American Elephants

“How to Fix the Economy” by Nancy Pelosi. by The Elephant's Child

On Wednesday night, September 29th, Speaker of the House Nancy Pelosi cast the deciding vote when the House voted, 210 – 209, to adjourn.  By custom, the speaker doesn’t ordinarily vote except on issues of special importance.  Over the past four years, Pelosi has shown an impressive ability to deliver Democrat majorities on one roll call after another, by a sheer display of brute power.

This time, it wasn’t routine, for the Republicans wanted a roll call vote on extending all of the George W. Bush tax cuts which are set to expire on January 1.  There were enough Democrats on record for that move to give them a majority, and 39 Democrats had joined Republicans and voted against adjournment.

Pelosi had lost control of the House, so she decided to shut it down and let Democrats go home and try to rescue their seats.

In the furor of an election campaign, with blame flying around like shrapnel in a fire-fight, it’s helpful to correctly apportion responsibility. We can learn from history and ask the founders.  From Federalist 62:

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

Somebody is responsible for 2,700 pages of a health care reform bill that creates all sorts of bureaus and agencies and departments and offices who will issue thousands of pages of as-yet-unknown regulations and rules.  President Obama demanded a health care reform bill, communicated some specifics and then left it up to Nancy Pelosi and Harry Reid to push through Congress, so he could take all of the credit, but none of the blame.

But the President can only propose.  Congress controls the purse strings.

Here’s what our economy looked like in 2006, just before the Democrats took over both houses of Congress.  Unemployment was 4.4%.  Real GDP growth over the previous four years averaged 3% a year.  The S&P 500 stock index stood at 1418, 84% higher than its 9/11 low and more than 7% higher than when Bush took office.

Every year of Bush’s presidency, real (inflation adjusted) disposable income per person went up.  By the end of 2006, the average person was making 9% more in real terms than before Bush became president.  The last election in 2006 was considered a referendum on Iraq, where the war was not going well.  55% of Americans said the economy was in good shape.  Harry Reid said the Iraq War was lost, and Senator Barack Obama introduced a bill in the Senate to prevent the Surge.  Granted, Mr. Bush signed many of those laws that he should have vetoed.   But TARP did just what it was supposed to, and is paying back American taxpayers — except for the portion that Obama used to bail out and take control of the auto industry. There is little likelihood that will ever be repaid.

In January 2007, the CBO projected a $379 billion surplus over the next decade.  After four years under Mrs. Pelosi and Mr. Reid, and two years of Mr. Obama in the White House, the 2007–2016 projection is a deficit of $7.16 trillion.  We have  41.8 million Americans on food stamps.  Participation has set records for 20 straight months.  According to Speaker of the House Nancy Pelosi said this is great news.  At a press conference in her home town of San Francisco, Mrs. Pelosi explained:

[T]he program’s multiplier effect — the amount of money generated in the local economy as the result of the subsidy — far exceeds the nearly $60 billion spent this year by the federal government and is a sure-fire way to stimulate the economy.  For every dollar a person receives in food stamps, Pelosi said that $1.79 is put back into the economy.  The U.S. Department of Agriculture cites an even higher figure of $1.84.

“It is the biggest bang for the buck when you do food stamps and unemployment insurance.  The biggest bang for the buck” she said.

See. You can fix the whole economy.  Just have the government spend $2 trillion on food stamps and we will get back $3.58 trillion, or if we use the Agriculture figures $3.68 trillion.  We’ll all be rich, just like magic, it will all come back and the economy will fix itself.  It will all come back, just you wait and see,  just you w-a-i-t  a-n-d,  w-a-i-t   a—n—d      w—a—–i  …

Monday Morning Miscellany. by The Elephant's Child

— 89,000 stimulus payments of $250 each made to people who were dead or in prison. The Social Security Administration’s inspector general reported that $18 million went to 72,000 people who were dead.  A little more than half were returned. 4.3 million more payments went to a little more than 17,000 prison inmates.  The payments were part of the government’s massive Keynesian economic recovery package enacted in February  2009. Some stimulus.

—  The centerpiece of President Obama’s health care plan was a lifeline for those whose medical conditions made them uninsurable.  The Pre-Existing Condition Insurance Plan started this summer, but there is no rush to join.  California has the money for about 20,000 people, but has received only 450 applications. Wisconsin has received 200 applications, but has room for 8,000.  Government economists projected  in April that 375,000 would gain coverage this year, and wondered if that would be enough. Premiums may be too high, and rules require that people be uninsured for at least 6 months.  A requirement that they provide documentation to prove that they’ve been turned down by an insurer may be a problem. Where the federal government runs the program directly, the plan doesn’t provide coverage for prescription drugs until people have met a $2,500 deductible.   How do you keep a $5 billion program going if nobody signs up?

Charging up your electric car can take 15-18 hours or more to charge a full-battery car like the Nissan LEAF through a regular wall socket.  GM has come up with a charging system for the Volt—  that will cost only $490.  The car can plug into any old 120 volt wall socket and be fully charged in only 10 hours. For those who opt for the wall charger at $490, installation will cost around $1,475, for a car that goes just 25 to 50 miles on an electric charge.  This might bring the time required to recharge down to four hours.  So if nobody but Leonardo Di Caprio buys one and the government has to buy vast quantities to avoid terminal embarrassment about the Volt and all those battery factories — what will be the government costs for all the electricity to recharge the batteries every day?  That should send the meters spinning.

In the wake of ClimateGate, an overhaul was needed to win back public trust. In November of 2009, an archive of some 1,000 emails sent and received by scientists at the Climatic Research Unit at the University of East Anglia was leaked to the blogosphere. Was it evidence of malpractice among the scientists on both sides of the Atlantic?  Had scientists tried to suppress views critical of their work? Allegations were serious and could not be just brushed aside.  The government quickly set up  inquiries by the University of East Anglia, the Royal Society and essentially asked the scientists if they did anything wrong, and recommended some modest changes in the way things were done and put the same people back in charge, which has produced some very outraged complaint from highly respected sources. On this side of the pond, the University of Pennsylvania was asked to investigate Michael Mann.  The University apparently asked him if there was any problem with his work, and he said no, so there you are.   The Attorney General of Virginia is suing, and demanding information. Don’t question us, we’re scientists?

— We are not alone in our folly. The world’s largest wind farm opened off the Kent coast last week. The most important and shocking aspect of this vast project according to Christopher Booker is that over the coming years the Brits will be giving the wind farm’s Swedish owners a total of £1.2 billion in subsidies.  That same sum, invested now in a single nuclear power station could yield 13 times more electricity, with much greater reliability.  It is an array of 100 three-megawatt turbines, each the height of Blackpool Tower, which will have the “capacity” to produce 300 MW of electricity, enough to power 200,000 homes.  The key word again is “capacity.”  That means what the turbine could produce if the wind blew at the perfect speed constantly, which, sorry, doesn’t happen, and is useful only for impressing gullible government bureaucrats.

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