Pollution from the Bully Pulpit

Aside from disastrous policies and a poorly veiled socialistic legislative agenda, perhaps the most insidious and unglamorous aspect about Barack Obama's comportment as president is his unrelenting reliance on low rent snipes aimed at stoking the flames of class warfare. The division and civil infighting among classes is, in Obama's mind, the best opportunity for political survival. We are talking about Obama's own political survival. He could give a rip about his own party unless it somehow affects him.

The damage, the strife, and the contentiousness that his trash talk engenders is harmful to the nation and a hinderance to our economic recovery - to the extent that economic recoveries are boosted and made possible amid an environment that focuses on the business of America rather than causing harm with ceaseless sophomoric taunts.

Obama's use of class warfare is not novel. It was on national display during the presidential campaign (see FW November 5, 2008 post). What is disturbingly disappointing is the incessant drumbeat and pedestrian quality of Obama's finger-pointing shrieks. The man appears not to have matured while in office. His conduct has degenerated. On that note, he would do himself a favor by losing the Mussolini style narcissistic head gestures -- chin juts up, eyes dart down.

There is a saying that "patriotism is the last refuge to which a scoundrel clings". In that vein, perhaps it is fitting to state that "tawdry fulmination is the first shield (and sword) that a demogogue grasps". Saul Alinsky would be proud of his Sancho Panzaesque disciple. Obama promised a different tone in Washington. He delivered.

Change

Meet the Press (McConnell and Armey)

Senate Minority Leader Mitch McConnell appeared on Meet the Press this morning. He is inept and relies on tired political talking points to argue the economic vision of the GOP. When pressed by David Gregory to answer a simple question: Would the extension of the Bush tax cuts be "unpaid for" and therefore be paid via added US debt?, McConnell dodged the easily rebuttable question and kept mumbling about "raising taxes is not a good idea in a recession". Although McConnell's assertion is true, it is cannot be inspiring to voters and simply not good for the GOP if it's Senate leader cannot articulate a more pointed response than that.

What McConnell should have said (with conviction and purpose) is: David, the premise of your question is that an extension of the tax cuts will lead to a bigger deficit. That premise is absolutely wrong. In fact, the opposite is true. Certainty that the tax cuts will be extended, including NOT raising the capital gains tax, will lead to a reduced deficit precisely because these measures will accrue to elevated economic activity, more jobs, and consequently more tax revenue. Moreover, Mr Gregory, we should be looking at steeper tax cuts as a direct means to get this economy going, an economy that is at best stuck in neutral and at worst, going in reverse. Lastly, David, following the wrongheadedness of your premise, we should raise taxes across the board to close the deficit. Seriously David, do you think that would be good economic policy?

Contrast McConnell's feebleness with former GOP House Majority Leader's Dick Armey's performance on the same show. When questioned about extreme views by fiscal hawks about radical changes to Social Security and Medicare, Dick Armey's riposte was that he, following Rep. Paul Ryan (R), favors a policy that would allow people to choose between staying in the current Social Security or Medicare program or opting to save and provide for their own well-being. To paraphrase Armey: "If these programs are as good as claimed by its supporters, why do its same supporters fear allowing people a choice?"

Free to Choose = Economic and Political Liberty.

The Times Are Always A'Changin'

One recent morning, a Fox & Friends host exclaimed that "most kids these days have never used a phone with a cord". The comment's purpose implied a dig at the lack of worldliness that today's kids possess. The comment was unwise, unfair, and generationally challenged.

There are several ways to rebut what Mr Doocy insinuated. First, kids use the tools, equipment and electronics that are at their disposal today. It is the technology of the time. They can't easily operate a loom to make clothes. All generations do this. Mr Doocy did this. I wonder if he felt unworldly because he didn't have to churn butter, wash clothes on the riverside, use an outhouse, or upkeep his lawn with a scythe like those before him had to do. Moreover, only a few generations before, there were NO phones. So I guess, following Mr Doocy's logic, the only enlightened youth were those that were around during the wonderful and fabled "cord era".

