My (belated) Reaction to SOTU 2012

Also known as "give Chairman Zero 77 free minutes of national campaign time."

Sheesh.  It was worse than the one last year.  Revisiting the podcast I did on that event last year:


Besides all the attempts to appease non-Leftists with centrist-sounding rhetoric (Clue, Zero, we already know your record), and telling only half the story of the purportedly "great" things that are going on in this country, and suspiciously leaving out the huge issues of Solyndra, Fast & Furious, and his stepping over the Constitution to get his appointments in, the thing that really annoyed me was the fake enthusiasm showed by Dems on the floor.

On cue, they would stand up, clap, and sit down.  At one point, I wondered when Obama was going to pull out a fish bucket and we'd start hearing horns.  Arf! Arf! Arf!

Kind of like what Nancy Pelosi did in 2009:



But, what do you expect from the Party of Astroturf?

The Law Does Not Apply to Øbama, Apparently...

From American Thinker (h/t Monty Pelerin's World)

The 2012 race is gearing up, so it seems fitting that the perennial "Birther" issue would raise its head again.  Only this time, it seems to threaten Øbama's eligibility to be on the Georgia ballot.

As far as "Birtherism" goes, the only thing that bothers me is the lack of transparency from what was supposed to be the "most transparent administration in history."  Something was released, and arguments have gone back and forth over its authenticity...but why were over a million dollars spent to conceal it?  And what of his academic records?

Some of these questions have been deemed serious enough to warrant a hearing in Georgia, requiring Chairman Zero to appear and provide some explanation for the evidence brought against him.

He has simply waved it off as frivolous. Well, technically, Øbama's attorney called it, "baseless, costly and unproductive," and "improvidently issued."

And to underscore his sentiments, Obama failed to show up at the 26. Jan hearings that were supposed to address this issue.

I seem to recall another set of "frivolous" lawsuits aimed at my former Governor, Sarah Palin.  She had to answer them.  And it got to the point that she chose to step down rather than use State money to address them.

Is the President given immunity from such?  Especially when it's not a bunch of random individuals or organizations, but a State-level department demanding your presence?

Alan P. Halbert has some thoughts about the whole deal:

Since Obama and his attorney chose not to be present a defense and dispute the evidence that was presented, this can be taken as an admission that all of the evidence admitted were indeed facts and may not be disputed at a later time on appeal!   The irony of this course is that Obama is declaring that the court has no Jurisdiction in this matter and will appeal as a matter of law though these damning facts may very well stand!  It also gives the impression that he considers himself above the law -- Georgia's.  We have a plethora of data points on the sequestering of all of Obama's records and bona fides which he has spent millions of dollars to keep out the public's hands for the last four years.  After this hearing we may eventually know why.

The Consistent Economic Failures of the Øbama Admin

Mark Levin often ascribes a scatological Midas Touch to Chairman Zero, saying that everything he touches turns to crap.

Now, I usually just chalk it up to editorial hyperbole.  However, after reviewing the Summers Memo, and coming across several articles that just happen to show failure after failure of the Obama Agenda, I'm seeing that, well, it just might be true.



The Stimulus Package fell way below expectations, and left us much deeper in debt.

Turns out the bailouts (TARP, Auto bailouts) still left taxpayers in the hole by some $133 Billion.  Weren't we told they were paid off?

ObamaCare will not bring down the cost of health insurance.

High Speed Rail is flopping.  It is proving both unnecessary, and a lot more expensive than originally projected.

And don't forget the consistent failure in his Energy Policies.

Damning Evidence from the Secret Memo - Part 3

WRAPPING IT UP

So far, it seems that Doug Ross' and AEI's assessment of the Summers memo from 2008 seems to line up.

AEI's checklist:

1. The stimulus was about implementing the Obama agenda.  Check.
2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them). Check
3. Obamanomics was pricier than advertised.  Check
4. Even Washington can only spend so much money so fast. Check
5. Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic. Check
6. Team Obama wanted to use courts to force massive mortgage principal writedowns. Check
7. Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing. Check
8. Greg Mankiw, economic adviser to Mitt Romney, was dubious about the stimulus. Check
9. But the Fed was a stimulus enabler.  Check
10. IPAB was there at the very beginning. Check
11. The financial crisis wasn’t just Wall Street’s fault. Check.
And I'm only at page 34.  23 more pages to go.

