As today’s WSJ editorial points out, this Obama budget is “one of the greatest spend-while-you-can documents in American history!” The budget will reach a post war high of over 25% of GDP, well over the 40-year average of 20.7%. As with most budgets the assumptions are optimistic. And despite nearly $2 Trillion more in taxes and fees, the decade long deficits will add $8.5 Trillion to the national debt.

You would think Obama would learn something form history, but that’s not the case. A friend, Ron Tomsic, sent this April 20th, 1934 cartoon from the Chicago Tribune. (Double click the image for a full size image.)

It took World War II to bring the country out of the Great Depression. Anyone think Obama will relish that prospect?

Tom Motherway

But the real story tonight is the significant victory of an “independent” Republican in a solidly Democratic state. This has not happened since 1972, 38 years ago. Keep in mind that Paul Revere’s ride in 1775 started the revolution which led to the founding of this great nation.

At the risk of being overly dramatic, Scott Brown, Senator Scott Brown, is the real thing. I have never heard a better national victory speech. I predict Scott Brown will someday lead a national ticket.

He was forceful, humble, a man of the people who gave the people credit. He covered the issues of concern on the national scene, emphasizing the Obamacare debacle and the expanse of and intrusion of big government into our lives. Yet he was magnanimous in recognizing his opponent and in acknowledging the interim senator. Later in the speech he did gratefully acknowledge his conversation with Obama saying he was ready for a two-on-two game of hoop with a pick of the president’s choice against Scott with his daughter! (She played round-ball at Boston College!) He did say that he would drive his truck to D.C. so the president could have a look.

He let his military record be known and his strong support for national defense. He strongly opposed giving constitutional rights to foreign terrorists. Spend our taxes on national defense not attorneys for foreign terrorists. This a strong “in your face” to Obama Hussein’s dangerous minion, Eric Holder.

He let it be known that he was ready to go to Washington and start now. I predict the Democrats will seat him without delay. No games, they are already in trouble without compounding their problems.

But the real nuance of the speech was his connection to the Kennedy heritage. He called Ted’s widow. He said that he was proud to hold the seat once held by John Quincy Adams and John F. Kennedy. In other words he connected with history and with the Kennedy mystique. Quite a masterful politician.

Toward the end of the speech after the heartfelt thank-yous, Scott Brown assumed a national mantel without losing his Massachusetts mandate. He said what started tonight early in 2010 would reverberate throughout the country in 2010 and the people across the country should take heart.

We did indeed witness this evening another “shot heard ’round the world.” And, it was delivered without a teleprompter!

Tom Motherway

This is the first great conservative anti-statist manifestation in American history. The conservative movement, which developed in the post-WWII, Cold War environment has now fully matured into the most significant political movement of the 21st century. I believe that this day could be referred to in the not too distant future as the day that changed America. This was the day the great silent conservative majority finally found its voice.  

Many of the attendees were quite meek and timid and were unsure of exactly what to expect, this being the first time in their lives they’d been involved in a protest movement. Their fears evaporated early in the day and I saw people reveling in the camaraderie , the joy and sheer civility that was exhibited at the entire event. Chants of “Freedom, freedom, freedom”, “No more czars! No more czars!” carried through the air without the slightest hint of rancor or incivility which is the norm at the leftist rallies I have photographed over the years.

Protesters came from every state in the union. One man came from San Antonio, TX. He said that he was really sorry he hadn’t brought his family. He stated that being a black conservative he was afraid to expose his children to what he expected would be a lot of liberal abuse. He was thrilled with the tenor of the event and the fact that no liberals were present to harass him. He spoke about how incredibly intolerant the left is to black individuals who don’t bow to the party line.

San Diego radio host Mason Weaver said from the podium: “I came here because I thought you might want to hear a black man speak without a teleprompter. This government is trying to make a nation of dependent people. Americans have always been independent people. ¦This is not a Republican thing, it’s not a Democrat thing. It’s not a black thing or a white thing. It’s an American thing. We the people are telling them ‘No more! We’ve had enough!’

A follow up to Cash’s contribution is an article by Robert Tracinski in Real Clear Politics, It’s the Liberty Stupid. In it he links a number of other pictures which show the multi-facated nature of the Washington demonstration; these are well worth the peek! I particularly like the Ayn Rand reference, Atlas Shrugged. Pray that we are not already there!

Tom Motherway

What Obama proposes is a “post-material economy.” He would de-emphasize the production of ever-more private goods and services, harnessing the economy to achieve broad social goals. In the process, he sets aside the standard logic of economic progress.

Since the dawn of the Industrial Age, this has been simple: produce more with less. (“Productivity,” in economic jargon.) Mass markets developed for clothes, cars, computers and much more because declining costs expanded production. Living standards rose. By contrast, the logic of the “post-material economy” is just the opposite: spend more and get less.

Consider global warming. The centerpiece of Obama’s agenda is a “cap-and-trade” program. This would be, in effect, a tax on fossil fuels (oil, coal, natural gas). The idea is to raise their prices so that households and businesses use less or switch to costlier “alternative” energy sources such as solar. In general, we would spend more on energy and get less of it.

The story for health care is similar, though the cause is different. We spend more and more for it (now 21 percent of personal consumption, says Brookings economist Gary Burtless) and get, it seems, less and less gain in improved health. This is largely the result of costly new technologies and the unintended consequence of open-ended insurance reimbursement that encourages unneeded tests, procedures and visits to doctors. Expanding health insurance might aggravate the problem. Many of today’s uninsured get health care free or don’t need much because they’re young (40 percent are between 18 and 34).

