BLOGS FROM US^®

(Article first published as Obamanomics: Simply Insanity or Crazy Craftiness, Too? on Blogcritics.) On February 12, 2008, in a campaign speech delivered to a packed, thunderously approving crowd, then candidate Barack Obama provided a glimpse of Obamanomics. As in his later encounter with Joe The Plumber, the first term Illinois Senator preached government control of wealth. The specific example he used on both occasions was wealth redistribution. But, that is merely one type of wealth control. There are others and Obama has also pursued them in his first term. They’ve all failed or we wouldn’t be surveying their smoldering wreckage from our perch on the brink of a double dip recession.

And yet Obamanomics hasn’t changed one whit. No lessons learned, not even a slight course correction. It’s still all about government control of wealth through taxing and spending, regulating, granting unfair advantage to handpicked businesses and industries, etc. Take Obama’s jobs proposal, or Stimulus 2.0, unveiled in his September 7 speech. The payroll tax cut is merely an extension of the current one-year reduction. It won’t improve hiring because it’s not a cause of unemployment. But, it is convenient diversionary dressing around a window the White House can’t break through.

And then there’s infrastructure spending, redux. In 2008 and 2009, Obama preached the importance of shovel ready jobs so much he practically turned it into a religion. But in a September 2010 interview, published the following month, Obama admitted those jobs don’t exist in the public sector. One short year later, he’s pushing them again.

The tax increases in the President’s just announced debt reduction plan are nothing new, either. He’s pressed the issue of increasing taxes on the rich since his first term candidacy days. But, at this juncture, even Democrats are having a difficult time supporting them. The reason is obvious. The economy cannot be fixed by taking money out of it. Increasing taxes on those who invest their incomes in growing businesses is much more than merely foolish.

Obama’s persistence in the face of these failures is very like Einstein’s definition of insanity. That is, doing the same thing over and over again, expecting a different result. It doesn’t happen in physics and it won’t happen in economics, either. But, is Obamanomics just insanity or is it also the slick strategy of a President desperate to win re-election?  The facts are stacking up in favor of the latter.

From the moment of his first presidential campaign appearance, Obama has clung to the politics of blame like an addiction. Now, in these beginning days of his re-election bid, with his poll numbers tanking faster than the Titanic, he desperately needs a distraction to hype. Anything that will get the electorate more upset with Republicans than with his mishandling of the economy. So, he offers proposals that couldn’t get through Congress with a battering ram in order to contrive blame scenarios.

His jobs plan is a typical example. Before its delivery, he set the stage by characterizing it as ‘bipartisan’, which, of course, is wrong since it takes two parties to create bipartisanship. No matter, in his Saturday address to the nation, Obama stated his intention to extort GOP support for his new Stimulus proposal. His grand scheme is to blame House Republicans for continuing high unemployment if they oppose it. What he’s not saying is that, if Republicans do support his plan, he will include them in a circle of ‘bipartisan’ blame when it fails. Using blame like a flamethrower is what got Obama elected and blame is what he believes will get him re-elected. Meanwhile, we’re getting much too cozy with double dip.

In another favorite blame pitch, Obama pits the “rich” against the “little guy” over the amounts of money they earn and taxes they pay. But, concocting divisions and wielding them like weapons to get re-elected merely underscores his unsuitability for the office he holds. He ignores the fact that the rich pay most of the federal income tax while about fifty percent of wage earners pay zero dollars.

Obama also fails to mention that many in his crosshairs are small business owners who employ the majority of the American workforce. Taking more money out of their pockets leaves them with less to invest, which means businesses stagnate and the unemployment rate remains high. It also depresses tax revenue.

But, it works for Obamanomics, which holds that government, not the private sector, is the engine of economic growth. As if on cue, the Solyndra loan scandal, presently engulfing the White House like a Gulf oil fire, belies that argument. Taxpayers, courtesy of the Obama Administration, guaranteed $535 million in venture capital loans to the handpicked company. One thousand new jobs were supposed to be created in return.

