March 8, 2009
Mar 08 03:01 Have We Reached a Tipping Point? Mar 08 03:52 President Obama's Incompetence Knows No Bounds Mar 08 05:26 The Trend Continues Mar 08 06:20 Health Care Coalition Discontent Mar 08 12:51 Technically Speaking Mar 08 19:19 Best Indicator that Obama Is In Trouble
Have We Reached a Tipping Point?
Michael Barone is so on the money with his latest column . It isn't just that he's the most brilliant demography expert in American politics. It's why he's also a policy expert. Here's what he's saying about President Obama's tax policies:
Economists tend to believe that opinion moves in linear fashion. But that's not always true. Case in point: gas prices. When gas prices earlier last year were at $2, $2.50, $3 and $3.50, most Americans opposed oil drilling offshore and in Alaska's Arctic National Wildlife Refuge. When they hit $4, opinion shifted. The Santa Barbara County Board of Supervisors and the governor of Florida suddenly favored offshore oil drilling. As for Alaska, nuke the caribou!I've never studied this before but I've heard multiple stories about the "underground economies" in cities with excessive taxation and regulation. That makes perfect sense. Instead of sheltering their money like big corporations do, these people simply go underground. Why this is relevant is because it's what happens when tax policies reach a tipping point.
Obama in his chosen city of Chicago always assumed that the private sector would be eternally bounteous. As a community organizer following the formulas of Saul Alinsky, he assumed that the political establishment would always be there and that if you organized smartly enough, you could get a chunk out of it.
When he decided that community organizing was small change and went into the politics business, he, like all Chicago politicians, assumed that the private-sector economy would always be bounteous and that if you shook its members down and taxed them, you could always get a bigger chunk out of them. And it has mostly worked that way in Chicago.
But America is not just Chicago writ large. The Obama tax plan, combined with major state tax plans, puts not a three in front of the high earners' tax rate as the Clinton plan did, it puts a four or a five in front of it. And at that point, I fear, the animal spirits of high earners are going to be directed away from productive investment and toward tax avoidance and tax shelters. Away from creating new enterprises that can provide avenues upward for any and all, and toward gaming the system for the well-connected and shrewd insiders. Away from an economy that grows more than anyone imagined and toward an economy where system-gamers take shares of a static pie away from the rest of us. Is that where we really want to go?
President Obama's tax policies are reaching that tipping point. That isn't just caused by increasing marginal federal tax rates, either. The legislators that I've talked with are telling me that they're finding stipulations on stimulus money that mandate increased state spending. For instance, part of the stimulus money is tied to the states maintaining a higher level of unemployment benefits after the stimulus money has dried up, which will cause increases in those states' taxes. (That's why Gov. Sanford, Gov. Jindal and Gov. Barbour raised the possibility of not accepting parts of the stimulus money.)
That sort of policy is short on carrots and long on sticks. That isn't the way to inspire loyalty to President Obama's economic policies. That's the fastest way to guarantee a taxpayer's revolt. If President Obama continues down this path, he's likely to get his things passed this session, only to cause a sea change election in 2010.
Mr. Barone raises this great question in his closing paragraph:
Away from an economy that grows more than anyone imagined and toward an economy where system-gamers take shares of a static pie away from the rest of us. Is that where we really want to go?That question is similar to the questions that conservatives should forever be putting before the people:
- What kind of America do you want to live in?
- Are President Obama's policies more likely to cause economic hardship? Or more likely to trigger a burst of sustained prosperity?
- Will President Obama's policies deepen or lengthen this recession?
- Is anyone out there proposing better policies that will shorten this recession and cause sustainable prosperity? If there is, shouldn't our representatives be supporting those policies instead of President Obama's?
