We've all heard the aphorism: "Power corrupts and absolute power corrupts absolutely". No one currently exemplifies this time-tested truth more than Nancy Pelosi. Although Barack Obama is our President, Speaker Pelosi has exhibited a callous disregard for her opponents whether Republicans or members of her own party. She takes counsel from no one and scoffs with all those who disagree with her even the American public
Recently, Scott Brown won the late Senator Kennedy's senate seat (or, rather, "the people's seat") in Massachusetts. Brown campaigned against the current Democratic version of healthcare "reform", among other things. He referred to himself quite conspicuously as the "41st vote" against adoption of such legislation. He expressed his desire to work with Democrats to craft a new bipartisan approach to healthcare that focused on prohibiting insurance companies from denying coverage based on pre-existing conditions, permitting competition between insurance companies across state lines and enacting tort reform to reduce the cost of unnecessary medical procedures that are often undertaken simply for fear of litigation. He also campaigned against the special interest giveaways that had undermined the integrity of the extant healthcare legislation.
Apparently, Pelosi didn't get the memo after Brown's shocking upset victory in Massachusetts, the bluest of blue states that other Democrats surely received as demonstrated by their actions since then. While the majority of Democrats in the Senate realize that The People had spoken and that a reset and a more bipartisan effort was needed to achieve public support for healthcare reform, Pelosi has continued to pursue a rejected approach that is opposed by a substantial majority of the U.S. electorate unabated.
Is this what Pelosi calls leadership? If so, she is more tone deaf that even her worst critic could have imagined. She is now attempting to circumvent the public will by a bald parliamentary maneuver that would attempt to pass the Senate version of healthcare legislation solely for the purpose of then modifying it through a process called "reconciliation" that does not require a cloture vote of 60 senators.
If Pelosi is allowed to proceed with such a cynical power play with the support of congressional Democrats, it will likely backfire in their faces come November. Even President Obama has expressed a more conciliatory tone (at least publicly) concerning healthcare reform, including suggesting that he is open to any good ideas from whatever source. So, in that respect, Obama is a rightfully and responsibly a bit chastened by the new paradigm since Brown's election and not outwardly displaying the megalomaniacal tendencies of the Speaker.
Based on Pelosi's actions, it is fairly evident that her quench for power is corrupting the process to such an extent that not even Obama has publicly supported her latest machinations. Even he realizes that too close an association with Pelosi is not good for him politically or for Democrats generally.
So whatever benefits that Obama may have realized as a result of his State of the Union address (which I will separately argue are very few), Pelosi seems intent on not being a team player and intent on upsetting the applecart of bipartisanship before it has even had a chance to germinate or potentially fail on its own.
Tuesday, February 23, 2010
Monday, February 22, 2010
Jobs Bill is Populist Gimmickry, Not Sound Economic Policy
This post is in response to the CNN article of February 22, 2010 entitled: Senate Takes up Jobs Bill.
Based on the Sentate vote today, it seems virtually certain that the so-called "Jobs Stimulus" bill will shortly be on President Obama's desk. This is a classic example of seemingly well-intentioned legislation that, in reality, won't achieve its intended purpose and is fraught with opportunities for fraud and outright gamesmanship.
The purpose of the tax credits is to create incremental "new" jobs, not to reward employers for creating jobs that they would have created without the credits otherwise the legislation serves no purpose. And therein lies the problem. The tax incentive is not really sufficient enough to cause a rash of hiring amongst employers given the uncertainty of health care reform, cap and trade and other taxes. Consequently, an employer is only going to hire a new employee who is truly needed based on the demands of the relevant business and not to take advantage of a tax break. The jobs that will be "created" will likely be those that would have been created without any incentive and in the process the taxpayers are going to fund this "job creation" scheme which will result merely in found money to employers because the employers actions will not be driven by or changed due to the tax benefit. This type of "benefit" leads to gamesmanship because no one can say with absolute certitude whether a job would have been created but for the credit. This squishy reasoning behind this latest government giveaway permeates all government-sponsored attempts to reinvigorate the economy artificially.
