Free Markets, Free People


Have you spotted the evolving narrative yet?

Today at his press conference, President Obama claimed that people may have been confused by what he did early on with the massive spending because it was an “emergency” and he had to do something quickly.  Or said another way, he rushed everything through as quickly as he could – despite his promises – because the situation demanded it.  It wasn’t because he wanted too – it was because he had too.  

You know, like the pure pork stimulus bill,  most of which was scheduled to be spent in later years.  And, of course, although many would like to lay TARP completely at Bush’s feet it should be remembered it was a Democratic Congress that passed that and Obama voted yes. 

The point this new meme, of course is to cast himself as much more of a deficit hawk who was put in the position of saving the world (and his reaction argues against any claim of being a deficit hawk, by the way) – the emergency he continued to talk about today.

Timothy Egan at the NYT employs a variation on the theme in an article hilariously entitled, “How Obama saved Capitalism and lost the midterms”.  No.  Really – that’s his claim.  Obama saved Capitalism.  Because intruding on the natural processes of capitalism and not allowing them to take their natural course actually saves capitalism from, well, I suppose capitalism. 

Yeah, it’s a pretty funny in a weird sort of NYT kind of way. 

Most, except perhaps Egan, understand that capitalism isn’t something that “fails”.  It is as much a process as anything and it is built upon the trillions of private individual interactions that voluntarily happen daily.   What Egan claims Obama did isn’t at all true.  What Obama did was prop up crony capitalism by bailing out institutions that had been incentivized by government to behave badly.  End of story.  And then he went on to prop up manufacturers (car companies) that had been managed badly and were failing all on their own.  Neither action has a thing to do with capitalism per se.  Markets reward success and are brutal to failure.  Propping up failure has nothing to do with markets and thus nothing to do with market capitalism.  Had both GM and Chrysler gone under, the best parts would have emerged under some other car company.   The fact is we’d still be going cars today had they gone under, just not those cars.

Obama may not have been among those who created the incentives that created the financial problems  – although it was rather disappointing to see one of them win reelection in MA – but the fact remains that at base, Obama was using borrowed money to keep the government/private bank scam it precipitated from collapsing the whole economy as the bubble they’d created burst.  Again, that’s not a problem of capitalism.

So Egan’s premise?  Well, it’s simply nonsense. 

On the eve of the day after a “shellacking” as Obama called it during the presser, I suppose the left is looking for any silver lining it can find. Even if it is to be found in that for which they claim the president supposedly didn’t get proper credit.  Egan might have had a slight chance at credibility if he’d claimed that the “emergency” actions of the Obama administration had kept the recession from being deeper – that’s at least debatable.

But saving Capitalism?

That’s just ignorance on a stick.

~McQ

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29 Responses to Have you spotted the evolving narrative yet?

  • “How Obama Converted The U.S. Into A Banana Republic, And Converted Middle-America Into TEA Party Activists–All In Less Than Two Years”

    subtitled–Perverting Bankruptcy, Contract, And Property Law For Funds And Profit…Building CRONY Capitalism The Chicago Way

    Crips…

  • I’m surprised they haven’t claimed outright victory yet because they held onto the Senate and California.

  • Don’t you silly wingnutz understand?  It’s not important that the Porkulus funds weren’t spent right away – what’s important was the symbolic effect – it made everybody feel that the Prez was Doing Something Right Now, and thus we have the vibrant economic boom that we’re all enjoying!

    If some Liberal Loon wants to advance this “explanation” – it’s just bizarre enough for someone to try -  I will demand a royalty.

  • No compromise.  Obama gets NOTHING for the next two years.

    His presidency effectively ended yesterday if we hold the GOP to the fire.  MAKE IT HAPPEN

    Or we’ll throw you out next.

  • I heard him say during the press conference ‘people want to point to what we did and say it was some kind of ‘agenda’, instead of pointing to it and saying it was a ‘reaction to the difficult situation he inherited’.
    Reaction or Agenda – you make the call

  • Stanley Kurtz’s “Radical-in-Chief” and Steven Malanga’s “Shakedown.”

    Those present the real narratives about what this is all about.

    Whereas I started arguing here, I think last year, that Obama cannot be grasped within the normative terms of American politics and that any attempt to do so only strengthens him, well, I now submit Kurtz’s book as proof of that thesis. I urge you all to get it and spend a week with it. You will not be quite the same when you are done with it.