Posted Sunday, March 8, 2009 3:01 AM
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President Obama's Incompetence Knows No Bounds
It isn't a stretch to say that Wall Street and Main Street don't have much confidence in President Obama's economic team. Based on Jim Hoft's post at Gateway Pundit , it isn't a stretch to think that President Obama's foreign policies aren't ready for prime time either. Here's what Jim focused on:
President Obama declared in an interview that the United States was not winning the war in Afghanistan and opened the door to a reconciliation process in which the American military would reach out to moderate elements of the Taliban, much as it did with Sunni militias in Iraq.President Obama's foreign policy is astonishing similar to Jimmy Carter's, which should scare the bejesus out of people. President Obama isn't willing to extend an invitation to just the Taliban, either:
UPDATE: It's not just the Taliban terrorists. It's the Hezbollah and Hamas terrorists, too! The Corner reported:If that doesn't sound like appeasement to you, you'd best read this definition of appeasement :
Great Britain has opened an official dialogue with Hezbollah. It is intended to ease the way for the Obama administration to follow suit - and a prelude for both to open communication with Hamas.
Of course, Hezbollah (like Hamas) continues to call for the annihilation of the Jewish state. But so does Iran, which Secretary of State Clinton has announced she will formally invite to a mulitlateral conference over what to do about Afghanistan. One might have thought Iran had already registered its views on that issue, especially given this week's Times of London report that the mullahs are arming the Taliban with surface-to-air missiles (on top of lots of other assistance that Iran has been giving the Taliban all along, as Tom Joscelyn recounted almost exactly a year ago).
But hey, everything's negotiable, right?
to yield or concede to the belligerent demands of (a nation, group, person, etc.) in a conciliatory effort, sometimes at the expense of justice or other principles .Extending an olive branch to the Taliban, Hamas and Hezbollah without demanding that these extremists stop their terrorist attacks is the ultimate definition of appeasement. President Obama's foreign policy team just sold the Israelis out. They've essentially told Hamas and Hezbollah that they can attack Israel without fear of US retribution.
QUESTION: What proof do we have that President Obama's foreign policy team is even more inept than President Obama's economic team?
The more we learn about President Obama's policies, whether they're national security policies or economic policies, the more that honest people have to admit that he's proposing irresponsible, even dangerous, policies.
It's bad enough that President Obama's economic policies are deepening and lengthening the recession we're in. What's even worse is that President Obama is content with waving the white flag of defeat in the war on terror.
QUESTION: Didn't then-Sen. Obama rail that fighting the war in Iraq was diverting forces from "the real war" in Afghanistan? If so, why isn't he preparing a full-scale war against the Taliban remnants in Afghanistan?
The more we know about President Obama, the more we understand that we shouldn't trust him with big decisions, whether they're national security or economic decisions.
Posted Sunday, March 8, 2009 3:52 AM
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The Trend Continues
When the DFL's Cherrypicked Testimony Tour visited Brainerd and St. Cloud , one of the things that emerged was city governments complaining about unfunded mandates. According to this article in the Plymouth Sun Sailor , that trend is still continuing:
Long Lake Mayor Randy Gilbert said Long Lake had greatly reduced its dependency on local government aid funds from the state, adding, "More cities should be doing what we did."Hearing mayors saying that "more cities" should reduce their dependency on LGA is music to this conservative's ears. Hearing a mayor rightly criticize unfunded mandates is just icing on the cake. What this testimony tells me is that there isn't a great groundswell gathering momentum for tax increases or for the DFL majority's status quo policies. I thought this information was noteworthy, too:
Plymouth Mayor Kelli Slavik asked the state not to pass any more unfunded mandates and to recognize the importance of local control. She added that Plymouth has received no state aid since 2003.
One group said Minnesotans are taxed enough: don't raise taxes. Several people told the legislators the state doesn't have a budgeting problem; it has a spending problem.Legislators must be wary of raising taxes, especially with South Dakota having an official office that's aggressively recruiting Minnesota businesses to South Dakota. Whether we like it or not, we aren't just competing with China, India and South Korea in terms of preferred relocation destinations; we're also competing with South Dakota, Colorado and Utah, too. Raising taxes just drives businesses across the Minnesota-South Dakota border.
"Small business owners feel maxed-out on taxes," said Chris Hoffman. "I see a lot of businesses leaving the state and going to South Dakota," said Jeff Johnson, a small business owner from Maple Grove. "To continue raising taxes makes it difficult to make [a business] work. People are angry."
To be fair, DFL-leaning testimony was heard, too:
"I'd like to see our government protect our needy and vulnerable, not protect bureaucracies," said Tracy Taylor. "Citizens are too easily shut out."If you listened to these citizens, you'd think that Minnesota's safety net either didn't exist or was tiny. Minnesota's safety net is neither tiny or nonexistent. It's rather robust in nature.
