Alan Greenspan has a piece in the Wall Street Journal today which essentially casts him as the Pontius Pilate of the financial crisis. Or, to sum it up rather sucinctly, “it wasn’t my fault”. You’re welcome to read through it and agree or disagree. However, the imporant point I think that should be taken from the Greenspan piece are the last two paragraphs:
Any new regulations should improve the ability of financial institutions to effectively direct a nation’s savings into the most productive capital investments. Much regulation fails that test, and is often costly and counterproductive. Adequate capital and collateral requirements can address the weaknesses that the crisis has unearthed. Such requirements will not be overly intrusive, and thus will not interfere unduly in private-sector business decisions.
If we are to retain a dynamic world economy capable of producing prosperity and future sustainable growth, we cannot rely on governments to intermediate saving and investment flows. Our challenge in the months ahead will be to install a regulatory regime that will ensure responsible risk management on the part of financial institutions, while encouraging them to continue taking the risks necessary and inherent in any successful market economy.
Those words reminded me of the quote I saw in business columnist Tom Oliver’s piece today in the Atlanta Journal Constitution:
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
Any columnist who starts with a Hayek quote is guaranteed to get my attention. And I’ve come to enjoy Oliver’s columns. However, reviewing Greenspan’s advice and admonitions in those two paragraphs, juxtaposed against the simple and elegant truth of Hayek’s statement you find yourself back in the outback watching that big red kangaroo headed for a collision with the car. It is inevitable, there’s nothing you can do about it, they can’t or won’t hear your warnings and all you can do is watch – and cringe.
Frankly, as we watch the machinations of government and listen to their declarations, we have begun to understand that for the most part, those in charge of all of this haven’t a clue. As Oliver states:
Far from demonstrating the demise of free enterprise, this long-running, deepening recession is revealing the limitations of government.
Government, in its various yet powerful incarnations, has been offering one fix after another since August 2007.
The more the Fed and Treasury have tried, the less sure they seem and the more nervous the money makers have become.
It’s understandable that folks would look to the new administration for new ideas. So it’s harder than usual to acknowledge that the ideas are in fact pretty old and, having been tried, found wanting.
Whatever one may think about the so-called stimulus, it’s too easily deconstructed as pork and policy initiatives.
And if it’s still debatable whether to nationalize the financial industry, the move to nationalize health care, education and energy can hardly be disguised as economic recovery programs.
It is understandable that those who derive their power from government would use this recession as an excuse to further government’s reach. But they act as if government has been absent — as if they’ve been absent — from the role of regulator and legislator.
He’s precisely right – it wasn’t a problem with lack of regulation or lack of legislation. It was a lack of proper regulatory oversight and a willful decision by legislators to ignore the building crisis coupled with government distorting the market and actually incentivizing risk taking far beyond that which is prudent that led us here. And now that they have us in this position, all of them, Greenspan included, are engaged in a flurry of finger-pointing and name calling at every one but the right ones. This wasn’t a crisis which happened in just the last 6 months or 8 years. This one has been building for a while.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
We had Democrats in charge and then we had Republicans. Again and again.
Both endorsed and encouraged the subprime sleight-of-hand. Both appointed heads of the regulatory agencies that could’ve stopped the poison seeping through our banks’ balance sheets. Both allowed gamblers to hedge and swap derivatives on top of derivatives that no one can explain and that are proving far more debilitating than the debacle they were insuring against.
Freddie Mac and Fannie Mae became toxic assets of the government while doing the bidding of congressmen who now act like the piano players in a brothel.
The Federal Reserve proved to be anything but reserved, instead stoking a fire that burned us all.
These were not the result of idle hands of government, but rather deliberate deeds that created false markets with inflated credit while turning a blind eye to those who finance election results.
Oliver’s characterizations are dead on – and he’s nailed both the fed and the Congress. The most irritating thing to me about this whole mess, other than the obvious huge loss of wealth, is the success those who were responsible for writing the rules, laying out the playing field and calling the game are escaping both blame and punishment for what they’ve brought about. That toad Barney Frank having the chutzpa to talk about prosecuting those who were guilty of getting us in this mess still astounds me. If anyone should be undergoing such prosecution right now, it is he and numerous other congressmen and women, both past and present.
Oliver concludes as follows and I can’t help but say a hearty “amen” to what he has to say:
We periodically recoil in horror at government’s failure to protect foster children or care for veterans or the mentally ill. But then we turn around and assume government will perform better in areas more complicated.
