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Monthly Archives: March 2009

The Good—Part III

March 30th, 2009 - 9:18 am

Ok—after those depressing six “bad” and “ugly” trends, here are three things that bring at least some optimism in otherwise trying times. 

The Good

1) Technology. For all the dangers and destruction inherent in access to instant electronic information and communication (cf. the subprime mortgage bundles and computer programs that accelerated  innate human idiocy), there often can be much good in such a radically egalitarian enterprise. Today’s peasant in Guatemala with a cell phone or a stop at an Internet café, has more knowledge of market futures at his hands than had aristocratic grandees of the 1940s.

I used to tote books and magazines on trips to do research and write contemporary commentary. Now? I can confirm in 10 seconds on the Internet that once again Sen. Dodd is not telling the truth or reread the Melian Dialogue of Thucydides in Greek, or learn what Sun Maid paid on free tonnage for raisins in 1982—whether in rural Fresno County or in a dingy hotel in Mexico. In a debate once, an audience member with his laptop in the first row was able to correct the record instantaneously during the question and answer period. In some sense, the many have gained an enormous amount of power, and, for good or evil, the old hierarchies are crumbling (Who cares whether the debater has a MD or law degree if he is stating things that can instantly be proven inaccurate?)

Most of us would be long dead without Westernized/globalized medicine—something we seem to forget in the near hysterical demonization of the US health care system. In 1979 an emergency operation and antibiotics saved me from a severed ureter cut by a staghorn calculus; in 2006 the degree to which Libyans had access to Flagyl, Augmentin and Cipro, and Westernized notions of surgical protocoal, saved my life after an operation for a ruptured appendix. Urocit-K (potassium citrate) alone provided relief from nearly weekly kidney stones.

All of us have similar stories of our own possibly short, unpleasant lives had it not been for brilliantly-trained doctors, courageous nurses, wonder drugs, and high-tech instrumentation. Unfettered reason, free speech, rationalism protected from zealotry and tribalism, and free-market capitalism have given us years of physical comfort and relief that premodern man could only dream of. Thousands of Western-trained doctors, researchers, and scientists daily provide us with breakthroughs that are making our lives far less nasty, solitary, poor, brutish and short.

I won’t deny that modern medicine—especially from my experience with lost family members undergoing failed regimens of chemotherapy—can be insensitive, misleading, and often excruciating painful. But by and large, American medicine has improved the lives of billions on the planet.

We forget how life has been transformed just from the 1960s alone. As a student, I used to drive a beat up car with spare points, plugs, an old alternator and starter replacement in the trunk. The clutch went out frequently—so I ended up at the side of rural highways quite often. In 1969 it was common to see California freeways littered with broken down cars; now it is a rare occurrence. I grew up with a father taking apart our dryer, washer, vacuum cleaner, and refrigerators almost monthly; today, they seem to run on autopilot.

In often insidious ways, technology is making daily life ever easier—and providing a much needed counterpoint to a culture and politics that get worse, as popular civility and wisdom vanish. (Wait! Some of you object: ease of life, affluence and leisure brought on by technology explain the end of the old cherished culture. It is not exactly so simple.)

2) Competent people. There is an entire nation of brilliant hardworking and uniquely gifted people within the United States like none other in the world—of all politics and beliefs. Critics of America fault our crime rate, growing illiteracy, and dismal education system (as I pointed out last time). But much of that pathology arises from America’s ambitious plans to educate, house, and take care of 300 million souls at levels found nowhere else in the world, amid all sorts of endemic poverty, the arrival of nearly 1 million illegal aliens per year (12-20 million already here), and millions more who have arrived legally in the last three decades abjectly poor from Asia, Africa, and South America. We notice our failures to ensure a massive equality of result in a generation, never the magnitude of the undertaking.

The fact is that one out of five Americans—an enormously large hidden nation of, say, some 60 million—is better educated, more innovative and optimistic than anyone else abroad. This meritocracy of the hyper-hard-working and talented—of all races, both genders, of varying ages, and no set religion—by and large, commits very little crime, follow the law, and pay their taxes without cheating. They’re either highly educated or magnificently trained by family and vocational schools in the various trades.

