Obama Administration's Egghead Economic Saboteurs
Official motto of the White House economic team: Those who can, do. Those who can't, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.
Take Austan Goolsbee, please. President Obama's "fresh-faced" University of Chicago econ professor arrived in Washington in December 2008 to fill two slots: chief economist/staff director of the president's Economic Recovery Advisory Board and member of the Council of Economic Advisers. In September 2010, he replaced CEA head and fellow academic Christina Romer, who retreated to the University of California at Berkeley last August when unemployment hit 9.5 percent. (She infamously projected that the Obama stimulus would hold the jobless rate below 8 percent.)
Goolsbee's primary task: translating all of the administration's big-government theories for us dummies. As Goolsbee put it to his university's student newspaper: "We've certainly seen in previous crises that it's quite important to explain things to non-experts. The American people can confront any challenge if they're comfortable with the approach."
And what exactly was the nature of Goolsbee's vaunted expertise? Making money as a business rescue-and-recovery expert without ever having had to meet a payroll.
Goolsbee, the 15th wealthiest member of the Obama administration, has raked in assets valued at between $1,146,000 and $2,715,000. He also pulled in a University of Chicago salary of $465,000 and additional wages and honoraria worth $93,000, according to Washingtonian magazine. As I've noted before, the government research fellow and Obama campaign adviser was a champion of extending credit to the un-creditworthy. In a 2007 op-ed for The New York Times, he derided those who called subprime mortgages "irresponsible." He preferred to describe them as "innovations in the mortgage market" to expand the pool of homebuyers.
Goolsbee's most recent "innovation": the "White House White Board," a weekly video lecture teaching everyone else how to hitch what remains of America's free-market system to the wagon of the state and how much (or rather, how little) we should make doing it. He illustrated his grand interventionist strategy to pick and choose "Startup America" winners by drawing a trough of broken light bulbs (symbolizing entrepreneurial ideas) piling up in a "Valley of Death" because they lacked government support.
A comical choice of imagery given the Democrats' enviro-nutty ban on incandescent bulbs. But I digress.
When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent. Romer and Jared Bernstein (former chief economist to Vice President Joe Biden) had predicted unemployment would drop every single month after August 2009 due to the Obama stimulus. Bernstein bailed on the administration in April 2011 for the sanctuary of a liberal think-tank. He'll also now ply his failed wares as a financial pundit.
These hapless command-and-control ideologues were preceded by Peter Orszag, who hung his "Mission Accomplished" banner over the White House budget office in June 2010 after fewer than two years on the job, and by former National Economic Council head and hedge fund manager Larry Summers, who was caught sleeping on the job -- literally -- more than once during his brief tenure. Summers packed his bags in September. He was followed by Princeton economics professor and former top Obama Treasury Department official Alan Krueger in October 2010.
White House aides have lamented that the economic team is "exhausted." Apparently, Obama is tired of hearing from them, too. The Hill newspaper reports that he has stopped receiving daily economic briefings that were once treated with the same emergency status as national security briefings. So, the central planners continue to be paid to fail -- while their boss looks the other way at the destruction, whistling into what he calls America's temporary "head winds." Nice non-work if you can get it.
The Cancer of Regulation
Politicians care about poor people. I know because they always say that. But then why do they make it so hard for the poor to escape poverty?
Outside my office in New York City, I see yellow taxis. It's intuitive to think that government should license taxis to make sure they're safe and to limit their number. It's intuitive to believe that if anyone could just start picking up passengers, we'd have chaos. So to operate a taxi in NYC, you have to buy a license, a "medallion," from an existing cab company (or at a once-in-a-blue-moon auction). Medallions are so scarce, they now cost hundreds of thousands of dollars.
Licensing prices poor people out of the business. "Compare New York City, where a license to own and operate a taxi is $603,000, to Washington, D.C.," George Mason University economist Walter Williams told me. "There are not many black-owned taxis in New York City. But in Washington, most are owned by blacks." Why? Because in Washington, "it takes $200 to get a license to own and operate one taxi. That makes the difference."
