They Should Be So Lucky

March 16, 2009 by Frank Gannon | Filed Under economy | Leave a Comment 

Stewart Vs Cramer: The Latest Round

March 14, 2009 by Robert Nedelkoff | Filed Under Economic issues, Media, Money, News media, TV News Personalities, economy | 3 Comments 

Earlier this week, as noted in TNN’s Featured Articles section, Jim Cramer of CNBC wrote a column for Mainstreet.com defending himself from criticisms leveled by The Daily Show’s Jon Stewart regarding the overly rosy economic forecasts he made in the year before the bankruptcy of Lehman Brothers heralded economic collapse across the board – a year which, our leading economists tell us, actually represented the opening phase in the ongoing recession.

Stewart’s response was to have Cramer on his show last Thursday. The host grilled his guest for over 20 brutal minutes, in a performance many have since compared with Mike Wallace in his heyday. Clips from the show have been flooding Youtube and other sites ever since, and Stewart’s skewering of CNBC’s hosts has been getting more media attention by the hour. Here are two representative examples from Washington Post media reporter Howard Kurtz and David Bauder of the Associated Press. The AP story includes two rather telling quotes:

[...] Don Hodges, chairman of Hodges Capital Management in Dallas, said he doesn’t fault CNBC for not seeing the bust coming.

“I’m not sure that anybody had seen it coming,” he said. “I’ve listened to all of the so-called experts, and it’s obvious that everybody is very confused.”

You don’t say. And:

“Stewart’s a comedian and Cramer is a showman,” said Robert Howell, professor at Dartmouth University’s Tuck School of Business. “If anybody takes seriously anything that (Cramer) says, they’re stupid.”

This might be a worthwhile question for opinion polls: what percentage of Americans made their investments in the last few years based on what Jim Cramer said? Or Maria Bartiromo or Carl Quintanilla, the other targets of Stewart’s wrath? Or, Heaven forfend, Suze Orman?

Lessons From Lyndon’s Successful Failure

March 6, 2009 by David R. Stokes | Filed Under American Politics, Barack Obama, Congress, Domestic issues, Featured Articles, History, Presidents, U.S. History, economy | 4 Comments 

When Lyndon Johnson was a boy growing up near the Pedernales River in the Texas hill country his parents would regularly play a record on their Victrola. But it wasn’t music. It was William Jennings Bryan, the Great Commoner, who was known for his charismatic oratory and populist ideals. This was one factor, though small and symbolic, in how the future president developed the ideas he would work feverishly to translate into reality during his frustrated presidency.

Though he was no Bryan when it came to having a way with words, he did give a famous speech articulating his views – and initiating a torrent of policy initiatives – just a few months after he came to the nation’s highest office following the tragic death of John F. Kennedy in Dallas. Johnson was riding high in the polls and en route to a landslide election that fall, when in May of 1964 he went to Ann Arbor, Michigan to deliver the commencement address before 80,000 at the football stadium on the campus of the University of Michigan.

The past was very much in the tall Texan’s mind as he spoke that day – both distant and recent. He likely heard the scratchy but memorable words of Bryan echoing in his brain, but he also was reminded that just one year before President Kennedy had used another commencement in another place very effectively. That venue was American University in Washington, D.C. and Kennedy had talked of war and peace in a way that overshadowed the diploma distribution that day.

Always conscious of any comparison with his far more elegant and erudite predecessor, Johnson was determined to make some history of his own.

He did.

What he had to say that day – and all that followed – signaled sweeping change in how government functioned in, around, and over culture. Lyndon Johnson talked in glowing terms that day about his vision for “The Great Society.” His rhetoric did not match that of Bryan, nor his eloquence that of Kennedy, but his content was designed to pick up where another one of his heroes left off. That hero was Franklin D. Roosevelt.

In a very real sense, as Barack Obama unveils – almost daily – new components of the kind of change he insists people voted for last November, the best historical comparison may not be the New Deal of 75 years ago. It could actually be what Lyndon tried to do 45 years ago. Of course, wise insiders will never admit this because it didn’t go that well for our 36th president – or the country, for that matter.

When President Johnson spoke to those gathered on that sunny afternoon he said:

The Great Society is a place where every child can find knowledge to enrich his mind and to enlarge his talents. It is a place where leisure is a welcome chance to build and reflect, not a feared cause of boredom and restlessness. It is a place where the city of man serves not only the needs of the body and the demands of commerce but the desire for beauty and the hunger for community. It is a place where man can renew contact with nature. It is a place which honors creation for its own sake and for what it adds to the understanding of the race. It is a place where men are more concerned with the quality of their goals than the quantity of their goods.

But most of all, the Great Society is not a safe harbor, a resting place, a final objective, a finished work. It is a challenge constantly renewed, beckoning us toward a destiny where the meaning of our lives matches the marvelous products of our labor.

And, in language with a where-have-I-heard-that-before ring:

I intend to establish working groups to prepare a series of White House conferences and meetings — on the cities, on natural beauty, on the quality of education, and on other emerging challenges. And from these meetings and from this inspiration and from these studies we will begin to set our course toward the Great Society.

The most dynamic era of sweeping political change in a generation began that day. Federal spending tripled over the next ten years. And it took several decades to undo the damage – Nixon started the job, Reagan accelerated it, and – ironically – Clinton finished it off.

But Santayana was so right. History ignored is often repeated.

How does all of this compare to what President Obama is attempting to do these days? Well, there are some clear and obvious similarities, but also some fundamental differences.

First, Johnson was no Obama – and vice versa. Our current president is a much better speaker than LBJ (heck, Gerald Ford was), and has charisma reminiscent of that possessed by Jack Kennedy (a trait about JFK that LBJ both resented and admired).

