Malaise II

Friday, September 30, AD 2011

On July 15, 1979, after an abysmal time leading the nation, Jimmy Carter, worst President of the United States except for James Buchanan and the present incumbent, gave a speech in which he blamed the ills of the land on the American people.  The problems certainly could not be due to him and his wretched policies, they had to be the fault of everyone else.  The speech became known as the spiritual malaise speech, although Carter did not use the term malaise.

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39 Responses to Malaise II

  • Yep, what the American people need are a cheerleader. Bring in the Dallas Cowgals!

  • Throughout our history Joe the American people have responded to good presidential leadership. We do not need a cheerleader; we desperately do need a good leader.

  • The following was posted on Instapundit a short while ago.

    “ . . . Well, I am quite deliberately rubbing it in, as the ridiculously inflated expectations for Obama are regularly and repeatedly exposed as . . . ridiculously inflated. But what’s really juvenile is expecting that an inexperienced former community organizer could successfully execute the office of President of the United States. And if I’m peeing all over the wave of hope-and-change hype that got him into office despite his obvious unsuitability, it’s to help ensure that nothing this disastrous happens again in my lifetime. I realize that it’s painful for those who fell victim to the mass hysteria to constantly be reminded of their foolishness, but I hope it’ll be the kind of pain that results in learning. . . . “

    “UPDATE: Prof. XXX emails:
    ‘Nicely said.
    ‘Many all too willingly wanted to follow the piper and now that it’s proven to have been a disastrous choice, would prefer that all that was forgotten. Well, no it shouldn’t be. Votes matter, and their gullibility, or pursuit of easy absolution, or confirmation of some imagined moral superiority in support of the President’s election has led to the disaster we now face. Many among these people, in particular those with a public voice, bear a large measure of responsibility for having brought us to this point. What is truly juvenile is that among many of these same people there exists a continued denial of the reality we face and of their role in helping to bringing it about.’

    “Indeed. Which is why I continue to rub it in.” Instapundit

  • The Carter Administration made a number of mistakes in policy. Notably, the President reacted to the Federal Reserve’s dysfunctional monetary policy with a series of Potemkin measures, not addressing escalating currency erosion until the appointment of Paul Volcker as chairman thereof in the fall of 1979. Even so, they insisted that Volcker not implement his plan for controlling the growth of monetary aggregates during an election campaign. (Please recall, though, that the Board responsible for the decay in price stability in 1977-79 was largely appointed by his predecessors). There were some decisions made in late 1978 and early 1979 regarding the turmoil in Iran which should be regretted later, but much of his trouble with Iran was largely imposed and would have bedeviled anyone in similar circumstances.

    I think you need to recall that Mr. Carter was operating within constraints imposed by the internal culture of the Democratic Party, that he tried to educate his party on certain matters, and that the Democratic congressional caucus had little use for him because his priorities were so different from theirs. (Hence Ted Kennedy’s presidential campaign).

    It was Mr. Carter who promoted the removal of residual wage and price controls in 1977 (in the teeth of a filibuster run by George McGovern); it was Mr. Carter who promoted the removal of aging and dysfunctional regulatory systems in the transportation sector; it was Mr. Carter who attempted to persuade Congress (with no success) to stop using the tax code to sluice benefits to the oil industry and other favored economic sectors; it was Mr. Carter who attempted (without full success) to persuade Congress to pass a balanced budget for the fiscal year ending in 1980; it was Mr. Carter who began arming the insurrection against the Communist government in Afghanistan.

  • Well, I do think we need to hear something like what Carter said. Donald, if you didn’t think society needed to hear a ‘Carter speech’ about society’s building blocks, waste, sloppiness, loss of nerve, immorality, laziness, etc., you wouldn’t post many of your posts. I do agree that Carter may have been kind of ineffective overall. But when he got up and told us we needed to look at ourselves, he spoke truly. By the 70’s, we needed to hear that.

  • Couldn’t disagree more Pat, unless I tried very hard. The main problem this country faced in the late Seventies was Carter’s idiot policies. His speech was not a serious look at the failings of the American people, and I think such generalized Jeremiads are usually useless execept to make the person on the soapbox feel superior, but was rather an exercise at blame shifting from him to the people who had the misfortune to live under him. The American people gave the appropriate response to this tripe in November of 1980.

  • The main problem this country faced in the late Seventies was Carter’s idiot policies.

    Donald, in 1978, the country had had two decades of escalating rates of social pathology. Carter’s policies did not cause that and, from his post in the federal government, the only components he was in a position to do much about were illegal immigration and the international drug trade. You could likely point to various and sundry disagreeable things emerging from the regulatory state during those years. The thing is, positions in any administration are staffed by camp followers drawn from abiding Democratic constituencies. Carter commonly thought and acted in counterpoint to those constituencies, but he still had to operate in that matrix.

    You really do not say what policies to which you were referring. Monetary policy was poorly conducted. Perhaps critics of Carter have found the memoranda which show that Arthur Burns, et al were taking instruction from the President in these matters. We know from the whole history of the period after 1965 that Burns was quite capable of bollixing things without Mr. Carter’s intervention. Carter should have foregone gimmicks and told Burns, Miller, et al to get the growth rate of monetary aggregates under control. Keep in mind, though, that the Democratic Party’s cognoscenti was populated with characters like James Tobin who insisted that this could not be practically implemented and that the congressional caucus was occupied by characters like Hubert Humphrey and Gus Hawkins who thought you could garner full employment via legislative fiat.

    Iran was a godawful mess, but it is de trop to attribute to Mr. Carter the structural weaknesses of the Shah’s regime or the ruler’s personal failings. It is conceivable that a military coup executed in January of 1979 might have allowed some sort of sensible regime to take control. Then again, it might have failed utterly. You only see the downside of the policies you elect to implement. (The same observations apply to troubles in Central America).

    The military’s skill set had been deteriorating for years. He could have and should have been more vigorous about promoting improvements. That was a sin of omission, and one he sought to rectify as he was leaving office.

  • Art, let me count some of the ways:

    1. A completely ineffective energy policy which involved wearing sweaters and lowering thermostats.
    2. Raging inflation and interest rates. In 1980 inflation hit 13.5% and the prime interest rate charged by banks was 15.26.
    3. Afghanistan-Carter’s intial response was the plaintive cry that Brezhnev had lied to him, a symbol that with him at the helm our foreign policy was truly “Innocents abroad”.
    4. A hollow military-The military despised Carter for producing a weak military. My brother was commanding an armored platoon in Germany on night manueveres when news that Reagan had been elected reached them. Cheers rang out through the column.
    5. Iran-The failure of the rescue mission was a sign of what the military had been reduced to under Carter. His Deputy Secretary of State, Warren Christopher, when the cabinet was being briefed on the mission, asked if the weapons could be shot out of the hands of the Iranian guards rather than harming them. The disbelieving briefing officer told Christopher that shooting guns out of hands was only something that happened on television.

  • 1. Effective energy policy would have required the following: comprehensive removal of controls on the price of petroleum and its derivatives; abjuring the use of general tax revenues and financing of road construction and maintenance with tolls, excises on gasoline, and vehicle registration fees; the imposition of green excises on petroleum and its derivatives; and extension work with builders and architects promoting insulation technology. A federal laboratory investigating alternative energy technology and also improved technologies for disposing of nuclear waste might have been helpful also. Such a policy would also have required time for its salutary features to take effect. Carter fought tooth and nail with Congress (with partial success) to remove controls on the price of petroleum (and Reagan was able to accelerate implementation of decontrol by executive order). To sell the rest, the President would have to tell a truth most people did not want to hear: that they were not paying the full freight for their consumer choices and they needed to do so for reasons of economic efficiency and reasons of state. Aspects of that the President attempted. I cannot think of any of his successors who would have even made the attempt.

    2. I agree with you regarding inflation. I do point out, however, that the President was making decisions in a particular intellectual and political context. You need to ask yourself which of his opponents in 1976 would have made better decisions. This is speculative, to be sure, but that is inherent in evaluating a President because what you are evaluating is a contingent response to circumstances. (I suspect Mr. Ford, Mr. Reagan, and Mr. Brown would have done a better job with this. Messrs. Udall, Church, Wallace et al? Nope.)

    3. This is trivia. (And after what you call his plaintive cry, Mr. Brezhnev got hit with a policy innovation that had never been attempted in a sustained way: equipment of an insurgency intending to overthrow a Communist government).

    4. Carter did not manufacture such a military, he inherited it. Carter should have been far more vigorous about improvements in the military’s equipment and skill set. You have to recall, though, that he was facing a Congress for which this was not, in 1977, a priority. Mr. Reagan would have done things differently, but I think you are forgetting how atypical Mr. Reagan’s views were at the time. (And please note, the Reagan Administrations methods – an arbitrary annual increase in the real military budget – could be somewhat crude.

    5. The President makes 3,000 discretionary appointments. Some of them are bound to be crummy. Warren Christopher and Robert Pastor had no business being any position in the foreign policy apparat and Cyrus Vance was certainly in the wrong position (as the President came to realize). The real problem with the Iranian mess (at that point) is that the Administration allowed ABC News to turn it into a saga and the President appeared to have ruled out pro-active measures (e.g. asking for a declaration of war and then jailing Iranians in the country as enemy aliens – suggested by George Kennan) to resolve the crisis.

    You set yourself a high bar referring to Carter as the worst president since the antebellum. The man’s bad decisions in their consequences do not compare unfavorably to those of Herbert Hoover or Lyndon Johnson and you completely neglect the man’s virtues (such as his allergy to public sector borrowing and his willingness to tackle issues which did not arise from constituency pressure). He had an unpleasant public personality, he could be opportunistic in a disagreeable manner, he was caught up short by events. However, Carter did not stink. The Democratic Party stank. Mr. Carter was more antagonistic to the culture of that political nexus (as manifested in our wretched federal legislature) than any of his Democratic predecessors or successors).

  • 1. As to energy Art, Carter’s policy was rigidly focused on conservation and sponsoring what is now called “green technologies”. They are an economic boondoggle now, even more so in Carter’s time, as the technology to make solar, wind, etc simply isn’t there, even more so in the Peanut Farmer’s day.

    2. Oh Carter was probably no worse on the economy than the Democrats he ran against in 1976, which speaks volumes about the rot besetting that party. To be fair, I also regarded Ford as a poor president and voted two-handedly in November of that year. I think only Reagan had the political guts and the imagination to undertake the stern measures need to wring inflation from our economy.

    3. It’s not trivia Art, it is revelatory. The arming of the Afghan resistance was almost entirely the work of Brzezinski, Carter’s national security adviser, and was hotly opposed by the rest of Carter’s foreign policy team. It was a rare foreign policy success, other than the Camp David Accords, in an administration otherwise noted for American retreat around the globe.

    4. No Art, Carter was content to gut the military. I remember it vividly since I was in the Army at the time. The contempt that most people in the military had for the man is hard to exaggerate. His neglect of the military was part and parcel of his foreign policy which could be summed up in his statement that we were outgrowing our “indordinate fear” of communism.

    5. Warren Christopher and Vance were typical of the appointees of Carter running our foreign policy. National security advisor Brzezinski was very much the exception. (As I recall Brzezinski was booed at the Democrat convention in 1980 by delegates there.)

    I call him the worst president except for James Buchanan Art because the man was a walking disaster in both domestic policy and in foreign policy, all the while being the most sanctimonius president we have ever had. I have never relished a politician’s defeat more than I did his on election night 1980.

  • 1. There is nothing bad about conservation. There are arguments to be made for and against government engaging in scientific and technical research outside its usual book. It gets to be a boondoggle not in the doing but when you create a state-dependent businesses and laboratories – i.e. corporate welfare and higher education pork. Carter faced a problem when he took office generated by public policy at all levels: petroleum products (and hence activities like motor vehicle use) were underpriced. Attacking that problem (and he put a great many chips on the table in so doing) puts you on a collision course with Congress and the general public. He was willing to take these hits. Attacking him for his energy policy is ill-informed and graceless.

    2. Both men who chaired the Federal Reserve Board during the period running from Carter’s inauguration to the summer of 1979 performed wretchedly. Please recall that the first of these men was a Republican appointee who had performed wretchedly for the previous seven years. The academic economist who correctly diagnosed the source of the problems manifest after 1968 was Milton Friedman, whose insight was that the empirically discernable trade-off between inflation and unemployment was crucially-dependent on public expectations of future price trajectories. This insight did not penetrate the Fed during those years nor the business press.

