American Elephants

So Obama Is Lecturing Congress About Doing Their Jobs? by The Elephant's Child

President Obama made a little fiscal speech today, saying how hard he has worked, and lashed out at Congress for not giving him what he wants.

Ordinary folks, they do their jobs. They meet deadlines. They sit down and discuss things and then things happen. It there are disagreements they sort through the disagreements. The notion that our elected leadership can’t do the same thing is mind-boggling to them. It needs to stop. So I’m modestly optimistic that an agreement can be achieved. Nobody’s going to get 100% of what they want. But let’s make sure that middle class families and the American economy and in fact the world economy aren’t adversely impacted because people can’t do their jobs.

That sounds impressive, but he’s been in Hawaii golfing all week. And before that, it was pretty clear that he was neither involved nor willing to offer any compromise whatsoever. Nor is he willing to cut back on spending.

While he was giving his speech the Dow Jones industrial average dropped by 158 points to finish below the 13,000 threshold, at 12,938. It dropped nearly 70 points during the speech. And the Dow Futures dropped 226 points following the speech.

President Obama is interested in playing politics, and the Republicans are trying to save the economy from another recession. He wants the revenue from those who earn over $250,000 a year, he doesn’t have any intention of cutting back on spending. Spending is what he does, and his idea of “governing.” Twenty-four million Americans are out of work, want jobs, and can’t find them. The median U.S. household income has dropped $4,520 a year. So right in tune with the times, Obama has issued an executive order to end the pay freeze on federal employees, giving everybody a raise. Poor Joe Biden only earned $225,521 last year , so he gets a $6,379 increase.

My hunch, and it’s only a hunch, is that his economic advisers have told him that the economy will recover naturally now, and he doesn’t need to worry about it.  That’s sort of what Christina Romer and his other economic advisers told him about  the effects of the stimulus.  Keynesian economic program. Pump-prime the economy with a big shot of cash and the economy will come right back— that was in 2008.  Didn’t matter where he put that $825 billion stimulus money, putting it into the economy would increase demand, just what was needed.  Didn’t work. Stimulus wasted.

Perhaps the economy just needed more time, more stimulus?  Nope. Didn’t work. Mr. Obama now wants more revenue — which he blames on “the rich” who are not paying “their fair share.” He also wants to do another stimulus.

Unfortunately, there are over 900,000 small businesses who file their taxes as individuals, who fall into that category whose taxes he wants to raise. And they are the small businesses whose rapid growth and expansion provides the engine of new employment— except they aren’t growing and expanding, because they are getting a gigantic hit from ObamaCare, and another hit from the flood of regulations emanating from the EPA and other government agencies, and with the expected sharp raise in taxes, they are letting workers go, not hiring.

President Obama does not believe that small businesses fall into this category, for he identifies small business as the neighborhood bookstore, coffee shop and barber. The Small Business Association, however, identifies “small business” as businesses with upwards of 50 employees. Obama has remarked any number of times that these are not small business. Republican lie, I guess.

Economist Stephen Moore suggested that Republicans in the House should just pass a bill extending the Bush Tax Cuts permanently for everyone, and then pass another bill giving Mr. Obama the tax hike on “the rich” that he so much desires, and pass both on to Harry Reid and let him deal with it.  Heh.

Obama has a big microphone and a compliant media, so he will probably be successful at blaming whatever happens on the Republicans, and then he will fly back to Hawaii for the rest of his vacation and more golf.



Obama Has Brought Economic Mobility to a Screeching Halt. by The Elephant's Child

The federal government, for its own convenience, divides the American people into five classes by income. One poor, three middle, and one rich — or perhaps now it’s two middle and two rich. The Occupy people, an unfortunate distraction, divided Americans up into the 1% and the 99%, the filthy rich and the rest of us.  I always assumed it was the 1% of Occupy layabouts and the rest of us, for I certainly didn’t care to be associated with that mess.

There are reasonable ideas behind these divisions, for Americans believe there should be a safety net, and the poor and disabled should have the help they need. But then everybody starts using the “classes,” and drawing sharp lines and becoming obsessed by inequality, and the “growing gap” between the rich and the middle class. They do not understand the economy as a living, changing entity.

