American Elephants

The Political War — Another Take. by The Elephant's Child

Time Magazine’s Mark Halperin writes on “Why Obama is Losing the Political War.”

With the exception of core Obama Administration loyalists, most politically engaged elites have reached the same conclusions: the White House is in over its head, isolated, insular, arrogant and clueless about how to get along with or persuade members of Congress, the media, the business community or working-class voters.  This view is held by Fox News pundits, executives and anchors at the major old-media outlets, reporters who cover the White House, Democratic and Republican congressional leaders and governors, many Democratic business people who raised big money for Obama in 2008, and even some members of the Administration just beyond the inner circle.

On Friday, after the release of the latest bleak unemployment data — the last major jobs figures before the midterms — Obama said, “Putting the American people back to work, expanding opportunity, rebuilding the economic security of the middle class is the moral and national challenge of our time.” But elites feel the President has failed to meet that challenge and are convinced he will be unable to do so in the remainder of his term. Moreover, there is a growing perception that Obama’s decisions are causing harm — that businesses are being hurt by the Administration’s legislation and that economic recovery is stalling because of the uncertainty surrounding energy policy, health care, deficits, housing, immigration and spending.
This is from a liberal writer for the liberal media. His description of the conclusions of the political elite may be spot on.  His analysis of what President Obama has done — or not done — is not.   I think Obama came into office enraged at President Bush.  Obama did not expect to be faced with a problematic economy, and was furious that he had to spend time and effort at that instead of directly beginning to transform America.  He could not stop blaming George W. Bush at every turn and in every speech, for everything.

For whatever reason, the president settled upon a vast Keynesian stimulus to give the economy a corrective jolt.  Though he talked of “shovel-ready projects’ and “repairing infrastructure” most of the money went to governmental agencies and state governments. Chairman of the Council of Economic Advisers Christina Romer was reduced to reading print-outs from Keynesian computer programs that estimated how many jobs should be “created” from how many dollars dumped into the economy. His economic advisers were asked to “run the numbers,” not to have any influence on policy.

The economy saved, Obama turned his attention back to transforming America, and ordered up a massive reform of health care, which was not high on anybody’s list and began investing in a “clean energy economy” which was not even on anybody’s list.  The public is fairly dubious that there is any global warming.

With policies poorly considered and executed, he kept adding thousands more to the unemployment rolls; shutting down car dealers, slapping a moratorium on oil drilling everywhere,  investing in “clean energy” that sent the money to China and Spain.  With that taken care of, he turned his attention to ‘reforming’ Wall Street, building high-speed trains, wind farms and solar arrays while ignoring the very large elephant in the room — millions of Americans unable to find work. Annoying, so he went on vacation.

I don’t think anyone in the administration has any idea how jobs are created.  Things like tax-cuts are Republican things. The private business sector is something that Republicans are always talking about and Obama is out there now trying to demonize the Chamber of Commerce. The Chamber of Commerce!  Who does he think hires people?

I don’t think there is the slightest chance that President Obama will shift to the center after the election.  We’ll see.

More Questions About the American Media. by The Elephant's Child

The media is incredibly excited about the news that one patient has been injected with embryonic stem cells, to see if they are safe for use in treating acute spinal-cord injuries. The story is all over.

This has long been a matter of intense debate. If you remember, one of the first things Barack Obama did after he was inaugurated was to “lift the ban” on embryonic stem cell treatment. Of course that was absurd, for there had never been a ban. Scientists were restricted to existing lines of embryonic stem cells, but free to do all the experimentation they desired. This seemed a reasonable solution to the problem since there was little hope that embryonic stem cells could overcome the rejection problems.

Obama made a very big deal of it. He, as an enlightened scholar, was going to restore Science to its rightful position. He issued an immediate Executive Order “Removing Barriers to Responsible Scientific Research Involving Human Stem Cells.” Venture capital firms had refused to back embryonic stem cell treatment, so scientists who were hoping to strike it big with patents had to appeal to government.

I think this whole subject is an exposure of the basic differences between Democrats and Republicans. Democrats are inclined to react emotionally. Promise them that success with embryonic stem cells will enable the paralyzed to walk again, the blind to see, the brain-damaged to recover, and they are all for it. Suggest that the reason that people are not rising from their wheelchairs is that a fundamentalist religious nut from Texas has banned the treatment because it uses ’embryos’ that aren’t babies for Heaven’s sake, and they foam at the mouth in rage.