Fourteen months later, the company folded, laying off eleven hundred workers and leaving taxpayers holding an expensive bag. At a cost of over $535,000 per job, the loan guarantee is being criticized as “crony capitalism”. One of the Solyndra investors is a high-profile Obama campaign contributor. Regardless, the whole debacle highlights the inability of a government bureaucracy to drive an economy anywhere but off a cliff.

In an unusual public chastisement, former Clinton strategist, James Carville, scolded Obama last week for not firing his staff and completely changing his direction. Press Secretary Jay Carney responded that the American people know Obama is doing all he can to grow the economy and create jobs. At last, we all agree on something. We know Obama’s doing all he can. And it’s not working.

In that February 2008 speech, candidate Obama promised to remake this country, block by block, precinct by precinct, county by county and state by state. If you’ve had enough of that, get your shovels ready. You’ve got a job to do come November 2012.

See you in the mirror.

(First published as Why Obama’s Jobs Speech Will Be a Nonstarter on Blogcritics.) President Obama will give yet another major speech this Thursday night. He’ll speak in broad platitudes and intone about the seriousness of our predicament. He will emphasize the necessity of working together. He will, of course, offer way too little in the way of specifics, but whatever it is will have a huge price tag. And his speech will come a cropper, die aborning, stumble out of the gate, take a dirt nap. Pick your metaphor. The speech will go the way of all of his other featured addresses, which is to say, precisely nowhere. Why? As Elizabeth Barrett Browning once wrote, “let me count the ways” or at least the three main ones.

First, Obama talks too much. He’s a man of big words and small deeds, long on rhetoric and short on results. In fact, his Administration has produced no sustained economic growth in its existence. We’ve heard the reasons for this failure repeatedly and the only thing that changes is the length of the list. It grows. And grows. Bush, the evils inherent in the American financial industry, the Tea Party, the Republican House majority, the Tea Party, the tsunami in Japan. But, when the smoke is blown away, what remains is what Obama has actually done. And it is a pitifully small pile of inconsequential, albeit costly, programs.

Lest we forget, the Republican congressional majority has existed for only the last 8 months or twenty-five percent of Obama’s time in office. For the first 24 months, he had his way with Congress, to the point of losing control of the House in the 2010 elections. What were the President’s economic accomplishments during that two-year period? Absolutely nothing that had a sustainable impact. Much of what he did had no impact at all.

The futility of the Administration’s efforts to jump start the economy is not limited to embarrassing hype programs like Cash for Clunkers. A much more telling example is Obama’s efforts to resurrect the housing market, the other elephant in the room that he mostly ignores. There was HAMP, 2MP, HAFA, PRA, HAUP and several others. Despite those efforts, and the billon$ they cost, the housing market is now in a double dip recession. You could argue successfully that it never arose from the first one. But, economists agree that, if it did, it fell into the second one last May. So much for the power of acronyms over actions.

Second, with his majority in the House a thing of the past, Obama must compromise to move the country forward. But, he either misunderstands compromise or simply can’t bring himself to engage in it. That’s really a coin toss. Compromise is not in his nature. For example, he is advertising his Thursday night speech, with its first word yet to be heard, as “bipartisan”. This billing could simply be political, as in everything the President says is bipartisan and therefore anyone who disagrees with him is necessarily partisan.

Or, as likely, Obama believes that if he moves away from any part of his original agenda, he is being bipartisan. But, this belief, of course, ignores the meaning of the word. Bipartisan means of, relating to or involving representatives of two different parties. Unless you suffer from a mental disorder like schizophrenia, you can’t be bipartisan all by yourself. The President needs to come to grips with this fact and stop listening to the little voices both in his head and in his Administration. He actually has to involve Republicans in defining solutions. Simply making unilateral pronouncements and daring his opponents not to accept them isn’t bipartisanship. But, it is a strategy for failure.

Third, making a significant, and sustainable, reduction in the unemployment rate is beyond Obama’s capabilities and those of his hand-picked advisors. This reason is the crux of the problem with all of his speechifying. He’s not very good at politics, but he’s even worse at problem solving. To gain acceptance of his ideas, he prays on people’s fears, distorts opposing viewpoints and protects sacred cows beyond our ability to support them. None of this will fix our unemployment quandary.

