Right Wing Nut House



Filed under: Bailout, Financial Crisis, Politics — Rick Moran @ 9:41 am


Tell me I’m being hysterical. Tell me I’m getting my panties in a twist over nothing. But that sound you hear is the death knell of capitalism as we know it.

The government is in the process of ordering levels of compensation for all. For those who believe regulators will stop with determining all “executive compensation,” I pity your naiveté and ignorance. Once government demonstrates it can do something, it has no reason to stop at some arbitrary point. Why? When has it ever done so in the past? It may not happen under President Obama, or even in the next decade or two. But some reason or justification will eventually be found to regulate and dictate the compensation of everyone and they will base that action on what the Obama Administration has proposed:

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.

The outlines of the plan are expected to be unveiled this week in preparation for President Obama’s first foreign summit meeting in early April.

Officials said the proposal would seek a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

It will propose that many kinds of derivatives and other exotic financial instruments that contributed to the crisis be traded on exchanges or through clearinghouses so they are more transparent and can be more tightly regulated. And to protect consumers, it will call for federal standards for mortgage lenders beyond what the Federal Reserve adopted last year, as well as more aggressive enforcement of the mortgage rules.

The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort.

The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could go beyond simple reporting requirements. Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.

“Relax you stupid conservative,” I can hear some of you saying. “This is simple oversight.”

The key is in that last graf I quoted above; “…how far it could go beyond simple reporting requirements.” They are already thinking beyond “oversight” and looking for “control.” And once the government can determine how much money one worker can make, they can determine what all workers make. All they have to do is gin up enough outrage at the “exorbitant” salaries paid to office managers, store managers or customer service managers as compared to clerks and secretaries and before you know it, we’ll have regulators determining your salary.

Could never happen here, right? Why not? Who’s going to stop them? Do you seriously believe that because you don’t want the government mucking around with your compensation that it will matter one iota? Perhaps you even support the idea that government should determine everyone’s wages. I think you will be enormously disappointed. With incentive virtually gone, our workforce will end up doing exactly the amount of work that will keep them employed and no more. And if you think that is the ticket to create a new kind of economy that will build wealth and create jobs, I’ve got a factory in North Korea I’d like to sell you.

Tigerhawk gives a little perspective on the Administration’s plan to regulate executive salaries:

First, this will do nothing to encourage executives in American public companies to take the risks necessary to restart the economy.

Second, executive compensation at public companies, including banks, did not cause the present economic troubles. This is but another “crisis” not to be wasted by people who want to effect social change.

Third, we are going to drive many of our best people out of public companies into private companies, or (perhaps worse) management will become dominated by people who are trained in process (lawyers and accountants and such). We are also going to deter private companies from going public (as has already been happening with the steep decline in initial public offerings in recent years). It does not seem to me that we should exacerbate either of these trends.

Fourth, you can cure “excessive” executive compensation by having the United States Congress or the attorney general of the state of New York determine what public company executives should make, or you could simply repeal the Williams Act and other state law obstacles to hostile takeovers. In a liquid market for corporate control, big, fat executive paychecks will become “synergies” if they do not earn a decent return.

Executive salaries and bonuses did not cause the economic meltdown. Regulating the matter won’t restart the economy. The only reason to try and dictate compensation is because they can. They have successfully demagogued the issue to the point that people are making death threats against AIG executives who had absolutely nothing to do with the trading in derivatives that caused all the problems, whose only “crime” is that they work for the company in some capacity. Way to go, Mr. President.

Like all other “opportunities” in this crisis that the Obama Administration is taking advantage of by scaring people half to death or now, ginning up murderous rage against “the rich,” Obama is putting the remaking of America ahead of economic recovery. Liberals have been railing for years against people making “too much” money especially compared to the rest of us. Now that they have the opportunity and the sheer gall to do so, they are going to do something about it. The fact that it will contribute nothing to the recovery and everything to Obama’s idea of “change” will not matter in the end. The effect will be the same; opening a door to exessive government control of decisions that should be made by individual companies.

For all its many faults - especially as it has been practiced for most of the last century - the world has known no greater engine of prosperity since civilization began than American capitalism. Much more than Thomas Jefferson or Andrew Jackson, American capitalism created the “common man.” It gave him a stake in the success or failure of both the macro and micro economy in which everyone participates. This self interest drove the American workingman to feats of productivity never before seen. It greatly expanded the “middling classes” and showered goods and possessions on them that were only reserved for the rich in most other countries. It created more wealth, more freedom, more human happiness than has ever been achieved anywhere else.

Yes, it also created suffering, misery, inequality, and great sadness while sending many to an early grave and others to live in abject poverty. American capitalism has always been about winners and losers and the idea that you can have one without the other is a mirage, a phantasm. Like life, it isn’t fair. Some risk takers are rewarded beyond avarice while others crash and burn. And playing by the rules is no guarantee that you will succeed.

So yes, regulate these markets that caused the meltdown to ensure it won’t happen again. And play your little power games with the bonuses of those getting bail out money. But, as Roger Simon points out, if you’re going to want everyone to play fair, perhaps you should look to your own house first:

I want it all out there. Total transparency, including Timothy Geithner’s TurboTax printouts and Christopher Dodd’s Irish real estate holdings. [Doesn't Dodd remind you of Claude Rains in "Mr. Smith Goes to Washington"?-ed. Worse.]

In other words, Mr. President, you want “increased oversight,” let’s have it - for everyone! That includes some of your creepy allies. Otherwise, you’re a hypocrite. Stick it.

[You forgot Charlie Rangel!-ed. I forgot a lot of people. Harry Reid and the Vegas connection! That too.]

Arbitrary exclusions to oversight like those above make the tyrannical proposals by Obama even more problematic.



Filed under: Bailout, Financial Crisis, Government, Politics — Rick Moran @ 7:16 am

I will no doubt be accused of damning with faint praise by Obama supporters and God knows what adjective that describes “traitor” by the president’s detractors but after looking at this AIG matter carefully, I think some of my friends on the right have gone too far in their criticism of the Administration.

The higher echelons of the Obama Administration have demonstrated a tone deafness regarding public sensibilities not seen since perhaps the Carter Administration. It’s not just the AIG matter but also their incomprehensible plan to force military personnel to have private insurers pay for their disabilities and war wounds and now, this idea to let loose upon the populace people who have been accused of supporting terrorism and who have spent the last several years in the Guantanamo prison camp. There have been plenty of other examples of what amounts to either arrogance or ignorance of how their public pronouncements and actions will play with the average American and one begins to worry if Obama and his advisors aren’t cocooning themselves — closeting themselves in the White House, unable to accurately gauge the perception of the public on matters large and small.

But beyond this curious disconnect, the Obama White House is experiencing what every single modern American president has had to endure; the mistakes inherent in trying to get initial control of the executive branch.

There are approximately 3 million employees in the executive branch (plus 1 million active duty military). All of them answer to the president. But the tentacles of power that snake from the White House, to the departments, and out into the field where offices dot the countryside are highly dependent on a cadre of about 2500 appointed positions. No president takes office on January 20 with very many of these vital positions filled. I believe an argument can be made that Obama’s personnel operation has been by far the worst of any modern president’s and at the rate he’s going, it will be well into the second year of his term before these slots are filled.

But even if he was ahead of the game, the nature of the presidency and the chief executive’s initial ability to effectively grasp the levers of power and control his own government are limited by the sheer greeness of his appointees as well as a lack of meshing by his top aides who are busy themselves trying to figure out where they fit in. It is easy to see how the left hand of any new administration wouldn’t know what the right hand was doing or would fail to grasp the significance of a particular issue.

