Free Markets, Free People

Michael Wade

Obama and the Economy: Incompetence, Disinterest, or Something Else?

Over the past several weeks we’ve been pondering Pres. Obama’s handling of the economic crisis. For the most part we’ve all agreed that Obama’s lack of leadership (whether from a dearth of experience or ability) is only serving to exacerbate the situation. But we also have somewhat divergent views as to whether there is a method to Obama’s madness.

Bruce is pretty convinced that the problem is a lack of executive experience, and the fact that Obama is learning on the job, while in the one government position that simply won’t allow for that sort of training. Being devoid of leadership skills or abilities, and being overly confident in his abilities to talk his way out of trouble, is driving Obama into mistake after mistake. Call this the Boy-King scenario.

Dale has suggested that Obama is simply disinterested in things like foreign and economic policy, thus he’s put little effort into guiding those efforts, and instead has handed these messy areas off to subordinates. That those on whom he is depending are not terribly proficient is not helping matters (e.g. Hillary and the “reset” button). But at bottom, the real problem with Obama is that his only real concern is with implementing his social agenda. This is bascially the Louis XVI problem (the King who famously recorded “Rien” as the sole entry to his July 14, 1789 diary, referring to his hunting exploits that day).

Last night on the podcast, I ventured that, in addition to a lack of experience and a disinterest in anything other than social policy, Obama is perfectly happy to let the economy flounder because (he thinks) it will drive more people into the arms of government dependency, and allow him to push forward with the radical transformation he envisions for this country. What he wants most, in my opinion, is to greatly expand the desire and need for government, to instill “democratic” controls into as many areas of life as possible (and especially in economic affairs), and to revise what he sees as a top-down power structure into a bottom-up one. Regardless of whether Obama is right or wrong in any of his thinking, it seems to me that his apparent lack of concern with respect to the economic crisis (only one of seventeen post filled in Treasury, despite the frightening prospects of a new depression?) has more to do with the fact that he does not envision the crisis interfering with his social agenda, and perhaps sees it as an enabler of that agenda. Call this the Commodus explanation.

I’m loathe to suggest that Obama is some sort of Manchurian Candidate, aiming to secretly impose socialism on the US, primarily because we’ve been teetering on that edge for several decades now, and he’s not been shy about wanting to give the final nudge. At the same time, I believe that Obama truly wants what’s best for this country. It’s just that what he views as “best” is something similar to European social-democracy, to which I am absolutely opposed.

So, I’m curious. How do you all see it? Is Obama the Boy-King, Louis XVI, or Commodus? Some combination of the three? Something different altogether?

Podcast for 22 Mar 09

In this podcast, Bruce, Michael and Dale talk about the AIG bonus Fiasco, limiting executive pay,  and the public’s tolerance for President Obama.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

From Here To Electricity

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Any rumors that the President and his muse were on the outs is pure folly, despite Obama been seen speaking out in public alone. From an interview with the TOTUS:

Teleprompter, is the president ever argumentative with you, or is he compliant with your instructions?

Teleprompter Of The United States

Teleprompter Of The United States


Good question. Look, like any relationship, we have our ups and downs. Last year on the campaign trail, The Big Guy came to me and told me that like the cigarettes, he really felt like he needed to start working through his dependency. Then he went out and did this townhall session on health care.

Suffice it to say, we aren’t having those unpleasant discussions any more.

[Photo by www.therightscoop.com; HT: HAHL]

Some Bonuses Less Outrageous Than Others

If you are inclined to accept without question that the bonuses paid to AIG employees deserve unmitigated moral indignation, as Pres. Obama and the Democrats seem to, then shouldn’t that opprobrium cut across the board? Well, I guess some animals are more equal than others:

At least four Fannie Mae executives are slated to receive more than $400,000 in bonuses each this year as a result of the company’s government-approved retention program, The Post’s Zach Goldfarb reports.

The executives include chief operating officer Michael Williams ($611,000), deputy chief financial officer David Hisey ($517,000), and executive vice presidents Thomas Lund ($470,000) and Kenneth Bacon ($470,000).

Each of these executives earned about $200,000 in retention payments last year and salaries ranging from $385,000 to $676,000.

According to the report, such bonuses are doled out depending on how integral the employee is to the companies, as approved by the FHFA:

Fannie Mae, which suffered $59 billion in losses last year, has requested $15 billion in taxpayer assistance, and has said it expects to need plenty more.

All major compensation decisions are authorized by Fannie Mae’s federal regulator, the Federal Housing Finance Agency, which created a retention program when the company was seized last September to hold on to key employees.

