January 30-31 – Doubling Down on a Failing Agenda
Image from Michellemalkin.com
Last Wednesday evening, President Obama delivered what I thought was a poor State of the Union address. The speech was combative – Obama attacked banks, CEOs, President Bush, and “Washington” – although he is the leader of the party and government that control “Washington.” Obama stated numerous times that he will continue to “fight” for his agenda. The speech was self centered – Obama referred to himself more than 100 times. And it lacked practical leadership – Obama failed to offer details or specific guidance on how he expected Congress to move his agenda forward. However, in spite of its somewhat haphazard organization, President Obama was clear on at least one message. He will not move to the political center. Instead, he is doubling down on his “progressive” agenda, regardless of its unpopularity with the American people.
On The Economy
President Obama called on Congress to pass ANOTHER Keynesian stimulus package, which he called a “jobs bill.” 20th century history shows over and over (in the U.S., Japan, Britain, etc. etc.) that this type of government spending does not stimulate economic growth and does not lead to lower unemployment. Liberal politicians love Keynes because he offers them justification to tax, borrow and spend more. The problem is that this just does not work. Remember the swimming pool analogy. You cannot raise the water level of a pool by taking a bucket of water from one end of the pool (in the form of increased borrowing or taxation) and then dumping the same or less water back into the other end of the pool (in the form of inefficient new government spending on public works projects – i.e. absurd tunnels to casinos in Pittsburgh and unneeded rural bridge overpasses in Nebraska — and social spending – i.e. free cell phone service for welfare recipients). Government must perform core functions like external defense, internal policing, necessary public infrastructure, and yes even a limited social safety net; however, government – with all of its political decision making and inefficiency — cannot create more wealth and economic activity by taking money away from people who have earned it and giving it away to people who have not. Let’s get real. If taxing and spending worked to grow an economy and create wealth for everyone, then everyone would have achieved wealth in America a long time ago.
In his speech, President Obama claimed that his $787 billion stimulus “saved or created” 2 million jobs. But the same Congressional Budget Office that Obama characterized as a neutral arbiter stated that “it is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus bill.” Just three days before Obama’s State of the Union address, Valeri Jarrett (an Obama advisor) claimed that “thousands and thousands” of jobs were created or saved, Robert Gibbs (Obama’s Press Secretary) claimed that 1.5 million jobs were created or saved, and David Axelrod (another key Obama advisor) claimed that 2 million jobs were created or saved. In December, President Obama himself claimed that only 600,000 jobs were created or saved. No matter what President Obama and members of his Administration say, the reality is that all of these figures are fictitious guesses and a leader owes us truthful information, not made up numbers! The U.S. economy has LOST 3.4 million jobs since President Obama took office, and the unemployment rate increased from 7% in December 2008 to 10% in January 2010. In February 2009, President Obama promised America that if his $787 billion dollar stimulus package was passed into law, the unemployment rate would not go above 8%. Well, it has gone above 10%. Either President Obama did not understand the depth of the crisis or his stimulus plan did not work. Either way, why should we trust him and the Democratic Party with our economy?
Amity Shlaes, senior fellow at the Council on Foreign Relations and author of the book, The Forgotten Man: A New History of the Great Depression, joined me on the program and also offered her commentary on President Obama’s State of the Union speech. Amity fears that our current administration is repeating many of the same political mistakes that made the Great Depression larger, longer, and more devastating than it needed to be. Some of these parallels include massive new government spending and debt, increasing taxes, political hostility towards business, arrogant politicians who thought they had all the answers, unpredictable government economic policy, and animosity towards the Supreme Court. Echoing the famous economist Milton Friedman, Amity reminds us that it is dangerous to think that business people are somehow more corrupt or greedier than politicians. The opposite is probably true. Who are these angels in government who are going to solve all of our social and economic problems?
If, in the words of Barack Obama, “Washington” is so “dysfunctional,” then how is “Washington” going to solve all of our problems? Give me a break!
On Health Care
Amazingly, even after Republican Scott Brown won the special election for Senator in Massachusetts, and even after the American people articulated their opposition to nationalized health care (at tea party & town hall events, and in public policy & job approval polls), in his State of the Union address, President Obama reiterated his commitment to passing ObamaCare. And he did so by repeating the exact same myths that he has presented so many times this past year. No Mr. President, ObamaCare will not allow everyone to keep their current healthcare plan and Doctor. Independent analyses show that ObamaCare would force as many as 100 million Americans onto government plans. No Mr. President, ObamaCare will not reduce costs. Independent analyses forecast that if enacted into law, ObamaCare would increase healthcare premiums by at least $1,500 per year per family of four over the status quo. And ObamaCare will not create competition in the healthcare market. One thousand three hundred (that’s right one thousand three hundred) different health insurance providers already exist in the United States, and these providers are currently restrained by 50 different sets of state government regulations. Mr. President, if you want more competition, do not increase government control over the market, decrease government control by enabling one national market. And of course, the President and the Democrat Party absolutely refuse to even consider the first tenet of any real reform which is the elimination of medical malpractice lawsuit abuse. They cannot even consider this real reform because trial lawyers are one of the largest contributors to Democrat Party candidates and left-wing political groups. And the President complains about the power of special interest groups in Washington? Has he heard the word hypocrisy?