Mr Doocy's comment was most likely a sweeping broadside like the ones that many of us make, with no harm intended. However, to be clear, kids today have a lot on the ball and will have skills and tools at their disposal that we "older kids" did not have. That's how progress works. We develop better tools. It's true that we always lose a little something as we move from one tool to the next, but in the larger picture we gain much more and are progressing.

No carping necessary because you had to get up and manually change channels and kids today find that alien. No, there is no inherent wisdom found in having used a phone with a cord. Wisdom is wisdom. Technology is technology. Don't conflate the two. Don't begrudge the youth because their world is different from ours. Ours was also different.

I Spend, You Pay

In his eight year presidency, George Bush increased the national debt from $5.7 Trillion to a whopping $9.8 Trillion. That amounts to a sickening $43 Billion per month. To personalize the amount, it is $1,700 per year for each resident in the United States.

Enter Barack Obama who scoffed at Bush's spending and so got himself elected. But what Mr Obama has done makes Bush appear to be a world-class tightwad. In the eighteen months since Obama swore the oath, our national debt has been jacked up by $178 Billion per month. Poor Georgie is chopped liver next to Barry.

Now let's personalize what Obama has done. The average American household amounts to 3.14 people. Obama, behaving like a giddy teenager with his first credit card, has racked up NEW debt that amounts to $1,850 per month for that average sized American household! That is $22,200 per year. With the median household income at $52,000, the mad spender's unpaid bill is 42% of that income. Put another way, the debt increase is equal to the median household's gross income earned from January 1st to June 7th.

Recently, Mr Obama used the metaphor of (the Republicans) running the car into the ditch and now wanting to re-take control of the keys to the car. A more accurate use, and an extension, of the metaphor still has the Republicans driving the car into the ditch. Then, into the car jump Barack, Nancy and Harry. These three wild-eyed "progressives", evoking memories of Thelma and Louise, crazily zig zag the car until it goes over a cliff.

However, unlike Thelma and Louise, the trio of spendthrifts bail out of the car before it actually flies off of the cliff. Who's in the car? Our children and grandchildren -- the ones that pay the tab that Obama rang up. Charge it, baby.

Change.

And then we have Blathering Barney

Here's another jewel from the recent past. Good thing America has Barney overseeing the House Financial Services Committee.

Barney Take 1 (2005)

The guy knows his stuff. Then he tells us where he really stood on the subject of home ownership:

Barney Take 2, (after the bubble splattered)

I'm sure Big Barney would say that we just don't get the nuance behind his non-contradictory comments. Being on tape is a tricky thing. Tricky.

April 17, 2008 (Oh, What a Night)

The venue was Philadelphia. The occasion was the ABC News organized Democratic presidential debate between Clinton and Obama. Charlie Gibson questions Candidate Obama on tax policy. The transcript is available on the internet. Retrospectively, this one is a gem.

Charlie Gibson presses Obama on his intention to raise the capital gains tax, citing historical evidence that lower capital gains tax actually lead to increase tax revenue because lower taxes propels economic activity. Unflinchingly, Obama says that he would raise the tax for "purposes of fairness". When I heard him say this that night, my immediate thought was that here's a guy whose ideological bent easily trumps national economic prosperity.

Obama went on to ramble that Wall Street executives are burdened with a lower tax rate than their secretaries, brazenly ignoring the fact that the income tax rate paid by the "fat cats" (a moniker that Obama did not officially unveil until nice and comfy in the oval office) is actually much higher than their secretaries' and that the capital gains tax is just an additional tax. Not to mention that 50% of Americans pay $0 income tax. Obama was telling us that what really matters is his hell-bent desire to spread the wealth regardless of the best economic calculation.

And there's more: Obama said that he wanted to be "...able to finance health care for Americans who currently don't have it. And you can't do that for free". Okay then, but when ObamaCare was being peddled to us, we were told it would pay for itself, and even save money. Square that one, President Obama.