Republicans look at stem cells taken from a person’s own bone marrow, skin, nasal tissue, fat tissue and other body parts that have no rejection problem, and it sounds pretty good. They note that four decades of work have produced some encouraging successes, and restored feeling to people with chronic spinal cord injuries. Human trials are underway in treating diabetes, heart disease, and MS, as well as many other degenerative conditions. Republicans consider the ethical problems, for there are some very serious ethical questions that remain unresolved.  Scientists who stand to gain real riches if they can patent their version of stem cells are probably not the ones who should solve the ethical questions.  And the old caution applies — first, do no harm.

Democrats are uninterested in the ethical questions. An earlier post, written a day after Obama issued his executive order is here.  Apparently nothing has changed over the past year-and-a-half. The encouraging work going on all over the world with adult stem cells gets a note on page 47 when there is another breakthrough, but the attempt to inject a patient with spinal cord injury with embryonic stem cells to see if he has major rejection problems or develops cancerous teratomas is really big news. Apparently the media consider adult stem cells to be simply the wrong kind — because they were advocated by the Bush administration? Can the media possibly be that partisan?

Scary Halloween Stories from Reason TV. by The Elephant's Child
October 12, 2010, 6:45 am
Filed under: Capitalism, Economy, Taxes | Tags: , ,

Protectionism is the Last Refuge of the Desperate Politician. by The Elephant's Child

A  Wall Street Journal/NBC News poll (Sept. 28) found that outsourcing was the top reason cited by Americans as the cause of the country’s economic problems.  And the same poll found for the first time in years that a majority (53%) of Americans say free-trade agreements have hurt the United States. Wrong villain.

That’s probably an understandable sentiment, but a very dangerous one.  Democrats are facing what purports to be a “wave” election, and they are desperate to shift the blame for the financial crisis that has created so much unemployment from Congress — where it belongs — to somewhere, anywhere, else.  They’re apt to pass legislation that will have dire consequences.  Trade wars are not pretty, and once started, hard to control.  Look up Smoot–Hawley!

The AFL-CIO produced a searchable database of more than 400,000 U.S. companies and their subsidiaries it says have shipped jobs overseas.  Organized labor is trying to stir up anti-outsourcing sentiment to energize union voters for the election, and creating a plausible enemy is one way to do it.  Politicians are happy to exploit an issue that seems to have some resonance with the public, even if it is economically stupid.

There are always unintended consequences.  Actions taken against another country prompt retaliation, including retaliation from companies abroad that hire American workers.

In 2007, Matthew Slaughter, an economist at Dartmouth’s Tuck School of Business published a comprehensive study of the hiring practices of 2,500 U.S.-based multinational companies.  He found that when U.S. companies hired lower-cost workers overseas, their parent companies hired even more people here at home to support the expanded operations.

Between 1991 and 2001, employment at foreign subsidiaries of U.S. multinationals rose by 2.8 million jobs; during that same period, employment at their parent firms in the U.S. rose by 5.5 million jobs.  For every job “outsourced” to India and other foreign countries nearly two new jobs were generated here in the U.S.

These new U.S. jobs were higher-skilled and better-paying — filled by scientists, engineers, marketing professionals and others hired to meet the new demand created by their foreign subsidiaries.  …

In 2002 those subsidiaries [of foreign-based multinationals] employed over 5.4 million American workers, nearly 5% of total private–sector employment.  They also paid American workers 31% more than their American nonsubsidiary competitors — an average of $56,667 per year.

That’s why we need some familiarity with economics.  So many things are counter– intuitive, just not the way you would at first assume.  NAFTA has been a great success, because it is not just the goods we import into this country— but the goods and services that Mexico and Canada buy from us, and they buy a lot.

Politicians are reacting to antitrade sentiment by enacting protectionist measures.  You cannot assume that a politician has much familiarity with economics.  During tough economic times, people are apt to look for comfort in protectionism.  This is true of other countries as well, and those countries  may well put up barriers against American investment.

But it’s important to know that a job outsourced to India may well create two jobs in Indiana.  Keep that in mind, and don’t fall for the boogeymen politicians create.

%d bloggers like this: