Free Markets, Free People

Monthly Archives: January 2010

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BlogTalk Radio – 8pm (EST)

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Yes, friends, it is a call-in show, so do call in.

Subject(s):

State of the Union – Reactions and ramifications.

KSM Trial – Suddenly GITMO is looking pretty good.

Bernanke reconfirmed – What does that mean?

Global Warming – Glaciers not melting and the Amazon unaffected. Where’s the science?


Deficit Of Trust In Government

During his State of the Union address, President Obama spoke of the nation suffering from a “deficit of trust” in government.

He’s right.  There is a large and growing deficit of trust in government.  That’s why health care is in trouble.

Obama’s also a big part of that reason.  He’s made some claims that a majority of Americans simply don’t think are true. For instance:

The president in the speech declared that his administration has cut taxes for 95% of Americans. He even chided Republicans for not applauding on that point. However, just 21% of voters nationwide believe that taxes have been cut for 95% of Americans. Most (53%) say it has not happened, and 26% are not sure. Other polling shows that nearly half the nation’s voters expect their own taxes to go up during the Obama years.

Despite what most politicians think, people are not idiots. They’ve watched what Washington has done in terms of spending and spending and spending, and they know someone has to pay for that. They also know the “rich” can’t possibly do that alone and that corporations really don’t pay taxes, they instead collect them. And finally, they understand when they’re being spun. While there may not be an increase in their income taxes this year, they’re seeing all sorts of proposals about new or increased taxes they’ll be paying outside of income taxes. They understand those impose a tax on them that is just as costly as an income tax in terms of their priorities vs. government’s. So the 95% rhetoric was most likely rejected by a good portion of the population as he said it, and another portion has come to realize it was just spin. Result – a deficit of trust in government. And for a good reason.

Then there’s this:

The president also asserted that “after two years of recession, the economy is growing again.” Just 35% of voters believe that statement is true, while 50% say it is false.

Governments and agencies can declare “the economy is growing again” until they turn blue, but until Joe Sixpack sees his lot improve economically, that’s just so much spin as far as he’s concerned. That’s what this number most likely reflects. While the numbers may look good at NEBR, the only number the voters care about are the one’s which directly effect his or her life – and at the moment, most of them are waving the BS flag. For them the recession isn’t over and the economy isn’t growing again until they’re materially benefiting from it. Hearing all this happy talk from government while experiencing 10% unemployment and very tough times equals a “deficit of trust”.

Obama claimed that steps taken by his team are responsible for putting two million people to work “who would otherwise be unemployed.” Just 27% of voters say that statement is true. Fifty-one percent (51%) say it’s false.

I don’t think it takes a political junkie to figure out who make up the 27% that believe this claim. This number is not only highly suspect, there have been a number of stories written about false job reports, stimulus funds to nonexistent congressional districts and zip codes that don’t exist. And we were told that “Sheriff Joe Biden” would be the one monitoring all this and ensuring the funds were spent properly to create jobs. If you can’t get the Congressional districts or zip codes right and don’t know where those funds went, why would anyone believe the job numbers that were supposedly “created or saved?” Again – a deficit in trust.

Personally I like the deficit in trust when it comes to government. That is both healthy and necessary as far as I’m concerned. The truth of anything a politician says, claims or promises should be taken with very skeptical grain of salt. While it is true that there was an era when the public was more accepting of government and considered it to be an ally and a “friend”, government has managed, over the years, to kill that perception (thank goodness). Now people are more readily seeing government for what it is – an intrusive, costly, ever expanding behemoth, bent on gathering more and more power and devouring our national wealth and liberty.

The fact that the public is waking up to this, as the numbers indicate, is a good sign, despite the fact that the statists claim that general skepticism and resistance (a hearkening back to our roots in freedom) makes us “ungovernable.” And perhaps it does. After all, “give me liberty or give me death” certainly smacks of someone who certainly was considered ungovernable by the rulers of his time.  Perhaps the “ungovernable’s” time, of necessity, has come again.

