Saturday, March 7, 2009

Say What?

I admit that I’m just totally perplexed by President Obama’s ongoing popularity (though it has dropped somewhat, to ~60% approval). What seems obvious to me (and others, though not enough others, apparently) is that the current administration is leading us to economic ruin, a depression, which could be avoided by utilizing a program of aggressive tax cutting, targeted spending and incentives for investments and risk taking.
Anyway, I noticed this letter to the editor in the 3/6 WSJ and I think it reveals the ignorance and muddled thinking that characterizes Obama supporters.

I am one Journal reader who applauds our returning adults to the White House and rational policy making to our country. Under the previous Republican administration our total national debt went from $5 trillion to $10 trillion. Now economies all over the world are choking on our mortgage and corporate debt and sinking into an economic abyss. Adults pay their debts. President Obama, to his credit, proposes raising taxes so that we can begin to pay off our accumulated debts. Mr. Obama proposes investing in the American people and our infrastructure so that we can dig ourselves out of the hole the last administration put us in. I say: Welcome, President Obama, and not a moment too soon.

Wow, where to start? The writer complains about too much debt then supports programs that will grow our debt exponentially - far beyond $10 trillion. These programs are not “investments”. They’re huge shopping sprees designed to pay back those constituencies that helped get Obama elected (ACORN, teachers unions, etc). Only a small fraction of the so-called stimulus bill is for improving infrastructure. And about three quarters of the total bill will be spent after this year – too late to stimulate the economy. The money, our money - mine and yours, representing our time, labor and intellect, (and even more so, that of our descendents) will go into the vast, bloated, inefficient federal bureaucracy. I suppose the writer believes that the magic bullet of raising taxes will miraculously pay down our debt. It, emphatically!, will not. It will retard economic growth and cause a drop in revenue. (Revenue increased significantly, to record levels, after the 2003 Bush tax cuts). So along with substantially higher expenditures, we’ll have less money to pay for them. There isn’t an earth mover in the world big enough to get us out of the hole that the Democrats are digging.

In his most recent column, (the indispensable) Charles Krauthammer neatly debunks Obama's ridiculous and disingenuous explanation of how we got into the current mess and how to fix it. (BTW, has ever a word more perfectly fit a person than disingenuous fits Obama?) Obama's analysis? We're in a deep recession now because we failed in three areas : not enough federal spending for 'green' energy, health care and education. The remedy? Massive federal subsidies for all three. Then Krauthammer analyzes Obama's analysis :

As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people...

...At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

Thank you Charles!

Alongside that asinine WSJ letter I posted above was another one (wisely) addressing the same subject. The writer cites Milton and Rose Friedman's book "Free to Choose", which quotes Supreme Court Justice Louis Brandeis in 1928.

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding."

This is a lesson that Obamaniacs would do well to learn.

On the lighter side – a very funny piece in the March 9 issue of National Review. Rob Long speculates on what really was written into the largely unread ‘stimulus’ bill by the Congressional interns charged with putting it together.

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