In the Mirror
In the Mirror

The President and the Economy: Lowering the Performance Bar

Blog From
July 16th, 2012

(Article first published as The President and the Economy: Lowering the Performance Bar on Blogcritics.) Fifty percent of the respondents in an AP-GfK poll taken last month believe that the President has little to no effect on the American economy. The poll consisted of telephone and cell phone interviews with 1,007 adults across the country.

While GfK markets its polling methodology as reliable, it is not described as drawing from a representative cross section of the nation. So, it’s uncertain whether the belief in the President’s irrelevancy to the economy is shared by fifty percent of the electorate. If it is, Obama has lowered the performance bar so much that half of the voters believe the person in the Oval Office doesn’t matter.

These poll respondents are wrong, of course, but they hardly can be blamed for their mistaken belief. It’s similar to the Stockholm syndrome where some kidnap victims who are held long enough begin to identify with their captors. We’ve been captive to incompetence for so long, it has begun to define our expectations. That’s a scary concession to performance failure.

Those who believe in the President’s negligible impact on the economy give three reasons in addition to “I don’t know why”. Some respondents view congressional intransigence as an insurmountable obstacle to presidential action. However, that is only true under limited circumstances.

In Obama’s case, his party controlled Congress for his first two years in office giving him free rein to realize his economic agenda. The result was a parade of ineffective mortgage relief programs and a stimulus package that allowed the unemployment rate to soar above 10%. One year after its signing, three million fewer people were employed than when the ink dried.

Naked ineptitude prevented the stimulus from being the boon that Obama promised it would be. To begin with, the economy was in much worse shape than the Administration’s naïve 2009 predictions. The stimulus, once enacted, was not directed at businesses. The bulk of the spending was merely a wealth transfer to state governments, many of which have been financially mismanaged for years. Worse than subsidizing people who can’t balance a budget, the least needy states received the most money.

Meanwhile, Obama wasted credibility capital preaching that the stimulus would fund “shovel-ready” jobs only to confess later that, to his surprise, those jobs don’t exist. As for excuses, even Barney Frank winces at the President’s fantastical failed-stimulus mantra – things could have been worse without me.

After the 2010 election, Obama had the same opportunity as Bill Clinton in 1994 to be the conciliator with Congress, the adult in the room. Presidents are uniquely positioned to turn partisan discord into a productive, if bumpy, relationship. Obama would have had an easier time of it, too, since the terminally self-important Newt Gingrich wasn’t around to challenge him at every turn. And he did admit on the eve of the election that he should have included Republicans in the stimulus negotiations.

Yet, when the time came to inspire unity, Obama chose, instead, to pour rancor over the political divide like gasoline on a fire. Rather than following Clinton’s example, he squandered his leadership moment for a bowl of partisan porridge and we are weaker for it.

Other poll respondents chalk up the President’s inadequacy to world events, which today are blowing ill economic winds onto our shores. Of course Obama cannot control developments in Europe, for example. But, he can help prepare our economy to withstand negative repercussions emanating from across the Atlantic.

This requires the President to encourage economic growth rather than discourage it. A strong economy is the best buffer we have against outside forces. However, rather than strengthen, Obama’s economic agenda stifles free enterprise because it is not about economics at all. It’s about incrementally replacing a free market system with one infused with government control. He’s using a weakened economy as an excuse to push his agenda much like he used a flawed healthcare system to give us Obamacare.

The President’s bureaucrats have issued hundreds of new regulations at a cost of over $46 billion to Americans, far surpassing his predecessor on both counts. He has created a climate of uncertainty with constant threats of tax increases and ever more regulations. Advertized as high-profile investment, Obama funnels political payoffs to company owners in special interest sectors only to see the companies fail and employees jobless. Rather than fostering a positive growth environment, he undermines it with politics. The outcome is an even weaker economy.

Still, Obama’s shortcomings are his own. The failure, spectacular though it may be, of a single incompetent individual does not define the boundaries of the office he holds. Admittedly, that’s hard to remember when the occupant has had so many swings and misses. But, Obama remembers. Voters should take their cue from his prediction that he will be a one-term president for failing to turn the economy around.

