
[H/T James Lileks]
Pure crap by an anonymous coward
“Conventional wisdom in Washington is that we must do something regardless of how wise or prudent it is,” said Boudreaux, the keynote speaker at an economic recovery event cosponsored by Heritage and the Club for Growth. “It’s taken as a matter of course that we must spend wildly.”
Instead, Boudreaux said, history offers a lesson that shows massive spending programs, such as those advocated by President Franklin Delano Roosevelt as part of the New Deal, do not work. “FDR’s policies put the ‘great’ in Great Depression,” Boudreaux said. He cited unemployment, which never dipped below 14%, and comments made by FDR’s own treasury secretary, Henry Morgenthau, who lamented that spending didn’t work. Should the United States fall into a deeper recession or depression, Boudreaux said, it would be the result of economic policies like those Obama is pursuing as part of his stimulus proposal.
New York University assistant economics professor Mario Rizzo kicks off the second morning panel “Market-Based Solution.” He begins by taking fire at the macroeconomists who are claiming they know exactly how many jobs each version of Obama’s Trillion Dollar Debt Plan will create.
Rizzo says:Unfortunately, much of the policy advice offered recently by commentators, including many economists, is shockingly superficial. It is reminiscent of the simple prime-the-pump ideas of the early Keynes and does not acknowledge Keynes’s own cautions and qualifications after the General Theory was published.” Rizzo then went onto stress that the microeconomic realities were the key to real economic recovery: “I wish to emphasize the resource allocation issues that characterize both the current situation and its underlying causes. The macroeconomic way of thinking ignores the complexity of our system and generates
policies that will not bring lasting recovery.”Turning to solutions, Rizzo recommends: First, allow the market adjustments to take place. When economic agents are confident that prices will be allowed to equilibrate, they will begin to take action in both financial and economic areas. Second, the current atmosphere of uncertainty has created an increase in a reluctance to lend, borrow, invest, and consume. Neutral stimulation can do some good. The only way stimulation can be neutral is through tax cuts, because only they encourage economic activity in accordance with voluntary decisions of economic agents.
Temporary cuts like the one in Obama’s plan will not work just like the rebates in Bush’s 2001 tax cuts do not work. Permanent and across the board cuts are needed and a cut in the corporate tax rate would be the most helpful. But these tax cuts must come with credible commitments to cut back on future government spending or they stimulative effects will be canceled by expectations of future interest rates.
Kling begins somberly: “I think about the stimulus as an economist but I feel it as a father. Barack Obama is destroying my daughters’ future. It is like sitting there watching my house ransacked by a gang of thugs. That’s how I feel, now back to how I think.”
Kling says this is a big bill, but not a big stimulus. There is nothing timely, targeted, or temporary about it. It is a simple transfer of money from one set of people to favored interest groups of the Democratic Party.
If economists had designed a plan, instead of Democratic politicians, it would look a lot like Greg Mankiw’s plan which calls for an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax.
Kling stressed that profits are the key to economic recovery. Profits and losses are signals in a market economy. Huge losses in the financial sector signal that that sector needs to shrink. Instead Obama is talking about buying and insuring toxic assets. They think they can force the financial sector to lend. But if businesses are not profitable then it makes no sense to lend. Cuts in payroll tax would make businesses more profitable.
JD also predicted that President Obama’s Trillion Dollar Debt Plan will only deepen the recession. The CBO has already said so, noting that “in the long run it will lower aggregate output (GDP) by 0.1 percent to 0.3 percent.” Foster believes it will actually be worse. He explains that the unprecedented levels of debt required to fund Obama’s spending binge will drive up interest rates across the board. It well send our debt to GDP ratio soaring by 25%-30%. This will in turn drive up interest rates by a full percentage point by 2010. This debt will be a millstone around our economic necks for years to come.
Finally, responding to a question from the audience, Foster said that it was insane that anyone could think an economy could recover while staring down the barrel of a 12-gauge tax hike … like the ones scheduled for 2010. Not to mention the ones needed to pay for all of Obama’s reckless borrowing.
In a full-employment situation, increased government spending would largely replace private spending, so the net stimulus to GDP would likely be quite small. In the present environment, however, with growing unemployment of both labor and capital, the net stimulus would be larger since the additional government spending would put some unemployed resources to work.
