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.

A "garbage" stimulus bill

Barack Obama gave his first news conference last night and spread the left's vision of doom-and-gloom, warning of a "lost decade" if we didn't act quickly to stem the faltering economy. Pointedly, he stated that the "Federal Government is the only remaining option to jolt the economy", and criticized Republicans for wanting to focus on tax cuts as a means of stimulating growth.  Just what you would expect a socialist to say.  Government is the answer -- the only answer -- to that which ills us...  And now comes some truth about the vaunted stimulus package, from the mouth of a Harvard economist with solid liberal credentials, Robert Barro (this excerpted from an interview in the Atlantic Magazine courtesy of the WSJ):

Barro: This is probably the worst bill that has been put forward since the 1930s. I don't know what to say. I mean it's wasting a tremendous amount of money. It has some simplistic theory that I don't think will work, so I don't think the expenditure stuff is going to have the intended effect. I don't think it will expand the economy. And the tax cutting isn't really geared toward incentives. It's not really geared to lowering tax rates; it's more along the lines of throwing money at people. On both sides I think it's garbage. So in terms of balance between the two it doesn't really matter that much.

Atlantic: Well, presumably Larry Summers is not an idiot.

Barro: [laughs] That is another conversation. I have known him for 25 years, and I have opinions about that.

Atlantic: Well, presumably Christina Romer is not an idiot if you're . . .

Barro: They've brought in some reasonable people in terms of economic advisers. I don't know what impact they're having, and I suppose they have different views on Keynesian macroeconomics than I have. But I'm giving you my opinion about it.

As Obama acts, Atlas shrugs weary shoulders

For almost nine months during the 2008 campaign I wrote about the dangers of Barack Obama's socialist views and liberal voting record -- both in the Illinois State Senate and United States Senate. I argued that his goal of "spreading the wealth" around would amount to a new socialist era in America, with tax and spend policies that were designed to transfer wealth from a shrinking percentage of tax payers to a growing percentage Americans "on the dole". Critics of my views kept telling me that I was wrong -- that Obama is a "new style" politician -- one who understands the importance of compromise and who would govern as a pragmatist from "the center". I was highly skeptical. Nothing in Obama's record led me to believe that he was anything other than a classic "tax and spend" liberal interested in using government for social engineering purposes. "Prove me wrong" I said on many occasions to images of Obama on the television (I said many other things to him as well, but this is a family blog).

Sadly, Obama has instead proven me right. Though he has mastered the image of bipartisanship -- inviting conservative Rick Warren to give the invocation at the inauguration, having Republicans to the White House for tea and cookies -- his actions have shown him to be true to his liberal roots. The so-called "stimulus package" now before the U.S. Senate has become an increasingly unpopular pork-laden spending bill served up by Nancy Pelosi and her cohorts, designed to enact social change rather than economic growth. Rather than choosing a truly bipartisan process for creating the bill -- to include targeted infrastructure spending and tax cuts to stimulate job creation -- Obama chose to throw a bone to every left-wing social and environmental cause, using tax payer money to "stimulate" social policy objectives. As opposition from Republicans grew, Obama chose to attack rather than compromise, lashing out at Republicans for their "tired old ways" of arguing that "government is the problem and that tax cuts are always the answer". To Obama, of course, government is the answer and tax cuts are for the rich -- exactly what you'd expect to hear from a socialist.

It is amazing to me that Obama calls this a job creation bill, for the only jobs this will create are in the public sector. Doling out cash to people to spend is not the same thing as creating an environment where employers will start to hire again. Businesses require structural relief -- tax relief -- to create the economic incentives necessary to spur new jobs. But Obama doesn't see the private sector as the real engine of growth -- he pointedly sees government in that role. For Obama, an economic stimulus that leads to New Deal-style public works programs is the ticket to getting out of this recession. Never mind that the original New Deal in the 1930s only served to prolong the Great Depression. In the minds of big-government liberals, FDR is a hero, and the conventional orthodoxy that government can solve the people's problems is alive and well.

It is hard to stomach what is going on now in Washington -- from the continued wasting of taxpayer's hard earned money to the hypocrisy of Obama's cabinet nominees who don't mind raising people's taxes because they apparently don't pay their own. Now we have the specter of the Federal government telling companies how much they can compensate their top executives because they took public funds -- funds that in certain cases the government forced them to take against their will. It's all so reminiscent of Atlas Shrugged: collectivist action denying the ability for those who create wealth to do so, and then confiscating their gains in the name of societal "good". This cannot -- and will not -- end well.

As I've said many times, elections have consequences. We shall see if a newly resurgent Republicans can use concrete proof of Obama's socialist plans to regain some momentum. 

Spare us the righteous indignation

The President's announcement that he'll crack down on evil CEO's and executives who are abusing their power and making too much money might be a worthwhile expenditure of his time in other circumstances. He promises to cap compensation to $500,000 until all federal loans are paid up, and he's taking 'the air out of golden parachutes'.  When Mr. Obama came out swinging the other day, declaring an end to what he considers to be Wall Street greed, he received loud applause and his minions in the media gave three cheers to the whole concept that big business was finally getting their comeuppance.  His fiery words ignited passion across the airwaves as America felt at least a little better, knowing the fat cats were finally getting their due.  The problem is, this bold new policy is not retroactive, and the righteous indignation is hollow. 

The stimulus package that Democrats will likely push through in the next few days does not provide for the bail out of any major corporations, banks or businesses.  I have not read the entire bill because my computer freezes up when I try to scroll through it (that may be why many legislators have failed to read it in it's entirely, as well).  Had the president imposed his policy retroactively to the banks and companies bailed out last fall, it would have had some viability.  Right now, he's talking about what will happen in the future.  He's apparently going to get tough at some point, but what has happened in the past is not important.

