Wednesday, July 28, 2010
Obama, Reagan and the economy
It’s easy to understand why President Barack Obama’s friends don’t want to acknowledge that July represents 17 months since Congress passed the $787 billion economic stimulus bill — the president’s signature measure to jump-start the economy and fight unemployment.
Obama says the economy is headed in the right direction; jobs are being created, not lost, and he is doing everything possible to revive the “worst economy since the Great Depression.” Most of the national press has been remarkably accepting of this narrative — even if the president has been vague, at best, about when we might finally see an uptick in economic growth and job creation.
But in another economic time, President Ronald Reagan’s economic recovery program took 17 months to take hold. It took from the time Congress passed his tax cuts, in August 1981, until the recession he inherited finally ended in January 1983.
Unemployment hit a high of 10.8 percent in December 1982. But then economic growth spiked, and the unemployment rate began a long, steady decline throughout the 1980s. It was obvious the program was working when people stopped calling it “Reaganomics.”
Tax cuts were a part of Reagan’s effort to cut the size and scope of government to fight economic stagnation. “Government is not the solution,” Reagan said in his remarkably clear inaugural address. “It is the problem.”
In addition to tax cuts, Reagan reduced domestic discretionary spending and streamlined regulations to make them less of a burden on businesses seeking to create jobs. He believed that government should give individuals and businesses the proper incentives to grow and expand and not inhibit the private sector with high taxes and cumbersome regulations.
Reagan faced obstacles that Obama did not. The House he had to work with was always controlled by Democrats. More ominously, inflation was running at double-digit rates, and it took nearly a year for the Federal Reserve to squeeze those pressures out of the system.
Regardless, in the end, Reagan’s program worked. The turnaround began 17 months later.
Fast-forward to today. The Obama administration says that government-directed investment, via huge spending increases, can revive the economy. It’s now stimulus plus 17. Is there a turnaround in sight?
Why all Obama's policy wonks can't save him or help America
Yes, the folks in the Administration may be smart, but they have no experience. Virtually none of them has ever participated in the free enterprise system creating income and jobs, so how – and why – would you expect them to create policies that would help entrepreneurs and small-business owners move the economy forward. They may be smart, they may be great at writing papers and drawing charts with arrows and symbols, but they are fairly low on wisdom. Wisdom comes from suffering experiences in life – not just living arcane social and economic theories.
A perfect example of this wisdom deficiency is the newest member of the administration, Donald Berwick, the man chosen to administer the Center for Medicare and Medicaid Services. These two behemoth bureaucracies consume 4% of our gross domestic product, and that’s even before Obamacare vastly increases the amount of money running through their bureaucratic fingers. So one might think Dr. Berwick would have had some experience running a major medical operation or a similar entity. It turns out that his most significant position was as President of the non-profit Institute for Healthcare Improvement (IHI). If you go to the IHI website, they self-describe the organization as “a small organization with a very big mission.” Not exactly the credentials most of us would consider when looking for someone to run an organization that dispenses hundreds of billions of dollars.
The important thing is Dr. Berwick has studied health care organizations and written heady papers and pontificated in speeches about how the health care system should be run. That should be good enough. Since that is the background of our President and almost all of his advisors, Dr. Berwick seems to be a natural choice.
The problem is that the left-wing rabble that comprises the Obama administration – having never done it themselves – have no understanding of how money is created other than by encouraging the federal reserve to print some more. They have no appreciation of what makes this country great, as described by Ayn Rand in Atlas Shrugged. She wrote
“To the glory of mankind, there was, for the first and only time in history, a country of money –and I have no higher, more reverent tribute to pay to America for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes by conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being – the self-made man – the American industrialist.”
The people running our country not only have never created a dollar’s worth of wealth, they appear to have a visceral disdain for those who do.
These government wonks repeatedly insist that federal intervention and control is the solution, but some of their own brethren have proven them wrong through an extensive study. Three Harvard Business School Professors, Lauren Cohen, Joshua Coval and Chris Malloy, examined the effects of increased spending over 42 years when 232 Senators or Congressmen became committee chairs and funneled federal dollars to their states or districts.
The study shows that the jump in federal funds significantly decreases private sector expenditures for capital items, research and development, and employment. The government money just squeezes out private funds. They found that this happens as long as the chairman stays in place, and begins to reverse itself only when the chairmanship is lost. The recently deceased Robert Byrd is a prime example. He was famous for funneling a hugely disproportionate amount of federal funds to West Virginia for 50 years, but when was the last time you heard people rushing to set up businesses in West Virginia. Maybe now that Byrd is gone, there is hope for free enterprise in West Virginia.
Our current Administration is stacked with book-smart and degree-laden people. Unfortunately, they have very little wisdom, no personal experience creating wealth, and don’t realize that efforts such as the Stimulus Bill just deter private enterprise from reviving the economy as it has in past downturns. The solution will come when they wise up – which, admittedly, is highly unlikely – or when change is forced upon them by Republican majorities after November 3rd.
Iranian regime sets up brothels; recruits prostitutes
The Province of the Quds’eh-Razavi of Khorassan has created centers for temporary marriage (just next door to the shrine) for those brothers who are on pilgrimage to the shrine of our eighth Imam, Imam Reza, and who are far away from their spouses.
