Bailouts beget corruption, history warns

Obama’s attempt to save America’s failing financial sector, automakers, etc., perhaps by nationalizing them, is classic socialism. It will result in failure not only of those industries but of our entire economic system. It will also produce the same massive societal corruption found in former states of the Soviet Union. I served as a Fulbright scholar in the former Soviet republic of Moldova about a decade after the end of the Soviet Union and observed how this culture of corruption continued to suppress freedom, initiative and economic growth.

f corporations are inefficient, they must either be made to be efficient or they must be allowed to fail. According to Joseph Schumpeter, destruction can actually be creative. If there is a need for the product the failing company produced, someone will step in the gap and produce to meet the demand. The fresh start provides the new company the opportunity to be free of the burdens which caused the inefficiency of the failed corporation.

If the government props up the inefficient corporation, it perpetuates the inefficiency and passes the cost on to the taxpayers and the entire economy as well. Like a communicable disease, this spreads the inefficiency from the corporation to the general economy and entire populace. Those not responsible for the inefficiency are now burdened unfairly, and that burden brings down more efficient businesses, who become burdened with the increased taxes necessary to prop up the inefficient businesses.

In this situation corporations are no longer seeking to respond to the needs of consumers to insure their viability, but to government which props them up. This is corporate welfare at its worst. The consumer loses his power to influence the market and is instead forced by the government to consume what is offered by mediocre, propped-up providers -- a situation artificially imposed upon them by politics.

Corporations find it more advantageous to cooperate with government than with the market. This close relationship between business and government elites, is akin to fascism in its truest sense which was how Mussolini attempted to run Italy in the 20s and 30s. It also corrupts both our economy and our government.

Access to government becomes the top priority of corporations, as they become more dependent on government than on consumers. Government officials began to manipulate the corporate sector and corporate executives begin to manipulate government.

This develops into a symbiotic relationship of corruption and inefficiency reminiscent of what resulted in the collapse of communism. It began with supposed noble and benevolent aspirations, and resulted in the worst of tyrannies and inevitably a far more profound collapse.

William Watson is a professor of modern history at Colorado Christian University.

Porkulus bill mocked transparency

1175 pages. That’s the length of the most massive-spending, government-expansive, pork-laden piece of legislation in U.S. history. And no one read it.

The “American Recovery and Reinvestment Act,” as it is so, ahem, inaptly called, was dispatched in its final, conference committee form at 12:00 AM on Friday the 13th.

Neither chamber was presented with a PDF copy of the bill, so the staffers, as video of a meeting in Senator Jim DeMint’s office reveals, had to go through it page-by-page the old fashioned way—by hand. Nearly 1200 pages. Normally they can search through the bill on the computer with greater ease, but the leadership would not allow it.

Furthermore, neither the Senate nor the House leadership permitted much time at all for debate and discussion on the bill in its final form, despite the fact that Republicans were essentially shut out of the conference committee process. Nor was the bill allowed to be read on the House and Senate floors.

And yet the bill was passed by the House after 2:00 PM, and the Senate followed suit later in the evening.

The public has a right to expect that, at the very least, the staffers in Congress have ample opportunity and means to read and review legislation before a vote and that their elected representatives have sufficient time to fully hash out and debate a bill before it becomes law. However, prior to the passing of the act, virtually no one got through it. And it wasn’t because they didn’t want to. With just 14 hours in the House, for instance, and no PDF copy, how could they?

Parts of the bill were even edited by hand. One line was crossed out, the number increased from $250 million to $500 million by hand. Such was the case with many portions of the bill.

Pork was thrown in casually, such as $1.4 billion tucked in for science. What kind of science? Nothing particular. Just science. So much for President Obama’s claim that the bill wasn’t stuffed with pork.

Welfare reform, the greatest success of the Clinton years, was subtly undone, as politicians in the backroom inserted provisions that would encourage states to keep the unemployed on the welfare rolls instead of take them off.

Here we have the single biggest spending bill in U.S. history, as well as the most massive solitary piece of legislation in U.S. history. Pork was unceremoniously injected. Staffers had no time to get through it all. It was forbidden to be read on the House and Senate floors. Debate and discussion were severely limited before the votes took place. Republicans were essentially shut out of the conference committee process.

The president claims to have tried to reach out to Republicans. After all, he did meet with them several times, didn’t he?