Why does the failure of government so often lead so many to believe we need more government?
Like the hair of the dog for the alcoholic, it may calm the trembling hands for a moment but it inevitably leads to another spree and another hangover.
We’re headed into a “or worse” moment. No one in government is going to listen to Alan Greenspan’s admonitions or believe Tom Oliver’s brief accounting of the history of this crisis. Instead we’re going to see precisely the opposite happen – more regulation, more strings, more intrusion, more control. And, as Hayek said, we’ll again see “how little [men] really know about what they imagine they can design.”
Because the Secretary General has it – and demonstrates again why we ought to let the Third World Debating Club on the Hudson find a new home:
A day after his White House meeting with President Barack Obama, U.N. Secretary-General Ban Ki-moon called the United States a “deadbeat” donor to the world body while making the made the rounds on Capitol Hill.
“He used the word ‘deadbeat’ when it came to characterizing the United States. I take great umbrage (over) that,” Ileana Ros-Lehtinen, the panel’s senior Republican, said after an hour-long, closed-door meeting. “We certainly contribute a whole lot of U.S. taxpayer dollars to that organization. We do not deserve such a phrase.
Interviewed after the session, Ban said he had wanted to draw attention to the fact that the U.S. agrees to pay 22 percent of the U.N.’s $4.86 billion operating budget, but is perennially late with its dues — and now is about $1 billion behind on its payments.
That figure is “soon to be $1.6 billion,” Ban emphasized. Asked if he’d used the word ‘deadbeat’ during the meeting, he replied, “Yes, I did — I did,” then laughed mischievously.
The ultimate deadbeat institution which can, unsurprisingly, find more ways to waste money than the US government, calls the country that pays 22% of its cost and host to the parasites that represent their backwater potentates the “deadbeat” ?
Ban certainly demonstrates a lot of respect for the country and the new administration doesn’t he? So far this new relationship with the world is going swimmingly, as the UK can attest.
But there’s a glimmer of hope apparently. Ban has given Obama some budget advice:
Obama seeks a 9.5 percent increase in international affairs spending, which Yeo said would be enough to cover not only next year’s U.S. dues to the U.N., but also $1 billion in arrears.
Amazing. And we’ll end up handing it all over, just watch.
Both Camille Paglia and Howard Fineman give an assessement (although not presented as a 50 day assessment).
Paglia says, “free Obama from his advisors“:
Yes, free the president from his flacks, fixers and goons — his posse of smirky smart alecks and provincial rubes, who were shrewd enough to beat the slow, pompous Clintons in the mano-a-mano primaries but who seem like dazed lost lambs in the brave new world of federal legislation and global statesmanship.
Heads should be rolling at the White House for the embarrassing series of flubs that have overshadowed President Obama’s first seven weeks in office and given the scattered, demoralized Republicans a huge boost toward regrouping and resurrection.
The advice he has received certainly hasn’t been the best, and Paglia makes the point eloquently. She primarily goes off on two things that have hurt the administration’s reputation – the “stimulus” bill and the mishandling of the Gordon Brown visit. Both poorly done. And she’s not at all impressed with, nor does she think anyone else has confidence in what she calls “a shrill duo of slick geeks (Timothy Geithner and Peter Orszag) as the administration’s weirdly adolescent spokesmen on economics” .
President Obama — in whom I still have great hope and confidence — has been ill-served by his advisors and staff. Yes, they have all been blindsided and overwhelmed by the crushing demands of the presidency. But I continue to believe in citizen presidents, who must learn by doing, even in a perilous age of terrorism. Though every novice administration makes blunders and bloopers, its modus operandi should not be a conspiratorial reflex cynicism.
Notice another assessment that uses “overwhelmed”. Paglia charitably tries to write it off as something “every novice administrations” goes though. But is it really?
Paglia interestingly uses the Limbaugh kerfuffle as the ultimate case in point of how his staff has let him down. But she notes he wasn’t particularly smart about it either:
This entire fracas was set off by the president himself, who lowered his office by targeting a private citizen by name. Limbaugh had every right to counterattack, which he did with gusto. Why have so many Democrats abandoned the hallowed principle of free speech? Limbaugh, like our own liberal culture hero Lenny Bruce, is a professional commentator who can be as rude and crude as he wants.