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[O]ur conclusion is that the net stimulus to short-term GDP will not be zero, and will be positive, but the stimulus is likely to be modest in magnitude. Some economists have assumed that every $1 billion spent by the government through the stimulus package would raise short-term GDP by $1.5 billion. Or, in economics jargon, that the multiplier is 1.5. That seems too optimistic given the nature of the spending programs being proposed. We believe a multiplier well below one seems much more likely.
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The evidence of past expansions of government programs is [that] [o]nce created they tend to survive and grow over time, even when the increases initially were said to be temporary. The underlying reason for this is that interest groups develop around new and expanded programs, and they lobby to keep and expand those programs.
This implies that the spending programs in the stimulus package will continue to some extent after the economy has returned to full employment. The multiplier at that time will surely be much closer to zero. Looking several years ahead, then, the average stimulus from the expansion in government spending will be smaller, perhaps much smaller, than the short-term stimulus.
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Whatever the merits of other government spending, the spending in this package is likely to have less value. A very large amount of money will be spent quickly over a two-year period: $500 billion amounts to about one-quarter of the total federal government annual spending of $2 trillion. It is extremely difficult for any group, private as well as public, to spend such a large sum wisely in a short period of time.
In addition, although politics play an important part in determining all government spending, political considerations are especially important in a spending package adopted quickly while the economy is reeling, and just after a popular president took office. Many Democrats saw the stimulus bill as a golden opportunity to enact spending items they've long desired. For this reason, various components of the package are unlikely to pass any reasonably stringent cost-benefit test.
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The increased federal debt caused by this stimulus package has to be paid for eventually by higher taxes on households and businesses. Higher income and business taxes generally discourage effort and investments, and result in a larger social burden than the actual level of the tax revenue needed to finance the greater debt. The burden from higher taxes down the road has to be deducted both from any short-term stimulus provided by the spending program, and from its long-run effects on the economy.
Republican Senators are questioning whether President Barack Obama’s stimulus bill contains the right mix of tax breaks and cash infusions to jump-start the economy.
Tragically, no one from either party is objecting to the health provisions slipped in without discussion. These provisions reflect the handiwork of Tom Daschle, until recently the nominee to head the Health and Human Services Department. Senators should read these provisions and vote against them because they are dangerous to your health.
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One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions. These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do
About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”
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Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time.” What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional. In his book, Daschle proposed an appointed body with vast powers to make the “tough” decisions elected politicians won’t make.The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and
technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.Elderly Hardest Hit
Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt. Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council. The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.
In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.
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The stimulus bill will affect every part of health care, from medical and nursing education, to how patients are treated and how much hospitals get paid. The bill allocates more funding for this bureaucracy than for the Army, Navy, Marines, and Air Force combined.
Hiding health legislation in a stimulus bill is intentional. Daschle supported the Clinton administration’s health-care overhaul in 1994, and attributed its failure to debate and delay. A year ago, Daschle wrote that the next president should act quickly before critics mount an opposition. “If that means attaching a health-care plan to the federal budget, so be it,” he said. “The issue is too important to be stalled by Senate protocol.”
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The health-care industry is the largest employer in the U.S. It produces almost 17 percent of the nation’s gross domestic product. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry. Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This
stimulus is dangerous to your health and the economy.
The problem with socialism is that you eventually run out of other people's money to spend.
To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies. So it is something in which no one believes and to which no one objects.
Barack Obama, a reputed master of the persuasive art, has settled on his central argument for the stimulus bill: I won.
That Obama is reduced to this crude appeal is a symptom of the intellectual collapse of the case for his stimulus bill, a congressional spendfest untethered from its stated goal of providing a rapid “jolt” to the economy.As far as political arguments go, “I won” has its power—provided it’s made on behalf of an agenda ratified by the American electorate. But Obama didn’t campaign on a sprawling, nearly $1 trillion new spending plan. If he had pledged in October to double federal domestic discretionary spending in a matter of weeks—including increasing the budget of the National Endowment for the Arts by a third, spending hundreds of millions more on federal buildings and throwing tens of billions on every traditional liberal priority from job training to Pell Grants—he’d have been hard-pressed to win at all.
The president should read the transcript of the third presidential debate. He claimed his program represented “a net spending cut.” He called himself “a strong proponent of pay-as-you-go. Every dollar that I’ve proposed, I’ve proposed an additional cut so that it matches.” He added, “We need to eliminate a whole host of programs that don’t work.”
