Mar 06 2009

“Big government” equivalence is a smokescreen

Category: Congress,economy,mediaharmonicminer @ 8:31 pm

Both parties love big government _ just different programs

Republicans say they’re outraged that Obama would “borrow and spend” his way to a new behemoth government. But they borrowed and spent their way through the ’80s and the current decade. And they love big government, when it’s at the Pentagon .

Democrats from Obama on down insist that they don’t like big government, that they’re just forced into a temporary spending spree by the recession. But Democrats love big government as well, when it’s for social programs such as universal health care.

“The basic difference between Democrats and Republicans in recent decades is which aspect of government spending they prefer,” said Steven Schier , a political scientist at Carleton College in Northfield, Minn. “With the Republicans, it’s defense. With the Democrats, it’s education, environment, health care etc. That’s been the major difference between the two parties going back to Reagan.”

What a crock.

Without a strong military, a nation disappears, or must depend on some other nation for its defense. Who, exactly, would have defended the USA during the Cold War, if not the USA? Who, exactly, will defend the USA now against the various threats on the world stage? Bluntly, our biggest error has probably been letting OTHER nations subsist under the USA defense umbrella for so long, especially Europe and Japan, but that’s Monday morning quarterbacking at this point… After WW II, it seemed like a good idea for Germany and Japan not to be militarized.

But what happens if a nation does not provide nationalized health care and retirement programs, centralized education bureaucracies and regulatory agencies? Not much. People simply make other arrangements. The market works, except when government interferes with it, and then blames the market for the outcome of its own interference.

Defense is one of the two biggest absolutely required roles for government, the other being the maintenance of law and order in the interest of public safety.

In any case, the amount of money that has been spent on social programs since 1960 is ENORMOUS, and social spending remains 60% or more of the national budget. And Obama’s intentions in social spending make the Pentagon’s fondest wishlist look like chump change.

The Lefty media, of course, wants to pretend there is a moral equivalence between what a nation must do to survive, and what Left leaning politicians must promise in order to be re-elected.

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Mar 06 2009

“Wishful, dangerous thinking”

Category: economy,Obamaharmonicminer @ 11:27 am

The Economist, which endorsed Obama, now says that his budget plans are full of Wishful, and dangerous, thinking

Sadly, these plans are deeply flawed. First, Mr Obama’s budget forecasts that the economy will shrink 1.2% this year then grow by an average of 4% over the following four years. It might if the economy were to follow a conventional path back to full employment. But this is not a conventional recession. The unprecedented damage to household balance sheets could well result in anaemic economic growth for years, significantly undermining the president’s revenue projections. The economic outlook continues to darken and the stockmarket has already tumbled to 12-year lows. Mr Obama may either have to renege on his promise to slash the deficit to 3% of GDP in 2013 from more than 12% now, rein in his spending promises or raise taxes more.

Second, Mr Obama’s scattershot tax increases are a poor substitute for the wholesale reform America’s Byzantine tax code needs. Limiting high earners’ deductions for mortgage interest, local-government taxes and other things is certainly more efficient than raising their marginal tax rates even more. But it would be better to replace such deductions for everyone with targeted credits, abolish the alternative minimum tax (an absurd parallel tax system that ensnares a sizeable chunk of the upper middle class), and implement a broad sales tax. Rather than simply eliminating the sheltering of corporate income from abroad, Mr Obama could have broadened the corporate tax base and lowered the rate. In sum, Mr Obama could simultaneously raise more revenue and make the tax code simpler and more conducive to growth. But he hasn’t.

To be more clear, this isn’t “wishful, dangerous thinking,” it’s “wishful, dangerous self-and-public-deception.” Remember when some people made fun of the Republican assertion that “Obama is the most liberal senator, and would be the most liberal president we’ve ever seen”? I wonder what rock they’re hiding under now.

Much more at the link.

Mar 06 2009

Israel down to the wire on Iranian nukes?

