The Method Revealed

As a follow-up to my previous post, I think the President's modus operandi is now clear. He makes agreeable noises, language inoffensive to all, then pushes bills through Congress that are full of controversy, and that in some cases, contradict his spoken intentions.

All of it without debate, or due diligence, that Congress is supposed to provide. After all, this is an emergency.

It is interesting to note that after the State of the Union speech, Obama's public opinion approval ratings held, and even the markets ticked up the next day... until the budget was actually published, whereupon the markets plunged, just as they had immediately after the housing bill was announced. Of course, investors aren't as moved by rhetoric as they are by details and the numbers, because their job is figuring out how government policy will affect the value of capital.

That should be instructive to us taxpayers.

And now, this morning, I read that he will pursue Cap and Trade sooner rather than later. Here's the deal: Government experts tell you (individual or corporation) how much carbon you can consume. You pay fines to Uncle Sam if you exceed the limits. Uncle Sam then distributes the fines to the middle class and the poor (or in the vernacular of the Obama White House, "the vulnerable") to help them pay for the higher energy costs that Cap and Trade created in the first place.

In his speech, Obama told us that he will see to it that renewable energy becomes more affordable. He didn't say that he would do so by driving up the cost of oil, coal and gas generated energy.

But that is exactly what he is proposing, and it is consistent with the thinking of the Earth First / No-Growth crowd, who would have us canning beats for the winter rather than buying avocados from California. It all makes you wonder how far he wants to take the extremist environmental agenda.

Really, it should come as no surprise for those of us who raised an eyebrow last summer when he was asked how he felt about $4/gallon gas, and responded that it was a shame only that the price went up to fast. See the video...



Again, the words provide only a hint of the actions.

Such a convoluted scheme as Cap and Trade could be very disruptive, of course, and it deserves extended study and debate before a vote. Whether or not we get the debate we deserve, or not, will be evidence of how circumspect Obama is, and how wise.

The Vision Revealed?

A brief followup to my previous post on Robert Reich... Please see the excellent American Spectator commentary on Robert Reich's testimony to House Ways & Means. The author gets right to the crux of the problem with Reich and many of Obama's followers (if not Obama himself), and of leftist ideology in general:

In Reich's worldview, it's groups that matter and individualism that's the enemy. "The American myth of the Triumphant Individual may have outlasted its time," Reich has explained. "The story of the little guy who works hard, takes risks, believes in himself and eventually earns wealth, fame and honor" is outmoded.

I believe this is what divides supporters of market-driven and planned economies, of republican democracy and totalitarianism, and increasingly, of free speech and "political correctness," the Maoist phrase that has eerily become a commonplace in American vernacular. It's time for us all to re-read Atlas Shrugged, as well as the Communist Manifesto. That so many of our countrymen and women voted for the latter last November is surprising, and troubling.

There is a good chance, however, that most of them did not vote for socialism, or whatever you want to call Obama's or Reich's central-planning ideas, but that they voted for its obtuse facade: Change.

Week by week, we are seeing the facade fall away and expose the aspirations of the new regime. Fortunately, there is always a gap between the aspirations of a regime, and its actual achievements. The tug-of-war around the so-called Stimulus Package is a good example. As presently constituted, it is a third pork, 50 per cent political payoff to groups like ACORN, the teachers and public service unions, etc., and 12-20% stimulus (dependong on the source) -- spending that we know will enter the economy quickly and result in hiring.

Of course, Obama does not need any Republican support to pass this bill as presently constituted. He needs their support only for political cover, to share the blame if things don't go as planned (a near certainty in the execution of government programs).

Instead of using his bully pulpit to cajole his Congressional majority to strip the bill of things unrelated to job creation, yesterday Obama used it to mock Republican (and a healthy number of Democrat) critics. One week he says he is interested in ideas that produce results, not ideology. The next week -- with a trillion dollars hanging in the balance -- he is taking a party line. This is disappointing.