Another bit of grumbling is being heard from Howard Fineman. In an article entitled “The Turning Tide“, Fineman notes “Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes.”
Not just the establishment -many in the big mushy middle who became enthralled with the cult of Obama without understanding the Obama agenda are now displaying a little buyer’s remorse.
But Fineman’s critique has to do with how the “establishment”, which he contends still holds enormous power, views the Obama presidency to this point. As with most of the elite media, he waves off the popular sentiment which is, for the most part favorable, and essentially claims it is the “establishment” which will make or break this president. By that, of course, he means the elite media, the money men and politicos. However, that said, his assessment is interesting:
They have some reasons to be concerned. I trace them to a central trait of the president’s character: he’s not really an in-your-face guy. By recent standards—and that includes Bill Clinton as well as George Bush—Obama for the most part is seeking to govern from the left, looking to solidify and rely on his own party more than woo Republicans. And yet he is by temperament judicious, even judicial. He’d have made a fine judge. But we don’t need a judge. We need a blunt-spoken coach.
For all his rhetorical skill, that’s something Obama can’t pull off. He comes off as preachy, and with his lack of experience, no one with any sense would accept him as a coach who’s been there, done that and is now helping the rest of us achieve certain results. He just doesn’t have the authority of experience to sell that. And what is going on around him, such as the poorly handled nomination process, makes any attempt by him to assume that role even less authoritative. Even those he does have on board, such as the “shrill duo of slick geeks” as Paglia calls them, do more to hurt his image than help it.
Fineman goes on implicitly giving credibility to the belief that Obama may not be up to the job:
Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any. A beau ideal of Harvard Law, he can’t wait to tackle extra-credit answers on the exam.
In the meantime events pop up and multiply, issues expand and reality barrels on. And the “establishment” is getting antsy. Because what the establishment isn’t seeing from their chosen son is something he’s never had reason or cause to display – leadership. What Fineman dances around with this “beau ideal of Harvard Law” and “blunt coach” characterizations is Obama doesn’t seem to understand the basic tenets of leadership. It has nothing to do with jetting around the country on the perpetual campaign, or excellent but basically empty speeches. It means taking charge of the process and spending less time in Columbus, OH and more time leading Congress and his cabinet heads in the direction he wants to see things go.
Instead he’s essentially turned foreign policy over to Hillary Clinton and his domestic agenda over to a Congress which simply cannot control itself while he and his staff pick rhetorical fights with talk-show hosts.
Fineman lays out a list of things to this point which aren’t playing particularly well among the “establishment”. Again, these are Fineman’s list:
-The $787 billion stimulus, gargantuan as it was, was in fact too small and not aimed clearly enough at only immediate job-creation.
-The $275 billion home-mortgage-refinancing plan, assembled by Treasury Secretary Tim Geithner, is too complex and indirect.
-The president gave up the moral high ground on spending not so much with the “stim” but with the $400 billion supplemental spending bill, larded as it was with 9,000 earmarks.
-The administration is throwing good money after bad in at least two cases—the sinkhole that is Citigroup (there are many healthy banks) and General Motors (they deserve what they get).
-The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to “give up” something.
-A willingness to give too much leeway to Congress to handle crucial details, from the stim to the vague promise to “reform” medical care without stating what costs could be cut.
-A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy. This led those who fear we are about to go over Niagara Falls to deride Obama as a paddler who’d rather redesign the canoe.
-A treasury secretary who has been ridiculed on “Saturday Night Live” and compared to Doogie Howser, Barney Fife and Macaulay Culkin in “Home Alone”—and those are the nice ones.
-A seeming paralysis in the face of the banking crisis: unwilling to nationalize banks, yet unable to figure out how to handle toxic assets in another way—by, say, setting up a “bad bank” catch basin.
-A seeming reluctance to seek punishing prosecutions of the malefactors of the last 15 years—and even considering a plea bargain for Bernie Madoff, the poster thief who stole from charities and Nobel laureates and all the grandparents of Boca. Yes, prosecutors are in charge, but the president is entitled—some would say required—to demand harsh justice.
-The president, known for his eloquence and attention to detail, seemingly unwilling or unable to patiently, carefully explain how the world works—or more important, how it failed. Using FDR’s fireside chats as a model, Obama needs to explain the banking system in laymen’s terms. An ongoing seminar would be great.
-Obama is no socialist, but critics argue that now is not the time for costly, upfront spending on social engineering in health care, energy or education.