~McQ


GITMO Eyed For KSM Trial

The Guantanamo Bay circus continues and comes full circle:

The trial of 9/11 mastermind Khalid Sheik Mohammed won’t be held in lower Manhattan and could take place in a military tribunal at Guantanamo Bay, sources said last night.

Administration officials said that no final decision had been made but that officials of the Department of Justice and the White House were working feverishly to find a venue that would be less expensive and less of a security risk than New York City.

The back-to-the-future Gitmo option was reported yesterday by Fox News and was not disputed by White House officials.

So much for that stale “fierce moral urgency” bit. I don’t think anyone believes that campaign slogan any more.

Funny how this administration, which claimed to have the moral high ground on the issue of Gitmo, now understands why it exists and why military tribunals were the preferred method of dealing with terrorists who’ve declared war on us.

Heck of a job, Eric.

~McQ


The GOP’s Tactical Mistake

I’m of the opinion that politicians are usually not quite as smart as they think they are.

Yesterday the GOP helped prove my point.

They invited the President to their caucus retreat.  It’s a pro-forma invitation.  To their surprise, he accepted.  And then he took control of the event by suggesting the media be allowed in.  In a tactical mistake, the Republicans agreed.  Why?  Because, as usual, they were more concerned about what others would say about them (specifically and pundits and the media) than they were about how the situation would be seen by the public.

In the end, they end up looking foolish in front of both.

They were outflanked by the President. The desire to be seen in a certain light was overshadowed by the result they unwittingly enabled.

What am I talking about? What was the tactical mistake?

Quite simply the format of the meeting to which they agreed. They handed the President a perfect, uninterrupted platform from which to do exactly what he did – lecture them – with a minimum of risk to himself and maximum of exposure to his benefit.  Decorum demanded they sit and take it. No Joe Wilson “you lie” on this one. Sit and take.  And take they did – Obama was able to spin the myth of their intransigence and obstructionism as the crux of this year’s problems.

Rule One: You never give your political opponent a format that favors him and his message.  The President understood the advantage he was being handed and decided that while it was a bit of a political risk, it was one heavily weighted in his favor and well worth taking.  Anyone who watched it understands why.

The question and answer wasn’t much better – although Republicans did get him to admit their proposals did exist and were substantive. But other than that, the exchange was not at all what the GOP had hoped for.

Surely some among the GOP leadership must have foreseen that this format presented a gold-plated opportunity for Obama to do just what he did.

As for the President, he got the opportunity for a one-sided vent. Again, as usual, it was “just words”. But in this media driven political culture, “just words” are a means for scoring mostly meaningless political points, but points none the less.

It was a President in denial. And for those of us who’ve followed what’s happened this year (and what he has and hasn’t done) that was clear in his words. This was a man trying to justify himself and shift the blame for this year’s failure – as usual. Unfortunately, because he had the podium, that’s the only voice that was really heard that was able to remain on message. So he wins that rhetorical round. But it doesn’t mean what he said was true. It only means he got to say it without any real rebuttal.

My favorite line was “I’m not an ideologue”.

Of course he is. If he were the pragmatic politician he claims to be, he’d have pursued jobs and the economy as his first priority beginning last year. He didn’t. He instead pursued (and continues to pursue, in the face of majority public opposition) his party’s ideological agenda. Those are the actions of an ideologue, self-denial notwithstanding.

Hopefully the GOP will, should this ever happen again, change the format to that more like that which the UK has when the PM interacts with the opposition party in the House of Commons. No speeches or lectures, a true back and forth in which both sides have the opportunity to give as good as they get. I’ve admired and enjoyed that tradition of theirs for years. That removes the advantage of yesterday’s format and allows a truly “frank exchange” to take place.

~McQ


Weird Story Of The Day

If this is true, this is a guy that we most likely should encourage to stay in NoKo:

Saturday’s report by the conservative Dong-A Ilbo daily could not be confirmed independently.

Dong-A Ilbo, quoting an unidentified source, said the American was a 28-year-old man.

He crossed the border near the city of Tumen in northeast China into North Korea’s Onsong County on Monday, the daily said.