Some of the poll respondents attribute their belief in presidential impotence to the death of optimism during Obama’s term. Defeatism is understandable after his failure to live up to the promises that swept him into the White House. But, the demise of hopefulness after just four years of disappointment and hardship is a premature death. It concedes too soon that inadequacy has become the standard of presidential performance.

To be sure hard times are difficult or they would be called something else. But, pessimism is easily averted by the knowledge that voters can improve their economic circumstances. Presidents who do not perform adequately only remain in office because voters allow them to remain.

In that regard, even those who believe that the President is a bystander to economic forces do not necessarily let him off the hook. As one respondent said, she is willing to give Romney a chance to see what he can do. That attitude is reflected in a more recent AP-GfK poll that shows Obama losing his long-held advantage over Romney as economic uncertainties increase.

Today, Obama’s response to his fumbling of the economy is to change the subject with a vengeance, attacking Romney with increasingly absurd accusations. The President and his staffers have assailed Romney’s religion, his wife, his business record, his patriotism and his wealth. This past week, they claimed he is also either a felon or a liar.

Obama is a Chicago politician, a street brawler whose favorite diversionary weapon is relentless character assassination. He’s also quick to spout a spate of promises, a la 2008, that he can’t keep. Romney responds poorly in a campaign thusly defined because he has no experience in that type of environment. His successes, unlike the President’s, are built on substantive achievements not empty politics. Viewed in that light, Romney’s stumbling retorts to Obama’s escalating personal attacks are actually a point in the challenger’s favor.

One thing is certain. When people begin to accept ineptitude as the nation’s new normal, it’s time to change the occupant of the White House.

See you in the mirror.

Posted in In the Mirror



In the Mirror

Cavmen Didn’t Have Debt and Neither Should We

Blog From
June 22nd, 2012

Cavemen come into vogue every now and then. From the silly Geico “so easy” commercials to serious diet choices, Americans don’t mind identifying with the scraggily cave dwellers of millennia ago. It shouldn’t come as much of a surprise since, on an evolutionary scale, we aren’t that far removed from them. Oh, we have more highly developed social, economic and governance structures. We dress better, live more grandly and bathe a lot more often. In fact, our entire hygiene regimen beats theirs clubs down. But, those differences are superficial. Underneath it all, we are still pretty much them. And if Darwin is right, it’s past time to get back to some caveman basics.

Evolution is one of the most flexible theories of modern science, often bending like a pretzel to accommodate nonconforming reality. But, Darwin’s brainchild does have some constants. Primary among them is, of course, survival. Initially, it was survival of the individual but that didn’t explain altruistic behavior, conscious or otherwise. So, it became survival of the group. Did I mention that the theory is flexible?

Anyway, group survival, practiced by our cave inhabiting predecessors, meant selfless individuals worked for the benefit of the group, even to the point of death. The work and the sacrifice were done to make the whole safer, stronger and, hence, better able to survive the vicissitudes of Paleolithic life. Actions that lessen the chances of group survival are counter-evolutionary, which leads naturally to species extinction. Since the caveman period lasted many millennia, counter-evolutionary deeds occurred infrequently, if at all. (As an aside, one wonders how the altruistic gene itself survived and there’s a theory twist for that, too. But, it’s a topic for another discussion.)

Today, some ten thousand years after our ancestors completed the metamorphosis into farmers, we find ourselves in the throes of counter-evolutionary lunacy. We live in a world of short-term gain at the cost of long-term survival and we’re loving it. Short-term-itis has crept into many aspects of modern society. We gorge ourselves at the dinner table while assiduously avoiding bothersome exercise and extend ourselves over our credit limits like there’s no tomorrow. And there won’t be unless we reel in our excesses in a quick hurry.

For America, the worst of these excesses is the national debt we’ve managed to accumulate in a relatively short period of time. It’s ballooned like the waistline of a Mickey D’s gourmand. Political machinations aside, social welfare expenditures are the main reasons for the debt explosion over the past fifty years. An associated indirect cost is the expansion of government to regulate them. Yes, from time to time, other factors have contributed to the debt on a temporary basis, like defense spending. But, the constant, and ever-expanding, contributors are subsidies to individuals and the costly growth of government that sustains them.