But charisma and speaking ability aside, Mr. Johnson was a much better personal politician than Mr. Obama – particularly when dealing with the egos, nuances, and patterns of Congress. Most historians recognize (some very reluctantly) that John F. Kennedy was good at “speechifying” but lacked the ability to get stuff done on the Hill. Johnson succeeded where Kennedy didn’t – or couldn’t.

It remains to be seen if Barack Obama can translate oratory and personal popularity into actual policy as he works with congress. Will he be strong enough to stand up to leaders in his own party? The mind fairly boggles at the idea of Lyndon Johnson being tempered by Senate Majority Leader Mike Mansfield (D- Montana) or Speaker of the House John McCormick, much less by Senate Minority Leader Everett Dirksen (R- Illinois) or his counterpart in the House, Gerald Ford (R- Michigan).

The only guy who could have given Lyndon a run for his money was Sam Rayburn, but the legendary “Mister Sam” had died in late 1961.

Our 36th president was famous for what was called “the Johnson Treatment” – a method of political arm-twisting that would presumably be seen today in the same category as CIA torture. Lyndon B. Johnson was the Jack Bauer of personal politics.

Those were heady days for President Johnson who soon found himself having been elected in his own right by a landslide margin and with a decidedly Democratic Congress on his coattails, if not in his pocket. After the 1964 election, the Senate was 68-32 and the House 295-140 lopsidedly in favor of LBJ’s party.

However, the biggest difference between what Johnson attempted to do in the mid-1960s and today is that LBJ launched his sweeping change against the backdrop of a stable economy. In fact, as Randall B. Woods has written in LBJ: Architect of American Ambition, “the Great Society was conceived and implemented during a period of growing prosperity.” Yet even then, it was largely a failure and ultimately politically repudiated.

Many wonder if President Obama, for all his best intentions, is overreaching by trying to do too many things so quickly and simultaneously. The answer to this might, in fact, be found in the story of Lyndon Johnson – a man with big dreams, a good heart, and gigantic ambitions.

While Lyndon worked the system as only he could do to bring forth his vision for The Great Society, he was mired in “that war in Asia.” And when LBJ went back to his Texas sanctuary near the Pedernales upon retirement, he did so as a man stretched, broken, defeated, despised, and in ill-health. For the rest of his days – which turned out to be not so many – he fumed about how Vietnam had been an altar of sacrifice for his best hopes for this nation.

I will not try to make a connection here between Barack Obama’s goals and some war over there. But what I will say is this: It is very possible that the economy itself might be an ironic Vietnam for the 44th president.

It’s very unlikely that anyone on his team a year ago envisioned the kind of economic meltdown we have now seen. Mr. Obama has assumed the office of the presidency during difficult times. Certainly, he must feel a sense of frustration about it all. He has dreams and ambitions that are threatened by a troubled economy.

But sometimes dreams have to give way to reality. Just as Lyndon Johnson couldn’t do guns and butter to the max for too long before something had to give, so President Obama needs to consider taking a page from another famous political playbook: “It’s the economy, stupid.”

He also needs to read the fine print of history and note that LBJ lowered taxes to continue to stimulate a growing economy. Proposed by President Kennedy, but stalled in Congress, Johnson led the effort to reduce the top marginal tax rate by 20 percent in February of 1964. He knew that a growing, prosperous economy was the only realistic foundation for what he wanted to do.

If Lyndon Johnson, master politician and visionary, couldn’t really make his “new deal” work against the backdrop of prosperity – can Barack Obama in these days of economic chaos?

Probably the most telling comparison between 1964 and now is that back then polls showed that 76 percent of Americans trusted the federal government to do what was right. Forty years later that confidence factor is less than half.

But the fear factor is growing by leaps and bounds.

Focus Grouping And Fiscal Groping

March 4, 2009 by Frank Gannon | Filed Under Obama administration, economy | Leave a Comment 

In his column today, Bill Kristol deconstructs the message that the markets are sending to the President.

SO the stock market drops over 25 percent since Election Day, almost 20 percent since Inauguration Day – and President Obama tells the American people at his press conference yesterday not to “spend all your time worrying about that”:

“What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. You know, it bobs up and down day to day. And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.”

What spooks the markets, I believe, is that the Obama administration has shied away from embracing anysolution. Under his administration, has a single toxic asset actually been seized, separated, sold or de-toxified? I don’t think so.

But the stock market isn’t gyrating, or bobbing up and down. It’s dropping. And the reason it’s dropping is that the financial system remains in desperate straits.

No, the stock market isn’t like a tracking poll. It’s about real money, about the real livelihoods of real Americans.

It’s not surprising that the White House used focus groups to calibrate the President’s not quite State of the Union speech last week.  But, per Kristol, there’s a difference between successful politics and successful policy.

Obama’s political advisors may have told him that dealing with the banking system will be politically difficult. I’m told almost every theme in Obama’s speech last Tuesday night was focus-group tested – and the speech played pretty well politically. But the markets weren’t impressed. Isn’t it time for Obama and his team to get up the nerve to stop playing politics and to govern?’
 

A Stock Answer

March 4, 2009 by John H. Taylor | Filed Under Barack Obama, Richard Nixon, economy | Leave a Comment 

How Obama can succeed by channeling Nixon.

Hank Greenberg On Deck?

March 3, 2009 by John H. Taylor | Filed Under Nixon Center, economy | Leave a Comment 

Former AIG chairman and CEO (and Nixon Center chairman) Maurice R. Greenberg offers an alternative narrative for the company’s last few months (and perhaps a glimpse of the Starr at the end of the tunnel).

The Dog Beneath The Skin

March 3, 2009 by Frank Gannon | Filed Under American Politics, Barack Obama, Obama administration, economy | Leave a Comment 

Clive Crook, whose column from and about America in the Financial Times usually has something interesting to say, yesterday tendered an apology to his Republican readers.