Joblessness cannot be dealt with in the vast vacuum of political posturing. The unemployment rate will come down when the economy recovers and not before, at least not in a lasting way. Getting the economy on track means taking strong actions. We are way past short-term fixes for political advantage. We need: (a) tax reform including, among other things, incentives to business, (b) repeal of much of the costly, burdensome business regulations put in place since 2009, and (c) a serious commitment to deficit reduction, which requires effective entitlement reform. These actions create the stable environment that businesses need in order to recover and begin hiring in earnest again.

The good news for Obama is that if he can get those things done, he can also get re-elected. But, as long as his speeches are major and his actions minor, he doesn’t stand a chance. And that’s good news for everyone else.

See you on the left-side.

(Article first published as Say It Ain’t So on Blogcritics.) In 1919, eight players on the Chicago White Sox threw the World Series to the Cincinnati Reds. They were later indicted and banned from baseball for life. A small boy who idolized the most famous of them, Shoeless Joe Jackson, entreated the star to deny his involvement. The child’s plea, “say it ain’t so”, has come to epitomize both disbelief and the pain of disappointment.  It’s a fitting reaction to the current crop of Republican presidential hopefuls. Each is such an easy target that one can almost discern a plot to throw the election to Barack Obama.

O.k., not really, but a conspiracy might as well exist. With the possible exception of Mitt Romney, none stands a snowball’s chance of living in the White House in 2013. Why? Each has a platform with such narrow appeal the Great Wallendas would lose their balance. Obama is already taking aim at the Republican field although, if he were smart, he’d wait. His attacks might help produce a new contender who defeats him.

The problem with the current GOP candidates is that they’re treating the 2012 presidential election as a one issue race. Each is betting that independent voters fear our desperate economic plight deeply enough to overlook his or her polarizing positions on other subjects. With that bet placed, they are racing to grab the nomination by playing to a narrow segment of the Party with the most apparent influence.

While it’s true that elections are usually a barometer of the way voters believe their lives are going, voting isn’t always just about the economy. With Obama’s divisive rhetoric and thick misdirection smoke screens, solutions for a broader range of issues must be defined. That’s a requirement the current GOP candidates are not up to meeting.

More than at any time in living memory, politics lies in polarized pieces. Politicians have come to mimic players in a TV ‘reality’ show, the more extreme the better. Predictably, the debt reduction plan of the interparty Gang of Six died aborning because it lacked the extremism that made the eventual legislation meaningless.

The fringe in both parties tries to lay exclusive claim to “principle”, reducing party value to brand marketing. But neither labels nor rhetoric solves problems. What does most often are plans with a mix of provisions that, collectively, defy categorization. But that’s a lesson too many choose to overlook.

Take Michele Bachmann, winner of the Iowa Straw Poll, although garnering a whopping 4,823 votes out of 16,892 cast isn’t much of victory. She bleeds Tea out of every political pore from tying the knot to waging war. It won’t get her to the White House. Although she is trying to broaden her appeal, her dye has been cast for much too long.

Ron Paul, the 76-year old Texas libertarian, may be Nostradamus and Edward Cayce combined when it comes to the economy, but he has no chance.  He does have, whether or not deservedly, a crackpot aura, which would be a problem except the media mostly ignores him. As the modern day Harold Stassen, he should save his money and go home.

Rick Perry, the hardline Texas conservative and newcomer to the race, is supposed to threaten the chances of both Romney and Bachmann. But, he has yet to be tested in a national context and his baptism by fire is just beginning. Speaking of baptisms, personal religious beliefs are great but they shouldn’t be showcased as a prelude to a national campaign. It’s bad theater on several levels. If Perry keeps that up, he won’t have a prayer.

And then there are the acknowledged and unacknowledged also rans. Tim Pawlenty, the weakest of the weak, dropped out of the race the day after his poor showing in Iowa. And only Gingrich thinks Gingrich is actually running rather than showing up periodically to pontificate. Santorum and Cain combined would have come in behind Paul in the Iowa poll while “Other” got more votes than Huntsman and McCotter put together. Don’t look for one of these four to be the 2012 breakout candidate.

