How (and Why) Obama has Impeded Recovery

By Alan Caruba

During and after his 2008 campaign, Barack Obama was hailed as the second coming of Franklin D. Roosevelt. History records that Roosevelt presided over the Great Depression, begun in the previous administration of Herbert Hoover who got most of the blame. Roosevelt’s policies extended it well beyond the normal recovery from a recession.

In his book, “Dupes”, historian Paul Kengor, wrote “Roosevelt won in a landslide in November 1932. To liberals and traditional Democrats everywhere, he was more than just a new face at 1600 Pennsylvania Avenue. He was a kind of political savior at the most desperate time in their lives.”

Roosevelt was immediately assailed by the Communist Party USA as he launched his New Deal stew of programs intended to reverse the effects of the economic crisis. As Kengor notes, “No president had ever moved so far to the left, and so quickly, but it was not enough for the comrades.” They portrayed Roosevelt “as a warmonger bent on wreaking havoc on the poor USSR (Soviet Russia)” because they feared the U.S. might go to war against it.

As we now know, some of Roosevelt’s closest advisors were either Communists or extremely sympathetic to Communism. Harry Hopkins was one of them and was later exposed as a likely Soviet agent. The Venona transcripts of secret communications between U.S. Communists and their Soviet handlers revealed this.

Obama came into office following the 2008 financial crisis which, as we know, he blamed entirely on George W. Bush. Triggered by Fannie Mae and Freddie Mac, two government sponsored enterprises, the crisis reflected the many “subprime” mortgages they had pressured banks to make. Bush’s efforts to rein them had fallen on deaf ears.

Like Roosevelt, Obama initiated a number of policies and legislation, not the least of which was his “stimulus” package to turn around the economy, but which has left it with a higher level of unemployment today than in 2009-10. His other initiative, stimulating Green energy has cost taxpayers billions.

In “New Deal or Raw Deal?” historian Burton Folsom, Jr., wrote of Roosevelt’s National Industrial Recovery Act (NRA) documenting that it and other measures did nothing more than balloon the federal government while interfering with the normal action of capitalism to recover—as it had many times before—from financial crises.

Oklahoma Senator Thomas Gore, first elected in 1907, summed up Roosevelt’s efforts saying at the time, “No depression can be ended by gifts, gratuities, doles, and alms handed out by the Federal Treasury, and extorted from taxpayers that are bleeding from every pore.”

As Folsom put it, “Capitalism had failed in Roosevelt’s view of the world and that opened the door for new experiments in government ownership and government direction of the economy. Private enterprise would become public enterprise.”

Why anyone would think that Barack Obama, a “red diaper baby”, raised by leftists and mentored in his youth by a card-carrying Communist, Frank Marshall Davis, would act any differently than Roosevelt, repeating all his mistakes, is to be ignorant of history.

The Worst Recovery Ever

Writing in the April 3rd Wall Street Journal, Edward P. Lazear, 2006-2009 chairman of the President’s Council of Economic Advisors, wrote about “The Worst Economic Recovery in History.” Assessing Obama’s policies, Lazear said that “our current recovery pales in comparison with most other recoveries, including the one following the Great Depression.”

“The Great Depression started with major economic contractions in 1930, ’31, ’32 and ’33. In the three following years, the economy rebounded with growth rates of 11%, 9%, and 13% respectively…According to the National Bureau of Economic Research, the recovery began in the second half of 2009. Since that time, the economy has grown at 2.4%, below our long-term trend by either measure. At this point, the economy is 12% smaller than it would have been had we stayed on trend growth since 2007.”

“It would be difficult to argue,” wrote Lazear, “that government policies over the past three years have enhanced confidence in the U.S. business environment. Threats of higher taxes, the constantly increasing regulatory burden, the failure to pursue an aggressive trade policy that will open U.S. exports and the enormous increase in government spending all are growth impediments.”

Like Roosevelt, Obama has impeded a rebound in the growth of the economy and he has done it by applying all the wrong Socialist “solutions” that extended the Great Depression from 1929 to 1941.

For Obama, this has truly been a crisis that would not be allowed to go to waste. What he has done has been to impose Obamacare in the face of massive rejection, overseen the loss of two million jobs, and increased the national debt to levels that put the U.S. on a crash course to financial collapse.

It would be naïve to think he did not know what he was doing. If one wanted to bring the United States of America to its knees, he would pursue Obama’s policies of the past four years. His “open mike” gaff, speaking with Russia’s President, Dmitry Medvedev, confirms his intent to work closely with America’s longtime adversary if reelected.

© Alan Caruba, 2012

It's the Economy, Stupid!

By Alan Caruba

It is interesting to see how intently foreigners are watching the run-up to the 2012 national elections, particularly as regards whether President Obama could be reelected. Hardly a day goes by that I do not receive inquiries from places like South Africa, Israel, or England. Some offer comments on my Facebook page, but the concern is the same, can Obama be defeated?

To borrow a phrase from Bill Clinton’s 1992 race, “It’s the economy, stupid.” That will be the deciding factor as Democrats , Republicans, and independents go to the polls in November. The news for Obama is bad. Unfortunately, the news for millions of out-of-work Americans it is even worse.

On February 28, the National Federation of Independent Businesses and a coalition of business groups were in the D.C. Court of Appeals to argue their challenge to the Environmental Protection Agency’s rules regarding greenhouse gas emissions. The fact that there is no correlation between such gases—mainly carbon dioxide—and a non-existent global warming probably won’t even be discussed. A spokesperson for the NFIB said, “For the small business community, the constant churn of costly and carelessly promulgated regulations has become too great a burden to bear.” Guess who all those small business owners will be voting against in November?

The Congressional Budget Office (CBO) keeps doing something that is unexpected from most government agencies; it keeps telling the truth. In mid-February it issued a report which said that, after three years of Obamanomics, the nation has seen the longest period of high unemployment since the Great Depression in the 1930s. Trust a Democrat President to repeat all the errors of Franklin Delano Roosevelt who prolonged the Depression for ten years while he held office.

The “official” unemployment rate has hovered around or exceeded 8 percent and this is expected to continue through 2014. The CBO noted that the level of long-term unemployment—those looking for work for more than six months—is over 40 percent! That is the highest since 1948 when the data was first collected.

Hans Bader, Counsel for Special Projects with the Competitive Enterprise Institute, recently noted that “The official unemployment rate is going down, but that’s partly because many long-term unemployed people went into Social Security Disability, citing ailments such as depression. Now they have a monthly government check, they are never, ever going back to work, and they are no longer treated by the government as unemployed.” This is governmental slight-of-hand to lower the rate of unemployment while contributing to it.

Writing in OpenMarket.org in February, Bader noted that a good part of the unemployment problem in the nation is a severe shortage of skilled factory workers. “In recent years, government officials have depicted white-collar jobs for college graduates as the way to go,” said Bader who noted that, while seeking to increase spending on colleges, the administration has been “slashing spending on more useful vocational education that could lead to work in manufacturing.”

An indication of how poorly the government solution to the need for skilled manufacturing employees has been is the fact that the private sector has stepped up to solve the problem. The National Association of Manufacturers has endorsed a National Manufacturers Skills Certification System to fill the gap. In partnership with community colleges and trade schools, the program offers “a relatively inexpensive path to meeting the human capital demands of U.S. advanced manufacturers.”

It has not gone unnoticed that Obama’s stimulus billions did not produce any “shovel ready” jobs and wasted public funds on a range of “green” industries, many of whom, like Solyndra, have gone belly up. Overall, the “green” industries involving solar panels, wind turbines, and electric cars have proven to be sinkholes of money that generate few jobs compared to the rest of the nation’s manufacturing sector.

Finally, after three years of the most anti-energy administration since Jimmy Carter, the rising price of gas is going to have a devastating affect for Democrats and Obama on public perceptions on Election Day.

To those foreign correspondents asking whether Obama will be reelected, I keep saying that the present economy with its slow “recovery” and the high rate of unemployed, combined with the government’s crushing load of irrelevant and odious regulations, is as good an indicator as any regarding the outcome of the November general elections.

If foreigners are as much concerned with U.S. elections as Americans, all the debates, daily silliness of political news coverage, and largely irrelevant social issues suggest that November will represent, like the 2010 elections, a massive voter movement away from “hope and change” to a Republican candidate that offers an alternative economic policy to four more years of the disaster called Barack Hussein Obama.