Yet when he met with House Republican leaders, he told them not to listen to Rush Limbaugh because, in doing so, “you can’t get things done.” In other words, he was telling them not to listen to Rush not because he’s a jerk, but because Limbaugh represents the antithesis of Obama’s left-wing agenda, one of the most powerful voices of opposition against Obama’s presidency. We can’t have that, now, can we?

And the Republicans will never forget Obama’s argument on taxes. “I won,” he said. True bipartisanship.

In his speech rallying the troops at the House Democratic Caucus retreat on the 6th, Obama labeled contentions against the stimulus bill “old,” “tired,” “worn-out” and “phony.” Clearly that’s the kind of bipartisan rhetoric that will get things done in Washington. That’s a new kind of politics right there, a “fresh” way to reach out across the aisle.

Sarcasm, of course. Does that sound like hope and change to you?

Obama promised on the campaign trail that a waiting period would pass during which all legislation is online for the public to view before it’s passed, yet he didn’t even attempt to hold to that pledge.

Call me crazy, but the jive I’m getting is that the Democratic Congress and Obama administration are acting out the “same old, petty politics” that the President decried in his campaign.

The bill has been passed by Congress and signed by the President. We needn't beat this drum anymore, pound something that is now law, but the way this bill was pushed through Congress less than 24 hours after its release tells us exactly what we need to know about and what we can expect from the next two to four years of Democrat dominance. As far as this observer is concerned, it puts a nail into the "openness" and "transparency" promised by the Obama administration and the Democratic Congress.

And we’re not even a full month into his presidency yet.

Obie was upbeat, markets weren't

"Beginning of the end" toward exiting the recession, President Obama's upbeat words about the stimulus bill he signed in Denver yesterday, clashed with another down day on Wall Street -- 300 points off the Dow, close to a three-year low. The bullish rhetoric was on Page 1A in the Denver Post today, whereas the bearish market reality was 22 pages in -- Page 6B. Interesting news judgment.

Additional cognitive dissonance came with the President's scare word "catastrophe" being cited in the front page headline -- while syndicated columnist Kathleen Parker was telling us on 11B that Obama himself backed away from that alarmist characterization in a chat with her last Friday. Not only were the '30s worse than now, says the Stimulator in Chief; so were the early '80s when he was in college.

Huh? Solar panels are one thing, but Barack has now entered a hall of mirrors. He can't keep his story straight. Fear one day, hope the next. Stop the bubble machine.

It was said that New York Mayor Robert Wagner set the chutzpah record by running for a second term on a reform platform against his own first term. That flipflop took four years. Obama has now done the same in four weeks.

Big spenders unhinged; price tag $3.2T

The era of big government is back -- with a vengeance. President Obama returned to Denver to sign into law his American Reinvestment and Recovery Act -- the biggest spending bill in history, conservatively priced at $787 billion. In reality, this "stimulus" encourages nothing but government dependency and the belief that you really can get something for nothing. It should be known as the American Dependency and Redistribution Act because that's what it stimulates most.

But Americans said they wanted change; now they've got it. Or do they? President Bush's biggest failure was a lack of fiscal discipline -- the inability to say "no" to big spenders, especially those in his own party. But if Bush was undisciplined, Obama, Nancy Pelosi and Harry Reid are completely unhinged.

With a single piece of legislation, Democrats will spend more during Obama's first month than Bush spent on the entire Iraq war. They passed the 1,073-page bill before anyone could read it -- just days after unanimously adopting a policy to require that the public have 48 hours to review legislation before it comes to a vote.

Democrats' commitment to transparency in Congress follows the same pattern as Obama's commitment to keeping lobbyists out of his cabinet -- they're for it, except when they're against it.

Bush signed a feckless $150 billion stimulus package last spring and the $700 billion TARP bailout bill plan in September and was criticized for both, from the right and the left. How many Obama voters expected the new president to follow in that same furrow, using not a shovel but an excavator?

Democrats like to claim "economists agree" that a government stimulus plan is necessary. Yet economists also acknowledge that the economy would eventually recover even if Congress did nothing.

Since the choice is between a government-induced recovery and one that would ultimately sort itself out, we should expect that government action do no harm.

Unfortunately, this stimulus is a minefield of potential and inevitable harm--if not abject fiscal disaster.

Congressional Budget Office notes that any short-term stimulative effect will wane, followed by rising government debt that actually hinders economic growth.

Then there's the cost of exploding federal deficits.

The cost of the stimulus isn't merely the $787 billion in authorized spending. It's closer to $3.2 trillion because it expands or resurrects many social welfare programs. Nearly three-quarters of a trillion dollars will be required just for interest payments on debt.