Unfortunately, in the face of this massive indebtedness (over $16 trillion by year’s end) our society has not survived to thrive. It merely grows increasingly dependent on a shrinking pool of those who work to support the group. And the debt grows ever greater. For those observing it from this side of the pond, the Greece example is nothing short of breathtaking. These people have lived above their collective means for so long that every vestige of rational thought has departed the national consciousness. After last week’s Greek election, the victors declared that the European bailout terms should be relaxed just because a pro-bailout party won.

Are they kidding? They have yet to bite any part of the bullet fired at them by long years of uncontrolled profligacy. Still they expect a tangible reward for merely agreeing in principle to start living small. If they were children, their parents would show them the error of their immature ways. But, they are just being childish instead and have no parents.

For our part, ludicrous, self-serving political blather has almost completely supplanted rational thought. We haven’t seen a federal budget since 2009 while the national debt grew more in Obama’s first 38 months than in 8 years under George W. If we stay this course, economic forecasters predict the end of life as we know it before 2030. Today, there is no realistic plan anywhere near a drawing board that can avert the looming train wreck.

Cavemen existed for over 100,000 years sans group debt. Our society has been around for less than 240 years and we’re drowning in it. There’s a lesson in the difference. Will debt reduction be painful? Yes. Will it be popular? No. Do our politicians have the strength of character to pull it off by themselves? No again. Ultimately, debt reduction will be forced, or not, by a group currently in love with short-term-itis.

There’s a larger than life prospect that society will still be plagued by the disease right up until the lights burn out on it. If that happens, it’ll just be Darwinian theory, with all of its convenient twists and turns, in practice. Where’s a caveman when you need him?

See you in the mirror.

Posted in In the Mirror



In the Mirror

Wisconsin Deals Fiscal Responsibility a Winning Hand

Blog From
June 6th, 2012

The much-anticipated vote has finally been tallied. Scott Walker is the first governor in U.S. history to withstand a recall attempt. Actually, only three gubernatorial recalls have been mounted in the nation’s history. Still, winning is better than losing. Just ask the two who were expelled, California Governor Gray Davis, ousted in 2003, and North Dakota Governor Lynn Frazier, sent packing in 1921. Frazier may be beyond querying but Davis can tell you that it’s no fun. Other than that, what are the implications of Walker’s survival?

It should be noted at the outset that Walker did more than merely survive yesterday’s attempted unseating. His survival was, in today’s vernacular, a blowout smackdown. The recall’s margin of defeat was almost twice Walker’s victory margin when he won the gubernatorial election in 2010 against the same opponent.

Democrats, stinging over the recall failure, are desperately trying to put a happy face on Walker’s continuing presence in the Executive Residence.  Most are claiming that the failure is the result of voter recall fatigue and the impropriety of using the recall process under these circumstances. Some are also attributing the defeat to out of state money. In other words, it had nothing to do with (a) fiscal responsibility, (b) anti union sentiment or (c) Election 2012. Regarding the latter, recall supporters point to the fact that Obama was favored over Romney in exit poll interviews conducted early on Tuesday.

The Dems are right on the third claim. But, it has nothing to do with the fact that Obama enjoyed a 9-percentage point preference over Romney in early exit poll interviews. When the interviews were conducted, the recall outcome was too close to call. But, by the end of the night, Walker had handily rebuffed those who would reject him. This means that those interviewed were not among the voters who gave Walker his margin of victory. No one knows who those folks will favor in the presidential election.

Even so, contrary to the prognostications of Karl Rove and other political pundits, the recall results have nothing to do with partisan politics. The issue was narrowly drawn and it has consumed, and changed, Wisconsin residents over the past year. It’s difficult to imagine that, in such a climate, the result can be anything other than narrow as well. The message that Wisconsin voters sent on Tuesday should not, therefore, encourage the GOP about the fall election. In saying no to Walker’s ouster, Wisconsin voters simply said yes to fiscal responsibility. And to a recognition of the role that public sector unions play in unsustainable deficits.