Presumably, the Obama Administration will later argue that all or substantially all the new jobs created after the tax credits become law were a direct result of the credits. That is unknowable and unprovable and, for the reasons stated above, will likely not be true.
I can't blame any employer for taking advantage of a credit for a new job, whether or not the job would have been created anyway. There is absolutely no way to reasonably police the system and, again, politicians will claim credit for stirring economic growth while the private sector pockets the free cash via tax credits. This lack of causal connection, of course, will be cheered and occur with the full blessing of populist politicians who care more about public perceptions rather than sound economic policy.
Has this administration not learned that gimmickry is simply that? That it has no long-lasting effects and may actually create mini-bubbles (e.g., Cash for Clunkers). It only changes behavior on a short-term basis lest the unemployment rate -- the real one including discouraged workers -- wouldn't be hovering around 17% or more. But reality and politics are often disengaged from one another as evidenced by surreal deficits that continue to grow unabated.
Based on the Sentate vote today, it seems virtually certain that the so-called "Jobs Stimulus" bill will shortly be on President Obama's desk. This is a classic example of seemingly well-intentioned legislation that, in reality, won't achieve its intended purpose and is fraught with opportunities for fraud and outright gamesmanship.
The purpose of the tax credits is to create incremental "new" jobs, not to reward employers for creating jobs that they would have created without the credits otherwise the legislation serves no purpose. And therein lies the problem. The tax incentive is not really sufficient enough to cause a rash of hiring amongst employers given the uncertainty of health care reform, cap and trade and other taxes. Consequently, an employer is only going to hire a new employee who is truly needed based on the demands of the relevant business and not to take advantage of a tax break. The jobs that will be "created" will likely be those that would have been created without any incentive and in the process the taxpayers are going to fund this "job creation" scheme which will result merely in found money to employers because the employers actions will not be driven by or changed due to the tax benefit. This type of "benefit" leads to gamesmanship because no one can say with absolute certitude whether a job would have been created but for the credit. This squishy reasoning behind this latest government giveaway permeates all government-sponsored attempts to reinvigorate the economy artificially.
Presumably, the Obama Administration will later argue that all or substantially all the new jobs created after the tax credits become law were a direct result of the credits. That is unknowable and unprovable and, for the reasons stated above, will likely not be true.
I can't blame any employer for taking advantage of a credit for a new job, whether or not the job would have been created anyway. There is absolutely no way to reasonably police the system and, again, politicians will claim credit for stirring economic growth while the private sector pockets the free cash via tax credits. This lack of causal connection, of course, will be cheered and occur with the full blessing of populist politicians who care more about public perceptions rather than sound economic policy.
Has this administration not learned that gimmickry is simply that? That it has no long-lasting effects and may actually create mini-bubbles (e.g., Cash for Clunkers). It only changes behavior on a short-term basis lest the unemployment rate -- the real one including discouraged workers -- wouldn't be hovering around 17% or more. But reality and politics are often disengaged from one another as evidenced by surreal deficits that continue to grow unabated.
Friday, February 5, 2010
Obama Tanks Stock Market Again on SBA Plan
Someone in the White House should tell President Obama that every time he speaks on television about the economy or some new government program to artificially prop it up, the stock market tanks. Today he did it again.
Obama has determined that the government via the Small Business Administration (SBA) is now going to guarantee small business loans up to $5 million. Those loans can be used not only to purchase inventory and equipment, as was the typical limitation in the past, but also now to finance real estate.
So, now the government can stick its fingers into another potential real estate rathole which hasn't worked in the past. Obama again has the uncanny knack of devising "solutions" that will end up socializing loan losses and privatizing business profits.
How is the government going to determine who qualifies for new SBA loans when banks are unwilling to lend to small businesses themselves? Perhaps the banks have good reason not to lend given the current uncertainties in the economy. Perhaps banks have learned their lesson that lending to questionably capitalized and non-creditworthy borrowers carries consequences.