© Alan Caruba, 2012

The Federal Reserve Rip-Off

By Alan Caruba

I have not been kind to Ron Paul and his participation in the Republican primary campaigns and it has taken me a while to understand why he is doing this. It is clear that he wants to be around to influence the Republican platform and the issue about which he is abundantly correct is the Federal Reserve.

Anyone taking notice of Obama’s latest budget has to conclude that his mission is to crash the nation’s economy and turn America into a Socialist worker’s paradise. The only problem is that Socialism has been a dismal failure everywhere it has been tried.

One only has to look at the collapse of the Soviet Union for confirmation of that, the Chinese abandonment of Communist economic theory, and Obama’s odd notion that a nation can spend itself out of ever-increasing debt.

I am not a fan of Paul’s isolationism, but he is absolutely right about getting rid of the Federal Reserve.

Established in 1913, the same year income taxes were instituted, the Reserve is not part of the federal government. It is, in fact, privately owned by a consortium of banks and that might include foreign banks as well.

In a remarkable essay, “10 Things That Every American Should Know About The Federal Reserve” by Michael T. Snyder, it is clear that the Constitution intended to have the U.S. Treasury to be soley responsible to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”

Snyder points out that the Federal Reserve System (the Fed) is a privately owned banking cartel and one granted the right to create money out of thin air.

It is, says Synder “a perpetual debt machine because “whenever more money is created, more debt is created as well.” On top of its ability to create money, the government then borrows it, increasing the cost to taxpayers by way of the interest that must be paid to the Fed.

The government issues U.S. Treasury bonds with which to secure a loan from the Fed and it, in turn, sells them to others. Money from nothing; interest on that money, and earnings from the U.S. Treasury bonds it then sells!

Synder noted that in fiscal 2011 the U.S. government paid out $454 billion just in interest on the national debt. “The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S. government at interest.”

“On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was $2.9 billion dollars. Today it is more than 5,000 times larger.”

If Rep. Paul can convince enough people to end the Federal Reserve Americans might actually learn how many trillions it loans to “too big to fail” Wall Street banking institutions as well as to foreign banks, generally without oversight by the Congress.

The previous Chairman of the Fed, Alan Greenspan, confessed to be totally astonished by the housing bubble that led to the 2008 financial crisis, His successor, Ben Bernanke, the current Chairman of the Fed, has been consistently wrong about the economy since taking office. In 2005 Bernanke said that housing prices had never declined on a nationwide basis and predicted full employment as far as the eye could see.

Those mysterious financial instruments, derivatives, were perfectly safe said Bernanke.

In 2008, he was still predicting housing prices would probably keep rising. In 2007 he saw no problem with the subprime mortgages that two “government sponsored entities”, Fannie Mae and Freddie Mac, kept pressuring banks to make. “A few months before Fannie Mae and Freddie Mac collapsed, Bernanke said ‘The GSEs are adequately capitalized. They are in no danger of failing.’”

Any CEO or CFO with a record like that would be out on the street looking for a job. And this man is still in charge of the Federal Reserve.

The latest budget put forth by the Obama administration demonstrates the same level of incompetence and wishful thinking. “All the voters need to do is suspend belief for another nine months. And ignore the first four years,” opined The Wall Street Journal.

The budget essentially says that what a government that is deeply in debt---with the size of it growing daily---has to do is to borrow and spend more! And, oh yes, Obama wants to raise taxes on everyone and everything.

While I would not vote for Rep. Paul to be President, I applaud his lonely campaign to get Americans to think about ridding the nation of the Federal Reserve and to begin exercising fiscal restraint before we become the next Greece, Spain, Portugal, Italy or France.

© Alan Caruba, 2012

America's Dark Mood

By Alan Caruba

It is possible for an entire nation to suffer depression? Not the financial, but the emotional kind.

I have not spoken to anyone, however, that has expressed any optimism about the state of the nation and the air is full of conspiracy theories regarding what new action Barack Obama might take. The most popular of these is that he will declare “a national emergency” in order to assert powers that would put him in control of the nation without reference or consultation with Congress.

I would have dismissed such a notion in the past, but Obama genuinely scares me and a lot of other people as well. An example of this was the great surge in gun sales that led up to Christmas. Guns are not generally regarded as the kind of gift you find under the Christmas tree unless you’re a hunter or shooting sportsman.

I cannot shake off the memory of the march on Washington in 2009 when an estimated million Americans gathered there to peacefully protest the pending passage of Obamacare. The President’s chief political advisor, David Axelrod, dismissed the gathering saying, “They’re wrong.” That’s beyond arrogance. It signals contempt for the way a democracy works.

They were not wrong and the Supreme Court has scheduled a hearing in March in response to 26 U.S. State Attorney Generals who filed suit to have Obamacare declared unconstitutional. The manner in which the then-Democrat controlled Congress forced the bill through to passage was scary, along with then-Speaker Pelosi’s statement that we just would have to read the bill “to find out what’s in it.” It was apparent that none of members of Congress who voted for it had bothered to do that.

What’s scary, too, is that Congress has provided the presidency with all manner of virtually dictatorial powers that were intended to be evoked only in the event of a major, national crisis. Even following 9/11 these powers were not used to hamper news coverage, freedom of travel, and other aspects of our lives. 9/11, however, was followed by the Patriot Act and many of us continue to have grave misgivings about some of its provision.

A more recent piece of legislation that permits the President to authorize the seizure, arrest and imprisonment of anyone deemed an enemy of the state is scarier still. Obama says he would not use such powers but modern history is filled with examples of dictators that did.

So, yes, America is in a very dark mood these days. New Hampshire’s citizens are poised to vote for a Republican to be that party’s candidate for the presidency. Adopted in 1945, at the end of World War Two, New Hampshire’s state motto is “Live free or die.” It is my hope that other Americans feel the same way.

Suffice to say that Barack Hussein Obama is not like any other President in the history of the nation. It is more than a little frightening that this unknown quantity was so carefully “packaged” that, along with a mainstream media that were literally enthralled with him, enough voters were found to elect him.

A lot of those voters were young and likely unaware of U.S. history, the Constitution, and the principles by which the nation is intended to be governed. A lot of those young voters, now a bit older, looking for jobs that don’t exist, living at home still, and perhaps also saddled with huge college loan debt may not vote at all or vote for anyone but Obama.

The other group that was instrumental in his victory was African-Americans and one wonders if a majority among them have had a change of heart. I doubt it. A third group was union members and the civil service unions and others have benefited greatly from his Administration despite growing opposition at the state level.

It is worth keeping in mind that there is a hard core of 25% to 30% of voters who are blindly liberal and utterly immune to facts or reality. The “Occupy” movement drew from this group and they quickly wore out their welcome wherever they gathered. If enough liberals are disheartened by their personal situation, they too may not turn out in large numbers to vote.

As for the GOP, it has become fractionalized by its libertarian segment, its evangelical Christian segment, and by what was a cohesive Tea Party conservative segment. They need to set aside their differences to elect a candidate who can defeat Obama and I am inclined to believe that the closer we get to Election Day, they will.

As with any depression, one has to shake it off and find ways to turn dark moods in to bright tomorrows. That’s America’s job. We have done it in the past and we can do it again.

© Alan Caruba, 2012

Obama's Delusions of Grandeur

By Alan Caruba

Did Obama really think that a 2,000-page takeover of the nation’s healthcare system, passed late on the night before Christmas 2009 in the Senate was going to go unnoticed or unprotested?

Indeed, it was protested when a million Americans showed up in Washington, D.C. in September 2009 to demand its defeat.

The obscenely misnamed Patient Protection and Affordable Care Act was passed because all the Democrats in the Senate voted for it, but in the House 34 Democrats in addition to all the Republican members voted against it on March 21, 2010. The President signed it into law on March 23, 2010.

By November 2010, political power in the House passed from the Democrats to the Republicans and in almost every election before and since Republicans have been the people’s choice. The House voted to repeal Obamacare and that bill sits idle in the Senate that is still controlled by Democrats.

The Supreme Court is expected to take up the case brought against Obamacare by 26 state attorneys general and various amicus curiae. It would be justice, indeed, if it were declared unconstitutional before the November 2012 elections. A new Congress controlled by Republicans would finish it off no matter how the Supreme Court decides, but Obamacare has had a dangerously disruptive affect on the economy.