Thing of it is, even AEI and Investors' Business Daily didn't get into all the details that taking my own look into the memo did, and even the article in the New Yorker (which started this whole discussion), while it gives the story of this memo in a nice, flowing, narrative, and even includes Summers' bombshell, that none of his recommendations “returns the unemployment rate to its normal, pre-recession level," it leaves much out that proves that the Obama administration has not been up-front with us about his economic policies. Some might even call it outright lying.

The remaining pages of the memo (34-57) go into (among other things) technical details regarding bank regulation, continued auto industry bailout, and plans for education improvement.  One particular comment by Summers stood out to me in this last section:

"This section outlines our strategy for stabilizing the U.S. financial system based on work led by Tim Geithner. Our judgment is that we need to move quickly to put in place a program that satisfies the critical imperative of decisively restoring public confidence in the health of our financial institutions and improving overall market functioning. Doing so will require more resources--potentially considerably more--than those authorized under the TARP. An effective program for stabilizing the financial system is a necessary complement to your Economic Recovery Plan and to more targeted efforts to support the housing market. Without healthy institutions and robust markets, our efforts toward repair and recovery for the broader U.S. economy are likely to be compromised."

 It's funny that it took a crisis for the Dems to see what is economic common sense for us fiscal conservatives.

Lesson learned:  if you put your political agenda ahead of the economic health of the country, you wind up with the cluster schtupp-laden nightmare that finally manifested itself in '08.

And yes, I largely blame the Dems for '08.  It was government-forced (and therefore, funded) "fairness" (in this case for the housing market) that created an unstable housing market, leading to the crash.  The GOP has its part as well for letting it go (ever since 1977) in the interest of scoring political points themselves, but this, too, proves my main point.

But was the lesson really learned by Dems?  Two items in the appendix (the memo's final ten pages) don't really inspire that much confidence.

The first is a Green Energy agenda.  Now, the memo makes a rather optimistic, if not unrealistic, assessment of what pursuing such an agenda ought to yield.

However, it fails to ask a central question:  is it economically viable?  Well, the downfall of Solyndra and other Green Energy Enterprises doesn't inspire much confidence at all.

And how in the hell can we dump billions of dollars into these boondoggles when we can ill afford them?  But, like I said, the memo didn't discuss the economics of Green Energy much.  But it does say that it was a "campaign commitment."

Once again, it proves my point.  And Spain proved how much of a jobs-wrecker Green Energy was.

The second point was education.  But I'm seeing about 90% attention being paid to physical matters (building maintenance/improvement), and not a whole lot to teacher accountability--which, in my view, is a lot more central to effective education than a nice building.

This item, however, really showed how economically clueless the Left is:

"The plan sets forth measures to assist more Americans enroll in college and job training
programs during this economic downturn. The plan will help ensure that every academically qualified student can realize the potential of a postsecondary education."

Think about this.  #1:  Economic downturn.  #2:  Encouraging people to undertake an expensive endeavor like college during an economic downturn.  #3:  Letting the government pay for an expensive endeavor like college during an economic downturn.

What could the end result of this economically genius approach be?

The so-called "99 Percenter," who has spent $86K on an esoteric degree and can't find a job for it.  So, instead of using that supposedly agile mind to adapt to other work, he spends months in a tent whining about the success of others (and getting nowhere closer to paying off that degree).

Not taking into account that said success stories probably started out in the same boat as he, only this person decided to do something about it instead of expecting someone else to take care of him.

But that could be an entirely different post in itself.

Bottom line:  Obama lied, the Economy Died.

More Damning Evidence from the Secret Memo - Part 2

In the last post, we found out that the Stimulus was egged on by Union interests, and despite a "bipartisan" veneer, was really only looking for confirmation bias along Keynesian lines.