    3. It is trivia and your elaboration on the policy decision – that he over-ruled most of his advisors – undermines your argument.

    4. I am not going to second guess you on the subject of morale in the Army. The man ‘committed to gutting the military’ expended 5.67% of gross domestic product on it during his first years in office as opposed to Mr. Ford’s 6.13%. Please note, the ratio of military expenditure to domestic product saw an almost monotonic decline after the end of the Korean War. There were three reversals in this pattern: one during 1956-58, one during 1965-67, and one extending over the period running from 1979-86. Mr. Reagan’s military buildup antedated Mr. Reagan’s administration.

    5. The salient officials for high politics in any Administration are the Secretary of Defence, the Chairman of the Joint Chiefs of Staff, the Secretary of State, the director of the Central Intelligence Agency, and the staff director of the National Security Council. For the trade, development, and monetary component, the Secretary of Commerce, the Secretary of the Treasury, and the director of the Agency for International Development are salient. The director of what was called the U.S. Information Agency &c. bring up the rear. The chief of mission at the United Nations is quite prominent but not very important (Mr. Carter used that job for political patronage and eventually fired its occupant after repeated reprimands). Dr. Brzezinksi’s conflicts with Cyrus Vance were well known. It was Vance, not Brzezinski, who ended up leaving. I do not recall that Harold Brown, a physicist from CalTech with a previous history in the Defense Department’s research apparat or Gen. David Jones, a military professional, had much of an ideological profile. The Central Intelligence Agency was directed by another military professional, Stansfield Turner. Adm. Turner has been criticized for a number of things – e.g. firing a great many people he should not have and placing too much emphasis on technical collection over espionage. The agency is such a black box and has such a history of dysfunction it is hard to evaluate these claims. Vance and his subordinates aside, I am just not seeing an incorrigible dovecote here. (You recall Carter himself had been a Naval officer).

    —-

    C’mon. Herbert Hoover presided over a catastrophic economic implosion largely attributable to wretched monetary policy (and inadequate banking supervision). Lyndon Johnson, Robert McNamara, and William Westmoreland prosecuted a war so ineptly we ended up with 58,000 dead soldiers and we lost anyway. (Did I mention the Office of Economic Opportunity?). Woodrow Wilson promoted the disestablishment of central Europe’s monarchies and assisted in perpetrating the Treaty of Versailles – all in pursuit of his ideological fixations and dippy collective security schemes. The competition is just too stiff for Mr. Carter to win, place, or show in the Worst-President-Evah sweepstakes.

  • “1. There is nothing bad about conservation.”

    There most certainly is when it doesn’t get to the heart of the problem. All of the sweater wearing and theromstat diving in the world didn’t make a dent in America’s energy problem. Carter relied on pie in the sky initiatives rather than implementing policies which would spur domestic American energy production. His legacy has become one of the central core beliefs of his energy-luddite party.

    “2. Both men who chaired the Federal Reserve Board during the period running from Carter’s inauguration to the summer of 1979 performed wretchedly.”

    Wretchedly sums up the performance of the entire Carter administration in regard to the economy Art.

    “3. It is trivia”

    No, it is a simple indication of his world view, a world view he has doubled down on during his career as our most ex-of ex-Presidents. He took the advice from his national security advisor on Afghanistan, a very atypical response from Carter, I think largely due to the fact that 1980, election year, was the next year. Carter was a “useful idiot” otherwise in office for our enemies, just as he has been a “useful idiot” out of office for our enemies.

    4. Hollow military:

    “Joint Chiefs of Staff Break With Carter On Budget Planning for Defense Needs” p. A1: “Right now, we have a hollow Army,” responded Gen. E. C. Meyer, Army chief of staff, in what turned out to be the bluntest response. “I don’t believe the current budget responds to the Army’s needs for the 1980s,” said Meyer of Carter’s fiscal 1981 defense budget. “There’s a tremendous shortfall in the ability to modernize quickly” in response to the Soviet threat.”

    Washington Post, May 30, 1980

    5. “Dr. Brzezinksi’s conflicts with Cyrus Vance were well known. It was Vance, not Brzezinski, who ended up leaving.”

    And outside of Afghanistan it was Vance’s policy of retreat and accomodation in regard to our adversaries which continued to be followed.

    Art, I remember those years vividly. I think Jimmy Carter came very close to derailing the American economy and placed us on a very dangerous path where his weakness and dithering encouraged Soviet adventurism. I can only imagine the shambles that this country would have experienced if he had had a second term. No, for all around bad performance as president Carter will get my vote right after James Buchanan, the man whose tilt to the South helped bring on the secession crisis, and who helped convince the South that the North would not fight.

  • I have Jimmy Carter to thank for making me a Republican. When Carter was elected, I was 13 and I bought into my parents’ view that the GOP was the cause of the nation’s problems and now that the Democrats ran everything in Washington, things would improve.

    Carter cured me of ever believing anything that came out of the mouth of a Democrat.

    Carter was an incompetent, limp-wristed, ineffectual and diastorous president. His overall incompetence did lead us to Ronald Reagan, the greatest president of the 20th century.

    Obama was the second pop culture president. The slimy Bill Clinton was first. As modern pop culture is infested with leftist politics and lack of morality, it has become the religion of far too many young people. I remember Forbes Avenue in Oakland (Pittsburgh) was closed down because it was filled with college students from Pitt celebrating Obumbler’s election. Those fools back in 2008 are now the unemployed and under employed – and that bunch, across the nation, helped put Obumbler in the White House, because it was the “cool thing to do”.

    Sometimes, people have to learn the hard way, more often than not. Perhaps some of the nation’s young people will look elsewhere than Jon Stewart and other late night talk show hosts for their political information next time around.

  • Carter will never get another “shot” at ruining us. Obama may be given four more years to finish us off.

    There were a lot of bad presidents. Obama sets the standard.

    Make no mistake. It’s not only his destructive ideology and incompetence, add dishonesty and ill-disguised calls for violence.

    New Harris poll: 51 – 49: Ron Paul over Obama.

    You can fool some of the people . . .

  • I remember those years as well. So do most of the regulars here. If Darwin or Paul Zummo do not mind an unsolicited suggestion and want a sense of the feel of contemplating public life at that time, the movie Americathon or Ann Beattie’s novel Falling in Place might be helpful toward that end.

    I think one problem people have in recalling the Carter years has to do with a pervasive anxiety that dissipated after 1982. There was tremendous and unanticipated social entropy after 1958 manifest in all spheres. Things fall apart and everything looks absurd. Few people, even very perceptive and intelligent men like my father, had an idea where the bottom was. Around about 1982, the bottom showed up, for the most part. There has continued to be decay in one important sphere (attitudes toward sex and family life), but other than that, we could feel the bottom.

    I think Jimmy Carter came very close to derailing the American economy

    Just what does that phrase mean in terms of measurable results? We had a brief and mild recession in 1980 (in an economy that was otherwise growing); the labor market was not in the best of shape, but unemployment rates never exceeded 7.5%; the troubles in the banking system (savings banks losing money on their loan portfolios and money center banks with uncollectable sovereign loans) were as yet not manifest; there was an eruption in commodity prices in 1979-80, but such eruptions happen without much regard to public policy and households can (and did) adjust; and we had chronic problems with currency erosion, as we had had since 1966. Much of the inflation experienced in 1979 and 1980 was a temporary phenomenon, but there was a baseline of about 8 or 9% in annual consumer price increases. It was a problem that could have been and should have been addressed, but re-stabilizing prices need not cause an economic depression and it was accomplished here without one.

    The man who accomplished that was Paul Volcker, and if you wish to undertake counter-factual speculation as to what would have happened had Mr. Carter been returned to office in 1980, you do need to take account of the fact that Mr. Carter appointed Mr. Volcker.

    and placed us on a very dangerous path where his weakness and dithering encouraged Soviet adventurism.

    I imagine that was part of it. Prestige – your reputation for power – is an asset. Mr. Carter dissipated a certain amount of it. Since leaving office, Mr. Carter has manifested a bourbonish learnt-nothing-and-forgot-nothing aspect to him. However, at the time, he was willing to make adjustments in the face of circumstances and in the face of failures (something Obama does not do). That included putting the military budget on an upward trajectory, planning a commando raid in Iran, unloading first Andrew Young and then Cyrus Vance, and beginning a military aid program to counter the red insurgency in El Salvador. Appointing Paul Volcker, an experienced central banker with a radically different view of monetary policy than his predecessor, was another act of reassessment.

  • Ron Paul over Obama by 51-49? Really?!!? I’d take that one with a boatload of salt…

  • “Expect more blaming of the American people from our Excuse Maker in Chief as his administration …”
    It took him some search time for the word ‘country’ after he said ‘great – uh’ in the video. Symptomatic of malaise, too, considering his title.
    Abominable is his ever so dead-eyed, ‘righteous’ castigation of only certain sectors of the American people, not even the American people as a whole, thus developing good guy-bad guy mentality into a voting block where good and bad become meaningless. The psychic wounds inflicted, one way or the other, on all the American people of whom he is President, will probably be festering by mid-2012. The bandages offered will probably be in shades of gray.

  • President Carter was man enough to sacrifice his presidency for the good of the American economy. No presidency could have survived the bloodletting remedy that Mr Volcker applied. It was the retrenchment of the economy achieved at the tail end of the Carter presidency that gave the US the leaness to spring forward. For Afghanistan, Carter had offered a mere $400 million to Zia-ulHaq, which he derisively dismissed as ‘peanuts’. Ronald Reagan blundered in with his billions and CIA training, thus ensuring that the rise of militant Islam followed the the end of Communism. The Reaganites were played like a violin by the Saudis and the Pakistanis. It cannot be denied that the Communists in Afghanistan tried to make a go of it through education and improved healthcare. The Islamists would have none of it. President Carter was basically a decent man who became embittered in his later years. Now Obama on the other hand is without doubt the least qualified, most vacuous man ever to be President. This is perhaps all for the good, as he has the moral and historic sense of an Alinsky agitator. The saving grace here is that unlike the legendary agitators he lacks the ability to carry through his all plans. As the saying goes, God takes of little children and the USA.

  • Carter sacrificed nothing Ivan. He had absolutely no clue about the economy or what Volcker’s policies would lead to. His appointment of Volcker was done reluctantly and under pressure from Wall Street. His first pick for the Fed, G. William Miller, believed that inflation was a necessary product of “priming the pump” of the economy, and fought against raising the interest rates of the Fed. That Carter had little understanding of the issues involved is demonstrated by the fact that he made Miller his Treasury Secretary as an inducement for him to leave the Fed so that he could appoint Volcker, thereby ensuring that Treasury policy and Fed policy would be at war with each other during the remainder of his administration.

    There is a revisionist view that it was the tax cuts of Reagan, and not Volcker’s policies, that actually produced the reduction in inflation:

    http://www.forbes.com/sites/briandomitrovic/2011/02/07/volcker-and-the-reagan-legacy/2/

    I do not know that I accept that, but it is true that what Volcker was doing had proven counter-productive until combined with the Reagan tax cuts of 1981. Certainly since Reagan tax cuts have not proven to be inflationary in the US, contrary to the dogma of many economists prior to Reagan. Additionally, Volcker did not fully clamp down on the money supply until Reagan had defeated Carter/

    As for Afghanistan, your misreading of history is complete. The Soviet imposed puppet regime was despised by almost the entire Afghani population. The Afghanis were going to be fighting in any case and the US simply assured that they would be doing so with something better than the leftovers from the Anglo-Afghani wars of the nineteenth century. The rise of the Islamic militants has nothing to do with US aid. Bin Laden and his cronies were products of Saudi Arabia and Bin Laden’s involvement in Afghanistan had nothing to do with the US effort. The Taliban came into being just before Soviet withdrawal in 1992, and were a completely indigenous Afghan creation. To blame US aid for them is fanciful.

  • Donald, that the communists were hated is true. The Reaganites clearly saw it as a godsend to create the USSR’s Vietnam. It is perhaps understandable that the Americans were itching for payback. But it does not excuse the Americans of their folly in proping up an evil Islamist military regime in neighbouring Pakistan, which has now metastasised into perhaps the greatest menace to peace. The foundation for all this was laid right under Reagan’s nose by Zia-ulHaq. Any Indian (such as myself) could have told Weinberger and co. even then that the road to peace in Afghanistan runs through Pakistan.

