Saturday, August 1, 2009

The Perfect Storm

By Alan Caruba

The term, ‘”the perfect storm”, has come to mean how circumstances and bad judgments come together to create havoc and death.

I have begun to conclude that America is caught in a perfect storm. It didn’t occur overnight, but it has rapidly reached a point wherein the very life of the nation is at stake.

The tipping point, if I may be permitted another cliché, was the election of Barack Hussein Obama as President. Though efforts, including several books, attempted to flesh out what little was actually known about Obama, it was the skillful packaging that turned him into a rock star whose theme “hope and change” could and did mean anything the voter imagined.

Obama arrived in the Oval Office with virtually no paper trail. He had not ever managed a business, never made a payroll, and had not worked in the private sector. He had been “a community organizer” and had taught constitutional law as a lecturer at the University of Chicago. In this regard, he was spectacularly ill-prepared to make decisions regarding the greatest economy in the history of civilization.

He had been preceded by a Congress controlled by the Democrat Party as of the 2006 midterm elections as voters wearied of the long war in Iraq and, typically, the second term of then-President Bush. Leading the new Congress was, by any standard one could apply, two of the most stupid politicians to hold high office. Sen. Harry Reid (NV) was Senate Majority Leader and Rep. Nancy Pelosi (CA) was Speaker of the House.

Sen. Reid had famously said, “The war is lost” and Rep. Pelosi told the world that the CIA “lies to Congress all the time” and has called insurance companies “villains.” Not exactly a vote of confidence in the nation’s military or its intelligence agency. When did insurance companies, banks and investment firms become the enemy? The burst mortgage loan bubble was the creation of the federal government.

It is the perfect storm.

It was, however, the economy that took the first body blow with the sudden, though predicable, bursting of the mortgage loan “bubble.” There had been earlier warnings but as in any perfect storm, they were ignored. It goes back to the days of the Carter administration when legislation was passed to give everyone the “right” to own a home. Banks and mortgage firms were literally required by law to ignore normal lending caution. When there were more bad loans than good, Fannie Mae and Freddie Mac, government “entities”, owned more than half of all the mortgage loans in the nation.

At that point, in what can only charitably be called total panic, Congress authorized the U.S. Treasury to spend $700 billion in TARP funds to “bail out” troubled financial institutions instead of letting them fail. The word was that they were “too large to fail” and had to be rescued and there may be some truth to this, though Lehman Brothers was allowed to fail. To this day, Congress does not know much, if anything, about the distribution of TARP. It can’t even audit the Federal Reserve.

It is the perfect storm.

In a similar fashion, instead of allowing General Motors and Chrysler to go through the tried and true bankruptcy process, the government “invested” billions before, inevitably, they did undergo bankruptcy. The government now owns some 60% of GM; its unions own most of the rest. Its creditors are suing to get their legal and proper compensation. The government is not supposed and is not allowed to own private enterprises; (though it does own government “entities” like Amtrak which has never made a profit.)

It is the perfect storm.

The country is watching a “Cap-and-Trade” bill pass through Congress that everyone, including its authors, agrees is a massive tax on the use of electricity, one that will drive up the cost of electricity to every American and all business and industry in America. It is based on the assertion that “greenhouse gases” must be reduced to avoid “global warming”, but there is no global warming and greenhouse gases such as carbon dioxide play no role in climate change.

When the cost of energy is increased, the cost of everything that depends on energy use increases and that is, well, everything.

At the same time, for decades the United States has placed every possible obstacle before the exploration and extraction of vast oil, natural gas, and coal resources that exist within the nation and offshore on its continental shelf. Plans for more than a hundred coal-fired plants have been abandoned despite a growing population that is using more electricity. There hasn’t been a single new refinery built since the 1970s. The construction of nuclear plants has been painfully slow due to regulatory hurdles. The nation’s electrical distribution grid was built largely in the 1950s and 60s. It is in desperate need of expansion.