Wait, there's more: Candidate Obama donned the mask of a fiscal conservative and exclaimed that the country "can't take out a credit card from the Bank of China in the name of our children and grandchildren". Really now?

And, yes, still more: "I believe in the principle that you pay as you go ...and you don't increase spending unless you're eliminating some spending or finding some new revenue". That's good to know.

Last one now, and it's a doozy: "That's how we got an additional $4 trillion worth of debt under George Bush. That is helping us to undermine the economy. And it's going to change when I'm president of the United States".

With regard to the last comment, Candidate Obama spoke the truth. Our national debt has indeed changed.

Change. Yes he did.

Big Bad Profits

A resurgent economic rationale for rapacious government intervention in the delivery of consumer goods and services is the unfounded claim that government can provide said goods and services at a lower price to consumers. This is because government does not have a profit motive; there is no mark-up. To some, this convenient argument may initially make sense. In the real and lucid world, it is senseless.

For example, let's assume that a product costs $100 to produce. Cheerleaders for big government would want you to believe that if the government produced that product you would be able to buy it at the same $100 cost. However, if a private business made the product, the cost would still be $100 but you would need to pay, say $120, with the extra $20 representing the businesses' profit margin. If this were only true, then government should produce everything and sell at cost. Social utopia. Rejoice Karl Marx!

The hallucinogenic logic craters when one considers the reality of a competitive marketplace where demand/supply dynamics give rise to price elasticity. Price elasticity dictates the limit to which the price of a product can be elevated and still be acceptable to consumers. The freer, or more competitive the market, the more forceful are the constraints of price elasticity. In pure monopolies, where there is no competition, a seller can charge exorbitant prices because the consumer has little alternatives. Monopolies must be regulated because they bypass the demand/supply characteristics found only in a dynamic free market.

Given the price constraints imposed by demand/supply forces, it is imperative for a private sector business to become effective and efficient in order to lower its cost structure, sell the product, and still make a profit. Hence, price levels are tight (inelastic), creating a ceiling. The cost needs to be safely below the price ceiling if a merchant intends to render a profit.

The key here is cost. Government, not having shareholders that demand profits, allows inefficiencies and waste that consequently drive up the cost of any good or service it produces. Government cannot, simply due to its political nature, produce at costs lower than what economic driven private business can achieve. If made to compete with private business, the government will kill business profit by excessive regulation. Businesses then fail. Farewell private sector employment.

In more extreme cases, government will legislate that it is the only "permitted player" with respect to a good or service and therefore nationalizes the product/service altogether. The government creates a monopoly that it gets to regulate. Foreign competitors? These get thwarted by raised tariffs that jack up their cost structure.

The government payroll swells and the cost of our hypothetical product soars from $100 to $225 and we consumers can only be comforted by knowing that although we are now paying exceedingly more, big bad greedy private business is not making a profit.

But, hey, Mr. Obama would look at that $225 cost and proudly defend it by saying: "It could have been worse, it could have been $375. Be thankful that I limited it to $225. Now let's increase unemployment benefits for those who used to work for now defunct companies that produced the same product at $100."

Voodoo for an Ailing Economy

"Doctor, help me, this flu is killing me. I have barely the strength to walk. I am struggling to even tell you that I'm sick"

"Hmmmm...let me think for a moment. I know what - you should guzzle a fifth of whiskey right away. Then I will deftly remove two quarts of blood from your body. But first, do fill out these dozen and a half forms for me, would you?"

The American economy is fragile and there are quacks holding political office that would prescribe massive doses of deficit spending followed by hefty tax increases. And don't forget the bureaucracy that we endure just for the sake of complying with the clueless economic voodoo doctors.

The illness is bad enough but the antidote is ten times worse.