Hunter Sergeant pleaded with the legislators not to turn their backs on people with disabilities.
"Without services I wouldn't be living successfully in the community and attending things like this where my voice can be heard," he said.
"Public education funding hasn't kept up with inflation," said Bob Madison of Golden Valley. "There is no better investment we can make."
I can relate with this gentleman's testimony:
Going "from rags to riches every three years" is ridiculous, said Frank Moriarty of Plymouth. The state should create a rainy-day fund when economic times are good.Yes, I know that there is provision for a rainy day fund. The part that I can relate to is the "rags to riches every" few years part. In 2007, GOP legislators told the DFL majority that we shouldn't increase spending like they did. The DFL majority ignored those warnings, instead choosing to spend everything but the rainy day funds. What the DFL majority should've done is raised spending modestly while stockpiling money in the rainy day funds for the slowing economy.
The DFL majority knew that the economy knew that the economy was slowing. While they couldn't have seen the turmoil we're currently confronting, the DFL majority should've exercised more fiscal restraint than they did.
Now that we're in the famine portion of Minnesota's economic cycle, the DFL's allies are coming out of the woodwork to say that their budgets shouldn't get cut. Had the DFL exercised restraint, there wouldn't have been this big a need for budget cuts.
Exercising fiscal restraint is precisely why we need to change the DFL majority into the DFL minority.
Posted Sunday, March 8, 2009 5:26 AM
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Health Care Coalition Discontent
According to this NY Times article , President Obama's health care coalition is unraveling. Here's what the NY Times is reporting:
Two labor unions have pulled out of a broad coalition seeking agreement on major changes in the health care system.Before his tax troubles, Tom Daschle had put together a blueprint on how to get health care reform passed. Inside-the-Beltway conventional wisdom was that the combination of large Democratic majorities in the House and Senate and with President Obama at the other end of Pennsylvania Ave., bureaucrat-oriented health care reform would become a reality.
The action, by the American Federation of State, County and Municipal Employees and the Service Employees International Union, shows the seeds of discord behind the optimistic talk at a White House conference on health care this week.
It also illustrates the difficulty of reaching agreement on two of the knottiest issues in the health care debate: whether to offer a new government-sponsored insurance option, and whether to require employers to help pay for employee health benefits.
Labor unions and leading Democrats in Congress support both ideas. But insurers and many employers oppose them.
SIDENOTE: This is why I don't trust inside-the-Beltway conventional wisdom.
Mr. Adler, a professional mediator with 30 years of experience, said the coalition had been meeting since September. It tentatively plans to issue recommendations later this month on how to rein in health costs and help achieve the goal of universal coverage. Congress is grappling with the same issues and is struggling to find bipartisan consensus.This another major reason why bureaucrat-oriented health care will be difficult to put together. With 18-20 groups and organizations working on consensus-oriented legislation, it's predictable that there will be major disagreements. That's why private sector reform is still the best option for health care reform.
Members of the dialogue said they had been unable to reach agreement on proposals for a new public insurance plan or a requirement for employers to contribute to the cost of coverage.
Getting 18-20 organizations to agree on consensus legislation is cumbersome. In a coalition that size, there's always going to be egoes that need satisfying. Ironing out the administrative infranstructure is daunting, too, with people vying for positions in the various agencies.
For the American people, that bickering is done before considering whether the consensus will bring meaningful reform.
SIDENOTE: That's why I consider bureaucrat-oriented reform to be another RINO-- Reform In Name Only.
That's before we start talking about why President Obama is paying this much attention to health care reform. With the economy in recession and with Wall Street taking a nosedive and with the banking system still reeling because of a lack of leadership, President Obama should be focusing on the economy.
The official reason he's giving for why he's paying attention to health care reform is because it's part of what will lead the economy out of this recession. The real reason he's focusing on health care reform is to distract our attention away from Wall Street's free-fall and President Obama's economic team's ineptitude.
People aren't forgetting the economic challenges that we're facing because they're confronted by it on a daily basis. If I were director of PR management right now, I'd certainly attempt to change the subject to distract people's attention. the problem is that the economic troubles facing our nation are just too big to ignore.