I have been saying that Obama is a moron since well before it became fashionable to doubt his alleged intelligence. I saw little evidence of it and now, like many others, I am seeing evidence of a man under intense pressure and—to be generous—not handling it well.

We expect our presidents to be able to take the heat. It is the job description.

We learned belatedly that President Nixon was a raving paranoid, convinced that everyone was plotting against him when, in fact, he was plotting against them. He even kept an “enemies list”. The result was the Watergate scandal and it took impeachment proceedings in Congress to finally get him to resign. His successor, Jerry Ford, granted him a pardon and promptly lost the next election. Unfortunately for America, it was won by Jimmy Carter.

I was therefore not surprised when New York Post columnist, Michael Goodwin, made the same connection, writing “While there is no indication Obama is walking the halls of the White House late at night, talking to the portraits of former presidents, as Richard Nixon did during Watergate, the reports explain his odd public remarks.”

In a similar fashion, a recent column by David Limbaugh titled “Obama’s Behavior is Getting Worse” spells out the reasons to doubt his intelligence and judgment, while focusing on his personality and the price we all pay for his failures. Elections have real consequences.

What we know about Obama at this point is that he is a hardcore narcissist who will not take the blame for anything. This is an unpleasant trait in children, but we know, too, Obama is extremely immature.

We know that he spends taxpayer’s money on all manner of foolish things such as loan guarantees to Solyndra and countless other “Green” enterprises that yield either bankruptcy or slim returns. He threw billions at the nation’s unemployment problem without success and, incredibly, is insisting that Congress authorize more of the same.

We know that his “answer” or “fix” for any problem is to give another speech either before a joint session of Congress (usually reserved for a State of the Union speech or the declaration of war). on the campaign trail, or in a hasty press conference where any serious questions evoke the rather tiresome blaming syndrome.

Lately everything is the Republican’s fault even though Democrats controlled both houses of Congress for the first two years he held office and still control the Senate. The President’s own party is dragging its feet on his latest “jobs” bill.

For a President of all the people, he makes no secret of the fact that he has no love for people who use corporate jets, for businesses of any size, for bankers, for Wall Street, for physicians and their patients, and people who don’t want to join a union.

Most certainly, he has been actively engaged in bankrupting the nation, achieving in two and a half years (with the authorization of a Democrat-controlled Congress) a national debt that exceeds the total achieved by every prior President from George Washington to George H.W. Bush.

This reflects his penchant for self-indulgence which has been seen in his vacation choices, the lavish lifestyle he maintains in the White House, and his frequent visits to the golf course. His wife seems to think she is the National Nanny, forever hectoring everyone about what and how much they should eat. The administration tried to pass her off as someone who shops at Target!

The worst aspect of all of this is the contempt other nation's leaders feel for him and, in particular, his judgment which impacts events worldwide. He is a great embarrassment for his inept handling of foreign relations. Ironically, after decrying George W. Bush’s conduct of the war on terror, he has adopted every single aspect of it.

His energy policies have favored no energy as his administration attacks coal, oil, and natural gas extraction and use. Unleashing the energy industries would generate thousands of jobs and billions in tax revenue. Lacking adequate energy, America will begin to resemble a Third World nation.

In so many ways, his election has proven disastrous whether it is for the 14 million Americans who cannot find work or those whose homes have been foreclosed. It is a national shame that so many are on food stamps and other government handouts.

We have witnessed a mainstream news media that debased itself, first by ignoring his thin resume and then by ignoring to whatever extent is possible the damage he has done and continues to do.

All Americans must now wait out the election process until November 6, 2012. The good news is that his party will suffer greatly at the polls and America will be rid of Barack Hussein Obama on January 20, 2013.

The nation has taken wrong turns in the past and reversed course. It will do so again.

© Alan Caruba, 2011

The Financial Advice of Experts, Then and Now

By Alan Caruba

“I see nothing in the present situation that is either menacing or warrants pessimism…I have every confidence that there will be a revival of activity in the spring, and that during the coming year, the country will make steady progress.” That’s what William Mellon, the U.S. Secretary of the Treasury, had to say on December 31, 1929. The Great Depression would last until 1941 when the U.S. entered World War Two.

“Could we have a crash a la 1929? The flat answer is no.” So said Dr. Pierre A. Rinfret, a noted economist, writing in Time magazine on October 5, 1987 and, on October 19, 1987—instantly dubbed “Black Monday”—the Dow Jones average plunged 508 points.

Despite the pronouncements of Presidents and pundits, it was the December 30, 1929 edition of Variety, a newspaper for the entertainment industry, that got it right. The day after the crash its headline read, “Wall Street Lays an Egg.”

All through history, the opinions of “experts” have been subject to revision and derision. The Internet has simply multiplied our access to a multitude of opinions. It behooves us all to pick our experts very carefully. A good track record is always a good sign, along with a healthy measure of common sense.

As the economies of the U.S. and several European nations totter on default it is essential to draw on lessons from the past. The most obvious lesson is that the governments of the U.S. and the Europeans have been spending far more than they can tax or borrow.

All have spent decades since the 1980s wasting billions on “alternative” sources of energy in the name of global warming or climate change. All have stayed busy before and since the end of World War Two consolidating power in the U.S. federal government and more recently in the European Union.

Herbert Hoover on whose watch Wall Street crashed in 1929 generally gets the blame, but five years earlier in an address to the annual meeting of the U.S. Chamber of Commerce, Hoover said, “The test of our whole economic and social system is its capacity to cure its own abuses,” warning that, “If we are to be wholly dependent upon government to cure these abuses, we shall by this very method have created an enlarged and deadening abuse through the extension of bureaucracy and the clumsy and incapable handling of delicate economic forces.”

“The clumsy and incapable handling of delicate economic forces.” Spoken nearly 90 years ago!

What a perfect phrase to describe what the nation has been passing through as Congress during the last days of the Bush administration and the past two and a half years of the Obama administration has demonstrated.

The financial crisis of late 2008 was the result of government “entities”, Fannie Mae, created in 1938, and Freddie Mac, created in 1970, both intended to stimulate the housing market by securing the loans made by banks for the purpose of giving everyone, including those who could least afford it, the opportunity to own a house. By the time the crisis hit, they jointly owned more than 50% of all U.S. mortgages.

The failure of communism in the former Soviet Union (1922-1991) should be proof enough that government ownership of property and the means of production is one of the all-time bad ideas of the last century. A modified version exists in China with other versions existing from North Korea to Cuba. All depend on oppression and coercion.

The irony, of course, is that the Great Depression was extended by Hoover’s successor, Franklin D. Roosevelt, who believed that expanding the role of government was the best way to bring the Depression to an end. Instead, the Depression, experienced as well by European nations in the wake of World War One, gave rise to totalitarian governments and World War Two.

There is a reason that President Obama’s approval ratings, along with those of Congress, are at record lows. Most astonishing is the fact that, when Obama took office, the Democrats controlled both houses of the legislature, the Senate and the House. Even more astonishing, Obama pursued the same failed programs of FDR, most famously sponsoring a multi-billion dollar “stimulus” bill, along with taking over General Motors and Chrysler, ginning up a Cash-4-Clunkers program, and discovering belatedly that there were few “shovel ready” infrastructure projects.

By 2010, the voters returned political power in the House of Representatives to the Republican Party, largely on the basis on newly minted “Tea Party” candidates. Obama’s Congress had rejected his proposed budget and the nation has been operating with “continuing resolutions” to fund its activities and a massive battle over raising the debt ceiling for the same purpose. A farcical congressional “super committee” has been told to cut a trillion and a half dollars out of government spending.

The economic advisers that Obama brought into the White House have all departed with the exception of the Secretary of the Treasury, Timothy Geithner. The various government departments continue to spend millions authorized by the Congress every week or engage in dubious “loan guarantees” which give every indication of being a series of Solyndra scandals.

Despite the increasingly absurd assertions of the President, it’s not just corporations, large and small, making decisions about the current and near-term future of the economy. It is the vast body of Americans who are deciding what to purchase, whether to expand their business by hiring or not, whether to invest in stocks or gold, and thousands of individual decisions by which the real economy is shaped.