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The Ugly—Part Two

March 26th, 2009 - 11:10 pm

After outlining some “bad” trends—the conservative abandonment of budgetary restraint, the new liberal-Wall-Street nexus, the rise of therapeutic excuse-making for substandard behavior—I now offer three “ugly” trends. These are not merely bad, but sort of creepy as well. Don’t despair—I’ll end with some good developments on the next posting.

I)      The Corruption of the Press. We have no media—at least as we once knew it. Somewhere in late 2007, it disappeared entirely, and became something akin to the old Pravda, or the livelier Baghdad Bob’s broadcasts, or the rants of Lord Haw-Haw. (We got everything from Judith Warner about the dreams of women having sex with Obama to “I felt this thrill going up my leg” Chris Matthews).

For the short-term thrill of ensuring the coronation of Barack Obama, it gave up all hard-won standards of journalistic objectivity—so much so that it is hard to adjudicate whether the rise of the Internet alone, or the clear bias of the print media, has nearly destroyed the newspaper industry.

Few any longer connect with a Newsweek editorial, a Time essay, a riff from NPR, or commentary on PBS. The front pages of the New York Times or Washington Post are op-eds in thin disguise. The faculty of the Columbia School of Journalism is not objective. We live in an age of affluent, rather inbred ironists who punch in at the Ministry of Truth, and the result is that about half of the population still wakes up every morning and sighs when they turn on the television, listen to the radio news, or read the newspaper, “He’s lying” or “She’s biased”.  The utopian ends of social egalitarianism for the new media lords justified the tawdry means of distorting reality

Now we have those in Congress talking about saving the newspapers by making them “non-profit,” tax-free entities that will drop political endorsements! That rather insane notion would have three deleterious effects:

1) The papers would become even harder one-sided and Left, once market forces were eliminated and the now soon to be unemployed could find federal media tenure doing, at best, what NPR does, and, at worst, having a sinecure at something public, but analogous to Air America. Oh yes, crede mihi, tax-free newspapers will be very biased.

2) A quasi-public print media will become even more incompetent. Think a very big DMV newsletter. Or perhaps a sort of tax-free sinecure for high-paid federal employees who make more at less stress than their private counterparts. Imagine a tax-exempt, quasi-public New York Times, running telethons, praising their public service investigatory work, begging for donations as they sell cups, plates, hats, etc., with scads of G-15 employees manning the phone banks on money-raising day, a Bill Moyers or senior journalist like Marvin Kalb extolling the courage of the new Times.

3) More fossilization of the economy. Not all the harness-fabricators morphed into tractor producers, but in our new wisdom all newspapers will become—what? I simply don’t know. We are trying to ossify American society at about 1965 in the age of LBJ, as Nancy Pelosi and Harry Reid prove to be the most reactionary politicians in a half-century.

In the meantime, we are beginning to see that the media is about to add humiliation to its moral failure, as it grasps that once you worship a Messiah, you cannot leave the cult. Mr. Obama tolerates no dissent among the believers. The recent Obama press conference showed what happens to the shunned New York Times or Washington Post once you even consider climbing over the fence of the compound. What were these sycophants thinking as they watched Obama produce all sorts of bogus figures in assuring that tripling the deficit, then halving it will translate into lessening the present red-ink? Again, imagine a sequel to the Wizard of Oz, where everyone goes on thinking that the floating image on the screen with the smoke really is Oz, despite seeing the tiny man behind the curtain with his hands busy with the levers. The media knows what they’ve become, and already have seen the flip side of their one-eye Jack—and is now trapped in culthood.

II) Uglier still is what is going on in universities. Higher education in the humanities has devolved into a sort of indoctrination/reeducation camp, on the following apologia: the corporation, the family, the church, the military, the government are illiberal. So in our precious, rare chance to have the nation’s youth for a brief four years, we the professoriate have to offset, balance, offer an antithesis to these dominant conservative cultures. So, presto, we cannot be biased since we the anointed are the corrective to the bias.