Of course on the other side of these points are those that argue that the stimulus bill was poorly designed and will do nothing to stimulate the economy while ballooning the debt and inviting hyper-inflation as a result. They’d also argue that $275 home-mortgage-bailout rewards bad behavior and that when Obama claimed the pork laden, 9,000 earmark omnibus spending bill was the “last administration’s business” he gave up any hope of being in the same county as the “moral high ground”. Etc., etc.
In essence, the first fifty days can be summed up fairly easily in three words: lack of leadership. And leadership ability isn’t something the tooth fairy delivers one night along with the quarter for your tooth. That is what has the “establishment” mumbling in their martinis.
I had to laugh, however, at how Fineman ended his piece:
Other than all that, in the eyes of the big shots, he is doing fine. The American people remain on his side, but he has to be careful that the gathering judgment of the Bigs doesn’t trickle down to the rest of us.
Talk about “side-steppin'” and damning with faint praise.
But I have to wonder if Fineman’s title, “The Turning Tide” isn’t somewhat of a threat to the Obama administration if it doesn’t get its act together and do so quickly. As in-the-tank as the media was for Obama, they’re now realizing that it was their credibility they sold short if he isn’t successful. But there is only so much, in this era of the new media, they can do to spin what is happening positively. Fineman is issuing a warning of sorts – we can do this for a little while longer, but at some point it is going to turn, and it won’t be pretty.
The narrative that is now building is one of an administration overwhelmed, still in a campaign mode and rudderless. It began with the UK’s Telegraph last week and it seems to be gaining momentum. Unless Obama and the administration can do some pretty fancy work over the next 50 days, he may emerge from his first 100 days with that being the conventional wisdom. If so, he’s going to have a long 4 years ahead of him.
UPDATE: Interesting Gallup Poll – totally average:
They yelled, they screamed, they hopped up and down on one leg and told us how bad this 410 billion dollar spending bill was and how it was “business as usual’ (something they should certainly know about) that increased the spending level 8% and was full of 9,000 earmarks. And they condemned the Democrats and said they were spending the country into bankruptcy. They claimed that the best way to continue the spending was to keep it at this year’s level and that would save 250 billion dollars.
In the end, 8 Republican senators voted for the bill. That’s right, 8. Specter and Snowe were consistent – they’ve never seen an outlandish and wasteful, pork packed, deficit-funded spending bill they didn’t like.
Who else joined them? Why Mississippi Sens. Thad Cochran and Roger Wicker; Alabama Sen. Richard Shelby; Tennessee Sen. Lamar Alexander; Missouri Sen. Kit Bond and Alaska Sen. Lisa Murkowski. The cloture vote passed handily even with three Democratic senators voting against it.
So what do we get for the debt?
All kinds of goodies:
$1.8 million for “Swine Odor and Manure Management Research.”
$200,000 for “Tattoo Removal Violence Prevention Outreach Program” to get rid of gang tattoos.
$75,000 for the “Totally Teen Zone” that encourages teenagers to play Wii and X-Box, listen to a DJ, and eat at a snack booth.
$473,000 National Council of LaRaza.
$400,000 “to combat bullying.”
$50,000 for midnight basketball through the “At the Park After Dark” program in Los Angeles.
$5.8 Million for the “Ted Kennedy Institute for the Senate… for the planning and design of a building and an endowment.”
$1.762 Million for “Honey Bee lab” research.
$215,000 for PhD’s to learn to write press releases. It funds a program at “Stony Brook University to teach scientists how to communicate with press.”
$1.5 Million for the scandal-ridden Alaska Sea Life Center to study seals.
$250,000 for Maine Lobster research earmarks.
$2 million for “the promotion of astronomy in Hawaii.”
Senator Reid earmark to make “Nevada eligible for the Pacific Coastal Salmon Recovery Fund.”
$4.4 million for “Center for Grape Genetics” & “Center for Advanced Viticulture and Tree Crop Research”
$657,000 for “Brown Tree Snake Management in Guam”
$480,000 for “Urban Horticulture”
$1.75 million for “Mammoth Springs National Fish Hatchery, complete visitor center.”
Per the Heritage Foundation, when combined with the trillion dollar stimulus bill, Congress has just increased discretionary spending by 80% in one year.
And they advise us that more trillion dollar deficits and possibly more stimulus is on the way.
But don’t worry about inflation, they have everything under control.