“I came here because I did not want to serve as a cannon fodder in the capitalist military. I want to serve in the North Korean army,” the American was quoted as telling North Koreans, according to the daily.

However his identity including his name and occupation remained unknown, the paper said.

Don’t want to be cannon fodder? In an all volunteer force? Don’t join.

Want to join an military that redefines the term “cannon fodder”. Join the NoKo People’s Army.

My guess is this person escaped from the funny farm and found their way to the land of the Funny Farm.

~McQ


New Technology gives a 360 degree view of devastation in Haiti

I have to admit upfront that I have a conflict of interest on this, but the Immersive Media cameras from my sisters company are amazing. Throw in that it gives some of the best views of the devastation in Haiti and I am kind of speechless. Go ahead and take a trip with them through Port au Prince and drag the view to look around in a full 360 degree view from a moving vehicle.

In addition to taking you into this disaster the potential applications seem rather large to me. Check it out. You can grab the screen while it is still or when playing and drag the view wherever you want.

index.php?clip=Video2

The initial commercial applications are kind of obvious, but I am curious about the applications to entertainment. Specifically movies. Like most new ways of filming I expect the initial efforts to be gimmicky, and low in actual value other than the novelty. However, imagine watching movies with an interactive ability for the viewer to shift the camera view from a first person point of view. The directors focus becomes less of an issue, and all of what is happening in view of whoever a character is becomes part of the story. Talk about taking the idea behind something like Vantage Point to a new level. Other interactive technologies could be combined with more impact.

You can view more footage of Haiti and look into the technology at http://www.immersivemedia.com/haiti/

Update: The autoplay was annoying, and the embed for the other footage seems to be having a problem at the moment, so I included a link to a video instead until the flash embed starts working again.


Krugman, Peacocks, The Deficit, Health Care And Spending

If you’ve been following Nobel economist and NY Times columnist Paul Krugman over the last few months, you’ve seen him slowly fall out of love with the Obama administration.  The primary reason is the administration has seemingly ignored his advice about the size of the deficit spending  – stimulus – that should be happening.  Krugman feels that the first stimulus was “too small”. I disagree, I feel it was a poorly targeted pork bill that didn’t address stimulus at all (with spending delayed on most of it for future years, it’s hard to fathom how it acts to stimulate the economy now).  But the amount should have been more than adequate to do that which Keynesian’s like Krugman prefer.  In fact, my guess is Krugman knows that, but can’t bring himself to admit it.  Thus he continues to pretend the size of the “stimulus” is the problem.

That said, today he goes after the president’s claim in the SOTU that he’s addressing the deficit.  Krugman essentially comes to the same conclusion most of us have – it’s not at all a serious attempt to do so:

Last week, the Center for American Progress, a think tank with close ties to the Obama administration, published an acerbic essay about the difference between true deficit hawks and showy “deficit peacocks.” You can identify deficit peacocks, readers were told, by the way they pretend that our budget problems can be solved with gimmicks like a temporary freeze in nondefense discretionary spending.

Guess who he identifies as a “deficit peacock?” Anyone who listened to the State of the Union address knows that answer. Krugman goes on to tell us why it is in our best interest to be spending more right now and not worrying about the deficit:

The nature of America’s troubles is easy to state. We’re in the aftermath of a severe financial crisis, which has led to mass job destruction. The only thing that’s keeping us from sliding into a second Great Depression is deficit spending. And right now we need more of that deficit spending because millions of American lives are being blighted by high unemployment, and the government should be doing everything it can to bring unemployment down.

But that brings us back to the $787 billion dollar “stimulus” bill (which, btw, the CBO now says will cost us $862 billion). That bill was supposed to be focused on bringing unemployment down, wasn’t it? In fact, the explicit claim was if it was passed, unemployment wouldn’t rise above 8%.

Of course one has to wonder if the money had been spent to stimulate job growth instead of monitoring the radioactive feces of rabbits whether or not such spending could have kept that unemployment number down. Only $256 billion of the $787 has been spent with no appreciable effect on unemployment at all. Could it have had an effect if it had been spent on what it should have been? We’ll never know. What we do know, as does Krugman, is that politically a second stimulus is a very unpopular.

