Sunday, January 31, 2010
Saturday, January 23, 2010
Ifhad been the first President to need a teleprompter installed to be able to get through a press conference, would you have laughed and said this is more proof of how inept he is on his own and is really controlled by smarter men behind the scenes?
If George W. Bush had given the Queen of England an iPod containing videos of his speeches, would you have thought this embarrassingly narcissistic and tacky?
If George W. Bush had spent hundreds of thousands of dollars to take to a play in NYC, would you have approved?
If George W. Bush had reduced your retirement plan's holdings of GM stock by 90% and given the unions a majority stake in GM, would you have approved?
If George W. Bush had made a joke at the expense of the Special Olympics, would you have approved?
If George W. Bush had given Gordon Brown a set of inexpensive and incorrectly formatted DVDs, when Gordon Brown had given him a thoughtful and historically significant gift, would you have approved?
If George W. Bush had bowed to the King of Saudi Arabia , would you have approved?
If George W. Bush had visited Austria and made reference to the non-existent "Austrian language," would you have brushed it off as a minor slip?
If George W. Bush had filled his cabinet and circle of advisers with people who cannot seem to keep current in their income taxes, would you have approved?
If George W. Bush had been so Spanish illiterate as to refer to "Cinco de Cuatro" in front of the Mexican ambassador when it was the (Cinco de Mayo), and continued to flub it when he tried again, would you have winced in embarrassment?
If George W. Bush had mis-spelled the word "advice" would you have hammered him for it for years, like and potatoe, as proof of what a dunce he is?
If George W. Bush had burned 9,000 gallons of jet fuel to go plant a single tree on Earth Day, would you have concluded he's a hypocrite?
If George W. Bush's administration had okayed Air Force One flying low over millions of people followed by a jet fighter in downtown Manhattan causing widespread panic, would you have wondered whether they actually get what happened on 9-11?
If George W. Bush had failed to send relief aid to flood victims throughout the Midwest with more people killed or made homeless than in New Orleans, would you want it made into a major ongoing political issue with claims of racism and incompetence?
If George W. Bush had created the position of 32 or more Czarswho report directly to him, bypassing the House and Senate on much of what is happening in America, would you have approved?
If George W. Bush had ordered the firing of the CEO of a major corporation, even though he had no constitutional authority to do so, would you have approved?
If George W. Bush had proposed to double the national debt, which had taken more than two centuries to accumulate, in one year, would you have approved?
If George W. Bush had then proposed to double the debt again within 10 years, would you have approved?
If George W. Bush had spent more than all the Presidents combined since
So, tell me again, what is it about Obama that makes him so brilliant and impressive?
It seems like a pretty simple question. Who made the decision to charge Umar Farouk Abdulmutallab, the accused terrorist arrested for trying to blow up a Northwest Airlines jet on Christmas Day, as an everyday criminal, as opposed to an enemy combatant?
After all, Abdulmutallab was trained by al Qaeda, equipped with an al Qaeda-made bomb, and dispatched by al Qaeda to bring down the airliner and its 278 passengers. Even though the Obama administration has mostly abandoned the term "war on terror," the president himself has said clearly that the United States is at war with al Qaeda. So who decided to treat Abdulmutallab as a civilian, read him the Miranda warning, and provide him with a government-paid lawyer -- giving him the right to remain silent and denying the United States potentially valuable intelligence that might have been gained by a military-style interrogation?
This week that simple question -- Who? -- became more complicated after several of the administration's top anti-terrorism officials testified on Capitol Hill. The director of the National Counterterrorism Center, Michael Leiter, said he wasn't consulted before the decision was made. The director of National Intelligence, Dennis Blair, said he wasn't consulted, either. The secretary of Homeland Security, Janet Napolitano, said she wasn't consulted. And the head of the FBI, Robert Mueller, said he wasn't consulted.
"The decision was made by the agents on the ground," Mueller told the Senate Judiciary Committee on Wednesday, referring to the officials who apprehended Abdulmutallab when the plane landed in Detroit. American agents questioned the accused terrorist briefly before he was taken to a hospital to be treated for burns suffered in the attempt to set off explosives hidden in his underwear. After that, Mueller testified, "in consultation with the Department of Justice and others in the administration," the agents read him his rights.
And that was that. "Isn't it a fact, that after Miranda was given ... the individual stopped talking?" Republican Sen. Jeff Sessions asked Mueller.
"He did," Mueller answered. But Mueller declined to say who made the decision to grant Abdulmutallab the right to remain silent.
The issue is enormously important because Abdulmutallab, newly trained by al Qaeda in the terrorist group's latest hot spot, Yemen, likely knows things that would be very useful to American anti-terrorism investigators. He's not some grizzled old terrorist who's been sitting in Guantanamo Bay since 2003 and doesn't have any new intelligence. He's fresh material. Yet he is protected by U.S. criminal law from having to answer questions.
Why? Republicans on the Judiciary Committee increasingly believe there is only one person who can answer: Attorney General Eric Holder.
It was Holder who made the decision to try 9/11 mastermind Khalid Sheikh Mohammed in a criminal trial in New York. It is Holder who has expressed his desire to grant full American constitutional rights to foreign terrorists. It is Holder who is leading the administration's sputtering effort to move some Guantanamo inmates to the United States. And it is Holder who is apparently cutting other parts of the government out of crucial terrorism decisions like the treatment of Abdulmutallab.
But you schlubs aren’t that smart. You didn’t get it. And Barack Obama is determined to see that you do. So the president has decided that he needs to start “speaking directly to the American people.”