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The Good, the Bad, and the Ugly—Part One

March 24th, 2009 - 8:40 am

 

In the spirit of optimism, let’s review some good, some bad, and some downright ugly things about this present age. I’ll give three examples of each. For today, here’s the “bad.” Later this week, I’ll post the “ugly,” and then on the weekend the “good.”

First, THE BAD (remember picking three examples is by needs arbitrary).

1) The end of fiscal sobriety. One of the strangest developments has been the embrace, reluctant or not, by conservatives of large government and deficits. Anytime we hear a conservative or a Republican talk of the deficit in terms of percentages of GDP rather than x-amount of real dollars in red ink, we infer that he has no plans to balance the budget. But do we appreciate the psychological, ethical implication of a voter waking up each morning, satisfied that his government is running a surplus? Even with good incomes and some cash in the bank, do we feel better that we have $5,000 on our Visa cards or $O?

For all the talk of smaller government, it grew enormously during the Bush administration, and, to a lesser extent, during both the Reagan and Bush I terms. The problem with growing government to fund idealistic programs like No Child Left Behind or Prescription Drug augments to Medicare is not just the unfunded cost, not just the misguided trust in yet more government bureaucracies that spawn ever larger constituencies of dependants, but the discrediting of the conservative critique of an ongoing DMV-ing of America. Who will now police the fiscal police?

Despite his stalwart efforts to keep us safe for seven years after 9/11 (and we will in time come to appreciate the magnitude of his Trumanesque achievement), had Bush left something akin to a balanced budget, it would have been far easier now to have convinced the public of the pernicious legacies of the far larger Obama deficits (remember the new Orwellian subtext, “We must borrow and spend in order to save and cut”). What are conservatives to say of Obama’s $1.7 trillion annual deficit? “My God in Heaven, that rascal trumped our $500 billion shortfall three-times over!”

The odd thing is that despite 9/11, Katrina, Iraq, and the tax cuts, had Bush just kept discretionary domestic spending at the rate of inflation, we would have  been near budget surpluses by 2005. By January 2007 when Bush had lost the Congress and wished to repent and reform, the game was lost and there was no chance of financial sobriety. Now, our best and brightest suggest that taxing and spending, and printing and borrowing money will lead to financial stability, as if it has in the past in prewar Germany, present -day Zimbabwe or 20th-century Argentina—or 1979 America.

2) Wall Street and the Democrats. By all accounts, liberals and Democrats receive far more Wall Street money than do conservatives—and it has left us baffled about the old role of big money and big government. So here we are: liberals are favoring crony capitalism—crony capitalism is favoring liberals advocating equality of result.

We are reduced to a Chris Dodd on the barricades railing against financial greed, or populist Charles Rangel limoing over to AIG to jawbone funding for his “Rangel Center,” or Bill Gates figuring once more how to connive a Microsoft monopoly, in order to, Carneige-like, fund his noble causes, or George Soros, in between trying to wreck the Bank of England, funneling his hard-won cash to liberal attack-dog centers.

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Thoughts About Depressed Americans

March 20th, 2009 - 11:43 pm

 Why are so many Americans so depressed about things these days? It is perhaps not just the economy.

 I think the answer is clear: all the accustomed referents, the sources of security, of knowledge and reassurance appear to be vanishing. Materially, we still enjoy a sumptuous lifestyle in comparison with past generations—and the world outside our borders. America remains the most sane and successful society on the planet.

But there is a strange foreboding, a deer-in-the-headlights look to us that we may be clueless Greeks in the age of Demosthenes, played-out Romans around AD 450, or give-up French in late 1939—with a sense it cannot go on. Why? Let us count the ways.