  • No presidency could have survived the bloodletting remedy that Mr Volcker applied.

    Ivan, you seem to have forgotten that Mr. Reagan was returned to office with 58% of the vote. I think that qualifies as ‘surviving’.

    There is a revisionist view that it was the tax cuts of Reagan, and not Volcker’s policies, that actually produced the reduction in inflation:

    The “revisionist view” is nonsense. Inflation is a monetary phenomenon, though the effects of monetary policy are intermediated through the real economy. Unless it is someone’s contention that tax cuts increase households’ propensity to hold cash balances or increase banks’ propensity to hold reserves, I cannot see how tax cuts would promote price stability. That aside, the timeline alone is incongruent with such a thesis. The tax cuts were implemented over a three year span of time with just 20% of the proportionate reduction implemented in the first year. Re-stabilization of prices had been completed by the fall of 1982 and the Federal Reserve was already relaxing monetary policy.

    For Afghanistan, Carter had offered a mere $400 million to Zia-ulHaq, which he derisively dismissed as ‘peanuts’. Ronald Reagan blundered in with his billions and CIA training,

    You are conflating two separate programs. The Carter Administration did offer Zia an aid program, quite publicly and explicitly. It also began a covert program of equipping the extant insurgency in Afghanistan.

    As for Mr. Volcker’s medicine, they began in the fall of 1979 with targets for the growth of monetary aggregates (the monetary base, M1, M2, M3). Mr. Carter insisted in March of 1980 that he replace this with a policy of credit controls because the country was heading into a recession during an election year. He re-imposed the original policy, with Mr. Reagan’s blessing, when Mr. Carter left office.

  • I was in school and learned my (little, paltry amount of) economics before they screwed up everything and decided economics was studying about everyone getting something for nothing, i.e., free lunch/income redistribution.

    Yer second worst POTUS somehow managed the impossible. His fiscal actions (spending and taxation) and whatever influence (full employment with stable prices with social spending) he exerted on the Fed, resulted in rampant inflation and rampant unemployment.

    Obama says we are soft.

    Obama Day-One Today
    Poverty 13% 14%

    Unemploy Really 14% 16%

    Median Income $52,000 $49,400

    Jobs 142,200,000 139,600,000

    Inflation 0% 3.77%

    Gasolinbe $1.82
    It wasn’t Carter’s fault. He couldn’t have done it all by his little self. He had 30 or 40 years of Dem Congresses and the Great Society unproductive additions to money supplies and cost push inflation from the Cold and Vietnam Wars, and it was Nixon’s, no Ford’s, no Eisenhower’s faults . . .

    He signed Humphrey-Hawkins in 1978, that improved the 1946 Full Employment Act. It politicized the Fed and set hard economic goals that run against each other. It confused full employment with price stability with trade balances with halitosis, all of which often move in opposite, uncorrelated or divergent directions and magnitudes.

    And, the global terror war against us would have never happened if he hadn’t “sold down the river” the Shah to be replaced by fanatical terrorists: in the name of fairness?

  • My general sense of Carter was that he was a nice guy. He seemed thoughtful.

  • Carter was and is pat a mean-spirited sanctimonious little twerp. I have written on this aspect of his character before:

    http://the-american-catholic.com/2009/12/12/jimmy-carter-anti-catholic-bigot/

  • Ivan is off base regarding the rise of militant Islam. Militant Islam as we face it today was originally fueled by Hitler, who had his mufti, as Rabbi Davis so clearly explained in his book about Pope Pius XII. That mufti was Yasser Arafat’s uncle.

    The USSR was one of the chief sources of funding and support for the PLO. The USSR helped instigate the 1973 Six Day War by providing fake intelligence to Arab states in the hope that they would destroy Israel.

    Past policies from several administrations led to the Shah taking power in Iran and to his brutal holding of that power. What replaced the Shah is far worse. Iran has been a terrorist client state for more than 30 years. Their support of Hezbollah is proof.

    Jimmy Carter was not a nice guy. He is, even today, a mean spirited and spiteful man. Yes, Carter appointed Volcker. Yes, Carter signed legislation to begin deregulation of so many parts of the economy. Yet, Carter and the arrogant beyond belief Democrat Congress wrecked the economy and emaciated the military.

    Reagan was not played by Pakistan or Saudi Arabia. They helped the Reagan Administration get rid of the brutal Soviet occupation of Afghanistan. In retrospect, the Western world did nothing to help Afghanistan after the USSR left. The USSR should have been compelled to pay war reparations to Afghanistan, but the West was too wimpy to back the old Soviet codgers into a corner. The power vacuum that filled Afghanistan should be blamed primarily on the Soviet invasion that caused so much death and destruction.

    Obumbler is truly Malaise, Part II. The four years of the Nancy Pelosi controlled House are four of the worst years economically the USA has ever faced.

  • More revisionism regarding Volcker’s role in defeating inflation:

    It is twaddle from beginning to end.

    Carter was and is pat a mean-spirited sanctimonious little twerp.

    C’mon, Donald. He has managed to stay married for sixty-odd years; his children are among the least embarrassing of presidential offspring; and, other than Gerald Ford, no occupant of that office in the last 40-odd years has been so free from being sliced up by his employees after the fact. He cannot be that bad.

    He has some character and personality defects. He has some virtues as well. Musn’t overdo it.

  • “He has managed to stay married for sixty-odd years”

    I rejoice that he and the “Steel Magnolia” kept each other out of the marital market. I recall her comment that Reagan made people “comfortable in their prejudices”. Considering the history of the Carter family and blacks, I found that rich.

    Carter of course has always been quite willing to accuse political opponents of being racists:

    http://www.americanthinker.com/2009/09/jimmy_carters_sanctimonious_gu.html

    These comments by former secret service agents are on a par with numerous others who had the misfortune to work under Carter:

    “But the president subject to the greatest scorn is Jimmy Carter.

    Carter is portrayed as a phony according to the agents interviewed by Kessler. Carter would put on a show for the public to convey himself as a common man, but it was never anymore than an act. For instance, we are told that when Carter would make a point of carrying his own luggage in front of the press, he was really carrying empty bags. He expected others to carry his real luggage. Unfriendly, Carter “didn’t want the police officers and agents looking at him or speaking to him when he went to the [Oval] office,” explained an assistant White House usher. “The only time I saw a smile on Carter’s face was when the cameras were going,” one former agent told Kessler.

    After his presidency, Kessler reports that when Carter would stay at a townhouse maintained for former presidents in D.C., he would take down pictures of other presidents and put up more pictures of himself! “The Carters were the biggest liars in the world,” one agent told Kessler of the Carter era.

    Carter, not surprisingly, denied to Kessler through a lawyer many of the allegations in the book.

    The man who sent Carter packing from the White House could not have been more different according to accounts from agents. Ronald Reagan would constantly interact with his secret service agents and other staffers who worked for him. He was apologetic when he would take secret service agents away from their families on holidays. While Carter would make secret service agents pay for any leftover food they consumed after White House parties, we are told Reagan would insist the secret service eat leftover food (without charge, of course).”

    http://www.northstarnational.com/2009/10/14/secret-service-agent-opens-window-private-lives-presidents/

  • This fellow Kessler is an ‘investigative reporter’ currently employed by Newsmax. Scandal is what his stock and trade is. He is in scant danger of a defamation suit if he makes stuff up out of whole cloth. (Here he is passing along the anonymous gossip of supposed Secret Service agents). This is the sort of thing properly taken with a large hunk of rock salt.

  • Art Deco, isn’t targeting the M1, M2 and M3 growth simply a fancy and as it turned out a blunderbuss way of achieving credit control? President Carter was a successful businessman and a nuclear engineer. He probably felt that the claims of the monetarists to be able to fine tune a complex plant like the economy were bogus. He re-imposed the original policy, with Mr. Reagan’s blessing, when Mr. Carter left office. Mr Reagan would not have been too unhappy with this seeing that that the next electoral test – the midterm – was a full two years away. I come from a country where elections turn on the price of onions; timing the recovery is everything. The Reagan Democrats were looking for a robust response to the likes of Iran; they were prepared to accept some incidental pain to see it through. Overall President Reagan was a better leader through his sunny optimism and an ability to quickly learn from his mistakes. But he failed bigtime in Afghanistan, though the poor man was probably not even aware of it.

    Penguin Fan, the final cause of militant Islam is the Islamic religion itself. Nonetheless it could have done without proximate American help. Pakistan had giddy dreams over Central Asia which the American sponsored through their naivete. We Indians made matters worse with our sanctimonious lectures and congenital hypocrisy.
    The USSR should have been compelled to pay war reparations to Afghanistan…

    Go easy on this: haven’t they suffered enough already through fatuous and at times cynical American “advice”.

  • The last link does not work. Try this if required:

    Go easy on this: haven’t they suffered enough already through fatuous and at times cynical American “advice”.

  • Kessler is indeed an investigative reporter Art who in his career has worked at the Boston Herald, the Wall Street Journal and fifteen years at the Washington Post. Your sneer at his credentials is unwarranted.

    http://en.wikipedia.org/wiki/Ronald_Kessler

  • The reference to Newsmax was for identification only (though the site has a poor reputation). It is ‘investigative reporters’ of which I am skeptical. What someone pointed out about Richard Clarke applies to anyone who writes this sort of thing – if you have no scandal, you have no book and you do not earn your advance. ‘Investigative reporter’ is a trade for people of dubious ethics for reasons inherent in how these chaps earn their living. The American Spectator and Gary Aldrich were taken to task for trading in gossip about the Clinton’s and their entourage. The thing was, the state troopers who fingered Mrs. Clinton as a terror to work for put their names on it and Aldrich was a witness to much of what he described. This fellow Kessler is trading in what career civil servants supposedly told him. Journalists reviewing the book grant other journalists professional courtesies (which Aldrich did not receive), such as not raising the possibility that much of it could be fabricated by the author or his sources. Trust car salesmen before you trust these guys.

  • Art Deco, isn’t targeting the M1, M2 and M3 growth simply a fancy and as it turned out a blunderbuss way of achieving credit control?

    Ivan,

    Targeting interest rates had been the policy of Mr. Volcker’s two predecessors. You can see where that got us. Targeting monetary aggregates succeeded in re-stabilizing prices with 19 months of continuous application. You can say it was not worth the candle (I know a leftoid economist who does). You cannot say it was an unsuccessful policy or that there was a ready alternative to the ends it sought to achieve. James Tobin was of the opinion, ca. 1980, that restabilizing prices would require a process of adjustment of 15 years in duration. The economic recovery from the end of 1982 to the spring of 1985 was so rapid the process was completed in five years.

  • Carter was and is pat a mean-spirited sanctimonious little twerp.

    One of the standard characterizations of Carter is that he was a poor president but a nice guy. As you’ve outlined, he isn’t a nice guy either. His outsized ego was in fact one of the reasons he was such a poor president, as he could never learn to appreciate that he in fact did not know everything, and this contributed to his disastrous management style. He is, simply, a jerk.

    Worst president ever? The pre- and post-Lincoln bunglers still take the cake. Pierce was invisible, Buchanan fiddled while the country tore itself apart, and Johnson’s pigheadedness destroyed any possibility of a real reconstruction effort. Johnson’s sins were in particular egregious as he lacked Lincoln’s ability to mollify the radical Republicans in Congress. So we had two extreme factions – one in the White House and one in Congress – and no clear leadership.

  • One of the standard characterizations of Carter is that he was a poor president but a nice guy. As you’ve outlined, he isn’t a nice guy either.

    I have to say that in 30-odd years of reading newspapers, I have never seen Jimmy Carter characterized as a ‘nice guy’. Mr. Ford and Mr. Reagan and the elder Mr. Bush, certainly; Mr. Nixon and Mr. Carter, no. The toothy grin aside, his public persona was fairly sober and even melancholy. The complaint that he was mean of spirit was heard from time to time as well, though it was a minority view. I do not think his ethics were much questioned, though there was the complaint (from Michael Kinsley, among others) that he had a habit of cynical reversals of policy undertaken without even acknowledging the reversal.

    Lot’s of folk are not affable. That really is not a character defect or worthy of much critical comment except among sales managers. There is no reason to savage Mr. Carter for his common-and-garden human flaws. Messrs. Kennedy, Johnson, Clinton, and even Nixon provide ample fodder for that sort of commentary.

  • Worst president ever?

    The functions of the federal government have varied so over time that I am not sure why you would attempt to evaluate them in a common pool.