The media spotlight leading up to the vote largely ignored the fiscal issues, preferring to focus on the more glamorous union-busting angle. But, banning collective bargaining for most public sector unions was not a direct assault on them. They were the foreordained casualty of slaying Wisconsin’s fiscal dragon. And the Badger State is hardly alone in the effort to ward off the yawning debt that flows from collective bargaining negotiations. On Tuesday, voters in two of California’s largest cities voted overwhelmingly to reduce public employee pensions.

The largest direct financial threat posed by public unions today is massive unfunded pension liability, which faces too many states. According to the Pew Center on the States, at least 18 of the Federated Fifty each face liabilities greater than $10 billion. California and Illinois lead the liability parade with an excess of $50 billion a piece. When retiree healthcare costs are included, the unfunded liabilities of these states total $1 trillion.

Unless this liability is reduced, government spending priorities must necessarily change. As pensions are funded, the amount of money available for services such as schools, roads and welfare will be dramatically reduced. States will eventually end up serving only retired employees since their post-retirement obligations are difficult to void, even in bankruptcy. This isn’t what taxpayers have in mind on tax day.

The cost of pensions and benefits, as high as they are, is only part of the picture. In fact, the indirect costs may be even higher. According to a National Affairs treatise, the public union price tag includes reduced government efficiency and responsiveness due to union-imposed rules and regulations. Sweetheart agreements entered into by their predecessors also hamstring newly elected, fiscally responsible officials.

The unseemliness of public employees holding sway over public services caused Franklin Roosevelt and George Meany to renounce the idea of public unions. Today’s fiscal predicament shows that those gentlemen were more right than they could have imagined.

In an exit poll interview, one Wisconsinite who voted for the recall said she did so because she was tired of the bickering. One wonders how tired she would become if her state government could only afford to service union debt.

See you in the mirror.

Posted in In the Mirror



In the Mirror

The Social Advocacy Lure: Whom will it catch?

Blog From
March 24th, 2012

(Article first published as The Social Advocacy Lure: Whom will it catch? on Blogcritics.) Last month, the Obama re-election campaign began an effort in earnest to redefine the major issues in this election year. Treating superficially the still weak economy, the persistently high jobless rate and the skyrocketing national debt, Obama’s main messaging is now on social issues. He addresses the rights of discrete groups, like women. But, he speaks most passionately of, in essence, a national ‘oneness’. It is a social concept he uses to justify the continual expansion of the scope and power of the federal government. From it flows many proposed social engineering regulations that necessarily erode individual freedoms.

Obama’s recent defense of women’s rights in the free contraceptives fight is a good, but not great, display of his social restructuring strategy. It was a two-fer: (1) an opportunity to label Republicans as anti-woman and (2) a needed distraction from his freedom of religion gaffe. It seems, as far as the first point is concerned, that the stumblebums at the GOP are all too willing, albeit unwittingly, to help him out. During the dust up, credible discussions about whether contraceptives should be available gratis went largely unnoticed. Not really surprising as those pieces lacked an emotional element.

Individual skirmishes such as the free contraceptive example may be interesting, but they aren’t especially telling in trying to identify a cohesive campaign strategy. That comes from the main theme of speeches over time as well as other campaign outreach efforts. In Obama’s case, the overarching pitch is his oneness assertion. As he sees it, we are one nation, one people. We owe a responsibility to each other and a shared responsibility to future Americans. We rise or fall as one. Under this view, the purpose of government is to protect and expand the interests of the one.

A great example of oneness is the justification for increasing taxes on the rich to raise the standard of living for everyone else. Enlarging the levy on fat wallets was once couched in strictly economic terms, but not any longer because it makes no economic sense. So, now days, it’s mostly characterized as one of the many fair and decent things the federal government can do for all of us. It is a manifestation of Obama’s personal belief that some people simply have too much money and get tax breaks they don’t need.

Complementing that social argument is Warren Buffet’s statement that decent rich people don’t mind having their taxes raised. So, there it is. Decent people don’t object to the government being decent, which means only the indecent protest. But, the government does not exist to protect them. The argument does have a horrifyingly attractive allure, like being transfixed by the lights of an oncoming train. But, it is failed logic.