Regulation hurts the people the politicians claim to help. People once just went into business. But now, in the name of "consumer protection," bureaucrats insist on licensing rules. Today, hundreds of occupations require expensive licenses. Tough luck for a poor person getting started.
Ask Jestina Clayton. Ten years ago, she moved from Africa to Utah. She assumed she could support her children with the hair-braiding skills she learned in Sierra Leone. For four years, she braided hair in her home. She made decent money. But then the government shut her down because she doesn't have an expensive cosmetology license that requires 2,000 hours of classroom time -- 50 weeks of useless instruction. The Institute for Justice (IJ), the public-interest law firm that fights such outrages, says "not one of those 2,000 hours teaches African hair-braiding."
IJ lawyer Paul Avelar explained that "the state passed a really broad law and left it to the cosmetology board to interpret." Guess who sits on the cosmetology board. Right: cosmetologists. And they don't like competition.
One day, Jestina received an email. "The email threatened to report me to the licensing division if I continued to braid," she told me. This came as a shock because she had been told that what she was doing was legal.
"When I called (the commission) in 2005 on two separate occasions, they did tell me that, but then when I called (again) ... the cosmetology lady told me that the situation had changed and that I needed to go to school now and get a license."
No customers complained, but a competitor did. One cosmetologist claimed that if she didn't go to school she might make someone bald. But this is nonsense -- hair-braiding is just ... braiding. If the braid is too tight, you can undo it.
The cosmetology board told Jestina that if she wanted to braid hair without paying $18,000 to get permission from the board, she should lobby the legislature. Good luck with that. Jestina actually tried, but no luck. How can poor people become entrepreneurs if they must get laws changed first?! Jestina stopped working because she can't afford the fines. "The first offense is $1,000," she said. "The second offense and any subsequent offense is $2,000 each day."
"It is not unique to Utah," Avelar added. "There are about 10 states that explicitly require people to go get this expensive, useless license to braid hair."
Fortunately, IJ's efforts against such laws have succeeded in seven states. Now it's in court fighting for Jestina, which, appropriately, means "justice" in her native language.
Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it's one in three. We lose some freedom every day. "Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers," Avelar said. "(Licensing laws) just help entrenched businesses keep out competition."
This is not what America was supposed to be.
Let's Not Forget About Obamacare
Democrats will often get irritable when some clingy philistine refers to Obamacare as "socialized medicine." It's simply not a precise phrase for the Patient Protection and Affordable Care Act. In any event, it's not socialized yet, you ignoramuses! Progress doesn't happen overnight. No worries, though, recent signs portend that Obamacare will give us the state-run plan we proles deserve.
A new study published in McKinsey Quarterly claims that in 2014, the provisions of Obamacare will induce 3 in 10 employers to "definitely or probably" stop offering health coverage to their employees. And we can only assume the companies have had the good sense not to read the legislation.
Sure, the president promised we could keep our insurance if we liked it. But why would you want to be mixed up with pitiless corporations that focus on profits, anyway? Obamacare courageously forces states to implement concocted "exchanges" so that someone much smarter than you can pick participants, regulate prices and keep an eye on things. Sounds like a vigorous marketplace. It's only a wonder that more Americans aren't clamoring for government-run supermarkets, smartphones and dating exchanges, as well.
You'll also recall that the un-socialized system allowed 20, 30, 40 million (please feel free to come up with any number you'd like; The New York Times won't care) people to go uninsured. Medicare's chief actuary estimated that 400,000 would sign up for these high-risk pools before Obamacare kicked in. The Congressional Budget Office estimated that the budget would be able to handle 200,000, and others claimed that the program would need eight times the funding to meet demand. This was the driving reason for Obamacare. But as Megan McArdle of The Atlantic points out, just as with the exchanges, folks have been standoffish, with only about 18,000 people signing up.
Victory, right? The success of a government handout is always measured by how little Americans need to use it, right? Well, judging from the food stamp administration's actions, that would be a big no. What this probably calls out for is more public service announcements or a wider net. Hey, we'll just get some toffee-nosed yacht jockeys to offset the cost.