That’s not to say we won’t see one. What we will see, however, is any second stimulus introduced to the public as a massive “jobs bill”. The word stimulus won’t be attached to it in any way, shape or form. But that’s why the characterization of Obama as a “deficit peacock” is dead on.

Krugman then gets to the pretzel logic that leaves everyone shaking their head:

In the long run, however, even the U.S. government has to pay its way. And the long-run budget outlook was dire even before the recent surge in the deficit, mainly because of inexorably rising health care costs. Looking ahead, we’re going to have to find a way to run smaller, not larger, deficits.

How can this apparent conflict between short-run needs and long-run responsibilities be resolved? Intellectually, it’s not hard at all. We should combine actions that create jobs now with other actions that will reduce deficits later. And economic officials in the Obama administration understand that logic: for the past year they have been very clear that their vision involves combining fiscal stimulus to help the economy now with health care reform to help the budget later.

First, not everyone agrees that you must “spend” to help the recovery. In fact, credit where credit is due, Obama layed out some tax cuts for small businesses and cap gains tax cuts that may indeed provide the impetus for hiring. The fact that he could have done that a year ago shouldn’t be lost on anyone. But while that means some reduced tax revenue for government, it isn’t a massive spending program. And, in fact, to offset that loss of revenue, government ought to cut spending commensurate with the loss. That’s the way toward fiscal sanity and a balanced budget – or at least one which is closer to being balanced than it is now.

So Krugman’s attempt to claim there’s only one “intellectual” solution to the contradiction he’s posed is poppycock. Note also that he brings up health care reform. The “budget” he’s talking about is that of the US government. The reform he’s talking about in this particular case has to do with the government programs which are out of control. Not the private side which as zip to do with the US budget. Only the Medicare/Medicaid side. Which again begs the question of why taking over much of the private side helps solve the crisis on the government side?

He finally admits it later on in the article:

So if health reform fails, you can forget about any serious effort to rein in rising Medicare costs.

He’s most likely right. And here’s what’s interesting about that sentence. Many of us on the right have been saying for quite some time, “if Medicare and Medicaid are the problem, why not fix those problems first and then, if successful, we can talk about further reform”. Instead we’ve gotten this monstrosity which really doesn’t address those problem areas (despite Krugman’s belief it will) and grabs for even more.

I’d love to see Krugman defend the logic of that.

So we’re paralyzed in the face of mass unemployment and out-of-control health care costs. Don’t blame Mr. Obama. There’s only so much one man can do, even if he sits in the White House. Blame our political culture instead, a culture that rewards hypocrisy and irresponsibility rather than serious efforts to solve America’s problems. And blame the filibuster, under which 41 senators can make the country ungovernable, if they choose — and they have so chosen.

I mostly agree in general with the sentiments expressed here, just not some of the specifics. Our political culture leaves much to be desired. You have to understand that when the best you can hope for is gridlock, something is very wrong with the mechanism that governs the country. It incentivizes behavior that looks short-term and rewards those who bring money to their home districts and states. Until that sort of system is changed, gridlock is about the best we can hope for. Unfortunately those who would have to change the system are presently rewarded by it.

That said, Obama is as much a part of the problem as anyone. He stole into the White House by promising “change” and people like Krugman bought into it. And while some of the scales have slipped from Krugman’s eyes, he still hasn’t accepted the fact that Obama is a double-talker who says all the right things and then acts exactly like a Chicago machine pol in his daily dealings. Obama is as much a part of the problem as anyone else in the system.

Lastly – it seems all the cool kids in DC and NY have discovered a new word for “they won’t go along with what we want to do” – “ungovernable”. Have you noticed that? We weren’t ungovernable when the Democrats wielded the minority filibuster in the Senate. We weren’t ungovernable when the anti-war crowd filled the streets. We weren’t ungovernable when Democrats used every procedural trick in the book to block Social Security reform. Nope, that only happens when Republicans have 41 seats in the Senate, Tea Parties protest and the right fights health care reform.

