Category Archives: Government

Updated: The Guy Really Doesn't Get Econ 101

Barack Obama, Business, Debt, Democrats, Government

State-enforced egalitarianism in borrowing and lending has been a key component in the economic meltdown. But Barry the Bolshevik is intent on preventing any market corrections from taking place.

Financial institutions are attempting to reverse lending socialism. That means charging clients commensurate with the risk they pose to their lenders. Or not lending to the risky. Increases in late fees and in interest rates on existing balances, as well as requiring greater disclosure—these are all necessary, and to be expected, if a correction is to occur, one that incentivizes savings and solvency.

But not if Obama can help it. At Obama’s behest,

Both the House and Senate are considering a credit card “bill of rights” to limit the ability of credit-card companies to raise interest rates on existing balances and to require greater disclosure.

“These practices need to be stopped. … They cannot continue to use and do practices that are unfair to people,” Rep. Carol Maloney, D-NY, told CBS News.

Readers discuss “Survival On the Road To Serfdom.”

Update (April 25): The federal Frankenstein’s latest folly caught Peter Schiff’s attention, and is the subject of his latest column (great minds…). Writes Schiff:

“The bottom line is that credit card lending is a very risky business. The debts are unsecured and the probability of default is high, meaning big losses should borrowers choose not to pay. In addition, should a borrower file for bankruptcy, credit card debt is often the first to be discharged. Given the risks, interest rates need to be very high to keep lenders in business.

One way to keep a lid on rates for those who do pay is for lenders to weed out those most likely to default. This can be accomplished through higher rates. Not only does this discourage riskier borrowers from taking on more debt, but it gives lenders a bigger cushion to absorb losses. However, by interfering with card issuers’ attempts to better price risk and limit losses, the government will reduce credit availability.”

Debt Means Taxes

Debt, Economy, Government, Media, Taxation

“But you’re getting a tax cut under Obama,” screeched the cerebrally and ethically challenged CNN attack dog, Susan Roesgen. She was shouting at an informed, ticked-off taxpayer at the nationwide tea parties. Which is why reporters, retarded ones especially, should never editorialize.

Writes former US accountant and comptroller general, David M. Walker:

Total federal debt almost doubled during President George W. Bush’s administration and, as much as we needed some stimulus spending to boost the economy, the nonpartisan Congressional Budget Office now estimates total debt levels could almost double again over the next eight years based on the budget recently outlined by President Obama.

Regardless of what politicians tell you, any additional accumulations of debt are, absent dramatic reductions in the size and role of government, basically deferred tax increases. Remember the old saw? “You can pay me now or you can pay me later, with interest.” …

the federal government accumulated $56.4 trillion in total liabilities and unfunded promises for Medicare and Social Security as of September 30, 2008. The numbers used to calculate this figure come directly from the audited financial statements of the U.S. government.

If $56.4 trillion in financial commitments is too big a number to digest, think of it as $483,000 per American household, or $184,000 for every man, woman and child in the country.

Even broken down, the numbers can be tough to swallow. Yes, you’ve paid your taxes, but you still bear a significant share of the government’s own financial burden. …

So as you file your tax returns this year, bear in mind that no matter how much you’re paying now, you’ll pay much more in the future because of Washington’s failure to get its finances in order…

Laid-Back Barack

Barack Obama, Government

Bush was no workaholic, but the media diligently and derisively chronicled his all-too frequent escapes to Crawford, Texas.

Laid-back Barack heads to the hood (Chicago) for a leisurely, long, week-end, instead of reading 1100 pages of “Stim”–as Doberman Olbermann calls the Thing affectionately–and the New York Times is enraptured:

“Leaving the protracted battle over the economic stimulus plan and the difficulties of some of his cabinet nominees behind him, Mr. Obama sought a return to the familiar in Chicago: He worked out at a favorite gym. He played basketball with his buddies at the Chicago Laboratory School. He got a haircut from his favorite barber at a friend’s apartment. ‘This weekend was a good time for the family to spend time in Chicago and see a few friends,’ the White House press secretary, Robert Gibbs, said in an e-mail message.”