Even Romney, who has the best chance of victory among the known’s, has flip-flopped himself to the right side of the political frying pan. They all want to outdo each other in staking a claim to the Republican’s most conservative wing. In their rush to be Right, they appear more and more Wrong to independents essential for victory next year.

The GOP’s best 2012 hope is that the election turns out to be a rerun of 2008. With an economy Obama has made much worse and his tanking poll numbers, he’s becoming the reincarnation of George Bush. Either that happens or the convention in Tampa Bay next year brokers a real winner. That last one is a desperate solution, but so are our times.

See you in the mirror.

(Article first published as The Fatal Conceit of Perpetual Prosperity: Will It Sell? on Blogcritics.) Winston Churchill once said, “The biggest argument against democracy is a five-minute conversation with the average voter.” Today, the truth of that observation is being determined in democracies around the globe. In the U.S., with politicians sharply divided along partisan lines on how to solve our fiscal crisis, voters will decide on the path forward. Are they up to the task? Will they buy the perpetual prosperity pitch or insist on belt-tightening? With the chips down, will Americans both recognize and reject political absurdities or is Churchill right? Will they be as foolish as some of their currently elected officials?

The prospect of perpetual prosperity can be alluring. This enticement lies at the heart of Obamanomics, which promises endless entitlements for some through higher taxes on others. But, as the demand for entitlements increases through larger aging populations and expanding social services to many more, the price tag grows exponentially. This necessitates a bigger and bigger revenue pot or deeper and deeper annual deficits. Since most of Obama’s fellow democrats agree that deficits must be tamed, entitlements require a mushrooming revenue stream gushing into federal coffers.

Under Obamanomics, the funding source is higher taxes on the rich, of course, but the sustainability of that model is not addressed. The continuing ability of those footing the bill to meet the growing demand for their money is simply assumed. These people are supposed to be a perpetual moneymaking machine with a need-to-achieve compulsion that assures ever more federal revenue.

A telling dichotomy underlies this belief. While abiding achievement is assumed in one part of the population, indelible dependence is assumed in the other, much larger, part. Viewed in microevolution terms, this change in a once-unified group marks the beginning of two subspecies, producers and consumers. Under predictable evolutionary progression, producers prosper, even if it means migrating to more accommodating locales, while consumers eventually go extinct.

The analogy could not be clearer. The indispensable core of Obamanomics is also its inevitable demise. Friedrich Heinemann, the Corporate Taxation and Public Finance Department Chair at the Centre for European Economic Research, defines the problem as a forced morality change.

In a study of the long-term impact of social norms on the welfare state, Heinemann concludes that increasing benefits and unemployment fatally destabilize the system. A generous welfare state creates a dependency in those who take from it, undermining the social norms indispensible to its survival. People become so used to feeding at the public trough, they will cheat to keep the benefits coming. Heinemann’s is not a politically correct study, but reality rarely is.

The reaction of the Greeks to their Government’s austerity measures is also real and underscores Heinemann’s point. After decades of extravagant social spending, the Greeks have shot through dire straights and are dangling in mid air over financial ruin. Keeping them from falling into the abyss is the refusal of European leaders to see their banks and their economies undone by unpaid Greek loans. But, the eurozone’s rescue imposes “austerity” on the country, if living within its means can be fairly called austere.

And the Greeks don’t like it one bit. They burn. They loot. They riot. They vent their displeasure like spoiled children whose profligate parents are trying to change their ways. And yet, public support is critical to the success of reforms necessary to restore financial health. Whether it is ultimately given is anyone’s guess.

Meanwhile, in a show of resolve, Wisconsin voters rejected the bullying tactics of national unions, refusing to restore democrat control to their legislature. All the national boys could buy for their thirty-five million dollars in campaign spending was a net gain of two seats. Sounds vaguely like the federal deficit.