This next section, covering pages 12-33, there are a few passages that hint that this Stimulus scam wasn't the best of ideas.

So far, in my reading, only one bit of forecasting in this memo seems to have held true:

"An excessive recovery package could spook markets or the public and be counterproductive."

If you see the graphs I put up the last post, that seems to have been the case, and we would have been better off not having passed the Stimulus bill.

Further on down, it seems that a political agenda was a chief consideration for this stimulus bill.  It wasn't necessarily doled out by need.  The "Core" package included "key campaign priorities."  And the "short-run economic imperative" was to address as many campaign promises as possible.

But here is another critical factor--so critical, in fact, that it was in bold, underlined, and italicized in the memo itself: 

"But it is important to recognize that we can only generate about $225 billion of actual spending on priority investments over next two years. and this is after making what some might argue are optimistic assumptions about the scale of investments in areas like Health IT that are feasible over this period."

In short, you have only so much money you can spend.  This was a point the memo felt a need to spell out twice.  Unfortunately, there seems to be nothing in this memo that takes seriously the notion that spending cuts might be something to consider for the country's economic health.



And speaking of spending, the memo's preparers had a thing or two to say about Obama's campaign promises:  they were unsustainable.

"Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run."

What's more, the memo says if Obama were able to implement his campaign promises in 2007, before the crash,

"...the deficit would rise by another $100 billion annually. The consequence would be the largest run-up in the debt since World War II and the highest debt as a share of the economy since the 1950s. Figure 4 shows the projected increases."

Let's have a look at that figure, shall we?

Holy crap!  And this was supposed to help our economy how again?

But take a look at that slump in the graph (and here, a slump is a good thing).  That happened after the GOP took control of the House & Senate after Clinton had pissed off the public enough (and after just a year in office, to boot).  Compare this with the 2006 Dem takeover of House & Senate (which occurs about where the red leaves off after 2005):

I really do not see how, especially after looking at this chart, Obama and the Dems could possibly see this massive spending bill as a good thing.

And this was the reason the people revolted in the form of the Tea Party in February of 2009.

People tend to want to blame the President for bad economic policy.  He may have some hand in it, but according to the Constitution, the purse strings belong to the House.  Which brings up another interesting point, the memo encouraged Obama to take on a familiar line that Obama has used pretty much throughout his presidency:

"With a short-term economic recovery package, the deficit in fiscal year 2009 is likely to
be about $1.3 trillion, which at 9 percent of GOP will be by far the largest deficit in American history excluding the two world wars and the Civil War. Most economists are not concerned about the near-term deficit deterioration, but the public may be more concerned. As noted above, it is therefore crucial in early January that we make it clear to the American public that you inherited this large deficit rather than created it." (Emphasis mine) 

But, in comparison to the debt projections post-Stimulus, the Bush years, even at their worst, were far better than what the Stimulus slapped onto us.

You would think Obama & Company would see this clearly, but unfortunately, even the memo points out Obama's economic cluelessness as a senator, citing the failed "Hope for Homeowners Act" that he co-sponsored:

"You were an original co-sponsor of the Hope for Homeowners Act- a foreclosure mitigation policy which sought to encourage principal write-downs among investors by splitting the cost with the government. Unfortunately, largely due to the unwillingness of lenders to write down principal, the program completely failed: 400,000 mortgages were eligible for writedowns but only 111 applied."

And why did it fail?  Borrowers and lenders were more familiar with economic realities than pie-in-the sky idealism:

"Our conversations with industry and community groups have led us to believe that
lenders will continue to resist the idea in most cases (and hence our core proposal is the
affordability program outlined in Part 1). However, there were some flaws in H4H that remain:  fees that push interest rates up for borrowers, fees that deter lenders, and requirements that lenders eat too much of the mortgage losses for them to be willing to participate."

Nonetheless, the memo proposes a mortgage restructuring program that could modify 2.5 million loans, "profitably," with the caveat that 1 million of those would probably redefault.

Did you get that?  1 million of those would probably redefault!  This is the sort of thinking that got us into the whole subprime cluster-schtupp in the first place!  A plan that expects about a 40% rate of failure is a plan that should not be considered!