As you recall, in the debate over the fiscal stimulus, Republicans accused the president of presenting a measure they could not support, disguising this with an empty show of co-operation. Bipartisanship, they said, is more than inviting your opponents round for coffee and a chat. I did not buy it: I accused them, in effect, of brainless rejectionism and a refusal to compromise, and congratulated the president for trying to come to terms with the other side.

This budget says the Republicans had Mr Obama right all along. The draft contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal.

Take this budget at face value, and when Mr Obama talks about “a new era of responsibility” he does not mean: “We are all in this together.” He means: “The rich are responsible for this mess and it is payback time.” Leftist Democrats are thrilled, and rightly so. The budget has three themes: healthcare reform, public investment and unflinching redistribution. This is indeed a new social contract: we get, they pay. Liberals never had it so good.

For the moment, though, this budget reveals Mr Obama with new clarity. He is no Tony Blair, ideologically rootless, as I had previously suspected. He is a conviction politician: a bold progressive liberal. 

Barack, Not Burke

February 27, 2009 by John H. Taylor | Filed Under Barack Obama, Republican Party, economy | Leave a Comment 

American Tory Andrew Sullivan, who helped fuel the Obama phenomenon with a seminal 2007 article in the “Atlantic,” now concedes, on release of the new federal budget, that those who said the President was a social democrat, not a moderate, were right:

He won the stimulus debate long before the Republicans realized it (they were busy doing tap-dances of victory on talk radio, while he was building a new coalition without them). And now, after presenting such a centrist, bi-partisan, moderate and personally trustworthy front, he gets to unveil a radical long-term agenda that really will soak the very rich and invest in the poor. Given the crisis, he has seized this moment for more radicalism than might have seemed possible only a couple of months ago.

As for whether these are the right policies — whether the American people, no matter how economically anxious they are right now, really want the federal government to equalize wealth in addition to opportunity — well, Sullivan’s just not sure:

The risk is, at least, a transparent risk. If none of this works, he will have taken a massive gamble and failed. The country will be bankrupt and he will have one term. His gamble with the economy may come to seem like Bush’s gamble in Iraq. But if any of it works, if the economy recovers, and if the GOP continues to be utterly deaf and blind to the new landscape we live in, then we’re talking less Reagan than FDR in long-term impact.

It’s going to be a riveting first year, isn’t it?

Yes, certainly, if you’re in it for the sheer theater, which many in Sullivan’s business are, especially the so-called old media, which often seem to want to turn politics and policy into sports. I hadn’t thought it of Sullivan until now. As much as he admires Edmund Burke and Ronald Reagan, how can he be so blase? If I may state the bleeding obvious, people’s lives, careers, businesses, and fortunes are at stake, not to mention the mighty engine of wealth on which so much of the world still stakes its hopes and dreams. As most conservatives know, or at least believe, a national government can grow and consume to a point where initiative and enterprise begin to die as systems fundamentally though not exclusively based on risk and reward are replaced by ones based on safety and equality.

Perhaps Sullivan is one of those who believe that the pendulum always swings between progressivism and conservatism. You can’t get back to one without a corrective rooted in the other. The difficulty is that the point over which the pendulum swings seems only to move leftward. Under Reagan, for instance, the rich may have gotten richer, but the government didn’t get smaller. As anyone who’s worked with big government will tell you, its denizens have infinite means at their disposal of protecting their interests. Big government doesn’t shrink. Ever.

As one who argued that Obama would move to the center, I find his profoundly ideological budget, which seems to seek to exploit class anger for the sake of arrogating more power to the federal government, to be deeply disappointing. Knowing (or reading) Sullivan, he may think that the GOP will now have to grow up and talk about its own mature vision (if it has one) of the state vs. individual freedom. Let’s hope so.

Puhleeze, Mr. Postman

February 23, 2009 by Frank Gannon | Filed Under American Politics, economy | Leave a Comment 

The Washington Times broke the story last week:

Postmaster General John E. Potter  recently warned that economic times are so dire that the U. S. Postal Service  may end mail delivery one day a week and freeze executive salaries. But his personal fortunes are nonetheless rising thanks to 40 percent in pay raises since 2006, a $135,000 bonus last year and several perks usually reserved for corporate CEOs.

The changes, approved by the Postal Board of Governors and contained in a little-noticed regulatory filing in December, brought Mr. Potter’s total compensation and retirement benefits to more than $800,000 in 2008. That is more than double the salary for President Obama.

The new compensation package, much of it deferred to later years, goes beyond a newly beefed-up salary, now $263,575, that Congress arranged for him as part of a 2006 law to make top postal salaries more competitive with those in the private sector. At least four other postal officials got more than a quarter-million dollars in total compensation in 2008, according to Postal Service records reviewed by The Washington Times.

Today’s paper reports that Rep. Stephen Lynch (D-MA), chairman of the House Oversight and Government Reform subcommittee that oversees the Postal Service, will be looking into General Potter’s windfall profits.  ”All things considered,” he said, “I think most postal customers feel that the huge increase in pay for Mr. Potter is incongruent with the post office’s recent performance. I assure you that our subcommittee will look into this matter at a hearing in March.”

Are Better Angels All Socialists?

February 20, 2009 by David R. Stokes | Filed Under American Politics, Barack Obama, Economic issues, Ethics, Faith, Lifestyle, Money, Religion, economy | Leave a Comment 

G. K. Chesterton used to say that the idea of “original sin” was “a fact as practical as potatoes” and “the only part of Christian theology which can really be proved.”

As the nation-at-large wrestles with monumental problems, there are many who advocate strategies that rely on what is often referred to liberally as “the essential goodness of people.” The idea being that given a fair choice and level playing field people will generally do the right thing.

