporters get everything and the rest of us pay for it.  Newt Gingrich believes America's best days are still ahead and he wants equal opportunity, not equal results.  

(“Neuter Obama” by William L. Gensert dated December 19, 2011 published by American Thinker at http://www.americanthinker.com/2011/12/neuter_obama.html )

Much of the success of the Democrat Party over the last eighty years has come from its ability to successfully portray itself as the party of the middle class, but many of the major programs enacted by the Democrat Party have hurt rather than helped the middle classEconomic researchers and objective historians have shown this for decades; however, it is only in the last three years that the public has started to recognize this.  President Obama is still traveling across America claiming that his programs are for the benefit of the middle class.  The Democrat strategy for 2012 also relies on those receiving government benefits for a significant portion of its voting power.  This helps to explain why Democrat-sponsored legislation has focused upon expanding unemployment benefits and government health care at the expense of policies that will create jobs.  As far back as FDR, one of the most successful Democrat election strategies has been to increase programs of dependency, even if those programs prevent economic recovery and result in increased unemployment.  The 2012 election strategy excludes middle-class Americans largely because Democrat-sponsored job-creation programs have failed miserably.  The 800-billion-dollar Stimulus Bill was designed to provide continued funding of public-sector jobs rather than the creation of new private-sector jobs.  The Democrat voting strategy for 2012 may have excluded middle-class white voters, but the election-funding strategy will include one very important white middle-class group.  Private-sector unions are predominantly white and middle-class.  These unions are also historically among the most significant contributors to the Democrat Party.  In fact, of the top-fifteen PAC contributors to the Democrat Party over the last twenty years, twelve are public- and private-sector unions.  As the number of private-sector union members diminishes, so do the contributions to pension and health care funds to pay retirees.  Unions are increasingly dependent upon government programs like ObamaCare to pay their retirees' health care benefits.  The real question going into to the 2012 election is whether middle-class voters will see through the marketing efforts of the Democrat Party and its media supporters to recognize that policies of prosperity, not redistribution and dependency, truly help the middle class.

(“The Democrat Party Does Not Represent the Middle Class” by David A. Nace dated December 17, 2011 published by American Thinker at http://www.americanthinker.com/2011/12/admitted_the_democratic_party_does_not_represent_the_middle_class_1.html )


A truly free market is a perfectly competitive market, which means that whatever you have to sell in that market, so does your competition.  This leads to price war, which means your price gets driven down, which can mean little or no profit for you.  That’s why businesses use strategies like product differentiation, so their competition is no longer selling the exact same product they are.  That’s why they use strategies like branding, so their buyers don’t think the products are the same.  Businesses will, in fact, do almost anything to get out of the hell of pure head-to-head competition.  They don’t do it because they’re crooked; they do it because they have an intrinsic economic incentive to, which is part of the innate essence of capitalism.  It is not a flaw or a defect, but instead is part of what makes the whole system work - what makes capitalism capitalism.  If I’m buying something, I want the freest possible market in that product.  The political players in America today who claim to support free markets don’t.  They support free markets in the things their backers buy, but maximum barriers to entry in the things their backers sell.  For example, one of the great unnoticed achievements of the Republicans (and their Democrat collaborators) from Reagan onward has been to gut U.S. antitrust law.  Having a monopoly, or a cozy oligopoly with friendly rivals, is one of the best barriers to entry around.  This is a huge part of what ails American farmers.  Family farmers are caught between the agribusiness monopolies who push up the price of their inputs (feed, seed, fertilizer etc.) and the agribusiness monopolies who push down the price of their outputs.  The economists’ term for the latter is “monopsony,” with an “s,” but it works the same way as monopoly.  Free, or nearly free, markets do have their rightful place in many parts of the economy, and it would be foolish to sabotage them.  However in other areas, above all, in labor markets, our prosperity was based on pricing power.  A number of areas other than labor also worked better thanks to a healthy dose of pricing power.  Try advanced technology, for a start.  The patent system, which is not natural, is a fairly recent invention, and does not de facto exist even today in much of the world, is one.  Innovation doesn't come cheap, and without pricing power for innovators, few companies could afford it.  Even the existence of scale economies, which are intrinsic to modern, large-scale, capital-intensive industry, implies markets that are less than free, because scale economies intrinsically imply a small number of large producers and thus give rise to oligopoly, with the consequences mentioned earlier.  This is why most other industrialized nations aren’t romantics about free markets, are honest about their frequent nonexistence, and focus their policies on taming the negative effects of oligopoly while capturing the positive ones.  Most industrialized nations understand that big corporations are necessary, but often act like pirates, so the regulatory focus is on making them share their loot with their crews.  

(“Why Free Market Economics is a Fraud” by Ian Fletcher dated December 18, 2011 published by Intellectual Conservative at http://www.intellectualconservative.com/2011/12/18/why-free-market-economics-is-a-fraud/ )


* There is so much published each week that unless you search for it, you will miss important breaking news.  I try to package the best of this information into my “Views on the News” each Saturday morning.  Updates have been made this week to the following issue sections:

·  Health Care at http://www.returntocommonsensesite.com/culture/healthcare.php

·  Social Security at http://www.returntocommonsensesite.com/culture/socialsecurity.php

·  Employment at http://www.returntocommonsensesite.com/dp/employment.php


David Coughlin

Hawthorne, NY