It is their decisions that determine how long the recession lasts, not the official pronouncements about when the last one “ended” or a new one begins. Economists of a conservative point of view know what must be done and should be listened to, but they are not advising this President, nor guiding the government’s decisions.

In the midst of this latest of many financial crisises at home and abroad, the campaign for the next presidential election has begun. Much depends on who John Q. Public elects to the office. Much depends on the long, hard slog to reduce the size and grasp of the federal government.

Will the wisdom of “the crowd” prevail over the present “experts” affecting the economy?

Stay tuned.

© Alan Caruba, 2011

What Debt? Obama's Insane Spending Binge!

By Alan Caruba

There’s a reason that President Obama wants to increase taxes. His administration cannot spend your money fast enough.

A visit on Tuesday morning to the websites of various federal departments reveals that this administration can find an excuse to spend millions on anything. Here’s a quick tour.

In the wake of the Solyndra scandal in which taxpayers were, in the words of Investor Business Daily, “put on the hook for at least the first $75 million if the company should default and with “a minimum of five green firms going bankrupt” the U.S. Department of Energy, on September 13, announced a $1.2 billion loan guarantee to Mojave Solar LLC for the development of the Mojave Solar Project.

On the same day, the U.S. Department of Transportation (DOT) announced a $32.5 million grant “to finalize expansion plan of Boston’s South Station” for the purpose of expanding and enhancing the historic station on the grounds that it estimates a “50 percent increase in high-speed intercity passenger rail travel in the coming years.” And we all know how accurate estimates are, eh?

Three days later, the DOT provided $22 million to the Maryland Department of Transportation for a study of replacement options for the Susquehanna River Bridge on Amtrak’s Northeast Corridor from Boston to Washington, D.C. Why not spend the money on actually replacing the bridge? On September 19, DOT awarded $25 million to the city of Charlotte, N.C. for a streetcar line “to improve access to jobs, housing, and schools.” Why money from other States should gift Charlotte with a streetcar line when the nation has a $14 trillion debt might have something to do with the fact that the Democratic Party National Convention will be held there in 2012.

In the midst of a recession that officially does not exist, the U.S. Department of Housing and Urban Affairs (HUD), on September 15, announced $93 million in grants to 39 local projects “to conduct a wide range of activities intended to protect children and families from potentially dangerous lead-based paint and other home health and safety hazards.” HUD estimates there are “nearly 7,000 high-risk homes” because “providing healthy and safe homes for families and children is a priority.” Keep in mind that lead-based paint was banned for residential use in 1978, more than three decades ago.

On September 15, the U.S. Department of Health & Human Services announced awards totaling $10 million “to aid 129 organizations across the country that would like to become community health centers. The funds came from the Affordable Care Act, but at the same time Obamacare cuts billions from Medicare, reducing payments to hospitals and to individual physicians providing care to America’s growing population of the elderly. Go figure.

At the Department of Commerce, on August 30, they were celebrating a $2.9 million “investment to expand access to capital for area small businesses and entrepreneurs.” One of them was a new $75.6 million Convention Complex in Cedar Rapids, Iowa that broke ground that day and we all know how many conventions Cedar Rapids hosts.

On September 14, the Department of Agriculture announced that taxpayers are now on the hook for loans to 27 rural electric cooperative utilities. DOA made $603 million in loans to help electric utilities "upgrade, expand, maintain and replace rural America’s electric infrastructure."

This is the same administration whose Environmental Protection Agency is waging war on coal-fired utilities and mining (coal provides 50% of all electricity in America). On September 16, USDA announced funding for more than 500 projects to boost renewable energy production (wind and solar) despite the fact that this represents just over 2% of all the electricity produced and companies producing solar panels are declaring bankruptcy on a weekly basis these days.

Secretary Tom Vilsack also noted that USDA Rural Development “is providing $35 million to finance smart grid technologies such as advanced metering infrastructure.” The problem with smart grids is that, if the utility thinks you’re using too much electricity to cool your home or business in the heat of summer, it can reduce the amount you receive. Same goes for warming it in the winter.

Not to be outdone, the U.S. Department of the Interior announced in late August that it was making more than $53 million in grants to 17 states “to support conservation planning and acquisition of vital habitat for threatened and endangered fish, wildlife, and plants.” The Endangered Species Act has been one of the greatest failures in U.S. history and responsible for thwarting billions in development. This money is intended to remove yet more landmass from development, all in the name of obscure species and plants.

On September 14 the Department of Justice announced grants totaling $118.4 million to “enhance public safety in Indian Country.” The money went to tribal governments. Apparently the Apaches are on the warpath again. Over the last two years, DOJ spent $121 million on conferences.

This doesn’t even take into consideration the money flowing from the Departments of Defense, Education, Veteran Affairs, and Homeland Security. It is in fact just a quick overview of the funding the Obama administration is spending while 14 million Americans are trying to find a job and others struggle to pay their mortgage or put their children through college.

It is a look at a government grown so large and so profligate that its credit rating was recently reduced and our President is on the campaign trail telling Americans they must pay more taxes despite the fact that 40% pay no taxes and “millionaires and billionaires” pay 70% of taxes collected. It’s the same government that wants to impose a 1% tax on all banking transactions, the deposits and withdrawals of your money!

Tea Party, anyone?

© Alan Caruba, 2011

This Way to the Poorhouse

By Alan Caruba

On Tuesday, September 13, Reuters news service reported “Number of poor hit record 46 million in 2010.” Another new record set by the Obama administration and a President who has been out campaigning to “Pass this jobs bill now.”

“The number of poor Americans in 2010,” Reuters reported, “was the largest in the 52 years the Census Bureau has been publishing poverty estimates.” Obama has the great misfortune of presiding over a government, some of whose agencies report just how bad a job he’s doing. Last month, we were informed that zero new jobs were created in August.

On the same day of the Reuters article, Douglas W. Elmendorf, the Director of the Congressional Budget Office (CBO) was on Capitol Hill, advising the new deficit super-committee to whom Congress has punted the job of reducing the obscene amount of money the federal government wastes every day.

If they don’t come up with a plan, cuts kick in automatically. This basically means that they have to decide what agencies and departments get protected. Otherwise the federal government gets a one-size-fits-all budget cut. That is as dumb a way to run the nation as one can imagine.

There was some fairly desultory media coverage of Elmendorf’s presentation. For most reporters it was just more of the same, but for the rest of us, it was a reasoned description of the utter disaster that faces the nation if a truly massive effort isn’t undertaken to slash government spending.

Aside from spending, there’s the problem of all those old codgers like me. “If current policies are continued in coming years,” Elmendorf said, “the aging of the population and the rising cost of health care will boost federal spending, as a share of the economy, well above the amount of revenues that the federal government has collected in the past.”

Social Security and Medicare have to be significantly reformed. They are bankrupting the nation because, in the words of Margaret Thatcher, “Sooner or later you run out of other people’s money.”

Reform, however, of any part of the federal budget is complicated by “the weakness of the economy and the large numbers of unemployed workers, empty houses, and underused factories and offices.”

Or to put it another way, we’re broke. We are seriously broke. We are $14.3 trillion broke in terms of the national debt. That’s about the same amount of the entire gross domestic product for a year.

We are not only broke, Elmendorf told the committee, “the economic growth for the remainder of this year and next is likely to be weaker than the agency anticipated—with growth in the vicinity of 1 ½ percent this year and around 2 ½ percent next year.” We need at least 3 percent to just break even.

Since both the Democrats and Republicans got us into this jam, it is highly doubtful the super-committee will do anything but dawdle long enough to let the automatic cuts kick in.

Meanwhile, the rest of the federal government is hemorrhaging money.

As this is being written, I received a news release from the U.S. Department of Housing and Urban Development that it has awarded “nearly $100 million to promote jobs, self-sufficiency, independent living for HUD-assisted housing developments.”

Then the U.S. Treasury informed me that “two additional New Jersey community banks receive $22 million to help small businesses access capital, create new jobs.”

And something called the Renewable Energy and Energy Efficiency Advisory Committee is set to “present eleven recommendations to promote U.S. exports of renewable and efficiency technologies to federal officials.”

Folks at the Department of Commerce will be told that green energy and clean energy is the wave of the future. Did anyone tell them that Solyndra, the solar panel company that received a U.S. government loan of more than $500 million just filed for bankruptcy? Or that General Electric builds its wind turbines in China? Or that it shut down the last factory in America that manufactured incandescent light bulbs?