Under the program, employees are eligible to receive up to 150 percent of their salary in bonuses this year, but many will receive far less than that, and some might receive zero, depending on how central they are deemed to the company’s task.

pigs-in-the-house

Congressman Barney Frank, one of Fannie Mae’s and Freddie Mac’s biggest supporters, and Chairman of the House Financial Services Committee which oversees the institutions, was reached for comment and had this to say about whether paying retention bonuses was really necessary:

That’s nonsensical. It’s clear they made a lot of mistakes and we need to undo what they did. If they really understood what they did in the first place, seriously, they probably wouldn’t have done much of it. Secondly, when you are trying to undo something, it is often not the case that the people who did it are the ones to put in place. People are sometimes committed to not admitting mistakes. … So that argument I think is in fact almost counter, because the argument that you take the people who made the mistake and put them in charge of undoing the mistake goes against the human impulse not to admit a mistake.

Oops! Sorry, about that. The foregoing statement was from Barney Frank, but he was referring to AIG bonuses.

This morning, ThinkProgress sat down with Rep. Barney Frank (D-MA), who chairs the House Financial Services Committee and has called for the firing of AIG executives. When asked to respond to Sorkin’s claim that only AIG employees can navigate the economy out of the mess they created, Frank dismissed it as “nonsensical”

Pigs in the House indeed.

Newspeak: Pelosi Style

Up is down. In is out. Billions in earmarks are no big deal, but millions in “bonuses” merit extreme outrage. And now, per Speaker Nancy Pelosi, illegal aliens represent the height of patriotism, but enforcing American laws is “un-American”:

No I can't!

No I can't!

House Speaker Nancy Pelosi recently told a group of both legal and illegal immigrants and their families that enforcement of existing immigration laws, as currently practiced, is “un-American.”

The speaker, condemning raids by Immigration and Customs Enforcement agents, referred to the immigrants she was addressing as “very, very patriotic.”

“Who in this country would not want to change a policy of kicking in doors in the middle of the night and sending a parent away from their families?” Pelosi told a mostly Hispanic gathering at St. Anthony’s Church in San Francisco.

As some might say, that’s muy estúpido. But the Speaker wasn’t done:

Referring to work site enforcement actions by ICE agents, Pelosi said, “We have to have a change in policy and practice and again … I can’t say enough, the raids must end. The raids must end.

“You are special people. You’re here on a Saturday night to take responsibility for our country’s future. That makes you very, very patriotic.”

Our country? Perhaps Pelosi is unclear on the concept of illegal immigrants? Do you think she realizes that they are not part of our country?

And the idea that enforcing our immigration laws is somehow “un-American” is beyond ludicrous. Although, when you consider this is coming from the party that seems to think paying taxes is a only a patriotic duty if you aren’t working for the Democrats, then I suppose it makes sense.

In the spirit of Pelosi’s newspeak, may I just say that the Madam Speaker is clearly a thoughtful and intelligent lawmaker who is doing a fine job at her post.

[HT: HotAir HL]

Barely Legal

surf-beaver

Talk about the government getting all up in someone’s business:

Things could get hairy in New Jersey this summer for women who sport revealing bikinis or a little bit less.

The painful Brazilian wax and its intimate derivatives are in danger of being stripped from salon and spa menus if a recent proposal to ban genital waxing is passed by the state’s Board of Cosmetology and Hairstyling.

[...]

New Jersey statutes allow waxing of the face, neck, arms, legs and abdomen, but officials say that genital waxing has always been illegal, although not spelled out.

Regardless, almost every salon in South Jersey, from Atlantic City casinos to suburban strip malls, has been breaking the law for years by ridding women, and some men, of their pubic hair for $50 to $60 a session.

Jeff Lamm, a spokesman for New Jersey’s Division of Consumer Affairs, said that the proposal would specifically ban genital waxing, and was prompted by complaints to the board from two women who were injured and hospitalized. One of them sued. Lamm said that the state only investigates infractions if consumers complain.

beachbeaver2
What happened to “keep your hands off my body”? If the government can dictate the size and shape of the drapes, what’s to stop it from taking over the whole womb room? It’s not as if the rights of the unshorn are at risk here. In addition, there is a legitimate concern for where women will turn if they lose the right to freely control their bare necessities:

Cherry Hill salon owner Linda Orsuto said that women would “go ballistic” if the proposal passed. She said that some women would resort to waxing themselves, visiting unlicensed salons or traveling to other states, including Pennsylvania, in a quest to remain bare down there.

“The clients are going to freak,” said Orsuto, who owns 800 West Salon & Spa, on Route 70. “It’s a hot issue, and we’re going to have to do something.”