1)   About Broke. The collective debt is simply staggering, $1.7 trillion in borrowing this year alone. $3.5 trillion is our annual budget, and by 2012 what we all owe will be well over $15-17 trillion. (No fears: the President promises to triple the Bush deficit, but by the end of his “first” term “halve” the deficit, as if tripling and then halving it is not increasing it.)

Today while President Obama railed against AIG bonuses (imagine damning the bonuses you signed into law to the execs from whom you took over $100,000 in campaign donations!)—the congressional budget office “found” another trillion or so dollars in anticipated deficits that Team Obama lost.

So after Obama, the next President will campaign on “I promise a $1 trillion annual surplus for eight years to pay off the last eight, so we can then start over paying off the old $11 trillion shortfall.”

The rub is not just that we are inflating—no, ruining—our currency. And the problem is still more than the fact that we are destroying the lives of the next generation, whose collective budgets will be consumed largely with health care for us baby-boomers, and interest payments on our debts. (If I get to be 87, can we keep asking 500 or so Chinese to put off false teeth to lend me their money for a hip replacement?)

I think instead the worst element is a sort of ill-feeling about ourselves, an unhappiness as we look in the mirror and see what we are doing to our dignity in this, the hour of our crisis.

We are starting to fathom that when times got iffy, we lacked the resilience of the proverbial Joads and the grit of that tough Depression-era generation, and certainly we seem different sorts from those who built and flew B-17s amid the Luftwaffe.

Instead, this generation has gone quite stark raving mad the last seven months, hysterical, and decided we would simply borrow, charge it, print money, blame, accuse—almost anything other than roll up our sleeves, take a cut in our standard of living, pay off what we owe, admit  that we lived too high on the hog, and find a certain nobility in shared sacrifice.

So again, here we are reduced to begging the Chinese to subsidize our life-styles, while 500 million of their own poor make their American counterparts of the lower classes here seem like well-heeled grandees.

2) Fides? We have almost destroyed the concept of trust: we don’t think there is any accuracy in AIG statements; don’t really believe GM will make it on its own,  or that Goldman-Sachs is honestly run.

All our icons—Ford, General Electric, Citibank, Bank of America—in a mere generation imploded by their own hands, and now we don’t have any real idea of what went wrong, and believe their captains don’t either.

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The “Depression” for Us Idiots

March 17th, 2009 - 5:26 pm

I confess I don’t know all that much about the theory of economics, and have done some unwise things in the strict financial sense the last thirty years—remodeled an ancient family farm house that will never be appraised at what was sunk into it, both farmed and rented out a 40-acre Thompson seedless vineyard whose returns usually did not pay the property taxes, irrigation taxes, infrastructure upkeep, and depreciation—and in unthinking fashion kept up my modest monthly 401(k) contributions through the height of inflated Wall Street stock prices. I could go on, but will leave at that.

My point? Many of us who have little abstract financial or economic sense are nonetheless baffled about the bad news from the economic front—and the inability of so-called experts to clarify issues. Let me list some troubling items.

1. 1984 Redux. I feel like Winston Smith in Oceania, confused about all the doublethink coming out of Washington. Great Depression—no Great Depression. Recession for years; its end at the end of this year. Signing statements bad; signing statements good. Fundamentals hardly strong; fundamentals really sound. Earmarks terrible; 8,000 wonderful. Bush’s $500 billion deficit reckless; Obama’s $1.7 sober and judicious; Iraq horrific and the worst whatever; Iraq suddenly quiet, democratic, and hopeful; highest ethical bar in an administration ever—Richardson, Daschle, Killefer, Solis, etc. cannot meet the lowest; Guantanamo a Stalag; Guantanamo open for a year, pending the recommendations of a “task force”; Guantanamo a torture place for unlawful combatants; Guantanamo a nice place without unlawful combatants; Obama not to be blamed for massive collapse of stock prices since November; Obama to be praised for modest gains last week. At some point, someone in the media must be getting embarrassed that they are all working at the Ministry of Truth.

2. Stimulating the Stimulated. I am also confused the various stimuli, bailouts, and guarantees. We all support some type of federal guarantees for some banks, lest like a house of cards they start falling seriatim.