They see the economy as a pie, and if the rich get richer, then the rest will have to subsist on less. The rich make the poor poorer. But that is nonsense. The amount of money in the economy grows to accommodate increased economic activity. In theory, when the economy needs more money, the treasury prints some. In our current situation, we borrow more and sign more promissory notes.

The current battle over “The Fiscal Cliff” is all about “the rich.” President Obama wants to tax “the rich” significantly more because he has decided that they aren’t paying their “fair share” even though we have the most progressive taxes among  industrialized countries (until France elected a socialist president who raised taxes on the rich and the rich moved out of the country). This has long been a fixed idea among liberals.

According to Timothy Noah, a senior editor at the New Republic, the inequality dates from the Reagan tax cuts. The present gap between rich and middle class is intolerable. Noah declared it indisputable that income inequality is bad not only for people on the losing end but also for society at large.

There has always been enormous mobility in the American population. Young people start out poor, find jobs, get promoted or find a better job, and with hard work some even get rich.The rich are not the same people over time, nor are the poor. Obama hasn’t managed to make people richer, though he’s tried with his subsidies for political cronies; but  he has succeeded beyond anyone’s dreams at enormously enlarging the numbers of those considered poor. Over 540,000 people have dropped out of the labor force. More than 24 million Americans who want jobs don’t have them, driving labor force participation down to 63,6%. That is his accomplishment, not, as he so often claims, Bush’s fault.

There will be another big drop in the ranks of the employed in January as company after company lays off workers as a result of ObamaCare, and the threat of sequestration hits military defense contractors. Increasing taxes on “the rich” will only add to the unemployed as small businesses, who are the usual engine of prosperity, are deprived of the funds they might have used to hire or expand. New regulations being streamed out of the EPA will do more damage to the economy. The EPA has announced that consideration of costs or job losses are not a matter that they consider. They are only protecting the environment.

To make the economy prosper, we do not need to extract more taxes from the rich, we need to add a minimum of 200,000 new jobs every month. It is not happening, and because we are determinedly pursuing the wrong policies, there is no relief in sight. Obama created this mess, his policies have cost millions of jobs and money he has extracted from taxpayers has been wasted in endless, useless green schemes. If the president wants to know why the economy isn’t recovering, he only has to look in the mirror.

Shining the Public Spotlight on Sneaky Secrets at the EPA. What Will Be Revealed? by The Elephant's Child

Lisa Jackson

Splendid news from the U.S. Environmental Protection Agency is administrator Lisa Jackson’s forthcoming departure. It is a major victory for transparency and accountability in Washington.

There have been whispers for years and rumors that EPA officials used private email addresses, fake names and coded messages to avoid the strictures of the Freedom of Information Act (FOIA). Jackson’s use of “Richard Windsor” as her chosen email address has recently become public, and Jackson admitted to using “Richard Windsor”as her nom de plume on a government email account.

The EPA inspector general opened an investigation into the matter because it is against federal law to use nonofficial or secret email addresses to conduct official business.  The use of private or false flag emails enables government officials to hide things that they would prefer we do not know about. And hiding things from FOIA requests is illegal. But the EPA has been hiding things for a very long time.

During the Clinton years, Carol Browner (a former senatorial aide to Vice President Gore) headed the EPA. She ordered the hard drive on her government computer to be reformatted and all backup tapes destroyed, just hours after a federal judge ordered her agency to preserve all agency email records. Only hopelessly naive or blindly partisan folks took seriously Browner’s doe-eyed claim that it was all just a big mistake and she certainly wasn’t trying to cover up anything. Nothing to see here, so move along, folks.

And nothing was done.

Christopher Horner, a Senior Fellow at the Competitive Enterprise Institute, and FOIA expert turned up an internal memo from the EPA’s IT department, which described the process for establishing and using secret email accounts.

That particular revelation engendered real warfare among Jackson’s EPA, a federal court, at least two Congressional committees, Horner and the CEI over thousands of other internal emails and documents that are likely to shed light on the illegalities going on at the environmental agency. The EPA has authored hundreds of regulations that damage business, cost jobs, and involve huge costs to innocent bystanders for highly questionable reasons dependent on unusually questionable evidence.