A week ago, the Competitive Enterprise Institute (CEI) released a ten-point plan to create jobs that has nothing to do with shoveling gobs of taxpayer money out the door to banks, housing developments, or wasting time discussing renewable energy.

Among its recommendations were the repeal of the financial “reform” laws, Dodd-Frank and Sarbanes-Oxley. Bank of America isn’t planning to cut 30,000 jobs because it has too little regulation, but too much bad regulation.

CEI urged that proposed or recently finalized federal environmental regulations that will force the closing of power plants and energy-intensive industrial plants be put on hold. The Institute urged the federal government to expedite environmental permitting of natural resource projects (coal, oil, natural gas) projects on federal, state and private lands. Ending taxpayer subsidies for wasteful, inefficient “green” jobs was yet another recommendation.

It’s not that CEI and the U.S. Chamber of Commerce, among other think tanks and trade associations haven’t been telling the Obama administration what needs to be done to energize the economy. It’s more like the administration either isn’t listening or doesn’t care or intends to deliberately put America further into bankruptcy.

© Alan Caruba, 2011

A Week of Horrid Headlines

By Alan Caruba

Journalism is often called “History written in a hurry.” If so, last week’s headlines from the front page of The Wall Street Journal reflected a period of our current history that will likely have future historians wondering how we made it through these times without completely losing our minds.

If fear sells newspapers, drives television news ratings, gets bad laws passed, and is useful for selling all manner of other goods and services, than last week must have been very good for business.

The weekend edition, Saturday/Sunday, September 3-4, began with “Job Growth Grinds to a Halt.” The sub-headline was “Lack of Hiring in August Roils Financial Markets; Gloom Ratchets Up Pressure on Obama.” The President would have to wait until the following Thursday to roll out his “Jobs” bill and to tell a joint session of Congress, “Pass this bill now!”

Reluctant to admit its role in the housing mortgage crisis that broke in late 2008 during the political campaign and largely due to Fannie Mae and Freddie Mac—both of whom own 50% of U.S. mortgages—the next article on page one was “U.S. Sues Big Banks Over Home Mortgages.”

Monday was Labor Day so there was no WSJ edition, but on Tuesday, September 6, the lead headline was “Europe Signals Global Gloom” with a sub-headline, “World Markets Fall as Continent’s Debt Crisis Fuels Worries of Lengthy Slowdown.” It reminded me of the cliché that, when the U.S. sneezes, the rest of the world gets pneumonia.” Under the lead story was a headline, “Voter Discontent Deepens Ahead of Obama Jobs Plan.”

By Wednesday, September 7, the headline was “Euro Woes Stir Currency Fears” with a sub-headline, “Older Americans Held Hostage by Mortgages.”

On Thursday, September 8, the headline was “Fed Prepares to Act” with a sub-headline, “Officials Consider Unusual Steps to Avert an Economic Stall.” The nation has been stalled since 2008 when gobs of taxpayer money was used to bailout banks, an insurance company, and two major auto manufacturers. Meanwhile, an accompanying headline said, “U.S. Hits Builders with Pay Probe” about a Labor Department investigation “of the top companies in home building, hitting them with a broad demand for records that has led to complaints of regulatory overreach.” You think?

By Friday, following Obama’s speech, the lead headline was “Obama’s Bid to Spur Growth." The sub-headline was “President Asks Congress for $447 Billion in Cuts, Spending; Tepid GOP Response.” With a $14 trillion national debt, I’d be tepid, too.

The proposed bill would be paid for with tax increases that would kick in after the next election in 2012. They are the same increases a Democrat-controlled Congress refused to authorize!

The Saturday weekend edition, led off with “Banker’s Exit Rattles Markets” and a sub-headline, “In Europe, Top ECB Economist Resigns, Seen as Policy Protest; Dow Industrials Fall 303.68 points.”

Obama speaks. The Dow tanks. Coincidence? I think not.

The other lead article headline was “Treasury Weighs New Tax Scheme.” It began “Treasury floats the notion of eliminating some, but not all taxes on overseas profits of U.S. multinational companies…”

Thus, the week’s WSJ headlines were a microcosm of the fears defining the economies of the U.S. and European nations whose socialist programs and massive over-spending had landed all of them in hot water.

We expect and we want government to exercise prudence in the management of public funds, but successive administrations and congresses did not, electing always to expand government. Let's hope the Fed does not want to print more money. It will cause a collapse of confidence.

It’s September 2011. Welcome to the 1930s.

© Alan Caruba, 2011

A High Stakes Clash of Economists

By Alan Caruba

“We need an impulse, a jolt, an acceleration…Let us experiment with boldness on such lines, even though some of the schemes may turn out to be failures, which is very likely.”

Who said that? Was it President Obama? Franklin Delano Roosevelt? Neither. It was John Maynard Keynes, a British economist. The year was 1924 and England, still struggling to recover from the cost of World War One, was trying to figure out what steps to take. The British economy was suffering from high interest rates, falling prices, and high unemployment.

Keynes’ view was that the government had to spend lots of money on public housing, better roads, and improvements to the electricity grid to get money into general circulation, stimulate the economy, and restore business confidence. The unemployed had to be given work even if it was the government not private enterprise that would provide the capital.

Keynes was already world famous because of his role as a British Treasury negotiator at the Paris Peace Conference, a precursor to the Treaty of Versailles. He had written a book, “The Economic Consequences of the Peace”, that revealed the disastrous path the treaty has set Europe upon, the beggaring of Germany and Austria that led to the rise of Hitler and World War Two.

His economic theories would eventually take his name and, ultimately, his magnum opus, “A General Theory”, would enshrine him in the pantheon of the most famed economists. Succeeding generations of economists and even politicians would call themselves Keynesians.

A quite thoroughly unknown economist, Friedrich Hayak, an Austrian who was sixteen years younger, took a far different view. While Keynes thought economics must be applied to improve the lives of people through government programs, Hayak thought that the less government interfered with the free market, the better. Indeed, the smaller the role of government, the better.

All this is told brilliantly in a new book, “Keynes Hayek: The Clash That Defined Modern Economics” ($28.95, W.W. Norton & Company) by Nicholas Wapshott, a biographer of film actors and directors, as well as political figures, Ronald Reagan and Margaret Thatcher.

While one might assume that economics had to be the driest of topics and two economists most people have never heard of, the least of interest, Wapshott pulls it off, explaining some fairly daunting theories, mixing in lots of history to the present day, and bringing Keynes and Hayek to life in a way that is very entertaining.

What emerges is the recognition that politicians, whether it was Roosevelt in the depth of the Depression years, George W. Bush with a huge financial crisis in 2007, or Barack Obama struggling with high unemployment in 2009, all tend to look for the shortest route out of their problem because they want to be reelected or vindicated for the steps they took. They all think government is the answer.

Hayek reflects the conservative view that government should get out of the way and let a recession yield to natural economic forces. History demonstrates that, without government involvement, they eventually go away in relatively short order.

Government, Hayek argued, is more likely to make a mess of the economy than fix it. He has been proven correct over and over again, but that doesn’t matter because it is politics, not economics, that drives politicians. Politicians do not want to appear to be doing nothing.

Keynes was for a hands-on government, intervening to save the economy and, he too has been proven correct as in the most recent steps both the U.S. and British governments took to literally push gobs of money out the door and into banks to keep the whole system from collapse. The problem, however, is that it was taxpayer’s money and the borrowing to replace it will saddle future generations with an enormous debt unless some austerity is imposed on government.

Always in Keynes’ enormous shadow, Hayek, late in life, was vindicated with a Nobel Prize, but even more when the Soviet Union collapsed after seventy-five years of imposing a central government that owned everything; property, the means of production, and still could not compete with free market economies.

Keynes, however, has seen his view fulfilled because most Western nations subscribe to some form of socialism with the kinds of programs that he advocated to protect everyone. Social Security and Medicare are the ultimate Keynesian legacy.

Keynes was your classic “top down” manipulator of an economy. Hayek was a “bottom up” believer in the natural energy of the entrepreneur, small business and corporate enterprise.

Neither, however, could calculate greed or fear into their theories though they surely were aware of both as factors driving or retarding an economy.

