Tag Archives: recession

O’Reilly and Beck Completely Miss the Point

Last night on The O’Reilly Factor, Glenn Beck responded to O’Reilly’s stupid idea for a two percent “temporary” national sales tax by proposing an even more asinine idea.  Beck suggested a two percent Value Added Tax (VAT) instead, apparently feeling a need to one-up O’Reilly’s ridiculous and naïve idea.  After taping the show, they probably left the studio to go play chicken with each other in fast cars on some quiet suburban street full of children.

Clearly, anyone who is not watching the turnip truck drive away while picking gravel out of their posterior can see the flawed logic on display here.

In O’Reilly’s case, the notion that any national sales tax would be temporary, or held at 2% for that matter, is simply ludicrous and is an insult to the intelligence of anyone who has observed politics for more than a month.  Furthermore, the very notion of adding a tax like that with the expectation that it will generate any real revenue demonstrates a lack of understanding of how the tax system influences behavior, particularly in a recession.

Glenn Beck’s proposal is equally stupid but has the added feature of making the taxation far more insidious and dangerous.  Value Added Taxes, like the corporate income tax so beloved by statists and the myrmidons with whom they play simplistic and dishonest class warfare games, add the far more dangerous reality that the taxes simply get hidden in the prices of products and services, allowing the levitation government to covertly connect yet another tick to the neck of productive America.  At least O’Reilly’s idea involves a tax that we can see, though the notion of any tax being “temporary” ranks right up there with the ludicrous idea that ObamaCare will help with the deficit and the economy.

I propose a simpler idea, one that may be too clear for smart guys like O’Reilly and Beck.  Let’s stop the spending.  At a time when so many Americans are struggling to pay their mortgages or keep their old cars running long enough to get back in the black with their personal finances, a proposal to raise taxes on any Americans is patently absurd.  Bill and Glenn, like so many American politicians, sit up on their ivory pedestals without any memory of what it is like to be a regular middle class American.

Furthermore, we need to reduce subsidies to those who were getting a free ride before the recession hit.  How much money could we save by canceling the euphemistically named Earned Income Tax Credit and any other tax credit programs that simply transfer money from the productive to the non-productive?

I submit that any increases in taxes right now would only hurt the economy and the Americans who fund our system, and are the equivalent of treating a hangover by imbibing a little “hair of the dog”.  Additionally, I humbly submit that since we have so many people hurting who were not societal parasites before this recession, we can longer afford the luxury of continuing to subsidize the lifestyles of people who were living off of us before the economy tanked.  For a deeper discussion of which groups get a free ride and which groups are societal parasites in America, check out a piece that I wrote for my other blog titled On Taxes and Socialism.

Glenn Beck and Bill O’Reilly could really stand to read Milton Freidman’s Free to Choose.  They would learn a lot.

Wynn Teaches Basic Economics to Gov. Granholm

In what was a lively discussion on Fox News Sunday, Steve Wynn responds to Michigan Gov. Jennifer Granholm’s stubborn defense of President Obama’s stimulus package by giving her a very brief lesson in basic economics:

If we had taken the tax-cutting response to this recession the economy would be in much better shape today.  But our ideologue-in-chief could not do something like that, so utterly anathema to everything in which he believes.

POTUS was and remains the problem

President Obama was out campaigning in VA and threw out a whopper:

“I expect to be held responsible,” Obama said. “But I don’t want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess. I don’t mind cleaning up after them, but don’t do a lot of talking.”

President Urkel

President Urkel

Of course I know that this is typical.  Leftists will always pretend that history started yesterday.  One has to ask the question as to why Freddie and Fannie gave so much money to politicians like Barney Frank and Chris Dodd and, yes, Barry Obama.  Could it be that it was a quid quo pro?

It is certainly hard to hold the president as accountable for the sub-prime crisis as insiders like Dodd and Frank, after all he has not had as much time on the job given his meteoric, media-assisted rise from dog catcher to president.  But all of those guys were at the wheel as Freddie and Fannie required more and more sub-prime loans, creating the market that ultimately collapsed.  The idea that the republicans created this banking crisis is absolute fiction.

But do you think that Obama’s sycophant Charlie Gibson will report that?

Obama running out of people to blame

An Op Ed over at the Wall Street Journal says what most thoughtful people now know: this is now Obama’s economy and his continuing attempts to blame everything on the previous President are resonating with fewer and fewer people.  Very few of us who actually pay taxes are buying into his smoke and mirrors, though he does have a lock on the loser class.

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama’s policies have become part of the economy’s problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it’s become clear that Mr. Obama’s policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence — and thus a longer period of recession or subpar growth.

[Review & Outlook]

The Democrats who now run Washington don’t want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it’s also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length — and average job loss — of the last three postwar downturns. What goes down will come up — unless destructive policies interfere with the sources of potential recovery.

I have said it before and I will say it again, President Obama clearly does not want an economic recovery right now, he needs the misery to continue so that he can continue his Chavez-like consolidation of federal government power and squelching of any opposition.  The Op Ed continues with very specific indictments of Obama’s agenda:

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year’s fourth quarter.