Now, circumstances change, and no president can adhere to every jot and tittle from his campaign, but the “I won” argument only works if the campaign program matches the governing program. Obama himself seems confused on what exactly “I won” means.
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When Barack Obama ran last year, he didn’t say he’d engage in faith-based economic policy on a grand scale. He didn’t say he’d toss aside the normal processes of governing. He didn’t say he’d quickly act to add waste to the federal budget. And he didn’t say he’d try to brush away criticism with the mere
assertion of his victory. On the stimulus, when Obama says “I won,” he’s out of better arguments.
Healthy Kidney Removed Through Donor's Vagina
ScienceDaily (Feb. 2, 2009) — In what is believed to be a first-ever procedure, surgeons at Johns Hopkins have successfully removed a healthy donor kidney through a small incision in the back of the donor’s vagina.
“The kidney was successfully removed and transplanted into the donor’s niece, and both patients are doing fine,” says Robert Montgomery, M.D., Ph.D., chief of the transplant division at Johns Hopkins University School of Medicine who led the team that performed the historic operation.
The transvaginal donor kidney extraction, performed Jan. 29 on a 48-year-old woman from Lexington Park, Md., eliminated the need for a 5-to-6-inch abdominal incision and left only three pea-size scars on her abdomen, one of which is hidden in her navel.
[...]
The Jan. 29 operation is one of a family of new surgical procedures called natural orifice translumenal endoscopic surgeries (NOTES) that use a natural body opening to remove organs and tissue, according to Anthony Kalloo, M.D., the director of the Division of Gastroenterology at Johns Hopkins University School of Medicine and the pioneer of NOTES. The most common openings used are the mouth, anus and vagina.
He lectured us about "virtue" in his Inaugural Address, and he was quite right to do it. But ever since, he has thrown virtue under the campaign bus—an attorney general who lied under oath, tax cheats at Treasury and HHS, and now (h/t Instapundit), despite all the pious talk about putting an end to torture, he seems to be retaining what is arguably the worst component of our "interrogate the terrorist" programs: rendition.
I well remember the first time I heard about this noxious practice. An intelligence-community official told me, with evident satisfaction, "We're sending these guys to places where they don't have Miranda rights. Or lawyers." I didn't like it then, and I
don't like it now. It's a total moral copout: We enable torture while claiming to have abolished it.This is what appears to be the SOP of the Obama administration—moral lectures, immoral practices. They pose as virtuous citizens and tell us what to do in myriad ways, and then install serial offenders in the highest positions. They pose as human-rights defenders, and then turn over our prisoners to some of the worst human rights offenders.
This is a prescription for moral and political disaster, because either the electorate will figure it out, and deliver a stinging rebuke to Obama and his people (with considerable disruption at a time when we need to seriously address our many problems), or there will be an immoral free-for-all, to the ruin of the common good.
Is it "new" to acknowledge Muslim interests and show respect to the Muslim world? Obama doesn't just think so, he said so again to millions in his al-Arabiya interview, insisting on the need to "restore" the "same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago."
Astonishing. In these most recent 20 years -- the alleged winter of our disrespect of the Islamic world -- America did not just respect Muslims, it bled for them. It engaged in five military campaigns, every one of which involved -- and resulted in -- the liberation of a Muslim people: Bosnia, Kosovo, Kuwait, Afghanistan and Iraq. The two Balkan interventions -- as well as the failed 1992-93 Somalia intervention to feed starving African Muslims (43 Americans were killed) -- were humanitarian exercises of the highest order, there being no significant U.S. strategic interest at stake. In these 20 years, this nation has done more for suffering and oppressed Muslims than any nation, Muslim or non-Muslim, anywhere on Earth. Why are we apologizing?
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Every president has the right to portray himself as ushering in a new era of this or that. Obama wants to pursue new ties with Muslim nations, drawing on his own identity and associations. Good. But when his self-inflation as redeemer of U.S.-Muslim relations leads him to suggest that pre-Obama America was disrespectful or insensitive or uncaring of Muslims, he is engaging not just in fiction but in gratuitous disparagement of the country he is now privileged to lead.
US President Barack Obama's offer to talk to Iran shows that America's policy of "domination" has failed, the government spokesman said on Saturday.
"This request means Western ideology has become passive, that capitalist thought and the system of domination have failed," Gholam Hossein Elham was quoted as saying by the Mehr news agency. "Negotiation is secondary, the main issue is that there is no way but for (the United States) to change," he added.
