Glad they finally noticed:
The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama’s agenda.
Of course the greatest stoker of this populist backlash has been the Obama administration. I’ll be the first to agree that some of the financial institutions, such as AIG recently, have played into the populist condemnation by the administration, but instead of being specific about the AIGs of the world, they have instead gone after an entire industry to the point that “banks and Wall Street” are synonymous with crooks, swindlers and liars. Having established that narrative, seemingly purposely, there’s now a huge backlash building which may, in fact, cripple the administration’s efforts pertaining to both.
“We’ve got enormous problems that need to be addressed,” David Axelrod, Mr. Obama’s senior adviser, said in an interview. “And it’s hard to address because there’s a lot of anger about the irresponsibility that led us to this point.”
“This has been welling up for a long time,” he said.
Mr. Obama’s aides said any surge of such a sentiment could complicate efforts to win Congressional approval for the additional bailout packages that Mr. Obama has signaled will be necessary to stabilize the banking system.
As it is, there have already been moves in Congress to limit compensation to executives at banks and Wall Street firms that are receiving government help to survive.
Beyond that, a shifting political mood challenges Mr. Obama’s political skills, as he seeks to acknowledge the anger without becoming a target of it. A central question for Mr. Obama is whether his cool style — “in a time of crisis, we cannot afford to govern out of anger,” he said in his address to Congress last month — will prove effective when the country may be feeling more emotional.
And the country is feeling emotional because the administration has been making emotional arguments targeting the industry it wants to help. Not very smart politics. And they’ve now finally realized that.
“Never underestimate the capacity of angry populism in times of economic stress,” said Robert Reich, a professor of public policy at the University of California, Berkeley, and labor secretary under President Bill Clinton. “A big challenge for President Obama will be to maintain a rational and tactical public discussion in the midst of this severe downturn. The desire for culprits at times like this is strong.”
The “culprit” has been identified. In their desire to escape blame, government officials in Congress and elsewhere have almost unanimously used their access to the media to vilify banks and Wall Street while pretending they had no hand whatsoever in this debacle. Unfortunately they’ve been quite successful in the scapegoating. However, having established the narrative, they now have to attempt to reverse it because the public rage they’ve helped stoke may prevent them from doing what they think they need to do to turn the financial industry around.
The entire problem that the administration is now recognizing is one of their own making and another indication of their inexperience and lack of foresight. It’s one thing to demonize such industries when campaigning, it is, as they’re learning, an entirely different thing when you do it as the President of the United States. The administration now has to figure out how to reverse a narrative they helped build and establish. That should be interesting to watch.
A week or so ago, I highlighted a story about the possibility that Democrats were going to tax your employee health care benefits (after all, those among the 95% who are getting a tax cut have to have something to spend it on) and I was assured this particular plan comes up all the time and never gets out of committee. Well it appears those assurances of nothing to worry about were premature. The idea may not only get out of committee this time, but be signed into law as well:
The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.
So you’ll pay taxes on your private health benefits to pay for health benefits for others, while government tells you how expensive your private coverage is and how they can run it much more cheaply and efficiently if only you’ll pitch in and pay for it.
Question: If taxes on your health care benefits are going to pay for a governmental health care system overhaul, and one assumes the purpose of the overhaul is to bring more and more of the health care system under governmental control, how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?
Read the whole article. It doesn’t even take a double digit IQ to spot the law of unintended consequences laying in the weeds just salivating over this one.
There are plenty of good writers around, but there are only a few who cause me to pause during reading and think “Oh, how I wish I could write like that.”
Mark Steyn is in that group. Just about anything he writes is worth reading, and he is the best in the business at being funny and thought-provoking at the same time.
Occasionally, though, he captures the essence of an issue in a way no other current writer can. His current article at National Review, “The Brokest Generation“, is in that category. Go read it yourself, and then pass it along to the folks who are going to be paying for the folly of the Obama years (and the somewhat-lesser follies of the administrations that preceeded him).
It’s true irony that the chanting, swaying kids in the creepy Obama videos will be the ones who pay the highest price for Obama’s fumbling foolishness. Per Mark:
As Lord Keynes observed, “In the long run we’re all dead.” Well, most of us will be. But not you youngsters, not for a while. So we’ve figured it out: You’re the ultimate credit market, and the rest of us are all pre-approved!
