economy

Posted on Democrats, George W. Bush, Liberals

grading on a curve

We certainly can’t say that the President of the United States lacks self-confidence. When asked to grade his performance as President, he gave himself a B+.  Can’t imagine what kind of curve he was using to come up with that grade.   Obviously our citizen king knows better than we do about, well, everything, so his falling ratings have nothing to do with the great job he’s doing.  Got that, fellow citizens?  Also, he has the hardest Presidential job ever of any administration, because President Obama had to follow the flawed administration of George W. Bush.  There’s no question that President Obama has faced tough challenges, but his reaction to them hasn’t even been close to getting these problems fixed.

Forget about grades.  Let’s talk about objectives.

“You don’t get rid of poverty by giving people money.” – P.J. O’Rourke

How about fixing the economy?  One way to help with that is to support American businesses by creating conditions that allow American businesses to succeed, prosper, and add critical new jobs for the American people.   What has he done about that?  Nothing.  The stimulus has not gotten the job done, and besides that, I think Bush deserves most of the blame / credit for the end results of the current stimulus package.  Instead of rolling back the Bush spending, and spending less taxpayer money, the Obama administration is spending MORE.  Odd way to prove your differences from the previous President.  While President Bush wasn’t exactly known for his fiscal discipline (which I have pointed out on numerous occasions – look it up), President Obama also knows that there is no money for all of these ambitious programs he plans to implement.  There is no money for health care “reform” as he would like to see it, or for the greenies’ fave – cap and trade.  You don’t fix an economy by raising taxes on the few productive taxpayers who still have jobs and the employers who supply these jobs.  That’s what this administration has in mind.   The common phrase we most hear is “taxing the rich”.  Well, who exactly is rich?  Eventually, the answer will be YOU.

FIXING THE ECONOMY SHOULD BE THE MOST IMPORTANT PRIORITY OF THIS ADMINISTRATION.  IT IS NOT.

But maybe I’m being unfair. Maybe the reason President Obama was elected had more to do with his foreign policy views than with his ambitious domestic agenda.  Let’s see how he’s progressing with the kinder, gentler America through non-cowboy diplomacy, shall we?

The desirable objective is for our allies to be able to trust us and for our enemies (rogue states, terrorist sympathizers, and similar other bad actors) to fear and respect us.  I don’t think this is the perspective of our current President.  He doesn’t seem to make the distinction between countries who can be legitimate partners in our struggle against the jihadists, and countries who need to be controlled in their quest for world domination through nuclear power.  Without any sticks in sight, the bad actors will continue to be bad actors, because they know the threats of the UN and of the United States are worthless.

The disregard of our allies, especially the Brits, is a glaring mistake when we consider that there are only a few countries left in the the world who share our views on potential nuclear opponents like Iran and North Korea.  We need all the support we can get in trying to keep Iran and North Korea from extending their nuclear capability into dangerous weapons that threaten the security of the United States and our allies.  President Obama, with all his grand rhetoric about America being a friend to the world, needs to spend more time talking to our allies than proposing grand schemes to single-handedly talk rogue states out of their nuclear ambitions.  Right now, our allies don’t trust us.  That has more to do with the fluid foreign policy strategy of President Obama, and not as much to do with Bush and the Iraq war.

How are we doing with stopping the bad guys?  As far as Iran / North Korea is concerned, it’s a push.  But Iran is getting more vocal and belligerent day by day, and at some point, it will be too late to stop them from getting nukes.  It may already be too late.  North Korea is still out there, although we haven’t heard much from them lately.  Afghanistan is still a struggle, and I hope that the additional troops Obama is sending will be enough to get the job done.

Both the left wing and the right wing have reasons to be frustrated with the Obama administration.   I just pray that someday there will be enough Americans who disagree with current administration policies that they will vote out the Democrat Congress  in 2010 and President Obama in 2012.  It can happen.  The Republican Party just needs to get its own house in order first.

