Quote of the Day
I wept because I had no shoes, until I saw a man who had no feet.
Ancient Persian saying
Identity Politics and the President's Economic Team?
Is it just a coincidence that three prominent GOP female former CEO's are running for statewide offices this fall? (Meg Whitman (eBay) California governor, Carly Fiorina (HP) California US Senator, and Linda McMahon (WWE), Connecticut US Senator.) No doubt Obama has noticed the formidable challenges these first-time candidates are posing to highly successful veteran Democratic politicians. Politico is reporting that Obama has his eye on replacing Larry Summers with a female CEO.
We conservatives have been arguing for 20 months that the Obama Administration had an historic imbalance in terms of lack of experience in the private sector--the only experience has been meeting the payroll at the expense of taxpayers, typically at unsustainable deficits. Where did the Obama Administration help "create" jobs? Well, if you were a local or state government that hired an unsustainable number of teachers, policemen, fireman, or other politically favored workforce on an ongoing basis, did not maintain a properly funded rainy day fund and/or promised unsustainable pension benefits to government employees, the Obama Administration was willing to reward you by deferring your day of reckoning. (I call it "moral hazard" pay.) Oh, if you're a member of an auto union, the corrupt Obama Administration was willing to abuse its power by ripping off higher-standing interests (e.g., bondholders). Or Obama wants to give prospective federal government bureaucrats a taxpayer-funded break in the payback of college loans. Let's not forget companies with politically-favored industries, like green energy, which only eke out a profit with massive, inefficient taxpayer subsidies.
But it's not just that Obama finally decides, with nearly 16 million Americans unemployed, it might be helpful to have representation of job creators on his economic team, but we hear pretentious politically correct progressive gibberish from people like Amy Suskind: "[Obama] does not seem to understand the need for diversity and gender balance." [Oh, of course not, after naming women as his first two Supreme Court picks, the third female Secretary of State over the past decade, Latino picks to the Supreme Court and his Cabinet, and clearly Christina Romer, whom he initially named to head his Council of Economic Advisers and will be a member of the President's Economic Recovery Advisory Board, doesn't count...]
I am personally impatient with individuals whom seem to predict that an idyllic America if voters would just put gender above considerations of individual political and leadership skills, background, achievements and experience. After all, didn't all political problems simply melt away when naturally superior women reached the pinnacle of national democratic leadership in Britain, Israel, Germany, India, Pakistan, and other countries? How does it help to advance the feminist cause when Hillary Clinton disingenuously implied that she was Bill Clinton's co-governor and co-President and absurdly spoke of 30-35 years of government experience? The fact is that she would never have been voted senator from New York on her own merits.
Then on the GOP side, some are seriously pushing Sarah Palin, whom quit just two-thirds of the way through her only term as Alaska's governor, for President. Recall just a few weeks before Sarah's resignation her divisive nominee for attorney general was rejected 35-23, with the 'no' votes of 9 Republicans, including the Senate President and the House Speaker. With that, Sarah Palin became the first Alaskan governor to fail to have a state agency nominee confirmed. Just this past May, Rasmussen ran a poll that found 48% of Alaskans would vote AGAINST Palin for President, with another 11% undecided. Not to mention the Senate nomination of Christine O'Donnell, with no public sector experience and various financial problems, defeating a male public servant with decades of honorable statewide experience as a governor and Congressman.
I'm going to get criticized for saying this by my fellow conservatives, but I thought Romer, Summers and Orzag were as best as we could hope to expect from an economic team of a progressive administration. The problem is, there's not much an economic adviser can do when you have an anti-business President whom is clueless about how tax hikes, populist attacks on business, mandates, heavier regulation and report requirements, and historically abnormal federal spending and deficits affect business investment and consumer spending. Cherry-picking businesses and industries for federal invention of any kind is not only intrinsically corrupting but unfairly shifts the tax burden onto other parties.
Mr. Obama preposterously assumes that the American public will consider him a "reformer" for writing obscure 2000-page laws written not by politicians but by unaccountable legal staffers. How many hidden business bombs lay under the surface of incomprehensible legalese that violate the very spirit of the rule of law? He can engage in misleading rhetoric about the Republicans being "the" party of special interests while he cuts political deals with insurers, pharmaceuticals and medical device companies or unions. Tell me, Mr. Obama--what happens with you replace an arcane tax system with a simpler tax system where everybody (not just the top 2%) shares in the tax burden on a fair, predictable basis, which takes away the intrinsic incentive for lobbyists to get their fair share of the federal teat?
