Wednesday, January 27, 2010

What You Won't Hear Tonight: About How Obama's Interventionism is Eroding U.S. Prosperity

"His grandiose legislative ambition has become the partially free economy's biggest debt problem (see chart below, data here)."

Neil Reynolds writing in today's Toronto Globe and Mail:

"When President Barack Obama delivers his State of the Union address tonight, he should - but won't - report the significant U.S. decline in economic freedom during his first year in the Oval Office.

Jointly published last week by the conservative Washington-based Heritage Foundation and The Wall Street Journal, the
2010 Index of Economic Freedom (a 480-page work) strips the United States of its traditional designation as a "free economy," listing it instead - and ranking it as No. 8 in the world - as "partially free." More embarrassing for Mr. Obama, it elevates Canada to the No. 7 spot that the United States surrendered, making Prime Minister Stephen Harper the leader of the economically freest country in the Western Hemisphere (see top ten below, click to enlarge)."



27 Comments:

At 1/27/2010 10:22 AM, Anonymous Machiavelli999 said...

What you won't hear from Mark Perry tonight:

Most of that rise in debt was due to TARP, falling tax receipts due to the slow down in the economy, unfunded tax cuts, unfunded wars and and an unfunded prescription drug program.

Pretty much in that order of importance.

 
At 1/27/2010 10:52 AM, Anonymous Anonymous said...

And a continuation of what Machiavelli999 said,

The TARP fund was initiated under Bush (with barely any opposition from the Repubs.), and it was Wall Street's reckless ways (which needed a bailout) that eroded people's prosperity.

If Obama is doing anything, he's merely being Wall Street's good lap dog by doing their bidding. Remember the chart from opensecrets.org, the one which disclosed the single biggest cash recipient of any particular industry - that a number of them involved finance, and Obama was numero #1 with a lot of them? That explains much of our current problem

It's fine if one wants to keep government out of the affairs of business, but by the same token, it means business should stay out of the affairs of government; and unless the Supreme Court's recent campaign finance ruling is corrected, it's going to get a lot more involved.

Sorry, three branches of government is enough; I don't want a fourth one.

 
At 1/27/2010 11:16 AM, Anonymous Snest said...

What we won't hear from Machiavelli is that the financial crisis was a DUAL effort between Republicans and Democrats, mainly starting under Clinton, to intervene in the housing market to increase "affordability", particularly for minorities. We won't hear Machiavelli admit that Democrats voted for both wars and voted to continue funding both of them despite the red meat propaganda they threw to their attack dogs. We won't hear Machiavelli admit that Obama, Pelosi, and Reid pushed for TARP and that 100% of House Republicans voted against it. What Machiavelli won't admit is that all the Democrats in Congress voted for prescription drug benefits for seniors while simultaneously agreeing to the Bush tax cuts.

Those of us who are old enough and didn't use too many drugs remember when liberals blasted Reagan for a FOUR PERCENT budget deficit. Reagan used that deficit to kick the Soviet Union off a cliff and improve the economy.

How big is our deficit now? What are we getting for it?

 
At 1/27/2010 11:20 AM, Blogger PeakTrader said...

If Obama understood a large economy and was honest, he'd say:

"Over the past year, I threw trillions of dollars of your money at problems, but they weren't solved. They were made worse, because I failed to understand the real problems. Without the help of the Fed's quantitative easing, it would've been a bigger disaster. So, now we're heading into a Japanese-style "Lost Decade" rather than a third superbubble, which would've been more of a production than a consumption boom."

 
At 1/27/2010 11:32 AM, Anonymous Machiavelli999 said...

Snest,

As I read your response I just sigh at the lie after lie. I started writing a response but it doesn't even matter. Your kind and Fox News run the country now. Go and screw it up some more.

Here is my very quick response.

Google and YouTube "Bush AND ownership society". Bush did as much to promote home ownership as anyone else.

BUT that did not cause the crisis. If it did, don't you think the bankers would be falling over themselves blaming these regulations for the crisis. They sure fell over themselves trying to get Glass-Steagel repealed.

And by the way, what about the synchronized housing bubble all around the world. I never knew that American "affordability" laws extended across the world.

And what about the fact that the ground zero of the foreclosure crisis were not the slums of big cities like Chicago or Baltimore, which is who the CRA tried to help, but the suburbs of Florida, Arizona, Nevada and California.

I can go on and on...