Yes, there have been troubling indications that these folks aren’t the geniuses everyone thought they were and that the president himself has demonstrated a lack of sure handedness on numerous issues. But the AIG bonuses matter (as well as the far more serious lapse regarding AIG paying counterparties in full) appears to have been mishandled as a result of a combination of Timothy Geithner’s incompetence and miscommunication between the Treasury and the Oval Office.

Exhibit 1: This article in WaPo that details Geithner’s stupidity and the White House being in the dark about the bonsues:

Treasury Secretary Timothy F. Geithner, a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York, said in an interview yesterday that he had not been aware of the size of the bonuses and the timing of the payments.

“I was stunned when I learned how bad this was on Tuesday [March 10],” Geithner said. “I shouldn’t have been in that position, but it’s my responsibility and I accept that.”

Two days later, Geithner told the White House. The last-minute disclosure irked some of the president’s senior advisers, but they refuse to point fingers now, saying the timing had little impact on the outcome or the president’s public statements this week.

“Would I have liked an earlier warning system on this? Yeah,” said David Axelrod, a senior White House adviser. “Would it have markedly changed things? Probably not. The legal constraints are the legal constraints.”

One source familiar with the discussions said the company had provided details about the bonuses to senior Treasury officials at least a month ago. A Treasury spokesman said last night that was not true.

I think it entirely possible that AIG informed someone at Treasury last month about the bonuses and it is even possible that Geithner himself was made aware of them at that time but failed to realize or anticipate public anger. If Geithner has lied, he must go — plain and simple. In fact, given what we know already about the Treasury Department’s utter failure to negotiate with AIG regarding their 100% payouts to counterparties, Geithner should probably be canned. He has lost the confidence of investors, of troubled banks, of many if not most in Congress, and the American people. It’s hard to see how he lasts through the weekend except the president just recenty expressed “full confidence” in his leadership at Treasury. As the drip, drip, drip of revelations continue over the next few days about what Geithner knew and when he knew it, that attitude by Obama may very well change and Geithner could be thrown under the bus.

But that doesn’t solve the president’s problem with regards to a lack of communication especially with the Federal Reserve as CEO Liddy testified yesterday before Congress:

“What we’ve assumed is that, in our discussions with the Federal Reserve, that they were properly communicating with others,” Liddy said. “It appears that we need to improve upon that process.”

While declining to answer questions about the AIG bonuses, Fed spokeswoman Michelle Smith said in a statement: “The Fed and Treasury officials have coordinated closely on all aspects of the U.S. government’s support for AIG during this extraordinary period.”

The Fed officials did not anticipate the political firestorm that would erupt over the bonuses, a senior government official said. “They clearly underestimated the matter,” the source said.

AIG executives say the Fed had been intimately involved in reviewing the contracts before the first dime was paid. The payments, which were due by March 15, were ready to be distributed last Tuesday, a senior AIG executive said. But the firm didn’t get the go-ahead from government officials to make the payments until late last week.

“We weren’t authorized until Thursday night,” the AIG executive said. “We were negotiating with the Treasury and the Federal Reserve. Treasury indicated that they needed it cleared by the White House, as well. We hit the go button for the payments on Friday.”

I would love to say that the Obama Administration “should have known” about this or that but frankly, it is unrealistic to expect the Administration to have focused on the bonus problem given that both the Fed and the Treasury Department had already signed off on them. They can be faulted for not realizing and not being prepared for the political firestorm that erupted but to expect them to have stopped the bonuses presupposes a level of control that they apparently lack at the moment. Is this incompetence or the growing pains felt by all new administrations? More evidence is needed to make a definitive judgement.

Barack Obama is the 8th president I have seen take the oath of office where I was old enough and interested enough to follow politics. I have also read numerous biographies and non-fiction accounts by insiders that detail these early months of struggle with riding the rough off of the president’s management style, discovering lines of communication, chains of command, who reports to who through whom, and building trust among top level executive branch employees who are, after all, strangers for the most part and must get used to each other’s personal idiosyncracies and habits.

I believe that many of Obama’s early problems can be chalked up to this shakedown period. His problem is that he doesn’t have the luxury of making mistakes — especially in the economic sphere. The crisis confronting the nation — not of his making — requires much more than he has shown so far. I believe his concentration on the economy has been poor, his execution, abysmal, and the fact that he keeps pushing his “remaking America” schemes at the expense and in lieu of focusing like a laser on economic recovery calls into question his basic leadership skills.

But in the AIG matter, I think many of his problems (some of them self-inflicted) can be chalked up to bugs in the system. How he overcomes these initial bumps in the road will tell the tale of his presidency — and whether we have a strong and vibrant economic recovery.



Filed under: Bailout — Rick Moran @ 2:20 pm

I am beginning to wonder if liberals have an extra side of the brain instead of just the right and left sides that normal people are born with.

Otherwise, I can’t for the life of me figure out how some on the left believe that AIG is “blackmailing” the government to give them their bonuses. It takes some superior convoluted thinking to arrive at that conclusion and I want to congratulate Jane Hamsher for achieving a level of stupidity I didn’t think possible - until I remembered some of her other “Great Moments in Blogging” that set a standard for shockingly bad taste and dripping hypocrisy.

Hamsher riffs off of this thoughtful but flawed piece by Andrew Sorkin that defends the bonuses by pointing out that these were “retention bonuses” designed to keep the people who created the mess at AIG on board so they can help unravel their extraordinarily complex handiwork:

A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.

So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company. In the end, we may actually be better off if they can figure out how to unwind these tricky investments.

Not that any of this takes the bite out of paying these bonuses. For better or worse — in this case, worse — someone at A.I.G. decided this company needed to sign bonus agreements last year to keep people before the full extent of its problems became clear.

Now we can debate why A.I.G. felt it necessary to guarantee seven executives at least $3 million apiece when the economy was clearly on shaky ground. Perhaps we will find out these contracts were a bit of sleight of hand to enrich executives who knew this financial Titanic had hit the iceberg. But another possible explanation is that A.I.G. knew it needed to keep its people.

That is the explanation offered by Edward M. Liddy, who was installed as A.I.G.’s chief executive when the government effectively nationalized the company last fall. (He is being paid $1 a year.)

“We cannot attract and retain the best and brightest talent to lead and staff” the company “if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he said.

A distasteful but perfectly legitimate point of view. As Sorkin points out, you can argue the merits of giving bonuses but taking into account the reason given by Liddy must be part of the debate.

Hamsher rejects this argument in favor of a conspiratorial view of history:

Let’s look at the implications of what Sorkin is saying. The markets have seized up for various reasons, but ultimately due to the fact that people have no confidence in the entire system. There were huge conflicts of interests when agencies like Moody’s and S&P were paid by issuers to rate structured securities backed by subprime mortgages. They handed out AAA ratings like they were Pez, and because certain firms could only put their money in such “investment grade debt,” facilitated the spread of the subprime cancer that riddled the entire system. It’s just one example of why nobody trusts anything right now. There’s no confidence that if you put money into something, you’re able to assess that what you’re investing in has real value, and isn’t just another ponzi scheme designed by crooks to enrich themselves.

So what Sorkin is saying is that we should just admit, in a very public way, that we have no ability to regulate the system. That if someone commits fraud and theft on such a massive scale, there’s nothing we can do but pay everyone off or they will use their knowledge to steal even more money. He’s saying that there is no authority, no viable regulation, no legal structure that can right this mess. All we can do is keep writing checks, pay off the blackmailers and hope that if we let them continue to get rich they won’t make matters worse.

Geithner seems to share that assumption, namely that there is nothing wrong with this system that piles of money won’t fix. That if you keep shoveling cash into it, some day things will get better. He has not addressed the crisis of public trust, the critical lack of faith that everyone — both inside and out of the financial industry — is gripped with right now. He wants to pay the very bankers who created this mess in order to buy up “toxic assets,” which the public views as just another way for him to funnel billions to his Wall Street pals. As if the systemic problems that led to this crisis will just go away and the same thing won’t happen all over again.