Regardless of the lessons to be learned from the financial crisis, Obama is either oblivious to them or simply ignoring them for political expediency. His rationale for doing so is that since the banks won't loan to small businesses the government must do so instead. Is that a new form of underwriting standard: banks won't lend to prospective borrowers so the government should or must lend. Seems unwise and fraught with risk.
As a consequence, Obama is not allowing the free market system to function. In difficult economic times, unfortunately, lenders are forced to tighten lending standards and many businesses cannot obtain funding. But to put taxpayer money at risk when private lenders are unwilling to underwrite the same risks that the SBA will surely undertake sounds like a repeat of the Fannnie Mae/Freddie Mac debacle admittedly on a smaller scale.
While small business is usually the biggest generator of new jobs, the vast majority of small businesses fail with a few years. Government should recognize as private lenders do the risks inherent in lending to most small businesses and act in a prudent manner. The government has an incredibly poor track record of managing loan portfolios (again I note the above-mentioned GSEs). Why is it that Obama now believes that government will do a better job as the risk profile for many SBA loans and the potential for significant losses continues to increase? And why does Obama believe that companies formed as a result of SBA loans will actually generate sustainable job except in very limited instances, consistent with the average life cycle of such companies.
Obama has determined that the government via the Small Business Administration (SBA) is now going to guarantee small business loans up to $5 million. Those loans can be used not only to purchase inventory and equipment, as was the typical limitation in the past, but also now to finance real estate.
So, now the government can stick its fingers into another potential real estate rathole which hasn't worked in the past. Obama again has the uncanny knack of devising "solutions" that will end up socializing loan losses and privatizing business profits.
How is the government going to determine who qualifies for new SBA loans when banks are unwilling to lend to small businesses themselves? Perhaps the banks have good reason not to lend given the current uncertainties in the economy. Perhaps banks have learned their lesson that lending to questionably capitalized and non-creditworthy borrowers carries consequences.
Regardless of the lessons to be learned from the financial crisis, Obama is either oblivious to them or simply ignoring them for political expediency. His rationale for doing so is that since the banks won't loan to small businesses the government must do so instead. Is that a new form of underwriting standard: banks won't lend to prospective borrowers so the government should or must lend. Seems unwise and fraught with risk.
As a consequence, Obama is not allowing the free market system to function. In difficult economic times, unfortunately, lenders are forced to tighten lending standards and many businesses cannot obtain funding. But to put taxpayer money at risk when private lenders are unwilling to underwrite the same risks that the SBA will surely undertake sounds like a repeat of the Fannnie Mae/Freddie Mac debacle admittedly on a smaller scale.
While small business is usually the biggest generator of new jobs, the vast majority of small businesses fail with a few years. Government should recognize as private lenders do the risks inherent in lending to most small businesses and act in a prudent manner. The government has an incredibly poor track record of managing loan portfolios (again I note the above-mentioned GSEs). Why is it that Obama now believes that government will do a better job as the risk profile for many SBA loans and the potential for significant losses continues to increase? And why does Obama believe that companies formed as a result of SBA loans will actually generate sustainable job except in very limited instances, consistent with the average life cycle of such companies.
Obama Tanks Stock Market Again on SBA Plan
Someone in the White House should tell President Obama that every time he speaks about the economy or some new government program to artificially prop it up, the Stock Market tanks. Today he did it again.
Obama has determined that the government via the Small Business Administration (SBA) is now going to guarantee small business loans up to $5 million. Those loans can be used not only to purchase inventory and equipment, as was the typical limitation in the past, but also now to finance real estate. Brilliant idea. Not!
So, now the government can stick its fingers into another potential real estate rathole which hasn't worked in the past. Obama again has the uncanny knack of devising "solutions" that will end up socializing loan losses and privatizing business profits.