As Dr. Phil might ask: “How’s that working for you?”

I certainly believe people can rise up and do good things following what President Barack Obama, quoting Abraham Lincoln, is fond of calling our “better angels.” But the truth is that the default position of human behavior actually falls short of the ideal. Various forms of theology explain this propensity in terms of “original sin” or “total depravity” – that we are wired with a spiritual-genetic flaw.

In other words, the very suggestion of the existence of “better angels” in our nature implies other “less-than-better angels” – putting it mildly; or maybe “fallen angels.” The mention of better begs the question: “Better than what?”

Some people will dismiss this kind of thinking as puritanical. But it’s sort of like a paraphrase of that old Marxist line (Groucho, not Karl): Are you going to believe them or your own two eyes? Empirical evidence abounds that people tend to follow paths of least resistance and worse.

We are in this mess now because many people either made unwise choices (rejecting personal responsibility or deferred gratification), or they were manipulated and deceived by predators. Others on a certain street in lower Manhattan exploited everything. All of this while Barney Frank kept an eye on things. Clearly, any angels in attendance weren’t of the “better” variety.

People harm and take advantage of others because it is part of human nature. People pollute the planet because it is part of human nature. People lie, cheat, steal, and commit adultery, because humans (all of us) are sinners. And sometimes a toxic storm is at work in a life and monsters emerge to do despicable things. We are tempted to call them insane, and maybe they are by some psychological standard, but they are also very depraved.

All sins great and small flow from the same polluted human nature stream, whether they are grave and life destroying in our eyes or relatively excusable in today’s “I-did-it-because-I-am-a-victim” world. The lack of integrity that leads some to break a vital covenant and others to commit abhorrent crimes are connected to the same ugly ancestral disorder.

For example, we are witnessing a surge in bank foreclosures and people are losing homes. What is being little noticed though, is that while it is true some have lost jobs and can’t pay, there are cases where some who really could pay have stopped making payments and are deciding to walk away unless the government makes it easier for them. The home is now “less attractive” than it once was as an investment. Some are walking away only because they are upside down – not because they really can’t pay.

Stay tuned taxpayers. Keep your eyes on the funds and mechanisms as they become available to help people catch up on, or renegotiate, mortgages. I predict that some people will still simply choose to walk away, in spite of help available, because their homes just won’t be worth it in their eyes. In many cases, it may be more about the value of a home than the ability to pay.

Won’t it be interesting if money to help some people “stay in their homes” winds up going unused because, when it comes right down to it, they don’t really want to stay after all? Is being behind on payments the big problem (certainly it is for some), or is being upside down the big deal? There is a difference between catching up and getting out from under.

Upside down may be becoming an excuse to move from inside out.

In many places there is a scenario called “buy and bail.” This is where someone buys a new – cheaper – home, while still in the original dwelling. Then once the deal is done – they walk away from the first, more expensive home. Admittedly, this practice is not widespread now, largely because some states have cracked down on it.

What we do know is this, when homes go empty for whatever reason it hurts everyone who is trying to really play by the rules and keep their word. Upside down/walk away homes on an already depressed market contribute to the downward spiral of home values and prices – damaging those who believe that when they signed the mortgage they made not only a financial commitment, but a moral one as well.

If liberal-bail-out-advocates really believe in the “greater good” and “spreading the wealth,” they might want to consider that the wealth they want to redistribute is actually disappearing because of the “help” they are providing. People who made bad choices in the first place are being encouraged to continue doing things that hurt everyone. How is this about the greater good?

While we are trying to figure all this out, we meet a lady named Nadya Suleman. She recently gave birth to eight children. She’s been all over the news and now we hear she is looking at a new million-dollar-plus-pad for her growing family. I haven’t figured out whether she is a caricature or a metaphor. Maybe she’s both.

Of course, the Suleman story is objectionable and infuriating to us on so many levels because she clearly seems to be deranged. Or maybe she is just depraved. Maybe she is a manipulative, scheming, deceiver, who is thinking only of self. I am not trying to bash the lady – that line is really too long.

After all, if OctoMom, as she has been dubbed, is indeed trying to “work the system” with the mother of all scams (literally), is she really all that different from many others right now? I’m talking about those who are already slowing down on the personal responsibility side of things because we have a cool new government in place ready to stimulate all of us. Nadya Suleman may be more like the not-too-distant future of America than we might care or dare to admit.

Here’s where “original sin” comes in. Like it or not, we all bear a moral-DNA similarity to OctoMom, in the sense that we have this natural propensity to be selfish and deceitful. It is only as this part of us is restrained (by law, fear, inspiration, or love) or transformed (by grace – or, if you prefer, “a higher power”), that we can function in any effective social-contract sense.

Russian novelist Fyodor Dostoevsky said, “If there is no God, everything is permissible.”

There is a lot of talk these days about America becoming socialist and more like Europe. What needs to be noticed is that these trends not only have to do with the size and role of government, but also speak about a culture moving toward dominant secularism and sterile religion.

I ate at a restaurant the other day in Manhattan. It was in a beautiful building that had once been a thriving church. It was a church; now it is an eatery. Then I thought about how so many of the churches in Europe function basically as museums, if at all. Is this where we are headed?

One of the basic differences between socialism and capitalism as they manifest themselves in social, cultural, political, and even religious senses, is that the former believes in the essential goodness of humanity. On the other hand, capitalism tends to be more realistic about basic human nature and works to channel that “self-interest” in ways that can lead to something better for everyone.

Of course, human nature is at fault in runaway capitalism and the excesses of a few can be detrimental to many. This is why very few conservatives these days advocate a radical form of laissez-faire capitalism. Human nature will take advantage and there have to be times of balance, judgment, adjustment, and reckoning.

Somebody does have to watch the store. But the store should be privately owned.