The Bailout and the TARP and the Stimulus and the Multi-Trillion Budget and TARP 2 and Stimulus 2 and TARP And Stimulus Meet Frankenstein and the Wolf Man are like the old Saturday-morning cliffhanger serials your grandpa used to enjoy. But now he doesn’t have to grab his walker and totter down to the Rialto, because he can just switch on the news and every week there’s his plucky little hero Big Government facing the same old crisis: Why, there’s yet another exciting spending bill with twelve zeroes on the end, but unfortunately there seems to be some question about whether they have the votes to pass it. Oh, no! And then, just as the fate of another gazillion dollars of pork and waste hangs in the balance, Arlen Specter or one of those lady-senators from Maine dashes to the cliff edge and gives a helping hand, and phew, this week’s spendapalooza sails through. But don’t worry, there’ll be another exciting episode of Trillion-Buck Rogers of the 21st Century next week!
This is a connection we need to be making over and over again: when the mountain of federal debt finally collapses of its own weight, the younger generation will be hurt the worst. Most of the people who fomented the crisis will have long since passed on, or be comfortable in their retirement because of the assets they were able to accrue at taxpayer and lobbyist expense. They will have gotten what they wanted: time in the sun, running things, letting others pay them obeisance, getting respect they don’t really deserve. Either they are too stupid to realize what they are doing to the next couple of generations, or they are too mendacious to care. The sooner the younger generations learn the con job that has been perpetrated on them, the better.
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.
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?
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.
President Obama and VP Biden are going to be watching you:
Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. “If we see money being misspent, we’re going to put a stop to it,” Obama told a gathering of state officials at the White House. How? Obama says “we will call it out and we will publicize it.” Biden, meanwhile, scolded: “If we don’t get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states.”
Of course, these were words spoken to representatives of states getting “stimulus” money.
Lost in the shuffle is the fact that there is no one to shout “BS” to the whole scheme and declare it all “misspent” money. A $787 billion dollar social spending scheme isn’t money “misspent?” Hah!
But other than that, I think Earl Devaney provides us with the ground truth about this upcoming spending debacle:
The chief watchdog for spending from the $787 billion stimulus package says it’s guaranteed there will be waste and fraud.
Earl Devaney, tapped by President Obama to track the giant spending plan, also said it will be at least a year before the government gets recovery.gov, the Web site the administration has touted as a key part of its transparency, up and running properly.
“I’m afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur.
A “naive impression?”
Heh … nah, you don’t say?
The word “naive” seems to describe a lot of what is going on right now with the Obama administration.
Or perhaps a better way to say that is this is a typical reason Democrats aren’t well thought of, for the most part, by the military community:
Several veterans groups “are lashing out” at the Obama administration over a policy proposal they say would “dramatically alter” how the Department of Veterans Affairs handles health insurance claims for veterans, The Hill reports. Under the policy, which is included in President Obama’s fiscal year 2010 budget proposal, VA would bill health insurers for treatment of injuries and conditions sustained as a result of veterans’ military service. Currently, VA covers those costs and bills health insurers only for treatment for conditions unrelated to veterans’ military service.
The “you got it, you pay for it” method of saving money on the back of wounded vets. This after all the rhetoric and promises about taking better care of our veterans than ever before because they’ve “earned it”?
Of course, as soon as this trial balloon is discovered, the mealy mouth nonsense begins:
According to OMB spokesperson Tom Gavin, although concerns about policy changes in coverage are understandable, no official proposal is on the table. He said, “The details of the VA budget are being worked out right now and the details won’t be available until April,” adding, “The administration is committed to providing the VA with substantial resources to provide for our veterans” (Tiron, The Hill, 3/9).
And, of course, with the federal government spending money on social issues disguised as “stimulus”, followed by a porked up spending bill and now an almost 4 trillion dollar budget, where is the one place that they decide they should try and save money?
On the backs of wounded vets.
Sorry, but that cost was prepaid by the terms of their service and wounds. But obviously, more interested in social issues within the military than keeping promises, the administration begins the ground work for backing out on another of its promises (to their credit, some Democrats, such as Sen. Patty Murray (D-WA), have declared such a proposal would be “dead on arrival” should it make it into the budget – a tip of the hat to her).