2 Comments Posted on Democrats, George W. Bush, Liberals, Republicans

what’s different

I don’t like federal interference in private industry.  Have I made that clear enough yet?  That means I would have been opposed to former Treasury Secretary Paulson, acting (I assume) on the orders of President Bush,  putting heavy pressure on the head of AIG to step down after AIG received one of their many sacks of bailout cash.  But somehow it doesn’t register quite the same way with me as President Obama forcing the GM CEO to resign.  Maybe I didn’t pay as much attention to AIG’s internal employee shuffling as I have been to what’s going on with the auto industry.  It’s just that the failure of AIG, while terribly detrimental to the economy (and many 401ks) in the short term, wouldn’t have nearly the impact of GM or another one of the Big Three closing up shop.  The Big Three are American institutions, and it would be harder to imagine an America without them than without one of the many insurance companies we have in this country.  Sentimentality aside, if we continue to interfere with the free market the way former President Bush has done with his bailouts,  and  the way President Obama continues to do with his multi-million dollar taxpayer gifts to various entities,  the economy will not improve.

Neither President had (or has) the expertise to make personnel decisions at insurance companies (Bush) or to make the right choice for the next GM CEO(Obama).  Thank goodness President Obama says he has no intention to run GM, and that he will draw the line at forcing their CEO to step down.  GM and Chrysler owners can also be thankful that their warranties are now guaranteed by the United States Government.   What a slippery slope it is for companies who take their fair share from the federal money tree — now the feds pretend to have the right to exercise direct control over these companies.   It’s a painful lesson to learn — next time the feds come with the offer of cash — the correct answer is: Just Say No.

I rarely link to Wonkette, due to the fact that it’s not exactly (hardly ever, in fact) family-friendly, but this quote is priceless:

Hmm, so this auto bailout problem, is it a good thing or a bad thing? Good, because the government should continue to withhold money from GM and Chrysler until they get their acts together. Bad, because GM and Chrysler cannot get their acts together without money, plus the demise of the manufacturing sector etc. President Obama assures us, however, that no matter what happens “we will not let our auto industry simply vanish.” This is liberal socialist code for “we will raise taxes on the wealthy and give everyone a free Geo Metro.” [Washington Post]

Awesome.   But see, Wonkette’s got it all wrong.  President Obama will give us all free bicycles, since he doesn’t want us using more fossil fuels, even in a tiny car like the Metro.   Just can’t wait for all my free stuff that my taxes are paying for…

Posted on Conservatives, Democrats, Liberals, Republicans

right on

We could learn so much from history if we choose to acknowledge the wisdom of those who have lived before us. I’ve been reading P.J. O’Rourke’s On the Wealth of Nations, a condensed version of the famous economist Adam Smith’s Wealth of Nations. Only P.J. O’Rourke could get me to read a book about economic theory in my spare time. He’s always a must-read.

Here’s an interesting quote:

It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense… They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.

Adam Smith
The Wealth of Nations, Book II, Chapter III

Posted on Democrats, George W. Bush, Republicans

more on the “rescue plan”

One day after the House Republicans, with the help of a significant number of Democrats, stopped this disaster of a federal bailout, the world hasn’t collapsed.  The Dow rebounded a little today after its terrible day yesterday.  I still think those who voted against this bill did the right thing.  I am, however, unsympathetic to the Republicans complaining about Pelosi’s partisan speech, and making that a reason to oppose the bailout.  The bailout should be opposed on its lack of merit, and its expansion of government welfare to those who acted irresponsibly.  Republicans haven’t been making this case, and that’s why Democrats could still win the PR war.

Some of my fellow conservatives are trying to tell us the sky is falling and that we must pass Bush’s plan NOW.  Not so fast.  A federal takeover of this kind must be carefully studied and discussed, and alternatives must be presented.  Any acceptable plan must attempt to correct past errors as well as to hold those responsible for this mess accountable for their actions.  We aren’t there yet.

To the Democrats still willing to support their Speaker, I would ask them: Doesn’t it concern you that the Bush administration wants to expand the reach of the federal government to take over a large section of our economy?  I thought you all were against more power for the federal government under George Bush.  Why all of a sudden do you believe the Bush administration and Secretary Paulson when they insist that the only way to save the economy is through a federal takeover?  If this bill passes in its current form, then Democrats will share the blame with our President when it fails to achieve its objectives.  Hope you all are ok with that.  Looks like a no-win to me.

There are a few economists who are opposed to this bailout, and I would take their opinions over those of some of the know-nothings in Congress.

Here’s part of what one of them, Jeffrey Miron (day job- Harvard), had to say:

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

Read the whole thing.