Neither could predict what any particular politician might do in their own best interest. In America, both Democrats and Republicans have proved to be big spenders since the end of World War Two.

One man who was not an economist understood how to bring down an economy. Keynes warned, “Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency.”

Americans who have watched President Obama triple our national debt to more than $14 trillion should take note before the dollar, still the benchmark currency for the world, is debauched. Too much Keynesian government spending and borrowing will do that.

That was the warning from Standard & Poor’s when it downgraded the nation’s credit rating. Hayek would have approved.

© Alan Caruba, 2011

The Green Jobs, Clean Energy Scam

By Alan Caruba

There will probably never be a definitive calculation of how much money the United States (and other nations) has wasted on Green programs, litigation, grants, research, and projects such as those involving “renewable” or "clean" energy. It will surely add up to several trillion because it has been going on for a very long time through administrations reaching back to Jimmy Carter’s and Richard Nixon’s.

A recent article in Washington Examiner.com revealed the amount of money taxpayers pay out to Green organizations that sue the EPA and other government agencies. In point of fact the EPA encourages such law suits in order to use the court system to affirm regulatory efforts that might otherwise by stopped by Congress.

As this is being written, there are several pieces of proposed legislation in Congress to keep the EPA from utterly and completely destroying the economy and the ability to provide Americans with electricity.

Following an request from Republican Sens. Jim Inhofe of Oklahoma and David Vitter of Louisiana, the Government Accountability Office undertook an investigation regarding the cost of environmental litigation and while it proved daunting, the GAO reported that “the Department of Justice spent at least $43 million from 1998 to 2010 defending the Environmental Protection Agency in court, while the Department of Treasury paid about $14.2 million from 2003 through 2010 to successful plaintiffs for attorney’s’ fees and associated costs. The EPA paid about $1.4 million from 2006 and 2010 to plaintiffs”

Earlier, in a special report, the Washington Examiner noted that “the major players in the environmental movement are lavishly funded by private contributions from individuals and foundations. And many of them also receive hundreds of millions more dollars in government grants and contracts, so it’s not as if these groups are unable to pay their legal legions out of their own coffers.”

But no, the taxpayers are stuck with the bill.

The cost of Green “solutions” to non-existant environmental problems is proving particularly evident as reports reveal that “renewable energy” companies rapidly fail when federal subsidies are ended or spent. A case in point was the Senate vote in June to end billions of dollars in subsidites for the U.S. ethanol industry.

Ethanol, also known as “moonshine” had been ordered by the government to be added to every gallon of gasoline consumers use despite the fact that it produces less energy, reducing mileage, and adds to the cost at the pump. It was, of course, another Green lie about reducing “greenhouse gas emissions” said to be the source of a “global warming” that was not occurring. Ethanol producers have been closing their doors in droves now that the tap has been shut off. In a world afloat on billions of barrels of oil, the need for ethanol never existed.

In a similar fashion U.S. manufacturers of solar panels are also closing their doors, sustained initially by U.S. subsidies and loan guarantees. The latest is Solyndra, a California firm that just declared bankruptcy.

President Obama had touted Solyndra as a shining example of Green jobs and technology, offering $535 million in loan guarantees. China, however, has captured much of the market for solar panels. Touted as a way to help reduce electricity costs, left unsaid is that they are expansive to purchase and install. The average homeowner would have to wait ten or twenty years to amortise their investment.

Without similar subsidies and mandates, the wind power industry would rapidly collapse as well.

The impact of Green initiatives and mandates has been particularly onerous at the state level. As I noted in an earlier commentary, “In July, New Jersey Gov. Chris Christie pulled out of the Regional Greenhouse Gas Initiative, a consortium that would have required renewable energy use for the provision of electricity.

In Pennsylvania, Gov. Tom Corbett has been aggressively de-emphasizing renewable energy use and energy conservation. He has shut down the state department of environmental protection’s office of energy and technology development.

The President has been touting Green jobs since he took office and, if he does so in the course of his speech to a joint session of Congress, you will know that this Big Green Lie is still part of his continuing failure to address the real causes of unemployment in America, taxation, regulation, and a general assault on the energy industry and others..

Word is that Obama still hasn’t installed solar panels on the roof of the White House despite promises to do so. The last President to do that was Jimmy Carter and they were removed by President Reagan.

Green Lies have cost Americans trillions of dollars since the environmental movement began in earnest in the 1970s.

This is written prior to President Obama’s address, but if you hear him speak of “Green jobs” or “clean energy” or “renewable energy”, feel free to turn the channel to anything else because this is the most duplicitous and incompetent President to ever hold the office.

© Alan Caruba, 2011

How to Create an Instant Bear Market

The EPA Nation-Killing Machine

By Alan Caruba

The problem with the Environmental Protection Agency is that it has “protected” the nation into a place where corporations flee to other nations, exporting jobs no longer available here. When not doing that, it is destroying the ability of whole industries—particularly energy—and of our agricultural dynamo to function.

In late July, the Sacramento Bee reported that “There are fewer undocumented immigrants in California—and the Sacramento region—because many are now finding the American dream south of the border.” While America struggles to survive its regulatory juggernaut, “Mexico’s unemployment rate is now 4.9 percent, compared with 9.4 percent joblessness in the United States.”

What’s wrong with that equation? Everything!

Putting aside the debate over debt and wasteful spending, at the heart of the economic stagnation that has been occurring is the Environmental Protection Agency. It is an agency of pure malice and a place that arrogantly cites bogus health statistics while issuing rules and regulations that are strangling the economy.

James Hammerton of Freedom Works recently noted that “The EPA is in the process of completing and finalizing 30 major regulations and 170 major policy rules that would impose hundreds of billions of dollars of compliance costs on the economy.” Only Congress can stop this.

Long after the global warming hoax was exposed, the EPA continues to insist that carbon dioxide, a gas vital to all life on Earth, has to be regulated. Even after the administration’s failed effort to get Cap-and-Trade legislation passed, the EPA relentlessly pursues this policy.

In brief, the claim is that carbon dioxide (CO2) in the atmosphere is causing global warming. Therefore it must be reduced. Who produces CO2? Everyone! Humans exhale about six pounds of it a day. Every kind of energy use for manufacturing, for transportation, for the production of electricity, all this and more generates CO2 emissions. All this and more represent the core elements of our economy.

Why would you want to “trade” CO2? Well, by selling and trading “carbon credits”, millions of dollars can be made by the exchanges set up for that purpose. Utilities and manufacturing facilities would all have to buy the credits in order to stay in business. The whole global warming hoax was devoted to this scheme and, of course, those advocating it were all going to get obscenely wealthy while the cost of everything increased for the rest of us.

The problem for the EPA is that the Chicago exchange set up to trade carbon credits has long since closed its doors after revelations in November 2009 that a handful of climate modeling scientists had rigged the models to show a warming trend when, in fact, the planet had entered a cooling cycle in 1998!

Sensing that its ability to destroy the economy is slipping away, the EPA has been readying regulations allegedly based on the nation’s air quality. The problem they face is that the air over the U.S. is as clean as it has ever been. With the exception of places like Los Angeles, air quality has never been better. The EPA is literally trying to regulate dust that drifts in from Africa or airborne soot that arrives from Pacific volcanoes.

Regarding its proposed Ozone rules, John Engler, the president of the Business Roundtable, noted that “There’s nothing reasonable or balanced about the Environmental Protection Agency’s proposal to tighten national air-quality standards for ozone emissions at this time. For one thing, it’s premature, coming a full two years before the EPA is scheduled to complete its own scientific study of ozone emissions in 2013.” Not surprisingly, 2013 is likely to be the year that the U.S. has a new president and a Congress made up primarily of politicians devoted to debt reduction and the elimination of waste.

There is not enough time, nor space to describe how crazed the EPA is, but let me share just one example. The EPA recently told New York City that it will have to build a $1.6 billion-plus cover of a reservoir to prevent contamination of cryptosporidium, a water-born pathogen that causes diarrhea, from getting into its water system.

As the Wall Street Journal noted, “There’s one problem. The pathogen hasn’t been found in the reservoir despite years of tests and is barely present in the city.” Never mind, the EPA is claiming that the cover would “prevent between 112,000 and 365,000 cases annually”!