Courtesy my meager Photoshop skills:
*** Update 6:20 PM Central Daylight Time ***
Unfortunately, the sign is already obsolete.
A group of economists asked to assess the efforts of both Obama and Geithner were none too impressed:
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
The economists’ assessment stands in stark contrast with Mr. Obama’s popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration’s economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.
The big criticism has to do with “overpromising and underdelivering”:
[E]conomists’ main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. “They overpromised and underdelivered,” said Stephen Stanley of RBS Greenwich Capital. “Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone’s head.”
The Hill reports that lack of progress is starting to really concern some Democrats in Congress:
Members of Congress and old political hands say [Obama] needs to show substantial progress reviving the economy soon.
Some Democrats have started to worry that voters don’t and won’t understand the link between economic revival and Obama’s huge agenda, which includes saving the banking industry, ending home foreclosures, reforming healthcare and developing a national energy policy, among much else.
While lawmakers debate controversial proposals contained in the new president’s debut budget — cutting farm subsidies, raising taxes on charitable contributions, etc. — there is a growing sense that time is running out faster than expected.
Democrats from states racked by recession say Obama needs to produce an uptick by August or face unpleasant consequences. Others say that there is more time, but that voters need to see improvement by the middle of next year.
The most optimistic say Obama and Democrats in Congress will face a political backlash unless the economy improves by Election Day 2010.
Of course, as mentioned previously, it becomes increasingly clear that he, Geithner and others really don’t know what to do about all of this. And careful and objective analysis of the money promised in both the bailout and stimulus see the former not accomplishing the bailout hoped for and the latter not being at all properly targeted to stimulate the job creating, wealth producing private sector.
And Democrats are right – the sausage making legislative process is of little interest to most Americans, especially those in trouble. They want results and they want them now. He promised to fix it and now they are going to expect results. There was no reality in his promises so it is rather difficult to understand why the American public which elected him should suddenly understand the reality of the situation. He promised, they took him up on it, now he has to deliver.
That’s the downside of actually winning after making a raft of promises that reality won’t let you keep.
This is just pathetic:
President Barack Obama signed a $410 billion spending bill Wednesday that includes thousands of pet projects inserted by lawmakers, even as he unveiled new rules to restrict such so-called earmarks.
At the same time, after Democrats criticized former President George W. Bush’s signing statements, Mr. Obama issued one of his own, declaring five provisions in the spending bill to be unconstitutional and nonbinding, including one aimed at preventing punishment of whistleblowers.
Presidents have employed signing statements to reject provisions of a bill without vetoing the entire legislation. Democrats and some Republicans have complained that Mr. Bush abused such statements by declaring that he would ignore congressional intent on more than 1,200 sections of bills, easily a record. Mr. Obama has ordered a review of his predecessor’s signing statements and said he would rein in the practice.
“We’re having a repeat of what Democrats bitterly complained about under President Bush,” said Sen. Arlen Specter (R., Pa.), who drafted legislation to nullify Mr. Bush’s signing statements.
The president said the spending measure should “mark an end to the old way of doing business.” His proposals, seconded by the House Democratic leadership, followed days of attacks by Republicans — and some Democrats — over the spending for local projects tucked into the bill.
This is an example of what I was talking about yesterday when I said Obama’s first 50 days was marked by a total lack of leadership.
Here was a chance to lead. After railing on the campaign trail against earmarks and wasteful spending, he signs a bill full of earmarks and wasteful spending and then, like a mom who yells, “boys, quit it” but never moves to enforce her words, Obama says “this should end the old way of doing business”. Really?
What’s the penalty? Another lecture after the signature? Had Obama vetoed the bill, he’d have sent the strong message necessary that his assumption of the presidency marked the end of “business as usual”. Instead he caved and created a fiction that this was the “old administration’s” business and therefore exempt from his pledge.
Talk about BS on a stick. If a president signs something into law his watch, it is his and not anyone else’s. To pretend anyone would actually believe that glib nonsense is incredible. But much of the MSM dutifully reported it as such.