We conservatives aren't looking to justify compensation practices of large business executives or businesses decisions. But when Obama demagogues business investment in other countries, misleadingly characterizing it as a big business giveaway and implying a zero-sum relationship with domestic investment, he ignores the fact that businesses are sitting on a ton of cash--not investing it in America for reasons that are tied to Obama's counterproductive scattershot economic policies. Americans have greatly expanded their savings over the last 3 years; normally, that's a positive sign, but in this case, it actually negates the very intent of the tax savings portion of the stimulus package. (It's not that Obama couldn't have predicted it--the same issue was raised during the Bush 2008 stimulus package.)
What's the solution? Some conservative economists believe that Americans don't really believe Obama's rhetoric that you can maintain a no-pain solution; the top 2% don't have enough assets to cover progressive spending binges. Sooner or later, just like at the state and local government level, we are going to see a need for shared sacrifice. Obama dogmatically maintains he can give 95% of American workers tax cuts--in fact, half don't pay a penny towards government expenses; the American people just don't believe that and so the savings could be their way of establishing a rainy day fund in preparation for upcoming tax increases and other costs.
The first step to a solution is acknowledging you have a problem. Obama has to admit that the tax hikes will have an economic as well as arithmetic fact, and you cannot maintain after several years at 35%, raising the marginal tax bracket to nearly 40%, that extending the current tax rates is a tax "cut" which isn't paid for; the expiration of Bush tax cuts for job creators is a de facto tax hike and the middle class portion of the tax cuts Obama wants to extend are 3 times more unaffordable than those to the wealthy. What Obama is trying to do is knock out the political compromise underlying the Bush tax cuts.
But right now we have uncertainty--uncertainty directly caused by Obama and his fellow progressive Democrats. He talks about the GOP holding the middle class tax cuts hostage, but he's the one whom took the Bush cuts for the upper 2% off the table--despite the fact that higher-income taxpayers are also important consumers and investors. He's suddenly become a fiscal hawk, after piling up consecutive $1.4T deficits? Mr. Obama, I'm a fiscal hawk--I'm willing to cut EVERYTHING: operations, entitlements, defense spending--and everything else in the federal budget. No sacred cows, nothing off the table. You, sir, are no fiscal hawk. None of this symbolic, token crap of freezing pay for a small number of political appointees but not any of the other federal workers making over $100K.
Bottom line, Mr. President: stop trying to thread the needle to benefit only your target voting and constituent groups--the lower- and middle-income American workers, the unions, the green energy industry, etc.. You shouldn't aspire to be a corrupt upsized city party boss doling out special favors for votes. You are supposed to be a President of ALL the people, including people like me whom pay taxes and don't support you. I don't care if you name a one-eyed Eskimo lesbian quadriplegic operating an eBay store to be your next economics adviser. But whatever woman you name, let's hope that she has seen this movie clip featuring Cher and Nicholas Cage :
Warren Buffett: Get Over It?
Bloomberg released a survey earlier this month showing 77% of American investors (including me, although I have a very modest portfolio) consider Barack Obama anti-business. At least 35% of higher-income taxpayers holding larger portfolios plan to engage in some tax-saving activities (e.g., pushing taxable transactions up to this year) as a result of the automatic Obama tax hike for the upper 2% occurring at year end. Two-thirds of American investors (including me) consider Obama's tax hike for the job creator class to be damaging to the US economy. [I should note that international investors are more favorably inclined, although the overall global unfavorable rating has risen from 42 to 50% since January, with American investor ratings constant on Mr. Obama.]
Legendary investor (and Obama supporter) Warren Buffett, CEO of Berkshire Hathaway, says "I hope we get over it pretty soon, because it’s not productive...The truth is we’re running a federal deficit that’s 9 percent of gross domestic product. That’s stimulative as all get out. It’s more stimulative than any policy we’ve followed since World War II."
With all due respect, Buffett is clearly subscribing to a variant of Keynesian economics that most of us conservatives simply reject. Keep in mind that federal spending has traditionally accounted for roughly 18% of GDP. There are a variety of facts that Buffett is simply ignoring: for example, tax rebate portion of the $816-860B stimulus bill (a considerable portion of which remains unspent by the way in a nearly $15T economy) is simply being saved by most Americans, not spent. Saving is good for the economy in the long run, but it's intrinsically not stimulative. Second, a number of stimulus programs (e.g., cash for clunkers, mortgage assistance, etc.) artificially raised markets, which sharply corrected after the federal teat was withdrawn. One could argue that hyperactive progressives did little more than prolong the day of reckoning for various markets. And what Buffett also clearly doesn't acknowledge is that the 15-month-old "recovery" may very well the the shallowest one ever following a sharp correction.