While coal provides 50% of our electricity and nuclear 20%, the rest is taken up by natural gas and hydroelectricity (water). Just over 1% is provided by wind and solar energy and the government proposes to provide billions in subsidies to its producers.
In much the same fashion, the government mandates the inclusion of ethanol in all gasoline sold even though ethanol provides less energy and adds to the cost not only of the gasoline, but to food products that utilize corn, the primary source of ethanol. We are burning food to fuel cars, trucks, and buses.

It is the perfect storm.

Under the Obama administration, the nation is borrowing more and running up a deficit that is, in his own words, “unsustainable”, but the government is making no effort to seriously cut spending. Instead, it passed a “stimulus” bill that is largely devoted to helping states fund government mandates such as Medicare and Medicaid, thus failing to create any new jobs in the private sector, most of which would come from investment in infrastructure. The “stimulus” bill is pure pork, a political Christmas tree.

It is the perfect storm.

Meanwhile, it is no secret that the United States is the world’s policeman. Our navy ensures that the world’s vital sea lanes remain open. Our military has some 800 bases, large and small, around the world. It is engaged in fighting the Taliban in Afghanistan and it is withdrawing from active fighting in Iraq. Billions have been expended in both of these campaigns to defeat an enemy sworn to destroy America.

Then too the borders of the nation and its sovereignty are being ignored and reduced by the tide of illegal immigration and by ratification of United Nations treaties that supersede U.S. legislation and rights. An obscure group of bureaucrats in the Department of Commerce are still working on plans to merge the U.S., Canada, and Mexico into a single political and national entity called the North American Union.

It is the perfect storm.

The United States, an experiment in individual liberty and federal rule; a nation that survived a Civil War, that struggled another century to end racial discrimination, that fought in many wars including two world wars in the last century, is now disintegrating financially and will soon lack the means to provide adequate power to its cities and towns.

Most of the nation’s individual States are, for all intents and purposes, broke and laboring under public service sector union contracts that impose huge present and future costs on their citizens.

To the astonishment of every economist in the world, the White House and Congress are proposing to raise taxes in the midst of a recession. John F. Kennedy, Ronald Reagan, and George W. Bush all lowered taxes and made their recessions go away.

In mid-July, the Vice President said, “We have to go spend money to keep from going bankrupt.” That is impossible.

It is the perfect storm.

The nation’s voters are almost completely divided between those on the Left and those on the Right. There is an all-or-nothing, winner-takes-all quality to our political system and has existed since the FDR era. The middle ground of independent voters literally determines most elections or at least those that are no longer stolen such as the recent one in Minnesota that sent a former comedian to the Senate.

That brings us to the observation that we have a very unsavory group of politicians in government these days. There are exceptions, but the revelations of sexual infidelity or misconduct as well as outright theft have become routine. The vile politics of Chicago and Cook County have now been imported into the White House.

The worst development, however, is the creation of “czars” empowered to make and shape policy without ever being subject to review or oversight by Congress. That is a kind of gangster government.

Lastly, it comes as no news to anyone that the nation has been sinking into a era of decadence since the 1960s in which the consumption of illegal drugs is widespread and sexual license is reflected in popular entertainment as well as high divorce rates, single parents, and, of course, abortion. There’s a lot to be said for morality.

I am by nature an optimist and I remain hopeful that elections and protest movements will alter future events, but for now it is the perfect storm.


Rich Kozlovich said...


Now THAT is a commentary. You have neatly summed up the whole mess and tied it up into a neat well thought out package in this one article.

If this doesn't make it into someone's “Column De Jour” I will be amazed. Really well done.


Alan Caruba said...

Thank you, Rich. I thought it was a good time to pull together the various factors threatening the future of the nation.

Ayrdale said...

It may well be the perfect storm, but like all storms it will break and recede. It has been brewing since the Club of Rome's utterances in the 70's. Now, all of the green left have staked everything on the creation of a socialist future via AGW. They may appear to be winning, particularly with Obama in the White House, but as you know the truth will win out. Once it does and the storm passes the green left will be washed up and washed away.