Hope Versus Dread

I took a vacation from this blog to enjoy Christmas, and to let the dust from the election settle, and see where things really stand. I certainly don't have much to add to the inaugural that hasn't already been said. It surely was a great day for the country.

I heard many hopeful signals from Obama during the last two months, including the selection of his cabinet, the management of the transition, but especially the following snippet from last week on the so-called Stimulus: Policy will not be guided by ideology... there will be no left wing ideas or right wing ideas, only ideas that get results. Wonderful!

While he was saying this, however, one of his many economic advisers, and former Clinton acolyte Robert Reich was testifying to Charlie Rangel's Ways & Means Committee:

"I am concerned, as I’m sure many of you are, that these jobs not simply go to high-skilled people who are already professionals or to white male construction workers…I have nothing against white male construction workers, I’m just saying there are other people who have needs as well."

Well, I'm sure we don't want highly skilled people building bridges, let alone the dreaded white male. But the last time I looked, we were talking about a spending bill to stimulate the general economy. That's why it's called the Stimulus package, as opposed to the Welfare package, or the Homeless Relief package, or the Affirmative Action package.



Reich couldn't have said anything more directly opposed to Obama's results-rather-than-ideology statement.

Rather than debate how to maximize the general economic impact of the spending in terms of metrics (growth of GDP, jobs, fewer unemployment applications, etc.), some in the new regime are more concerned with the social impact of the spending.

Nor have they considered the inflation that will likely accompany new economic activity. Who benefits -- besides state and federal government tax receipts -- when inflation soars into double digits, as it did in the 1970s? We all know how slow state and federal governments are to index tax rates when inflation rises. And they are slow for a reason: By increasing government revenue without legislative action, inflation is a tax that doesn't risk anyone's re-election!

And it takes hold more quickly, before people feel its pinch.

If you think I'm being too conspiratorial here, tell me why, with the Treasury increasing the money supply since October, there is no discussion of how to mitigate inflationary risk in the implementation of these spending programs?

We all know, from reading Reich's memoir Locked in the Cabinet, that President Clinton made a clear choice to grow the nation's economic output and reduce federal debt as a means to general prosperity rather than pursue Reich's Marxist agenda of central economic planning, limiting the nation's economic output through government policy, then rationing pieces of it to politically correct constituencies.

Similarly, Obama will have to control the left wing of his party and Congressional patronage hacks if he intends to get broad-based growth as a result of his Stimulus package, rather than ideological triumphs. Let's see how he does. If he can't, Joe the Plumber was right.

The Paul Newman President: "Confident Smile and Kind Eyes"

Finally, I got the Obama thing. After a long afternoon of household chores and tired legs, I relaxed in front of the TV and found Michael Douglas' middle-class-guy-under-siege period (Disclosure, Fatal Attraction) and with it, annoying gadget ads that used to run exclusively on UHF channels when I was a kid, advertising miracle products for this or that, always for $19.99. Amazingly, after decades, it's still (usually) $19.99. And still, if you order NOW you get a bunch of free stuff.

One of those offers was for a Barack Obama commemorative plate -- called the Barack Obama Victory Plate -- which if ordered NOW, would come with a free stand, suitable for desktop display or wall hanging, and a certificate of authenticity from something called the American Historical Society. The ad does not mention that the web site selling the offer is discountmugs.com. There have been a spate of cheapjack TV ads for Obama commemorative coins, plates, who-knows-what -- but this one was special because of the editorial insight it offered:

Commemorating the day the world changed forever... Honoring the election of the 44th President of the United States, America's first African-American Commander-in-Chief... his confident smile and kind eyes are an inspiration to us all.

Click here to view the ad

The last line is one of the clearest and most insightful observations I've read about Obama after two-years of surfing news sites, blogs and opinion compilations.

"His confident smile and kind eyes are an inspiration to us all."

To re-use an oft-quoted line from my ill-spent youth: So that's what this is all about! Even the smitten Chris Matthews and Keith Olberman could not utter such concise insight into the appeal of our new President.