    Malanga’s book deals with just another element of it. I haven’t finished it yet, but I know that there is not a single regular here who will not be seriously updated by it. If you’ve read the things I’ve written, for instance, about teachers unions and local school districts, you will have a hint of what I’m referring to. Get it.

    Kurtz first, then Malanga.

    • Martin: Good to hear from you! FYI — my Firefox thinks your blog is an attack site.

      • The blog is not infected with malware as far as I can tell. I’ve yet to hear of or experience any actual problems. I’ve been too preoccupied with other things to get the various alerts discharged, however. There’s a bit of a confusing process involved and I just haven’t been able to focus on it.

        • Well, just so you know. I visited twice and wasn’t infected with anything, but the “Attack Site” warning page is scary.

          My anecdotal experience is that the web has become more dangerous in the past year. I’ve had to nuke system partitions three times.  I use disk imaging software so it’s pretty painless, but I still don’t like it.

  • Had both GM and Chrysler gone under, the best parts would have emerged under some other car company.   The fact is we’d still be going cars today had they gone under, just not those cars.

    You can argue whether they should have been allowed to go under.  But this above claim is a sugarcoating to allowing them to go under and any cascading consequences that is simply not justified.

    If there was any validity to that claim, there would already have been new car companies.  The Big 3 had lost half their market share and most of that in slightly over a decade.  There was and still is plenty of ‘pieces’, factories, personnel, executives, etc.  that could have been absorbed by a new company.  There is no logistical reason from the existence of GM & Chrysler that prevented a new company from springing up.  If anything, with no baggage like mountains of debt or unions, they should have been able to clean house if it is so easy to set up shop.

    The problem is that the amount of cold hard cash an auto company would require to penetrate the marketplace and ride the learning curve to making its own cars would put the bailout amount to shame.  The industry is crushingly competitive.  The upstart phase is long gone.   Only companies that have pre-existing markets can penetrate the US marketplace.  That goes for both foreign and domestic.  Its only be leveraging existing operations that new products can be introduced competitively.  Foreign makers had their essentially captive home markets to leverage.  In the beginning they could crank out a few more and send them here.  The investment cost is minimal because the plants already existed for their own market.  Even then it took decades and a regulatory barrage favoring their vehicles for consumers to get comfortable with their cars.

    • There is still an Enron, though you would likely never have heard of it.
      The Chapt. 11 bankruptcy process is EXTREMELY rational, fair, and well understood.  It is…was before Obama…very rule-driven, and it would have allowed a GM and Chrysler to come out of the process lean, clean, and competitive.
      Saturn proves your “up-start” stuff just that…stuff.  They were doing rather well.  Just look at all the new name-plates that did not exist only a decade ago.  What nonsense!

      • And I will never forgive the bastards for deep sixing Saturn, which was one of their few competative operations. They did it only because the Unions didn’t like the deal that Saturn had.

        I loved Saturns, I will never buy a Government Motors car.

        • The unions had nothing to do with it.  Saturns had become mostly badged engineered Chevys.  They were built at the same plant and most of them continue to be built now.

          They closed Saturn because their dealership agreements were made in light of the State Dealership Laws that were passed with retroactive effect on most of their older dealerships.  Those laws made it highly expensive to terminate those extra dealers.  Saturn’s dealership terms were more flexible and easier to terminate.

          And those overseeing the bankruptcy wanted to see dealerships and brands of one kind or another eliminated because that’s what the peanut gallery wanted.  And until recently Saturn’s product lineup was lack luster so their overall track record wasn’t that great.

          (try number three hoping it won’t be swallowed by the comment system again)

      • In the markets where the remnants of Enron offer their product, how much competition is there?  Chances are like most utilities your alternatives to avoid Enron were to go without or move to a new location.

        Combine that with the fact utilities deliver an incremental product where if somehow you were let down, the most you could lose is one month’s payment.  When people spend $30,000 in one shot and truly have a choice, their decision process is a little different.

        So Enron had a guaranteed customer base and someone willing to put up the debtor in possession financing because eventually, they would get their money back almost guaranteed with a captive customer base.

        Name one company that stepped forward to offer dip financing for the tens of billions of dollars it would have required to see GM through a bankruptcy?

    • A – the validity is found in the fact that there are other car companies already.

      B – the fact that there would be a cascading effect (something that has happened over the ages with badly managed companies) doesn’t, nor should it ever, give them or the government a claim on my wallet.