People are outraged at the injustice of paying out billions in bonuses to AIG bankers, but they’re also irate (and freaked out) about what it says about those in charge — that they are so much a part of the fabric of the problem that they’re incapable of seeing what it is, much less solving it. Paying off blackmail notes from architects of the fall is a great way to make things worse.

I included Hamsher’s thumbnail sketch of what went wrong because it is instructive of how the populist left views Wall Street and big business in general. The sub-prime mess had many fathers and may have been driven by a frenzy to get customer’s signatures on mortgage contracts (this piece is a pretty fair explanation of the practice) but the financial instruments that have caused the world wide meltdown were designed to spread the risk contained in those mortgages. As traders jiggered the contracts, slicing the risky instruments into smaller and smaller pieces, they created a monster that no one - least of all the traders - could control. Ultimately, the ability of anyone to understand what these instruments were truly worth went beyond our understanding.

Is this criminal activity, as Hamsher suggests? More like uncontrolled hyperbole from the writer. Every trade made was perfectly legal under current law. Is it “reckless” as President Obama avers? No doubt. But is the fix for the government to regulate risk? No matter how much we end up paying out to solve this crisis, if Wall Street is forced to answer to the government when it comes to grading risk on investments, we may as well just turn the whole shebang over to Washington. We may end up doing so anyway because the government has already determined that companies who didn’t recognize the risk inherent in these credit derivatives and other mortgage securities will not suffer the consequences of their stupidity/recklessness/greed. The market is not determining winners and losers, the government is.

Sorkin is not saying, as Hamsher accuses, that we can’t regulate “the system.” How the hysterical writer ever leapt to that erroneous conclusion is a mystery. All Sorkin is saying is that the justification for these bonuses may be the key to solving the AIG mess. Keeping the traders who created this pyramid of bad paper in place may be our only shot at unraveling their complex transactions without bringing the whole system down around our ears.

Unpalatable? Of course. In a perfect world, we would take these galoots and throw them out on the street, planting a dunce cap on their heads and preventing them from ever being in a position where they can risk the financial stability of the world again. But in the real world where most of us live, it becomes necessary to live with the situation we have and not play make believe by wishing it was different.

Of course we need regulation of the financial system and both Sorkin and Geithner are not saying we don’t. It is to Hamsher’s discredit that she has so misread (or deliberately misinterpreted) what Sorkin wrote that she then goes off the deep end and posits the notion that AIG employees are holding a gun to the government’s head trying to blackmail us into giving them their money. No one at AIG has even hinted at this which begs the question; why would Hamsher make this stuff up.



Filed under: Bailout, Financial Crisis, Government, History, Politics — Rick Moran @ 7:41 am

I just finished visiting the blog Crooked Timbers and, as is the case when I read stuff by very smart people, I need an aspirin because my head hurts. I take that as a sign that too much brainy stuff is crammed into my head and I must access the release valve so that some of the older crap can dribble out of my ears to make room for the next clump of logical, coherent, analysis from writers who know a helluva lot more about philosophy and politics than I do.

I lose a lot of long term memory that way, but hopefully, nothing major like the batting averages for the 2005 World Champion White Sox or the names of my children. (Do I have any children? Too late.)

Some very smart writers give me both a headache and make me want to throw up. Juan Cole comes to mind because even though I find his history writing the bomb, he is a nauseating self-referentialist and a terrorist apologist. Come to think of it, just about anyone who writes a blog is guilty of the former so perhaps I am being too hard on Professor Cole as far as his constant self promotion is concerned. His views on Hezbullah and Hamas are another matter and not only have me gagging but also make me want to take a shower after reading him. Same thing happens to me after trying to read Jane Hamsher’s foul mouthed spewings which only goes to show that you can have the mind of slug and still engender massive disgust. Nice trick, that.

There is great virtue in reading stuff by people more intelligent than you are. First of all, generally speaking, you learn something new - even if it’s that the writer is a dork and despite his brilliance, would benefit from the intellectual equivalent of a bracing thwack across the noggin with a two by four. Beyond that, learned writers offer perspectives you will never find by reading most columnists (the sainted Buckley one of the few exceptions), bloggers, or pundits, or by listening to your bartender expound on the mysteries of the universe (despite the fact that most PHD’s in philosophy work as mixologists or cab drivers).

That said, this well toned argument by Henry Farrell at Crooked Timbers on whether or not Barack Obama is turning America into a European style social democracy should be must reading for those who have been complaining about the president’s “socialist” policies.

Farrell quotes Roger Cohen on turning America into France-lite:

To paraphrase Mauriac, I love France, but I don’t want there to be two of them, least of all if one is in the United States. … I think President Obama’s counter-revolution goes in the right direction. … Still, the $3.6 trillion Obama budget made me a little queasy. There is a touch of France in its “étatisme” — the state as all-embracing solution rather than problem — and there’s more than a touch of France in the bash-the-rich righteousness with which the new president cast his plans as “a threat to the status quo in Washington.” … You know possibility when you breathe it. For an immigrant, it lies in the ease of American identity and the boundlessness of American horizons after the narrower confines of European nationhood and the stifling attentions of the European nanny state, which has often made it more attractive not to work than to work. High French unemployment was never much of a mystery. Americans, at least in their imaginations, have always lived at the new frontier; French frontiers have not shifted much in centuries. Churn is the American way. … If America loses sight of these truths, it will cease to be itself.

Cohen sums up the argument nicely, referencing American exceptionalsm without naming it explicitly. Any such mention of exceptionalism would put him in very bad odor with some of his friends on the left who have a jaundiced view of such old fashioned, outmoded, jingoistic nonsense.

Farrell also quotes from this Clive Crook piece at National Journal where the author speaks the forbidden words and points out that if we were to adopt some French social policies (health insurance, labor protections, etc.) that we would not become some kind of French-American hybrid while maintaining our “exceptional” character but rather something totally different:

I was hoping that Brooks would press Shields to say what exactly it is about France he objects to, what makes him recoil at the parallel. Where has France gone too far, in the view of an American liberal? … Presumably, liberals approve of the universal health care, the generous and extensive welfare state, the comprehensive worker protections, the stricter regulation, the vastly more-generous subsidies for higher education, the stronger unions, the higher taxes, and especially the higher taxes on the rich. … Perhaps some liberals privately long to make the United States over in the image of France, but the great majority, I imagine, are more interested in taking the things they regard as best in the European economic model—all the things I just listed—and combining those “socially enlightened” policies with the traditional economic virtues of the United States. Take French social policies and welfare-state institutions and add them to the American work ethic, spirit of self-reliance, and appetite for change. Et voila, the best of both worlds. Color me skeptical. Culture shapes institutions and vice versa. Culture—that bundle of traits of self-reliance, self-determination, innovation, and striving for success—underpins the American exception. … In ordinary times, this culture makes it hard for a government to push the United States in a European direction … But now, maybe, the time is ripe. This unusually severe economic crisis has called American capitalism into question, highlighting its weaknesses and making it easier to forget its strengths. Liberalism has a rare opportunity. … But the interaction between culture and institutions works both ways. Change the system and, with time, you will change the culture.

Farrell’s take deals with the shocks to the political economies of Europe in the 90’s when the “Anglo-Saxon” model of capitalism seemed to be the road to take in a globalized economy:

France and other countries faced a profound crisis – a crisis which in some ways was even more profound than that facing the US today. They have faced continuing pressures to ‘reform’ institutions in a more market-liberal direction over the succeeding two decades. And they have indeed changed in some very important ways. But France did not converge onto the US model despite these pressures. If it had, presumably Crook’s and Cohen’s criticisms would be rather different than the ones that they are making Instead, it has reformed along a divergent trajectory to the US, with continued heavy state involvement in the economy but of a different variety than previously.