The conflict is ongoing, and there are sure to be more ugly revelations. Those who defend Jackson will claim that her departure has nothing to do with such matters.  Chris Horner makes an obvious point: “It is not only implausible that Lisa Jackson’s resignation was unrelated to her false identity, which we revealed, given how the obvious outcome and apparent objective of such transparency laws was intolerable. But it became an inevitability when, last week, the Department of Justice agreed (as a result of our lawsuit) to begin producing 12,000 of her “Richard Windsor” alias accounts related to the war on coal Jackson was orchestrating on behalf of President Obama outside of the appropriate democratic process.”

Along with all the other things the Obama administration hid until ‘after the election’ there are dozens of Jackson’s most costly and controversial proposed regulations, which the administration is now releasing. These regulations are especially damaging to the coal industry which supplies the major portion of our electric power.

President Obama has long made clear that he wants to bankrupt the coal industry, which seems to be part of his desire to save the planet from a global warming that is proving to be non-existent. There are lots of legal battles to come.

It has become obvious that many of the numbers put forth by the agency are fraudulent, environmental damage is invented, and harm to humanity is exaggerated hooey. That’s what transparency and accountability are all about.

If you believe that the government’s business should be conducted in public, this is a significant beginning. Nobody in government has ever gone to jail for violating a FOIA request, and Jackson won’t go to jail either. But the agency is now an object of attention by the IG office as well as Congressional committees. That can only help.

The Do-Something Disease. by The Elephant's Child

Reflecting on the shooting in Newtown, Connecticut, have you ever noticed how very brief the period is when the murder is blamed on the perpetrator, and how quickly the blame shifts to society in general? It’s not the perpetrator — it’s us. We are too violent as a society. We have a love affair with guns. We allow assault weapons in our society. We play violent video games. We allow and enjoy violent movies. We are bad parents. We don’t put our mentally ill people away. And so it goes. We must all understand that it is not the fault of the perpetrator, it is our fault.

Blame immediately shifts to guns, and not just any guns, but “assault weapons,” which seem to be any kind of guns that look scary. Assault weapons have been banned before, which didn’t do much good, and Congress twisted itself into pretzels trying to describe what constituted an “assault weapon.” It is not a descriptive term. An assault weapon is one used to assault someone, and could be a baseball bat or a kitchen knife. Semi-automatic simply means not automatic. So naturally, a large group of people marched on the National Rifle Association headquarters, which perhaps made them feel good.

The questions about mental health are more difficult. The American Civil Liberties Union (ACLU) has lobbied for laws that prevent people from being committed in most circumstances, and account for much of the mentally ill homeless being on the street instead of being treated. It is very difficult to get anyone committed or restrained. Mental health professionals are the first to point out that those who most need help are often not amenable to treatment of any kind, and that it is not really possible to correctly designate those who are most likely to commit mass murder.

The New York Times headline said “N.R.A. Envisions ‘a Good Guy With a Gun’ in Every School.”

The N.R.A.’s plan for countering school shootings, coming a week after the massacre at Sandy Hook Elementary School in Newtown, Conn., was met with widespread derision from school administrators, law enforcement officials and politicians, with some critics calling it “delusional” and “paranoid.” Gov. Chris Christie of New Jersey, a Republican, said arming schools would not make them safer.

National Review correctly and quietly pointed out that 1/3 of public schools already have armed security on staff, as of the 2009-20010 school year, the most recent data, and a number of states and districts that do not use them are discussing the idea.

In the wake of a dreadful shooting, particularly of helpless schoolchildren, it is natural to want to do something to prevent such happenings.

When Major Nidal Hassan, an Army Psychiatrist, supervised by other Psychiatrists, shot 13 people and wounded 29 others,at Fort Hood Texas Nov. 5, 2009, there was, in retrospect, all sorts of evidence that should have warned his superiors that he was a danger.  Three years later, he has not yet been tried. The incident is described by Homeland Security as ‘workplace violence’ and those wounded are not allowed purple hearts nor any of the benefits that those wounded in combat are entitled to.

Looking back at other mass murders should make us a little more cautious about our rush to do something. There are no easy answers. New laws need slow and careful consideration, not dramatic action when emotions are high. We do need an ability to restrain or commit those who really need help, but past history shows that those who badly need help are only identified after they have committed some horror.