With the debris will go the institutions that supported the chaos. Among them will be much of the main stream media. Now unloved and soon to be unlamented.

The bet is on. The green left are losing.

Alan Caruba said...

I am inclined to believe you are right. Obama's presidency is already in tatters, the Democrat controlled Congress is held in utter contempt, and the two major bills are gathering vast resistance.

GUYK said...

OUTSTANDING piece of work! I am going to link it and hope everyone who knows how to read will get to take a look at it. I have had all of this "Hope and Change" that I want...and my 'hope' now is that the Nov 2110 elections will bring about some 'change' while I still have some left in my pockets

Alan Caruba said...

Thank you, Guy.

Watching the rapid decline and fall of Obama is about the only fun I have these days.

Rev. Paul said...

I've created a link to it, too - and what GuyK said goes for me, too. I hope the recovery comes before the country fragments any further. Civil war is not going to be pretty.

Alan Caruba said...

Thank you, Rev. Paul. Come visit every day because I have something to say about the nation and the world that might interest you.

LomaAlta said...

Excellent post, thank you. I agree with the comments complimenting you.

But, Ayrdale said "Now, all of the green left have staked everything on the creation of a socialist future via AGW. They may appear to be winning, particularly with Obama in the White House, but as you know the truth will win out. Once it does and the storm passes the green left will be washed up and washed away."

I think this may be wishful thinking. Does anyone know of any major government program that once it becomes established ever going away going away?

The top 1% of the income taxpayers now pay more than the bottom 95%. We will have untold millions that like socialism because it is an illusion of something for nothing.

Entitlement programs build a dependency base, a lobbying base, an a political base that makes real reform impossible.

Alan Caruba said...

LomaAlta: Thing to remember is that Obamacare has NOT become a government program yet and, if the anger that members of Congress are encountering is any indication, it will not be a program except in some totally watered-down form, mostly directed at private insurers.

It is too soon to say, but this socialist monstrocity has awakened the public and I doubt it will become the law of the land.

Howard Taub said...

Alan, What happens if the Dems pass the health plan, all 1,000 plus pages without any republican votes? Can the election of 2010, or 2012 overturn this nightmare?

Alan Caruba said...

If the Democrats pass the Healthcare plan they will destroy the party because many within the party detest the plan.

Passage would surely cause them to lose majority power in Congress as the result of the 2010 elections.

I suspect a very different "plan" will emerge, focusing on regulating private insurance companies.

Ed Darrell said...

The tipping point was the election of George W. Bush as president.

It may be too late to rescue America, but Obama's doing his best.

Alan Caruba said...

Wrong. George W. Bush kept you and the nation safe from any further attack after 9/11.

Obama is turning a blind eye to Iran's acquisition of nuclear weapons.

Obama is the tipping point and, in case you haven't noticed, fewer and fewer Americans like him and his policies.

Ed Darrell said...

I noticed that George Bush stopped the hunt for Osama bin Laden on January 22, 2001 -- and we were struck six months later. The nine-year campaign to fight terrorism suddenly became important to Bush, while it had not been important enough to worry about before September 11. Experience is a good school, but a dear one.

Water under the bridge.

How, exactly, is actually appointing people to watch Iran, working with the United Nations to stop Iran, and in a dozen other ways working to get Iran to stop their George-Bush-fueled rush to develop nuclear weapons, "turning a blind eye?"

I agree there have been changes. You are more bitter than you were a few months ago, and the vitriol from the hate-America first crowd, now fully unleashed on our president, is worse than it has ever been.

For example, you claim that banks were forced to avoid usual lending caution. That's not accurate. There is no such law. The loans made under the anti-red-lining legislation are not the loans that failed.

There's a cancer in that dialogue, I think you'll agree. Don't accept a diagnosis of indigestion.

Alan Caruba said...

Ed, there are none so blind who will not see.