This reinforces a near-universal finding of the relevant literature in political economy as I read it. While there is some diffusion of policy lessons across states, it tends to have limited consequences. Different countries respond to common shocks in very different ways, because of their existing institutional structures. National economic trajectories are quite robust. Even in major crises, advanced capitalist countries tend to tinker around the edges of their institutional systems rather than opt for wholesale reform, let alone converging on a perceived ‘better national model’ elsewhere.

And this is what is happening in the US. The Obama proposals are not particularly radical departures from existing practice in the US. They are certainly nothing like traditional European social democracy. Even David Brooks effectively acknowledges this, when he says that they are potentially problematic in combination rather than individually. They aren’t going to set the US on a different national trajectory, let alone make it ‘French’ or ‘European.’ Some of us might like to see this happen, but it isn’t going to, even given the ideological trauma that the US is undergoing. And arguing that American individualism is likely to wilt if exposed to nasty foreign influences smacks more of a kind of capitalist-road José Bové-ism than any serious kind of intellectual analysis.

Reformer, not radical? Farrell seems to be saying that because our “Americanism” is so ingrained, that Obama can slap all the social democratic nonsense he wishes over the exceptionalism template and we will remain virtually unchanged in a cultural sense. I agree. A little more “progressive” in our tax and spending policies perhaps. But it will take a lot more than universal health insurance or card check legislation to destroy what has taken 400 years to build. The problem is, it is not Obama’s policies per se that are necessarily “radical” but rather the ways and means he will achieve them.

But I think Farrell is missing one part of the argument - the practical political effect of Obama’s transformative agenda. This is where the real “change” will occur - a change that will fundamentally alter the relationship between the governed and the governors. For this, we must look to the last American president who attempted transformation - Ronald Reagan.

At bottom, Reagan’s revolution was also firmly grounded in a non-radical departure from existing practice. Reagan did not repeal the Great Society or the New Deal. Social spending skyrocketed under his leadership, anywhere from 3-5% above inflation. Part of this was the fact that he was dealing with a Democratic majority in the House (and, for the last two years, the Senate). The traditional guarantors of aid to the poor made sure there was plenty of funding available to take care of their dependent constituency. Reagan managed to cut the rate of growth as a percentage of GDP in social spending, nothing more - a not inconsequential achievement given the spending trajectory we had been on in the 1970’s.

But even beyond that, Reagan’s “revolution” altered the national conversation on entitlements, bringing some much needed realism and perspective to the debate. Whether this caused a backlash or was itself a product of middle class resentment I will let the historians duke it out to discover the truth of the matter. I don’t see President Obama trying to bring us back to the days when the only question about entitlements was “How much more do we spend?” That part of the Reagan legacy seems secure and may be a starting point to finally come to grips with the frightening prospect of stupdendous social security and medicare outlays 20 years down the road that could literally bankrupt us (if Obama doesn’t beat the clock and do it sooner).

Further, Obama is not going to “undo” the Reagan tax revolution, not when 48 million Americans are paying no taxes at all and the marginal rates he proposes will still fall far short of the rates in place when Reagan took office. Again, Reagan’s tax policies were not really radical in retrospect (Bush’s tax cuts fit that bill nicely) but the changed perspective on taxation - influenced by the California tax revolt that was occurring at the same time - may have been radical in the sense that it reversed 50 years of thinking about taxation. Seeing taxes as personal property and that the government that confiscates the least, governs the best may have to undergo some slight adjustments given our current deficits but the overarching belief that low taxes are a beneficial model for our government will outlast Obama.

So the question of how radical Obama’s policies might be must be seen in the context of politics and history. While grounded, as Farrell rightly points out, in practices and theories of the past, the “remaking” of America that I and others see in Obama’s policies have more to do with a psychological barrier being broken with regards to government intervention in the economy and the resulting alteration of the national conversation about the efficacy of statist solutions to a myriad of social problems. Not France and yet, not America as we have known it either. I realize that “change” is what people voted for but did they vote for the kind of Middle Class dependency that some of Obama’s policies would seem to promote? I struggled with this question in a post I wrote last month, “If Government Makes Life Easier, Does That Make it Better?”

The transformation of American society from one that values liberty to one that embraces dependency has taken longer than any other western nation. This has largely been due to American conservatisms steadfast refusal to abandon what Kirk calls the “voluntary community” in favor of the stifling hand of collectivism. Where once only the poor felt the deadening hand of statism which created a permanent underclass, destroyed the family, and smothered ambition, now the middle class is in line to be granted similar attention…

Liberals do not like to discuss the loss of freedom their collectivist ideas entail. But we are clearly in an era where choices are to be limited for the middle class in order to make life less of a burden . And any society that limits choice, limits freedom.

But isn’t this what the people want, what they are demanding? How can you live in a democracy and tell people that government acting to make your life easier is wrong and that the alternative - struggling to make the right choices for yourself and your family and where not choosing wisely might cost you - is the preferred, indeed the “American” way of self sufficiency and taking responsibility for your own life?

There is nothing noble in suffering but I would posit the notion that independence is, in and of itself, enobling and in any society that values freedom, the slide into dependency cannot be allowed without a recognition of what we lose as well as what is gained. There are 400 years of struggle behind us to create a society where the individual took responsibility for his own well being and that of his family, his fortunes rising or falling based on his native abilities and talents. The reward was “an earned life” of personal satisfaction and a feeling of self worth and accomplishment that you simply cannot experience if you depend on government for as much as we do today. Or as much as we will in the near future if more of our freedoms are given up in the name of personal security and comfort.

Farrell does not believe that kind of “rugged individualism” is at stake in an Obama presidency. I believe it is. I believe the real transformation that Obama’s ideas and policies represent might not make us into a France (which isn’t really the point) but will result in a different kind of America - one that is inconsistent with our founding and an anathema to conservative (traditional) principles upon which we have built a society unique among men. And what I find despicable is the president and his cohorts using the “opportunity” of an economic crisis to bring about these transformative policies by subterfuge. They wouldn’t fly otherwise and they know it.

Give us a stand up fight without resorting to political tricks of fear mongering and partisan bitchery and I would guarantee the bulk of Americans would be standing with us and not the president.



Filed under: Bailout, Financial Crisis, Government, History, Politics — Rick Moran @ 6:57 am

They were just whispers a couple of weeks ago - a hint there, a question here. But if you believe Howard Fineman, the inside the beltway crowd has taken the mettle of our new president and discovered that despite all the hype, Obama may not be all he’s cracked up to be.

I hasten to add that this has not and probably will not affect his enormous personal popularlity anytime soon. The mass of citizens have more common sense than the elites and a lot more patience as well. But to people who follow politics as a religion and look for signs and portents as a soothsayer would look for harbingers in the entrails of a frog, there are a few things to be worried about when looking at our president’s performance so far.

What has he done in 50 days? He has proposed much and accomplished some. The primal push of his presidency - the stimulus bill - is getting it from both sides with conservatives deriding it as pork while liberals already saying it wasn’t big enough. This is something we better get used to from the left because they area establishing the parameters of debate when the ultimate let down occurs and it is shown that Obama’s massive spending is not working. The battle cry will be “not enough!” rather than “let’s try something else!”

But why not enough? Rahm Emanuel, Hillary Clinton, and even President Obama himself have all used the exact same phrase to describe their approach to governance in these times of economic hardship; “In crisis, there is opportunity.” I am convinced this phrase will come back to haunt them because if the first stimulus bill wasn’t enough to get the economy moving, it was because it was loaded up with “opportunity” spending that had nothing to do with economic recovery and everything to do with remaking America. In other words, a great deal of the spending in the stimulus package was discretionary and not crisis-related.