The thing Americans need to be thinking through these days is, however, what system has a better overall record? Is it really better in France, Sweden, or Denmark than America today? Do we really want to admire nations where people surrender significantly more than half of what they earn to a government in exchange for state-run services that are chronically insufficient, incompetent, and impersonal?

If so, then we need to be fair and concede that, as Pogo might have put it, we have met Nadya Suleman and she is our future.

Tending Toward Statism

February 14, 2009 by John H. Taylor | Filed Under Barack Obama, Election 2008, economy | Leave a Comment 

During the Oct. 15 Presidential debate, Sen. Obama ducked a $200 billion question from Bob Schieffer. If he’d answered it, would he still have won the election? Read more here.

The Stimulus: Yes We Can’t

February 13, 2009 by David R. Stokes | Filed Under American Politics, Barack Obama, Democratic Party, Economic issues, History, Money, Republican Party, U.S. History, economy | 5 Comments 

Addressing the Democratic Party faithful last week in Williamsburg, Virginia, President Barack Obama brought the house down with a now-famous bit of political sarcasm about the stimulus package now emerging from the congressional laws-and-sausages-making mill. He mocked some who have been characterizing it as merely a “spending bill” with the question, “What do you think a stimulus is? That’s the whole point.” Then as the audience burst into laughter and applause (one could almost hear a Ralph Kramden-like “Har Har Hardy Har Har”), he added, “No, seriously, that’s the point.”

Seriously? Really?

These days it is accepted as gospel that government spending, spending, and more spending is the cure for America’s economic ills. Accordingly, still basking in the glow of an impressive victory last November, Democrats are gleefully using the cover of the current crisis to exact generational revenge on the politics and policies of those who decried big government in the past. Leaders such as Ronald Reagan and even, ironically, Bill Clinton who famously said the “era of big government is over” during his days in the Oval Office.

The president himself talked during his inaugural address about no longer wanting to define government as too big or small. He promoted a new standard; that being simply: “Does it work?” Well, if more is inherently better, then we are on the threshold of a golden age promising 17 chickens in every pot, with the pot itself made of gold, and a colorful rainbow not too far away. Of course, rainbows are all image with no substance.

Is unleashed and unprecedented government spending a stimulus to the economy as a whole, or does it just grow the government? Is the real plan for all of us to become more and more addicted to the toxic drug of statism? When Gerald Ford traveled around the country giving speeches as a congressman, vice-president, and ultimately president, one of his few memorable lines (he was not known for his oratory) was that “a government big enough to give you everything you want is a government big enough to take from you everything you have.”

Okay, so Ford was no Lincoln – but he did have a point. We all know the phrase “it comes with strings attached,” meaning that there are times when receiving something can have dire, if sometimes deferred, consequences. Well, those stimulus strings are beginning to look a lot like piano wire.

I think all the talk of “doom and gloom” is not misguided; it’s misdirected. A catastrophe will not result from a failure to inject a trillion dollars of government spending into a struggling economy. The thing we should really fear is the fallout from a toxic overdose of federal dollars. If our economy actually survives the euphoric rush of a stimulus-driven high, it will just be a matter of time before an emerging majority of strung out neo-socialist junkies will be clamoring for another fix.

The fact is, there is no empirical evidence that massive government spending stimulates anything except massive government growth. Is anyone noticing that while unemployment nationwide is now at well over 7% – with some of the harder hit areas at twice that – that the bedroom counties around Washington, D.C. report jobless rates ranging from 1.9% in Arlington County to 2.1% in Fairfax County?

Guess what the big industry is in the area? Really, can you guess?

As Mitt Romney has been talking a lot about recently, the Obama spending bill would stimulate the government, not the economy. No matter how you view economics, it is simply true that funding for new and exponential government spending has to come from somewhere.

It can come via taxation. In the best-case scenario, the gain to the taxpayer is theoretically equal to the tax paid – which begs the question, why take it just to give it back? Of course, most taxpayers won’t get it back dollar for dollar because of “overhead” (or in the government’s case “big giant head”) and the fact that so many really nifty programs will be funded. Not to mention, the earth will cool down dramatically.

Awesome.

Additionally, in a “we’ll get the money from taxation” model, it’s hard to envision an expense so unprecedented to even be possible without tax increases coming from somewhere (better: someone). And there seems to be near universal agreement that raising taxes in a recession is just plain dumb. Therefore, congress will probably raise our taxes in the near future.

Another way to finance the mother of all stimulus packages is to borrow the money. But this would dramatically increase the demand on the lending mechanisms in the country; this at a time when credit is already pretty much paralyzed. One result of this could be a return to rising interest rates – certainly no stimulus there. The Japanese government tried this in the 1990s, yet the economy did not recover.

The third way for government to find a trillion or so dollars to save us all would be to create money. They could do so “ex nihilo” – from the Latin meaning “out of nothing” (often used by those of us who believe God created all things, pardon this awkward insertion at a time when all amoebas mark Darwin’s 200th birthday). However, absent any U.S. department of alchemy (wait – that would be making something out of something – oh well, you get my drift), the best the government could do is to print more money, possibly finding a place to put “yes we can” on the new currency.

Most economists admit that just printing money would be dramatically inflationary. No stimulus there, either.

Here’s a better idea – one that I know would really help working people in this country, as well as stimulating businesses to hire new workers. Simply declare a 90-day moratorium on the payroll tax, thus putting real money into the hands of those who earned it in the first place. Don’t take it away and then try to find clever ways to trickle it back. Leave it with “we the people.”

Someone might argue, “But what will government do? How will they fund all the programs?” Well, they were going to have to borrow money in the first place for the stimulus. Three months won’t break the bank – heck, the government has wasted that much of our money on wacky ideas before. But it might just be enough time for American workers to start really stimulating the economy themselves. Novel idea, huh?