Category: economy,energy,Iran,Israelharmonicminer @ 10:08 am

At the link, an op-ed in the Jerusalem Post detailing the reasons why Israel’s “window of opportunity” to take out or slow down Iran’s nuclear program is closing fast, making imminent action likely, especially given the results of the recent Israeli election. It’s a very persuasive case,  and includes this assertion:

American policymakers are now convinced that Iran, despite all protests and charades, is in a mad dash to create a deliverable nuclear weapon. The Obama administration has almost openly abandoned the assertions of the CIA’s much-questioned 2008 National Intelligence Estimate that concluded Iran was not pursuing nuclear weaponry for the simple reason that its atomic program and military programs were housed in separate buildings.

But what if Israel DOES strike Iran? Necessary as that may be, it spells very bad news for the USA.

Iran, of course, has repeatedly threatened to counter any such attack by closing the Strait of Hormuz, as well as launching missiles against the Ras Tanura Gulf oil terminal and bombarding the indispensable Saudi oil facility at Abqaiq which is responsible for some 65 percent of Saudi production. Any one of these military options, let alone all three, would immediately shut off 40% of all seaborne oil, 18% of global oil, and some 20% of America’s daily consumption.

America’s oil vulnerability has been back-burnered due to the economic crisis and the plunge in gasoline prices. However, the price of gasoline will not mitigate an interruption of oil flow. The price of oil does not impact its ability to flow through blocked or destroyed facilities. Indeed, an interruption would not restore prices to those of last summer – which Russian and Saudi oil officials say is needed – but probably zoom the pump cost to $20 per gallon.

American oil vulnerability in recent months has escalated precisely because of oil’s precipitous drop to $35 to $40 a barrel. At that price, America’s number one supplier, Canada, which supplies some 2 million out of 20 million barrels of oil a day, cannot afford to produce. Canadian oil sand petroleum is not viable below $70 a barrel. Much of Canada’s supply has already been cancelled or indefinitely postponed. America’s strategic petroleum reserve can only keep that country moving for approximately 57 days.

THE OBAMA ADMINISTRATION, like the Bush administration before it, has developed no plan or contingency legislation for an oil interruption, such as a surge in retrofitting America’s 250 million gas guzzling cars and trucks – each with a 10-year life – or a stimulus of the alternate fuel production needed to rapidly get off oil. Ironically, Iran has undertaken such a crash program converting some 20% of its gasoline fleet yearly to compressed natural gas (CNG) as a countermeasure to Western nuclear sanctions against the Teheran regime that could completely block the flow of gasoline to Iran. Iran has no refining capability.

The question of when and how this endgame will play out is not known by anyone. Israeli leaders wish to avoid military preemption at all costs if possible. But many feel the military moment must come; and when that moment does come, it will be swift, highly technologic and in the twinkling of an eye. But as one informed official quipped, “Those who know, don’t talk. Those who talk, don’t know.”

Because our leaders have dithered and stonewalled in developing our own oil resources, in the name of “environmentalism” and “global warming” fears, and general eco-pagan-panic, we’re about to be in world of hurt, energy-wise.

I’m keeping my Prius.  And I just put in a wood stove. 

Try to imagine what a true oil-shock will do to our already reeling economy.  Can you imagine a DOW average of 4,000?   Better stuff your nest egg (shrunken though it probably is already) in some VERY SECURE place…  which the stock market sure isn’t.

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Mar 06 2009

Obama prescribes heart bypass surgery for a broken arm

Category: Uncategorizedharmonicminer @ 9:21 am

Charles Krauthammer : Obama’s ‘Big Bang’ Agenda – Key graphs below, but all worth reading.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

What’s going on? “You never want a serious crisis to go to waste,” said Chief of Staff Rahm Emanuel. “This crisis provides the opportunity for us to do things that you could not do before.”

Things. Now we know what they are. The markets’ recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions — the sense of crisis bordering on fear-itself panic — for enacting his “Big Bang” agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy — worthy and weighty as they may be — are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.