He also pushed the fiction that if this bill wasn’t signed, the government would shut down. No it wouldn’t. Congress simply passes a continuing resolution which funds government at last year’s levels. But that’s not what he or Congress wanted. They wanted the 9,000 earmarks and the 8% increase in spending as well – thus the fiction about it being both necessary and last year’s business.
Then to put the proverbial cherry on the dissembling rhetorical sundae, Obama issues his own signing statement after making a press event about dissing Bush’s use of them.
The Drug War along the Mexican-US border is getting some high level consideration:
President Obama weighed in Wednesday on the escalating drug war on the U.S.-Mexico border, saying that he was looking at possibly deploying National Guard troops to contain the violence but ruled out any immediate military move.
“We’re going to examine whether and if National Guard deployments would make sense and under what circumstances they would make sense,” Obama said during an interview with journalists for regional papers, including a McClatchy reporter.
“I don’t have a particular tipping point in mind,” he said. “I think it’s unacceptable if you’ve got drug gangs crossing our borders and killing U.S. citizens.”
Already this year there have been 1,000 people killed in Mexico along the border, following 2008’s death toll of 5,800, according to federal officials who credit Mexican President Felipe Calderon for a crackdown on drug cartels.
But the spillover on the border — for example, to El Paso from neighboring Ciudad Juarez — has created a political reaction.
In a recent visit to El Paso, Texas Gov. Rick Perry called for 1,000 troops to protect the border.
Obama was cautious, however. “We’ve got a very big border with Mexico,” he said. “I’m not interested in militarizing the border.”
I agree with his point about not “militarizing the border”. And I certainly understand the desire to send in help to quell and control the violence that spills over the border. But my question is, how will the troops be mobilized? The only way Obama can send in National Guard troops as I understand it is by federalizing them. Then it becomes a matter of their role. The Posse Comitatus act prevents federal troops from being used in a law enforcement role except on federal property (like Washington DC). So he’s limited in the role to which he can commit any troops even if he wanted too.
It would seem instead, that perhaps the best way to proceed in this case, if the desire is to send NG troops to the border to help in law enforcement, is for the Governors to mobilize and send them while letting active military lend logistical, intel and perhaps advisory support. But unless they’re sent in a war-fighting mode, there isn’t much of a role for federal troops in this case.
UPDATE: Commenter Jay Evans notes a recent change in the law which may effect this (the John Warner National Defense Authorization Act for Fiscal Year 2007 (H.R. 5122)):
SEC. 1076. USE OF THE ARMED FORCES IN MAJOR PUBLIC EMERGENCIES. (a) USE OF THE ARMED FORCES AUTHORIZED.— (1) IN GENERAL.—Section 333 of title 10, United States Code, is amended to read as follows: ‘‘§ 333. Major public emergencies; interference with State and Federal law ‘‘(a) USE OF ARMED FORCES IN MAJOR PUBLIC EMERGENCIES.— (1) The President may employ the armed forces, including the National Guard in Federal service, to— ‘‘(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that— ‘‘(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order; and ‘‘(ii) such violence results in a condition described in paragraph (2); or ‘‘(B) suppress, in a State, any insurrection, domestic violence, unlawful combination, or conspiracy if such insurrection, violation, combination, or conspiracy results in a condition described in paragraph (2). ‘‘(2) A condition described in this paragraph is a condition that— ‘‘(A) so hinders the execution of the laws of a State or possession, as applicable, and of the United States within that State or possession, that any part or class of its people is deprived of a right, privilege, immunity, or protection named in the Constitution and secured by law, and the constituted authorities of that State or possession are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection; or
‘‘(B) opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws.
‘‘(3) In any situation covered by paragraph (1)(B), the State shall be considered to have denied the equal protection of the laws secured by the Constitution.
‘‘(b) NOTICE TO CONGRESS.—The President shall notify Congress of the determination to exercise the authority in subsection (a)(1)(A) as soon as practicable after the determination and every 14 days thereafter during the duration of the exercise of that authority.’’.
(2) PROCLAMATION TO DISPERSE.—Section 334 of such title is amended by inserting ‘‘or those obstructing the enforcement of the laws’’ after ‘‘insurgents’’.
It looks like it now depends on the classification of the problem.