  • In regard to pre Civil War presidents Paul, Buchanan will always have my top slot for worst President.

    In regard to Carter, he believes that we are currently more polarized than we were during the Civil War, indicating that he must have slept through the American history classes at Annapolis. He also states that he enjoyed a bipartisan relationship with Congress during his term of office which is simply delusional.

  • IIRC, Mr. Carter had rather cold relations with all components of Congress.

    At the time, however, roughly 20% of those in Congress had a set of policy preferences closer to the median of the opposition caucus than to the median of their own caucus. I think the use of Cadillac filibusters and holds was more sparing then, so there were more opportunites for bipartisanship of a sort than the younger Mr. Bush would have had.

43 Responses to America’s Spending Open Thread

  • I suspect this brinksmanship will have an eleventh hour resolution.
    But if not, Then what?
    Could this crisis bring down the Obama administration?

    The crisis is certainly having a major effect in financial markets around the world, not the least down-under here on the fringes of civilisation. All our exports are traded in $US, and with the $US weakening, the $NZ is at record high levels against the $US and is causing huge problems for our exporters who are the drivers of our economy, and economic recovery frome the recession – which didn’t impact on us too badly. But our people going on trips overseas, and importers are loving it, but it is having the effect of a rather undesirably large trade deficit.
    What is surprising is that the $NZ is at record strength against the $AUS as well – I think that is because the $AUS is linked so strongly to the $US, but the Aussies hardly felt the recession – their economy is booming.

    So the world is waiting with bated breath. Maybe a collapse and a fresh start may not be a bad thing. But its too complex for me – I am after all, just a simple man. 🙂

  • Could this crisis bring down the Obama administration?

    We do not have a parliamentary administration, so he stays in office for a full term until he dies, resigns, or is deposed by Congress. This last would require a two-thirds majority of the Senate, which his party controls. The 2d option would require a capacity for shame which (one suspects) eludes him. As for the first, no President under the age of 63 has ever died in office of anything but an assassin’s bullet.

  • At this point I’m hoping for no deal. Nobody comes out ahead politically but the Tea Party Republicans will probably suffer the most. We need to remove that tumor.

    On a related matter, I’m hoping that the GOP gets pledge fatigue and follows Jon Huntsman’s lead who said, “I don’t sign pledges — other than the Pledge of Allegiance and a pledge to my wife.”

  • We are a cancer? We didn’t create this mess. It was profligate spending that set the stage. It is hardly accurate or fair to blame that on those elected to trim that spending. That almost all of them are freshmen reps makes your dig particularly idiotic and ill conceived.

    I’m not all that upset. Our government works only when it is divided; when the Executive and Legislative branches tussle. This is good! This is the conversation that We the People should have had BEFORE we threw away 2 trillion dollars. Frankly, it was the unimpeded access o power that created this mess.

    No, RR, I am content to have legislators fighting for their beliefs. This is the government of America, not the Kremlinesque government of Pelosi and I’m lovin it!

  • ROTFLMAO 😆

    The demagogues and their dishonest media henchmen are spinning like tops blaming Republicans for approaching default. They cannot ( dem compromise: “my way or no way”) to agree to the GOP bill for two reasons.

    One, because it doesn’t push out the debt ceiling past the 2012 election. They are vulnerable due to their excessive spending and the deficit. Two, they cannot keep political power if their cash/graft flow is cut; e.g., the FAA is now shut down b/c the GOP cut wasteful Fed grants to airports in NV and in a few other states each equivalent to the AK “bridge to nowhere.”

    The debt ceiling probably will be raised and near term default temporarily avoided. Unless they strong-arm the rating agencies, ratings will be downgraded. Worse, we will see Greecification of the USA due to galactic levels of spending and concomitant insolvency.

    The cartoon says that in a way even a PhD in Social Justice can (but refuses to) comprehend.

    Yesterday, Gallup Poll: Approve Obama 40% (34% of Independents). Disapprove Obama – 50%. Tells me 40% of respondents either believe its the government’s sole function to provide for them, or are, one way or another, living off government largess.

    Of course, for desperate dependents and the ideologues (obama-worshiping imbeciles and idiot congress critters) they keep in power any disagreement is evil and/or pathological.

  • A united Congress with a president from the opposition works well. A divided Congress does not. You usually get pork-filled bills. Now that earmarks aren’t allowed, we just get stalemate.

  • My wife and I had about 20K in credit crd debt at one time. It had built up over the first seven years of marriage.

    A little for furnishing a house, a bit for repairs, some appliances, etc. The kids’ needs made it worse… And always, always a reason why we needed to have such and such now.

    It wasn’t until we ran up against our debt limit that we stopped making excuses.

    I feared we would never get out from under and, worse could not imagine living without access to more credit. What if we needed diapers or medicine and my check was spent? What if an appliance broke or we needed to travel for a wedding or funeral or something? So many excuses…

    But my salary IS enough. Not having access to credit has forced us to be more judicious. It has made us more the people we were meant to be, the careful stewards of those things God, in His infinite mercy, gives us.

    Five years after reaching our credit limit, we have only about 8 thousand of that debt left to pay.

    What is missing from this debate is a sense of the justness of our obligation to pay our debts.

    We borrowed money, some for critical things, some for frivolous. Now, we are saying that our salvation lies not in paying our just debts but in taking out more at whatevee terms we can reach. Like the failing nobles of Enlightenment Europe, we are begging… BEGGING the worl to take our paper in exchange for durable goods and services; knowing full and well that we have no intention of paying ot ourselves and no concern for whether our progeny will pay it or weasle out of it through trickery, theft, or bankruptcy.

    A more dishonorable and shortsighted approach is hard to imagine.

  • I’ve got a question (from someone with almost zero financial knowledge). If we pass a balanced budget amendment, does that mean the government could no longer issue bonds? Until recently these were good conservative investments. Would they disappear? I like the idea of a balanced budget amendment, just worried about the repercussions.

  • 49 states require a balanced budget. They also issue bonds.

  • I dunno. War bonds? There probably would be a feature to fund wars; emergency operations; buildings, highway systems; etc.

    I think states issue bonds to fund long term infrastructure improvements like bridges, roads, schools, tunnels. I believe they must (like you and I when we took out mortgage loans to buy our homes) must have a plan (tolls, incremental revenues, etc.) to repay the bonds with interest.

    Is state and local government debt something about which to worry?

    Nuveen a major mutual fund conglomerate selling shares in state, county, municipal (SCM) tax-free mutual funds (that buy and hold such debt securities) just obtained (shareholder vote) authority to make loans to SCM gov units that can’t pay per terms: (I think) very dangerous because the loans could be less recoverable than the past due bonds.

  • A BBA is useless. Look at Illinois. There are so many ways around it that all it does is make politicians more creative.

  • Washington D.C. …
    This is the central headquarters of the inmates who are running the asylum amock.

  • G-Veg, if you believe in the justness of paying debts, you must necessarily be for raising the debt ceiling. Going forward we need to reduce spending but right now we cannot pay our debts without raising the debt ceiling. It is mathematically impossible.

    The TPR’s rejected a $4 trillion bipartisan deal that lowers tax rates because according to Grover Norquist even broadening the tax base is a tax hike. Now we are guaranteed to get a much worse deal. Reagan is yelling from his grave, “Take the deal, you idiots!” Tell me again why anyone would support the TPR’s?

  • RR, You are going to have to do a better job explaining your position. I’m not getting it.

    It sound like you are saying we have to borrow more to pay our debts now, i.e. more debt is good because it is necessary for debt reduction… Which does not, on its face, make sense.

    I am willing to try to understand. Don’t be afraid to use a few bytes. I’ll give it as fair a hearing as I can.

  • 😀

    We have Detroit, Greece and Illinois to show us the United States in a few years.

    RR: There you go again. But, this rant is refreshing. Usually, you people lecture us on just exactly what God is yelling about in Heaven.

  • RR,
    I do not think you are correct. There is a difference between legal debts and political expectations. We do not need to raise our debt ceiling in order to pay our debts — not even remotely. Basically, the budget is composed of (i) interest and principle payments on debt, (ii) entitlement expenditures, and (iii) discretionary spending (i.e., government services ranging from the military to the Department of Education). Items (i) and (ii) are not legal debts at all, and entitlement cutbacks as well as government employee layoffs or salary reductions would probably actually firm up our credit rating. The reason that S&P is threatening a downgrade has nothing to do with the debt ceiling drama as such. No informed person believes that the US is in danger of defaulting on its bonds if the debt ceiling is not raised. Instead S&P et al are very concerned that the US is running a worsening structural deficit and eventually (i.e., in the long-term) may experience difficulty in repaying bondholders. The GOP is using the ceiling as an opportunity to negotiate exactly the kind of deal that is necessary to reassure S&P et al.

  • Detroit, Greece and Illinois.

    Throw in New Orleans in that mix, they make Baghdad look peaceful.

  • A BBA is useless. Look at Illinois. There are so many ways around it that all it does is make politicians more creative.

    It can be gamed to a degree, but it is not useless. The balance sheet of the states is far better than that of the federal government.

  • Not to nit-pick but wouldn’t we expect the states to be better off since they have abrogated their responsibilities and passed off the costs o the federal government?

  • Not to nit-pick but wouldn’t we expect the states to be better off since they have abrogated their responsibilities and passed off the costs o the federal government?

    Transfers from the federal treasury amount to about 20% of state and local expenditure. I believe they have amounted to 3% or 4% of domestic product for forty years or more, which is to say they were an environmental feature of fiscal policy-making prior to our recent economic unpleasantness. (Enormous federal deficits were not).

    The transfers in question were to fund federal initiatives various Administrations (most notably Lyndon Johnson’s) wished to channel through the states and localities. States and localities certainly lobby to defend such subsidies. I am not sure why you interpret that as having ‘abrogated their responsibilities and passed of the cost…”.

  • The GOP is using the ceiling as an opportunity to negotiate exactly the kind of deal that is necessary to reassure S&P et al.

    Heckuva job, Brownie.

  • My wife and I had about 20K in credit crd debt at one time. It had built up over the first seven years of marriage.

    That’s the problem here. People fancy public finance is equivalent to household finance.

  • Here’s what’ll happen if the debt ceiling is NEVER raised:

    The federal government receives about $200 billion a month in tax revenue. It spends about $330 billion/month. On 8/3, Social Security checks are supposed to go out but there won’t be enough money. Barclays says there’s enough money for this week’s checks and so we have until 8/10. Either way, soon we would need to cut spending by 40%. Non-defense discretionary spending is only 20% of total spending and includes things like the FAA, border patrol, DOJ, and VA. So even if we create domestic anarchy, we still need to cut entitlements and/or defense. Cutting all of defense gets us close. That means not paying troops anymore and contractors would have to donate supplies. Personally, I think it’s immoral not to pay current troops what you already promised them. In the long-run, we would have a truly volunteer army working for donations. Or we can cut all of Medicare+Medicaid or all of Social Security. For something like 20% of the elderly, Social Security is their only source of income. That means, they’ll all have to live off donations alone. Remember we already cut all discretionary spending so there is no welfare. Personally, I want to abolish these entitlement programs and replace them with tax credits but that still requires money.

    If we manage to cut spending by 40%, we still have our existing debt to deal with. We will have enough to pay the interest but not enough to pay the $500 billion/month in principal. The Treasury can reissue debt as it matures but since there’s no way that $200 billion can pay $500 billion, investors will demand higher interest rates for the risk of default. The interest rate will increase indefinitely until there’s not enough to pay the interest itself. At that point, there is no choice but to default. Even if the debt ceiling is eventually raised, if it’s after interest rates have gone up, we will have had to pay more interest in exchange for nothing.

    I’m all for cutting spending and shrinking government but we can’t in the short term without defaulting on our debt. We need to continue borrowing until revenue can pay off the principal. You can’t pay $500 billion with $200 billion!

  • I derailed with fedarlism comment. It is related to the subject at hand because there is much that the federal government does that should be done, if at all, by the states. That is a different battle for another day so I retract the omment.

    As to the theory that public finance and personal finance are insuffiiently similar to carry over principles, I am not convinced.

    You make a bold claim above but you offer insufficient explanation for me to know if I agree or not. I fail to see how life experience is not relevant to the analysis of public policy, for, if it is, then we better get cracking on producing Philosopher Kings to rule us.