To that end, we call on all our sisters who are virgins, who are between the ages of 12 and 35 to cooperate with us. Each of our sisters who signs up will be bound by a two year contract with the province of the Quds’eh-Razavi of Khorassan and will be required to spend at least 25 days of each month temporarily married to those brothers who are on pilgrimage. The period of the contract will be considered as a part of the employment experience of the applicant. The period of each temporary marriage can be anywhere between 5 hours to 10 days. The prices are as follows:
* 5 hour temporary marriage – 50,000 Tomans ($50 US)
* One day temporary marriage – 75,000 Tomans ($75 US)
* Two day temporary marriage – 100,000 Tomans ($100 US)
* Three day temporary marriage – 150,000 Tomans ($150 US)
* Between 4 and 10 day temporary marriage – 300,000 Tomans ($300 US)
Our sisters who are virgins will receive a bonus of 100,000 Tomans ($100 US) for the removal of their hymen.
After the expiration of the two year contract, should our sisters still be under 35 years of age and should they be so inclined, they can be added to the waiting list of those who are seeking long-term temporary marriage.
The employed sisters are obligated to donate 5% of their earnings to the Shrine of Imam Reza. We ask that all the sisters who are interested in applying, to furnish two full-length photographs (fully hijabed and properly veiled), their academic diplomas, proof of their virginity and a certificate of good physical and psychological health which they can obtain through the health and human services of the township of their residence.
Attention: For sisters who are below 14 years of age, a written consent from their fathers or male guardian is required.
The US economy is Obama's mess and Democrats are panicking : At the end of the day, something has to give. If Obama is not forced to change course the economic consequences for millions of Americans will be increasing severe. Although 'there is a great deal of ruin in a nation', as Adam Smith once observed, there is still a limit to what an economy can endure. Despite its size and power America is not an exception
Influential commentators urge the Fed to raise the pace of pumping : Contrary to Krugman and other mainstream economists neither the Fed nor the government's loose monetary and fiscal policies can cause an expansion in the pool of real savings. On the contrary loose policies only weaken the process of real wealth formation thereby weakening prospects for a sustained economic expansion
Will the Reserve's tight monetary policy drive the Australian economy off a cliff? : Our economic commentariat have no idea how tight monetary policy is. With the money supply shrinking, the housing market cooling, manufacturing slowing and retail prices stabilizing there is only one direction in which the economy can go
The Government's 'alternative energy' policies will be a disaster for the economy : Replacing centralised power generation with alternative energy would result in a colossal waste of land, labour and capital, massive increases in energy prices and savage cuts in living standards
Fidel Castro predicts nuclear war : It was Castro & Guevara's attempt to start a nuclear war that forced Kruschev to remove nuclear missiles from Cuba in 1962, not Kennedy. In fact, Jack Kennedy folded like a bad poker hand, giving Kruschev everything he asked for. And Democrat presidents have been folding ever since
Of course Obama's a socialist : Obama is a card-carrying member of the ruling class, and every act of this president aims to concentrate more power in the government or distribute favors to his supporters. America was not founded for this. The 600,000 did not die in the Civil War for this. The GIs did not crush Nazism and Communism for this. And that is why it shall not stand
Iran foresees a need for more cannon-fodder: "Iranian President Mahmoud Ahmadinejad inaugurated a new policy on Tuesday to encourage population growth, dismissing Iran’s decades of family planning as ungodly and a Western import. The new government initiative will pay families for every new child and deposit money into the newborn’s bank account until they reach 18, effectively rolling back years of efforts to boost the economy by reducing the country’s runaway population growth.”
Inching towards free trade?: “Congress has passed legislation that temporarily reduces or suspends tariffs on 639 items, mostly components that American manufacturers use in their production processes. The Miscellaneous Tariff Bill comes up periodically. On Tuesday it passed the Senate without opposition or a recorded vote. The bill passed the House last week, and now goes to the president for his signature.”
Persecution of fundamentalist Mormons under challenge: "The Utah Supreme Court has reversed Warren Steed Jeffs’ two convictions on charges of rape as an accomplice and ordered a new trial, saying that instructions given to jurors were erroneous. Jeffs, the ‘prophet’ of the Fundamentalist Church of Jesus Christ of Latter-day Saints, or FLDS, was sentenced to two consecutive terms of five years to life after he was convicted in September 2007. He was accused of using his religious influence over his followers to coerce a 14-year-old girl into marrying her 19-year-old cousin.” [Sticking your dick up another guy's ass is hailed as "marriage" but Mormon ideas about marriage are a crime?]
Why are we discussing racism?: "Can anyone tell me why suddenly race is the hot topic of national discourse? According to Gallup polling of last week, the issues most on the minds of Americans are the economy and jobs followed by dissatisfaction with all aspects of government. I didn’t notice racism on the list anywhere. The NAACP says it was ’snookered’ by Fox News on the Shirley Sherrod story. I say we’ve all been snookered by the NAACP.”
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
Posted by JR at 11:32 PM