Granted, this was not a direct showdown on Obamanomics. But, it does maintain the reforms that were ushered in by the 2010 elections, which were a rejection of Obama’s fiscal policies. And you can bet that, had the unions succeeded, our president would be on the stump today pushing the result as next year’s victory predictor.

Will the country’s voters follow Wisconsin’s lead and opt for responsible government or will they burn and loot in the footsteps of Greek rioters? Is there really a choice? On October 8, 2008, the national debt stood at $10.1 trillion. Today, less than three years later, it has spiraled past $14.6 trillion for a 45 percent increase. Other than hand waving and smoke screens, all we have to show for it is an historic downgrade in our credit rating.

In 2012, voters can turn out the lights on Obama or tune up the orchestra because it’ll be time for “Nearer My God To Thee”.

See you on the left-side.

(This blog is an update of an article first published as The Afterglow on Blogcritics.) It took almost no time at all for the phony afterglow conjured up by Washington’s politicians to be extinguished by the cold winds of reality. In the brief two days between the signing of the debt ceiling increase and the first gust of trouble, the President and Congress were celebrating. Obama, planning a bus tour of the Midwest at taxpayer expense, was busy filling his head with happy re-election thoughts. After all that political posturing, Congressional members fell back exhausted and went on vacation and deeply into denial.

Forty-eight hours after the debt deal was inked, the stock market plummeted 500 points, erasing the gains for the year in a single day. While the crisis in Europe contributed to the plunge, much of the impetus was the grim economic outlook in the U.S. The Dow finished the roller coaster week with the largest five-day drop since October 2008.

On Friday night, Standard & Poor’s downgraded the U.S. credit rating from triple-A to AA+. The historic move means that U.S. Treasury debt is no longer among the safest investments in the world. The action was prompted by the failure of the debt ceiling legislation to address America’s chronic finance problems, a fact many people already knew.

More than one dozen countries now have a higher credit rating than the U.S. Lower credit ratings generally necessitate higher interest rates on the debt instruments in order to attract investors. The interest we already pay on the debt would feed several small countries annually. With higher rates, the national debt will grow at an accelerated pace, compounding our current problems.

The Standard & Poor’s downgrade is the first crack in the timbers supporting our economic viability. In response to its reverberating sound, the stock market plunged again on Monday, this time by 634 points. For the second time in just three short business days, the Dow hit a record rocky bottom. The performance in the international financial markets is bleak as well. And the response from Washington? It’s been nothing short of suicidal, but not from despair. Self-destruction in D.C. is at the hands of politics as usual.

Even with the record levels of political partisanship and acrimony these days, statements emanating from the White House in the last four days are stunning. The response to the S&P downgrade has ranged from meaningless to blaming it on the Tea Party. Regarding the former, Obama says that while markets will rise and fall, the U.S. will always be a AAA country. Seriously? Tune up the orchestra. It’s almost time for “Nearer My God To Thee”.

Meanwhile, Main Street looks like it’s been tossed in a DEA raid. According to most experts, the housing market is now in its second, or double, dip since December 2007 when the Great Recession began. Unemployment remains so huge, you don’t need 20/20 vision to see it.

On that score, the President is disingenuously touting the July jobs report. But, the hundreds of thousands of people who left the job force last month offset the jobs that were added. In fact, the employed-to-unemployed ratio has not been as low as it is right now since January 1984. In looking at the persistent unemployment situation, we’re watching a slow-motion train wreck. Our year-to-date GDP numbers make this sorry situation even worse. At 1.3 percent, economic growth is practically invisible and puts us even farther behind the unemployment curve.

There was some comic relief amid the gloom and doom in the last week. In the World of Weird, a TV ad is currently running that rivals the 2010 Christine O’Donnell “I am not a witch” pitch. In it, viewers can gaze upon the scowling visage of the perpetually self-important Chris Matthews as he extols Obama’s love of country. We can imagine the sustained howls if Fox News featured Bill O’Reilly in an ad supporting a Republican candidate. The double standard is as alive and well as the double dip.