Yet, I have not seen signs yet (unemployment, deflation, crashing GDP, etc.) that we are in the Great Depression, or even close to the hard times that supposedly will last “for years” as warned by President Obama. Are there not self-correcting mechanisms and natural stimuli at work that simply are ignored by the media and the administration in this madcap race to socialism?

Cf. hundreds of billions saved, both collectively and by the government, when oil prices crashed from $147 a barrel to around $40; billions more were saved when 6-month U.S. treasury notes, sold to finance the debt, crashed to about a half-a-percentage point in interest (allowing us free use of money, given that what we pay out is less than the rate of inflation); then there are the preexisting stimuli, given that Bush left with a $500 billion annual deficit.

Before we charge our grandchildren with another $3-5 trillion in aggregate debt over the next four years, cannot we take a deep breath, stop the hysteria, and let these stimuli have a chance to work—on the real chance we are in a 1981-3 serious recession, but hardly at 1929-41 Great Depression?

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Can’t We All Agree?

March 11th, 2009 - 3:32 pm

What hope and change would all of us, conservatives and liberals alike, welcome from President Obama? Here are some suggestions, surreal and serious, trivial and quite important.

1) The UN. Recently the UN Secretary-General termed the US a “deadbeat” donor, despite our long record of more than generous donations. Cannot we hope and change this organization out of New York? There is no need to withdraw from the organization, but rather we need a liberal solution of asking the aggrieved body to relocate closer to the center of present-day global problems. Conservatives would like the UN gone from our shores; liberals could agree that multilateral solutions need to be closer to the problems—the suffering, the starvation, and the killing? Possible new host cities? Beirut? Cairo? Moscow? Tripoli? A UN headquarters in Nairobi or Lagos would save millions in transportation costs, and allow UN employees a feel for problems in a way New York does not. So many birds killed with so few stones: a) no more autocratic functionaries living it up in New York restaurants and limo-ing around the city as they trash the United States during their day jobs; b) no more media attention to UN antics, as the soap-box speeches no longer go down a few blocks from CBS and ABC, but thousands of miles away; c) the world’s reps live the life in the concrete that they advocate in the abstract;

2) The Meltdown Commission. We had a 9/11 Commission; we formed the Baker-Hamilton Commission on Iraq (never mind the utility of the conclusions). So let us try a bipartisan investigatory commission on the autumn financial meltdown. Thus far the mainstream media narrative is a reductive “Bush did it.” But let us examine past bundling of subprime mortgages, and derivatives, and who introduced more regulation of banks, who opposed it; who tried to restrain Freddie and Fannie, who fought that tooth and nail, what the SEC did and did not do—and why. Let us collate all the campaign contributions from the failed banks, Madoff, the entire open sewer of politics and high finance, and then let those of the commission, both Democrat and Republican, issue a white paper on when, why, and how it all went down.

3) Farm subsidies. From 2002-8 prices for most subsidized commodities, from corn and wheat to cotton and dairy, were quite profitable. Yet the five-year $307 billion farm bill contains billions in direct subsidies to corporate and large farmers who are already making a profit in the open market. The bill itself is full of pork, and there is no real reason to continue any of the direct cash support elements of the legislation. I’m not sure of the exact correlation, but if one were to graph the history of farm subsidies and the decline of small family farms the later line would go upward as the latter went down. We were once promised in the 1996 “Freedom to Farm” act that it would all end. It didn’t. Then right after 9/11 we rushed a renewed “farm security” bill, using the fear of terrorism as another false rationale. When that fear faded, we advanced the notion of stimuli and pump-priming. I never understood why a plum or grape grower got nothing and survived, and much wealthier cotton growers got lots, thrived, and said they would go broke without federal largess. The bill never explained why a few farmers got a lot, and most got nothing; or why the dole continued even when prices climbed.

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Oh, the Debts We Will See!