    I Have learned to avoid unnecessary debt and nothing I’ve read coninces me hat that life lesson is inapplicable to the present discussion. Without formal economics training, I am relying primarily on the analyses of The Economist, The Philadehia Inquirer, Fox News, The American Caholic, and on-line resources on Keanes and Hayek. If this isn’t enough for me to reasonably analyze the problem, our Republic is doomed.

  • And now it’s all moot. Now let’s criticize the TPR’s for what they did wrong. The deal is $2.1-2.4 trillion in cuts and probably no revenue increases. That’s just depressingly inadequate. The plans that the TPR’s rejected were in the $4 trillion range. $3.5 trillion in spending cuts and $500 billion in revenue increases. The revenue increases would not come from higher tax rates. In fact tax rates would fall and flatten. Instead the revenue would come from eliminating deductions. No rational conservative rejects a deal like that. I’ve read legitimate criticisms of the plan from the right but they were about likelihood of adoption, not the goals themselves.

  • RR, Thank you for presenting as clear a statement as I could have asked for. I’m off to bed but will mull your statement on the ride in on the morrow. Pax, G-veg

  • I will also add that by failing to reach a deal on tax reform, the TPR’s have guaranteed a tax hike next year when the Bush/Obama cuts expire. Completely irrational.

  • What lying liberals call tax reform are tax hikes.

    Sure and you’re not increasing rates. You’re decreasing the amount of our earned money that big government will let us keep.

    Philosophical divide: obama-worshiping geniuses want political power concomitant with big government/social democrat welfare state.

    We the hobbits want prosperity.

    The deficit would resolve itself if 15,000,000 people had private sector jobs (taxes take $$ from the private sector) and the GDP was growing at better than 0.4%.

    But, due to Obama’s job killing politics the US likely is falling back into recession.

  • Sure and you’re not increasing rates. You’re decreasing the amount of our earned money that big government will let us keep.

    The various and sundry deductions and exepmtions are subsidies for particular economic sectors. Economic efficiency is enhanced by excising the subsidies.

    Again, federal tax collections as a proportion of gross domestic product are at a 50-odd year low.

  • entitlement cutbacks as well as government employee layoffs or salary reductions would probably actually firm up our credit rating

    If they don’t kill the economy first. There’s a difference between spending cuts done gradually with deliberation as part of a strategy, and gov’t spending dropping off a cliff overnight because we can’t borrow to pay for all of our discretionary spending. Maybe they need to watch that Douglas Holtz Eakin video again, but the Tea Party doesn’t seem to understand that difference. Sure, we wouldn’t default, and we’d probably pay seniors their SS and Medicare payments to the extent possible. But everything else would dry up instantly – millions of people effectively not paid (read: unemployed) overnight. That’s not sticking to conservative principles, that’s insanity.

  • but the Tea Party doesn’t seem to understand that difference

    That an irate citizen holding up a hand-painted sign misunderstands issues for which he does not have everyday responsibility is to be expected. That a bloc of sixty-odd federal legislators behaves as if basic arithmetic is beyond them, behaves as if competing interests holding institutional trump cards can be blackmailed or ignored, and behaves as if the consequences of bad stewardship are naught if they wish them to be naught is most distressing. The thing is, ordinary political processes have been unable to translate the inchoate resistance to the Democratic Party into constructive efforts at public policy. Is it our institutions, our political culture, or both?

  • With respect, aren’t we being unfair to the Tea Party Republicans?

    A deal was reached. The process was messy and the results are mixed but that is how this is supposed to work. This back and forth, as unpleasant as it is, is proper for a republic.

    I thought a lot about RR’s comments and re-read the thread several times.

    I am out of my element and lack the competence to determine good fiscal policy. I do not understand why principles of thrift and fiscal responsibility that are essential to the my family’s financial health are inapplicable to discussions of fiscal policy. I have followed, as much as I have been able, the competing policy views and see merit in both, though I favor Hayek.

    This realization troubles me for I am not a dumb man and am fairly tuned in to current events. That I am not competent to determine what is good for our country is a problem because my meagre skills and knowledge is representative of a meaningful portion of our citizens. Since our representatives, at all levels, are drawn from just such people, it is likely that many of them also lack the knowledge and skills to discover good policy.

    This is to say that Art Deco and the other persons with expertise in these matters have to lead us by the nose and, meaning no disrespect, I am not one who likes to be led like a pack horse, which is what I’m feeling like right now.

    For all of their expertise, the experts have led us to what seems like an unsustainable debt, an economy that produces almost nothing, and a dollar that the world is trying to discard as a basic currency. Joblessness abounds. Real inflation is on the rise, though hidden through accounting tricks. Our cities are in shambles, our roads and bridges are failing and there is no money to rebuild them, and the largest generation in history is moving into a retirement that will impoverish the generations that come after.

    Forgive me for pointing it out, but the experts don’t seem to have done all that well.

    Despite all of this, we are attacking 40 or so Tea Party Republicans and 10 or so Blue Dog Democrats for insisting that incurring more debt be accompanied by an honest attempt to curb expenses.

    Maybe they are wrong. Maybe they are just as dumb and ignorant as I am – latching onto ideas from their experience like “only buy things for which you have money,” “don’t buy things for which you have no need,” or “the first step to getting out of a hole is to stop digging.”

    But it must be fair to ask what the deal would have looked like if the House GOP leadership, the Senate leaders of both parties, and the White House had been left to their own devices. Do you honestly believe that the establishment that incurred 3 trillion in debt in five years would have hesitated to incur more without making any effort to address the debt itself?

    I may be uncomfortable with the stock index but I’m pretty comfortable with the Constitution.

    The Framers understood full and well that the interests of many parties collide in a political sphere and that divided power and conflict within that sphere preserves the liberty and security of those outside of that sphere. What we saw this last month in Washington was a thing of beauty. It was raw and honest and loud. It was the kind of debate that is supposed to be occurring every single time a complex issue comes up.

    For all of our ignorance, we pushed the establishment to do what it absolutely didn’t want to do – discuss and debate. This month harkens back to what our brothers did in Boston on December 16, 1773 and I am proud to call myself a Tea Party Republican because of it.

  • G-Veg, I am not an expert. However, I can do basic arithmetic.

    It is certainly necessary and proper (barring a banking crisis or a war of national mobilization) that the rate of increase in outstanding public debt be less than the rate of increase in nominal gross domestic product (capital investments in public works being of scant importance at the federal level). The Republican caucus in toto has been implacable in their opposition to any tax increase. Extra-parliamentary TEA partisans (and about 10% of the House Republican caucus) have insisted the debt limit not be raised. The question at hand is thus whether or not you attempt to repair public finances by an abrupt 40% cut in federal expenditure.

    It is a reasonable inference from the experience of the last two years that those who said that fiscal stimulus via public expenditure would prove to be weak tea were correct. However, you are all proposing an abrupt 10% cut in aggregate demand. Even with a weak multiplier, that will result in a severe recession, perhaps half-again as that suffered in 2008-09. Said recession will injure tax collections. Ergo, you will still have a deficit (but no authority to borrow).

    I had a discussion in a forum just like this some days ago where I offered the following:

    1. You cannot welsh on federal debt service;
    2. Benefits to the elderly are properly cut gradually on a cohort-by-cohort basis, because those benefits have been incorporated into their long-range planning and they have a limited capacity to adjust.
    3. These things being the case if you want to get by without a tax increase, you have to cut the share of domestic product allocated to everything else by about two-thirds.

    His response was: go ahead and do it. After a run of caterwauling about the splendors of Ronald Reagan’s tax cuts (not acknowledging that the federal tax take is now a lower share of domestic product than was the case in 1984) and the terrible burden of federal taxes on small business (I think federal excises and payroll taxes claim about 3% of the revenues of unincorporated businesses), he was willing to demobilize two-thirds of the military in the midst of a war and can two-thirds of the customs and border constabulary rather than accept one dime in tax increases. Attitudinizing and foolishness are not worth a pitcher of spit.

  • “Attitudinizing and foolishness are not worth a pitcher of spit.”

    I have to admit, though, it is bleakly humorous: folks who see the Hand of Alinsky everywhere have adopted the “Burn, Baby, Burn!” mindset of Saul’s comrades.

  • Attitudinizing… I had to look that up.

    Hand of Alinsky… I had to look that up too.

    Having looked them up, I confess that I don’t get their relevance to the discussion at hand. I don’t care all that much about some other commenter on some other blog. Unless you are saying that I am like that commenter, in which case, I need a citation to know whether you are correct or not. Of course, you may be saying that only those Tea Party Republicans in Congress are like the commenter that you had the dispute with but, then, while I’m not offended on my own account, I admit that I don’t know whether your analysis holds up without a citation.

    Did the commenter make a complete ass of himself and did you route his arguments again and again? I’m willing to take your word for it that you did but, again, I don’t know why I should care.

    Your comments about the economic impact of a default are mirrored by many others in the mainstream media, in government, and in the blogosphere. I am must accept, at least temporarily, as reasonable what is said by many and which I cannot dispute by experience. It is insane to insist on a position merely because it is in opposition to what the majority holds as true.

    However, I don’t think the Tea Party was as you describe them. The opposition to raising the debt ceiling was on account of there being, at least initially, no effort to deal with the underlying causes of our debt. The President’s Grand Bargain failed because it included 800 billion in new revenue but no specificity as to where that revenue would come from. I truly believe that the President might have gotten that deal if he had been specific since the Blue Dogs would certainly have come over and many of the non-Tea Party GOP Members would have crossed over if specific taxes had been balanced against specific cuts… Only it wasn’t. True to form, the establishment of both parties assumed that they could craft yet another meaningless bill and then work out the details later.

    And that is the point that you haven’t addressed.

    The Tea Party Republicans are only “terrorists” as Biden described them or the idiots and posers that you describe them to be if their purpose WAS to drive the US to a default. But that never was their stated purpose. The question remains… If you believe, as you say you do, that debt reduction is necessary, do you believe that the establishment of the major parties would have crafted a deal to reduce our debt without being pushed to do so by fiscal conservatives? If so, then you can call the Tea Party whatever you wish because you are part of the problem. If not, you are being terribly unfair to precisely the group that made the policy you favor into law.

  • No, it was not you, and I do not expect you to care about the arguments I have with third parties.

    I was merely offering an example of the sort of thinking that forms the matrix within which these Republican members of Congress operate (and appears to reside in the heads of some of them): uninformed about historical tax burdens, uninformed about the coarse distribution of appropriations, and insouciant about the consequences of what they are (implicitly or explicitly) advocating. They have taken their stand and they’re sticking to it. Regrettably, their stand does not derive from even a cursory study of what the government does and does not do. It derives (best I can see) from a lump of resentment about their personal tax payments and a somewhat potted understanding of the economic history of the 1980s. It is not concerned with the relationship between ends and means or even any ends beyond ‘no tax increase’.

  • Attitudinizing… I had to look that up.

    Don’t feel bad, Art has sent me running for the dictionary on more than a few occasions.

  • But, isn’t the “starve the beast” idea a pretty old one? The view that government, particularly the federal government, will never limit its power, size, or consumption voluntarilly, has been floating around for a long time. The wastefullness of TARP and other programs over the last five years has given, at least in my opinion, reasonable men good and sufficient cause to conclude that the government will spend, spend, spend, and spend so long as the credit limit can be raised. Isn’t it a good thing to have a couple dozen representatives in Congress who refuse to feed that bloated hog we call the federal government?

  • “Detroit, Greece and Illinois.

    Throw in New Orleans in that mix, they make Baghdad look peaceful.”

    Well, if Greece-style or Detroit-style or even New Orleans-style rioting/looting breaks out in Springfield, let me know, ’cause I sure haven’t seen it. Our state employees — even the unionized ones — seem to be much better behaved than those in Greece, or even in Wisconsin, because despite recent attempts to rein in their pay raises and benefits (yes, serious attempts to do so have been made, by a Democratic governor, no less) I see no indication of massive civil unrest breaking out in our capital any time soon. At least not until the State Fair Twilight Parade starts 🙂

  • The debate can be analogized to personal finances though there are important differences.

    The federal government cannot stay alive and pay the minimum on its credit card payments so it’s needs to default or borrow even more. In personal finance, the choices are bankruptcy or taking out another credit card. Cutting spending alone is not an option because you can’t cut enough right now to pay creditors. If you can create a budget surplus over time (e.g., because you’re moving into a smaller house next month or getting a raise), it would be wise to take out another credit card to avoid immediate bankruptcy.