It would save trees (no government checks), cut down on electricity (for electronic fund transfers), save money for the post office, and create real jobs the way real jobs are created – by private businesses. And if it meant that some federal employees would have little to do during the duration of this experiment, maybe they could work on the nation’s infrastructure – or the area around the Jefferson Memorial.

There might be a downside, though. If it worked too well, many current members of congress might find themselves out of work in two years. That would be just sad.

Speaking of Thomas Jefferson, I am sure some reading this are preparing to correct me about that Gerald Ford quote – thinking it goes back to Jefferson. But it really doesn’t. Here’s one that does, though, from his inaugural address on March 4, 1801:

Still one thing more, fellow citizens: a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…

One thing for sure – the number of Democrats in America using this Jeffersonian nugget during recent Jefferson-Jackson Day festivities was less than the number of Republicans voting for the so-called stimulus package.

Devils And Details, Mice And Monorails

February 13, 2009 by Frank Gannon | Filed Under American Politics, Congress, Obama administration, economy | 1 Comment 

From the account in today’s Washington Post about some of the pork that —mirabile dictu— managed to worm its way into stimulus bill in today’s Washington Post:

The deal provides $8 billion for high-speed rail projects, for example, including money that could benefit a controversial proposal for a magnetic-levitation rail line between Disneyland, in California, and Las Vegas, a project favored by Senate Majority Leader Harry M. Reid (D-Nev.). The 311-mph train could make the trip from Sin City to Tomorrowland in less than two hours, according to backers.

In other words, they just voted billions of bucks for projects including a monorail between Disneyland and Vegas.

Barack W. Obama

February 12, 2009 by John H. Taylor | Filed Under Barack Obama, Congress, Kindle, economy | Leave a Comment 

Andrew Sullivan comes right out and accuses Republicans of wanting to sabotage not only President Obama but the U.S. economy. He’s not an especially enthusiastic supporter of the stimulus bill, so it’s hard to imagine he finds it impossible to accept that congressional Republicans, including ex-Commerce Secretary-designate Judd Gregg, are sincere in their opposition to this hastily assembled, impossible to comprehend, unprecedentedly expensive, soon-to-be-signed mess. Instead, Sullivan and other Obama boosters seem to be appalled that all Washington refuses to embrace their bracing post-partisan vision and march lockstep behind the President whether it agrees with him or not.

Perhaps one reason Republicans don’t do so is that, so far, Obama doesn’t lead very effectively. As a matter of fact, he’s beginning to remind me of George W. Bush, whose conception of Presidential persuasion was to state what he took to be obvious about the war on terror and the evildoers and then act weary and vaguely peeved when people didn’t see the world the same way he did. Over the last week, Obama has sounded so harsh and pedantic that Sullivan may be barking up the wrong end of Pennsylvania Ave. looking for the politicians whose actions and statements may actually be hurting the economy.

Now that he’s got his bill, I’d like the President to begin talking up the productive and recuperative power of the American people and encouraging me to spend it if I have it. Just a word from you, Mr. President, and I’ll even order a Kindle 2.0.

Left vs. Right, And Center Wins

February 11, 2009 by John H. Taylor | Filed Under Barack Obama, economy | 1 Comment 

“Everything comes down to left vs. right,” President Nixon told me one morning in the late 1980s. “Everything.” I don’t remember the subject, just the way he clinched his fist and set his jaw as he spoke. I’d wondered lately if he was wrong. If the political culture wars as decried by Rick Perlstein and Andrew Sullivan were finally over. If we’d entered a new, post-partisan era. Evidently not, as the New York Times reports:

In cobbling together a plan that could get through both the House and the Senate, Mr. Obama prevailed, but not in the way he had hoped. His inability to win over more than a handful of Republicans amounted to a loss of innocence, a reminder that his high-minded calls for change in the practice of governance had been ground up in a matter of weeks by entrenched forces of partisanship and deep, principled differences between left and right.

While the media theme of the week has been party-line Republican opposition to the bill, I’ve been more struck by the intensity of the ideological pressure from the left. Many obviously hope the economic crisis will form the pretext for a permanent 20-25% increase in the size and scope of the federal government. For promoting tax cuts instead of social and infrastructure spending, Republicans were accused of defying the will of voters as expressed at the polls in November, opposing the creation of 600,000 (Paul Krugman) or even 4 million jobs, and refusing to work with the dashing young President. Besides, argues Will Bunch, the Reagan tax cuts didn’t even work:

In the case of Reagan’s massive 1981 tax cut, it did start the great divergence of wealth between the very affluent and the middle class in this country, but it didn’t save the American economy, which actually slid into a deep recession the next 15 months.

The success of the 1981 tax cuts by themselves appears to be an article of faith. Others argue that the cruel 1982 recession ended thanks to low interest rates and massive deficit spending (which, after all, is the flip side of tax cuts not accompanied by spending cuts). Those factors, low interest and high deficits, we’ve definitely got again — along with both massive Keynesian spending and tax cuts designed to spur consumer spending and business investment. I’m as happy with the bill as it’s possible to be about spending nearly $800 billion of taxpayers’ money. Better a hodgepodge reflecting a broad range of ideas than a package dominated by left or right.

The Ginsburg Slam, Or Meeting The Media

February 4, 2009 by Robert Nedelkoff | Filed Under American Politics, Barack Obama, George W. Bush, Hillary Clinton, News media, Obama administration, Obama family, Presidents, Public Opinion, Richard Nixon, TV News Personalities, U.S. History, economy | Leave a Comment 

Eleven years and three days ago, when the nation was ten days into the trauma that was l’affaire [Monica] Lewinsky (or Lewinski, as the late Richard Grenier initially spelled her name in his Washington Times column), the personal attorney of the errant intern, William H. Ginsburg, came to the nation’s capital and introduced a new term into the language of broadcasting.