Had Bush uttered Obama's simplistic "stimulus is spending" rhetoric, he would have been pilloried by the press as a know-nothing. Obama acts as if all government spending is equally stimulative, so the lion's share of this boondoggle is little more than a resurrection of the welfare state.

Welfare reforms hammered out between President Clinton and a Republican Congress in 1996 are rolled back. New entitlements are promised. These expenditures are authorized only through 2011, but the underlying programs form the foundation for a cradle-to-grave nanny state. The entitlement lobby will fight, hammer and tong, any effort to end funding, accusing opponents of "hating children and seniors," just as they vilified Republicans during welfare reform.

As the Bush administration was largely defined by the war on terrorism, so Obama's will be defined by the biggest spending bill in history, a return to the welfare state, and exploding deficits -- ultimately leading to soaring inflation and rising interest rates.

Six years ago, Bush's decision to invade Iraq enjoyed overwhelming support, but when the war effort stumbled, the public and many politicians turned on a dime and left him holding the bag. Now, public support for the stimulus appears to be a mile wide but an inch deep. Americans hope it will work but don't expect their own finances to improve.

If the economy is still struggling in a year or two with today's problems compounded by inflation and rising interest rates, President Obama will learn that he alone owns his decisions and that the Oval Office can be a very lonely place.

Mark Hillman served as Colorado senate majority leader and state treasurer. To read more or comment, go to www.MarkHillman.com.

Sausage process belied BHO promises

Many Americans are skeptical of the economic stimulus bill as passed by Congress, and with good reason. We may debate the merits of the Keynesian principles of government stimulated economy versus supply side economics. Both the House and Senate versions of the stimulus package, however, did not embody the true intent of either theory. They are, rather, a dreadful example of social engineering and special interest spending that most Americans denounce. Despite calls to implement the best ideas from all to stimulate the economy and reach a true bipartisan compromise, this bill has been rammed through the legislative process without taking stock of legitimate concerns and proven stimulus techniques or the implications of massive debt on future generations.

Keynesian theory is an economic policy that believes you can stimulate the private sector through tax policies and funding of public projects. As the government spends money on infrastructure it creates jobs and makes America more competitive on the world market through the infrastructure improvements. Even though the stimulus package was presented as primarily Keynesian, both versions stimulus bill of 2009 spend more money on special interest projects and the type of wasteful, uncontrolled spending that is often blamed for our current economic troubles.

Supply side economists believe that the best way to get Americans back to work is to create tax structures that encourage businesses and people to invest capital and create jobs. The United States has the highest corporate tax rate of industrialized nations. I favor a reduction of corporate tax rates from 35 percent to 25 percent, which would directly inject capital into an economy that is sputtering. I also believe there are legitimate infrastructure, scientific and transportation projects that are practical only on a governmental scale that would also make us more efficient and effective.

President Barack Obama made three main promises about taxes, the economy and spending during his campaign. First, he promised that 95 percent of Americans would receive a tax cut. Second, businesses that created or transferred jobs from overseas would receive a $3,000 tax credit, per job. Third, he pledged to go line-by-line through the budget and remove wasteful spending and eliminate special interest pork. It is disappointing that two of three promises have not represented in the economic stimulus package. Although there are some tax cuts, they are nowhere near the extent to which he promised and unlikely to stimulate investment in businesses or create jobs. The Congressional Budget Office's (CBO's) assessment of the current stimulus bills states that the spending will probably result in an economic drag on the economy due to increased debt and insufficient stimulating activities. Further, the CBO analysis concludes there is not enough spending in 2009 to give the economy a jump start and, overall, most expenditures are not stimulating in nature.

I realize that through the art of legislation and politics, many campaign promises are often too difficult or impractical to implement. I believe that the President should have shown true leadership by putting a stop to the wasteful spending and taking the time for serious thought and negotiation. President Obama should have led this process, rather than leave the crafting of this critical legislation to the sausage mill process and divisive House and Senate leaders.

True bipartisanship in Washington would combine the best of both of Keynesian and supply side economic principles while being as fiscally responsible as possible. This is the type of change that Americans want and need. Americans' real hope was for our politicians to resist the temptation to load special interest spending in the stimulus and avoid taking out a second mortgage on our children's future.

Scott Starin works in industry, ran for Congress in 2008, and chairs the Boulder County Republicans. This is from his Sunday column in the Boulder Camera.