That's why I believe it's inevitable that Tim Geithner will have to be removed. The Obama administration simply can't afford someone who's causing President Obama's nightmare scenario.
Posted Sunday, March 8, 2009 6:20 AM
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Technically Speaking
Technically speaking, President Obama says that he'll raise taxes "on the richest 2%" of America's wage-earners. It's also intellectually dishonest. If his cap-and-trade initiative is passed, it will be a job-killing tax increase of greater proportion than his income tax increase.
Michael Goodwin's column highlights the fact that President Obama's enemies list is growing, at least in part, because of President Obama's habit of not telling the whole story:
He hasn't called anyone an "evildoer" or denounced an "axis of evil." But make no mistake: President Obama is putting together an enemies list.This isn't how a postpartisan politician is supposed to speak. It's how a hyperpartisan political hack talks. In fact, it's the same type of hyperbole-laced partisanship that Al Gore practiced.
Strangely, though, those on it are not terrorists or foreign dictators. They are mostly Americans lucky enough to have succeeded through capitalism and democracy.
In the President's words, they are guilty of being "special interests" and "lobbyists." The Bush-era tax cuts were merely "an excuse to transfer wealth to the wealthy" and he will bring fairness by raising taxes on "the wealthiest 2% of Americans."
His barbs flow almost daily, faulting corporate leaders for "greed" and shirking "a sense of responsibility." And sometimes he suggests the problem is criminal, as when he defended his plan for an expanded government push into health insurance as necessary "to keep the private sector honest."
In fact, Rasmussen polling shows that 49% of Americans think DC partisanship will get worse in the next year:
Nearly half (49%) the nation's voters say politics in Washington, D.C. will be more partisan over the next year. That's up nine points from a month ago and fifteen points from early January. The latest Rasmussen Reports national telephone survey found that just 32% expect more cooperation between the two sides over the coming year. That's down from 48% in January.This polling isn't surprising to those of us who paid attention to then-Senator Obama's words on the campaign trail. In fact, I expected this type of polling result fairly early in the Obama administration.
As with most things, President Obama's words are much easier to accept than are his actions. (That's the kinder, gentler way of saying President Obama talks a good centrist game but walks a disturbingly radical path.)
If they're paying attention, this observation should be putting grey hairs on the Obama administration's heads:
The President dismisses the growing perception he is adding to the economic pain. Asked about the markets, Obama waved them off as like a "tracking poll in politics" that "bobs up and down day to day."The truth is that President Obama's policies are negatively affecting middle class voters. The perception that his administration's economic ineptitude is the biggest driving force behind the plummeting stock markets means that people will start tying him to their not being able to retire on time and their grim-looking 401(k) statements.
It was a telling moment, for the markets on his watch have moved almost exclusively down. And the 55 million households that hold mutual funds are watching their savings and retirements vanish in great gobs. Most are decidedly middle class, making them collateral damage of this war.
If this trend doesn't reverse, that will be enough to cause Democrats tons of electoral troubles. Losing the middle class's trust is a quick path to minority status. Breaking your campaign promises is another surefire way of losing elections.
Another thing that's likely causing Oval Office heartburn is the fact that Rasmussen's polling shows President Obama's approval/disapproval ratings at 56 percent approve, 43 percent disapprove. It isn't a stretch to say that President Obama's approval rating has dropped as quickly and as far as the stock market.
In fact, it's quite reasonable to think that the stock market's tanking is causing President Obama's approval tanking.
John at Powerline has a spot on observation with regards to President Obama and the Democrats' attempted power grab:
From the beginning, I think the Democrats have overestimated both Obama's personal popularity and the extent to which that popularity will cause voters to accept (or perhaps not to notice) otherwise unpalatable policies. The most basic evidence for that proposition is that polls do not show majority support (or, in most cases, even plurality support) for Obama's major policy initiatives--the bailouts, trillion dollar plus deficits, and so on.I've said from the outset that Democrats would overstep their mandate. Based on John's opinions, it's apparent that I've got company.