March 8th, 2009 - 11:12 pm

 

Going broke without style…

$3.6 trillion budget. $1.7 trillion annual deficit. $800 billion plus borrowing stimulus.  $600 billion plus in outlays for new nationalized health care, and then another $600 billion again for cap-and-trade.

These numbers are so fantastic, so absolutely crazed, that the thought of ever paying them off boggles the mathematical senses. (I have surreal nightmares that as we haggle with the Chinese for another $500 billion dollar note to fund cap-and-trade, or another DMV-like national health care center, the USS Carl Vinson radios that it is broke and has no credit to buy supplies off Dubai, or its F-18s sit in rows on its deck, gathering brine for want of parts to take off).

 ”They” will pay

How many of those diabolical rich making $250,000 and above are there left to gouge to pay for this all? It simply doesn’t compute. One is left with the only possibility that we slash defense, or we will inflate our way out, since no foreign debtor will want to supply those staggering sums of cash.

 

Athens in the fourth century B.C. chose to mint “redheads”, silver coins with bronze cores that  were quickly exposed once the patina around the coins’ imprinted busts wore off. Rome did the same thing, and by the fourth century AD simply flooded its provinces with money of little real value. Germany paid off its war debts to France in the 1920s, with deliberately inflated German marks. I lived in Greece during the oil-embargo hyperinflation of 1973, and remember buying individual eggs with three or four inked-in price figures crossed out, as the store-keeper kept upping the price each day. (And I remember farming in the early 1980s when full-strength Roundup herbicide seemed to go from $60 to $70 to $100 a gallon in a single year).

 What, me worried?

I don’t think any one knows what is quite going on. I recently gave a lecture, and a Wall Street grandee afterwards approached the dais, asking me for advice (me, who could not even turn a profit growing raisins, and was a lousy peddler of family fruit for years at Farmers’ Markets), saying in effect something like the following: “Mr. Hanson—Consider: Real estate bad—not going to put money there when I’m not sure where the bottom is. Stocks worse—had I got out at New Year’s, I’d have thousands more than I do now. Cash pathetic—the interest doesn’t even cover what’s lost to inflation. So what’s left—the dole?”

 

I had no advice, of course, other than some vague warning that we are in a war against capital, sort  of similar to what Sallust and Cicero claim that Catiline and his band of dissolute and broke aristocrats were planning, with his calls for cancellation of debts and redistribution of property.

 

 

Here are the possible exegeses.

 

(a) Clueless. Obama, the community organizer from Chicago with a mere two years plus in the Senate, is clueless. He has never run a business, never served as an executive, never done anything in matters of commerce other than speak and write and authorize spending bills as part of his government job. The result is that he listens to the last person he speaks with—and with dozens of advisors with dozens more agendas, we are seeing a herky-jerky, now this, now that, everything but the kitchen sink, sort of governance. This version of the President is a nice guy who wants to please everyone and will please no one.

 

(b) Not so clueless. Or Obama has a pretty certain, calculated European objective of high taxes, big-spending programs, utopian foreign policy initiatives, and a therapeutic sense of ensuring we are all going to be equal by result. In that sense, the recession was a godsend, since he has a brief window of about six months of fright and uncertainty to ram through programs that will last a lifetime, and whose expense will ensure a vast redistribution of income. His closest advisors are life-long government technocrats who are inured to spending others’ money and can use tax-free public appurtenances (salaries, perks, benefits, travel, etc.) to emulate the grand lifestyles of those they detest in corporations and on Wall Street. So we will get a new technocrati overseer class to replace the now disgraced masters of the universe on Wall Street. This manifestation of Obama is a hustler of the first order, and almost everything he says from FISA and earmarks to raising the ethical bar on appointments and limits on spending is, well, made up as he goes along, with the assurance that the media is still ga-ga.