Krugman, like much of the left, has a very short and selective memory.

~McQ



The Fannie And Freddy “Secret”

The Obama administration and Democrats have consistently blamed the financial problems that the country has faced on Wall Street, banks and their greed. But it has just as consistently ignored the role and cost of two quasi-governmental agencies which were also in the center of the financial storm – Freddie Mac and Fanny Mae. The Wall Street Journal points out that the cost to the government (and therefore the taxpayer) of these two institutions has been kept “off books” by the fiction that they’re “private institutions”. But, in fact, they’re really not:

As the CBO notes in a recent background paper, the standards for when to include government-sponsored entities in the budget go back to the 1960s, when a Presidential commission laid out a set of questions.

To wit: “Who owns the agency?” (In the case of Fan and Fred, taxpayers.) “Who supplies its capital?” (Taxpayers.) “Who selects its managers?” (The federal government.) And finally, “Do the Congress and the President have control over the agency’s program and budget, or are the agency’s policies the responsibility of the Congress or the President only in some broad ultimate sense?” (The feds have control in every sense.)

The point, of course, is the claim they’re “quasi-governmental” or “private” entities is fiction. They are, in every way, controlled by the federal government and were as involved in the financial melt down as any other institution. In fact, there’s an argument that they were the instututions which made the housing bubble possible and, through their policies, encouraged it.

And if you want to talk about losses and costs to taxpayers, take a gander at these numbers:

Since Hank Paulson placed them in conservatorship in September 2008, Fan and Fred have stopped even pretending to be run for profit. Losses have mounted accordingly: Some $291 billion for taxpayers through 2009, $48 billion for the cost of new business in 2009 alone, and $21 billion more this year. Last August, CBO estimated the 10-year cost to taxpayers of keeping Fannie and Freddie afloat at $389 billion.

And it is now estimated that the two will average losses of 8 billion a year for the next 10 years, assuming the housing market stabalizes soon. Yes, that’s 80 billion over 10 years in addition to the losses above. Why isn’t the president hollering “we want our money back” at them?

The full cost of subsidizing mortgages via Fannie and Freddie, the FHA and Ginnie Mae remains hidden and off the official balance sheet, so there is little political pressure to stop the losses.

As the CBO notes, Fannie and Freddie “purchase mortgages at above-market prices,” driving down interest rates and passing some of the savings to home buyers. That subsidy is felt right away, but the risks in providing it are stored up over time, and their real costs may not be felt for years or even decades—as was the case in the years leading up to their spectacular collapse in 2008.

With the spectacular debt the Obama administration and Congressional Democrats are running up, they’re looking for every creative accounting means available to hide the truth. This is one of those ways. By pretending that Freddie and Fanny are “private” institutions, when it is clear they belong to the government in every conceivable way, they can keep their losses off the second set of government books presented to the public and say “see, it’s really not as bad as you think”.

Of course if a bank or Wall Street institution kept those kind of books, they’d go to jail.

WSJ concludes:

We suspect the real reason the White House wants Fan and Fred off budget is to disguise their real costs to taxpayers. They have become off-the-books subsidy engines for the housing lobby, and it is easier to push off the recognition of their losses to some future Administration and Congress rather than pay for them today. The new age of transparency has once again died aborning.

~McQ


SOTU Fact Check

Surprisingly, AP does it (credit where credit is due).  They cover the “spending freeze” (it would amount to less than 1% of the deficit) which we’ve covered in some detail.  They also point out that the nonsense about the health care plan preserving the “right” of Americans to keep their doctor and their plan isn’t exactly true (we’ve covered that before as well).   And they take on the claim about lobbyists which Michael has handled quite well below.

AP also talks about the deficit commission that Obama covered last night:

Obama: “I’ve called for a bipartisan fiscal commission, modeled on a proposal by Republican Judd Gregg and Democrat Kent Conrad. This can’t be one of those Washington gimmicks that lets us pretend we solved a problem. The commission will have to provide a specific set of solutions by a certain deadline. Yesterday, the Senate blocked a bill that would have created this commission. So I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans.”