And now Obama wants to come back for more? For hundreds of billions that will be for “real” stimulus?” He’s got to be kidding. What this shows is a frightening prospect; Obama cares less about economic recovery than he does about changing America to reflect his left wing vision.

This is also born out in how he has established his priorities. At Obama’s first press conference, he refused to discuss what his administration was going to do about the banking crisis because he “didn’t want to steal any thunder” from his Treasury Secretary who was going to announce the plan the next day.

This was a lie. There was no “thunder” to steal because his Treasury Secretary Timothy Geithner had no plan to announce. Once that became apparent, the markets began a serious slide to oblivion. And here we are more than 5 weeks later and Geithner is still mum about his plans to save the banks. This is causing not only a lack of confidence but has opened the Administration up to questions about their basic competence. It has made Geithner a butt of jokes and has even led to calls in some quarters for his resignation.

Did Obama think we wouldn’t notice? Did he believe that people would simply forget his promise to have a plan? And here is where wildly misplaced priorities come into play. The fact is, the key to this whole economic mess is getting the banks to lend money again. Obama could pass 10 stimulus bills and it wouldn’t make a difference because as long as credit is frozen, our economy will continue its free fall.

This begs the obvious question; why did the Obama Administration choose to try and pass the stimulus bill before solving the banking crisis? Why didn’t they concentrate on that fundamental problem rather than ram an $800 billion spending free for all down our throats when even its supporters say didn’t contain enough money to immediately stimulate the economy? Shouldn’t they have been working from the first hours after the election on trying to solve the problem that, more than any other factor, could lead to a catastrophe for our nation and the world?

Or was it more important to take advantage of the “opportunity” found in the crisis to fund liberal programs that the president feels will remake America?

Obama claims he can work on more than one problem at a time:

“I know there are some who believe we can only handle one challenge at a time,” Obama stated today. “They forget that Lincoln helped lay down the transcontinental railroad, passed the Homestead Act, and created the National Academy of Sciences in the midst of Civil War. Likewise, President Roosevelt didn’t have the luxury of choosing between ending a Depression and fighting a war. President Kennedy didn’t have the luxury of choosing between civil rights and sending us to the moon. And we don’t have the luxury of choosing between getting our economy moving now and rebuilding it over the long term.”

As Jules Crittenden points out, Roosevelt needed the war to get out of the depression. And Kennedy? I know Obama went to Columbia and all but Holy Smokes! Kennedy hardly “chose” civil rights - it was forced on him by the courage of the Freedom Riders and the demonstrations in Selma and elsewhere. Kennedy was furious with King for forcing his hand and sicced Bobby on him to try and get him to pull back. Also, as Jules points out, civil rights and the moon program together did not cost the government even a tenth of a stimulus bill in today’s dollars.

That’s beside the point, however. Yes, presidents can and should deal with more than one problem at a time. But Barack Obama is starting to look suspiciously like Jimmy Carter who tried to do so much those first 3 months that he ended up accomplishing very little. This description of Obama by Howard Fineman is eerily Carteresque:

Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any. A beau ideal of Harvard Law, he can’t wait to tackle extra-credit answers on the exam.

But there is only one question on this great test of American fate: can he lead us away from plunging into another Depression?

Carter was so desperate to be liked and yet, ended up being universally despised because he ineptly used the powers at his command. What do you call a president who puts economic recovery as a secondary goal in a deep recession while being unable to come to grips with the fundamental reasons for the downturn?

Inept? Incompetent? Misguided? In over his head?


If the establishment still has power, it is a three-sided force, churning from inside the Beltway, from Manhattan-based media and from what remains of corporate America. Much of what they are saying is contradictory, but all of it is focused on the president:

  • The $787 billion stimulus, gargantuan as it was, was in fact too small and not aimed clearly enough at only immediate job-creation.
  • The $275 billion home-mortgage-refinancing plan, assembled by Treasury Secretary Tim Geithner, is too complex and indirect.
  • The president gave up the moral high ground on spending not so much with the “stim” but with the $400 billion supplemental spending bill, larded as it was with 9,000 earmarks.
  • The administration is throwing good money after bad in at least two cases-the sinkhole that is Citigroup (there are many healthy banks) and General Motors (they deserve what they get).
  • The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to “give up” something.
  • A willingness to give too much leeway to Congress to handle crucial details, from the stim to the vague promise to “reform” medical care without stating what costs could be cut.
  • A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy. This led those who fear we are about to go over Niagara Falls to deride Obama as a paddler who’d rather redesign the canoe.
  • A treasury secretary who has been ridiculed on “Saturday Night Live” and compared to Doogie Howser, Barney Fife and Macaulay Culkin in “Home Alone”-and those are the nice ones.
  • A seeming paralysis in the face of the banking crisis: unwilling to nationalize banks, yet unable to figure out how to handle toxic assets in another way-by, say, setting up a “bad bank” catch basin.

There’s more at the link but you get the idea. We are, for all intents and purposes, adrift and at sea with the president’s answer to every problem to spend more, borrow more, and use the crisis as an opportunity to tear at the fabric of our founding. The Administration is frozen about what to do with banks that are teetering on the edge of insolvency (along with the entire banking system) and appear not to be focusing on the chaos their incomprehensible delay in proposing solutions to solve the problem is causing. Instead, we get nonsense about comparing the stock market to tracking polls rather than a vote of “no confidence” in Obama’s plans - or lack thereof.

Are these just the growing pains that all presidents go through when they first take office? I’m sure some of this can be ascribed to that notion. It is, after all, still very early in Obama’s term. And I would hardly write off one so gifted so easily.

But Jimmy Carter was also seen as brilliant, a super technocrat who could answer the question of the day, “Is the presidency too big for one man?” It took Reagan - chuckling and snoozing his way through history - to definitively answer that question; it depends on the man.

To those who read the signs of this administration, the question is not if the presidency is too big for one man but whether the man currently occupying the office is up to the challenges that face us.

The jury is still out on whether or not he is.



Filed under: Bailout, Financial Crisis, Government, Politics — Rick Moran @ 12:35 pm

Mark Tapscott thinks so:

Did you feel it? The political ground shifting beneath President Barack Obama since his speech last week to Congress? It’s been downhill since and I’m not referring mainly to the Dow Jones record-setting dive. The pivot point of the shift was the speech, or rather what the speech did to the evolving public narrative of Obama.

The case Mr. Tapscott tries to make seems a little forced to me - at this point. Here are a few of his bullets:

1. Increased audiences for Rush Limbaugh and Glenn Beck.

2. Some Democrats in Congress bailing on the omnibus spending package and the tax increases in Obama’s budget.

3. A coherent conservative critique appears to be emerging. As evidence, Tapscott points to two excellent articles this week that provide plenty of logical conservative ammunition to critics.

Paralleling these developments, a potentially devastatng conservative case against Obama is coming together rapidly. Two influential columns this week tell the tale: On Thursday, Daniel Henninger offers this crucial observation in a WSJ piece otherwise devoted to asking why Republicans aren’t more eagerly and quickly taking advantage of the fact the Obama Democrats have all but declared war on the 75 percent of the U.S. economy that is private and therefore productive of the nation’s wealth:

“Beyond the stock market, there is a reason why, despite much goodwill toward his presidency, the Obama response to the faltering economy has left many feeling undone. There isn’t much in his plan to stir the national soul. It’s about ’sacrifice’ now so that we can live for a future of small electric cars and windmills. This may move the Democratic Party’s faith communities, but it cannot revive a great nation. If the Democrats want to embrace market failure as a basis for their ideology, let them have it. As politics, it’s a downer.”

The second column appeared today in The Washington Post and was written by Charles Krauthammer. Obama’s mastery of public speaking has heretofore served to deflect attention away from the details of what he is actually proposing. And there is in those details, according to Krauthammer, a fundamental deception: Obama summons visions of catastrophe that are the result of too little government regulation of the financial markets and he offers as a solution vastly more government regulation of …. health care, energy and education.