How is the government going to determine who qualifies for new SBA loans when banks are unwilling to lend to small businesses themselves? Perhaps the banks have good reason not to lend given the current uncertainties in the economy. Perhaps banks have learned their lesson that lending to questionably capitalized and non-creditworthy borrowers carries consequences.
Regardless of the lessons to be learned from the financial crisis, Obama is either oblivious to them or simply ignoring them for political expediency. His rationale for doing so is that since the banks won't loan to small businesses the government must do so instead. Is that a new form of underwriting standard: banks won't lend to prospective borrowers so the government should or must lend. Seems unwise and fraught with risk by me.
As a consequence, Obama is not allowing the free market system to function. In difficult economic times, unfortunately, lenders are forced to tighten lending standards and many businesses cannot obtain funding. But to put taxpayer money at risk when private lenders are unwilling to underwrite the same risks that the SBA will surely undertake sounds like a repeat of the Fannnie Mae/Freddie Mac debacle admittedly on a smaller scale.
While small business is usually the biggest generator of new jobs, the vast majority of small businesses fail with a few years. Government should recognize as private lenders do the risks inherent in lending to most small businesses and act in a prudent manner. The government has an incredibly poor track record of managing loan portfolios (again I note the above-mentioned GSEs). Why is it that Obama now believes that government will do a better job as the risk profile for many SBA loans and the potential for significant losses continues to increase? And why does Obama believe that companies formed as a result of SBA loans will actually generate sustainable job except in very limited instances, consistent with the average life cycle of such companies.
Obama has determined that the government via the Small Business Administration (SBA) is now going to guarantee small business loans up to $5 million. Those loans can be used not only to purchase inventory and equipment, as was the typical limitation in the past, but also now to finance real estate. Brilliant idea. Not!
So, now the government can stick its fingers into another potential real estate rathole which hasn't worked in the past. Obama again has the uncanny knack of devising "solutions" that will end up socializing loan losses and privatizing business profits.
How is the government going to determine who qualifies for new SBA loans when banks are unwilling to lend to small businesses themselves? Perhaps the banks have good reason not to lend given the current uncertainties in the economy. Perhaps banks have learned their lesson that lending to questionably capitalized and non-creditworthy borrowers carries consequences.
Regardless of the lessons to be learned from the financial crisis, Obama is either oblivious to them or simply ignoring them for political expediency. His rationale for doing so is that since the banks won't loan to small businesses the government must do so instead. Is that a new form of underwriting standard: banks won't lend to prospective borrowers so the government should or must lend. Seems unwise and fraught with risk by me.
As a consequence, Obama is not allowing the free market system to function. In difficult economic times, unfortunately, lenders are forced to tighten lending standards and many businesses cannot obtain funding. But to put taxpayer money at risk when private lenders are unwilling to underwrite the same risks that the SBA will surely undertake sounds like a repeat of the Fannnie Mae/Freddie Mac debacle admittedly on a smaller scale.
While small business is usually the biggest generator of new jobs, the vast majority of small businesses fail with a few years. Government should recognize as private lenders do the risks inherent in lending to most small businesses and act in a prudent manner. The government has an incredibly poor track record of managing loan portfolios (again I note the above-mentioned GSEs). Why is it that Obama now believes that government will do a better job as the risk profile for many SBA loans and the potential for significant losses continues to increase? And why does Obama believe that companies formed as a result of SBA loans will actually generate sustainable job except in very limited instances, consistent with the average life cycle of such companies.
Thursday, February 4, 2010
Is Eric Holder Seriously Defending His Blunder?
Why is it so hard for Eric Holder to accept the fact that he bungled the decision to treat the "underwear bomber", Umar Farouk Abdulmutallab, as a criminal defendant in the U.S. Courts as opposed to an enemy combatant? As an immediate consequence of that decision, the FBI's interrogation of Abdulmutallab on Christmas Day, which was yielding potential valuable national security information, was abruptly curtailed to "mirandize" him. Thereupon, Abulmutallab was given a court-appointed lawyer and thereafter refused to answer any further questions. Holder seemingly made this ill-thought-out decision without consulting senior military personnel, the Department of Homeland Security or the President.