All four major broadcast networks and CNN frantically wanted to get Mr. Ginsburg on the air,  with whatever revelations he might have about his client’s past deeds or future plans.  And he happily obliged them.  Between 9 am and noon EST that first of February 1998, he appeared on Fox News Sunday, Meet The Press, Face The Nation, This Week, and Late Edition — not revealing very much, but clearly enjoying the attention he’d garnered for being the keeper of the secrets of the minx sphinx in the Watergate.

The punditocracy was duly impressed, and “a full Ginsburg” afterwards became the chosen phrase to describe one who had managed to appear on the five Sunday morning talking-heads shows on the same day.  For more than two years, Mr. Ginsburg remained the only person who had accomplished this.

Then in July 2000, future Vice President Dick Cheney, shortly after his selection by then-Texas Governor George W. Bush, became the second to do so.  Four years passed, and then a few weeks before Election Day 2004, Democratic vice-presidential nominee John Edwards blessed the airwaves with five different views of the most famous political coiffure before the Age of Blagojevich.

In September of the following year, Homeland Security Secretary Michael  Chertoff managed the elusive full Ginsburg, and in September 2007, Sen. Hillary Clinton, in her final months as President-presumptive, did the same — the only woman to undertake the feat so far, and the last person to date.

In this brave new world, the rules have changed a little.  Last month Late Edition was replaced on CNN by State Of The Union, which concludes one hour after its predecessor did, at 1 pm. Therefore, a full Ginsburg, from now on, will not quite be the heroic achievement it once was.

And another fact which has diminished the luster of the full Ginsburg was that, until now, no sitting President had ever undertaken anything resembling it.  But a variation on the old full G – which I’ll call the Ginsburg Slam – has proven to be yet another in the ever-growing list of the dubious achievements of the Obama Administration.

A little over forty-eight hours ago, as former Senator Tom Daschle sweated before a Senate committee not quite satisfied with his account of how he failed to pay taxes in timely fashion for the services of a limo and driver, the White House was still assuring one and all that no matter what, the President was solidly behind his nominee for Secretary of Health and Human Services.

But at 11 am yesterday morning Nancy Killefer, Obama’s choice for the newly-minted post of “Chief Performance Officer,” announced that she was removing herself from consideration because of her own tax troubles, and about two hours later Daschle did the same.  The President and his advisors decided that damage control was the order of the day.  How to handle it?

It would seem that the most logical way to approach the problem would be for President Obama to simply stroll into the White House press room after arranging for a few minutes of airtime, inform the assembled reporters and the nation that he regretted that the decisions of Killefer and Daschle had to be made, wish them well, take no questions, and return to the Oval Office and more consequential tasks.

Instead, he arranged for face-to-face conversations with ABC’s Charles Gibson, CBS’s Katie Couric, NBC’s Brian Williams, CNN’s Anderson Cooper (take that, Lou) and Fox’s Chris Wallace, informing each of them by turn, and at some length, that he had Screwed Up and was Really Sorry.  The mea culpas, taken together (or indeed separately), do not suggest Camelot redux.  After all, when John F. Kennedy botched the Bay of Pigs invasion, he promptly took the blame for it — once – and was rewarded with the highest approval rating achieved by a President before George W. Bush topped him in the weeks after 9/11.

Instead, Obama’s use of several hours of President Time (time that could be employed to work on the economy, or terrorism, or finally choosing a pup for Malia and Sasha, or something) to repeat his regrets five times over and ask for forgiveness isn’t an approach calculated to impress our adversaries abroad, whether Hugo Chavez or Kim Jong Il or a nameless thug in western Iraq, that the Chief Executive is brimming with determination or resolve.   Rather, it brings to mind some of the unhappier moments of the Carter era.  You have to wonder what’s going to happen when the killer rabbit shows up.

The way in which the Daschle debacle was handled suggests that President Obama has a preoccupation with winning over the media that makes Lyndon Johnson’s agonies over each new Scotty Reston or Walter Lippmann column look almost, well, Nixonian.  It’s 180 degrees removed from the approach of George W. Bush, who may well be concerned now with what the historians will write but, when in office, reasoned that if he did the occasional sit-down with Brit Hume or Tony Snow or Tim Russert, then everything else would take care of itself.

One has to wonder what the future has in store.  Will MTV’s Kurt Loder or the correspondent from Disney Radio be added to the list of people to whom the President must speak whenever a bill fails to pass, or whenever he knocks over an unwary staffer on the basketball court?  It’s time for some realistic thinking about media relations in the West Wing.

Vain Thain’s Pane

January 23, 2009 by John H. Taylor | Filed Under economy | Leave a Comment 

“The Economist” on the departing Merrill Lynch chief:

[John] Thain reportedly ordered $1.2m to be spent on his suite last year, of which $87,784 went on a rug, $68,179 on a 19th-century credenza, $28,091 on curtains, $18,468 on a George IV chair and $35,115 on a commode, presumably not the type used for night-time relief. The interior designer was not the only beneficiary of Mr Thain’s largesse: his driver picked up $230,000 for a year’s work.

And the New York Times:

Last summer, fuming over another grim quarter for the firm, [Thain] halted a meeting with his chief financial officer and hurled a chair against the wall, shattering a nearby glass panel, according to people briefed on the meeting.

We know just how you feel, John!

The Big Three Thought Too Big

January 7, 2009 by John H. Taylor | Filed Under Congress, economy | Leave a Comment 

In his not-to-be-missed e-newsletter, Rep. John Campbell (R-Newport Beach), who worked in the car business before beginning his political career, says the Big Three’s biggest problem is not poor quality compared to foreign manufacturers, the failure to build attractive products, building too many big cars, or even the UAW contracts (expensive though they are because of retirement benefits).