“The ‘day of reckoning’ has now arrived. And because ‘it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,’ Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

“Amazing. 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,” Krauthammer said.

I think Mark is getting a little ahead of himself - as are many conservatives - who see the entire narrative, so carefully constructed over these many months by the media about Obama, suddenly shifting to reflect the realities of what the president is proposing as well as the myths surrounding his brilliance, his competence, and even his work ethic.

Wall Street is making its judgement as we speak. They cannot afford to listen to spin or engage in the kind of pretense about the Obama administration many Democrats are currently trying to foist upon us. They, like us, realize that the president’s personnel shop is in shambles, that his Treasury Secretary is the most spectacularly underperforming cabinet member in American history (given the fact that we were told the economic recovery depended on us ignoring the fact that he is a tax criminal and confirming him anyway), that there is no plan at all to deal with the banking crisis that worsens as you read this, that his foreign policy gaffes continue to make the United States look weak, indecisive, and ridiculous, and that in the midst of the worse economic crisis in a generation, the White House has chosen to waste time and effort to demonize a talk show host and try to paint his face on the Republican party.

We know all this. But the idea that these facts have altered or are even in the process of altering the fundamental narrative about Obama and his Administration is premature and borders on wishful thinking. As long as the Democrats can keep this a Republican economy, Obama will remain relatively unscathed. Defections from Democratic ranks on his budget will be few and given their huge majority in the House, insignificant. Even the declining stock market will be spun as sour grapes by the rich who don’t want to see their taxes raised.

Expectations on recovery are so low at this point that they will be able to spin any rise in job creation as occurring as a result of their porkulus package - even if, as most economists predict, the overall jobless rate will continue to climb. And as long as Republicans fail to offer anything remotely resembling an alternative to Obama’s ruinously transformative spending plans, the Democrats can paint the opposition to Obama as being obstructionist. (Adopting some of Newt Gingirich’s 12 points to recovery would be a nice start).

I think Tapscott is right about a consensus forming among the right regarding how to go about criticizing the president. Lord knows there’s enough ammo. The problem is getting by the major gatekeepers in the media who are still in a full blown Obama swoon. Some of the puff pieces on this guy and his family have been incredible. He buys his kids a new swingset and that rates cutsie article in AP. Some sex therapist writes on NBC’s website about the “5 Love Lessons” we can get from watching the Obama’s. No thanks, they appear much too demure for my tastes. As I have written previously, “I like my sports violent and my sex hot, sweaty, and loud.” The Obama’s strike me as a couple that would enjoy reading “The Kama Sutra” in the original Sanskrit or whatever while I prefer classic porn of the Debbie Does Dallas era.

Sorry, but in order to get beyond a narrative that holds up the first couple as idealized, perfect sex partners worthy of being imitated, we have some work to do. And I don’t think altering the narrative will happen in one “Eureka!” moment but rather a gradual chipping away at the myths, the lies, the spin, and the sleight of hand Democrats will use to distract people from the truly awful results that will occur when Obama’s policies come a cropper.

Unless I miss my guess, that day is coming sooner than the Democrats or Obama could possibly dream.



Filed under: Bailout, Financial Crisis, GOP Reform, General, Politics, conservative reform — Rick Moran @ 9:30 am

I have read some speculation in the last few days that it may be possible for the GOP to make big gains in the House and Senate in 2010 if they “tap in” to the rage being felt by ordinary taxpayers against the savior based economy being created by Obama and the Democrats.

As a tactic, it would probably be a winner. But is there another way to achieve the same result without exacerbating the already deep divisions in American society? We may be in a period of low employment, sluggish growth, and high inflation for a while if the Japan model is any indication with their “lost decade.” This is especially true since the Obama administration shows no signs of lessening the flow of cash from the federal spigot. Taxpayers have seen where most of this money is going already and feel betrayed by a government that is seeking to reward failure and bad decisions. The chances are pretty good at this point that all the “stimulus” in the world is not going to head off a deep recession and the federal government is apparently setting itself up to decide who wins and who loses in this shakeup.

The inevitable populist backlash is predictable. The problem is that mass movements based on populist rage have generally led to untoward and unanticipated consequences. History is littered with these populist outbreaks - especially those that happen as a result of great cultural and economic changes being enacted by a perceived elite. The last major populist movement in America was George Wallace’s candidacy in 1968 (to a much lesser extent in 1964 and 72) that saw the Alabama governor get an astonishing 13.5% of the vote and carry 5 states in the general election. Wallace tapped into the rage and fear being felt by white, working class men who felt threatened (thanks to Wallace’s sneering, bigoted rhetoric) by African American agitation for equality. Nixon and the GOP then mainstreamed the tactic albeit using much more subtle language and even Clinton got into the act with his famous “Sister Souljah Moment,” assuring whites he wouldn’t pander to black racists like Jesse Jackson (Clinton is the only Democrat since JFK to carry any states of the traditional “Deep South.).

Tapping in to the rage of taxpayers by exploiting their fears then, would almost certainly result in unanticipated problems for the GOP. But beyond that, is this the way the Republicans wish to return to power? The Rovian strategy of using wedge issues to cleave the electorate over gay marriage, abortion, and other social issues got Republicans elected but also sowed the seeds of their own destruction. By the time 2008 rolled around, those wedge issues had lost their potency and there was ample evidence of a backlash by center-right and center-left moderates against the GOP and their perceived intolerance. It was Obama who exploited this backlash by promising to govern based on not what divides us but by what unites us. His “post partisan” message - a campaign gimmick we know now - resonated powerfully with the center who had tired of the back biting and poisonous partisan atmosphere in Washington and longed for “change.”

There is only one campaign theme more powerful in American politics than fear; optimism. This is especially true in dire economic times or when America is threatened from abroad. Not only would running a campaign based on tapping into the native optimism of the people score political points with the electorate, it would give the GOP if not a mandate, then certainly the political clout to slow down the Obama Dependency Express and restore some sanity to our fiscal situation. It would also give the Republicans some leverage to moderate the Democrat’s bail out policies and give the party more input into legislation

What a marvelous opportunity for the GOP to show that they have indeed changed their tune if the party were to adopt an enthusiastically optimistic message while presenting viable solutions to our economic problems. With President Obama criss crossing the country trying to scare people into supporting him, the contrast between the GOP’s confident, optimistic agenda and the Democrats “America Held Hostage” policies would be pronounced. And, they would result in the kind of gains we can only dream of at this point.

But if the GOP were to descend to the Democrat’s level - scaring people by screaming about “socialism” and the attendant imagery of economic doom and gloom, the party may indeed make some gains but with what kind of mandate? And would it be as effective as preparing the people for tough choices by playing to their native optimism and saying that as Americans, we are capable of anything if we pull together? Coupled with some new ideas about targeted tax cuts and real “stimulus” spending instead of the porked up monstrosity offered by the Democrats, that rage could turn to optimism and hope which would attract a helluva lot more people than scare tactics.

Obama has ceded this territory to the Republicans. He has embarked on a course where in order to get his agenda passed, he will be forced to appeal to the basest instincts of the people. We are already seeing the result as it has pitted ordinary Americans who are resentful of where the bail out money has been going against other Americans who will be the beneficiaries of government largess. He may have underestimated the extent of this backlash although it remains to be seen if this rage can be channeled by Republicans into doing something constructive. For that, they simply cannot exploit the emotions of the day but must help make people feel good about themselves. Already, the feel-good aspect of the Obama candidacy - electing the first African American president - is fading. And as Obama’s policies to fundamentally alter the country become obvious, I suspect that feeling will disappear for all but the most committed Obamabots. The Republicans can reclaim the “feel-good” mantle by appealing to one of America’s greatest strengths; the ability of our citizens to look to the future with hope. Obama played to that strength during the campaign and is now abandoning it in favor of fear mongering. It’s s delicious political opening that the GOP ignores to its detriment.