Don’t worry about transparency either. Mr. “The Public Will Have 5 Days To Look At The Bill Online” Obama plans on signing the bill tomorrow. The man who dishonestly characterized this bill as “the last administration’s business” as an excuse to duck his campaign promise of no earmarks, will again duck his campaign promise of legislative transparency.
Best government ever.
David Brooks had started down the road to Damascus when he was called back into the fold by Dear Leader. His Op-Ed in today’s NYT is the result.
Most of Brooks’ offering is a rather transparent attempt to shame congressional Republicans into supporting Pres. Obama’s agenda:
The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.
The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is “no.” They’ve apparently decided that it’s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.
There are myriad problems with Brooks’ line of reasoning, including many in just to two foregoing paragraphs (e.g. How much input did Republicans have into the recent legislation? By “adopted a posture” is he referring to “not having control of either the House or the Senate”?), but I wanted to focus in on a couple of points in particular.
After some platitudinous admonitions, Brooks launches into his prescription for Republicans to save capitalism:
Third, Republicans could offer the public a realistic appraisal of the health of capitalism. Global capitalism is an innovative force, they could argue, but we have been reminded of its shortcomings. When exogenous forces like the rise of China and a flood of easy money hit the global marketplace, they can throw the entire system of out of whack, leading to a cascade of imbalances: higher debt, a grossly enlarged financial sector and unsustainable bubbles.
I really don’t know what point Brooks thought he was making, but he failed miserably on any score. First of all, “exogenous forces” cannot be “weaknesses” and/or “shortcomings” with capitalism since, by definition, they come from outside that system. At best, examining such forces can be used to understand better ways of protecting capitalism from them. In the context of the entire Op-Ed piece, however, it appears that Brooks is pitching the tired line that capitalism must be reigned in so that people don’t get hurt. That’s like diagnosing the problem with house, finding termites, and then thinking of ways to protect the termites from the house.
Furthermore, Brooks cites a “flood of easy money” (which, of course, is caused by government) as an example of an exogenous force, and then lists the following “shortcomings” of capitalism: “higher debt, a grossly enlarged financial sector and unsustainable bubbles.” What do any of those things have to do with capitalism? If anything, these are once again a failure of government skewing incentives.
In fact, when the government does its darnedest to make the cost of borrowing money historically low, people would be really stupid not to take advantage of that. We all know that rates fluctuate, and that the cost of money will be more expensive when they go back up. Logically therefore, it only makes sense to borrow when the Fed turns the money spigot on and then to find some sort of an asset to grow that money in. That, of course, is what leads to bubbles as everyone has barrels of money but not as many clear ideas of what makes a good investment. Instead of taking the time to really investigate what opportunities are available, and which ones fit a particular person’s portfolio, the herd mentality takes over and we all tend to keep up with the Jones and Smiths whether that means buying tulip bulbs or a run-down house we intend to flip.
The bottom line, however, is that these sorts of scenarios start with government intervention into the market place. In addition to turning on the money spigot, the federal government was also encouraging lenders to make high-risk loans, and for the Freddie Mac and Fannie Mae to buy them up, securitize them and sell them into the derivatives market. Again, that’s all fine and dandy (until it it all goes to hell), but it has nothing to do with “weaknesses” and “shortcomings” of capitalism, and everything to do with government sticking its big fat honker where it doesn’t belong.
If the free market party doesn’t offer the public an honest appraisal of capitalism’s weaknesses, the public will never trust it to address them.
The “free market party”? Who does he think he’s kidding here? The Republicans haven’t acted like a free market party since … well … it’s been so long I can’t remember.
Moreover, I simply can’t fathom how Brooks thinks a “free market party” would ever be able to reconcile itself to joining hands with Obama on his completely anti-capitalist agenda.
Power will inevitably slide over to those who believe this crisis is a repudiation of global capitalism as a whole.
Earth to Brooks: that’s already happened. Look who the president is for crying out loud, or take the time to read your own newspaper. Each and every day we hear about how the excesses of capitalism caused this crisis, and how the “libertarian” policies of Bush (HA!) have landed us in this awful spot. Capitalism didn’t get a trial, Mr. Brooks, it was rounded up, convicted and summarily shot as soon as the latest grand experiment in government do-goodism failed (again).
What is going on with the Charles Freeman nomination, and is it an indicator of a overwhelmed administration losing control? Who, exactly, is in charge there?