It gets worse, “New York City has already spent nearly $15 billion since 2002 for federally-mandated water projects, with the feds chipping in less than 1% of the costs. Next year it will finish building a $1.6 billion ultraviolet facility—the largest in the world—to disinfect water even more than it already does.”

That is just a snapshot of the billions in costs the EPA is right now trying to impose on a nation that is already $14 trillion in debt.

Here’s a suggestion. Close down the EPA entirely. Let the States determine what should be done regarding their air, water, and other environmental standards. The nation could save itself trillions by just ridding itself of the crazies running the EPA.

© Alan Caruba, 2011

Flatlining the Economy

By Alan Caruba

As is well known, I am an expert on practically everything. This is why I am obscenely wealthy, sought after by the major media, and am an object of desire even in my early 70s. And! I have a bridge to Brooklyn to sell you!

Despite my shortcomings, I can and I will share with you a bit of economic forecasting that takes no great genius to detect. The U.S. economy is going to flatline all the way through the next election in November 2012. It’s going nowhere and prospects thereafter are dim as well.

Millions of Americans, including those so deluded to think that a guy who had never run a business in his life could actually run a nation, put him in the White House. Let me rephrase that. He has run a nation…right into the ground.

It doesn’t matter if you think he’s a Marxist, a Muslim, a narcissist, a sociopath, or any other name for his behavior, the fact is no one is going to spend a dime more than necessary until he’s out of office and on a plane back to Chicago, Hawaii or Kenya as of January 2013.

Take, for example, the news on July 8th that unemployment had risen to a six-month high of 9.2%. Non-farm payrolls had risen to just 18,000 in June. Peter Ferrara, a senior fellow for Entitlement and Budget Policy at The Heartland Institute, responded to the news saying, “Since the Great Depression, recessions on average in America have lasted 10 months, with the longest previously being 16 months. Yet here we are 42 months, or 3 ½ years, after the recession started, and unemployment is still rising.”

Historically, noted Ferrara, “the deeper the recession the stronger the recovery. Instead, we are suffering no real recovery at all.”

No recovery!

If Obama and the moronic economic advisors he brought into office with him—only Treasury Secretary Geithner remains---wanted to turn the economy around all they had to do was cut tax rates, cut government spending, push for deregulation to reduce the costs of doing business, and exercise restraint with monetary policies. They did none of this. Instead, they doubled-down with a massive, failed “stimulus” program, cash for clunkers, and comparable measures.

Obama’s policies are mostly oriented toward public service unions and others that have been sucking billions out of public treasuries to such an extent that they have bankrupted entire states. Their private industry counterparts have virtually destroyed industries such as the auto manufacturers.

Then, too, there’s the regime’s preference to buy votes from the least productive elements of the population. On July 12th, the U.S. Department of Housing and Urban Development announced that it had awarded “more than $1.9 billion to public housing authorities in all 50 states, the District of Columbia, Guam, Puerto Rice, and the U.S. Virgin islands.”

The money is allegedly intended to “build, repair, renovate, and/or modernize the public housing in their communities”, but Secretary Shaun Donovan asserted that “Housing Authorities need nearly $26 billion to keep these homes safe and decent for families, but given our budget realities, we must find other, innovative ways to confront the decline of our public housing stock.” Yeah, sure, but can we even afford the $1.9 billion being shelled out? No. It has to be borrowed just like 40 cents of every dollar the government spends.

The reality is that this government keeps shelling out billions at a time when the big debate is whether to raise the debt ceiling!

The U.S. government is leaking billions. Just watch C-Span on any given evening as the Senators and Representatives discuss and vote on the expenditure of millions for everything short of another trip to the moon. It’s like watching drunks ordering a new round of drinks for everyone in the bar.

The GOP is not going to allow the U.S. to default on our debts. There is sufficient revenue coming into the government to avoid that. The debt ceiling will be raised.

So long as President Obama keeps blathering about corporate jets, millionaires and billionaires, and all the usual efforts to blame “the rich” (now considered to be anyone earning $200,000 a year), those who generate jobs are going to keep as much of their earnings as possible and, for businesses, that means hiring as few people as possible.

There will be no chance of job growth until Obama is gone, but overall the U.S. is losing jobs by the thousands as industry moves manufacturing overseas. Since 2001 the U.S. has lost approximately 43,000 factories. Why? Lower corporate taxes, less regulatory drag.

The U.S. Census Bureau says that 43.6 million Americans are living in poverty, the highest number of poor Americans in the 5l years such records have been maintained. As of November 2010, 14% were using food stamps, 43.6 million Americans.

Look at any statistical chart about the U.S. economy today and these ugly truths leap out at you.

© Alan Caruba, 2001

Scary American Stats

By Alan Caruba

Rasmussen Reports maintains a daily presidential tracking poll and, as of Sunday, July 10, President Obama’s Approval Index rating was minus-19. If he wasn’t such a narcissist this might bother him, but one gets the impression he is so convinced of his ability to lie his way out of any situation, that he will continue his present trajectory.

The kabuki dance regarding the negotiations over raising the debt ceiling limit provides a useful insight to the workings of Washington, D.C., and the principles—or lack of them—that drive the Republican and Democratic parties.

Democrats want to raise taxes. Republicans want to cut spending. The latter course of action is the only one that will pull the nation back from the brink of default and insolvency. The U.S. now owes so much interest on what it borrows that economists say it will take a decade just to pay it, let alone address the principal.

Here are some scary stats about America and its citizens that say something about how a great nation has slid into bad habits, bad behavior, and bad judgment :

We have the highest rate of illegal drug use in the world.

We have more reported rapes, murders, and total crimes in the world.

We have the largest prison population of the entire world.

Between December 2000 and 2010, the U.S. ran the largest trade deficit in the world every year, $6.1 trillion dollars. The U.S. has had a negative trade balance every year since 1976.

The U.S. has accumulated the biggest national debt the world has ever seen and it is getting worse, expanding at a rate of $40,000 per second.

On Sunday, the tracking poll showed that 21% of voters “Strongly Approve” of the way Obama is running the nation. That’s just short of one-in-four voters and is a fairly constant number reflecting those voters who are (a) too stupid to realize just how much trouble the nation is in, (b) too devoted to Obama to see any flaws, and (c) too committed to the Democratic Party to step back and ask why we are in the midst of a depression.

Why those who analyze and comment on public issues will not call it a depression escapes my understanding. We have unemployment rates that are comparable to those of the 1930s, home foreclosures from coast to coast, and, most importantly, a consumer confidence rate that is in the basement.

All the Democrat talk of “shared sacrifice” is just nonsense, given the fact that the top earners—the millionaires and billionaires—pay the largest amount of the taxes (the top 10% pay 68%) while somewhere close to 40% or more pay no taxes. Rewriting the U.S. tax code would bring everyone closer to actually sharing the burden of providing Washington the revenues politicians routinely waste.

The “social justice” programs of the 1930s and 60s, Social Security and Medicare, need to be fixed or, better still, phased out. It must, of course, be done with regard to a huge population of seniors who paid into these programs, neither of which even comes close to being “voluntary.”

They are about as voluntary as Obamacare’s demand that you buy health insurance even if you don’t want to. Meanwhile, it will continue to wreak havoc on what is arguably the best health system in the world. This might account for why 26 states have joined in a court case against it and why the House has already voted to repeal it. It is the Democrat controlled Senate that is the obstacle.

It also accounts for why 40% of the voters Strongly Disapprove of Obama’s performance in office at this time. The majority of voters are not stupid. Rasmussen reports that “55% of voters nationwide believe that cuts in government spending are good for the economy.” In addition, “54% also believe that raising taxes will hurt the economy.”

What these statistics reveal is that there is a shift in the direction of common sense and an understanding of fundamental economics. It also explains why voters in the 2010 election returned political power in the House to Republicans. What remains to be seen is how many of those newly-minted GOP representatives keep their pledge not to raise taxes.

It is troubling, though, that “Overall, 46% of voters say they at least somewhat approve of the president’s performance” while “53% at least somewhat disapprove. “Somewhat”? What does it take to get people to look at Obama and see the worst President of the modern era?

Historians will look back at this period and rightly conclude that the nation was politically very sharply divided between liberals and conservatives. Look to the Obama administration to play heavily on the fears of those who believe that their Social Security checks will be cut or not arrive at all. They will suggest all manner of other cuts and changes as well that slow the welfare train. It is classic Chicago-style and Democrat politics that depends on buying votes.

