Archive for January, 2010
CA Dems Compete With DC Dems for the Hubris Award
Posted by Tom in Government Regulation, Nationalized Health Care, State Finances on January 31, 2010
How about this, California’s Democratically controlled state senate voted to enact universal healthcare for the state’s residents while outlawing private insurance and subsidizing coverage for millions in the process. All this for the 37 million Californians for the mere “estimated” cost of $200 Billion a year. This in a state where the $85 Billion budget is already $20 Billion in the red and unfunded liabilities are anybody’s guess!
As the OC Register points out, this is “hubris raging out of control in Sacramento.” Little wonder they call it the “Left Coast!”
Lisa Benson, Washington Post Writers Group
Who Owns Obama and the Democrats?
Posted by Tom in Democrats, Economics, Energy Facts & Policies, Environment, Individual Freedom, Politics, Unions, Wall Street on January 29, 2010
There are primarily four major political groups that literally own Obama, Reid, Pelosi and the rest of the Democrats: Unions, particularly the public employee unions. Trial lawyers. Environmentalists. And, Wall Street and Business Rent Seekers. The cost of these relationships to the economy and to our freedom is significant but difficult to completely quantify.
Unions. According to the latest figures overall union membership as a percentage of the workforce has held steady with 2008 at 12.4% and 2009 at 12.3%. Within that overall group, however, the private sector unionization declined from 7.6 to 7.2% while the public sector grew from 36.8 to 37.4%. It’s no secret that Obama favored the unions over the bondholders in his nationalization of GM and Chrysler. Nor is it a secret that his most frequent visitor is Andy Stern who will let you know what they spent to get Obama elected! Oh, and about 1 million of the federal work force are union members, 28% of the wage and salary workforce. As to the effects of this, see my post of January 7th Unions and Excessive Government Compensation.
Trial Lawyers. This is that monopoly of “professionals” who are licensed to represent real or pretended injured people for “contingency fees” of 25-50% of the awards obtained in trial or, more likely, settlement. These “injured” plaintiffs can be investors, cancer patients, or “whiplash” victims. Oftentimes the attorneys advertise to let them know they are “injured” or purchase new issue stock to become self fulfilling injured plaintiffs themselves! Recent cases have highlighted the manufactured testimony that these lawyers pay for, the perjury that they suborn. According to a recent post in OpenSecrets.org, during the last decade the trial lawyer given over 90% of their political contributions to the Democrats. In 2009 $2.86 Million to the Democrats and $140 Thousand to Republicans. Is it any wonder that there are no caps on medical malpractice damages in Obamacare? Thus big awards, large insurance premiums and defensive medicine will continue to drive up medical costs. (In the interest of full disclosure, I was once one of these trial lawyers, but as Woodrow Wilson said, “I have repented of it”)
Environmentalists. This is the most difficult economic drag and freedom surrender to estimate. Consider the ethanol debacle both in terms of costs and free market damage where the government pays producers to produce, forces customers to buy and restricts cheaper imports for a process and substance which increases greenhouse gasses! Consider the recent cap and trade bill passed by the House. Or, how about the CO2 we exhale and the EPA’s intention to regulate it as harmful! Has there been a cost-benefit analysis on the solar, wind, insulation state and federal tax and other subsidies or the wasted economic investment as a result thereof? And all of this for a “global warming science” in which the scientists manipulate the data!
Wall Street and Business Rent Seekers. Now we get to the folks we love to hate, the money guys who have long sucked at the Democratic teat. These folks spend the money to get the edge. They love cap and trade because they will become the traders getting the juice of commissions. They love Barney Frank’s push on Fannie and Freddie for more subprime mortgages because they generated fees from packaging and selling them as securities. Some felt “forced” to deal like drug companies, hospitals and insurance companies in the recent Obamacare debacle. Others just sought advantage over honest competition; in economic terms they are simply rent seekers.
These poor seekers of corporate welfare are the easiest to turn on for political reasons, so Obama is turning on them appearing like the populist he isn’t, while still taking their cash. This is truly fun to watch but is of little significance.
As long as the elite Democratic rulers are literally owned by these very special and influential interests, our economy will flounder and our freedoms will diminish.