HH: [A] lot of people have missed the Obama appeal to Arabiya, and the fact that he didn’t bring up its gender apartheid, Christopher Hitchens calls it. It’s where gays are executed. And he made no rebuke to these societies. I found it astonishing, Mark Steyn. What did you think?
MS: Well, you don’t have to be gay, an oppressed homosexual about to be executed. You don’t have to be a woman who’s being sold to an arranged child marriage. You just have to be a moderate, centrist Arab intellectual in, say, Cairo or Amman, and you listen to Obama sucking up to these creeps, and there’s nothing for you in it. What he’s doing is he says, he’s saying to hell with the Bush freedom agenda. We just want to get back to schmoozing the feted Arab dictatorships and the mullahs in Tehran all over again. And so if you’re a gay or a woman, you’re out of there. And as I said, if you’re a moderate Arab who just would like to have a free society in Cairo or Amman or wherever, you’re out of it, too. You’re on the Obama horizon. It was a pathetic, disgraceful Jimmy Carter speech.
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I think in fact, on that al-Arabiya interview, he just sounded basically way out of his league. And I hope someone brings him up to speed soon, because going around giving those interviews, as I said, he was talking about getting us back to thirty years ago. Well, thirty years ago, they were taking Americans hostage in Tehran. Thirty years ago, Jimmy Carter was communicating weakness to the world, and the Ayatollah rightly concluded these Americans are pushovers. And Obama shouldn’t be doing that message all over again.
“Girls Basketball Coach Fired After 100-0 Win”One might surmise that the coach of the team that lost to another team by 100 unanswered points was the poor slob cast into the unemployment line. Nay. The coach of the winning team was fired.
“The coach of a Texas high school basketball team that beat another team 100-0 was fired Sunday, the same day he sent an e-mail to a newspaper saying he will not apologize "for a wide-margin victory when my girls played with honor and integrity."”
On its Web site last week, Covenant, a private Christian school, posted a statement regretting the outcome of its Jan. 13 shutout win over Dallas Academy. "It is shameful and an embarrassment that this happened. This clearly does not reflect a Christlike and honorable approach to competition," said the statement, signed by Queal and board chair Todd Doshier.Oh, he simply failed to be like Christ. Good lord. SBD does not remember where in the New Testament Christ spotted the Devil 20 points in competition. I seem to recall the devil going 0 for 40 in some desert challenge with Jesus.
"In response to the statement posted on The Covenant School Web site, I do not agree with the apology or the notion that the Covenant School girls basketball team should feel embarrassed or ashamed," [Coach] Grimes wrote in the e-mail, according to the newspaper. "We played the game as it was meant to be played. My values and my beliefs would not allow me to run up the score on any opponent, and it will not allow me to apologize for a wide-margin victory when my girls played with honor and integrity."
“Dallas Academy has eight girls on its varsity team and about 20 girls in its high school. It is winless over the last four seasons. The academy boasts of its small class sizes and specializes in teaching students struggling with "learning differences," such as short attention spans or dyslexia.”
We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.
Yes, indeed, from behind the Resolute Desk, on his first day in office and his first act as Commander in Chief, watch our enemies cower in fear and shrink in defeat and hear the lamentations of their women as they behold the unwavering power of the new president . His is an unapologetically strong and unbroken spirit, entirely unlike that pussy Gov. Bush.Judge Suspends Guantanamo Cases at Obama's Request
By Peter Finn,Washington Post Staff Writer Wednesday, January 21, 2009; 2:07 PMGUANTANAMO BAY, Cuba, Jan. 21 -- A U.S. military judge Wednesday suspended the trial of five detainees accused of involvement in plotting the Sept. 11, 2001, terrorist attacks, acceding to a request from military prosecutors in accordance with a directive from the new Obama administration late Tuesday.
The suspension halts until late May the trial of Khalid Sheik Mohammed, the avowed mastermind of the Sept. 11 plot, and four other accused al-Qaeda members, even though Mohammed and three of the four objected to the delay.
In Washington, meanwhile, aides to President Obama were preparing an executive order that would begin the process of shutting down a detention facility at the Guantanamo Bay naval base for captured terrorist suspects. According to the Associated Press, the draft executive order calls for closing the detention center within a year. It was not immediately known when Obama would issue such an order.