 

(c) A Mean streak. Or there is not so much chaos or European utopianism at work as a sort of primeval dislike of capitalists and those who have access to money—an angry President Obama whose furor now and again peeks through (remember the clingers’ speech, the accidental middle finger scratches, and the Robespierre rhetoric). Never mind the hypocrisy involved, or the mega-fortunes at play in the rise of Obama’s candidacy. Instead concentrate on the effects, both direct and insidious, of his initiatives on capital of the near-do-well. This is a quadruple whammy:

 

1)    Aggregate tax rates are going to approach 70% in some states, effectively destroying the idea that anyone from the lower classes can ever achieve wealth in a single lifetime, and pass some of it on to his children (increases in estate taxes will be next).

2)    The pulverizing of the Dow (cf. Obama’s flippant talk of gyrations and advice to invest now at rock bottom prices, as if those who were wiped out have disposable cash to buy more stocks) means that the aggregate wealth in 401(k)s and stocks for millions—along with equity in homes— of the upper middle classes has effectively vanished. In some cases, the lawyer or contractor who a year ago had $400K put away in retirement funds and $300K in home equity has effectively lost half, if not more, of his hard-won wealth. And when one computes the additional taxes on future income he will pay, it will be almost impossible in his remaining lifetime to make it back.

3)    The promises of free health and free education for everyone most surely will come with salary considerations and mean-testing (we are seeing that already with ideas floating about charitable contributions). In other words, the more you of the upper middle class will pay for new expansive entitlements, the more likely you will not be eligible to use the full extent of them.

4)    The power of anti-“rich” rhetoric is already beginning to demonize the wealthy as those who have somehow done something wrong in paying the full ticket for their children’s’ educations, or their own health care, or their full mortgage payments. Of all the things that worry me about Obama, the most troublesome is his conflation of the super wealthy—who are so rich that even Obama cannot touch them and who often are his most fervent supporters—with the entrepreneurs, the scramblers of the small business class who make between, say, $250,000 and $600,000.

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Obamafusion

March 6th, 2009 - 12:02 am

Why is Wall Street Worried?—Let us count the ways.

1) The proverbial Wall Street capitalists believe that, with new federal income tax rates, the removal of FICA ceilings, increases in capital gains rates, decreases in deductions, and simultaneous tax raises, not only will Obama remove incentives for innovation and productivity, but that he does not seem to care about—or perhaps appreciate—he consequences?

2) On the spending side, investors see too many subsidies and entitlements that may Europeanize the populace and erode incentives, while creating so much debt that in the next decade, should interest rates rise, the federal budget will be consumed with servicing borrowing and entitlement obligations. A redistributive economy in which government ensures an equality of result is Wall Street’s worst nightmare. Debt can only be paid back by floating more foreign debt, issuing more US bonds at home, raising taxes, or printing money—all bad options in the mind of the investor.

3) Too many are beginning to think Obama is, well, a naïf—and hence dangerous. He chest-thumps speeches Geithner cannot deliver. He says we are near the Great Depression—but then, after the stimulus package passes, suddenly hypes future growth rates to suggest that we will be out a recession, soon after all? Add in all the talk of high-tax, Al-Gorist cap-in-trade, wind and solar, socialized medicine in the midst of a financial crisis, and at best Obama comes across as confused and herky-jerky, and at worse, clueless on the economy—as if a Chicago organizer is organizing a multi-trillion-dollar economy. Talking about ‘gyrations’ and confusion about profits and earnings, and offering ad hoc advice about investing do not restore authority.

`4) Given the amount of debt the US is incurring (and the decades needed to pay it off), given the loose talk about the ‘rich’, and given the rumors about nationalization, investors are unsure whether the United States will remain a safe haven for investment, or even offer a climate for profit-making, since it would either be taxed to the point of seizure, or its beneficiaries would be culturally and socially demonized. Ultimately perhaps some will accept that as the price of doing business in a socialist US, but for now it creates doubt. This is not a defense of Wall Street (a year ago Richard Fuld and Robert Rubin were our Zeuses on Olympus who strutted like gods), simply a warning that we are going from excess to stasis, and the cure will be as bad as or worse than the disease.