Frankly, approaching 45 days into this administration, the transition process, at least as it pertains to critical nominations, has been an unmitigated disaster. But it is the Freeman nomination which begs the question “who is in charge”. Charles Freeman has been nominated for the chairmanship of the National Intelligence Council (NIC), the organization in charge of preparing our most sensitive intelligence estimates.
Obama’s Director of National Intelligence Dennis C. Blair apparently never ran the nomination by the White House. That means Freeman has never been formally vetted. Now this may all fall back on Blair, but you have to wonder what sort of guidance or lack thereof provided him with the belief that this was the way things worked?
More importantly, why did Blair decide Freeman was the man for the job? A former ambassador under George H. W. Bush, to Saudi Arabia and senior envoy to China, Freeman is seen by many as having very serious conflicts of interest which were apparently ignored. Freeman was also a board member the China National Offshore Oil Corp (CNOOC) owned in majority by the Chinese government and other Chinese government agencies. And there are other financial ties which are suspect. Freeman is president of the nonprofit educational organization Middle East Policy Council (MEPC), which paid him $87,000 in 2006, and received at least $1 million from a Saudi prince. You can read about the ramifications of those connections here.
But its not just who Freeman has been connected with, but some of the statements he’s made that make one wonder about his objectivity and, frankly, his moral and ideological foundation. This is a person who remarked that the Chinese government had shown too much “restraint” when putting down the Tiananmen Square protests in 1989. And in testimony before the 9/11 Commission, he advocated the use of a national identity card. After all the wide-spread panic from the left concerning the Bush years and the claim that he was leading us down the path to totalitarianism, this seems like the type of person the left would really find unacceptable for a position.
Then there is the Congressional side of the question. Jennifer Rubin asks:
Does Diane Feinstein think Freeman is an acceptable pick? It is interesting to note how lacking in — what’s the word? ah yes — “oversight” the government is now that Congress and the White House are controlled by the same party. Imagine if George W. Bush had nominated someone whose earnings depended on the largess of the House of Saud or who advocated crushing Chinese dissidents — indeed faster than the Chinese government.
And she further asks, is this the type of person who will give the administration “the “unpoliticized” advice they are looking for?”
Given what we know, I’d say no. However, this nomination is just one more in what can only be characerized as a shambles – Commerce, HHS, Treasury, questions about his housing czar and nominees for other Treasury posts jumping ship – that is the nomination process.
This points to a very inexperienced administration learning on the job in one of the more turbulent times in our history. That is not a good thing, folks, but exactly what was predicted given his lack of a resume. We’ve now seen the result of a campaign based on vacuous slogans. A campaign that was part demonization of the opposition and part beauty pageant. A campaign in which few focused on what the responsibilities of the office entailed and whether the candidate had the qualifications to fulfill them. We’re now “enjoying” what that brings.
UPDATE: Politico reports that Charles Freeman has withdrawn his nomination. Heh … that’s the fastest reaction I’ve ever had to one of my posts.
Brad Warbiany at The Liberty Papers took note of my post about the “tea parties” and “going Galt”, specifically this passage:
I’d be more impressed if they fired a shot across the bow and coordinated a national day for cranking up their withholding allowances, just as high as they can. They’re planning their next party on Tax Day, right? One might think they’d be interested in ceasing to lend their earnings interest-free to the government. They might take some satisfaction in doing something that actually shows up on the government’s ledger.
Not knowing any accountants or tax professionals, I didn’t know just how far you could take that. But Brad decided it was worthwhile to find out. He did the legwork, consulted a tax preparer, and wrote up simple instructions for pushing it as far as you can without having to worry about incurring fees or other penalties.
And he has some suggestions for Tax Day:
So here’s my suggestion. April 15th, go to your HR department and change your W-4 claimed exemptions. Go with the maximum exemptions that you calculate will keep you from over-withholding, but small enough to avoid penalties. Budget (save or invest) the difference, so that you can pay the necessary tax next April, and don’t dare postmark the check to them before April 14, 2010.
It’s not a big difference. But if enough people do this, it will be big enough to be noticed. The federal government is expecting to spend your money as soon as it comes in; they’re not expecting to wait until next April to get your money. In fact, if they have to wait, they’re likely to get angry. That’s more money they have to borrow today. That’s more of a functional deficit on their books. In short, if you want to get noticed, a far more effective way than getting some friends together for a group protest is to hit them where it hurts: the balance sheet.