How to Pass Legislation

The "Americans for Dignity Act". That would have been a splendid name to attain swift and non-controversial passage of a pending bill that would further extend unemployment insurance benefits. The bill, scheduled to pass this week, extends benefits to 99 weeks (one can only figure that the political calculation was that 100 would appear excessive. Items priced as $2.99 are considered a bargain; $3.00 is over the top). But if Democrats had just called it the Americans for Dignity Act they could have pushed benefits out for 40 more years.

Think of it. Who would dare commit political suicide by opposing an act of this name?

Fiscally responsible senator: We should make extended benefits deficit neutral.
Spendthrift senator: Are you saying you're AGAINST dignity?

Thoughtful senator: Wouldn't more benefits just deter people from finding work?
Blowhard senator: Mean-spirited bigot; trampling on those seeking DIGNITY!

Bush had the PATRIOT Act. We all want to be patriots, correct?

Other brilliant ideas for naming bills:

Want to ram through Stimulus Part 2 at, say, $13 Trillion dollars? May I suggest "Save our Country Act"

Unfettered access to food stamps and fine wine? The "Keep Citizens from Starving Act". Oops, that may appear too anti-illegal immigrant. Better call it the "Keep Humans Alive Act". Then again, PETA may object.

How about outlawing political dissent on the airwaves? The "Americans for Truth and Equality Act" should do the trick.

Who dares stand against saving our country, preventing starvation, and the defense of truth and equality?

Hello 1984.

Lessons from the Gipper

Barack Obama's adoration of the power of government is sure-fire confirmation of Ronald Reagan's quip. To wit, "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it; If it keeps moving, regulate it; If it stops moving, subsidize it."

Under the Obama administration, we are being deluged with the manifestation of all three parts of the Reagan axiom. Taxes? Going up, thank you. Increased capital gains taxes, termination of Bush tax cuts, and the omnipresence of ObamaCare taxes. With regard to the latter, in September 2009, Obama adamantly denied that the mandatory nature of ObamaCare participation was a tax. However, in response to State law suits against the constitutionality of ObamaCare, his own Justice Department proffers the "government right to impose taxes" argument to defend the "non-tax tax".

Regulation? The about to be signed Financial Deform bill will only serve to make the extension of certain types of consumer credit impossibly difficult and expensive to the masses. This will create another crisis for which there will be the typical Obama response: regulate more, to the point of nationalization.

Subsidize? Here Obama reached a new and somewhat perverted low. He invited three jobless Americans to the White House as props for extending unemployment benefits. Wait a moment now, wasn't he going to put Americans back to work via the $800 Billion (before interest payments) Stimulus Bill? Seeing that the Stimulus Bill only stimulated a desire to spend more money, he now wants to pay extra for what he could not fix in the first place. (Think of buying a cordless vacuum cleaner and then having to buy a broom). The three jobless Americans are a testament to Obama's failure. My prediction is that he will want to extend unemployment benefits through, say, November 2012.

Obama is actually making Jimmy Carter not look so bad.

On Humor

Having a sense of humor is having a sense of proportion. Humor is a lubricant that does wonders under the friction of intense debate. I was saying these things to a close friend as we entered into a discussion of the importance and rightful place of humor within our societal fabric. My friend told me that the influence of humor should be taken more seriously as a conduit of communication. And so the conversation went.

Later, and still thinking about the polemics we had engaged in earlier, I showed my friend a humorous refrigerator magnet of Sarah Palin with the caption: "Bush with tits". Okay, that was clever but it shifted the humor probe into the political realm. For instance, are liberals humorless? Would a store even carry a magnet with the likeness of Obama captioned, I don't know: "Carter with a jump shot"? I find both funny but I must admit that liberals are more than casually humorless when it comes to satirical pokes at their beloved people and causes.

Later, at a comedy club, I focused on how common it is to target "right wing" views for ridicule. Left wing crusades are holy - thou shalt not target nor laugh at a left wing cause. But, come on, Bush (either Bush) was an easy target. They have screwed up syntax and possess comical facial and bodily gestures. All true. But it is also true that Obama can easily be caricatured by showing his abject ineloquence when absent a TelePrompTer. And, come on, that Mussolini pose is to die for when he exudes his air of self-importance (arrogance).