      C – the market has shown that where there is a need, someone will raise the cash to fill it. It happens everyday with venture capital. What the bankruptcy and bailout of these car companies have proven is that the law is arbitrary. The bond holders in those companies were screwed by the government’s intervention. They’re going to have a GM IPO. I wouldn’t touch GM stock with at 10 foot poll.

      • Let me only disagree on one point, McQ…  Up until Obama, bankruptcy was considered a model of NOT-arbitrariness.
        It is impossible to square what came out of the GM and Chrysler deals with bankruptcy law, property law, or the law of contracts.  It cannot be done.  It is a pure example of fascist economics, IMNHO.  Which is to say, pure corruption…if that’s possible

      • The billions spent in bailouts make me wonder… when a company spends its own money (including that given to them freely by customers and investors) to drop obscenely large bonuses and severance packages on executives, there is an uproar.  Are the people behind this uproar the same ones who don’t blink when government reaches into someone else’s pockets to reward badly-managed corporations with massive “loans”?  Or worse, when they wink at Wall Street firms and tell them that it’s okay to take enormous gambles, because Congress has trillions of dollars (just burning a hole in its collective pocket) that it will use to cushion their fall?  How about when government takes over a company with a bad business plan, knowing that it can use someone else’s money to prop it up?

        How is it that any government official gets away with criticizing corporate owners and executives for doing something that they not only facilitate, not only reward with loans and bailouts taken from our wallets, but also mimick in even more egregious and less efficient ways?  Ugh.

      • A) Let me rephrase it this way.  Name one car company that penetrated the US marketplace based off of marketing only the the US marketplace in that last 60 years?

        B) Never said it did.  But the outcome shouldn’t be depicted as guaranteed rainbows and ponies.  Decisions have consequences and they are not always good ones.

        C) In addition to my response in (A), venture capital is usually spent in upstart markets.  The bondholders for GM weren’t like Chrysler in that the vast majority weren’t secured.  The Bondholders for GM would have been screwed in a normal bankruptcy.
        And about the IPO, I’ve found Wallstreet has absolutely no integrity.  I have no doubt that most of the pundits that inflamed people about the GM bailout using fact or fiction to make the financial ballout not look so bad and probably disparage the GM IPO, have their dibs in on a piece of it.  And they are glad people are staying away because it will save them a few dollars on this first pass.

  • Fu**in’ commies…worse than vampires…sometime a stake through the heart isn’t enough.

  • Obama inherited many problems, but he was pretty lucky. If Lehmans had been more aggressive in finding a buyer during the summer of 2008, the whole housing debacle could have lasted until after the elections, perhaps even into January 2009. If Bush had bailed out Lehman’s that might have happened, too. The timing of Bear Stearns and Lehmans is not based on politics – Obama just got lucky.
    Maybe if the crisis had been smaller, Obama’s coat tails would have been smaller, too. Then he might have had to compromise, and saved himself. Instead they had massive majorities, and passed the pork and bail outs fast and then dithered around for a while. The lefties I am reading in comments at other blogs all seem to think that Obama was obstructed by the GOP. LOL. LOL. LOL. He was obstructed by blue dogs and popular anger which (rightfully it turns out) gave some Democrats pause. These lefties now are saying “You GOP better compromise now, man” after we heard “I won, help clean up but be quiet, get in the back seat, the slurpee story, and punish your enemies.” Maybe Obama will send some spending cuts over as a peace offering….LOL.

  • The unanswered question is …
    Who is Obama going to out-source his legislative agenda to now that Pelosi is gone and Reid greatly diminsihed ?

    • That’s an easy one: he’s going to outsource his legislative agenda to the federal agencies.

      • That is VERY likely true, and VERY dangerous.  He has crazy people in those agencies

        • It’s been happening all along, and will intensify over the next two years. The goal has always been to crash the system and then bring the refugees from the broken economy under the state umbrella in new and wonderful ways.

    • Given the rumblings already about “modifying” the fillibuster and past grumblings about eliminating the Electoral College, I’m surprised that the dems haven’t started calling for the elimination of the Congress altogether.  It’s there way when they lose.

      “It’s an old institution, not efficient, doesn’t really reflect the will of the people, anti-democratic, etc., etc.”

      Honestly, the powerful federal bureacracy and now the various czars are steps in that direction already.  And, so long as they get face time on TV, some change to pass out largesse to their pals, and all the perqs, I think that most members of Congress would be fine with eliminating their official jobs.  All that pesky responsibility and the prospect of having to face irrate constituents.  Ugh!  Who wants THAT???