Wait, wait! Come back! Don’t all stampede for the hills! He only gave (according to CBS News’s Mark Knoller) 158 interviews and 411 speeches in his first year.
Obama’s attack on banks is a knee-jerk reaction in response to the devastating Democrat loss of the Massachusetts Senate seat this week. This breathes the fragrance of panic. The President evidently has no idea how to approach the most important concern on the minds of his constituents – stimulating the creation of jobs. He should stay away from teleprompters for a few weeks, and educate himself on the workings of businesses, and the economy. Then he should surround himself with advisors who have actually managed a wide variety of successful enterprises. The result should then be a speech, without teleprompter, impassionedly promoting American business and ingenuity to the national and international community.
What America will definitely not need is a lecture on what its core values should be.
Monday, January 18, 2010
Flashback January 21, 2007: The Washington Times nails it with Collapsing Venezuela.
If Venezuelan President Hugo Chavez President Obama deliberately intended to sabotage his nation’s economy, he would be hard-pressed to do anything different from what he is now doing to his country.
It has been widely reported that Mr. Chavez President Obama has been increasingly taking control of the oil, telecommunications and energy housing, banking, auto, and insurance sectors, as well as the media. What has not been reported is the full extent of the corruption in Venezuela the United States and how this ultimately will destroy the economy.
The financial scandal taking place is far bigger than Enron, and may ultimately even exceed the U.N. “oil-for-food” scandal, the biggest financial disgrace of all time.
Since 2004, the Venezuelan Central Bank Fed has transferred about $22.5 billionuntold $billions to accounts abroad by the Chavez government held by foreign governments, and about $12 billion all of that remains unaccounted for. It has also been reported that the gold reserves have been removed from the Central Bank.
While the rest of the world has been moving away from socialism for the last quarter-century for good reason, Venezuela the United States is becoming socialist. We know governmental use of central banks to basically print money to cover expenditures results in rising inflation and eventually monetary meltdown.
And, finally, we know that when a state becomes totally corrupt an economic collapse always follows. Mr. Chavez President Obama and his cronies had already been spending far more than they were taking in and you can bet the blood from the innocent Venezuelan people United States citizens will be drained long before those on the take from Mr. Chavez President Obama agree to have their looting stopped.
The original Washington Times article was extremely good, but a few minor changes would have made it the most prophetically accurate post the world had ever seen.
Will we inflate away our soaring high federal debt to GDP ratio??
Some people have raised the possibility that we will simply inflate our way out of debt. They say we have strong incentives to do so and they point to the years following World War II as an example of how we did it once before.
Joshua Aizenman of U.C Santa Cruz and Nancy Marian of Dartmouth published a timely paper on this subject in November entitled, Using Inflation to Erode the U.S. Public Debt. It’s worth your attention. This blog has used some of Aizenman’s and Marian’s data.
At the end of World War II, the ratio of publicly held debt to GDP was 108.6 percent. Currently it is over 50% and is projected to reach 100% in ten years.
From 1946 to 1956, the ratio was reduced 40% by inflation alone. The inflation rate over this period was 4.2%. Inflation turned bonds into certificates of confiscation.
Will this happen again? Are the comparisons of the two periods valid? My answers to these questions are “no” and “no”.
First, it needs to be said that the 4.2% inflation of 1946-1956 was not a conscious policy choice. As early as 1948-49 economists recognized that the Fed’s commitment to pegging the Treasury Bill rate at under 1% made the Fed “an engine of inflation”. Monetary policy was rendered impotent by the pegging. It was finally abandoned in 1951.
Also, the wage and price controls of the war years had suppressed prices. When abandoned, prices rose very rapidly for a short period of time, and accounted for a significant part of the inflation of the first post-war decade
The average maturity of the debt in 1946 was 9.2 years. It is now 3.9 years. Inflation does its nastiest work over extended time periods, so the shorter average maturity creates less incentive to inflate today than in 1946.
In 1946, an inconsequential amount of our public debt was held by foreigners. Today about 48% is held by foreigners; China and Japan account for 44% of that 48%. One the one hand it is much easier politically to let inflation confiscate foreigners’ wealth than our own. But, at the first whiff of inflation, foreign debt holders would act fast to protect the real value of their dollar holdings. The dollar and financial markets would crash.
While Treasury Inflation Protected Securities (TIPS) certainly detract from the temptation to inflate the debt away, but only 7.5% of the debt is in TIPS.
In 1946 there was a huge backlog of demand for goods, created by both the depression and the war. Additionally, there was a very low level of private debt, and an immense store of liquid savings available to activate that demand. The situation is quite different today. The store of savings is low, and debt is high. There is no great demand backlog.
Today, the Federal Reserve has considerable ability to become restrictive. I believe that, if necessary, the Fed will consider fighting inflation a priority, even if it were to restrict economic growth. For the time being, when we are operating the economy at well below capacity, inflation is not going to happen, and the Fed will not face that kind of unpleasant choice. But at some point in the decade, choosing between growth and inflation will be on the table.
There probably is some long-term rate of inflation that is compatible with reasonable economic growth, perhaps even necessary for growth. What that rate is is just a guess, but let’s say it’s 2%, and that any rate above that would be the result of either purposeful monetary policy or irresponsible fiscal choice at a time when excess capacity was no longer present. (By the way, a 2% inflation rate raises the inflation index 22% in ten years and 4.2% raises it 51%.)
My conclusion? Inflating away the debt load is not likely to tempt the Fed or Treasury. But Congress is another story. If they try it, either consciously or unconsciously, the markets would turn chaotic very quickly. The dollar would collapse and interest rates would soar. That’s why a credible plan to deal with the deficit is so crucial.