Taking from the rich is just one example of the application of Obama’s social strategy. Obamacare with its individual mandate was an early instance of the strategy. Wall Street regulation is another recurring theme. While Obamacare is an easy target, it is difficult to take a pro Wall Street stance, although the Occupy movement is a great motivator. The President’s social agenda also limits consumer choices. So, global warming justifies shutting down the oil and gas industry in favor of solar energy, high speed trains, algae-based fuel products and so forth. Pipe dreams replace pipelines in the President’s social order.

Team Obama believes that social advocacy will attract the much-coveted independent vote by doggedly labeling the GOP as the party of fundamental unfairness. If the Republicans can be made to look bad enough, voters won’t be able to stomach voting for them despite razor-thin pocketbooks. It’s a risky bet. Traditionally, voters in U.S. elections cast their ballots based on their economic well-being. If Obama’s re-election strategy is to prevail, it must not merely buck the tide of history. It must do so by convincing voters that traditional virtues such as individual responsibility and achievement have become vices.

Will the strategy succeed? Possibly, but only if voters surrender to the mob mentality that Obama appeals to in every campaign speech. It is never enough for him to state his positions on the issues he chooses to address and criticize those of his opponents. His re-election spiels are clarion calls to grab our pitchforks, light up our torches and storm the castle of the individual rights monster.

You can almost see the trail of lights going up the hill from here.

See you in the mirror.

Posted in In the Mirror



In the Mirror

Will Obama Step Aside or be Pushed?

Blog From
November 28th, 2011

(Article first published as Will Obama Step Aside or be Pushed? on Blogcritics.) The Wall Street Journal published an opinion piece a few days ago about the need for Obama to step aside. For the good of the country, he must give another Democrat a chance at the White House next year. The most surprising thing about the article is that it wasn’t written by a hardline right-winger. Or even a considered Independent. Two former Democrat pollsters, one for Jimmy Carter and the other for Bill Clinton, are the authors. They appeal to Obama to climb the moral high ground like Harry Truman and Lyndon Johnson before him and step down.

In a nutshell, these writers lay the blame for today’s political gridlock in the Capitol at Obama’s feet. Stalemate naturally follows in the wake of vitriolic posturing. They also believe that the President cannot win re-election with a constructive campaign because of his performance failures. His road to victory, if there is one, runs straight over a scorched earth. But, that strategy, already adopted by the President’s handlers, will only widen the political divide worsening dire issues facing the country. The authors’ solution is to run Hillary Clinton, the savior, not only of the Democrat Party, but also of the country.

It’s an interesting article, made more so by the political affiliation of it’s authors. But, the most interesting thing about it is the comparison, however brief, of Obama to the 1952 version of Harry Truman. There are dozens of articles on the Internet likening Obama to Truman in 1948. Some merely offer the possibility. Others predict a Truman-esque victory for Obama. There are also articles suggesting that Obama is the second coming of Jimmy Carter in 1980 or Gerald Ford in 1976.

But, Truman in 1952 is becoming a more likely scenario. In 1957, five years after he left the Oval Office, Truman claimed that he stepped down in the best interests of the country. He supposedly made the decision in 1949 based on his concern that advancing age would prevent him from governing effectively through 1956.

A much more plausible explanation is that Truman, deeply disliked, accepted the fact that 1948 Redux was not in the cards. He suffered a humiliating defeat in the first primary of 1952 at the hands of a freshman Senator.  Days later he withdrew his name from consideration. He did, however, successfully deny his primary opponent the Democrat nomination at a brokered convention later that year.

Will 2012 play out for Obama like 1952 did for Truman?  There are similarities. For Truman, the Korean Conflict was very unpopular in a war-weary America and he couldn’t bring it to an end. His administration was riddled with charges of corruption and cronyism. Even the post-WWII economic boom could not quiet concerns about the Federal deficit, miniscule by today’s standards. In the end, his past successes forgotten, voters rejected the man from Missouri.

Obama finds himself in worse circumstances than did Truman. America today is in protracted military conflicts in two countries. The economy is in the longest and deepest recession since the Great Depression. Financial collapse hangs over irresponsible spending like Damocles’ sword. The administration is facing corruption and incompetence charges in the ongoing Solyndra and Fast and Furious fiascos. While Truman, at least, took responsibility, Obama works very hard to deny it. Years of Obama’s persistent blame antics inevitably wear very thin.