Who are these angels in the government who are going to take care of us and make medical care just great? Give me another break!
Then after repeating the same year old case for ObamaCare, the President had the audacity to challenge Republicans to bring alternative approaches to the table, saying that if anyone had any better ideas, he certainly would listen. The problem is that President Obama has already refused to listen. Republicans offered more than 40 different health care plans in 2009 alone, and none of them were even considered by the President and his Democrat Party super majorities. Republicans were literally locked out of the negotiations that took place in the middle of the night and behind closed doors in the Capital building and in the White House. And this “lock out,” was in spite of the President’s repeated promises to have all negotiations on health care televised live on C-SPAN.
When President Obama speaks does he mean for us to believe anything he says?
On Education and Cap and Trade
Although the American people support constructive changes to the public education system in the United States, they do not share President Obama’s support for legislation that further empowers teachers’ unions and limits choice and competition. Remember, President Obama and the Democrats in Congress killed the popular and successful Washington D.C. School Voucher program that allowed 1,700 minority students to attend the private school of their choice. How can you say you care about poor people when you destroyed this one ray of hope for people living in inner city Washington, D.C? Whoops, I forgot, teacher’s unions are the largest contributors to the Democrat Party and Democrat candidates. Did President Obama say something about the influence of special interests in Washington?
Similar to President Obama’s proposed Nationalization of Healthcare, the American people have clearly articulated their opposition to Cap and Trade legislation. Despite this, President Obama used his State of the Union speech to affirm that he will forge ahead on this issue. And although the American people support a clean environment (who doesn’t?), they do not support “Cap and Trade” legislation that kills jobs and raises energy costs. The National Association of Manufacturers forecasts that the Cap and Trade legislation passed by the House of Representatives last summer will destroy 3 to 4 MILLION more American jobs, while an MIT study forecasted that the legislation would cause energy costs for the average American family to rise by $2-3 thousand per year. Yes, liberals can dismiss these studies, but all you have to do is look at the real experience of Spain over the past decade to be concerned. Spain passed Cap and Trade legislation early last decade. Spain’s unemployment rate has now reached 18.8% and climbing — and according to a study performed at King Juan Carlos University in Madrid, for every one new “green” job created (building wind powered electric projects, etc.), 2.2 other jobs have been destroyed. Can anyone who really cares about the United States and the American people just disregard these facts? Can we just trust Barack Obama, Nancy Pelosi, Harry Reid and the other Democrat Party leaders who say they have all the answers?
Final Thoughts
President Obama has had a very rough first year in office, but everyone makes mistakes and talented leaders can learn to manage and lead better if they listen to feedback and look at real facts. However, what is disturbing about this President (and very different from Bill Clinton) is that instead of learning from his mistakes and moving towards the political center, President Obama has chosen to ignore constructive criticism and reaffirm his commitment to his destructive, non-fact-based, liberal agenda. On their current course, President Obama and his Democrat Party are failing miserably for America and they will pay the price for their arrogance in Congressional elections this November.
As conservatives, we must reaffirm our commitment to defend liberty, freedom, and limited government — the principles that have made our nation great. Please continue to stand strong against President Obama’s and the Democrat Party’s liberal, “progressive” policies. Together, we will continue to make a difference.
Posted: January 29th, 2010 under Economics, News, Newsworthy, Radio, Show.
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The Worrying Trend of Faking Numbers
Earlier this month Stanford University Economics Professor Michael J. Boskin wrote an article on the Wall Street Journal called “Don’t Like the Numbers? Change ‘Em.” In it he discussed how lately, politicians and scientists who don’t like what their data show have simply taken to changing the numbers. They believe that their end – socialism, global climate regulation, health-care legislation, repudiating debt commitments, la gloire française – justifies throwing out even minimum standards of accuracy. He further highlights that it appears no numbers are immune: not GDP, not inflation, not budget, not job or cost estimates, and certainly not temperature. A CEO or CFO issuing such massaged numbers would land in jail, Mr. Boskin concludes. While Boskin’s article is really well written, it highlights a worrying trend of people of influence, be it elected officials, scientists or figures of authority, fudging the numbers to show balance and order in their domain.