    The government has more control over its finances than individuals because it not only controls spending but also revenue. So as long as there’s a chance of a budget surplus in the long run, it makes sense to avoid default now.

  • RR, That makes perfect sense. I think the final product accomplished this. Perhaps what I have been missing is the critique that the Tea Party Republicans won’t consider taxes to increase revenue.

    I understand why tax increases seem important. Honest men can disagree about this point without offense though. In the context of this last month’s debates, the refusal to accept unspecified revenue increases in exchange for an equal amount of unspecified spending cuts, does not seem unreasonable.

    The agreement reached seems to vindicate the position that the original Grand Bargain was not the only possible remedy. Since the Tea Party position is reasonable, it cannot be that we are too far from the mainstream to have a legitimate position at the table.

    I liken it to the position of the Anti-Federalists: though they lost, their contribution was substantial and, but for their dogged insistance on the enshrining of individual and states’ rights in the Constitution, we would be a very different nation. Similarly, the mere presence of uncompromising fiscal conservatives in the debate has already produced a better agreement for digging ourselves out of this hole.

  • G-Veg: I was referring to Art’s third party debate partner, not you. And to more than a few of the comments I’ve seen on conservative websites, courting financial chaos with relish.

  • My wife subscribes to Free Republic. I have mixed feelings about the content. They do a pretty good job of calling commenters on racist, xenophobic, and otherwise anti-social stuff but it is definately a “consumer beware” environment since there is little attribution and the back-and-forth can feed an unhealthy “slash and burn” mentality to politics and economics. If you are thinking of that stuff, I’m with you. But then, it isn’t meant to be taken as representative of any particular political group or body.

    I appreciate those websites as a bastion of free speech as it was meant to be: raw, candid, unvarnished, “pure” in the sense that it gets to the heart of the writers’ feelings and such.

General Petraeus Replaces General McChrystal, Obamas Presidency on the Brink

Thursday, June 24, AD 2010

President Obama has replaced General McChrystal with General Petraeus.

I haven’t really thought too much about General McChrystal’s comments regarding President Obama, but I am of the mind that American generals should have complete respect for the authority and the office of the presidency while in uniform.  We are the United States of America, not a second rate banana republic.

General McChrystal should have been smarter than to express his negative opinions of President Obama, though harmless, it is a small step towards chipping away of the established civilian controlled military.

I am almost feeling sorry for my fellow Hawaiian Barry Obama.  His healthcare push has grinded to halt his legislative agenda and the oil spill is ruining his presidency.  He’s certain to lose one or both houses of congress this November and then General McChrystal’s expresses his private sentiments of an inexperienced presidency which most Americans are coming around to view him as.

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13 Responses to General Petraeus Replaces General McChrystal, Obamas Presidency on the Brink

  • It’s hard to image things getting better for the community organizer.

  • His arrogance and know-it-all attitude will do him in if the GOP takes one or both houses of congress.

    Clinton at least is a pragmatist.

    I see Obama shooting his foot and his mouth off.

    He’ll be like the Arabs, I mean, “Palestinians”, he’ll never miss an opportunity to miss an opportunity.

  • Obama’s presidency on the brink? He just neutralized the greatest potential 2012 threat, David Petraeus, without spending any political capital. Obama is happy.

  • I doubt if Petraeus has any political ambitions. If he had, he wouldn’t have taken the assignment. I assume Petraeus thinks he can turn the tide in Afghanistan as he did in Iraq, and I pray that he can.

  • Our great, presidential genius:

    V.D. Hanson: “It is one of ironies of our present warped climate that Petraeus will face far less criticism from the media and politicians than during 2007–8 (there will be no more “General Betray Us” ads or “suspension of disbelief” ridicule), because his success this time will reflect well on Obama rather than George Bush. It is a further irony that Obama is surging with Petraeus despite not long ago declaring that such a strategy and such a commander were failures in Iraq. And it is an even further irony that he is now rightly calling for “common purpose” when — again not long ago, at a critical juncture in Iraq — Obama himself, for partisan purposes on the campaign trail, had no interest in the common purpose of military success in Iraq.”

  • I predict the following news item in June 2013, “Former President Obama indicted on corruption, fraud and tax charges.”

    That would be in addition to the “war crimes” charges Move-On.org brings in World Court.

    At least then, he’ll be able to wear his “Che” T-shirts.

  • He should have expected this, I know I did. If General McChrystal worked in the private sector, he would have been fired a long time ago.

  • I don’t believe Obama is on the brink as the headline says. In fact, I can think of no obvious reason yet to believe he won’t be re-elected.

  • “I don’t believe Obama is on the brink as the headline says. In fact, I can think of no obvious reason yet to believe he won’t be re-elected.”

    http://www.gallup.com/poll/140810/voters-split-obama-election-2012.aspx

  • “I can think of no obvious reason yet . . . ”

    Some obscure reasons:

    17% Real unemployment

    5,000,000 more home forelosures

    Wars unending

    Assassinations of innocent people by drones

    Gitmo still operating

    Oil spill to end all oil spills

    Inspector General-gate

    Bankrupt union pension funds

    Bankrupt community hospitals closings

    Bankrupt school districts

    Bankrupt cities

    Bankrupt counties

    Bankrupt states

    Rezko

    Blagoyevich

    Does anyone know why the solution to the most urgent, gravest health care crisis, i.e., state control over health is held in abeyance until 2013? Does it have anything to do with November 2012 would have given we the people two years of that mare’s nest?

  • I thought to add my $.02 here. I posted a critical commentary of my own at Vox-Nova:

    http://vox-nova.com/2010/06/24/whatever-is-necessary-obama-defends-war-again/

    Peace,

    Sam

  • There are a lot of scenarios in which President Obama would get elected to a second term. One foreign policy success, a forgotten oil spill, and two years of campaigning against a do-nothing Republican Congress, combined with a lousy Republican presidential candidate who fails to inspire his own party while scaring the frustrated Democrats back in line…tell me that isn’t winnable for him.

  • To those who disagree with what I wrote: none of that matters if the GOP fails to post a good nominee; ie Clinton in ’96 and Bush in ’04. We have not reached an “anyody but Obama” stage yet.

    In fact, I will say that if the GOP takes back even just one house of Congress, his reelection prospects improve.

    Do not underestimate him, the power of incumency or the dedication of his supporters. And, if a new war or big military action occurs the nation might support him into a second term.

    Polls schmoll

6 Responses to Is Barry, Jimmy?

  • Jimmy looks exceptionally good by comparison.

    Jimmy mismanaged inflation and unemployment adding up to horrendous “misery index” measures.

    Barry’s been successful in keeping unemployment so high that no one has cash to feed inflation. This is truly an outcome that had to be striven after. Barry and Ben Bernanke have destroyed the currency with expansionary monetary policy – monetized $1.25 trillion in worthless mortage papaer – and about $800 billion in fiscal stimulus, plus many hundreds of $$$ billions in TARP and bank (seems everything’s a bank excpet saloons and gas stations) debt guaranties. But, the patient expired anyhow. It appears, a dead economy doesn’t have inflation.

    Various coercive federal mortgage modification programs, tax credits, etc. have kept housing prices high and that piper must be paid before the housing construction can recover.

    The take-over of health care (no one knows how bad it will be but it will be bad) and demagoguery about raising taxes on the evil rich don’t foster economic growth and development.

    And, you know Barry’s gonna be at least as successful in saving the Gulf from the oil spill to end all oil spill.

    We’re screwed.

    Oh, I blame Bush.

  • No, Tito, Barry is not Jimmy. Jimmy was a largely good and honorable man who did not get us into any wars and stayed out of the internal affairs of other nations even if they were ruled by despots the US previously propped up in the past.

    Rather, I like the John Stewart segment the other night that showed that Barry is just becomming Bush III.
    http://www.thedailyshow.com/watch/tue-june-15-2010/respect-my-authoritah

  • “Jimmy was a largely good and honorable man who did not get us into any wars and stayed out of the internal affairs of other nations even if they were ruled by despots the US previously propped up in the past.”

    Carter was a self-righteous and smug idiot who presided over a bad economy, pulled the rug out from under the Shah and thereby allowed Khomeini and his thugs to seize power, who dithered through the humiliating Iranian hostage crisis, who hollowed out our military to the extent that the failed rescue attempt of the hostages was a symbol of American impotence, and who reacted to the Soviet seizure of Afghanistan by blurting out “Brezhnev lied to me!”

  • I’m tending towards the view he’s Nixon.

    Really, the last half-century or so of Presidents blur into one another, and if anything, they should be compared by policies rather than parties.

    Even in college, I heard the argument that it should really be the Carter-Reagan years and the Bush-Clinton years, since the actual policies of those presidents were very similar.

    If you go back before that (skipping Ford, though an argument could be made for a Ford-Carter comparison), LBJ and Nixon had a lot in common, and Eisenhower and JFK had a lot in common.

    So, if we’re going for historical comparisons, Obama is more like Nixon at this point than any other president (and the Stupak scandal is far worse in principle than Watergate), though Obama as Dubya II has some weight. Indeed, about 8 years ago at this time, Rush Limbaugh was accusing Dubya of being the second coming of Nixon.

  • T. Shaw, inflation is inconsequential. The Federal Reserve responded quite appropriately to a sudden increase in the demand for real balances, which is why prices have been more-or-less stable in the last 21 months (as opposed to declining at a rate of 9% per year over the period running from 1929 to 1933).

    Mr. Carter suffers from a menu of character and personality defects, as do we all. However, he was an experienced public executive, had two serious careers before adopting politics as a profession, was more resistant to public sector borrowing than any other president in the last 50 years, and sponsored a salutary policy innovations (e.g. removal of mercantile regulations in the energy and trucking sectors).

    Recall also that he had poor relations with Congress, not because he was deficient, but because they were. It was Mr. Carter’s position that the federal courts and U.S. Attorneys’ offices were not dumping grounds for patronage; that the watersheds of this country should not be manhandled to produce brochure fodder for members of Congress; that the tax code should not be manipulated to sluice income to the oil sector, the real estate sector, and a hundred other lobbies; and that Congress ought to concern itself with matters that they cannot exploit at the next election, like future energy sources and the condition of the civil service. There is a reason a mess of our federal legislators was attempting in 1979 to draft the U.S. Senate’s chief lecher-cum-lush, and it is not a publicly defensible one.

    To date, BHO has not compared favorably to Jimmy, and I doubt he will 50 years from now.

Obama Seems Unable to Face Up to Americas Problems

Monday, March 8, AD 2010

Simon Heffer of London’s Daily Telegraph wrote this timely piece on President Obama’s inability to govern America.  Here are some snippets [emphases mine]:

It is a universal political truth that administrations do not begin to fragment when things are going well: it only happens when they go badly, and those who think they know better begin to attack those who manifestly do not. The descent of Barack Obama’s regime, characterised now by factionalism in the Democratic Party and talk of his being set to emulate Jimmy Carter as a one-term president [We can only hope], has been swift and precipitate. It was just 16 months ago that weeping men and women celebrated his victory over John McCain in the American presidential election. If they weep now, a year and six weeks into his rule, it is for different reasons.

“Obama’s big problem,” a senior Democrat told me, “is that four times as many people watch Fox News as watch CNN.” The Fox network is a remarkable cultural phenomenon which almost shocks those of us from a country where a technical rule of impartiality is applied in the broadcast media [Like the BBC is a bastion of impartiality my left foot]. With little rest, it pours out rage 24 hours a day: its message is of the construction of the socialist state, the hijacking of America by “progressives” who now dominate institutions, the indoctrination of children, the undermining of religion and the expropriation of public money for these nefarious projects. The public loves it, and it is manifestly stirring up political activism against Mr Obama, and also against those in the Republican Party who are not deemed conservatives. However, it is arguable whether the now-reorganising Right is half as effective in its assault on the President as some of Mr Obama’s own party are.

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Obamaville Shanty Towns: Tent Cities Sprouting Up Across America

Monday, December 14, AD 2009

As the recession continue to take its toll on our fellow Americans, rendering more and more of them homeless, tent cities have begun sprouting up across this great country.  It would not be fair to blame President Obama for the predicament that our nation is in, but President Obama has done nothing to help the situation.

President Obama’s ‘stimulus package’ only rewarded government contractors with more spending.  It is also correct to point out that former President George W. Bush’s ‘stimulus package’ did nothing more than President Obama’s spending bill.