5) Uncertainty. Who is now our Commerce Secretary? Which cowards is the Attorney General talking about? What did Geithner mean about pernicious oil and gas companies? What is with this Solis, and card check? How hard is it to ensure a Richardson or Daschle is clean? In other words, market watchers see after five weeks chaos, and think there is no sure and steady paradigm in which they can make careful business decisions and anticipate with some surety future risk.

So the perfect storm forms, and millions of individuals come to millions of identical conclusions: “Cut your losses with these guys, and get your cash out before it gets worse” rather than “Wow, what bargains! I gotta get in before the window of profit opportunity closes.”

But is there an alternative?

Do Republicans offer an antithesis? Can they explain the Bush deficits and take responsibility for them, as well as the Republican congressional creepiness from 2002-06 (Craig, Stevens, Cunningham, Foley, etc)? And most importantly, will they offer counterproposals—a stimulus much smaller, mixtures of loan guarantees, tax cuts, and (some) public works alone, coupled with spending caps as soon as GDP growth returns? Can they articulate how the market corrected, say, in 1980-3, without our government going socialist? Can we get a plan not merely to balance the budget, but to pay off the debt? If not, legitimate criticisms of Obama fall on deaf ears without some positive alternative.

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The Great Divider?

March 2nd, 2009 - 8:01 pm

Do As I Say—Not As I Do?

I confess I did not believe Barack Obama entirely during the campaign when he bragged on working across the aisle and championing bipartisanship.

You see, as in the case of any other politician, one must look to what he does—and has done—not what he says for election advantage.

And in the case of Sen. Obama, in his nascent career in the Senate, he had already compiled the most partisan record of any Democratic Senator. He had attended religiously one of the most racially divisive and extremist churches in the country. His Chicago friends were not moderates. His campaigns for state legislature, the House and the Senate were hard-ball, no-prisoner affairs of personal destruction, even by Chicago standards. Campaign references to reparations, gun- and bible-clingers, and Rev. Wright’s wisdom were not words of healing.

In short, while the rhetoric was often inspirational, I found no real reason then—or now—to believe that Barack Obama wishes to be a uniter. And nothing in his first five weeks of governance has disabused me of that first tough impression.

Nevertheless, here are five modest recommendations that he might adopt if he were really interested in bringing the country together.

1) Forget talk radio. During the campaign, President Obama, you went after Sean Hannity on numerous occasions—which are recycled ad nauseam almost daily as sound-bites on his radio program. Once in office, both you and your staff have zeroed in on Rush Limbaugh by name. But Presidential candidates and elected Presidents must seem above the fray, and not descend into tit-for-tat with media celebrities. There is a reason why even your closest associates have ceased calling you Barack and now quite properly address you as “Mr. President”—and it is not due to your persistence in demonizing talk radio.

Did George Bush go after Bill Maher or Air American or Keith Olbermann when almost daily they slandered his character? Did he serially evoke Michael Moore? To have done so by name, would have demeaned his office. Worry about refuting conservative ideas, and governing the country, rather than dueling over the airways with those who get paid for only that. The country wanted a Lincoln, not another Nixon going after Dan Rather at a press conference. So far your administration resembles the latter, not the former.

2) Forget about George Bush. We got the message already that he is near satanic, you angelic. Yet even in your inauguration speech, you could not leave well enough alone, and so once again went after a predecessor who won two elections, and so far has been circumspect in his criticism of your own brief tenure. Even ex-Presidents—cf. Jimmy Carter’s self-serving ankle-biting and Bill Clinton contorted snipes—reduce the office when they engage in schoolyard “they did it, not me” finger-pointing.

Again, in your first address to the nation, you went out swinging: “As for our common defense, we reject as false the choice between our safety and our ideals.” But President Bush never set up such a Manichean either/or situation, as you yourself must accept, when you embraced his protocols on FISA, the Patriotic Act, the Bush-Petraeus Iraq withdrawal plan, and kept rendition, and so far have not quite closed Guantanamo.

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