Why did Holder act unilaterally and so abruptly? Whatever legal justifications may have been offered then, Holder's decision was primarily political as opposed to being the only possible result under federal or martial law. Clearly, before the Attorney General or anyone can determine the appropriate forum for trying an individual under the circumstances at hand, the individual's status as an enemy combatant or not must be resolved not the other way around. However, in an effort to distance itself from the Bush Administration and Guantanamo Bay and to demonstrate to the world that the United States is now operating under a different set of legal guidelines than previously employed under the Bush Administration, the chief legal officer of the Obama Administration wasted no time in appeasing America's critics as opposed to arriving at the best course of legally justifiable action for the United States. This would be gross malfeasance for any legal officer of the U.S., but it is absolutely unconscionable for the U.S. Attorney General to act in such a self-righteous and self-serving manner.
No person, not even the Attorney General, was entitled to determine by himself whether Abulmutallab was an "ordinary" criminal defendant or an enemy combatant. The only reason for his precipitous behavior must have been to cut off, silence or preclude any debate on that question. And lo and behold, now Holder has much explaining to do. Yet despite the overwhelming condemnation of his conduct, Holder continues to insist that Abulmutallab actions can be addressed through the criminal justice system.
Whether or not that is true is beyond the point. The question is whether Holder should have made the decision he made in the manner he made it. Holder seems less than prepared to argue the merits of that question.
Why did Holder act unilaterally and so abruptly? Whatever legal justifications may have been offered then, Holder's decision was primarily political as opposed to being the only possible result under federal or martial law. Clearly, before the Attorney General or anyone can determine the appropriate forum for trying an individual under the circumstances at hand, the individual's status as an enemy combatant or not must be resolved not the other way around. However, in an effort to distance itself from the Bush Administration and Guantanamo Bay and to demonstrate to the world that the United States is now operating under a different set of legal guidelines than previously employed under the Bush Administration, the chief legal officer of the Obama Administration wasted no time in appeasing America's critics as opposed to arriving at the best course of legally justifiable action for the United States. This would be gross malfeasance for any legal officer of the U.S., but it is absolutely unconscionable for the U.S. Attorney General to act in such a self-righteous and self-serving manner.
No person, not even the Attorney General, was entitled to determine by himself whether Abulmutallab was an "ordinary" criminal defendant or an enemy combatant. The only reason for his precipitous behavior must have been to cut off, silence or preclude any debate on that question. And lo and behold, now Holder has much explaining to do. Yet despite the overwhelming condemnation of his conduct, Holder continues to insist that Abulmutallab actions can be addressed through the criminal justice system.
Whether or not that is true is beyond the point. The question is whether Holder should have made the decision he made in the manner he made it. Holder seems less than prepared to argue the merits of that question.
Nancy Pelosi Actions Are Anti-American
Has Nancy Pelosi ever seen a big government program she didn't like? No, except for anything defense related. She has an uncanny knack for being completely and consistently at odds with anything that will actually improve the economy, increase private job creation or make the country more secure. It is incredible to me that this woman is serving as Speaker of The House, let alone that was even elected to Congress.
Apparently, she believes that continued expansion of government is the answer to all social evils even as the country is drowning in debt. Even a moron in a hurry should understand that only the private sector can create lasting jobs which are net positive to the tax base. Stated differently, if the government has to spend more in tax dollars to create a job than the government will collect in taxes and productive economic value therefrom, the taxpayer is the loser. This is an elemental concept yet she is too busy flying off in military airplanes (along with select friends, allies and family) befitting of her exalted status as Speaker, oftentimes to venues such as Copenhagen to support policies contrary to the best interests of American business (and, concomitantly, the American worker).
I sometimes wonder if Pelosi even understands that the United States is not an instrument of the United Nations or that blaming George W. Bush and the United States for the world's problems is beyond her powers of logic to cohere.