Small businesses and the private sector in general got almost zero benefit for either porkulus spending bills.  Though this recession is typical of a business cycle, there are some things that can be done to alleviate the stress the economy is undergoing and maybe expedite the expiration of the current recession.  President Obama has done neither.

So it is fitting and fair to label the tent cities that are sprouting across America as Obamavilles.

(Note: In case the above YouTube video is taken down by the Blueshirts, you can see the entire story and video here.)

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23 Responses to Obamaville Shanty Towns: Tent Cities Sprouting Up Across America

  • Perhaps this can be the campaign song for Team Obama in 2012:

  • I would like to know what you think Obama could have done differently over the past year.

    There’s so much misunderstanding over the role of fiscal policy during this recession. It was precisely the huge expansion in the public deficit that counteracted the collapse in private demand, preventing huge negative growth rates, and equally dire employment numbers. Think of it this way: we went from a deficit of 2 percent of GDP in the balance between private income and spending shifted from to a surplus of over 6 per cent – in increase in private savings by 8 percent of GDP. What do you think would have happened without the fiscal crutch?

    It’s fustrating how few people get this point. I listened last night to John King lecture Larry Summers on how government debt is exploding at the very time when households are tighening the belt. Honestly, I thought this fallacy went out with Herbert Hoover! Here’s the issue: the vast majority of the increase in debt during this recession was because of the recession (lower taxes etc). In the jargon, it comes from automatic stabilizers. You work against the stabilizers, you make the recession worse. Moxt experts quite rightly felt that the depth of the collapse in private demand justified going even further than automatic stabilizers – hence the stimulus. The standing “crowding out argument” does not work in an environment when interest rates are near zero and nobody is lending (the case of a liquidity trap).

    Anyway, have a look at this post I did on what governments did right, and 4 key fallacies surrounding this recession.

  • MM,

    he vast majority of the increase in debt during this recession was because of the recession (lower taxes etc)

    Don’t you think if there was less federal government bureaucracy and programs, instead of raising taxes, that we wouldn’t have gotten to this point?

  • MM:

    Moxt experts quite rightly felt that the depth of the collapse in private demand justified going even further than automatic stabilizers – hence the stimulus.

    Except as the author rightly pointed out that the stimulus didn’t do ANYTHING. Most of the money in the Obama stimulus has yet to be spent.

    I supported TARP under the idea that despite that it would be mishandled, the banks needed shoring up. But make no mistake, there was a ton of corruption in TARP and even more under Obama’s stimulus.

  • Think of it this way: we went from a deficit of 2 percent of GDP in the balance between private income and spending shifted from to a surplus of over 6 per cent – in increase in private savings by 8 percent of GDP. What do you think would have happened without the fiscal crutch?

    My guess is that if Congress hadn’t passed a stimulus the Fed would have engaged in more quantitative easing, and we’d be pretty much where we are now. I don’t think Obama is to blame for our current troubles, but the things he’s done haven’t been particularly helpful either.

  • It also would have been nice if they had used tax cuts, or focused a higher percentage of the spending in 2009 and 2010, rather than just handing out money to every Democratic Congressperson’s favorite pork project.

  • Tito – I don’t get your point. The recession was caused by greed in the financial sector. Government softened the blow …. dramatically. And by that I mean monetary, fiscal, and financial sector policy.

  • I reckon living in a tent in Colorado in mid winter won’t be too much fun.

  • MM,

    This is a normal business cycle. Recessions occur every 5-7 years.

    To blame anyone is like throwing darts at a dartboard.

    I was just touching on the debt. Meaning that if we had less wasteful federal programs to defund the debt would be a bit more manageable.

  • John: I take your second point, but not the first. Multiplers are much larger on the expenditure than tax side. And I never got the whole “pork” thing — that’s the whole point of stimulus. Of course, it would be nice to get some socially worthwhile investments going (greening buildings, trains etc) but that’s not really the point of stimulus. The whole “pork” fetish is really an argument for good times – when you are supposed to be building your reserves to use them in times like this.

    On the tax point, Krugman just referenced some cutting edge new research suggesting that tax cuts are a really bad idea in liquidity type situations – http://krugman.blogs.nytimes.com/2009/12/14/a-new-paradox/

  • Tito,

    No, this was not a normal business cycle. It was the buggest global slowdown since the Great Depression. The fact that a meltdown was avoided comes from policymakers learning the lessons of the Great Depression (see the chart in my post).

    On your second point, it certainly makes sense to run prudent fiscal policy in good times to store up reserves for the lean years. And the debt profile today would not look so scary if we had gone into this in good shape. But we did not – the major fiscal loosenings of the last administration were not paid for – Iraq war, tax cuts for the wealthy, medicare part D expanion. Each of these added more to the debt than any single Obama initiative, and they didn’t even pretend to pay for them.

    The key fiscal challenge is that taxes are too low for teh level of desired spending. And if you disagree, you need to be willing to cut military spending or medicare – nothing else is going to cut it.

  • Blackadder, that’s possibly right, but (i) QE doesn’t come without cost; (ii) its success has been limited – again, it comes back to the fact that monetary policy has limited value in a liquidity trap.

  • MM,

    I agree with you that taxes are too low for the level of desired spending.

    Which to me means that we need to cut more federal programs.

    We have never had an income tax at all in this country, with a couple of exceptions, until the current income tax I believe was finally imposed in 1913.

    There is nothing that warrants to take people’s hard earned money.

  • Tito,

    Much as it might hurt to admit it, MM is right here. This wasn’t an ordinary business cycle.

  • Tito:

    (1) But what programs? As I said, you can’t do this without touching the military and medicare.

    (2) Your last sentence is not fully aligned with developments in Catholic social teaching, and reflects more a laissez-faire liberalism. Remember Pope John XXII: “the economic prosperity of a nation is not so much its total assets in terms of wealth and property, as the equitable division and distribution of this wealth” (Mater Et Magistra, 1961). Powerful stuff, that!!

  • MM,

    There’s room for disagreement on taxing hard working Americans and redistributing to the proletariat in Catholic Social Teaching.

    Pope John XXIII’s teaching is not set in stone nor is it mandatory.

    And by wealth he didn’t mean taxes, he meant equitable distribution, ie, opportunities to capital, resources, etc. Not take from workers and redistribute to the proletariat.

    BA,

    I’m not debating whether it’s ordinary or extraordinary (if I gave that impression, I didn’t mean to). But the fact remains it’s a business cycle that the socialist leaning Democratic Party is exploiting to further control our lives.

  • But what programs? As I said, you can’t do this without touching the military and medicare.

    Means testing Medicare and Social Security would be a start.

  • Multiplers are much larger on the expenditure than tax side.

    You will get quite an argument from some macroeconomists on that assertion.

    I would like to know what you think Obama [ie the Administation and Congress] could have done differently over the past year.

    1. Undertake a special audit of Citigroup, Bank of America, JP Morgan Chase, Wells Fargo / Wachovia, Goldman Sachs, Morgan Stanley, and GE Capital [?] to determine their authentic book value.

    2. Erect a fund of about $300 bn to compensate defined benefit pension funds and purchase preferred stock in insurance companies as needed, as these entities are abnormally invested in bank bonds.

    3. Prepare articles of incorporation for the successors of each of the foregoing. Each should have at least two successors – an ongoing business concern and a holding company which owns certain assets (illiquid securities, delinquent loans, and swaps & derivative). Citi, Bank of America and JP Morgan might have three successors: the dead asset holding company, their deposits-and-loans business, and their capital markets business.

    4. Recapitalize the aforementioned banks and investment firms through swapping debt (bonds, securitized receivables, l/t loans, &c) for equity in the successor corporations. If any one corporation retains a positive book value, it should be divided between its erstwhile creditors and equity holders; otherwise, the former bondholders, &c. get the whole enchilada.

    5. Call in all outstanding Fannie Mae and Freddie Mac debt and replace it with common stock. If necessary, agree antecedently to exchange the Fannie Mae and Freddie Mac bonds held by sovereign wealth funds abroad with U.S. Treasury debt.

    6. Suspend collection of federal payroll taxes. Phase them back in per the performance of the macroeconomy.

    7. Transfer responsibility for unemployment compensation to the federal government.

    8. Institute reductions in pay and benefits for all federal employees. Compensation would be cut each quarter in step with the decline in domestic product per capita.

    9. Remove all conditions on intergovernmental transfers from the federal government to state and local governments bar one: they have to cut the compensation of all public employees in their purview in step with the decline in per capita income in the country at large.

    10. Legislate a pre-packaged bankruptcy for General Motors, Ford, and Chrysler which would feature compensation cuts of at least a third for the workforce and legatees in return for equity shares in proportion to losses. The bondholders might get preferred stock. In lieu of making use of TARP funding, have the Federal Reserve provide a bridge loan by purchasing their commercial paper.

    11. Cut the minimum wage to $4.60 an hour.

    12. Institution a mortgage modification program along the lines suggested by Martin Feldstein (with NO means testing): those whose mortgages are held by Fannie Mae, Freddie Mac, or banks held by the FDIC might apply for a reduction in the principal equal to the fall (since they purchased the home) in the OFHEO price index for their area; in return, their chattels could be attached and their wages garnished if they defaulted.

    13. Institution of comprehensive tax reform as part of medium term planning for a return to fiscal balance: the elimination of deductions and exemptions, the gradual replacement of the payroll tax with enhanced income levies, the gradual institution of a component which taxes an index of one’s personal consumption, and a an enhanced per-dependent credit.

    14. Introduction legislation to erect a revised financial architecture some features of which might be as follows:

    a. Divestiture of subsidiaries which hold deposits domiciled abroad;

    b. Prohibitions on the ownership of financial firms by non-financial firms, or (for more than a temporary period) of non-financial firms by financial firms.

    c. Separation of deposits-and-loans banking from securities underwriting, proprietary trading (in securities, futures, options, &c.), ‘prime brokerage’, and private equity.

    d. Separation of securities underwriting from all activities other than corporate lending.

    e. Separation of proprietary trading from all other activities.

    f. Separation of prime brokerage from all other activities.

    g. Separation of private equity from all other activities.

    h. The separation of mutual funds from retail brokerage, trust companies, and treasury services firms.

    g. The separation of mid-market, corporate, and governmental lending from mortgage, farm, consumer, and small business lending. The former would be lodged in national banks which take deposits only from governments and incorporated entities; the latter would be lodged in banks which could take deposits from anyone but would constrained to operate within geographic catchments.

    h. Erection of an exchange for trading in swaps and derivatives.

    i. Prohibition of credit default swaps and insurance on securities.

    j. Prohibition on the use of credit to purchase securities other than initial public offerings; limit the ratio of margin loans in individual portfolios to one quarter of total assets; limit the permissible leverage of hedge funds accordingly;

    k. Erection an agency similar to the FDIC to act as a receiver of bankrupt securities firms and roll them up as rapidly as possible.

    l. Prohibition on the securitization of receivables.

    m. Turning Fannie and Freddie into self-liquidating entities.

    15. Postponement of action on medical insurance UNTIL THE BLOODY BANKS ARE REPAIRED.

  • Means testing Medicare and Social Security would be a start.

    Bleh.

  • socialist leaning Democratic Party

    Hillarious!!

  • Morning’s Minion writes Monday, December 14, 2009 A.D.

    “preventing huge negative growth rates”

    I have read this phrase in several places. I have not succeeded in understanding what is “a negative growth rate”. Is it shrinking?

    [I make the point chiefly to illustrate that much discussion about matters economic has similar fine-sounding nonsensical phrases].

Libs Go After Obama, Why?

Tuesday, November 24, AD 2009

In this most recent SNL skit President Obama was skewered… royally.  It’s as if the SNL writers downloaded my thoughts on President Obama’s recent Asia trip, or what is sometimes referred to as his World Apology Tour: Asia Edition, and wrote this skit

The sarcasm is biting and the humor is hilarious.

The question is, why does it seem that his base is turning on him?  Are they realizing that their previous efforts to poke fun at President Obama failed miserably so they turned it up a notch?  Or is this genuine creative license that sometimes hits or miss and in this instance it hit?  Or are they really upset with the excessive spending that President Obama is pushing for?

My guess is that it’s their creative license that finally hit its mark.  I like SNL, but watch it infrequently now that I don’t even have rabbit ears on my tv set to watch the broadcast networks.

This skit certainly got me to smile and lifted up my day ever so briefly.

The most memorable line from this skit is:

“I am noticing that each of your plans to save money involves spending even more money.”

Enjoy!