Together, health care and energy constitute about a quarter of the U.S. economy. If their costs increase, they will crowd out other spending. The president’s policies might, as he says, create high-paying “green” or medical jobs. But if so, they will destroy old jobs elsewhere. Think about it. If you spend more for gasoline or electricity — or for health insurance premiums — then you spend less on other things, from meals out to home repair. Jobs in those sectors suffer.

The prospect is that energy and health costs may rise without creating much gain in material benefits. That’s not economic “progress.” To rebate households’ higher energy costs (as some suggest) with tax cuts does not solve the problem of squeezed incomes. Given today’s huge and unsustainable budget deficits, some other tax would have to be raised or some other program cut.

via RealClearPolitics – Articles – Obama’s Economic Mirage.

Obama is a leveler. He has come to narrow the divide between rich and poor. For him the ultimate social value is fairness. Imposing it upon the American social order is his mission.

Fairness through leveling is the essence of Obamaism. (Asked by Charlie Gibson during a campaign debate about his support for raising capital gains taxes — even if they caused a net revenue loss to the government — Obama stuck to the tax hike “for purposes of fairness.”) The elements are highly progressive taxation, federalized health care and higher education, and revenue-producing energy controls. But first he must deal with the sideshows. They could sink the economy and poison his public support before he gets to enact his real agenda.

The big sideshows, of course, are the credit crisis, which Obama has contracted out to Treasury Secretary Tim Geithner, and the collapse of the U.S. automakers, which Obama seems to have taken on for himself.

That was a tactical mistake. Better to have let the car companies go directly to Chapter 11 and have a judge mete out the bitter medicine to the workers and bondholders.

By sacking GM’s CEO, packing the new board, and giving direction as to which brands to drop and what kind of cars to make, Obama takes ownership of General Motors. He may soon come to regret it. He has now gotten himself so entangled in the car business that he is personally guaranteeing your muffler. (Upon reflection, a job best left to the congenitally unmuffled Joe Biden.)

Some find in this descent into large-scale industrial policy a whiff of 1930s-style fascist corporatism. I have my doubts. These interventions are rather targeted. They involve global financial institutions that even the Bush administration decided had to be nationalized, and auto companies that themselves came begging to the government for money.

Bizarre and constitutionally suspect as these interventions may be, the transformation of the American system will come from elsewhere. The credit crisis will pass and the auto overcapacity will sort itself out one way or the other. The reordering of the American system will come not from these temporary interventions, into which Obama has reluctantly waded. It will come from Obama’s real agenda: his holy trinity of health care, education and energy. Out of these will come a radical extension of the welfare state, social and economic leveling in the name of fairness, and a massive increase in the size, scope and reach of government.

If Obama has his way, the change that is coming is a new America: “fair,” leveled and social democratic. Obama didn’t get elected to warranty your muffler. He’s here to warranty your life.

via RealClearPolitics – Articles – Obama’s Ultimate Agenda.

Enjoy the limited freedom you have remaining comrades; there is little time left.

Tom Motherway, tom@renohayek.com

The basic point we all must believe in is that WE MUST DELEVERAGE (reduce debt), AND INCREASE SAVINGS. Nothing should be done to interfere with this process, already in process.

What I’m saying is that the world economy got far ahead of itself in the last several years. Why that happened is a subject for a book (maybe a shelf full of books). But it’s unwinding rapidly now, and this is the deflationary pressure we see everywhere. We don’t need as many autoworkers or factories, because people won’t be spending as much on new cars as they once did. And people still need to adjust to lower housing values in many parts of the country.

This process is plain, simple reality. The deleveraging and rebalancing simply has to happen. It’s a fast, disruptive process but ultimately a very healthy one. To be blunt, it’s like a big dog walking into your kitchen out of the rain. He plants his feet and shakes all the water off. It’s smelly and disgusting and you have to clean off your kitchen and yourself, but then it’s done and you move on. That’s how we’re shaking off the debt overhang caused by years of underpriced capital.

The government is flailing because they don’t want to allow this process to proceed at its own pace. So they’re doing a whole raft of desperate things, like the stimulus package, the desultory bank half-nationalizations, and the exceptionally dangerous attempts to prevent mortgage foreclosures.

Bernanke’s approach is to try anything, as long as it’s different from what was tried in the past. The Administration’s approach is to assume that we can get back to partying like it was 2006 as long as we push enough extra money into the system. It would be far better for everyone if they stepped back, got out of the way, let everyone rebuild her personal balance sheet, and let the housing markets find their own level.

What could we be doing that would really have a positive effect? There’s nothing we can do to stem the reduction of debt and the increase in personal savings. (Repeat: there’s nothing we can, or should, do about that.)

**********

What we could be doing is to encourage the eventual return of business and consumer confidence. That’s because a good shot of economic growth would provide the resources to make all the other problems less bad. But here, the Administration is doing its worst job of all.

The recently-announced budget would be radical and damaging to business confidence in the best of times. But these are the worst of times, and the budget is nothing short of disastrous. We’re being told to expect tax increases on high earners, business income and capital, increases in business regulation, a new energy tax on the whole economy (“cap and trade”), and the biggest expansion in government spending since World War II.

via RealClearPolitics – Articles – Print Article

Tom Motherway

The Omnibus Appropriations Act of 2009 is a sprawling, $410 billion compilation of nine spending measures that lacks the slightest hint of austerity from the federal government or the recipients of its largess.

The Senate should reject this bill. If we do not, President Barack Obama should veto it.

The omnibus increases discretionary spending by 8% over last fiscal year’s levels, dwarfing the rate of inflation across a broad swath of issues including agriculture, financial services, foreign relations, energy and water programs, and legislative branch operations. Such increases might be appropriate for a nation flush with cash or unconcerned with fiscal prudence, but America is neither.

via Evan Bayh Says Democrats Damage Their Fiscal Credibility By Accepting Barack Obama’s Federal Spending Bill – WSJ.com.