Newly minted GOP chairman Steele is just the sort of person to lead a newly energized GOP into this fight. His ideas on reforming the party at the top to bring transparency and ethics to the fore as evidence that the Republicans have learned their lessons is a gigantic first step toward reviving the party’s fortunes. But if the GOP were to then simply fall back on failed strategies involving dividing the electorate, any good work accomplished by the chairman will probably go for naught. The party needs new ideas, new solutions that can be presented to the people as evidence that they have gotten beyond the past and are ready to lead the country to a bright future.

I must say that I am not optimistic that the GOP has learned such lessons. The temptation to exploit fear and anger is almost irresistable since it is the easy way back, a shortcut to where the party wants to be. The hard thing to do would be to eschew such tactics and be positive, optimistic, and forward looking while offering solutions that recognize how serious the trouble we are in but remaining true to our first principles and beliefs.

Then again, I may be pleasantly surprised…



Filed under: Bailout, Blogging, Financial Crisis, Media, Politics — Tags: — Rick Moran @ 8:38 am

CNBC’s Rick Santelli hit a raw nerve with his rant against President Obama’s mortgage bailout plan on the floor of the Chicago Board of Trade - a 10,000 volt charge of energy and anger that hit the internet with a force that transcended politics and spilled over into popular culture.

His words fell like a jackhammer on the hearts and souls of conservatives who had been struggling in recent weeks to define what was making them so uneasy about President Obama’s “savior based economy.” At stake; the soul of America - the very essence of what makes us different from other countries. Self reliance, personal responsibility, a belief that individuals count for more than the group, and a well developed sense of justice and fair play are being thrown under the bus. They are being tossed in favor of a bail out culture that spits on self reliance, sneers at personal responsibility, lumps Americans into manageable (and malleable) groups of victims, and penalizes those who play by the rules.

These are not the attributes that have animated the American heart since our founding. Rather, it is those cornerstone ideals mentioned above that make up the crux of what it means to be an American. And these values are under attack by a president who is using the economic crisis as an excuse to fundamentally alter the relationship between the governed and the governors - a change that the president never mentioned during his run for the presidency and is accomplishing by means of executive diktat and legislative fiat.

By destroying “American exceptionalism” - a concept that has come under increasing attack by the left over the years - the president, vigorously backed by his base of democratic socialists, is seeking to elevate the importance of government over the primacy of the individual - as clear a violation of the intent of the Constitution as anything President Bush ever did in the name of protecting us. The President may not be shredding the Constitution but he his tearing asunder the spirit of our founding document. What will be left after he is done will be a lifeless husk, a shadow of the way the Founders saw themselves and how we, the inheritors of their dreams, have betrayed their fundamental beliefs about man’s relationship to government.

President Obama apparently believes it is necessary to destroy who we are to save us. Most conservatives disagree. I don’t doubt the president has the best of intentions. Perhaps he even thinks that what he is proposing is not that radical, not so fundamentally abhorrent to I believe a majority of Americans. It is certain he thinks he is doing it for our own good.

But in his determination to solve our severe economic problems, he appears willing to seek solutions that undermine the fabric that sustained our ancestors through even tougher times than these. He is using a nuclear bomb where a scalpel is called for. And the question of whether there will be much of a patient left after he is done goes unanswered.

Mr. Santelli’s rant - a bracing, emotional explosion that elevated flagging spirits and galvanized the hearts of netwise conservatives - is a fine catalyst but to what end? A “tea party” is being planned for several cities on July 4 but realistically, can you say that this is the beginning of a mass movement to oppose the Obama Dependency? Frankly, I see no evidence that millions of people are moving in that direction. And by the time the 4th rolls around, how many who are so excited today will show up?

I don’t doubt the passion Mr. Santelli has generated among conservatives. I just doubt its staying power. To have any effect at all, millions must stand up and make their voices heard. So far, I don’t hear them. In fact, by large majorities, the American people are extremely uneasy about what Mr. Obama is doing but are either so in thrall to his personae or so frightened of losing their jobs that they are willing to give him the benefit of the doubt. Of course, the president stokes this fear at every opportunity - something about which even Bill Clinton is becoming concerned.

But we are seeing only the beginning of massive government intervention and takeover of the economy. What will the majority of people say when Treasury Secretary Geithner finally comes up with details of his plan for TARP II that may cost taxpayers more than a trillion dollars? or Stimulus, The Sequel? Or this mortgage bail out plan that currently stands at $75 billion but that some administration-friendly economists say could run closer to $200 billion? And don’t forget the health insurance plan that will almost certainly have a price tag in the hundreds of billions.

For each, there will be Obama out front, telling us we must have this spending plan or that bail out measure or all is lost. He will slam these bills through Congress in the first 6 months of his presidency because after that, even his own party will balk. By then, it will be way too late - the transformation of America will be complete and it will just be a matter of administering what America will have become; a series of dependent duchies with the federal government dictating the winners and losers in our economy while overseeing a massive transfer of wealth.

It can’t be stopped. Conservatives don’t have the votes. All we can do is rant like Mr. Santelli. But after the feel good rhetoric and the shot in the arm, we are left with a Red Bull rush - a splash of energy and excitement that will eventually fade and leave us feeling groggy and sluggish. Not for all of us, of course. But if conservatives are expecting to build mass opposition to the president using Mr. Santelli’s outburst, that would be wishful thinking indeed. Such a cause needs organization, volunteers, and most of all, money.

Michelle Malkin is trying and if anyone can keep the right at an emotional high, it’s her. But so much more is needed to make an impact that I fear even such noble efforts are a lot of sound and fury signifying nothing.

When ordinary Americans in their millions become involved, I will be glad to hop aboard the bandwagon and wave the bloody shirt from the battlements. Until then, I think I’m already crashing from my Santelli Energy Drink and feel like taking a nap.


Eeeesh - re-reading this piece, I see that it came out much more negatively than I was actually thinking. Sorry - don’t feel like a massive rewrite but allow me a few points that I should have made above.

1. It is early yet. Much of my negativity is based on the idea that I don’t see the kind of mass groundswell of support beyond the environs of the conservative internet (including social networking sites). I may yet be proved wrong if this is actually the beginnings of a mass movement against dependency.

2. One side benefit is that this will probably serve as a catalyst to organize the right side of the internet in ways that we can only guess at now. I would watch a couple of websites like The Next Right and Rebuild the Party to see how those very smart folks latch on and try and lead this movement.

3. It was not my intent to dampen spirits just as it was not my intent during the campaign when I wrote gloomy analyses of McCain’s chances to discourage anyone from voting. Those who will make the argument that I am trying to spoil the party should really grow up a little. I am a rationalist and am offering my opinion, seeing the situation with gimlet eyed reason and skepticism. I will be overjoyed if I am wrong. But dreaming of a mass movement and creating one out of nothing are two different propositions. We want our dreams to come true but there is a gargantuan amount of work to be done in order to realize that dream. It can’t be done in months. But it very well may bear fruit in 2010.



Filed under: Bailout, Blogging, Financial Crisis, Government, Politics — Rick Moran @ 11:13 am

Read this piece from Veronique de Rugy at Reason Magazine about what exactly our legislators voted on yesterday.

It will turn your stomach, at the very least. With the economy falling down around our ears, these pork-loving, cynical, selfish bastards larded up a spending bill with some provisions that will easily make the Hall of Fame of Wasteful Spending.