FOLLOW UP: Media-Educators. At dinner tonight on this penultimate day of January Bill Collins suggested that Hollywood should have been included in the list of “owners.” Sure enough, common knowledge and a cursory internet search reminds us that Democrats dominate “Tinsel Town.” But this is just one segment of the media, the entertainment segment of the Fourth Estate, if you will. So, it seems incumbent to include the MSM (Main Stream Media) like MSNBC, CBS, ABC, CNN. It’s not too obvious that fawning lap dogs like Chris Matthews or Keith Olbermann are more than a bit biased. Stretching the “media” definition we can easily include the educational establishment. Hard to find a non-Obama hope-change professor on a college campus today. It would seem fair to say that the Media-Educators should indeed be included in the list of owners of Obama and the Democrats. Their influence aside from environmentalism would seem to be more social than economic. Things like “gay marriage” and “don’t ask, don’t tell” interest them. The cost here is to our intelligence and to the future of our society, thus our freedom. This is hard to measure in economic terms. But it is perhaps more critical to our democracy. The lack of education, intelligence in the electorate, and a free press willing to to its critical, investigative job will if continued doom our future.
Pray that the next generations are smarter than ours and will remedy this sorry state of affairs!
Tom Motherway
Rapper Keynes! Just Look at Us (and Britain) Now!
Jeanne Gurnee sent this “economic rap video” which mentions our namesake Friedrich Hayek, so for the sake of fun I post it. Note, we are on The Road to Serfdom now complements of Obama and the Democrats!
January 30th FOLLOW UP: Here’s the full rap video:
Obama’s Wishes He Had the Power His “Mi Amigo” Has!
Posted by Tom in Centrally Managed Economy, Foreign Policy, Press, Statism on January 25, 2010
Hugo Chavez caused a series of protests in Venezuela by shutting down the anti-Chavez TV Station. (See Fox News post of January 26th here.) Now we know Comrade Obama is cozy with Comrade Chavez. Hopefully Obama will avoid adopting his friend’s ways! At least not the one that closed all the golf courses.
Just Say No
Posted by Tom in Congress, Deficit, Democrats, Economics, Financial Crisis, Financial Policy, National Debt, Taxation on January 25, 2010
Facing $1.4 Trillion in annual deficits for the next decade, current national debt of $12.3 Trillion and 2009 estimated social security and medicare unfunded liabilities of $107 Trillion, Obama endorsed a bill that would set up a bi-partisan deficit-reduction commission.”These deficits did not happen overnight, and they won’t be solved overnight,” Obama said in a statement. “We not only need to change how we pay for policies, but we also need to change how Washington works. The only way to solve our long-term fiscal challenge is to solve it together — Democrats and Republicans.” Is this just another Obama promise like “no earmarks” or “negotiations on CNN?” Or, is it designed as a set up for the Republicans to cover the Democratic Congress’ and administration’s spendthrift ways?
Let’s see, we’re up in discretionary spending by 8% in 2009, the third such consecutive year since the Democrats took control of the Congress, that’s 25% from $873 Billion to $1.090 Trillion. The non-defense discretionary programs got an 8% bump in 2009 and again in 2010 not even including the $311 Billion in additional “stimulus.” The omnibus 2010 appropriations bill includes: a 120% increase in low income energy assistance, a 30% increase for the corporation for national and community services (SOUND FAMILIAR?), a 22% increase for the essential (?) (read rural congressmen’s) air service, and, of course, a 9% increase for Amtrak. (See Heritage Foundation report here.)
Does anyone remember the inflation rate? How about public employee salaries? Well then, try Congressional junkets? Surely then, the recession, the unemployment rate and our belt tightening? Enough said!
Problem is that these discretionary increases add to the “baseline” for future years!
Why should Republicans participate in the inevitable tax and tax solution that the Democrats have in mind? As demonstrated, they will not cut and cut, the only correct solution.
There are two reasonable alternatives to put to these out-of-control fools: one, tell them to repeal all non-defense discretionary spending enacted in the last three years and start with a zero baseline budget, and two, tell them NO, HELL NO! Let them clean up their own mess!
The second is easier to explain to America. Some of us still have our wits about us and would appreciate it! Say HELL NO!
Tom Motherway
State of the Union Preview
Certainly not a theme song for the Tea Parties!
America’s Lost Decade(s)-Complements of Obama, Bernanke and Geitner
Posted by Tom in Deficit, Democrats, Economics, Fed, Financial Crisis, Financial Policy, Monetary Policy, Real Estate, Uncategorized on January 25, 2010
Japan’s “lost decade” was caused by hiding bad assets, inflating values, and failing to recognize losses. “Hide the problems.” “Kick the can down the street.” Bank capital was suspect because bank assets were suspect. This societal attempt not to “lose face” resulted in a stagnant decade and higher interest rates for Japanese borrowers.
