Free Markets, Free People

Jason Pye

Let Them Buy Stock

While stocks are tanking, partially due to uncertainty and skepticism over President Barack Obama’s economic agenda, the president encouraged people to invest:

As Wall Street tumbles, President Barack Obama offered up some investing advice on Tuesday, telling a wary nation that stocks are becoming a “a potentially good deal” for those willing to think long term. The White House later cautioned people not to read too much into the statement.

Obama also said he will not base policy on what he called the “day-to-day gyrations of the stock market.” The Dow Jones industrial average fell again Tuesday after plunging on Monday to it lowest level in more than 11 years.

The index has lost more than half its value since a record peak in October 2007. The toll on retirement plans, college savings and nest eggs has been huge.

“You know, the stock market is sort of like a tracking poll in politics,” Obama said during an appearance with British Prime Minister Gordon Brown. “It bobs up and down day to day, and if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.”

Yet lately, Wall Street’s direction has been down, period. Investors are in despair over the state of financial companies, the deepening scope of the recession and doubts about the government’s various attempts to bolster the banking sector and create jobs.

Talk show host Neal Boortz responded with this:

Is he kidding? He’s waging an all-out war against capitalism, and he wants us to buy stocks? This man who wants a government-controlled economy wants us to invest in the stock market? This is like the Surgeon General telling us to go out and have unprotected sex with drug addicted street walkers. Yeah … let’s all do that!

No doubt that stocks may improve in the future, but economic forecasts aren’t that great in the long term, considering the amount of debt being piled up and unfunded liabilities from entitlements.

And who wants to be an investor when they constantly have a target painted on their backs by politicians who make class warfare the focal point of their economic agenda?

Geithner defends tax increases

Tax cheat Timothy Geithner is defending President Barack Obama’s proposed tax increases:

President Obama’s Treasury secretary is defending proposed tax increases, saying they are necessary to limit future budget deficits.

Timothy Geithner responded on Wednesday to Republican criticism that the administration wants to increase taxes during a recession. Geithner noted that tax increases on couples making more than $250,000 per year would not take effect until 2011.

Obama inherited a $1.3 trillion budget deficit that is expected to balloon to $1.75 trillion this year. Obama says his plan would reduce the deficit to $533 billion in four years.

Don’t you love how they act like the only way to cut the deficit is to raise taxes. I guess it’s too much to ask to just reduce spending to cut the deficit.

DC vouchers in trouble

The omnibus budget bill that passed the House last week could destroy school vouchers in Washington, DC and the Washington Post is urging the Senate to restore the funding:

Rep. Davis R. Obey (Wis.) and other congressional Democrats should spare us their phony concern about the children participating in the District’s school voucher program. If they cared for the future of these students, they wouldn’t be so quick as to try to kill the program that affords low-income, minority children a chance at a better education. Their refusal to even give the program a fair hearing makes it critical that D.C. Mayor Adrian M. Fenty (D) seek help from voucher supporters in the Senate and, if need be, President Obama.

Last week, the Democrat-controlled House passed a spending bill that spells the end, after the 2009-10 school year, of the federally funded program that enables poor students to attend private schools with scholarships of up to $7,500. A statement signed by Mr. Obey as Appropriations Committee chairman that accompanied the $410 billion spending package directs D.C. Schools Chancellor Michelle A. Rhee to “promptly take steps to minimize potential disruption and ensure smooth transition” for students forced back into the public schools.

We would like Mr. Obey and his colleagues to talk about possible “disruption” with Deborah Parker, mother of two children who attend Sidwell Friends School because of the D.C. Opportunity Scholarship Program. “The mere thought of returning to public school frightens me,” Ms. Parker told us as she related the opportunities — such as a trip to China for her son — made possible by the program. Tell her, as critics claim, that vouchers don’t work, and she’ll list her children’s improved test scores, feeling of safety and improved motivation.

But the debate unfolding on Capitol Hill isn’t about facts. It’s about politics and the stranglehold the teachers unions have on the Democratic Party. Why else has so much time and effort gone into trying to kill off what, in the grand scheme of government spending, is a tiny program? Why wouldn’t Congress want to get the results of a carefully calibrated scientific study before pulling the plug on a program that has proved to be enormously popular? Could the real fear be that school vouchers might actually be shown to be effective in leveling the academic playing field?

This week, the Senate takes up the omnibus spending bill, and we hope that, with the help of supporters such as Sen. Joseph I. Lieberman (I-Conn.), the program gets the reprieve it deserves. If it doesn’t, someone needs to tell Ms. Parker why a bunch of elected officials who can send their children to any school they choose are taking that option from her.

The vouchers cover up to $7,500 ($6,000 average), the average cost per student in DC is $24,600. So it’s hardly a substantial amount of money in comparison to the amount of money spent on the average student and the vouchers are having a positive impact for students.

Members of Congress and the President have made the choice to send their kids to private school. If they don’t trust the government to educate their kids, why should the residents of the District of Columbia?

Romney wins CPAC poll

Mitt Romney won the presidential straw poll at CPAC today:

One day after delivering a forceful campaign-style speech to the conference of conservative activists, former Massachusetts Gov. Mitt Romney won his third straight CPAC Straw Poll, earning 20 percent of the vote on a ballot that included nine other Republicans who could seek the party’s presidential nomination in 2012.