 
At 1/27/2010 11:32 AM, Blogger sethstorm said...

Third World, or Third-World friendly bias.

 
At 1/27/2010 11:50 AM, Anonymous Anonymous said...

Snest said,

"We won't hear Machiavelli admit that Obama, Pelosi, and Reid pushed for TARP and that 100% of House Republicans voted against it."

I think you're referring to last year's TARP push. When Bush and Hank Paulson dropped the bomb in '08, a large number of Republicans did vote for it. This excerpt from Forbes (http://www.forbes.com/2009/11/30/republican-hypocrisy-tarp-stimulus-opinions-columnists-wesbury-stein.html):

"But Treasury and Fed officials, along with many analysts and influential pundits, said that the threats to the economy were so grievous and scary that government bailouts were the "only" answer. This argument won the day, mark-to-market changes were pushed to the sidelines as a non-issue and many leading Republicans voted to pass TARP. Many of those votes came from "conservative" politicians who also supported the $150 billion Bush stimulus bill in February 2008."

Of course Obama's not going to solve any problems - not with his administration being so deeply corrupted by the finance industry. They've got a good thing going for themselves, and they're not going to stop the gravy train for anyone - Democrat or Republican.

 
At 1/27/2010 12:01 PM, Anonymous Benny The Man said...

Bring back President Clinton, the greatest economic adminstrator in US history.
Look at the Clinton years!
Debt as percent of GDP fell. The Dow tripled!
Under Bush, it was a train wreck into the dunghole.
I dunno if Obama can get us back on the tracks.
Thank you President Bush. Can't wait to read your memoirs.

"How I Wrecked the US Economy in Eight Years."

 
At 1/27/2010 12:04 PM, Anonymous gettingrational said...

I will watch Obama's address for the entertainment value and not the platitudes. The 2010 Index of Economic Freedom is fascinating and informative.

I am particularly was interested in the Trade Freedom and Freedom from Corruption categories. The U.S. had a score of 73.0 and fell in Freedom from Corruption because of an absence of transparancy in TARP and other bailout government funding.

With respect to Trade Freedom, Hong Kong scored 90.0; The U.S. 86.9; and China 72.2.

The Index report's Methodology explains that China would have had a score of 91.4 BUT "the existence of significant NTBs in China reduced the score by 20 points". The 20 point penalty is the maximum and is assigned if "...NTBs are used excessively accross many goods and services and/or act to effectively impede a significant amount of international trade".

What are NTBs? They are Non-Tariff Barriers and are creative, complex and effective ways to impede imports. Most headlines for international trade disputes are for last century's tariff issues (ie. Smoot-Hawley). U.S. citizens from all walks of life are almost completely devoid of any knowledge of NTBs which is unfortunate.

BTW, If China was to adopt a Hong Kong model and moved quickly to implement it would move quickly form #140 to either #1 or #2 ranking in the Index.

 
At 1/27/2010 12:29 PM, Anonymous Anonymous said...

Just ask youselves one question:

Are you better off now than you were 4 trillion dollars ago?

 
At 1/27/2010 12:40 PM, Anonymous Anonymous said...

When Bush and Hank Paulson dropped the bomb in '08, a large number of Republicans did vote for it.

Bush "spent" approximately one half of the original TARP funds, focusing that money on the banks, leaving the rest for Obama. Obama spent a large portion of the remaining funds bailing out the UAW. The banks have since returned the money they received with interest, while the UAW has pocketed the money Obama gave them.

So, yes, the entire deficit belongs to Obama and the Democrats. They voted for TARP, they voted for the 787 billion dollar "stimulus", they voted for all of the war funding (both before and after taking control of Congress in 2007), They voted for SCHIP and the enlargement of Medicaid, and they are responsible for the Ponzi scheme structures of both Social Security and Medicare.

Mach999, like so many leftists, has difficulty accepting that socialism is a lie.

 
At 1/27/2010 12:44 PM, Anonymous ften said...

I think its all Clinton's fault. Or FDR's, or maybe Wilson's, not sure, let me ask Rush.

 
At 1/27/2010 12:53 PM, Anonymous Anonymous said...

Read the Constitution, all spending bills must originate in the House of Representatives - period. When the Democrats took control of Congress, the deficit was approx. 140 billion and falling. They immediately went on a spending spree, enlarging welfare programs like SCHIP. Since they've taking over, government spending has spiraled out of control. Obama voted for - as a Senator - or signed into law all of this spending. They created, funded and enlarged all of the "affordable housing" schemes that led to the housing crisis. Sorry, but trying to blame Bush for this is only an indication of how gullible you are.