Apparently, she believes that continued expansion of government is the answer to all social evils even as the country is drowning in debt. Even a moron in a hurry should understand that only the private sector can create lasting jobs which are net positive to the tax base. Stated differently, if the government has to spend more in tax dollars to create a job than the government will collect in taxes and productive economic value therefrom, the taxpayer is the loser. This is an elemental concept yet she is too busy flying off in military airplanes (along with select friends, allies and family) befitting of her exalted status as Speaker, oftentimes to venues such as Copenhagen to support policies contrary to the best interests of American business (and, concomitantly, the American worker).
I sometimes wonder if Pelosi even understands that the United States is not an instrument of the United Nations or that blaming George W. Bush and the United States for the world's problems is beyond her powers of logic to cohere.
Tuesday, February 2, 2010
Reid Suddenly Cares About Individual Liberty When Vegas Is Concerned
Harry Reid is a stalwart liberal progressive, willing to lead the charge for massive government expansion and intrusion into individual affairs except, apparently, when that conflicts with political reality. As reported in Politico.com, Reid chastised President Obama for suggesting that Americans "... not blow a load of cash in Vegas when you're trying to save for college." And a fellow Nevada Democratic Congresswoman, Shelley Berkley was even more direct: "Enough is enough!" she said. "President Obama needs to stop picking on Las Vegas and he needs to let Americans decide for themselves how and where to spend their hard earned vacation dollars. (Emphasis supplied.)
While I agree, in this instance, with the sentiments expressed by the now conveniently one-issue libertarian Nevada politicos, it is difficult to reconcile their view that "hard-earned vacation dollars" should be spent by Americans at they see fit, but the same control over their finances does not apply to the rest of their money. The difference is merely provincialism. Reid and his aforementioned cohort understand that tourism is the business of Las Vegas and any effort to derail it will hurt their constituents and their respective reelection bids. But why is this obvious, especially to Majority Leader Reid, only when his own political interests are affected? Why isn't this basic American concept that people should be able to spend their money as they choose not equally relevant to decisions regarding healthcare and education and government bailouts?
Either Reid is oblivious to the inherent contradiction in his political views over the nature, extent and application of individual liberties of Americans or he is intellectually dishonest and, even worse, a hypocrite. Do as I say and not as I do should be Reid's campaign slogan as the Majority Leader's power or the fear of losing it has gone to his non-thinking head.
When are liberals like Reid going to realize that in all aspects of their financial and personal affairs, Americans should be of the same dominion? I fear not soon or never because Reid doesn't have a consistent political viewpoint other than trying to shove an ulta-liberal, progressive agenda down the collective throat of the electorate without regard for the Constitution and individual rights and the limits of government.
While I agree, in this instance, with the sentiments expressed by the now conveniently one-issue libertarian Nevada politicos, it is difficult to reconcile their view that "hard-earned vacation dollars" should be spent by Americans at they see fit, but the same control over their finances does not apply to the rest of their money. The difference is merely provincialism. Reid and his aforementioned cohort understand that tourism is the business of Las Vegas and any effort to derail it will hurt their constituents and their respective reelection bids. But why is this obvious, especially to Majority Leader Reid, only when his own political interests are affected? Why isn't this basic American concept that people should be able to spend their money as they choose not equally relevant to decisions regarding healthcare and education and government bailouts?
Either Reid is oblivious to the inherent contradiction in his political views over the nature, extent and application of individual liberties of Americans or he is intellectually dishonest and, even worse, a hypocrite. Do as I say and not as I do should be Reid's campaign slogan as the Majority Leader's power or the fear of losing it has gone to his non-thinking head.
When are liberals like Reid going to realize that in all aspects of their financial and personal affairs, Americans should be of the same dominion? I fear not soon or never because Reid doesn't have a consistent political viewpoint other than trying to shove an ulta-liberal, progressive agenda down the collective throat of the electorate without regard for the Constitution and individual rights and the limits of government.
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