But, you know, the Proglodytes of the Left have this habit of letting their ideologies trump reality.

As a final note of disgust, the precursor to Obamacare's "Death Panel" is mentioned in this section of the memo.  I've highlighted the bothersome part.

"The health board idea, proposed by Sen. Daschle in his book, allows for timely and oftentimes difficult policy changes to be made to Medicare and Medicaid and possibly other parts of the health system with a degree of independence from the Congressional process and special interests. This idea is included in Sen. Baucus's white paper on health reform. The Health and Economic Teams consider a Board an essential ingredient to improving the value of health care in the long run."

Congressional circumvention.  It's been a hallmark of these past three years.

Damning Evidence from the Secret Memo - Part 1

Yesterday, I read at Doug Ross' site how a "Sensitive/Confidential" Memo to President-Elect Øbama from 2008 that the White House knew the Stimulus was a scam.  Make sure you follow the link to the original article from AEI.

The 57-page document is available for download.  I'm running through it right now to see if it's so.

And I'm finding a lot of other stuff that further convinces me why Øbama SHOULD NOT BE RE-ELECTED IN 2012.

At this point, I'm only at page 11, but there are a few things I've already found in the memo that are well worth reporting.

Starting off, the second and third bullet points on Page 2 admonish the President-Elect to "establish serious reform and fiscal discipline credentials" and "committing to a responsible budget."

Continuing on to page 3, the team that put together this memo also said, "Your campaign proposals add about $100B per year to the deficit largely because rescoring indicates some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed."

Chairman Zero.  The faux Constitutional scholar who would wind up circumventing Constitutional principles showed even worse economic sense.  And that was before he took office.

Well, how well has he done with that advice so far?  It kind of reminds me of the sort of advice Rehoboam took when he was crowned King of Israel (1. Kings 12).  Instead of listening to the wisdom of the older generations, Rehoboam took with the inexperience of his own.  And it spelled the beginning of the end for Israel.

Well, there's that Stimulus that was rammed through Congress, and set off the Tea Party Movement.  The official line fed to us from the Hill was controlling unemployment.  Then-Speaker Nancy Pelosi even went so far with her "500 million jobs lost per month" gaffe. 

In the memo, the team put together projected rates of unemployment without the Stimulus, as shown by the graph below (taken from the memo itself):

How well did the memo-preparing eggheads do with their predictions?  Miserably.  Here are the unemployment numbers reported from January 2009 to January 2012 (Source:  tradingeconomics.com)

Now to give you a rough idea as to the difference between projected non-stimulus unemployment and actual numbers after the stimulus had been passed:

In short, it seems we would have been better off NOT passing the Stimulus.

To bolster the case for the Stimulus, on pages 10 and 11, a handful of economists are briefly quoted.  Now, economists from the Left and Right are presented, apparently to show a sort of bipartisan consensus for the Stimulus, but there is some fudging of the truth here.

From the Memo: 

     "This is standard macroeconomic analysis and it has led most leading economists to callfor substantial stimulus packages. Based on our consultations and published accounts:

Progressive Economists:
• Robert Reich believes it should be $1.2 trillion over two years, but also indicated it could be larger.

• Joe Stiglitz believes it should be $1 trillion over two years.

• Paul Krugman: at least $600 billion in one year

• Jamie Galbraith: $900 billion in one year

• Institute for America's future (signed by Dean Baker, Andy Stern, Leo Gerard, John
Sweeney, and others): at least $900 billion

First of all, why use the label "Progressive?"  They don't use the label "Conservative" when listing "Republican" economists.

Secondly, any report involving Robert Reich and Paul Krugman should not be taken seriously.  Robert Reich has a tendency to emphasize the facts only convenient to his ideology.  Krugman, despite his Nobel Prize (whose worth has been cheapened over the years) has striked out consistently on his economic predictions.

The majority of the IAF signatories mentioned here is very troubling:  Andy Stern, Leo Gerard, and John Sweeney are all major figures in the Union scene.  Of course they would advocate anything that would pour money into their interests!