[vodpod id=Groupvideo.4001657&w=425&h=350&fv=]

(Biretta Tip: Big Hollywood)

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34 Responses to Libs Go After Obama, Why?

  • There’s clearly at least one writer on SNL’s staff with some conservative sympathies (see here and here for other examples).

  • I remember both skits. Pretty good stuff.

    The second link, that of the Olbermann spoof, was so good that Afleck personally called up Olbermann to apologize for the skit.

    What a wimp.

  • Well, this liberal thinks our president is too conservative. And while I may be the most radical person in your commentariat, there are several million Americans who have me beat.

    That said, humor sells. SNL has spoofed every president since Ford. I doubted they had enough Palin material to roll with for eight years.

  • Well, Olberman crashed the closed set while Affleck was rehearsing the sketch…which must have been a little awkward. It’s not surprising that he apologized.

  • Why John Henry, I didn’t know you read the HuffPo! 😉

  • Well, this liberal thinks our president is too conservative.

    I’ll take the bait, Todd. How so?

  • Every President of a pronounced ideological stripe tends to leave the true believers on his side unsatisfied. That was certainly the case with Reagan and many conservatives. Obama is a dream come true for many liberals and worry is growing on the Left that they aren’t getting what they want. For example:

    1. No single payer health care system.

    2. US troops aren’t out of Iraq and Afghanistan.

    3. Deep cuts in defense spending aren’t being called for.

    4. No card check.

    5. No Freedom of Choice Act.

    6. Insufficient spending by the Federal government as typified by the calls on the Left for a second stimulus package.

    7. No blanket amnesty for illegal aliens.

    8. No attempts yet to go after “right wing” talk radio through an imposition of a new Fairness Doctrine.

    9. No repeal of “Don’t Ask, Don’t Tell” or the Protection of Marriage Act.

    10. No calls to overturn the filibuster rule in the Senate.

    Partisans of the Left recognize that this is the best opportunity to enact their agenda in four decades. From where they sit Obama is blowing a golden opportunity.

  • Donald,

    I hope they do fail on this farce of a health care bill.

    Lieberman has already said absolutely, unequivocally “no” to any form, delay, etc of the public option.

    Landrieu, Nelson, and Lincoln have hostile constituencies that want NOTHING to do with more public spending.

    I will be praying hard for this bill to die quickly.

  • Wow. I had no idea Donald was a closet liberal. Are you guys going to kick him off the blog for that?

    “I’ll take the bait, Todd. How so?”

    I don’t speak for other liberals, especially the secular ones, but Mr Obama is a conservative in my view because of …

    – pro-death penalty
    – Geithner and money
    – pro-choice (it’s a forty-year status quo, after all)

    He’s just a mainstream politician, no matter how much whining others do because he’s non-GOP. Y’all make the false assumption that we 40% non-GOP and non-Dem, are all tucked in ideologically between your two big parties. Look more closely.

  • We have other Catholics that lean left on this website.

    We all have fidelity to the Magisterium.

  • “Wow. I had no idea Donald was a closet liberal.”

    One does not need to be a liberal Todd to read their sites. The disappointment with Obama is palpable on many blogs of the Left. A typical type of post is linked below:

    http://lesserevilparty.blogspot.com/2009/06/obama-hoover.html

  • So, then, Donald, why are you pontificating on what it means to be a liberal? Aren’t there enough conservative things to talk about? Attending to your testimony, counsellor, would be like going to an internet-savvy Muslim to tell me about Catholicism. It just begs the question: what’s the point?

  • “He’s just a mainstream politican…”

    Maybe, but then why did so many of his disciples think he was The One?

  • Mr Obama is a conservative in my view because of …

    – pro-death penalty

    I may be mistaken, but I think the last time an execution was carried out at the behest of a (civilian) federal court was around about 1963, so whatever he might have said to whatever focus group is not likely to have much practical import. (Unless of course you were hoping for judicial appointments that would arbitrarily nullify all capital sentances, as Justice Brennan wished to do).

    – Geithner and money

    You appear to be referring to financial regulatory schemes and modes of recapitalizing the banks. He and Barney Frank have been most problematic in this regard. What appellation would you apply to Yves Smith (lapsed investment banker) and Luigi Zingales (professor at the University of Chicago) who have been most eloquent about the shortcomings of Geithner and his predecessor?

    – pro-choice (it’s a forty-year status quo, after all)

    How very Burkean, you and Jeffrey Hart.

    A purpose of political terminology is to supply and illuminating shorthand. It’s not working out for you (or the folks to whom you speak).

  • “It just begs the question: what’s the point?”

    To answer the question of the post Todd. There is growing concern about Obama on the Left. I find it interesting because Republicans he never had, Independents now are largely in opposition to his administration and even his base is becoming restive. That is a good shorthand description of an administration in trouble.

  • And right on cue Obama scores his lowest approval rating yet:

    http://hotair.com/archives/2009/11/24/rasmussen-obama-drops-to-lowest-approval-rating/

  • Okay …

    It’s just so fun to skewer you, Donald. I bet your courtroom opponents had similar fun on occasion.

    I think your politics are off somewhat. When elected, the president’s base was pretty solid among independents–I would have expected registered Dems to support him. Otherwise, he positioned himself (and giverns as) a moderate centrist Democrat. I give him credit for being the first northern Dem to be elected president since 1960.

    But base? Are you serious? These are Democrats you’re talking about. You realize that, right?

  • “It’s just so fun to skewer you, Donald. I bet your courtroom opponents had similar fun on occasion.”

    Normally they do not look like they are having much fun actually.

    “he positioned himself (and governs as) a moderate centrist Democrat.”

    For someone on the far Left Todd I have no doubt that Obama would appear moderate. For those Americans who have not swilled the “progressive” Kool Aide, Obama is quickly becoming president non grata. At 45% Obama is falling back on his Democrat base. Assuming the economy stays in the tank, I am expecting him to decline to 38% to 40% by the Spring of next year, assuming no foreign disaster. After he announces more troops to Afghanistan next week, that might peel off a point or two of the Out-Now crowd.

    You do have my sympathies Todd. It can be hard to vote for a man and then have him revealed as completely inept at the job. You can take solace from this observation however. With Jimmy Carter’s record as president, it will be difficult, although not impossible, for Obama to claim the distinction of worst post World War II president.

  • … or the worst president EVER.

  • Wow! So Pelosi, Kate Michelman, the late Ted Kennedy, Ruth Bader Ginsburg, and Obama are “conservatives” on the subject of abortion, because conservatives are always on the side of settled law, no matter what the law happens to be.
    Who knew?

    Nice bit of sophistry. Reminds me of the media trick of referring to the hard-line Russian Communists who opposed Yeltsin in the early ’90’s as “conservatives.”
    It was an entirely inaccurate description but a cute way for liberals to reassure themselves that they are ever on the side of the angels.

  • Tito may be right, Donald. In just one year, Obama is giving Mr. Peanut a run for his money. By 2012, The One might even match the dismal record of Buchanan, who was long thought unbeatable in the “Worst President” category.

    For America’s sake, I certainly hope not, but the possibility *shudder* is there.

  • You might be right Donna. Glenn Reynolds, Instapundit, is saying that a reprise of the Carter Administration is a best case analysis now.

  • It can be hard to vote for a man and then have him revealed as completely inept at the job.

    Given his deficient preparation, it would be a most pleasant surprise if he performs creditably. Todd should have understood this before casting his ballot. Given the severity of our economic problems, one better hope he performs creditably.

    With Jimmy Carter’s record as president, it will be difficult, although not impossible, for Obama to claim the distinction of worst post World War II president.

    No, it will not.

    Mr. Carter’s principal problem was that he lacked the people skills and acquired street smarts to persuade Congress.

    His secondary problem was that his priorities were rather at a variance with those of the majority of the Democratic Congressional caucus; Mr. Carter’s interests: tax reform, civil service reform, energy conservation, and improved methods of public budgeting were more those of a liberal Republican (e.g. Thomas Dewey) that the mode of the Democratic Party of his day.

    Another problem was that he was unwilling to countenance controls on monetary aggregates to restore price stability. Keep in mind, though, that the stable of economists listened to at the elite levels of the Democratic Party misdiagnosed the sources of inflation (as did Arthur Burns) or misjudged how costly it would be to contain it (as did James Tobin).

    All of which is to say that the domestic policy failures of the Carter era had less to do with Mr. Carter’s deficiencies than they did with the wretched matrix in which he found himself. Blame Tip O’Neill, blame Arthur Burns, blame Texas oil patch congressman, and blame the shills of the public employee union in Congress ‘ere you blame Carter.

  • Whenever a discussion like this veers to Jimmy Carter, the Republicans have gotten bored with the notion of the Left laughing at President Obama.

    In political cycles like these, it’s easy enough to find the worst presidents. But I can’t pass up the opportunity for the bogus administration of Bush the Second: inattention on terrorists, then still-unsolved anthrax. Let’s not forget a souped-up homeland security department, followed by an inability to deal with a homeland natural disaster. Two wars, not well thought-out, incompetently run.

    Honestly, I think y’all are still smarting from getting thrashed in the last two national elections. Let it sink in: by your own admission, you’ve been routed by the worst president in history. Seven more year, my friends. Seven more years.

  • “Seven more year, my friends. Seven more years.”

    Actually Todd it is 13 more months and change before the Congress elected in 2010 is seated. Enjoy the next year Todd. I think you and your ideological think-a-likes are going to be in the political wilderness for a very long time.

  • to Jimmy Carter, the Republicans have gotten bored with the notion of the Left laughing at President Obama.

    It’s a small topic, needing few words.

    you’ve been routed by the worst president in history. Seven more year, my friends. Seven more years.

    The man is an empty suit; the Administration and Congress have done flat nothing to address a most wretched banking and financial crisis, and ignored sachems like Paul Volcker and Luigi Zingales; he has squandered months attempting to build a policy monument to himself in the form of a hopelessly baroque medical insurance program (which ain’t gonnal look good if we have a failed Treasury bond auction); he allowed David Obey, et al to turn a needed macroeconomic stimulus into a patronage free-for-all; and he Rahm Emmanuel, a monster of arrogance whose personal history suggests Latin American levels of corruption, in charge of his executive office staff. You want seven more years of this????

  • “The man is an empty suit …”

    That empty suit still beat your war hero and perky governor. And it wasn’t even close.

    “You want seven more years of this?”

    I’m going to enjoy watching conservative heads spin until 2017, at least. You’re far more entertaining this way. The only thing that would be better would be a third party to vault ahead of the Dems and leave the GOP third in a 3-way race. Then I’d get to watch conservative Dems twist in the wind, too.

    I agree, Tito, that corporate banks and insurance are a complete mess. It wouldn’t have been different under McCain, and we know it was BAU under Bush II.

    If we were suddenly to see Ron Paul and pre-pro-choice Dennis Kucinich surge into the fore, then we’d have some excitement.

  • I read what you write; the President’s suit is not the only thing that is empty. Happy trails.

  • Art, it doesn’t seem you read terribly carefully. Like many conservatives, you assume that just because I disagree with you on one point, I disagree across the board. There is a distinction between being the bearer of bad news and actually causing the calamity oneself. Take the last word, friends. This has been a tough one for you; you’ve earned it.

  • Actually, I tend to think it was George W Bush that beat “the war hero”. The Democrats could have nominated anything from Charles Manson to a lobotomized lab rabbit to a gooseberry pie and it would have won by the same margin.

  • Todd, have you checked Gallup or Rasmussen in the last couple of days? They’re a bit more accurate than Daily Kos online polls.

    I live in a very liberal area. If I confused the entire country with the folks in my neighborhood I would be very glum indeed.

    Todd, you need to get out more.

  • The Democrats could have nominated anything from Charles Manson to a lobotomized lab rabbit to a gooseberry pie and it would have won by the same margin.

    I don’t know about that. Charles Manson would have had a hard time delivering the minority vote in usual numbers. The lobotomized lab rabbit was even a drag to the ticket as VP running mate, and the gooseberry pie was too much of a girly-man for most voters.

  • Actually, I tend to think it was George W Bush that beat “the war hero”. The Democrats could have nominated anything from Charles Manson to a lobotomized lab rabbit to a gooseberry pie and it would have won by the same margin.

    Darnit, Rick beat me to the punchline!

    Cheers!

  • Found this and just wanted to post it. No SNL skit, or funny, but straightforward truth.

    http://www.canadafreepress.com/index.php/article/16905