THE FACTS: Any commission that Obama creates would be a weak substitute for what he really wanted — a commission created by Congress that could force lawmakers to consider unpopular remedies to reduce the debt, including curbing politically sensitive entitlements like Social Security and Medicare. That idea crashed in the Senate this week, defeated by equal numbers of Democrats and Republicans. Any commission set up by Obama alone would lack authority to force its recommendations before Congress, and would stand almost no chance of success.

The key line is in bold. Any commission formed by executive order will have no authority over Congress. Thus it will be a “gimmick” designed to “pretend we solved a problem”. How can it be anything else?

As Obama mentioned the Senate blocked a bill that would have created the commission. The same Senate that today used its 60 vote supermajority to pass a 1.9 trillion dollar hike to the debt ceiling. So you can draw your own conclusions as to how serious the party that can muster 60 votes for raising the debt ceiling but can’t manage to get those same 60 votes to pass a deficit commission is about the debt and cutting spending.

Another one covered by AP has to do with the claim of 2 million jobs saved or created by the “stimulus”. By their calculation and those of CBO, it may – let me stress that word – may have been in the range of 600,000 to possibly 1.6 million. Yeah – with tight numbers like that, you can bet they know what they’re talking about.

That brings us to Obama’s quote about transparency in which he calls on the White House and Congress to “do our work openly and give our people the government they deserve”. Most of the people have awakened to the fact that after not vetting the current resident of 1600 Pennsylvania Ave, we have the government we deserve. However, AP points out that Obama just skipped past all the broken transparency pledges he made and hasn’t even attempted to keep. Why in the world would anyone take his latest plea for transparency seriously?

You may or may not remember one of the few mentions of foreign policy last night – other than the usual tough talk toward Iran, most likely signifying nothing in reality – in which he claimed, “The United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly two decades.”

Yeah, well, not quite. According to AP:

Despite insisting early last year that they would complete the negotiations in time to avoid expiration of the 1991 Strategic Arms Reduction Treaty in early December, the U.S. and Russia failed to do so. And while officials say they think a deal on a new treaty is within reach, there has been no breakthrough. A new round of talks is set to start Monday. One important sticking point: disagreement over including missile defense issues in a new accord. If completed, the new deal may arguably be the farthest-reaching arms control treaty since the original 1991 agreement. An interim deal reached in 2002 did not include its own rules on verifying nuclear reductions.

And one of my favorite claims of the night – I’ve killed more terrorists than Bush did in 2008:

“And in the last year, hundreds of al-Qaida’s fighters and affiliates, including many senior leaders, have been captured or killed — far more than in 2008.”

Not so fast, says AP:

It is an impossible claim to verify. Neither the Bush nor the Obama administration has published enemy body counts, particularly those targeted by armed drones in the Pakistan-Afghanistan border region. The pace of drone attacks has increased dramatically in the last 18 months, according to congressional officials briefed on the secret program.

If it is an “impossible claim to verify” then Obama knew when he said it, that he was safe from scrutiny. Nice. I have four words for those who choose to believe his claim: “saved and created jobs”.

Last but not least we turn to PoltiFact for the SCOTUS shot by Obama:

“Last week, the Supreme Court reversed a century of law that I believe will open the floodgates for special interests – including foreign corporations – to spend without limit in our elections.”

Politifact says that if it’s true, it is “barely true”. They have a very fine write up which I encourage you to read about why Justice Alito may have been absolutely justified in his silently mouthed “not true” as Obama took that shot. And I have to say, trying to humiliate the SCOTUS in a public speech with them sitting right there open to such ridicule is a politically stupid stunt. They are, after all, still human beings, and I wouldn’t want to be arguing a case for the Obama administration that could go either way after POTUS called SCOTUS out. They’re not underlings like the JCS who have to sit there and take it. They are members of an equal and separate branch. I don’t think we’ve heard the last of that little bit of political stupidity.

~McQ

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