Seriously, it took a huckster to nail it. Obama does have kind eyes and a confident smile, and those are features that win confidence in movies and on the street. I've heard him described as handsome, young, athletic, yeah, yeah, yeah, but nothing that so clearly pinpoints his appeal to people who know nothing about him and don't care.

What a pity the line had to come from a rip-off TV ad. All you can find on Google about "The American Historical Society" is a litany of complaints from people who've been ripped off buying allegedly precious coins after watching late nite TV ads. How could they catch what David Gergen, Tom Friedman, Juan Williams, David Broder, Peggy Noonan, Dick Morris, and even Obama schills like Rachel Maddow and Bob Herbert missed?

Indeed -- why didn't I write that line? Now that I think about it, his eyes and smile kind of remind me of Paul Newman. From the mouths of salesmen...

Making Water Run Uphill

In one of my first blog posts, I got a little worked up about the bailout of GM and facetiously asked who would be next, the newspaper industry?

Well, Michelle Malkin's column and blog today report that top Connecticut officials think government should keep their small city newspapers from going out of business. I link it here because it is the apotheosis of bailout mentality. Not only do we forget that markets operate in sometimes brutal cycles, but also that technology disrupts entire industries and remakes them. You go with the cycles, and try to get the dislocated back in the game. You don't try to contradict market forces; it's like trying to make water run uphill. To most of us, this is old news, part of an economics class in college or a Wall Street Journal oped. But not to Connecticutt's political leadership:

Attorney General Richard Blumenthal asserted: “The newspaper is an information lifeline. It provides really an essential service.” Among the “essential services” Blumenthal thinks taxpayers should prop up: marriage notices and school sports announcements.

These items are easily and effectively disseminated online. Connnecticut consumers who are passing up the newspapers who offer these products obviously don’t agree with Blumenthal that it’s “essential” to get them in dead-tree form. But Gov. Rell seems to believe that quaintness is an argument for government funding: “There’s something about having that paper and being able to sit there with your cup of coffee or your tea and read through and find out not only the news but the real feel for a community.”

I've remarked in the past how aloof our political class seems to be, interested in us only when elections come around, with only pollsters to connect our lives to theirs. Here, then, is one more data point of proof.

Global Warming Skeptic to Lead the EU

Now with the Czech President Vaclav Klaus set to lead the EU, a vocal skeptic of human-induced climate change is about to become highly visible, and hopefully influential in questioning the massive increase in state power that cap-and-traders want to impose on western economies.

Here's a good summary in Sydney (Australia) Morning Herald. It quotes geologist and University of Adelaide (Australia) professor Ian Plimer:

Plimer said there is a division between those scientists who sit in front of super computers and push piles of data into the mathematical models that drive the theory of climate change, and those who take measurements in the field.

We are not sceptical enough about the data. For instance, Plimer cited differences between results from temperature measuring stations in urban and rural areas. Those in urbanised Chicago, Berkeley, New York, and so on, show temperature rises over the past 150 years, whereas those in the rural US, in Houlton, Albany and Harrisburg (though not Death Valley, California) show equally consistent cooling. "What we're measuring is urbanisation," Plimer said.

Of course, science is based on skepticism. Human global warmning, as I've said in previous posts, has become an article of faith among its adherents and advocates, so much so that they've taken to labelling skeptics "deniers," an outrageous likening of legitimate inquiry to those who believe the WWII Holocaust never took place.

Seeing the skeptics emerge now is especially encouraging in light of the new governmental powers being accumulated by western democracies to save us from worldwide economic collapse. Taken together, a resurgence of statism to fight the twin economic and environmental panics would erode our freedoms far more than the Patriot Act and other post-9/11 reforms.

In a time like this, it's worth reading (or re-reading) Thomas Sowell's best book, The Annointed, in which he observes a familiar and recurring post-WWII political theme in the USA. To paraphrase him: First there is a crisis, a crisis about which only certain annointed people understand. They tell us that unless the rest of us adopt their solutions, we are all doomed. Those who dispute their solutions, or their premise, are derided is wildly out of touch, or worse, agents of the crisis itself. We adopt their solutions, the crisis worsens, but rather than accept responsibility for ineffectiveness of their solutions, the annointed point to a new crisis as the cause. And the cycle repeats.