 
At 1/27/2010 12:55 PM, Blogger Colin said...

http://thehill.com/special-reports/state-of-the-union-january-2010/78143-more-government-is-simply-not-the-answer

 
At 1/27/2010 12:58 PM, Anonymous Anonymous said...

I think its all Clinton's fault. Or FDR's, or maybe Wilson's, not sure, let me ask Rush.

Better hurry, you haven't got much time before "global warming" destroys the planet. The science is settled.

 
At 1/27/2010 12:58 PM, Anonymous Kevin said...

999 - you are such a hack...posting your comments all over the online world...you can't keep blaming Bush for what's happening NOW...and the Dems have controlled Congress since 2006 - where's your balme for them???

 
At 1/27/2010 1:18 PM, Anonymous Snest said...

@Machiavelli

You are both delusional and illiterate.

I clearly said both Republicans and Democrats were involved in the "affordable housing" push. That includes both Bush's "owneship society" AND Clinton's National Housing Policy which preceded it. While Bush increased home ownership from 67.8% to 69% at the peak, Clinton raised it from 64% to 67.4%. That is not an achievement for Clinton. It demonstrates how subprime mortgages, Alt-A, Option ARMs and securitization got started in 1996. That's when the bubble began!

Repealing Glass-Steagel had NOTHING to do with this crisis. Leftists have been pulling on that broken string for years and it's still not making a sound. The worst that could be said is that Gramm Leach Bliley facilitated the "too big to fail" problem. If true (but it's not), that puts taxpayers on the hook. But in no way, shape or form does it have any explanatory power over WHY or HOW this crisis occurred. It said nothing and did nothin vis a vis risky mortgages, imprudent lending practices, or securitization. You're blaming rainstorm in Australia for the flood from a broken dam in China. Yep, the both involve water so there must be a connection!

 
At 1/27/2010 1:30 PM, Anonymous Snest said...

@Mach

Oh, I forgot about your parting red herring.

I said NOTHING about CRA. "Affordable mortgage" products, enabled by CLINTON were a separate issue from CRA. While CRA impose de facto quotas on bank lending to minorities, the "affordable" mortgage products were used by poor and middle-class alike. People from every social class soaked up low interest rates from loose money policies and MBS purchases by Fannie and Freddie.

CRA was a small partof this crisis, but leftist always drag that out as if every time we say "affordable housing" we mean CRA.

And other countries DID have the equivalent of affordable mortgage products. They did consume all the securitized mortgages from Fannie and Freddie for the high yields they offered.

You can't go on and on because you don't even know the basics. It's hilarious how often I hear the same retort from leftists "Your statements are so full of lies I don't know where to start. I could go on and on shredding and fisking you forever." But the arguments never come because your guns are empty or you have no guns at all.

 
At 1/27/2010 2:07 PM, Anonymous Anonymous said...

What we won't hear from Obama:

The economy has been tanking ever since the American people handed Democrats control of Congress in 2006. But I still think it's all Bush's fault. [OK, we probably will hear that last sentence.]

The Stimulus bill was intended to stimulate my political supporters not create real jobs. Didn't you read the fine print?

We said that unemployment wouldn't top 8% without the stimulus bill, and I stand by that statement. But we did pass the stimulus bill, so I guess we'll never know for sure.

If you thought I did a good job helping out Martha in Massachusetts just wait until I help out Congress in the fall.

[Actually, Obama might say anything. It's what he actually does that counts. And by now the American people have figured out that those two things can be miles apart.]

 
At 1/27/2010 2:28 PM, Blogger juandos said...

Machiavelli999 rants: "As I read your response I just sigh at the lie after lie. I started writing a response but it doesn't even matter. Your kind and Fox News run the country now. Go and screw it up some more"...

Well sadly the Machiavelli999 couldn't be bothered to deal with the reality of what his fellow travelers foisted off on America with unfunded nanny state programs or the The Pelosi-Obama Deficits...

Don't you long for the days of sub 5% unemployment rates?

 
At 1/27/2010 2:44 PM, Blogger OA said...

"unfunded tax cuts"

Oh the horror. Tax rate cuts without finding new taxes to replace them. How will the government survive? But of course by 2005, tax receipts were 20% higher. What bizarro world is this?

