Free Markets, Free People

Bruce McQuain


The Stretch To Call Porkulus “Bi-Partisan”

For the Washington Post, it only takes 3 Republicans (out of approx 218 Congressional Republicans) to declare the “stimulus” bill to be a “bi-partisan” achievement.

As I said yesterday, and the WaPo article validates,  those three who will vote for this give the veneer of bi-partisan legitimacy to the bill and something the left and its fellow travelers will use to give them cover.

Calling this bill “bi-partisan” is like calling Andrew Sullivan’s obsession with Sarah Pallin “rational”.  But WaPo dutifully tries to frame the narrative:

The bipartisan deal was cut after two days of talks and would cut more than $100 billion from the $920 billion bill, dropping its cost to about $820 billion, if amendments added on the Senate floor are retained.

Of course the key phrase in that sentence is “if amendments added on the Senate floor are retained“. The bill must now be negotiated with the House and all of that which was cut may very well end up back in there. As Carl Cameron pointed out last night, you might expect bills with similar totals to be an easily negotiated, but that’s not the case. Different programs make up the amounts in each bill, and historically these negotiations haven’t lowered the totals for the final bill, but, instead, increased them – sometimes dramatically. And it is certainly possible those amendments added by Republicans could be discarded.

If that happens, and it is entirely possible, what will the three RINOs do then?

~McQ


Porkulus – It’s A Done Deal

political_pork

Well there’s an agreement on the Generational Theft Act of 2009. The squishy middle has capitulated.

As expected, just enough Republicans have signed on to ensure its passage. Names?

Specter for one:

Specter said Friday night that action was “very necessary,” and this bill, though not perfect, is better than inaction.

“I think no one could argue with the fact that the situation would be much worse without this bill,” Specter said at a news conference.

And of course, Susan Collins is the other (and Olympia Snowe is also reportedly going to vote for it). Voinavich and Martinez bailed. They’ll give this the veneer of bi-partisan legitimacy.

Oh, and the Senate has reportedly gotten the bill down to a miserly $780 to 805 billion depending on who you listen too.

Nancy Pelosi isn’t happy with the cuts:

“These cuts are very damaging — [the House bill] was put together very carefully. … The funding goes directly to school districts, they are stimulative because they maintain jobs instead of cutting jobs.”

If you believe the House bill was put together “very carefully”, then you will believe 500,000,000 Americans are losing their jobs every month.

But, even with the 3 Republicans, this monstrosity is all Democrat.

As an aside, our recent QandO poll asked which Senator was most likely to break for the bill. In that poll, Olympia Snow won with 33%. Interestingly, John McCain came in second at 29%. Specter came in third with 14%. Surprisingly, Susan Collins came in 4th with 7%.

~McQ


Delaying the Trial Will Hasten Justice (A “Spinorama” Adventure)

I‘ve got to say, if Robert Gibbs is the best they have, in terms of Presidential spokespersons, the press is going to eat him alive. To date he has not been impressive. Of course it helps if you’re not trying to spin so hard you simply look foolish.

As everyone knows, Obama signed an executive order calling for a freeze on all the military tribunals at Guantanamo for 120 days. One of the military judges,  COL James Pohl, refused the order saying to do so would delay justice. The particular case he was presiding over concerned Abd al-Rahim al-Nashiri, the alleged mastermind of the USS Cole bombing. That trial has now been suspended and charges dropped (without prejudice which, we’re told, means they can be brought again in the future).

A "Spinorama" Adventure

A "Spinorama" Adventure

Read this series of questions and answers.  I believe the questions are asked by ABC’s Jake Tapper (Gibbs says “Jake” prior to the question (transcript via email):

Q The president later today is going to be meeting with a bunch of families of terrorist victims. A lot of the people he’s going to be meeting with take issue with his decision to stop the military commissions. They say that it’s been through an extensive legal and legislative review, the Supreme Court has weighed in, and they don’t understand what concerns the president has in this process. Could you explain what are some of the concerns the president has specifically about the military commissions?

MR. GIBBS: Well, I think, the main concern that the president has is the military commissions’ failure to bring those in detention to swift justice.

The president invited family members, families of those that were killed, first in the USS Cole incident in 2000 and next in the September 11th, 2001 terrorist attacks, and wants to discuss his plan to bring about changes in Guantanamo that he believes will make this country safer and bring about the very same swift justice that they desire, on behalf of those that they know that have been killed.

Q I’m sorry. How does delaying or even renewing the trials make it any swifter?

MR. GIBBS: Well, the act that the Cole families are disappointed — the act that the Cole families were affected by happened in 2000. We’ve not yet seen justice brought now in 2009 to Mr. al-Nashiri.