But we cannot let this be the last mold we break, let alone the last big mission we accomplish. Now that we have overcome biography, we need to write some new history — one that will reboot, revive and reinvigorate America. That, for me, was the essence of Obama’s inaugural speech and I hope we — and he — are really up to it.
Indeed, dare I say, I hope Obama really has been palling around all these years with that old Chicago radical Bill Ayers. I hope Obama really is a closet radical.
Not radical left or right, just a radical, because this is a radical moment. It is a moment for radical departures from business as usual in so many areas. We can’t thrive as a country any longer by coasting on our reputation, by postponing solutions to every big problem that might involve some pain and by telling ourselves that dramatic new initiatives — like a gasoline tax, national health care or banking reform — are too hard or “off the table.” [Gosh, how positively radical and yet somehow lefty - SBD] So my most fervent hope about President Obama is that he will be as radical as this moment — that he will put everything on the table.
I've added something I got from my friend Ramalinga Raju from Satyam, the Indian company. We [!?!]decided that the greatest economic competition in the world going forward is not going to be between countries and countries. And it's not going to be between companies and companies. The greatest economic competition going forward is going to be between you and your own imagination. Your ability to act on your imagination is going to be so decisive in driving your future and the standard of living in your country. So the school, the state, the country that empowers, nurtures, enables imagination among its students and citizens, that's who's going to be the winner.Raju's bail hearing is on January 22. Wonder how imaginative the Indian Court will be?
It can be stated without fear of serious argument that no previous president has been treated as brutally, viciously, and unfairly as George W. Bush.
Bush 43 endured a deliberate and planned assault on everything he stood for, everything he was involved in, everything he tried to accomplish. Those who worked with him suffered nearly as much (and some even more -- at least one,Scooter Libby, was convicted on utterly specious charges in what amounts to a show trial).
His detractors were willing to risk the country's safety, its economic health, and the very balance of the democratic system of government in order to get at him. They were out to bring him down at all costs, or at the very least destroy his personal and presidential reputation. At this they have been half successful, at a high price for the country and its government.
Bush is alone at being attacked and denied support from all quarters -- even from many members of his own party. No single media source, excepting talk radio, was ever in his corner. Struggling actors and comics revived their careers though attacks on Bush. A disturbed woman perhaps a half step above the status of a bag lady parked outside his Crawford home to throw curses at him and was not only not sent on her way but joined by hundreds of others with plenty of spare time on their hands, an event covered in minute-by-minute detail by major media.
At least two films, one produced play, and a novel (by the odious Nicholson Baker, a writer with the distinction of dropping further down the ladder of decency with each work -- from sophisticated porn in Vox to degrading the war against Hitler in last year's Human Smoke) appeared calling for his assassination -- a new wrinkle in presidential criticism, and one that the left will regret. And let's not forget that tribune of the voiceless masses, Michael Moore, whose Fahrenheit 911 once marked the end-all and be-all of political satire but today is utterly forgotten.
And how shall Obama fare?What were the reasons for this hatred and the campaign that grew out of it? We can ask that question as often as we like, but we'll get no rational answer.
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As in all such cases, Bush hatred involves a number of factors that will be debated by historians for decades to come. But one component that cannot be overlooked is ideology, specifically the ideologization of American politics. It is no accident that the three most hated recent presidents are all Republican. These campaigns are yet another symptom of the American left's collapse into an ideological stupor characterized by pseudo-religious impulses, division of the world into black and white entities, and the unleashing of emotions beyond any means of rational control. The demonization of Bush -- and Reagan, and Nixon -- is the flip-side of the messianic response to Barack Obama.
There's nothing new about any of this. It's present in Orwell's 1984 in the "Five-Minute Hate" against the imaginary Emmanuel Goldstein, himself based on Leon Trotsky. The sole novel factor is its adaptation as a conscious tactic in democratic politics. That is unprecedented, and a serious cause for concern.
Being a Democrat, Obama has little to worry about, even with the far-left elements of his coalition beginning to sour on him. The ideological machinery is too unwieldy to swing around in order to target a single figure. Even if circumstances force him to violate the deeper tenets of his following, personal factors -- not limited to skin color -- will serve to protect him.
President Bush is leaving office amid the worst recession in 5 years, and naturally his economic policies are getting the blame. But before we move on to the era of Obamanomics, it's important to understand what really happened during the Bush years -- not least so we don't repeat the same mistakes.
