American Elephants

America Can’t Be Governed Successfully From the Left. by The Elephant's Child
January 18, 2010, 10:40 pm
Filed under: Economy, Health Care, Politics, Statism | Tags: , ,

This could be a Norman Rockwell painting for the Saturday Evening Post.  Pure Americana.  However the election turns out tomorrow, this special election represents a severe tremor in the American political scene.

That a race to replace Ted Kennedy, in the bluest of states could be so close is extraordinary.  Ted Kennedy, the so-called “Lion of the Senate,” whatever that means, remains the patron saint of the liberals.  The turnout of wildly enthusiastic voters in bitter, nasty weather shows that they are rebelling against the last year’s headlong pursuit of partisan liberal governance.

After only 12 months in office, Mr. Obama’s approval ratings have fallen further and faster than any recent president.  Congress is despised.  Nebraska’s Ben Nelson has dropped under 50 percent in approval ratings, and was boo-ed in a pizza parlor.

The Democrats are attributing their fall to GOP “obstructionism”,  though how the GOP can obstruct anything when Democrats control the House, the Senate and the White House remains unclear.

Jay Cost at Real Clear Politics lists the political blunders of the Obama White House.  #1. A Lack of Bipartisanship. The left claims that the Republicans are too crassly political to compromise. The fact that most policies are decided behind closed doors that exclude Republicans make this a little hard to swallow.

#2. Installing Nancy Pelosi and Harry Reid as de facto prime ministers. Obama essentially turned everything over to these two, and the result was an enormous effort to reward supporters, relatives and donors, with little concern for spending, the economy or unemployment.

#3. Pursuing an agenda that doesn’t fit the times. The public is concerned about jobs, spending and debt, and the left is pursuing long-term ideological aims such as health care. Voters suspect with some justification that the Democrats are more than a little math-challenged.

The Wall Street Journal has fun pointing out the children of “The Great Society” who are now committee chairmen and their foibles, with pictures so you will recognize them. “They have spent their lives in government and know almost nothing about the private sector or how to grow an economy.  They view the Reagan era as an historical aberration, and they have stayed in Washington for decades precisely in wait of this moment to realize 40-years of pent-up policy ambition.  They believe this is their 1965, or 1933.”

As the Journal editors pointed out:  “A crisis is a terrible thing to exploit.”

Audacity, Audacity, Audacity. by The Elephant's Child

The administration has spent months pleading with banks to lend more money.  The banks point out that they aren’t getting a lot of requests for loans.  Businesses that have hunkered down in response to a faltering economy are not going to be anxious to extend themselves by borrowing money that they may not be able to repay.

The actions of the White House and Congress are impossible to predict,  They’re talking about new taxes, new regulations, new Czars with new powers to interfere in business.  Who knows what they are going to come up with next?

President Obama’s new proposal, the “Financial Crisis Responsibility Fee” — do not call it a tax — is being sold as a way to cover expected losses in the Troubled Asset Relief Program (TARP).  The only problem is that the banks selected to pay the tax fee aren’t those responsible for TARP losses.  With the exception of Citigroup those banks have repaid their TARP money with interest.

TARP was a fund initiated by the Bush administration to help financial firms get rid of toxic assets — packages of underwater mortgages.  There are about 50 financial companies and the tax responsibility fee will apply only to those firms with deep pockets assets of more than $50 billion.  Those firms would have to pay the tax fee even though many of them did not accept any taxpayer assistance and those who did have already paid back the government money they were forced to accept, plus the interest on those amounts.

The administration never used all of the TARP funds, but applied them not to the designated financial firms, but to bail out  GM and Chrysler, and to homeowners as well.  So banks are having to pay for immense losses at car companies, and for rescuing homeowners underwater on their mortgages.

Surprisingly, banks were less than enthusiastic.  “Using tax policy to punish people is a bad idea, “Jamie Dimon, CEO of JPMorgan Chase & Co. told reporters even before details of the tax fee were known. “It would be very hard for the industry to pay for the auto companies,” he added. “I mean, at one point you have to be a little fair.”

The origins of the financial crisis have been explained: the Carter administration’s Community Reinvestment Act was designed to help poor people and minorities own their own homes.  Over the years, Democrats expanded on the program, because it wasn’t moving fast enough.  They demanded more loans to less-qualified people in the interest of more home ownership.  Eventually they insisted that banks make loans that prudent banking rules would have prevented banks from making.

Fannie Mae and Freddie Mac, the government sponsored mortgage giants, were required to encourage loans.  Questionable loans were packaged in large bundles as investments, and rated positively by credit reporting agencies like  Standard and Poors.   They offered higher interest rates than were available on government bonds, and came from institutions “understood” to be backed by the full faith and credit of the federal government.

Not to excuse the banks, they should have known better.  But to blame the banks as the source of the financial collapse is a canard intended to get congress, the administration, Barney Frank, Chris Dodd, and ACORN off the hook.  Barney Frank is already back trying to rescue people who couldn’t afford their mortgages.

So what’s going on?  David Axlerod inadvertently explained. You see the message is that the Republican policies of the Bush years brought the U.S. to the brink of disaster and Obama’s wise policies are, with hard work,  restoring the economy.

They want to stand with the insurance industry on health care and protect the status quo, then let them defend that in an election,” Axelrod said. “If they want to stand with the banks and the financial industries, and protect the status quo, then let them explain that in an election. If the party that over eight years turned a… surplus into the most significant growth in national debt by far in the history of the country and left this president with a $1.3 trillion deficit when he walked in the door and an economic crisis, let them campaign on fiscal integrity. You know… we’re certainly willing to have that discussion.

President Obama’s “Your Weekly Address” was devoted to blaming banks for the financial crisis, expressing his own rage at the banks,  insisting that Americans were enraged at the banks that caused the financial crisis and were now making a PROFIT and giving BONUSES to the fat-cats executives. How dare the banks resist his “fees?”

The intent is to convince gullible voters that the banks are responsible for everything.  Note the name of the tax fee.  Either the Bush administration or Wall Street are to blame for any mess that has occurred anywhere, and the brave Obama team is trying to figure out working hard to restore it.

If you can figure out how forcing the big banks to pay a tax to repay voters for the money the administration squandered on Detroit and the unions, is going to revive the economy by encouraging banks to loan money to private business, — send in your resume.  There may be an opening on the Obama Team.

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