A partial list:

  • $24 million for United States Department of Agriculture buildings and rent
  • $176 million for renovating Agricultural Research Service buildings
  • $290 million for flood prevention
  • $50 million for watershed rehabilitation
  • $1.4 billion for wastewater disposal programs
  • $295 million for administrative expenses associated with food stamp programs
  • $1 billion for the 2010 Census
  • $200 million for public computer centers at community colleges and libraries
  • $650 million for the digital TV converter box coupon program
  • $2 billion for Byrne Justice Assistance Grant program
  • $10 million to combat Mexican gunrunners
  • $125 million for rural communities to combat drug crimes
  • $1 billion for the Community Oriented Policing Services program
  • $1 billion for NASA
  • $300 million to purchase scientific instruments for colleges and museums
  • $400 million for equipment and facilities at the National Science Foundation
  • $3.7 billion to conduct “green” renovations on military bases

Again, for dimwitted lefties who may be lurking out there, some of this spending is no doubt needed - but has absolutely no business being attached to this bill. Why can’t some of these programs be funded through normal legislative channels? Because the whole Congress knows they would never be able to spend the amounts earmarked in this stimulus package or even pass some of these spending provisions at all unless we had a president out there deliberately and cynically ginning up fear in order to scare people and thus justifying its passage as a result of a national emergency.

And that’s not all:

The conference report dedicates 30 percent of all discretionary spending to 33 new programs totaling $95 billion and expands 73 programs which are normally part of the regular appropriations process by $92 billion.

That’s 33 new government programs brought into existence that, like almost all government programs, will take on a life of its own and we will be funding them long after you and I have let this planet for more hospitable climes.

Also, that’s another 73 programs getting money in this stimulus that should have gone through the regular appropriations process but didn’t because Democrats wanted to spend more money on them than they could possibly get going through channels.

That kind of thing happens occasionally. Bills will have riders attached that have little to do with the nature of the spending but is stuck in there by some member as the result of a favor. But it has never been done to this gargantuan extent nor with such blatant disregard for rules and procedures.

Finally, de Rugy shows us some things that were put back in conference that the senate had taken out:

So now funds can go to museums, stadiums, arts centers, theaters, parks, or highway beautification projects. Most significantly, this reopens the door for many of the projects on the U.S. Conference of Mayors’ wish list of “shovel ready” projects that includes many items that are nothing but waste and pork, such as doorbells, construction of dog parks, replacement of street lights, and money for a “mob museum.”

“No earmarks” doesn’t mean that Democratic mayors aren’t salivating over the prospect of getting their hands on this cash for their little pet projects. The only people who will benefit by that kind of spending are the political supporters and cronies of the big city mayors.

I am suffering from “outrage fatigue” this morning. And after reading de Rugy’s piece, I feel like getting sick to my stomach. The rank cynicism it took to write this bill and then sell it as a panacea for what ails us is perhaps the greatest betrayal of the public trust in my lifetime.

I only hope there are American historians a hundred years from now to write about it.

This blog post originally appeared in The American Thinker



Filed under: Bailout, Financial Crisis, Government, OBAMANIA!, Politics — Rick Moran @ 9:21 am

One after another, Obamagaffes just keep coming. Two, sometimes three times a day, we are witness to the fruits of electing someone president who quite simply, had no business running for the office in the first place.

I’m tired of writing about it except that it sets up my prescient and trenchant analysis directed at our good friends on the left:

I told ya so.

I hate to say it but we have got to find a way to right the ship at the White House. History has reached out and tapped this novice on the shoulder at a time when there is real danger his bungling will result in a catastrophic economic collapse as bad as the worst in our history.

Many historians believe that the Panic of 1837 (a speculative boom to bust combined with an inflationary crisis) was even worse than the Depresssion in the 1930’s. One third of all banks in the US failed. For different reasons, we are looking at a similar crisis today in the financial markets. It is not likely that we will see 1/3 of all banks in the country go under. But unless our unsteady and clueless Treasury Secretary can get his act together - and quickly - the dominoes will begin to topple, starting with giants like Citibank, working its way down to powerful regional banks like Fifth Third.

The idea of building up anticipation for the announcement of a plan to deal with this crisis as the White House did all last weekend and then first, delaying the announcment a day and then sending out Geithner with not much of a plan at all is shocking. Didn’t the bozos at the White House have any clue that the markets were on tenterhooks waiting for this plan? When nothing much materialized, many concluded that the White House and their financial wunderkind Geithner were stymied. They didn’t know how to solve the crisis and were fumbling around in the dark, trying to figure out what to do. The markets reacted accordingly and here we are, three days out from Geithner’s “deer in headlights” appearance before Congress where he was actually laughed at by members and Congressional staffs, and we still haven’t fleshed out many details of how this “plan” is going to work , how much it will cost the taxpayer, which banks will get more cash, which will be lucky enough to have toxic assets removed from their balance sheets, and on and on into the darkness.

We know that bank executives will have their salaries set by the Treasury Department, though so that’s something. Congratulations to Geithner and his boss for concentrating on the real important stuff like playing the class warfare game by sticking it to the rich bankers.

They’ve screwed up monumentally on the big stuff like the “Financial Stability Act” that no one knows how it will work as well as the stimulus bill that even if you believe we need to spend every dime of it, one must be concerned that this 1500 page monster of a bill will never be read in its entirety because the Democrats and the White House refuse to publish it and there isn’t enough time to read it and study it anyway.

The frightening fact that this reveals is that these guys aren’t really that smart after all. For all the talk of a “team of rivals” and the brilliance of our president and his people, the truth is a lot more prosaic; they have proven themselves to be as incompetent and thick headed as Bush ever was. Personnel problems the likes we have never seen with Judd Gregg the latest colossal blunder. Obama’s promise that if the stim bill passes, the head of Caterpillar will rehire some people has been revealed to be a lie or wishful thinking on the part of the president when the CEO - a supporter of the president - contradicted his optimistic rhetoric.

Then there’s the aggrandizing of power within the White House, marginalizing the Secretary of State and the bureaucracy. The last president that tried this? Nixon. And he was roundly criticized when it turned out the State Department never knew what the White House was doing behind its back. This led to some comical foreign policy blunders including the temporary derailment of our rapproachment with China. One could add the politicizing of the census, a tiff with the military over Iraq that had the president retreating from his campaign rhetoric about withdrawal, a rambling, disjointed press conference that resembled a question and answer session between 3rd graders and their teacher, and the general feeling emenating from the administration that no one is in charge.

All of this would be enough Obamagaffes for one term and yet we are barely 3 weeks into his presidency.

It’s time to call in some wiser heads. Obama would hate it but utilizing Bill Clinton’s knowledge and experience would probably help a great deal. Clinton, was if nothing else, a competent manager of the executive branch. One of the problems right now is that the Obama people still think they’re in Chicago. They were absolutely tone deaf to the tax problems of Geithner and Daschle as well as being blissfully ignorant of the impact that Bill Richardson’s real troubles with the law might have. Clinton might be of great help in fixing their broken personnel operation; no more lobbyists and find honest people who know what they’re doing.

Obama has done well in calling in some of the other Democratic graybeards like George Mitchell and Ambassador Holbrooke. Perhaps he can expand that list to include some other old Clinton hands. Not permanent hires but people he can call on to guide him through the maze that is Washington. God knows, we need this White House to get its act together and fast. Otherwise, Obama is going to have the shortest honeymoon in history. And there are so many challenges ahead that getting things right now is vital to his - and our - future success.

Right now, his party is still united behind him and the American people seem willing to give him the benefit of the doubt. But continuing to stumble and stagger around will cause people to lose confidence in him in a hurry. Democrats, a notoriously fractious and disunited bunch ordinarily, might return to their old ways if Obama proves not up to the job.

And if, despite all his rhetoric about his stimulus bill saving the day, the economy really begins to tank, the American people will desert him faster than you can say “Hope and Change.”

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