What is new is the unveiling of Mr. Obama’s agenda and his approach to governance. Every new President has a finite stock of capital — financial and political — to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his “stimulus” spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

The markets are scared.  They know that under the Pelosi/Reid/Obama agenda the economy is not going to get better; the markets know that the collectivist trifecta either knows nothing about economics or does not care when compared to the enhanced government power that they smell like blood in the water.  I am not sure that I have ever seen a time where I think that American Freedoms are under threat more than now.  Bill Clinton was a clear-headed centrist compared to this socialist President.

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they’re no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Have you ever gotten a job from a poor person?

The WSJ closes with an inescapable conclusion:

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn’t help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they’re reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that’s right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

Those of us who made good decisions, stayed gainfully employed, paid our mortgages, and secured our own health care coverage now get to pay for the stupidity of the societal parasites.  Even though I had the sense to vote against Obama, the least qualified candidate for President in US History, I end up with the government that you Obama-voting idiots deserve.  Galt’s Gulch is starting to look good.

Is Obama intentionally nuking the economy?

This is what I have been saying… this new President is allegedly so smart that he must be aware of the same history that I know.  He surely knows how destructive FDR’s response in the 30s was to the economy and the contrast of Reagan’s tax cutting response to Jimmy Carter’s recession.  Knowing just those two approaches and the two very different results, he must intentionally want the economy to continue tanking.  Remember that Democrats’ path to power always requires misery and if President Obama can make the misery more universal then he can secure more power and dependency on government.

Writing over at Director Blue, Doug Ross has some similar thoughts on this.  Read his full posting here.

A couple of quotes:

Consider that, in the teeth of a devastating recession, Obama has:

• Raised taxes on small businesses, the engines of entrepreneurship and job growth

• Raised the capital gains tax

• Lied about “tax cuts for 95% of Americans”, offering instead $13 a week, achieved not through tax cuts, but by changing the federal withholding tables!

• Destroyed charitable giving by axing the tax breaks for 26% of all giving (or $81 billion in 2006)

• Proposed a carbon cap-and-trading scheme designed to punish oil companies and further tax consumers

Why would Obama inflict these destructive policies while the economy is collapsing? Simple. Each step strengthens the role of government in people’s lives.

Since he is (allegedly) so smart, I can only assume that his economy-destroying proposals are intentionally designed to make the economy so bad that we will let him do anything.  Since he is following in the FDR template, we should expect him to attempt to expand the Supreme Court soon, right?

The only plausible explanation is that Obama’s destruction of the economy is intentional.

It is based on a failed ideology that has never — and can never — succeed.

And I’m not the only one who thinks so. Jim Cramer is a long-time investor who’s been around the block a few times. He thinks the Obama agenda is crystal clear, stating “…their agenda is destroying the life savings of millions of Americans… we’ve elected a Leninist.”

Those of you who voted for this guy are the most naive and gullible people ever to fall off of the turnip truck.  Unfortunately, we all get the government that only you myrmidons deserve.

Timely Political/Economic Definitions

[paraphrased from Ronald Reagan]

Timely definitions:

Recession: when your neighbor loses his job.

Depression: when you lose your job.

Recovery: when Barack Obama loses his job.


A Funny Sort of Depression

Victor Davis Hanson (website) is about the best and most thoughtful historian out there these days, the sort of guy who always has a very wide perspective on current events’ place in history.  Read anything that he has written, for example The Soul of Battle is excellent.

He wrote an article a couple of days ago in which he tries to put some perspective on our current economic crisis.  Hanson notes that while we do have a huge deficit, it is being funded by Japan and China at almost no interest.  Even now, almost 93 percent of the American workforce is still employed.  And the “crash” in energy prices has not only had a huge positive impact on the average American’s wallet, but those same lower oil prices have also had the benefit of hurting some who are hard to feel sorry for: The Persian Gulf states, Russia, and Venezuela.

Hanson sums up some postive results:

For the vast majority of Americans with jobs, the fall in prices for almost everything from food to cars has, in real dollars, meant an actual increase in purchasing power. The loss in value of home equity is serious for those who need to relocate for work or want to downsize and move to an apartment or a retirement community. But when averaged over the last decade, real estate still shows a substantial annual increase in value.

Moreover, the vast majority of American homeowners — well over 90 percent — meet their mortgage payments. They have no plans to flip their homes for profit. For them, the fact that they have lost paper equity, or even owe more than their homes are currently appraised at, is scary — but not equivalent to a depression. Most are confident that after a few years their houses will appreciate again. As for now, working young couples have a chance to buy a house that would have been impossible just two years ago.

Not denying that we are in a tough spot to say the least, Professor Hanson does deliver some perspective on all of this:

Unemployment insurance, welfare, food stamps and even more new social programs on the way have redefined poverty from what our grandparents told us of the Great Depression.

I live in southeastern Fresno County, one of the poorest regions of a now nearly bankrupt California. Many people are hurting. Yet to go to the local Wal-Mart is to see late-model cars in the parking lots and plenty of cell phones, iPods and BlackBerrys among the shoppers. Carts are stuffed with consumer goods, lots of food and Easter confections.

So are we in a depression that justifies a vast redefinition of government and a massive takeover of the private sector? Not quite. What we are a witnessing instead is a sharp downturn from the most affluent era in the history of civilization. For the last two decades, we borrowed and spent as if there were no tomorrow. Now we are living in that tomorrow of cutting back and making do.

In relative terms, it is no longer 2005, but that does not mean it is 1932 either.

VDH always brings an interesting and historically wide perspective on things.