Mr. Bush has tried to explain events with one of his populist aphorisms: "Wall Street got drunk and we got a hangover." The remark is ruefully amusing and has an element of truth. But it also reveals how little the President comprehends about the source of his Administration's economic undoing. To extend his metaphor, Who does Mr. Bush think was serving the liquor?
Democrats like to claim the 1990s were a golden age while the Bush years have been disastrous. But as the nearby chart shows, Mr. Bush inherited a recession. The dot-com bubble had burst in 2000, and the economy was sinking even before the shock of 9/11, the corporate scandals and Sarbanes-Oxley. Mr. Bush's original tax-cut proposal was designed in part as insurance against such a downturn.
However, to win over Senate Democrats, Mr. Bush both phased in the tax rate reductions and settled for politically popular but economically feckless tax rebate checks. Those checks provided a short-term lift to consumer spending but no real boost to risk-taking or business investment, which was still recovering from the tech implosion. By late 2002, the economy was struggling again -- which is when Mr. Bush proposed his second round of tax cuts.
This time the tax rate reductions were immediate, and they included cuts in capital gains and dividends designed to spur business incentives. As the tax cuts became law in late May 2003, the recovery began in earnest. Growth averaged nearly 4% over the next three years, the jobless rate fell from 6.3% in June 2003 to 4.4% in October 2006, and real wages began to grow despite rising food and energy prices. The 2003 tax cut was the high point of Bush economic policy.
Mr. Bush's spending record is less admirable, especially during his first term. He indulged the majority Republicans on Capitol Hill, refusing to veto overspending and giving in to their demand that the Medicare prescription drug benefit include only modest market reforms. Even those reforms have helped to restrain drug costs, but now Democrats are set to repeal them and the main Bush legacy will be the new taxpayer liabilities.
Nonetheless, the budget deficit did fall mid-decade, as tax revenues soared with the expansion. In fiscal 2007, the deficit hit $161 billion, or an economically trivial 1.2% of
GDP. That seems like a distant memory after the bailout blowout of the last few months, but the point is that the Bush tax cuts aren't responsible for the deficits. Before the recession hit, federal tax revenues had climbed above their postwar average of 18.3% of GDP.
Which brings us back to Mr. Bush's "hangover." While his Administration was handling the fiscal levers, the Federal
Reserve was pushing the monetary accelerator to the floor. In reaction to the dot-com implosion and the collapse in business investment, Alan Greenspan rapidly cut interest rates to spur housing and consumer spending. In June 2003,
even as the tax cuts were passing and the economy took off, he cut the fed funds rate to 1% and kept it there for a year.
His stimulus worked -- far too well. The money boom created a commodity price spike as well as a subsidy for credit across the economy. Economist John Taylor of Stanford has analyzed the magnitude of this monetary mistake in a new paper that assesses government's contribution to the financial panic. The second chart compares the actual fed funds rate this decade with what it would have been had the Fed stayed within the policy lanes of the previous 20 years.
"This extra easy policy was responsible for accelerating the housing boom and thereby ultimately leading to the housing bust," writes Mr. Taylor, who worked in the first-term Bush
Treasury, though not on monetary affairs, and is known for the "Taylor rule" for determining how central banks should adjust interest rates.
By pushing all of this excess credit into the economy, the Fed created a housing and mortgage mania that Wall Street was only too happy to be part of. Yes, many on the Street abandoned their normal risk standards. But they were goaded by an enormous subsidy for debt. Wall Street did get "drunk" but Washington had set up the open bar.
For that matter, most everyone else was also drinking the free booze: from homebuyers who put nothing down for a loan, to a White House that bragged about record home ownership, to the Democrats who promoted and protected Fannie Mae and Freddie Mac. (Those two companies helped turbocharge the mania by using a taxpayer subsidy to attract trillions of dollars of foreign capital into U.S. housing.) No one wanted the party to end, though sooner or later it had to.
While the Fed is most to blame, the Administration encouraged the credit excesses. It populated the Fed Board of Governors with Mr. Greenspan's protégés, notably Ben Bernanke and Donald Kohn, who helped to create the mania and even now deny all responsibility. Meantime, Mr. Bush's three Treasury Secretaries knew little about the subject, and if anything were inclined to support easier money and a weaker dollar in the name of reducing the trade deficit. We know because numerous Bush officials sneered at the monetary warnings in these columns going back to 2003.