That's not to say there aren't people out there who really need support. The president has generously handed out nearly 1,400 Obamacare waivers to the neediest among us. About 20 percent of them have been awarded to an upmarket district in San Francisco that, by pure chance, is represented by Nancy Pelosi. Others, such as the AARP and local unions, had demanded we pass Obamacare so they could not take part in it immediately.
We'll also soon be hearing more about the lawsuits challenging Obamacare's individual mandate. Randy Barnett, a professor of constitutional law at Georgetown University Law Center, recently asked, "If Congress can impose this economic mandate on the people, what can't it mandate the people to buy?" Everything and nothing. And that's the beauty of it.
And let's not forget it was Obama, the newfound holy savior of Medicare, who pinned the key cost control component of health care reform on Medicare through his Independent Payment Advisory Board, or what bitter righties call a rationing board.
Rationing boards. Political favors. Lies. Coercion. Broken promises. Precedents that can force us to buy about anything. It might not be socialism, technically speaking. But really, what's not to like?
Leftist Lies and the Media That Enable Them
You might have seen the vicious Mediscare video by now entitled “America the Beautiful.” If you haven’t, you should. It’s from folks who just the other day were chanting the mantra of “civility.” It’s a taste of what the left will be serving up as 2012 approaches.
As the song “America the Beautiful” plays, a man in a dark suit with a likeness to Republican Rep. Paul Ryan (Wis.) pushes an elderly woman in a wheelchair down a sidewalk. The message on the screen informs us that the Republican Medicare reform proposal will “privatize” Medicare. The man diverts to a steep path as the woman’s smile turns to terror. She fights as he pushes her faster. He then dumps her headfirst off a cliff, which we see clearly from the front. The only thing missing is a vampire giving her a hickey on the way down.
Not since Barry Goldwater was smeared in 1964 with the famous "little girl with daisy and mushroom cloud" TV ad has there been such bald-faced character assassination.
The ad was produced by The Agenda Project, a leftist group that earlier made a similarly nasty Tea Party video whose title includes the f-word, and also "Hate Begets Hate", a hateful assault on public figures who oppose the Cordoba House Mosque at Ground Zero in New York City. That one has little Muslim girls crying and being comforted while photos of big, bad (and even some liberal) politicians are quoted. This is propaganda at its rawest. No, wait. They topped it with that lady pushed over a cliff.
When all you have is a hammer: "Fed Chairman Ben Bernanke is troubled by the unemployment rate that has crept back upwards, and the 'frustratingly slow' economic recovery. And so what does he propose? More of the same, of course. More liquidity and a base interest rate kept near zero. You see, this is practically the only tool he has: monetary stimulus, which is another word for inflation, if we define this in terms of a rising money supply rather than rising prices, the latter of which is properly seen as a natural consequence of the former."
The dark side of the welfare state: "There comes a point when elected leaders reach the end of their ability to tax, borrow, and inflate for funding. The United States is verging on that threshold. However, rather than acknowledge the folly of and dispense with unsustainable entitlements, U.S. leaders are, for the most part, endeavoring to preserve them."
Real cuts for the debt vote: "The House's overwhelming rejection of a clean debt-limit increase means that the two parties must now find major spending cuts. House Republicans say that they will not support a debt increase unless the Democrats agree to equal-sized spending cuts. If Congress raises the debt limit by $1 trillion, then it must also find budget savings of at least $1 trillion, over either five or ten years. The crucial question is: Will the proposed budget savings be real cuts or smoke-and-mirrors 'cuts?'"
Free trade can help the US grow: "The Obama administration’s economic policies thus far would suggest that it sees the only way to increase growth is to increase federal spending. However, Free Trade Agreements (FTAs) that increase competition by removing tariffs and other barriers to trade may do more to promote America’s economic recovery than billions of dollars of government stimulus ever could."
Take your little black box and shove it: "We all heard this week that from this moment onward, all new automobiles manufactured in or imported to the United States will be required to have 'litle black boxes' like the flight recorders in aircraft."
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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)