Judge Crawford withdrew the charges without prejudice to reinstatement of those charges. Mr. al-Nashiri remains in detention. And her decision brings all cases into compliance with the executive order that the president issues.

But I think if you look at the number of those awaiting justice and those that have gone through the process, I think you’ll see quite clearly that very few, very few have been brought to justice.

The discussion that the president looks forward to having today is part of the ongoing process with how to move forward. I don’t believe that the families affected, by the terrorist incident with the USS Cole, have seen — they certainly haven’t seen this president.

I don’t believe they saw the last president either. And the president thought it was important to listen to their very personal cares and their concerns about anything that’s involved in this process.

Q The arraignment of al-Nashiri was supposed to be Monday, but because of the executive order of the president, Crawford suspended the — the charges. I still don’t understand how this is going to make the — (inaudible). I understand the cases that haven’t been heard, but justice delayed –

MR. GIBBS: Without getting into some of the specific aspects of this case, I think the president believed that the best course of action going forward to bring about the justice that both he and the families seek in this case was to go through the very process that Judge Crawford has done and the executive order that the president has signed.

You have to love that question – “How does delaying or even renewing the trials make it any swifter?”

Amazingly, it doesn’t!

And Gibbs answer is simply pathetic – it doesn’t even begin to address the point of th question.

As you might imagine, the families of the Cole victims are less than enthusiastic about the Obama decision. Apparently they’re having a rough time puzzling out the answer to that question as well.

Hope and change.

~McQ


There’s Always One …

Guys like this make be believe many CEOs are just idiot savants who have the single talent of making tons of money (or, lately, not):

I’m the chief executive of a publicly traded company and, like my peers, I’m very highly paid. The difference between salaries like mine and those of average Americans creates a lot of tension, and I’d like to offer a suggestion. President Obama should celebrate our success, rather than trying to shame us or cap our pay. But he should also take half of our huge earnings in taxes, instead of the current one-third.

Really?

How about speaking for yourself?

Oh, and if you want to give half, break out the old check book and in the line that says “Pay To The Order Of”, put “US Treasury”. Fill in the amount that equals half your pay and sign the thing.  There, all done.

I promise, it won’t be returned.

If you’re wondering who wrote the nonsense above, it was Reed Hastings, CEO of Netflix.

Idiot.

~McQ


Democrats Seem Poised To Repeat The Mistakes Of Japan

It’s been interesting to watch the left attempt to paint the right as obsessive about tax-cuts, to the exclusion of any other method of stimulating the economy.   Josh Marshall called it “tax cut monomania”.  Of course careful readers who’ve followed this debate know that’s absolute nonsense.  The Republicans have bought into the premise that some level of government spending is necessary, except that it should be tightly targeted and provide immediate stiumlus.

Instead they’re faced with this bloated piece of garbage legislation derisively called the  “2009 Spend Your Grand Children and Great Grand Children into Debt bill”.

I noted Marshall’s appeal to authority (the sacred macroeconomic texts) yesterday and his claim that macroeconomists couldn’t exactly run controlled experiments to prove their point.  But upon reflection, I thought, that’s not precisely true.  While it may not fit the classic definition of a “controlled experiment”, Japan’s 2 decade long struggle to revive its economy is about as close as we’re going to get.

And you know what – the lessons learned from that say we’re about to commit the same mistakes they did.  President Obama claimed, last night, that spending on infrastructure was the way to go – that it would create jobs and stimulate the economy.  But Japan spent $6.3 trillion on construction-related public investment between 1991 and September of last year, and it did nothing of the sort.  Nope, paving over Japan accomplished little in terms of stimulating a down economy.

In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan’s Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.

In the United States, it has also led to calls in Congress, particularly by Republicans, not to repeat the errors of Japan’s failed economic stimulus. They argue that it makes more sense to cut taxes, and let people decide how to spend their own money, than for the government to decide how to invest public funds. Japan put more emphasis on increased spending than tax cuts during its slump, but ultimately did reduce consumption taxes to encourage consumer spending as well.

Trade and tax cuts along with spending targeted at banking system was how Japan finally pulled out of its doldrums. We already have 700 billion aimed at our banking system, with only half of it spent. That leaves what, if you’re interested in not repeating the mistakes of an economy which has already gone thorugh this sort of thing?

Well it’s certainly not a huge NRA style spending spreed on public works. Japan spent trillions on public works and infrastructure and it didn’t do what all the economists said it would do. Instead Targeted spending on the banking system, tax cuts and the development of trade turned the tide.