Boskin illustrates his point with some great examples. On GDP he highlights how politicians from Europe to South America are clamoring for alternative measures that make them look better (GDP is a measure of national income accounts that indicate real GDP and inflation). A commission appointed by French President Nicolas Sarkozy suggests heavily weighting “stability” indicators such as “security” and “equality” when calculating GDP. And voilà! – France outperforms the U.S., despite the fact that its per capita income is 30% lower. Nobel laureate Ed Prescott called this disparity the difference between “prosperity and depression” in a 2002 paper and attributed it entirely to France’s higher taxes.
With Venezuela in recession by conventional GDP measures, President Hugo Chávez declared the GDP to be a capitalist plot. He wants a new, socialist-friendly way to measure the economy. Maybe East Germans were better off than their cousins in the West when the Berlin Wall fell; starving North Koreans are really better off than their relatives in South Korea; the 300 million Chinese lifted out of abject poverty in the last three decades were better off under Mao; and all those Cubans risking their lives fleeing to Florida on dinky boats are just loco. Yet Chávez has devalued the currency (again), essentially moving the line on the economic situation of the average citizen.
Professor Boskin points out that there is historical precedent for a “socialist GDP.” Having served under President George H.W. Bush, Baskin spent time in the former Soviet Union to help Mikhail Gorbachev with economic reform, He found out that the Soviet statistics office kept two sets of books: those they published, and those they actually believed (plus another for Stalin when he was alive).
Sadly, America has not been immune from this dangerous numbers game. Every president is guilty of spinning unpleasant statistics. Currently, the administration is pushing counting the number of jobs “created or saved” by the stimulus bill, an attempt at transparency that has absolutely no merit. Worse than the notion of jobs “created or saved” is the statistic of “jobs saved” to take credit where none was ever taken before. This has caused confusion in the numbers whereby it misses the jobs lost or diverted by the fiscal stimulus. Throw into the picture the hyped numbers of “green jobs” congress claims are likely to be created from the vast spending, subsidies, loans and mandates, while ignoring the job losses caused by its taxes, debts, regulations and targeted penalties of the banking industry, and you have anything but transparency.
Based on flawed data like this, governments are regulating and radicals are pushing agendas impacting energy, environment, the economy, national debt, inflation and security without truly understanding their impact. Take the deeply flawed cap-and-trade bill as an example. Instead of honestly debating the trade-offs and impact of this ill-conceived piece of legislation, they confidently pronounce that it boosts the economy, when in reality it simply boosts favored sectors and firms at the expense of everyone else.
Boskin sites the example of radical environmentalists focused narrowly on their green agenda. He states “It’s gotten so bad that the head of the California Air Resources Board, Mary Nichols, announced this past fall that costly new carbon regulations would boost the economy shortly after she was told by eight of the state’s most respected economists that they were certain these new rules would damage the economy. The next day, her own economic consultant, Harvard’s Robert Stavis, denounced her statement as a blatant distortion.”
Scientists are expected to make sure their findings are replicable, to make the data available, and to encourage the search for new theories and data that may overturn the current consensus. This is what Galileo, Darwin and Einstein -among the most celebrated scientists of all time – did. But some climate researchers, most notably at the University of East Anglia, attempted to hide or delete temperature data when that data didn’t show recent rapid warming. They quietly suppressed and replaced the numbers, and then attempted to squelch publication of studies coming to different conclusions.
Fortunately, the public around the world do not believe much of this out-of-control spin, be it on the environment, health-care legislation or the state of the economy. Large majorities believe the health-care legislation in the US will raise their insurance costs and increase the budget deficit, and their views were heard around the country and the world when a young Republican no-name won the late Senator Ted Kennedy’s seat in Massachusetts, a seat the Democrats had held since 1972 in a State where Democrats outnumber Republicans by 3 to 1. This was not a vote on parties as much as it was a vote for checks and balances. Most Americans are highly skeptical of the claims of climate extremists. And they have a more realistic reaction to the extraordinary deterioration in our public finances than do the president and Congress.
As a society and as individuals, we need to make difficult, even wrenching choices, often with grave consequences. To base those decisions on highly misleading, biased, and even manufactured numbers is not just wrong, but dangerous. In times like this I like to fall back on a little saying we have in my family, something we teach our young from an early age. We call it “Discipline”. Discipline is when we do the right thing, for the right reason, at the right time, no matter how difficult. Do the right thing, at the right time, for the right reason, no matter how difficult. We need discipline more than ever today and our elected officials, authorities and people in position of influence would do well to understand this. The people are watching.
Great interview Glen. I’m a big fan of Amity. Here is her latest http://online.wsj.com/article/SB10001424052748703808904575024981110918808.html