So, our President’s approval rating, like Truman’s before him, is dismal. Even Obama admits that we’re no better off now than when he became president. Not surprisingly, if the polls were open today, the Elephant would win.

But, are elections that occurred sixty years ago meaningful in predicting the course of the 2012 contest? Is there a dissenter among Democrats who will challenge Obama in the primaries? Are today’s voters enough like those in 1952 who preferred a maverick entry in an early primary? More to the point, are enough voters today like American adults in 1952? Those folks were battle-hardened and self-reliant. People these days are products of decades of entitlement indoctrination.

Then there’s the question of whether Obama can find the moral high ground with a map and a compass. Or, whether he’s so scorched the earth, it’s no longer discernable. If someone else is to be the Democrat standard bearer next year, it will take one very big push.

See you in the mirror.

Posted in In the Mirror



In the Mirror

To Flatten or Not to Flatten: Is that Really the Question?

Blog From
October 30th, 2011

(First published as To Flatten or Not to Flatten: Is that Really the Question? on Blogcritics.) On Monday, the Bloomberg editorial staff came down on the side of making the tax code more “progressive”.  The piece was in response to flat income tax proposals from three or four of the current Republican presidential primary candidates. One can only hope that what passes for thinking in that article is not repeated in future Bloomberg work because it’s very deficient indeed. You’d need a map and a compass to journey deeper into mindlessness, but then, being mindless already, you couldn’t read either one.

Still, the flat tax flap does give pause for thought. Is flattening federal income taxes really what the Republican candidates want? Or are they using the idea as a gimmick? As a recent Blogcritics offering laments, intellectual thought rarely makes an appearance at a political debate.

Assessing the current GOP flat tax proposals with this precaution in mind, are they just shallow attempts to grab the ever-fickle media spotlight? Or, like a lightening rod, are they purposefully erected to draw attention to the real problem? Or is it a combination of the two – a spotlight-grabbing gesture that accidentally shines light on a serious issue? Door Number Two would be nice. Really. And we really think the answer lies there.

The Bloomberg article is a string of knee-jerk claims that ignores the essence of the flat income tax argument. For example, a true flat tax is based on gross income rather than adjusted gross, resulting in a net revenue gain. It also simplifies the federal tax code. Today, that legislation, together with the IRS’s interpretive rulings and regulations, is almost 73,000 pages. It’s a conglomeration of complexity and convolution that almost no one, including your friendly taxman and White House officials, understands.

But, Bloomberg editors are happy with it and they should be happy for a long time to come. The flat tax idea has been around for decades and has gained absolutely no Congressional traction. While it has a popular fairness appeal, it cannot withstand the phalanx of special interests arrayed against it. The tax code is not an unintelligible mishmash by happenstance.

So, why are the Republican candidates talking about it again? The facile answer is the coveted media attention lavished on Herman Cain for his 9–9–9 plan, which includes, among other things, a flat tax. In what appears to be predictable monkey-see-monkey-do chain reactions, several of the other Republican candidates formulated flat tax proposals, too. But, is that really all they’re about? Inhabitants of a Pavlovian kennel, classically conditioned to crave the spotlight?

More likely, they are simply cowards. Pushing an idea with some popular appeal, these people are actually advancing a fairness argument they fear to make directly. And here it is. The problem with the federal revenue system is that too few people pay into it.  Put another way, too many people take too much out of it.

As we know, nearly half of all federal tax filers either pay no income tax or pay a negative tax. That number is increasing and not merely at the lower income levels. The fastest growing group of income tax non-payers includes those earning between $75,000 – $100,000 annually. These people cannot even pretend to be among the financially downtrodden yet they’re getting a free income tax ride. Meanwhile, the government’s generosity to them has a multiplying effect on the deepening federal debt burying our economy and us with it. It’s pure insanity.

We teach our kids to avoid child predators, those depraved individuals who would do them harm. Children are told to reject the lures of candy and puppies and other cute stuff and simply run away screaming for help. As adults, we have to do the same thing. When Uncle Sam tries to snuggle up using fistfuls of fiscal candy, we need to run away screaming, too. The scary arithmetic lurking behind those promises will do us all in.

See you in the mirror.

Posted in In the Mirror