Fellow Americans, it’s time to stop being doormats. If you really want to show the government that you’re angry, it’s far better to show them than to tell them.
Tell your family, tell your friends, tell your blog readers, tell your coworkers. April 15th is the American W-4 Party.
For the full instructions, read the whole thing.
I like it. I especially like it because of the clarity of the message. If you email this around to all your relatives and peers, or post it on your blog for your readers, you’re not asking them to embrace the prisons or fire anyone that they employ. They don’t even have to take the day off of work, which should be a relief to anyone who needs the work to support themselves and their families.
For the price of filling out a W-4 form and turning it in on a Wednesday, they can keep more of their money out of the government’s hands for the next year. They can invest or save it, saying effectively, “I trust that I can handle my money better than the government would.”
It’s not a revolt. It’s just telling the government in terms they understand that we’re paying attention and we don’t want to lend them our wealth if they’re going to treat it like they have been lately. It’s a reminder of where their power comes from. And the more people who participate, the clearer the message.
36 days ’til April 15. In the age of social networking, I wonder how many people could get involved in this?
Honduras is going through a rather large spike in kidnappings. From 5 in 2005 to 121 in 2008. In an attempt to understand this rise in kidnappings, The Overseas Security Advisory Council (OSAC), part of the Bureau of Diplomatic Security of the U.S. Department of State, was sure that economic conditions had most likely driven the spike. But what specifically was likely to have caused it? Apparently an increase in the minimum wage:
In January, Honduran President Manuel Zelaya increased the minimum wage 60 percent, raising monthly wages from US$ 181 to $289. As a result, an estimated 15,000 people have been laid off in urban areas. This number is expected to steadily increase as businesses cannot afford the new mandatory wages. Remittances from Hondurans in the U.S. have also decreased throughout 2008.
Some analysts predict increased crime in Honduras due to citizens unable to find legitimate sources of income. Many unemployed Hondurans could look to kidnapping for ransom in order to obtain large sums of money for a small amount of planning and effort. As the disparity between economic classes continues, wealthy Hondurans or foreigners of affluent appearance conducting business in Honduras could continue to be targeted at a higher rate.
Of course everytime increases are argued against here, those in favor of them tend to wave off the point that raising the wage will cause unemployment among those who can least afford it. Obviously I’m not contending that if we do so here, those laid off will take up kidnapping, but to pretend such rises in minimum wage don’t have any detrimental effect is simply not true – and Honduras provides the case study.
Warren Buffet on the economy and the effort of the government to “stimulate” it:
While praising efforts by Federal Reserve Chairman Ben Bernanke and others to stimulate the economy, he said the economy “can’t turn around on a dime” and that their efforts could trigger higher inflation once demand rebounds.
“We are certainly doing things that could lead to a lot of inflation,” he said. “In economics there is no free lunch.”
Funny how, when someone like Warren Buffet – who has been a supporter of Obama – says things like ‘trigger inflation’ and ‘no free lunch’, people who were previously playing the denial game (massive spending is necessary and good) suddenly figure there may be a problem. Meanwhile the laws of economics have continued to function despite the denial.
For the most part the press has ignored Buffet’s words and they’ve been downplayed by the administration. But perhaps if those who’ve been in denial are willing to consider Buffet’s warnings, they’ll be open to listening to others. Such as warnings about the double talk that’s been coming out of the Obama administration the past few weeks. For instance:
Confidence (too little) and uncertainty (too much) define this crisis. Obama’s double talk reduces the first and raises the second. He says he’s focused on reviving the economy, but he’s also using the crisis to advance an ambitious long-term agenda. The two sometimes collide. The $787 billion “stimulus” is weaker than necessary, because almost $200 billion for extended projects (high-speed rail, computerized medical records) take effect after 2010. When Congress debates Obama’s sweeping health care and energy proposals, industries, regions and governmental philosophies will clash. Will this improve confidence? Reduce uncertainty?
A prudent president would have made a “tough choice” — concentrated on the economy; deferred his more contentious agenda.
Instead he’s decided he’s not going to let a “good crisis” go to waste and pursue his very expensive agenda which has nothing to do with the economic crisis (or alleviating it). All the while he preaches about crisis, catastrophe, sacrifice, tightening belts and doing with less even as he plans to expand government beyond anything we’ve ever seen.
It is an amazing performance.