Humor is indeed powerful. It is necessary. It is well, funny and relaxing. It is also selective. It is also political. Liberals lack proportion.

The Problem with Socialism is that sooner or later you run out of other people's money -- Margaret Thatcher

Never Confuse Motion with Action (Lessons from Papa Hemingway)

The Politics of Boycotting

Those who are antipathetic toward the new Arizona anti-illegal immigrant law clamor for punitive action against the State of Arizona. A favorite call to action involves boycotting The Grand Canyon State. Already a girl's basketball team from Illinois was blocked from attending a tournament in Arizona because Illinois politicians find the Arizona legislative action repugnant. Fanatic hordes yell and rally to recruit "no vacations in Arizona" members. (Perhaps 1% actually planned to visit Arizona in the first place) So boycott they shall.

However, proponents of the Arizona boycott look an awful like those same cats that routinely decry the United States embargo (boycott) against trading with Cuba. Reason against Cuban embargo? It only hurts the Cuban people; therefore, it is an act of cruelty. Much better to engage the Cuban regime so that they can see the light of democracy.

Cuba Si! Arizona No!

May I suggest that these dazed and disturbed political agitators redirect their offensive vile by calling for a boycott against that country whose policy it is to kill those who wish to enter its sovereign via its southern border. The country? Why, Mexico of course.

Hypocrisy

Lectures on political civility by the Trash Talker-in-Chief and chiding on the importance of preventive health care provided by a chain smoker? What next, lessons on business ethics by Bernie Madoff?

"We inherited ..."

I don't know about you, but President Obama's whining about inheriting a $1.3 Trillion deficit is getting to be quite boring and a real sign of the hollowness that resides inside the man. Somehow he manages to complain about the $1.3 Trillion while in the same breath he defends the almost $6 Trillion he will leave if a one-term president and $10 Trillion if we a two-termer.

New technology alert --- at last night's press conference, Obama upgraded to a jumbotron at the back of the room. Apparently he was sensitive to the accusations of over-reliance on the teleprompter.

Bonus Vengeance - Soviet Style

So, certain members of congress and the Obama Administration are a bit nervous that the pitchfork-wielding populists may decide to point their weapons at them. After all, it was members of congress (Chris Dodd comes to mind) and members of the administration (Turbo Tax Tim for instance) that explicitly sanctioned the now scandalous AIG bonuses. I cannot imagine why they would think that this was any of their fault.

So, what do they do? Deflect of course - the tried and true political rat maneuver. Stand atop the Capitol building and the Treasury building and point at anyone and everyone. Divert criticism with vigor and with a megaphone and with a teleprompter. Whatever it takes -- retribution at all costs. Evade responsibility, in this the Obama proclaimed New Era of Responsibility. Blame others. 

Yes, blame others even by violating contract laws and the constitution. Abrogate existing contracts that they themselves approved -- even if they were inserted in bills that they irresponsibly passed without reading. Pass a bastardize excise/income tax on an ex post facto basis. And, for good measure, punitively tax only a select few -- no need to be concerned with Bills of Attainder when you are trying to save your own skin.

Joining the chorus of the usual suspects of Democrats supporting this Moscow-style action was a group of Republicans that is demonstrating their own lack of principles and respect for law and free markets.

Obama was off in Hollywood having fun on the Leno show getting into trouble for his total ineptness when not accompanied by his trusty teleprompter. Even Jimmy Carter's "malaise speeches" are starting to sound refreshing right about now. Good grief.

Change.

The Mission

For Barack Obama, social re-engineering through government control of the commanding heights of America's economy (1970s British socialism) is apparently his presidential mission. 

Income redistribution, pointed-finger harangues against "greedy capitalists", and demagoguery on the health care issue are part of his strategic design to incite class warfare and endear himself to the masses by making them forever dependent on his largesse (using our money of course). 