We learned yesterday that $78 billion of our hard-earned tax money used to bail out banks in October has been wasted.  The Treasury bought up stocks in failing banks and paid prices far above the value of those stocks and thus, the American taxpayer got taken to the cleaners. At the time, polls revealed approximately 70% of Americans were against bailing out any failed organization. Our voices were ignored.  Our new Secy of the Treasury, Timothy Geithner, apparently was involved in the entire bail out process, working hand in glove with Henry Paulson. We've been told he must be confirmed for his new position because no one else is qualified.  I think we expected someone with requisite qualifications to correct our problems, not make them worse and create more waste and debt.  Still, we are asked to have the utmost confidence in the direction our leadership is moving on economic matters.

The President is talking about applying his compensation rules from this point forward, so that must mean he has plans to do more bailing out of banks and major business that he hasn't told us about yet.  Is $500,000 now the standard for a year's worth of hard work? If so, will other hard working Americans get their pay raised to that level? What method was used to arrive at this amount? Will it go up when the economy improves or down if it doesn't improve? Will the salaries of other employees working for bailed out companies be mandated by the federal government, as well? Why didn't the president go back to the executives of the bailed out banks, insurance companies and automakers and require them to turn over any 2008 earnings above $500,000 to the Treasury Department in repayment?  We learned not to ask questions during the campaign, so I'm not expecting clarification any time soon.

Goldman-Sachs has apparently decided to back out of the socialist trend of our government taking over the financial sector and claims they will pay back all the money they received from the government.  Some are criticizing them, saying they just want to be able to pay their executives whatever they choose.  That's possible, but perhaps they also want to turn back a portion of the tidal wave of government take-over of every aspect of our lives.

Tax, spend and waste with fearmongering and class warfare as a political agenda. Righteous indignation, indeed.

Dems' thinly disguised power grab

“You never want a serious crisis to go to waste” said Rahm Emanuel, President Obama’s chief of staff. One look at the so-called “Stimulus Package” that doesn’t stimulate but is the biggest aggregation of special interest pork in the history of the Republic tells you exactly what he means. Consider two facts: One, the amount of money this bill would shovel out the front door of the Treasury is- adjusted for inflation- Five times the total amount of money spent by FDR in his first three years in office.

Two, given that all this money must be borrowed, and hoping that the Chinese and others will continue to purchase U.S. debt, the rarely mentioned interest payments alone-347 billion dollars- are the largest single budgetary line item in our history.

The tipoff on what the Democrats are up to is revealed in the way they (aided by the media echo chamber) relentlessly describe the country’s economic condition as the “Worst since the Great Depression”.

The truth however is very different. Our economy while certainly bad is only the “Worst since the Carter Administration”. In that period unemployment touched double digits, inflation hit 12%, interest rates an astonishing 21 %, and gasoline prices-adjusted for inflation- were higher even than the recent four dollars per gallon. Today these key indicators of economic hardship are nowhere near as bad as the Carter years.

So, why are Democrats desperately determined to utterly ignore the Golden Age of Jimmy and rush all the way back to the Great Depression as the proper benchmark for today’s economic crisis?

There are two reasons. First, using the Great Depression as a comparative allows Democrats to cast George Bush in the villainous role of Herbert Hoover, and even better lets Obama masquerade as the Second Coming of the liberal God FDR.

Now for Democrats it just wouldn’t do to describe Bush as merely “the worst President since Carter”, particularly since that would get people thinking that maybe Barack Obama is the new Ronald Reagan.

The second, and far more ominous reason is that by invoking the “Great Depression” and the economic horror stories associated with it (e.g. 25% unemployment) the Democrats hope to create a climate of fear and anxiety among our citizens that will in turn facilitate their radical agenda of a massive power transfer that will transform all the major sectors of our economy- education, environment, energy, health care, labor relations etc. Only by persuading the public that the economic crisis is truly calamitous and catastrophic in scope can the Democrats justify and sell the sweeping, even revolutionary changes they have in mind.

Needless to say, these sweeping changes are not talked about openly. Democrats long ago learned the imperative of a “stealth strategy” (i.e. say one thing while planning to do another).

In broad stroke the true liberal goal is the transformation of America into a statist social welfare society along European lines. Remember, these are the people who tried to impose Hillary Care, still praise the rationed Canadian health care system, and even find good things in Fidel Castro’s approach to public health.

The means of achieving this Brave New World are simply put, redistribution of wealth and income. Remember Barack Obama’s unguarded remark to Joe the Plumber: ”Aren’t things better for everybody when you spread the wealth around?”

Up until now these Democratic goals have been hidden behind vague promises-e.g. affordable health care for all, tax cuts for 95% of us. Now, with the “stimulus” the Democrats have been compelled to put in writing for the first time a list of specifics. The result is an appalling compendium of “good ideas” put together by Nancy Pelosi and friends,that is only a down payment on the even bigger and better ideas that will soon follow.

Now if the economic crisis is as catastrophic as the Democrats would have us believe, then it logically follows that these good ideas must be signed into law real fast, at least fast enough to insure that the public has no real chance to look at them, and Congress has no chance to debate or significantly alter the most expensive piece of legislation in history.

There will however be ample time-one day- for our grandchildren to ask us incredulously: “What were you thinking”?

William Moloney’s columns have appeared in the Wall St. Journal, USA Today, Washington Post, Washington Times, Philadelphia Inquirer, and The Baltimore Sun.