But all of the economists listed here--Krugman, Reich, Baker, and Galbraith--have one thing in common:  They're all Keynesians.  That is to say, they believe in the notion that you can spend yourself into prosperity, as opposed to exercising fiscal discipline.

And this is what is problematic about their choice of "Republican Economists":

Republican Economists:
• Marty Feldstein was an early proponent of a spending-only package and currently
believes it should be $400 billion in the first year.

• Larry Lindsey, a former Federal Reserve Governor and NEC Director, estimates that
$800 billion to $1 trillion is desirable.

• Ken Rogoff (widely respected macroeconomist, former chief economist of the IMF,former McCain adviser): $1 trillion over two years

• Mark Zandi (widely quoted economist, fom1er McCain adviser): at least $600 billion in one year

• Greg Mankiw is the only economist we have consulted with who refused to name a
number and was generally skeptical about stimulus.

Ken Rogoff is a Keynesian.

Feldman and Lindsey are not, but their names are attached to a memo supporting a Keynesian approach without telling the whole story.  Both expressed concern about where exactly the money was going to go.    As it turned out, the money went more towards political interests, so this confirms at least one point of Doug Ross' and AEI's findings about the Stimulus being a scam.

Mark Zandi's inclusion in this list is outright deception.  He was an "informal advisor" to the McCain campaign, but he himself is a registered Democrat.

Then there are all the "Others:"

Others:
• Senior Federal Reserve officials appear to be of the view that a plan that well exceeds
$600 billion would be desirable.

• Adam Posen (Deputy Director of the Peterson Institute): $500 to $700 billion in one year
• Goldman Sachs: $600 billion in one year

• Open Letter signed by 387 economists including Nobel Laureates Robert Solow, George Akerlof, and Joe Stiglitz on November 19th [note that most economists, including Stiglitz, support higher stimulus numbers today than they did a month ago]: $300 to $400 billion per year

Funny how they felt the need to quite Joe Stiglitz a second time.

Peter Klein of The (non-Keynesian) Mises Institute had this much to say on the whole lot of them: 

"So, we’ve got left-wing Keynesians, right-wing Keynesians, moderate Keynesians, Robert Reich who wouldn’t know a Keynesian from a Kenyan, and Goldman Sachs. How’s that for diversity of opinion?"

The only really honest alternative opinion to all this Keynesianism and special Union interest was Greg Mankiw.

Autocracy In Progress

David Limbaugh had an excellent recap of Chairman Zero's last three years, just in case we on the Right forget, and in the very likely case that the Left never heard it.

"We can endlessly debate whether he is such a devoted ideologue that he's blind to his policy failures, whether he's willing to sacrifice the economy and the fiscal integrity of the United States for his perceived higher good of radical redistribution, or whether he really intends to do harm, but these are moot questions anymore. Under any of these possibilities, the fact remains that he is hellbent on accelerating his present course, not reversing it, on dictating, not working within his constitutional constraints, much less building a bipartisan consensus."

One of the problems with Øbamacare, certainly the one that has received the most press in the last year, has been the constitutionality of the individual mandate.  Mona Charen goes into detail about another:  the Independent Payment Advisory Board (IPAB).

"IPAB is a new thing in American government. Unlike most other boards and commissions, the panel’s 15 members (appointed by the president and approved by the Senate) need not be bipartisan. Also unlike other boards, commissions, and federal agencies, the IPAB’s decisions are virtually unreviewable. IPAB doesn’t have to adhere to the notice and comment rules of federal agencies, which permit citizens to respond to proposed rule-makings. IPAB dictates automatically become law unless Congress itself intervenes. Ah, but they’ve thought of that and made it virtually impossible. The law prescribes that Congress has a limited period of time in which it can modify IPAB rulings and then it must do so by a three-fifths majority. Even ratifying treaties and proposing amendments to the Constitution require only two-thirds majorities. As for the courts, forget it. The judiciary is forbidden to review IPAB decisions."

Furthermore, abolition of IPAB is only possible in a narrow time window.

Way to stick it to the people, Dems!