President Obama's slipping approval rating will have consequences for the Democrats' majority, too. Thus far, Republicans have tread lightly because of President Obama's popularity. They've picked their fights wisely. They've chosen their words judiciously. They still have to pick their words wisely because they can't afford to overstep their bounds. Still, if they measure their words and offer an appealing alternative, they can go after President Obama's agenda by going after Harry Reid and Speaker Pelosi.
This Rasmussen polling shows Republicans gaining strength with the generic ballot:
The race between Republicans and Democrats has once again tightened up in the latest edition of the Generic Congressional Ballot. For the third time in the last four weeks, Republicans have pulled to within two points of the Democrats.People now understand that Democrats run the show in Washington. This has important electoral implications. Most important of those implications is that running against President Bush won't have an impact with many voters. It certainly won't impact swing voters who've lost 30-50 percent of their 401(k) net worth.
The latest Rasmussen Reports national telephone survey found that 41% of voters said they would vote for their district's Democratic candidate while 39% said they would choose the Republican.
Another important implication is that Democrats have to actually come up with solutions to the economic challenges. Thus far, John and Jane Q. Public don't believe that the Democrats have a plan that will lift us out of this recession.
If that image persists and more jobs get lost, that image will be difficult to erase.
Posted Sunday, March 8, 2009 12:51 PM
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Best Indicator that Obama Is In Trouble
I've seen a number of things that suggest that President Obama is in trouble. Ed Morrissey noted in this post that President Obama's gift to British Prime Minister was a flop because he's "overwhelmed" by the economic meltdown. I noted in this post that President Obama's ineptitude knows no bounds because he's in the process of opening talks with the moderate factions of the Taliban, Iran, Hezbollah and Hamas. Still another indicator is how quickly the stock market has fallen.
Those pale in comparison with this indicator : the AP's Tom Raum turning against President Obama. Yes you read right: The AP's Tom Raum wrote a piece that's critical of President Obama. Here's a part of Raum's article:
Although the administration likes to say it "inherited" the recession and trillion-dollar deficits, the economic wreckage has worsened on Obama's still-young watch. Every day, the economy is becoming more and more an Obama economy.That's a blistering indictment on the Obama administration but that's just the beginning. Here's another whack at the Obama administration:
More than 4 million jobs have been lost since the recession began in December 2007, roughly half in the past three months. Stocks have tumbled to levels not seen since 1997. They are down more than 50 percent from their 2007 highs and 20 percent since Obama's inauguration.
Many health care stocks are down because of fears of new government restrictions and mandates as part a health care overhaul. Private student loan providers were pounded because of the increased government lending role proposed by Obama. Industries that use oil and other carbon-based fuels are being shunned, apparently in part because of Obama's proposal for fees on greenhouse-gas polluters.These people should be wary. President Obama has painted a bright red bullseye on their chests. He's proposing awful policies with the worst possible timing. At least President Clinton raised taxes during a growing economy. That's really the only time when an economy can withstand a major tax increase. Instead of waiting for the recovery to start, President Obama painted a bright red tax increase bullseye in the middle of productive people's chest. Ditto with energy producing companies. Ditto with energy-reliant companies.
The administration argues its tax increases for the households earning over $250,000 a year and fees on carbon polluters contained in its budget won't kick in until 2011-2012, when it forecasts the economy will have fully recovered.Let's be intellectually honest and admit that Mr. Raum isn't throwing softballs here. These are hard-hitting accusations.
But even those assumptions are challenged as too rosy by many private forecasters and some Democratic lawmakers.
Many deficit hawks also worry that the trillions of federal dollars being doled out by the administration, Congress and the Federal Reserve could sow the seeds of inflation down the road, whether the measures succeed in taming the recession or not. The money includes Obama's $3.6 trillion budget and the $837 billion stimulus package he signed last month.
The next question is whether Raum will stay critical or if he'll pull a David Brooks . Fankly, I can't picture Raum staying critical of President Obama. I think his criticism of President Obama is just proof of the media's pack mentality, proof that the time-tested cliche "If it bleeds, it leads" still is true.
Whatever the case, Raum's writings must be upsetting to the White House. It wouldn't surprise me if they've got a bunker mentality right now. They've earned it.
Posted Sunday, March 8, 2009 7:19 PM
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