Romney’s straw poll win at the 2007 Conservative Political Action Conference helped to elevate Romney from a little-known governor to a bona fide presidential frontrunner, and his narrow victory in last year’s straw poll reaffirmed his support among conservative voters. But Romney failed to win the Republican nomination, which was eventually won by Arizona Sen. John McCain.

In the 2009 poll, Louisiana Gov. Bobby Jindal came in second with 14 percent of the vote, while Alaska Gov. Sarah Palin and Texas Rep. Ron Paul tied at 13 percent. Jindal and Palin did not attend the conference.

Rounding out the straw poll results were former House speaker Newt Gingrich at 10 percent, former Arkansas Gov. Mike Huckabee at seven percent, South Carolina Gov. Mark Sanford at four percent, former New York City mayor Rudy Giuliani at three percent, Minnesota Gov. Tim Pawlenty at two percent, and Florida Gov. Charlie Crist at one percent. Nine percent of poll participants were undecided.

Glad to see the folks at the conference aren’t taking Tax Hike Mike too seriously, though I’m a bit bummed about Mark Sanford’s numbers. I’m surprised to see how well Ron Paul did. I know C4L had a presence at CPAC, looks like it paid off.

Here is a better look at things from CPAC:

Nationalization of banks unlikely

Fed Chairman Ben Bernanke says bank nationalization is unlikely:

Stress tests of big US banks that start this week are unlikely to lead to any of them being seized by regulators and nationalised outright, Federal Reserve chairman Ben Bernanke told Congress on Tuesday.

His comments provided the clearest signal yet that US authorities hope to support major banks as going concerns in the private markets, taking equity stakes as necessary to shore up their capital in what would amount to partial nationalisations.

Stocks rose in response, with the S&P 500 index rising 4 per cent from the previous session’s 12-year lows. Both Citigroup and Bank of America rose about 21 per cent to lead the market higher.

Asked whether the stress tests will lead regulators to move in to take outright control of some banks under powers used to deal with failing institutions, the Federal Reserve chairman said: “No, I don’t think so.”

He made it clear that he does not believe that outright nationalisation makes sense today.

“I do not see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalise a bank when it just is not necessary.”

He said the authorities had other ways to “exert adequate control to make sure they are doing what is necessary to become healthy and viable”.

Obama has been trying to play down nationalization for the last week as well, though some would argue that a partial nationalization has already taken place.

You have to wonder if nationalization would cause a run on banks. Wall Street was clearly worried about the prospect. Stocks tanked last week even as Obama was denying plans to nationalize, but they jumped when Bernanke said nationalization was unlikely.

Despite Obama basically telling us last night that the Era of Big Government is back and on steroids, Wall Street was has been skeptical of his plans. For the first time in months, I’m proud of Wall Street.

Live-blogging Obama’s speech

Tonight’s speech by Barack Obama isn’t a true State of the Union, but it’s close enough. Republicans will even have a response given by Louisiana Gov. Bobby Jindal.

Live-blogging will begin tonight around 8:30pm or so, I hope you’ll join us.

Searching the Omnibus

Good luck searching through the omnibus spending bill:

The $500 billion omnibus spending bill to fund the most of federal government for the rest of the year will be debated in the House this week. And it has now finally been posted online.

It’s a PDF of scanned pages, meaning it can’t be searched or parsed in any other way. All 1,133 pages of it. Same with the 1,845-page explanatory statement.

That’s placing form over substance, putting a bill online in a useless format.

The bill combines spending for several agencies. On parts of the bill posted on the House Appropriations Committee website, you can literally handwritten notes and crossed out lines on various pages of the legislation. You can see an example on page 9 on the section of the bill dealing with appropriations for “Agriculture, Rural Development, Food and Drug Administration, and Related Agencies.”

You can still go through and find the pork, but the lack of a tool to search the document makes it more difficult.

9,000 earmarks in omnibus spending bill

“I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadily resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people.” – Grover Cleveland

An omnibus spending bill introduced today in Congress is stuffed with 9,000 earmarks:

“We need earmark reform,” Obama said in September during a presidential debate in Oxford, Miss. “And when I’m president, I will go line by line to make sure that we are not spending money unwisely.”

President Obama should prepare to carve out a lot of free time and keep the coffee hot next week as Congress prepares to unveil a $410 billion omnibus spending bill that’s riddled with thousands of earmarks, despite his calls for restraint and efforts on Capitol Hill to curtail the practice.

The bill will contain about 9,000 earmarks totaling $5 billion, congressional officials say. Many of the earmarks – loosely defined as local projects inserted by members of Congress – were inserted last year as the spending bills worked their way through various committees.

In case you’re wondering, the highest number of earmarks in a single year is 13,997 (2005) at a cost of $27.3 billion. Though the number of earmarks dropped to 9,963 in 2006, the cost surpassed the previous year at $29 billion.

Obama has pledged to “slash earmarks to no greater than 1994 levels and ensure all spending decisions are open to the public.” This spending bill isn’t a great start on that promise.

You can read the FY 2009 Omnibus Appropriations Act here.

H/T: Club for Growth