Fast-forward to the U.S. today. Fannie and Freddie, the efficient government instigators of the subprime residential debt bubble, are government toxic waste dumps. Tim Geithner in a little publicized Christmas Eve surprise, removed the $400 Billion in federal bailout limits from Fannie and Freddie. Currently the government, that’s your tax dollars, are behind everything these toxic twins do, without limit!
Why worry? What do they do? One thing is HAMP, the Home Affordable Modification Program. This is the $75 Billion program to keep people in the over-leveraged, over-priced homes that they can’t afford. It supports the inflated values of mortgage assets on the books of the banks so they won’t be required to write down the value of these assets with the corresponding hit to capital. As previously reported, including Christmas Eve Time Bomb, the program is a dangerous tilt at windmills! It only postpones the inevitable day of reckoning.
What happens to the Fannie-Freddie mortgages once made? Well, the majority go into the secondary market in packages against which bonds are issued, mortgage backed securities, MBS. Well, you argue, the market should fairly price these instruments. Unfortunately the Fed is the market, at least the great majority of the market, 75-80%. Where does it get the $1.45 Trillion to do this? Well, it prints the money. Yes, the Fed has doubled the monetary base.
Why then don’t we now have runaway inflation? Most of that excess liquidity is sitting on the banks’s balance sheets as bank reserves. The banks have not started lending it into the commercial market. There is little increase in the velocity of money, little economic activity. When the economic recovery gathers steam, inflation will raise its ugly head–on steroids!
To control that inflation the Fed would normally sell assets sitting on its balance sheet, typically government bonds. Problem is that now a lot of the securities sitting on the Fed’s books are the Fannie-Freddie toxic waste. Who’s going to buy that crap? And, at what price?
In an intriguing NRO post today, Fed Hedge, Stephen Spruiell points out that whoever the next Fed chairman is he will fail. He will have no where to turn when the stuff hits the fan. We will face runaway inflation with no exit, no remedy. Defaults, foreclosures, double-digigt interest rates. Borrowing will stop, business will atrophy.
So it really doesn’t matter who the next Fed chairman is. This gives populist bent Senators cover to oppose Bernanke’s confirmation. When the inevitable explosion occurs, they will say “told you so!”
Tom Motherway
We Get No Respect
Posted by Tom in Individual Freedom, National Character, Politics, Press on January 24, 2010
“On MSNBC, snakes and lizards poured almost visibly from Olbermann’s mouth when he said Scott Brown spoke “out of his bare bottom,” and called the Massachusetts father of two “an irresponsible, homophobic, racist, reactionary, ex-nude-model tea-bagging supporter of violence against women and against politicians with whom he disagrees.” To quote from the excellent post of Meghan Gurdon in her January 21st Washington Examiner post.
That made me think a bit more about our leftist, ruling elite. They, the Pelosis, Reids, Obamas, and Obermans of this world are out of touch with the people they govern. They believe in all sincerity that they are better than we are. They are certain that they know what is best for us. Thus, they govern; thus, they communicate.
We on the other hand, work to provide for our families, attend religious services to pray to our God, volunteer to help our neighbors, and try to make ends meet and enjoy life in the process. At election time we try to vote for the best candidates and we don’t always make the right choices. We’re often times persuaded by the smooth veneers of those elites.
When we disagree with what the elites are doing, we protest, we answer pollsters, we write to our elected representatives, we attend tea parties, and we vote. When the elites see that we unwashed masses disagree with their superior knowledge and governing, they name call. The lowest intellectual form of argument is the argumentum ad hominem, which is “name calling” rather than addressing the issue.
Those of us who object are called Nazis, astroturfers, right-wing nut cases, and tea baggers. This only goes to show the correct intellectual caliber of Pelosi, Reid, Olbermann, et al. They are great at calling names but short on substantive arguments.
Obama doesn’t connect with the people because he can’t connect. He talks down. He’s the darling of those who also talk down. His interview with George Stephanopoulos is the perfect example. “I think the assumption was…if we’re making a good rational decision here, then the people will get it.” (emphasis added) But the people don’t get it. So elitist Obama will now start speaking “directly to the American people.” His recent foray into his newly acquired populism is an example. He will not tax the banks to get back his bailout money, even though the banks have already repaid it. But he won’t tax the union-owned auto companies who haven’t repaid the bailouts. He’s indebted to the unions.
Obama, Reid, Pelosi do not respect this nation. They do not respect our history. They do not respect our values. They seek to change us into a European socialist state. Tonight I watched Dennis Miller at the Silver Legacy really lay it on hard along much the same lines. He had a standing ovation in the packed house. We get no respect.