But, there’s nothing funny about Congress and the President refusing to face a difficult balance sheet and come up with rational corrections. Unfortunately, refusal is a script too many of them have been following for the past three years. Harry Reid’s Do Nothing Senate, for example, has done nothing more than raise platitudes to a political art form. And increase the debt by almost 50 percent since October 2008.

To get an afterglow from that we’d need some serious glow in the dark.

See you in the mirror.

At different times in American history, the Do Nothing label has been stuck to Republican politicians and even the entire party. Like the time, way back in the day, when Woodrow Wilson glued it on President Taft and his administration. The most famous use of the term was by Harry Truman in his successful campaign against Thomas Dewey in the 1948 presidential race. The phrase helped to keep “Give ‘Em Hell Harry” in the White House confounding all political predictions. More recently, Do Nothing has been pasted, wrongly, on the Republican members of the 112^th Congress and, rightly, on Mitt Romney, the presidential wannabe.

In the past, Do Nothing was a pejorative, a brand to be avoided. After all, politicians who sat around doing nothing were worse than leeches on the body politic. But in today’s political culture, it is a strategy to be cultivated, a way to get your way risk free. No one exemplifies the new thinking better than Harry Reid. Not that Do Nothing is his entire game plan. The whirlwind of legislation he helped to push through the 111^th Congress made the country’s head spin. Without question, he’s a bona fide dynamo when it comes to expanding government.

But, when it comes to paying the piper for all the cool new stuff, Harry is strictly Do Nothing. The Senate Majority Leader has ducked every opportunity to develop a detailed proposal to address the national debt. The last time his Senate even offered an annual budget was in March 2009 when the red ink was a demure $10 trillion. By the end of this year, it will tip the scale at almost $15 trillion.

How did it grow so big so fast? In the year of our last budget, the deficit, at $1.4 trillion, was the largest since 1945. 2010’s $1.3 trillion operating loss was the second largest in the same time period. According to White House numbers, the 2011 deficit will come in at $1.6 trillion, the largest in U.S. history. To put this into sharper focus, on only four occasions has the deficit breached 10 percent of GDP, during three wars and now.

With the debt rising like a surging tide, why has there been no budgets to stem it? These days, budgets require difficult choices with high degrees of political risk. To the politically driven, preaching from the Book of Platitudes is infinitely more preferable than thinning sacred cow herds. Kicking the can down the road beyond the next election is definitely the way to go. So, when absolutely pressed, Do Nothings choose to grandstand down to the wire, then erect a labyrinth of smoke and mirrors and declare victory.

Where does this leave us?  Pretty much left out. The ridiculous debt ceiling agreement just inked by Obama is a perfect example. The many commentators currently mired in the weeds of speculation about the political winners and losers of the deal are missing the big picture. First, there’s so little substance to the terms of the agreement that it’s no deal at all. Second, we’re all losers. The whole episode is an international embarrassment to the people of this country. Rather than coming to grips with a crippling debt of their own creation, our politicians brought us to the brink of disaster with political posturing. And in their wake, the only thing that changed is the growing crisis.

Why don’t the Republicans, and specifically the Tea Partiers, deserve the blame here as well? For starters, they have offered several plans for dealing with the debt. Granted, each of them is flawed, but the Democrats refused either to open negotiations or counter with equally detailed versions. More than that, if it weren’t for the unseemly behavior of Reid’s Party and their monster pieces of legislation, there wouldn’t be a Tea Party. The baggers are a response to what’s wrong with the current bunch of ruling Democrats.

During last fall’s Lame Duck Congress, Reid refused to raise the debt limit even though he had the votes to extend it into 2013. His motivation was purely political. He wanted Republicans to “have some kind of a buy-in on the debt”, which is double talk for taking some of the blame. Of course, that wasn’t his approach twelve months earlier when the Democrat-controlled Congress upped the limit on a strictly partisan vote. But, back then, Republicans were effectively without power, putting them out of blame’s reach as well. So, they weren’t much use to the Senate Majority Leader.

Will the debt crisis ever be solved? Not by the Do Nothings. Small people create big problems, but they rarely solve them. It’s time to elect some big people for a change.

See you on the left-side.