Rising tax rates has been the traditional way to redistribute income -- it lowers after-tax income. Not content with that, the recent limit on executive pay for certain private companies is a ploy to redistribute by controlling pre-tax income.

President Obama cares more about his mission than he does economic prosperity. He cares more about changing how the pie is sliced than he cares about the size of the pie. 

Alas, equal poverty is nobler than unequal prosperity. 

Change.

Squashing Possibilities of a Recovery

It has been said that the problem with socialism is that you eventually run out of other people's money. So is the case for the Obama administration's fervor to recklessly and savagely super-size the role of the federal government. 

Barack Obama delivered a huge spending bill thinly disguised as a stimulus package aimed at favoring run-of-the-mill democratic hand-outs. Now comes a budget filled with pork and candy for the same and more democratic interest groups. 

Our economic house is on fire and the Teleprompter Reader-in-Chief dedicates time to conjuring ways to spend more money on health care for the planet and controlling the global warming effects of sheep belches and cow flatulents.

Obama casually shrugs off plummeting stock markets as merely "day-to-day gyrations of the markets, similar to political tracking polls". Mr President, these are the life savings of Americans you are callously dismissing.

To counteract massive deficits we will doubtlessly incur massive tax increases. It will be touted by Barack Obama as a "I have no choice but to ..." type of decision. Then he will have succeeded in his grand plan of crowding out the private sector in favor of his beloved government sector. 

In truth, government can only spend money when by first taking it from someone else, either via debt or tax. If foreign debt, then other sovereigns will have a greater say in our country's affairs. If debt from American citizens, then that is money that cannot be loaned or invested in private business. If taxed, then that is the government's way of saying: "Hey you idiot, I know you earned the money but we, the government knows how to best spend it." We, the people, are at grave risk.

Mr Obama just last week, in a rare non-teleprompter moment, said that now may be a good time to buy stocks because the "profit-earnings ratio is good." That ratio does not exist in the finance world and only provided insight into his deep cluelessness. By the way, without a teleprompter all we hear is a series of "aaahhhhhhs".

The President is more concerned with a socialist, government-grab agenda than he is the prosperity of the country. Americans will catch on because they are smarter.

The Role of Government: Competing Ideologies

In January 1981, the United States was facing an inflation rate higher than today's; higher unemployment rate than today's; higher interest rates than today's; higher marginal tax rates than we have today; lower productivity than we experience today and lower GDP growth. Confronting that situation, Ronald Reagan said the following in his Inaugural Address:

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we, as Americans, have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.

In this present crisis, government is not the solution to our problem.

From time to time, we have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.

On February 9, 2009, addressing our present economic crisis, Barack Obama pronounced the following:

It is absolutely true that we can't depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that's moving through Congress is designed to do.

Mr Obama could have instead responded to the weakened state of the private sector (debilitated largely due to government's intrusion into the marketplace) by stating that it will be the aim of his administration to refortify the private sector by cutting taxes and reducing government spending. But that would require Obama to trust individuals more than government. He does not. Reagan did.

Government by it's very nature injects politics into decision-making -- almost all acts and decisions have heavy doses of political calculation. Economic and financial problems require economic and financial solutions, not ones laden with political ploys. Hyping the crisis by loudly proclaiming that doom will befall us if we do not accept whatever Obama and Congress cook up is a sinister way to push through a political agenda that has little effect on the crisis itself, except to worsen it and therefore give rise to another round of socialist measures.

The excesses of government and politics have damaged us enough already. The Obama/Pelosi/Reid team is government on steroids. Political excesses can only lead to abuse and a loss of liberty, think of the madness of the French Revolution. Think of other instances when governments leeches on to a crisis as a power-grab excuse.

In his January 1996 State of the Union Address, President Bill Clinton announced that "the era of big government is over." I think of Mark Twain's rejoinder: "Rumors of my demise have been greatly exaggerated."