And note, the Clinton tax receipts boomed primarily due to the dot com bubble, which coincidentally followed the capital gains tax cuts that lefties like to ignore. They always pretend he only increased income tax rates.

But don't worry, all the tax cuts we see now are being paid for through tax increases elsewhere.

If TARP was the biggest reason for the increase then I guess we'll see a big drop in debt then in the coming years. Same as the Bush tax cuts on the rich expiring, the economy rebounding, and the wars winding down.

Wow, if only we'd cut that drug program, we'd probably have a surplus.

 
At 1/27/2010 2:55 PM, Blogger brodero said...

An incomplete study without a discussion of debt service to GDP....

 
At 1/27/2010 3:17 PM, Anonymous Anonymous said...

"Bush "spent" approximately one half of the original TARP funds, focusing that money on the banks, leaving the rest for Obama. Obama spent a large portion of the remaining funds bailing out the UAW."

Bush also bailed out Chrysler and GM. In fact, he didn't let them pursue the path of bankruptcy favored by many Republicans; Obama did. Unfortunately, Obama has effectively turned GM into "Government Motors."

 
At 1/27/2010 4:05 PM, Anonymous Anonymous said...

Bush also bailed out Chrysler and GM. In fact, he didn't let them pursue the path of bankruptcy favored by many Republicans

You're right, of the more than 80 billion dollars that the UAW has pocketed, Bush gave them "short term loans" of 15 billion arguing that it would buy time for the next administration to respond to the problem. But let's be clear about the "bankruptcy" that Obama orchestrated. The senior secured creditors were robbed. Majority interest in both GM and Chrysler was gifted to the UAW. The UAW was not required to make any sacrifices at all, no reduction in wages, no reduction in benefits, none. The taxpayer now guarantees their pensions and benefits. This was grand larceny with Obama heading up the mob.

 
At 1/27/2010 4:46 PM, Anonymous Anonymous said...

WASHINGTON — The White House raised for the first time on Thursday the prospect of forcing General Motors and Chrysler into a managed bankruptcy as a solution to save the companies from financial collapse.

On Thursday, his spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry M. Paulson Jr. were considering the step.

“There’s an orderly way to do bankruptcies that provides for more of a soft landing,” Ms. Perino said. “I think that’s what we would be talking about. That would be one of the options.”

These officials said the preferred solution would be to force a restructuring of the industry outside of bankruptcy court, extracting concessions that would make the companies more cost-competitive with foreign automakers.

In his speech Thursday, Mr. Bush made clear that he wanted to avoid a “disorderly bankruptcy” because of “what it would do to the psychology of the markets.” But he also said he was “worried about putting good money after bad,” and suggested he would only approve a plan that allowed the auto companies to “become viable in the future.”

But for Mr. Bush, that could be difficult to negotiate. If the autoworkers’ unions conclude they are likely to get a better deal from Mr. Obama, they are likely to stall negotiations and settle for a shorter-term loan.

New York Times

Bush was open to a bailout if the UAW agreed to concessions that would make the companies competitive. In the end, the UAW simply waited for Obama and the Democrats to hand over tens of billions of taxpayer dollars and a controlling interest stolen from the bondholders.

 
At 1/27/2010 7:52 PM, Blogger sethstorm said...

When the Republicans stop supporting the use of offshoring, then they can be trusted with the economy. Otherwise, they're just going to sell out our country as done with the previous administrations back to Nixon.


That means throwing Mr. Mankiw, Carly Fiorina, Elaine Chao, and their supporters/enablers under the proverbial bus. Now.


Bring back President Clinton, the greatest economic adminstrator in US history.

No thank you, but he supported NAFTA and the DMCA; never mind that he was a bit too friendly with the Chinese. The next president should be anti-China to correct for him and Elaine Chao.

Honestly, if we can cause China to collapse into unrest, that might give us another good century. If it also strikes fear into people who offshore work, so much the better.


Don't you long for the days of sub 5% unemployment rates?

I long for the days when US citizenship was respected in the job market. That 5% unemployment was amid large amounts of offshoring where they could find citizens to do the work but find some way to disqualify them.

 
At 1/27/2010 9:43 PM, Anonymous Steve said...

Congress has really lost control of the budget and allows ridiculous amounts of money to be passed in bills for things that aren't needed, won't work, and aren't even projected to be beneficial anytime soon.

 

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