When the bust finally arrived with a vengeance in 2007, the political timing couldn't have been worse. Mr. Bush tried to rally with one more fiscal "stimulus," but he repeated his
2001 mistake and agreed to another round of tax rebates. They did little good. The Administration might have prevented the worst of the panic had it sought some sort of TARP-like financing for the banking system months or a year earlier than it did last autumn. But neither the Treasury nor the FDIC seemed to appreciate how big the banking system's problems were. Their financial triage was well meaning but came too late and in a frenzy that invited mistakes.
This history is crucial to understand, both for the Democrats who now assume the levers of power and for Republicans who will want to return to power some day. Mr. Bush and his team did many things right after inheriting one bubble. They were ruined by monetary excess that created a second, more
dangerous credit mania. They forgot one of the main lessons of Reaganomics, which is the importance of stable money.
Caffeine Can Cause Hallucinations
People who take in the caffeine equivalent of three cups of brewed coffee (or seven cups of instant) are more likely to hallucinate, a new study suggests.
By LiveScience Staff
posted: 13 January 2009 07:32 pm ET
The researchers found that people with a caffeine intake that high, whether it came from coffee, tea, chocolate or caffeinated energy drinks or pills, had a three-times-higher tendency to hear voices and see things that were not there than those who consumed the equivalent of a half-cup of brewed coffee (or one cup of instant coffee). Though most people who drink loads of coffee are not known to hallucinate seriously, when these types of experiences interfere with daily functioning, they are considered to be psychotic.
Biden Outlines Plans to Do More With Less Power
By PETER BAKERWASHINGTON — He was in the Senate for 36 years and visited the White House under seven presidents. But Joseph R. Biden Jr. has never seen the inside of the vice president’s office in the West Wing. “I never thought a lot about the vice presidency,” he said, “until I was asked to go on the ticket.”
[...]
He said he would bring more to the job than any of his predecessors, except possibly Lyndon B. Johnson. “I know as much or more than Cheney,” Mr. Biden said. “I’m the most experienced vice president since anybody.”
"When John McCain said we could just 'muddle through' in Afghanistan, I argued for more resources and more troops to finish the fight against the terrorists who actually attacked us on 9/11, and made clear that we must take out Osama bin Laden and his lieutenants if we have them in our sights. John McCain likes to say that he'll follow bin Laden to the gates of hell--but he won't even go to the cave where he lives."--Sen. Barack Obama, Democratic National Convention speech, Aug. 28, 2008
Here we see the unconvincing, ballswaggering Obama during the campaign (unconvincing to at least to 46% of voters), when he was lecturing those pussies Bush and Cheney and McCain to stop dicking around in Iraq and to send large quantities of special forces into Pakistan to take out Bin Laden and"finish the fight." Finish the fight? He had no idea then who we are at war with and still doesn't. Flash forward a few months and we have this:
"I think that we have to so weaken his infrastructure that, whether he is technically alive or not, he is so pinned down that he cannot function. My preference obviously would be to capture or kill him. But if we have so tightened the noose that he's in a cave somewhere and can't even communicate with his operatives, then we will meet our goal of protecting America."--President-elect Barack Obama, CBS News interview, Jan. 14, 2009
Well. See what a few intelligence briefings can do for you. One could say that Obama has "grown in office," even though he hasn't yet taken the office. At least we can rest easy now that Obama seems to be backing off his campaign pledge to invade nuclear armed Pakistan. Obama still evidences a fatal understanding of our mortal enemy.
He remains untutored on some basic principles of enemy management. First, he seems to conflate the battle against the Taliban and the battle against Al Qaeda. Focusing just on Bin Laden here, to the extent that Bin Laden is "technically" alive, and to the extent that a thorough delousing of his cave complex is not yet practicable, it would not do to completely tighten the noose and shut him off from his operatives. Yes, we all want to see Bin Laden captured, brought to the US and taken on a magical mystery tour through our legal system for years and years until he is finally sentenced to death, a sentence that can't be taken against him because by then all forms of capital punishment will be deemed cruel and unusual, so he'll sit in Super Max next to other "lost souls."