1 Comment Posted on '08 Election

stop the madness

I think it’s only fair to call a mistake a mistake, and yes, I would consider the AIG bailout a mistake.  I would also question the wisdom of bailing out Fannie and Freddie, but there would have been far deeper financial chaos had the Bush administration decided not to make that move.  These are steps in the wrong direction, because we cannot keep sticking the taxpayers with the bills for the corporate mismanagement of these companies.  It’s fair and reasonable to call this socialism — this would be the perfect example of such,  with the government taking over private industry like this.  That said, it would take someone much smarter than myself in the ways of the financial markets to completely understand the reasons behind handing out some government checks and not others.

The Bush administration is not, and has never been, a proponent of small government.  Compassionate conservatism and limited government have absolutely nothing in common. That’s not what got him elected.  Most conservatives have been consistent in calling out the President and Republicans for spending too much taxpayer money, and they are currently questioning these government bailouts as well  — so we do not need to apologize for our criticism of Obama’s spending proposals.

If Barack Obama is so worried about spending all that money in Iraq, then maybe he should consider taking that 0.7% of GDP he wants to spend on the Global Poverty Act and use that money for domestic programs.  Shouldn’t the Democrats, who are so concerned about the working man here in America, consider a freeze on foreign aid until all these domestic problems are solved?  One thing Democrats and Republicans should recognize is that throwing money at problems doesn’t guarantee positive results.  This goes double for any money ending up in the hands of UN bureaucrats.

Both Senator Obama and Senator McCain should be more frugal with their spending proposals, because it’s fiscally irresponsible to create new programs and finance new services when the feds are flat broke.  Maybe someone smarter than me can explain how it’s possible that Barack will cut taxes for 95% of the American people, and still give us all these new exciting government programs and services.  That doesn’t sound right to me.

Even if he only raises taxes on the “rich”,  those tax hikes would trickle down to the middle class.  Corporations pass on increased costs to the consumer by charging higher prices.   These higher tax rates would also mean they couldn’t hire as many people to produce their products, and it might even mean that some of the company’s workers would lose their jobs.  None of these things would increase productivity or have a positive impact on our struggling economy, so I would hope that Barack would consider the implications of any tax hike on the rich before he makes them a permanent part of his economic policy.  After all, he has been known to change his mind when presented with conflicting facts.

1 Comment Posted on Random Musings

republican socialism?

Bet you haven’t heard that term before.

Why does it seem to me that all Washington ever seems to talk about these days is bailouts? Bailout Freddie Mac. Bailout Fannie Mae. Bailout Wall Street. Bailout homeowners. Is it possible in America today that no one is allowed to fail?

You know, Phil Gramm was right. We are a nation of whiners. No one wants to believe that failure is an option anymore. Whatever happened to personal responsibility? Or learning from your mistakes? Or going through transformative difficulties that just might change your life and your behavior? But it seems like failure is off the board nowadays and that it’s government’s job to rescue everybody.

Whatever happened to the philosophy of Friedrich Hayek, the great free-market economist and Nobel Prize winner, who said the great thing about capitalism is the freedom to succeed beyond your wildest dreams, but that there is also the freedom to fail? I believe Hayek once argued that if he had to choose between success and failure, failure is more important in terms of preserving the free-market system.

Of course, the great thing about America is that you can fail many times, pick yourself up, keep on trying, and then succeed beyond your wildest dreams. But this whole process is being subverted by the political attitude that no one must ever be allowed to fail. I don’t like it. It’s socialism, isn’t it? Perhaps it’s big-government socialism. Or maybe it’s corporate socialism. Or maybe (with Fan and Fred) it’s Republican socialism.

No, I guess it’s really bipartisan socialism.

Larry Kudlow

I’m with him.  Failure’s a part of the process — for the free market and for all of us as individuals.    We learn from setbacks, and so does private industry.  Businesses like Radio Shack that were originally computer and electronic parts stores have now become places where you can buy cell phones and iPod accessories.  They adapted and changed their product lineup to respond to the demands of the free market.  When government interferes in this adjustment process by subsidizing or bailing out private industry, there’s less incentive to adjust and change what’s not working.

In the case of Fannie and Freddie, the government must step in here, because the results of letting it fail would be disastrous for the economy.  But this is a bad precedent to set, and I hope that this is where the federal government finally draws the line.