Scary. If the government camel insists on sticking its nose under Jersey girls’ skirts, can back-alley bush removal with rusty razors be far behind? beach-beaver

Now, I understand that some aficionados of adult entertainment from the 70’s might be excited about the return of a tufted tarts and piliferous punani. But that sort of hirsute protectionism treads dangerously upon our most cherished freedoms, and will potentially lead to messy entanglements from which we will find it hard to extricate ourselves (think “velcro”).

Accordingly, I stand firmly behind the women of New Jersey and fully support their rights to depilate as they see fit, with the advice and counsel of their salon professional. So say it loud, ladies, in all your glabrous glory: “We’re bare! Down there! And we’re proud!”

Podcast for 15 Mar 09

In this podcast, Bruce, Michael and Dale talk about the week’s events, and the state of modern journalism.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Understatement of the Week

China expresses some … um … “concern” about whether or not it will ever see its money back:

The Chinese prime minister, Wen Jiabao, expressed unusually blunt concern on Friday about the safety of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to provide assurances that the securities would maintain their value in the face of a global financial crisis.

"How much chance China get repaid?"

How much chance China get repaid?\


Speaking ahead of a meeting of finance ministers and bankers this weekend in London to lay the groundwork for next month’s G20 summit, Mr. Wen said he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.

“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

Just a little? There’s an old saying to the effect of “if you owe the bank $1 Million, then the bank owns you; if you owe the bank $1 Trillion, then you own the bank.” China’s feeling pretty nervous because it knows it can’t sell its holdings except at a tremendous loss — both from the normal discount expected, and from the fact that it is by far the largest mover in the market (e.g. what do you think would happen to Microsoft stock if Bill Gates started selling off?) — and it doesn’t see a whole lot coming out of Washington to instill confidence.

But there’s no need to fret PM Jiabao! Unnamed economists are here to save the day:

While economists dismissed the possibility of the United States defaulting on its obligations, they said China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.

Whew! That was close. Nothing but a little market risk to worry about there, Jiabao. Default? Pffft … never gonna happen.

Back in the land called “reality” however, default is plays a bigger part since, aside from reneging on the debt, there are only three other ways for the government to pay for its spending binge: higher taxes, printing more money, or borrowing. Higher taxes impedes growth and leads to less revenue. Printing money leads to hyper-inflation. So, even though those two choices will be used to a certain extent, further borrowing is the only viable alternative to default. But who’s going to lend to us?

Maybe China?

The bulk of China’s investment in the United States consists of bonds issued by the Treasury and government-sponsored enterprises and purchased by the State Administration of Foreign Exchange, which is part of the People’s Bank of China … much of the Treasury debt China purchased in recent years carries a low interest rate, and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually create price inflation, which would lead to higher interest rates.

This puts the Chinese government in a difficult position. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.

It may just be the case that China’s best option is to support its investment by propping up its best customer with yet more loans. Unfortunately, that means that Washington will have little incentive to slow down spending (since it owns the bank). The nasty little cycle of borrowing > spending > inflation > rising interest rates > falling dollar, will continue necessitating even more borrowing. China, in turn, will have serious questions about the value of its investment, and the US will start having serious discussions about declaring a default.

In short, China’s not just “worried” about the current fiscal mess. It’s crapping its collectivist shorts.

House Praises Irrational Number

No, I’m not referring to any stimulus bill, or deficit spending figures. This was no celebration of a CBO report or Obama budget figures. Instead, the House of Representatives decided that it needed to spend some time lauding that most infamous of all irrational numbers:

With the world swirling about it, the House took a moment Thursday to honor pi, the Greek letter symbolizing that great constant in mathematics representing the ratio of the circumference of a circle to its diameter.

[...]

Rounded off, pi equates to 3.14, hence the designation of March 14 as Pi Day under the resolution. Informal celebrations have been held around the country for at least 20 years, but Thursday’s 391-10 vote is the first time Congress has joined the party.

“I’m kind of geeked up about it,” Rep. Brian Baird (D-Wash.) told POLITICO. “It’s crazy, but I’m a whole lot more excited about that than congratulating the winner of last year’s Rose Bowl.

Well that’s reassuring. As long as the peoples’ representatives are happy, then we must all be happy, eh?

“It makes you realize how consequential you really are,” Rep. Bill Delahunt (D-Mass.) said with a smile.

By “you” Delahunt meant himself (“consequential” being defined as “self-important”). Unless, of course, he meant to say “inconsequential” in which case he was referring to the voters, and he was exactly right.
pi-pie

“We were never good at math in my family,” said Rep. John P. Murtha (D-Pa.). “I thought I was voting for p-i-e.”

Or reading and/or spelling? Hey, wait. Does Sara Lee have a factory in Murtha’s district?

That’s your congress-critters for you. only slightly less useful than Chia pets.

UPDATE: In the comments, Shark finds the silver lining: “It’s the least destructive thing they’ve done this year.”