Given the present bill it appears we’re going to “Buy American”, refuse tax cuts and spend hundreds of billions on roads and bridges. The Republicans objections to this mammoth pork and relief fest have nothing to do with “tax cut monomania”. It has much more to do with understanding the lessons learned from the Japanese experience and not wanting to repeat them. Democrats, in their arrogance, seem to believe that they can do the same thing as Japan but have a different outcome.

Insanity.

~McQ


Planning To Shut Up Right-Wing Talk Radio

Well, after Democratic assurances that the Fairness Doctrine wasn’t something they planned to pursue, Michigan Democratic Senator Debbie Stabenow muddied those waters again.  Appearing on the Bill Press Show she had this to say:

BILL PRESS: Yeah, I mean, look: They have a right to say that. They’ve got a right to express that. But, they should not be the only voices heard. So, is it time to bring back the Fairness Doctrine?

SENATOR DEBBIE STABENOW (D-MI): I think it’s absolutely time to pass a standard. Now, whether it’s called the Fairness Standard, whether it’s called something else — I absolutely think it’s time to be bringing accountability to the airwaves. I mean, our new president has talked rightly about accountability and transparency. You know, that we all have to step up and be responsible. And, I think in this case, there needs to be some accountability and standards put in place.

BILL PRESS: Can we count on you to push for some hearings in the United States Senate this year, to bring these owners in and hold them accountable?

SENATOR DEBBIE STABENOW (D-MI): I have already had some discussions with colleagues and, you know, I feel like that’s gonna happen. Yep.

Really.  “Accountability”?  What sort of “accountability” is Sen. Stabenow talking about?

What she means is she’d like to see the bane of the Democrats, the one venue that regularly frustrates their efforts, out of business or seriously handicaped.

The arguments for the previous Fairness Doctrine were pitifully inadequate and certainly an infringement of free speech, but radio was a dominant medium at the time and that’s how supporters justified their attempted control of what could or couldn’t be said.

Now, however, even those marginal arguments are obsolete.  The choices of media have expanded exponentially.  The internet has changed the whole game.  To pretend that “standards” and “accountability” must be imposed on a very small part of this media spectrum while ignoring the rest is laughable.

So this comes down to power and control.  And it requires a willingness to ignore the tenets of liberty and heritage of free speech embodied in the Constitution.  I have no doubt that Democrats are more than willing to do exactly that in their effort to consolidate their power.

~McQ


Hate To Say, “I Told You So”

If you recall, all of us here at QandO had a rough time understanding how the government was going to pay for something when it didn’t know the value when it announced it was going to buy distressed bank assets.

Common sense says you don’t buy something on the way down, but instead wait for it to bottom out before jumping in.  As we’re now learning, the government lost between 64 and 78 billion dollars when it doled out that first quarter of a trillion dollars:

According to the testimony of Harvard Professor Elizabeth Warren, who is chairing the Congressional Oversight Panel for TARP, Treasury doled out $254 billion for bank assets worth only $176 billion – an overpayment of $78 billion of taxpayer funds. She has also noted that Treasury has not cited any reason for the overpayment. According to the Congressional Budget Office’s independent estimate released a month ago, Treasury overpaid $64 billion.

This is the same institution that now is going to spend 900 billion of borrowed, taxed or printed money. Apparently everyone who is  for doing that believe the outcome will be different this time.

Insanity.

~McQ


Long On Pork And Relief – Short On Stimulus And Jobs

Stephen Spruiell and Kevin Williamson over at NRO have put an excellent “stimulus package” summary together.

I’m going to give you an condensed summary from their work. Make sure you read the whole thing.

VARIOUS LEFT-WINGERY

$50 million for the National Endowment for the Arts
$380 million in the Senate bill for the Women, Infants and Children program
$300 million for grants to combat violence against women
$2 billion for federal child-care block grants
$6 billion for university building projects
$15 billion for boosting Pell Grant college scholarships
$4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
$1 billion for community-development block grants
$4.2 billion for “neighborhood stabilization activities”
$650 million for digital-TV coupons; $90 million to educate “vulnerable populations”

POORLY DESIGNED TAX RELIEF

$15 billion for business-loss carry-backs
$145 billion for “Making Work Pay” tax credits
$83 billion for the earned income credit

STIMULUS FOR THE GOVERNMENT

$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau

INCOME TRANSFERS

$89 billion for Medicaid
$30 billion for COBRA insurance extension
$36 billion for expanded unemployment benefits
$20 billion for food stamps

PURE PORK

$4.5 billion for U.S. Army Corps of Engineers
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”

RENEWABLE WASTE

$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid

REWARDING STATE IRRESPONSIBILITY

$79 billion for State Fiscal Stabilization Fund

You add it up. Estimates say that only 17% of these funds would be spent in the first year.