We know, from economics, that permanent tax cuts are superior to temporary ones. If I see a sale on meat, I don't necessarily consume more meat daily; I may simply stock my freezer--at the expense of future meat purchases. If the supermarket simply maintains low daily pricing on meat, I am more likely to buy meat when I intend to consume it. This also makes it easier for supermarkets to make their sales more predictable and manageable versus difficult-to-analyze sales spikes.
The massive national debt is unsustainable, and the Democrats have frittered the "stimulative" money in inefficient ways that favor certain special interest groups, like green energy companies, but has no effect on the economy's "losers". Spending billions on high-speed trains which will never operate break-even? In the long run, other taxpayers are going to have to foot the bill. When is going to be a good time to institute growth-crippling higher taxes to pay these bills?
Soon, interest payments alone are going to start crowding out funds for operating the government. And massive injections of liquidity into the market may eventually unleash raging growth-crippling inflation.
Get over it, Mr. Buffett? Not a chance. What Mr. Obama and his progressive cronies have done amounts to economic malpractice, and the taxpayers bear the ultimate cost. We have to put the nation on a fiscal diet.
Political Humor
"Last night on Fox News, Sarah Palin said she would run for President, if nobody else steps up. Which explains why today, nearly every person in the country announced they were running for President." –Jimmy Fallon
[Remember how Sarah Palin considered Katie Couric's question about what newspapers and magazines she reads as a cultural insult to Alaskans? Well, she mustn't have read there are active and former Republican governors, whom didn't quit in the middle of their first term in office, interested in the job, e.g., Mitt Romney and Tim Pawlenty, not to mention former Speaker Newt Gingrich, among others.
Sarah Palin questions whether any Republican would rise up to challenge an inept, inexperienced President whom has rammed expensive, ineffectual, partisan laws down the nation's throat and has an approval rating in the 40's; why, of course, America, which gave her the lowest favorable rating of any vice-presidential candidate over the past 30 years, would think someone, whom last year quit the demanding post of governor of a state with no income tax and 600,000 residents, is just the voice they are looking for. Never mind that pesky national poll conducted over the past that showed her at a year-high 58% unfavorable impression rating...
I'm sure the Tea Party Express, fresh off the stunning disaster of the Christine O'Donnell Senate nomination in Delaware (after all, everyone knows the election of another Obama progressive in Delaware versus Mike Castle, whose lifetime American Conservative Union rating is higher than any Senate Democrat, is what the Tea Party is all about...), is eager to do to the US what they did in Delaware. I'm sure they would rather stand on principle in considering the nomination of a "RINO" is worse than reelecting the worst President in my lifetime... If the Republicans put Sarah Palin on their 2012 ticket, I predict there will be a significant third-party candidacy that will make more of an impact than the 1992 Ross Perot bid... If anyone doubts that, look at the historically low recent ratings for both parties. That's a warning shot across the bow.
And I'm not talking about the Tea Party. I myself am in philosophic agreement with almost all of their positions, but the Tea Party Express has been counterproductive in targeting more pragmatic legislators. They are putting the cart ahead of the horse: it's a lot easier to influence an existing, credible politician on issues than to take an inexperienced candidate without broad political appeal or ability to problem solve, negotiate and come to a consensus in the interest not of terms of political ideology but the national interest.
Let me give a hint: Michael Bloomberg, the Independent Mayor of New York City, would have instant credibility as a 3-term mayor of America's largest city and as a successful businessman. If I was a betting man and saw the Tea Party Express, say, force an ideologically right GOP ticket in 2012, I think Bloomberg takes a shot as a fiscal conservative, socially moderate third way.
I'm sure that in the wake of Palin's comments, Mitt Romney, Tim Pawlenty and others have tried to email Sarah Palin's Yahoo account again, to no avail. No doubt the account has been broken into again. The challenge question, "Who do you think will win the 2012 Republican Presidential nomination?", wasn't strong enough...]
"Larry Summers, President Obama's top economic adviser, is stepping down. So finally some good economic news, I'll tell ya, Summers didn't want to leave, but apparently he was out of bad ideas." –Jay Leno
[Well, after the NBER declared that the recession ended in June 2009, Larry Summers decided that his work was done...]
Musical Interlude: The American Songbook Series
Ella Fitzgerald, "Stairway to the Stars"