Far be it from me to protest when a parasite takes a break. Still, this guy is surprisingly lax considering the state of the country. Playing basketball, working out, watching ballgames and hanging with pals; having his hair cropped, wining and dining his wife–this guy is mellow. And all three weeks into a new job.

No ‘Savior-In-Chief’

Barack Obama, Founding Fathers, Government

“Turns out that no, he can’t,” surmises Examiner Columnist, Gene Healy. There was a realistic reason for “the modest view of presidential responsibility” our Constitution’s framers held. “The president was, in Washington’s phrase, the mere ‘chief magistrate,’ and his main job was faithful execution of the laws.” Read on:

“Last week was a tough one for Barack Obama.

The president’s choice for HHS secretary withdrew on Tuesday. It turned out that Tom Daschle, who considered himself up to the task of redesigning the most complex and fastest-growing sector of our economy, had trouble figuring out his own taxes.

By the end of the week, Obama was facing growing resistance to key parts of his $800-plus billion stimulus package. Friday found the new president recuperating at Camp David.

Welcome to the NFL, Barack: There will be many more tough weeks to come.

The ‘Hopefest 2009’ aura that surrounded Obama’s inauguration made him appear unstoppable. But the smart money says that by 2012, Obama will look a lot more like Jimmy Carter than FDR. That’s not because the new president is incompetent; it’s because he’s signed up for an impossible job.

Our Constitution’s framers had a modest view of presidential responsibility: the president was, in Washington’s phrase, the mere “chief magistrate,” and his main job was faithful execution of the laws.

But today, Americans look to the president as the Savior-in-Chief, a figure who will heal what ails us—whether it’s unemployment, hurricanes, divisiveness, or spiritual malaise. When it comes to the presidency, we demand what we cannot have and, as a result, we usually get what we do not like.

Political scientists have a term for the vast distance between what the public expects of the president and what he can realistically deliver: the ‘expectations gap.’ And no presidential candidate in living memory has done as much as Obama to stoke public expectations for the office—which were insanely high to begin with.

‘Yes we can!’ was the preferred hosanna of hope in the revival-tent atmosphere of the Obama campaign. We can, Obama promised, create a ‘new kind of politics,’ ‘end the age of oil in our time,’ deliver ‘a complete transformation of the economy,’ and even ‘create a kingdom right here on earth.’ With the presidency, it seems, all things are possible.

Post-election polls suggested that Americans bought the sales pitch. Eight in 10 expected Obama to improve conditions for the poor, 70 percent to improve education and the environment, and 60 percent counted on him to create a robust economy.

Obama entered office with a 79 percent favorability rating, the highest score of any newly elected president since, well, Jimmy Carter.

As the Carter experience suggests, in presidential politics, great expectations often lead to crashing disappointments. Every post-WWII president has faced what scholar Barbara Hinckley called ‘the decay curve’—the decline in popularity that occurs as the public recognizes that the president can’t deliver the miracles he’s promised.

String them together, and presidential approval graphs look like an EKG on a patient being repeatedly shocked to life—’clear!’—and then fading out again. Just as popularity tends to fade within each president’s tenure, average approval ratings have been in decline from one president to the next for most of the modern era.

You’d never know it from his budget-busting economic nostrums, but Obama has taken office in an era of limits. And when he fails to fully heal our financial troubles, fix health care, teach our children well, provide balm for our itchy souls, and so forth, his hope-addled rhetoric will seem all the more grating, and the public will increasingly come to see him as the source of all American woes.

Perhaps, then, we ought to drop the notion of president as Savior-in-Chief. Our Constitution’s Framers thought the president had an important job, but they never looked to him to heal all the nation’s wounds and save the national soul.

Their vision of the presidency may be unromantic, but at least it’s realistic (not to mention cheaper). Until we return to the framers’ modest, businesslike view of the presidency, we shouldn’t expect any president, however well-intentioned, to be ‘a uniter, not a divider’ in American life.

Examiner columnist Gene Healy is a vice president at the Cato Institute and author of “The Cult of the Presidency.”