So, if you know you have not killed the leader and the enemy has not revealed a new leader, then they will continue to look to and continue a method of communication with the leader to ensure they are acting by his design. (And anyone pretending to be Bin Laden needs the same dynamic to work for him or he's out of job). Generally, Al Qeada is a cell based movement characterised by centralized decision making and decentralized execution. To the extent that they believe Bin Laden is alive, then it is in our interests to allow lines of communication to stay open for a number of reasons. First, to ensure a thorough understanding of the extent and scope of the network and its functions. Second, to forestall the development of strong leadership among the mainline cells in Western capitals and the self-starters in places like Iraq. We need them to be nervous nellies, afraid to make bold moves without hearing what Uncle Binny has to say. If Bin Laden is believed to be dead, then it implies a leadership vacuum which, while creating the impression of dislocation and chaos in the organization, actually makes the practice of rolling it up more difficult as splinter cells form and diverge and perhaps choose to concentrate on more generalized mayhem as opposed to putting on a big show. Al Qaeda is big on big attacks, which by design take longer to plan and leave more opportunity for discovery. Ironic, but their big attack philosophy is a key weakness for them as far as preventing discovery. Our craft has changed considerably since 2001. Third, the decentralization of execution causes delay as these big attacks must be green-lighted from the cave. Cells scrambling to maintain long lines of communication are more likely to reveal themselves and allow us to interdict them where they matter - well away from the caves of Waziristan.
Perhaps that's next Wednesday's morning briefing.
"Because of this anticipated influx of people, declaring an emergency permits the federal government to provide additional requested support ... to ensure that the inauguration is not only safe and secure, but that the health and well-being of visitors is preserved."
Ambassador Ryan Crocker, our envoy in Baghdad, put it best: “In the end, how we leave, and what we leave behind, will be more important than how we came.” The American project in Iraq can’t be allowed to fail. It is fundamental to the peace of that “Greater Middle East.” We must also retain the best of President George W. Bush’s “diplomacy of freedom”—the belief that Arabs and Muslims don’t have tyranny in their DNA. Americans may differ in their reading of Bush, but in
the Arab and Islamic world, he leaves behind a commendable legacy: the willingness to bet on freedom, the belief that our pact with autocracy in that region has not served us well. In Iraq, Afghanistan and Lebanon, the American effort has not been in vain.-- Fouad Ajami, Director of the Middle East Studies Program at The Paul H. Nitze School of Advanced International Studies at the Johns Hopkins University.
Hassett then reveals his entire column to be a sick joke by proclaiming this bit of "good news":One reason the increase [in spending] is so dramatic is the mystery of compounding. Each year, Congress passed pork-laden expenditure bills, which became part of the long-run baseline the minute they became law. Each time that the federal government wasted a billion dollars, it created budget space to waste $1 billion again and again, ad infinitum.
That’s perhaps the scariest fact about next year’s budget. The skyrocketing spending of 2009 will be the CBO baseline for every year after that. It will be easy to provide health care to everyone; the budget space will be blocked out. Indeed, Congress can spend with impunity in years to come, covered by the protective shroud of the CBO baseline that this year delivers. We can ride big government spending and trillion-dollar deficits all the way to 2017, when the Social Security trust fund itself starts running deficits.
This year may establish a government-spending black hole with gravity strong enough to suck the U.S. economy over the event horizon. Such a spending path has two possible endgames. Neither is pretty.
The Federal Reserve could print enough money to accommodate all of that debt, in which case the dollar will collapse and the U.S. will be looking at a South-America-style run on its debt.Or the U.S. government could get its fiscal act in order with higher taxes. For that to happen, income taxes would approximately have to double.
While advocates of Keynesian-style stimulus are correct that this economy is terrible enough to warrant dramatic action, it is hard to understand how such a fiscal path might help. So what if second-quarter gross domestic product blips up a little bit? What business is going to expand its operations with the mother of all tax hikes peeking over the horizon? If government spending provided such a wonderful boost to the economy, we would be in Nirvana already.
If we want to create optimism about our future, we need to provide a reason. Putting a ring road around every city in the U.S. will not accomplish that. The only sensible path is for the U.S. to put its long-term fiscal house in order. Without that, this year’s stimulus will likely be a historic flop.
The good news is that a bipartisan group of senators, led by Democrat Kent Conrad of North Dakota and Republican Judd Gregg of New Hampshire, is on the right track. Their idea is for Congress to empower a commission to make the tough choices about future benefits and taxes to restore sanity to the U.S. budget outlook, and then to fast-track the commission’s recommendations to an up-or-down vote. If Congress fails to take Conrad and Gregg seriously, we may all be headed for the bread line.