Obama's Push of Geithner
The Senate confirmed Tim Geithner as Treasury Secretary 60-34. I have discussed Geithner in prior posts; I believe that he is qualified, but there is a basic issue of integrity. For 4 years he went without paying self-employment taxes (social security/Medicare) on his earnings at the IMF. The IMF made him sign a statement on his employment that it was his responsibility to pay for self-employment taxes and partially reimbursed him for the amount (money Geithner kept for himself). Geithner claims that he basically didn't read what he signed, he had used a popular PC tax preparation product (Intuit's TurboTax) which failed to alert him of the fact he hadn't paid self-employment tax, an accountant he hired during 2003 and 2004 also failed to catch it, and he's not the only one to forget to pay self-employment taxes under similar circumstances. OH, PLEASE! I taught classes at the university level for 8 years, and I've heard all sorts of student excuses. But saying on one hand he accepts responsibility for his error (personally, I think what he's mostly sorry about is the fact that the IRS caught up with him), and then coming out with a list of pathetic excuses is disingenuous.
What bothers me about President Obama's involvement in the process is his failure to ensure proper vetting of his own cabinet, a point all the more glaring the way the Democrats went after John McCain for an alleged failure to properly vet Sarah Palin last summer. What part of knowing that Geithner's responsibilities includes oversight over the IRS and the fact that the IRS dinged Geithner on his 2003-2004 taxes failed to register with the transition team?
In addition, there were these dubious arguments by the White House, saying any delay in Geithner's confirmation would put the nation's economy that much more at risk and Geithner was uniquely qualified and impossible to replace. There are other people with Federal Reserve or IMF experience, not to mention state treasurers, corporate turnaround specialists, investment banking executives, federal budget directors, etc. The White House is saying that Geithner is more equal than others and not subject to the same scrutiny as other cabinet nominees as per our Constitution? Given the sheer policy chaos and swerves in the post managing the TARP funds by Paulson, perhaps a rush to judgment is precisely the kind of thing we want to avoid. Isn't it more important that we get the right person in than have to replace an unsuitable candidate down the line?
Obama on Letting States Deploy Tougher Emissions Standards
Isn't it ironic that weeks after pushing for the American automakers from filing for bankruptcy, Obama is going to let states (i.e., California) deploy tougher emissions standards, unfavorable to current domestic automaker product mixes. (Hmmm. Let's see if Obama is more philosophically consistent with his newfound appreciation for states' rights and will let states deploy weaker standards as well.) This is not to say I'm not sympathetic to the fact that the percentage of gas-thirsty trucks being sold rising during a recession-based dip in gasoline prices rising to an almost 50% mix is indicative of short-sighted consumers.
This is just part of Barack Obama's environmental initiative, which is counterproductive in so many ways, in particular the economy. Let me be specific; Obama is pursuing an energy policy openly dismissive of our most cost-effective energy sources (carbon-based), PRECISELY AT THE TIME THAT THE GLOBAL RECESSION HAS CUT ENERGY DEMAND (including fossil fuels). Who do you think does better in the current environment--the Middle East oil producers, whose marginal cost of producing a barrel of oil is probably under $1, or those sources requiring significant technological processes, such as oil sands? This is precisely the time to push for our domestic producion, not when oil returns, as it almost certainly will, in the years ahead back over $100/barrel.
The Wall Street Journal on January 24 wrote an interesting editorial called "Blowhards", which takes an amused look at the fight between environmentalists and green power proponents on the Cape Wind project, where Massachusetts liberals oppose wind turbines in federal waters spoiling their scenic view off Nantucket and Martha's Vineyard. The amusement comes from the liberals suddenly discovering that boutique energy solutions are very expensive. One economic estimate is that the federal government spents over $23 a megawatt hour in benefits for wind power versus less than 50 cents for coal; nearly two-thirds of what wind power producers spend comes from the government. Why, in an environment where we have bloated deficits that our descendants one day must pay off, is Barack Obama throwing money at environmental issues which have been mitigated by the recession? He can speak of growing green jobs, but the federal government should not be taking on green business risk, particularly during a recession.
There is a lot to be said about doing something on environmental problems before we have even worse ones, and certain projects, e.g., solar-paneling of government buildings, which have reasonable payback periods with current technology, make sense. But one must have realistic expectations; it's going to take years to convert millions of gas-powered cars that run on alternative fuel or power, and each day we don't work towards improving domestic production, our declining domestic sources must be balanced out by expensive energy imports. I know Obama desperately hopes that alternative energy sources will not only make up the difference of declining domestic energy production but grow in relative terms; he's in a state of denial, and we can't afford to put off accelerating our own domestic production. Foreign oil is still cheaper than subsidizing green energy, and Obama does not have a clue about what happens if and when foreigners stop buying American debt. HINT: Inflation and triggering or extending recessionary job losses.
Blagojevich's Bizarre Tour
It is bizarre while the Illinois state senate is holding impeachment hearings to see Blago on his publicity tour, seemingly oblivious to the fact that he has almost no chance of surviving a vote, even in a Democratic-controlling senate. He is politically radioactive, and no senator wants to face reelection having to explain how he or she supported sustaining a former governor, whom by then may be in the process of being prosecuted, if not convicted. Right now the senators have to put forth an impartial face, but it's difficult to see how he gets more than at most a handful of votes. Even Blago seems to anticipate conviction, claiming it's not fair, while he goes on a public relations tour vs. being at the trial itself. His pattern of pretentious quotes and bizarre behavior and talk (e.g., that Oprah Winfrey was seriously considered as a possible replacement for Obama's former seat) seems indicative of some sort of mental illness. Even President Nixon, who was reelected by one of the largest landslides in American history, could read the writing on the wall.