The worst of this is that it is precisely the “redistribution of wealth” that has gotten us to this point along with a housing bubble created by government entities, Fannie Mae and Freddie Mac. Together they distorted the housing market by providing the mechanism for low-cost loans to people who did not qualify to receive them. Unbelievably, they are still in business.

The stats tell us that it is the slim majority of voters that will determine the future and tucked in among them are the independents upon whom everything depends.

© Alan Caruba, 2011

America's Decline Follows a Familiar Pattern

By Alan Caruba

History is a relentless process and one that does repeat itself. Empires emerge, hold power, grow wealthy, and then find ways to commit suicide while new ones push them aside.

I was thinking of this while listening to outgoing Secretary of Defense Robert Gates’ speech on NATO’s future. He virtually spelled out why the United States is in decline and why Great Britain and Europe, once the seat of great empires, have been in decline since the end of World War Two.

The Second World War so sapped the energy of Europe and the United Kingdom that neither were able to retain the sources of their former wealth, their colonial empires composed of nations in the Middle East and Asia. NATO, the North Atlantic Treaty Organization, was formed after World War Two out of fear of an aggressive Soviet Union.

The United Nations was also created at that time and it too has long been sustained by U.S. financial support.

Gates made no secret of the fact that he thought the European members had been getting a free ride from NATO as U.S. funding had risen from “roughly 50 percent of all NATO spending” to “more than 75 percent in the twenty years since the collapse (1989) of the Berlin Wall”. The USSR ceased in 1991 and became the Russian Federation.

The generations that lived through the Cold War from the end of World War Two in 1945 until 1991 are now senior citizens. For nearly fifty years it was the focus of American concern and wars from Korea to Vietnam were fought to restrain Communist expansion whether it was motivated by Russia or China. Those wars, however, left those generations, their children and grandchildren, with a distinct distaste for combat in far-off places.

The 9/11 attack was unique in that it was not perpetrated by a nation-state, but by a stateless organization calling itself al Qaeda. It took a decade to find and kill its leader, Osama bin Laden. In the meantime, the United States had become mired in Afghanistan for over a decade. The invasion and occupation of Iraq in 2003 to rid the Middle East of Saddam Hussein was presumably taken to rid the region of a constant threat.

It’s not that the United States wasn’t joined by a coalition of NATO and other nations. It was, but it was also understood that the U.S. would contribute the bulk of the forces and machinery of war.

There is considerable irony in the way the Iraq war has since led to the instability of Middle Eastern nations whose dictators have been forced to flee or fight. If Saddam Hussein could be brought to justice, Arabs concluded that any dictator could be overthrown if they united against them. It did not escape notice that even longtime U.S. allies like Egypt’s Hosni Mubarack would be abandoned.

The result is that the U.S. and NATO have stumbled into a conflict in Libya that has demonstrated their present state of weakness. Moreover, the mission in Afghanistan is jeopardized by the need for access routes through Pakistan!

As Secretary Gates noted, “It is no secret that for too long, the international military effort in Afghanistan suffered from a lack of focus, resources, and attention, a situation exacerbated by America’s primary focus on Iraq for most of the past decade.” He warned against NATO nations pulling out “on their own timeline in a way that undermines the mission and increases risks to other allies.”

“Turning to the NATO operation over Libya,” said Gates, “it has become painfully clear that similar shortcomings—in capability and will—have the potential to jeopardize the alliance’s ability” to conduct a successful mission. The key word here is “will.” When a coalition lacks the will to win, it will not.

This applies as well to the United States. Said Gates, “The blunt reality is that there will be dwindling appetite and patience in the U.S. Congress and in the American body politic writ large to expend increasingly precious funds on behalf of nations that are apparently unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defense.”

Just as the NATO nations lost the will to defend themselves, preferring to let the U.S. pick up the bill, it is America’s turn to examine its own financial situation and likely have to reduce its own defense expenditures.

For some time now, it has been reducing its naval capabilities in terms of warships. It has aircraft that are wonders of technology, but much of the fleet is aging and in need of replacement. Its warriors have been in fields of combat for twice as long as it took to fight and win World War Two in two separate theatres, Europe and the Pacific.

As the U.S. appetite for combat diminishes and its financial stability remains uncertain, it is experiencing much the same kind of events that ended the British Empire. At one time it was so vast it was said that the sun never set upon it.

The juggernaut that was U.S. military power is being hollowed out. The value of the U.S. dollar, the default currency for the world, is declining. The empire that was Great Britain is no more and the influence that the U.S. has had and the power it could once project is fading.

Some very hard decisions must be made—and soon—or the United States of America will join the ranks of empires that exhausted themselves.

© Alan Caruba, 2011

An Inaugural Fail

By Alan Caruba

We are all now so accustomed to Barack Obama’s delivery of a speech and have heard so many Tele-Prompter recitations that his habit of raising his chin, of gazing off into some future only he perceives, and his now-annoying way of breaking a sentence into small chunks that render it a monotony is taken for granted.

After all the campaign speeches he delivered in 2008, the carefully-staged events, by January 20, 2009 the nation was ready to hear what the then-new President, the 44th, had to say. With the exception of John F. Kennedy’s inaugural speech and one or both of Lincoln’s, few such speeches are long remembered.

President Obama’s was no exception and, as he begins his campaign to be reelected, it seemed to me a good time to revisit it.

Believe it or not, he began by saying “I stand here today humbled by the task before us…” and I daresay there are few who would apply the word ‘humble’ to Barack Hussein Obama, then or now.

Here was a man who had already written two memoirs about a life without any of the touchstones of achievement we normally look for. He had never run a business or met a payroll. As a legislator, he was either absent or voted for liberal programs without fail.

He had leaped swiftly from being an obscure Illinois state legislator to being elected to the U.S. Senate in 2004. By February 10, 2007 he announced he was a candidate for President.

By November 2008 he was elected. It is a cliché to note that virtually the whole of the nation’s mainstream media did everything in its power to secure that outcome.

As he continued with his inaugural speech, Obama acknowledged that “Our nation is at war against a far-reaching network of violence and hatred”, but we would learn in the months that followed that Obama would never put a name to it, never identify it as an Islamic terrorism network and, following the Fort Hood shooting, it would take weeks before the words “Islamic extremism” were even applied to it.

Perhaps the most interesting aspect of the inaugural speech was its rather mundane enumeration of the huge economic problems that faced the nation at the time. “We will act, not only to create new jobs, but to lay a new foundation for growth.”

Based on his words, that speech was a huge fail. Based on the actions taken or not taken by his administration, jobs by the millions disappeared. The housing market is one of foreclosures from coast to coast. Consumer spending and consumer confidence remains stagnant.

We were, said Obama, to ask “not whether our government is too big or too small, but whether it works…where the answer is no, programs will end.” Instead, his administration embarked on huge spending programs dubbed “stimulus” that vastly increased the national debt and, by common agreement, achieved little or nothing to get the economy moving.

As this is written, the Obama administration adamantly refuses to agree to any spending cuts in exchange for raising the debt ceiling. The waste continues as various elements of the government pour millions into obscenely stupid programs and grants. The government continues to grow larger.

Rather than concentrate on the economic problems of the nation by cutting taxes and eliminating regulations, the Obama administration literally forced a 2,000-page piece of legislation dubbed Obamacare on Americans who largely opposed it. It is currently wending its way through the courts as 26 states have joined in rejecting it.

Obama’s inaugural outreach now seems infantile and naïve. “To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect.” Both were and are scarce, but Obama has ensured that the U.S. remains dependent on imported Middle East oil by thwarting every effort to explore and extract our domestic reserves.

His Libyan military adventure just adds to his list of failures, save one. Based on his predecessor’s groundwork, Osama bin Laden was delivered to justice.

Guantanamo remains open for business and 9/11’s terrorists will not be granted the protection of constitutional rights that belong solely to Americans.

In sum, present and future historians will conclude that Obama’s inaugural speech on January 20, 2009 was just so much blather and significantly devoid of any substance. That’s a pretty good description of the 44th President of the United States.

It is also a very good reason to ensure that Barack Hussein Obama does not get to deliver another inaugural speech in 2013.

© Alan Caruba, 2011