Obama, Reid, Pelosi and ilk are really pseudo intellectuals. They have never had any real life experience, never worked but instead have sucked off the public trough. They are unworthy of their offices. Despite the vile mouth Olbermann, Scott Brown is going to Washington.
The Massachusetts voters have spoken and they will get respect!
Tom Motherway
Freedom of Speech-An “Essential Mechanism” of Democracy
Posted by Tom in Constitution, Individual Freedom, Politics, Press on January 23, 2010
As the January 22nd WSJ pointed out editorially, “freedom has had its best week in many years.” The article refers to Scott Brown’s election as a check on the runaway Congress and more recently the Supreme Court 5-4 decision in Citizens United v. Federal Election Commission which overturned that part of McCain-Feingold which banned corporations and unions from “electioneering communications” within 30 days of a primary election or 60 days of a general election. Justice Kennedy for the majority wrote that the ban on corporate expenditures had a “substantial, nationwide chilling effect” on political speech; in other words, it was censorship.
Predictably the Democratic liberals and socialists howled! Corporations are not people! A major victory for big oil, Wall Street, insurance companies and other special interests, Obama cried. Senators called for hearings. Leftist groups called for a constitutional amendment!
Funny Obama in his rant did not mention his union employers, specifically the public employee unions, the membership of which now outnumbers that of private sector unions! And while members of his leftist coterie argued that corporations were not people, they neglected to mention that Obama’s coddling, fawning main stream liberal press are also corporations! Yes, its OK for leftist journalists to have freedom of speech, NBC, CNN, NYT WaPo and the like, who are all exempted under McCain-Feingold’d “electioneering communications” proscriptions. However, it unfair if other corporations and unions have freedom of speech.
So duplicitous Obama is showing his true position: freedom of speech is OK as long as the speech is in his favor. This gets uncomfortably close to the control of communications fostered in the USSR. The Supreme Court upheld this essential mechanism of Democracy. Bravo!
Tom Motherway
Mark Steyn, Nails It: “Too Much of a Bad Thing”
Mark Steyn’s January 23rd post on NRO says it like it is. No further comment necessary but to quote a few lines:
“So what went wrong? According to Barack Obama, the problem is he overestimated you dumb rubes’ ability to appreciate what he’s been doing for you. “That I do think is a mistake of mine,” the president told ABC’s George Stephanopoulos. “I think the assumption was if I just focus on policy, if I just focus on this provision or that law or if we’re making a good rational decision here, then people will get it.”
But you schlubs aren’t that smart. You didn’t get it. And Barack Obama is determined to see that you do. So the president has decided that he needs to start “speaking directly to the American people.”
Wait, wait! Come back! Don’t all stampede for the hills! He only gave (according to CBS News’s Mark Knoller) 158 interviews and 411 speeches in his first year. That’s more than any previous president — and maybe more than all of them put together. But there may still be some show out there that didn’t get its exclusive Obama interview — I believe the top-rated Grain & Livestock Prices Report — 4 a.m. Update with Herb Torpormeister on WZZZ-AM Dead Buzzard Gulch Junction’s Newstalk Leader is still waiting to hear back from the White House.
But what will the president be saying in all these extra interviews? In that interview about how he hadn’t given enough interviews, he also explained to George Stephanopoulos what that wacky Massachusetts election was all about:
“The same thing that swept Scott Brown into office swept me into office,” said Obama. “People are angry and they’re frustrated, not just because of what’s happened in the last year or two years but what’s happened over the last eight years.”
Got it. People are so angry and frustrated at George W. Bush that they’re voting for Republicans. In Massachusetts. Boy, I can’t wait for that 159th interview.
Presumably, the president isn’t stupid enough actually to believe what he said. But it’s dispiriting to discover he’s stupid enough to think we’re stupid enough to believe it.
So who’s panting for that 412th speech? Not the American Left. As Paul Krugman, the New York Times’s “Conscience of a Liberal,” put it: “He Wasn’t The One We’ve Been Waiting For.”
Not the once-delirious Europeans, either. As the headline in Der Spiegel put it: “The World Bids Farewell to Obama.”
And not any beleaguered Democratic candidates trying to turn things around in volatile swing states like, er, Massachusetts. The Barack Obama who showed up last Sunday to help out Martha Coakley was a sad and diminished figure from the colossus of a year ago. He had nothing to say, but he said it anyway. As he did with his Copenhagen pitch for the Olympics, he put his personal prestige on the line, raised the stakes, and then failed to deliver. All those cool kids on his speechwriting team bogged him down in the usual leaden sludge.”
To quote Mel Brooks, “it’s nice to be king!”