So, what is the problem with the Big 3? They have made some bad management decisions of course. But they have been chasing increased market share for decades as their market share has steadily declined. They have never been able to accept the idea that they could be smaller but more profitable companies and instead have always spent like they were bigger than they actually were. That is an oversimplification of course. But if you spend $100 thinking you can sell $120, but only sell $80 and you keep doing it because you have access to the cash flow and that $120 is right around the corner, you will eventually run out of money. And they have.

His advice? Go buy an American car or truck!

The First Reader

December 27, 2008 by Robert Nedelkoff | Filed Under American Politics, Bush Administration, Culture, History, Presidents, Richard Nixon, U.S. History, economy | 2 Comments 

It is hard to determine whether the number of books read by a President during his or her term, and which ones, have any real correlation to ability in leadership and governance.  Lyndon Johnson, famously, was reported never to have cracked open a book in his five years in the White House (except perhaps for British economist Barbara Ward’s The Rich Nations and the Poor Nations, a volume of 148 pages), but, in domestic affairs at least, he put together a considerable list of achievements.  Franklin Roosevelt seems to have read a lot of mysteries, which no doubt agreeably whiled away an hour before bedtime but had little relevance to policy; Harry Truman read perhaps countless volumes of history, but much of his book-reading appears to have taken place before he succeeded FDR in 1945.

Richard Nixon was a careful and thoughtful reader, concentrating on history and biography during his White House years.  (He had read a considerable amount of literature and philosophy as part of his studies at Whittier College, and in the years after 1974 took up such books again.) His admiration for Robert Blake’s biography of Benjamin Disraeli is well known; less so, the fact that he spent part of 1971 reading Winston Churchill’s four-volume account of World War I, The World Crisis. From these and from books such as Charles de Gaulle’s Memoirs Of Hope and Andre Malraux’s Antimemoirs he learned much that proved useful, especially in constructing foreign policy.  He didn’t peruse the flashier bestsellers, such as I’m OK, You’re OK or Airport or the several novels Harold Robbins wrote during those years. RN’s reading was weighty – and it took him a while to get through it, with the duties of office. It appears unlikely that he had the time to read more than one or two books a month.

But in recent years – whether or not it has anything to do with the need to assure those in the flagging book business that their wares are still in demand – White House insiders, past and present, have gone out of their way to emphasize the enormous degree of erudition of the Chief Executive.  During Bill Clinton’s eight years in office we heard a lot about his habit of utilizing his night-owl hours to read any solid nonfiction book that was handy, with the occasional Walter Mosley mystery on the side. (Indeed, his endorsement of Mosley in 1992 catapulted that writer to bestsellerdom.)

But it turns out that George W. Bush has Clinton, and seemingly every other President, completely beat when it comes to the printed page.  In yesterday’s Wall Street Journal Karl Rove, the former deputy chief of staff famed for his own wide reading ranging from Jorge Luis Borges to Paul Horgan to David McCullough, discusses a competition he has had with our outgoing President to see who can read the most books in one year.

Rove says that it all started on New Year’s Eve of 2005 when he told President Bush he planned to read a book a week during 2006.  Two days into 2006, the man in the Oval Office informed Rove: “I’m on my second [book]. Where are you?”

And so the contest was on.  If Rove’s account can be trusted, he personally managed to finish the year with 110 books read.  The President, during that time, had read 95 books – not nine, 95. The books read included eight Travis McGee mysteries by John D. Macdonald (a writer Rove identified as one of his own favorites in Vanity Fair), Albert Camus’s The Stranger, Doris Kearns Goodwin’s Team Of Rivals (that favorite of the President-elect), James L. Swanson’s account of the Lincoln assassination Manhunt, and biographies of Andrew Carnegie, Mark Twain, Babe Ruth, King Leopold, William Jennings Bryan, Huey Long, Lyndon Johnson, and Genghis Khan. The nonfiction-fiction ratio was 58-37.

In 2007, the contest was repeated and Bush read 51 books to Rove’s 76.  With a few days left in 2008, Rove has read 64 books, the President 40.  Well, Bush has an excuse for the slackened pace – he had to deal with a major recession, after all.  But Rove left the White House in August 2007 and has focused on writing, TV appearances, and the occasional lecture since then, so I have to wonder what has slowed him down.

Among the books Rove says the President read in the last two years are Jacobo Timmerman’s Prisoner Without A Name, Cell Without A Number;  Khruschchev’s Cold War by Nixon Library director Tim Naftali and Aleksandr Fursenko; biographies of Dean Acheson, Andrew Mellon and Andrew Jackson; David Halberstam’s book about the Korean conflict, The Coldest War; and Hugh Thomas’s mammoth history of the Spanish Civil War.  One very noticeable thing about the titles Rove lists is that none of them primarily concern economics – the one subject that, I would guess, many people wish the President had focused on during his second term, at least starting with the buildup of the housing crisis in the summer of 2007.

In 2000, Michael Beschloss, as eminent a figure as there is in the field of presidential history, wrote an article for the New York Times concerning the question of just how literate a president needs to be, as opposed to how literate he or she needs to appear.  He noted that Adlai Stevenson, during his lifetime a figure idolized by intellectuals from coast to coast as the archetype of the philosopher-statesman, in fact could let a whole year go by without finishing a book.  I would say it’s a good thing for Presidents to read books – and an even better thing if enough of the books have a direct bearing on the duties and concerns of the Presidency.

1972: Nixon To China. 2008: “Chimerica.”

December 26, 2008 by John H. Taylor | Filed Under China, economy | Leave a Comment 

Guess which country helped trigger the financial crisis. Guess which country will help finance the recovery.

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