“The Little Bell” by The Elephant's Child
December 21, 2012, 2:12 pm
Filed under: Entertainment, Heartwarming, Music, Russia | Tags: , ,

The Kremlin Capella sings a beautiful Russian Folk Song, with chilly pictures of Moscow in winter. The song is popularly called “The Little Bell.” In Russian Однозвучно гремит колокольчик.  We posted this  last year, and now it’s winter again.  Enjoy.

Unlearning Keynesian Economics: by The Elephant's Child

Economist Russ Roberts writing at Café, December 20.

When I was younger, everyone knew that the New Deal had saved the US economy from the ravages of the Great Depression. Everyone knew that Keynes was right—look what had happened when Roosevelt implemented his ideas—the Great Depression ended! Eventually, everyone knew that story was false. The New Deal wasn’t that big and the Great Depression didn’t really end when the New Deal was implemented.

Now everyone knows that World War II ended the Great Depression. Of course, private consumption fell during WWII and the vaunted Keynesian multiplier seemed to only work for the defense industry. Someday, perhaps, people will understand that when a war takes over most of the industrial sector, you don’t get much stimulus. And it’s not hard to reduce unemployment when you force a huge chunk of the male working-age population into the army.

When the war ended, all the Keynesians predicted disaster and a horrible depression because of the cuts in government spending and men coming home from Europe and the Pacific. Well, when that didn’t happen, people should have known that there isn’t a simple relationship between government spending and prosperity. But somehow, people didn’t learn that lesson.

Taxpayers Will Lose Big on the GM Bailout. by The Elephant's Child

The long sorry saga of the General Motors bailout is coming to an end. General Motors is buying back 200 million shares of its stock from the government, or about 40% of the government’s holdings of GM stock. The remaining 300 million shares will be sold by March 2014.

By selling the stock and putting GM back in business, the federal governments’ “investment” was a great success, was it not?  Not. We were told repeatedly that the GM bailout would not only save jobs, but it might even end up netting the taxpayers a profit.

GM on Wednesday said it will buy back the 200 million share of the government stake for $5.5 billion, or $27.50 a share. Unfortunately the break even point on the government’s total holdings was $53 a share. Now, with $20.9 billion in taxpayer funds left to pay off from the remaining 300 million shares, the break-even point has risen to $69.72 a share.

Back in October, President Obama was bragging about the big comeback of General Motors.

When the American auto industry was on the brink of collapse, I said, let’s bet on America’s workers. And we got management and workers to come together, making cars better than ever, and now GM is No.1. again and the American auto industry has come roaring back.

That’s a valiant attempt to make a silk purse out of a sow’s ears, but it is a poke of exaggerations, half-truths and deceptions — yet it helped to secure Obama’s re-election.

In the 1950s GM owned roughly half of the market. By 2006, just before the financial crisis, its market share had fallen to about 24%. In March of this year, according to Ward’s Auto Reports, it hit an all-time low of 16.5 %. Not roaring back, and not exactly No. 1. The nonunion transplants like Hyundai and VW are growing much faster.

As for Obama’s bailout of American workers, it was a taxpayer giveaway to the United Auto Worker’s Union that allied with sloppy management bears the blame for the ills of the auto industry. The $80 billion auto bailout gave the UAW nearly $27 billion because GM could not shed its overly expensive labor contracts, something it could have done in a normal, legal bankruptcy. Obama bailed out the unions, not the auto industry

The UAW and its affiliates give tens of millions of dollars each election cycle, almost entirely to Democrats. Which explains why Obama’s auto czars arranged a government “bankruptcy” for GM flew in the face of hundreds of years of bankruptcy law and violated investor rights. Bondholders took huge losses, while unions got a big chunk of ownership in GM stock to which they had no legal right.

UAW workers at GM kept their pensions as well, but nonunion workers at GM spin-off Delphi lost theirs. This is a Chicago style bailout in which corporate cronies of the Obama White House pocket taxpayer “subsidies” and “green investments”, give executives a raise, and then go belly up. That’s what happens when the spenders think of revenue as “government money” which they are free to distribute in any way that gathers in future votes.

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