Stimulus?

No – pork and relief.

~McQ


Meltdown On The Left

Dean Baker at American Prospect has an uninformed hissy fit over the amendment GA Sen Johnny Isakson offered to the pork, er stimulus bill. The amendment gives a $15,000 tax credit to those buying a principle residence – note that, principle residence – next year. Baker is sure it is the house flipper’s amendment.

And this is before we get to any gaming. It’s hard to see why tens of millions of people wouldn’t figure out a way to buy a house from a friend or relative and get their $15k. If we can get one-third of the country’s homes to change hands (lots of jobs for realtors) that would be good for $375 billion.

But no cuts

The usual solution

It would have been helpful if reporters had talked to an analyst who could have explained these points for readers.

As much as I criticize the media, someone needs to tell Baker that this information is being and has been reported (I heard it explained when the amendment was first discussed). Below is one example:

The U.S. Senate on Wednesday unanimously approved an amendment to the economic stimulus bill by U.S. Senator Johnny Isakson, R-Ga., that gives a $15,000 tax credit to anyone who buys a home in the next year.

Isakson’s amendment would provide a direct tax credit to any homebuyer who buys any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase.

Pretty clear to me.

That dispensed with, here’s the real reason the left is so up in arms with this amendment:

Somehow, Isakson has this thing costing just $19 billion. Let’s break the Washington rules and try a little arithmetic. Even with weakness in the housing market, it is still virtually certain
that we will sell close to 5 million homes in 2009. The overwhelming majority would qualify for the full credit. So, we get 5 million times $15,000. That sounds a lot like $75 billion.

That’s right – this would put more money in people’s pockets and make less available for the government to spend on dog parks and Frisbee golf courses.

Greg Sargent says:

But the ultimate real world cost of this measure has been disputed, with some critics predicting that it would cost much more, given the expected levels of housing sales this year.

Turns out the critics may have been right. The nonpartisan Joint Committee on Taxation has just sent a letter to Chuck Schumer, who’s on the Finance Committee, responding to Schumer’s request that the Committee score an estimate of the measure’s cost.

The total price estimated by the Committee? $35.5 billion — double the original cost, says the letter, which was sent our way by Schumer’s staff.

That’s kind of a big deal, and could actually alter the ultimate cost of the overall bill, potentially creating more complications as this gargantuan measure lurches fitfully towards passage.

Anyone – do you believe that all of the estimates contained in this “gargantuan measure” are dead on? That, among 900 billion of government spending, there will be no cost overruns, budget overruns or cost underestimates?

The problem, as stated, is it “costs” the government by putting money precisely where it belongs – in the pockets of the citizens.

And that’s because most of them believe, as Robert Reich does, that government is the only answer:

Regardless of your ideological stripe, you’ve got to see that when consumers and businesses stop spending and investing, there’s only entity left to step into the breach. It’s government. Major increases in government spending are necessary, and the spending must be on a very large scale.

Notice the smuggled premise – that consumer and business spending can’t be spurred by any other means than government spending. Of course that’s nonsense. And the Isakson amendment is one of many ways that can be done. Other obvious means would be a withholding tax cut (or suspension). That’s an instant stimulus.

The usual result

The predictable result

The CBO says the debt being incurred through this bill will crowd out private investment over the coming years. The key to recovery is private investment which leads to business expansion which leads to jobs.

What part of that don’t the Democrats understand?

Well, if you read Joshua Holland, most of it:

And the GOP’s approach is based on the theory that a “rising tide will lift all boats.” A simple question: how’s that theory been workin’ out for ya?

Mr. Holland, look around you and how you and others live. Then take a trip to, oh, I don’t know, China. Tell us how those boats floated in the past as compared to how they’re floating now. Or India. Or Poland. Or the Czech Republic. Etc.


Big Labor Wins, America Loses

The Democrats just couldn’t bring themselves to eliminate the “Buy American” provison of the stimulus bill.  They owe Big Labor and I”m sure Big Labor reminded them of that prior to the vote:

On another contentious issue, the Senate softened a labor-backed provision requiring that only U.S.-made iron or steel used in construction projects paid for in the bill. A move by Sen. John McCain, R-Ariz., to delete the so-called Buy American requirement failed, 31-65.

But with Obama voicing concern about the provision, the requirement was changed to specify that U.S. international trade agreements not to be violated.

Read that last line carefully. How in the world does keeping the “Buy American” requirement not violate US international trade agreements?

“Just words.”

Hope and change.

~McQ

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