Sowell describes an old political trick, the use of fear to galvanize public support for state power that would otherwise not be tolerated. It's been used as an organizing principle for state welfare programs, purges of immigrants and Communists, wars, and now "saving the environment."

This tactic often uses crisis as a mere vehicle -- a Trojan horse -- to implement the real agenda of its proponents, an agenda that would on its own be too unpopular to win support in a democratic society.

For example, the underlying motives of the most radical global warming alamists -- shifting the value system of western economies away from economic growth to local cummunitarianism -- has never been scratched or sufficiently aired. Most people have never spent time on Earth First's web site, or read Bill McKibben's thoughtful books, but if they wish to see where the global warming crowd wants to take us, they should. Were "saving the planet" not available as a useful vehicle, I think these same people would be advocating their ideas about capitalism, market-based economies, and American culture on their stand-alone merits, saying, for example, that they believe it is better to can your own food for the winter rather than have fresh food trucked in from California in January.

Of course, the planet isn't going anywhere for a few million years. The debate is really about human quality of life and existence today, and so far it hasn't been a debate at all -- just a fearful capitulation to the annointed. Maybe Vaclav Klaus can stir things up from the other side of the pond.

In Praise of Bankruptcy

A number of columnists and industry experts have stepped up in the last week to remind an amnesiac Congress and public that the legal process to deal with companies that become insolvent (dare I say its name?) does not spell instant doom.

For example, most of the major airlines have declared bankruptcy at one time or another. The days and months after they filed Chapter 11, their planes still flew, their employees still got paid. Of course, people eventually lost their jobs in layoffs, some took pay cuts, some vendors didn't get paid for services delivered -- whatever was necessary to make the company profitable again, or attractive to investors or buyers. It's a process that's worked time and again..

And kudos to Obama's economic team for considering it as a possibility. Bloomberg reports that the team is studying a "pre-packaged" bankruptcy deal where GM would file for Chapter 11 protection with government financial backing in hand, allowing it to accelerate the restructuring process from the usual 5 years to perhaps as little as 2.

Unlike an outright grant or loan from the feds, Chapter 11 protection would allow GM to re-negotiate its labor and vendor contracts, a key element of making their cost structure more competitive.

If Obama champions such a deal, who would stand in the way? Again from the Bloomberg article:

House Speaker Nancy Pelosi said yesterday that Democrats reject bankruptcy as an option.

In or out of court, automakers will have to submit a viable business plan to gain government funds, Peter Peterson, senior chairman of Blackstone Group LP, said in an interview.

``Unless they can show us the plan, we can't show them the money,'' Pelosi said yesterday.

Pelosi is very pleased with her "show them the money" sound bite, but in all honesty, would you trust her to evaluate a business plan? Sure, Congress will hire experts, but can Congress be as objective about evaluating a business plan as, say, a venture capitalist?

And isn't it odd that Pelosi, Frank, Reid and others went on the record two weeks ago in favor of a bailout before seeing a plan? Why, all of a sudden, are they talking about business plans? It's as if they caught up in the enthusiasm of trying to save GM, and forgot the check the numbers.

Perhaps it has something to do with that fact that they don't have the votes to throw money at GM. And perhaps that has something to do with public opinion, and the possibility that taxpayers who earn average wages working for healthy companies don't want to subsidize other taxpayers who earn twice the prevailing wage in their industry -- while their companies lose money!

Don't be resentful, you say. Well, how about being fair? If GM were profitable, nobody would care how much they paid their employees, or whether their execs flew coach or in private jets. But they are not profitable, and show no signs of becoming so. Their business model is a sieve, and it's a fact that their cost structure is a big part of the problem. So drastic changes are in order. That's what Chapter 11 is for.

Obama talked about fairness a lot on the campaign trail. Here's a great opportunity to demonstrate what it means.