1. We knew this was coming. The federal government has now committed to so much spending that long-term interest rates are starting to increase, as investors start worrying that the government will inflate its way out of debt.
In only a few months, President Obama has managed to overdraw the accounts of the US government—and of the entire American economy.
"Spike in Interest Rates Could Choke Recovery," Neil Irwin, Washington Post, June 12 Rising long-term interest rates are making it more expensive for home buyers, corporations and the US government to borrow money, threatening to further stifle an already weak economy.
In just the past two weeks, the rate on a 30-year, fixed-rate mortgage has risen to 5.6 percent from 4.9 percent, ending a boom in refinancing and working against a budding recovery in the housing market. Rates on corporate borrowing have also risen, making it more expensive for companies to expand. And the government has been forced to pay more to finance its deficit….
Investors around the world are increasingly fearful that Congress and the Obama administration will be unwilling to bring taxes and spending in line in the years ahead. That makes the US government appear to be a riskier borrower, leading those who lend to it to demand higher interest payments.
The Federal Reserve now finds itself in a box. It could try to lower rates by buying government debt. It has already said it would buy $1.5 trillion in US Treasuries and mortgage-related securities this year to try to stimulate growth.
But doing so would likely only deepen fears that the Fed will print money to fund government deficits in the future. That possibility—while rejected by Fed officials and many mainstream economists—means that expanding purchases might not have the intended effect of lowering rates. It could even drive them up further.
2. Those who accuse the Democrats of a policy of "tax and spend" get it backward. The Democrats never figure out where the money is coming from before they spend it. They always spend it first, point to the resulting fiscal disaster, and then demand higher taxes to pay for the runaway spending.
In fact, the really crushing burden of government spending comes from a program created more than 70 years ago: Social Security. We're still raising taxes to pay for the spending commitments Congress made in 1935.
Here's the latest ominous news: increased chatter about piling a national sales tax on top of all of the existing taxes, as a way of paying for Obama's new socialized medicine scheme. No, I don't think we will see this national sales tax soon. Congress will spend the money first, and only then will they get around to figuring out new ways to tax us for it.
The worst part about a national sales tax, by the way, is not just the fact that it will funnel more private money into the gaping maw of the government. Consider also the sheer economic disruption of creating a totally new kind of tax, which will require individuals and businesses to rethink all of their economic plans. That's enough to create a recession all by itself.
"Once Considered Unthinkable, US Sales Tax Gets Fresh Look," Lori Montgomery, Washington Post, May 27 With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.
Common around the world, including in Europe, such a tax—called a value-added tax, or VAT—has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.
At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.
"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."
A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American—a tangible benefit that would be highly valuable to low-income families….
Obama wants to raise income taxes for high earners and impose new levies on business, but those moves would not generate enough cash to cover the cost of health care, much less balance the budget, and they have not been fully embraced by Congress…. And while it might pay for health care, it would barely dent deficits projected to total nearly $4 trillion over the next five years and to grow rapidly in the future, as baby boomers draw on Social Security and Medicare….
Most lawmakers are still looking for "a painless source of revenue" to overhaul the health-care system and dig the nation out of debt, Burman said. "Who knows?" he added. "Maybe the tooth fairy will bring that to them."
3. The Only Job Obama Really Cares About "Saving" I have commented before that Barack Obama is unusually grand and ambitious in his lies, even by the standards of a politician, because he has reason to believe that a compliant press corps will let him get away with it. Hence the Obama administration's claim that its stimulus plan "saved or created" 150,000 jobs—during a period in which ten times as many jobs were lost.
The article below points out that these claims about "saving" jobs are utterly arbitrary—that this statistic is impossible to measure and no one is even trying to measure it. And it takes the press to task for not eating the administration alive for offering up such an obviously manufactured, self-serving lie.
But what strikes me about this story is what it implies about Obama's attitude toward the economy. In basing his claims of success on a statistic that his administration cannot measure and therefore cannot objectively know, President Obama is letting us know that he does not actually care about the economy—not enough to demand hard and firm facts about the nation's actual economic state.
Or rather, it implies that there is only one job Obama really cares about "saving": his own.
"The Media Fall for Phony 'Jobs' Claims," William McGurn, Wall Street Journal, June 10 "Saved or created" has become the signature phrase for Barack Obama as he describes what his stimulus is doing for American jobs. His latest invocation came yesterday, when the president declared that the stimulus had already saved or created at least 150,000 American jobs—and announced he was ramping up some of the stimulus spending so he could "save or create" an additional 600,000 jobs this summer. These numbers come in the context of an earlier Obama promise that his recovery plan will "save or create three to four million jobs over the next two years."
[Bush administration communications official Tony] Fratto sees a double standard at play. "We would never have used a formula like 'save or create,'" he tells me. "To begin with, the number is pure fiction—the administration has no way to measure how many jobs are actually being 'saved.' And if we had tried to use something this flimsy, the press would never have let us get away with it."
Of course, the inability to measure Mr. Obama's jobs formula is part of its attraction. Never mind that no one—not the Labor Department, not the Treasury, not the Bureau of Labor Statistics—actually measures "jobs saved." As the New York Times delicately reports, Mr. Obama's jobs claims are "based on macroeconomic estimates, not an actual counting of jobs." Nice work if you can get away with it….
In the months since Congress approved the stimulus, our economy has lost nearly 1.6 million jobs and unemployment has hit 9.4%. Invoke the magic words, however, and—presto!—you have the president claiming he has "saved or created" 150,000 jobs. It all makes for a much nicer spin, and helps you forget this is the same team that only a few months ago promised us that passing the stimulus would prevent unemployment from rising over 8%.
4. Get ready for the latest smear against the political right.
The left is trying to blame mainstream commentators on the right for a religious zealot's murder of abortion doctor George Tiller and for the recent shooting at the Holocaust museum by an anti-Semitic white supremacist. See the example below from the New York Times's insufferably pretentious "family" columnist Judith Warner, and an even more venemous column by Paul Krugman.
Blaming the right for Dr. Tiller's murder has at least has some grain of truth to it—the religious right has promoted the claim that abortion is murder, which does offer a moral justification for, in effect, murdering the murderers. And mainstream commentators like Bill O'Reilly have specifically condemned Dr. Tiller.
But what gives the real game away is the attempt to link the right to the Holocaust museum shooting. Anti-Semitism has no place in the contemporary right. In fact, anti-Semitism mostly comes from the left these days (see item #5 below), which is far more likely to condemn Israel—while the right is pretty much unanimous in supporting Israel.
The only way this character assassination of the right can be maintained is by classifying outright racists and white supremacists as the "extreme right-wing"—based on nothing but innuendo. Those who remember history might recall that in its heyday, the KKK was filled with Democrats—one of whom (West Virginia's Robert Byrd) still serves in the US Senate.
Meanwhile, notice who is missing from Warner's list of political murderers: Abdulhakim Mujahid Muhammad, the Black Muslim convert who recently shot two soldiers at a military recruiting center, and who was apparently motivated by the anti-war ideas of the left. But as Michelle Malkin points out, this shooting—and its victims—has disappeared from the attention of the mainstream media.
"The Wages of Hate," Judith Warner, New York Times, June 11 It is all too familiar.
A lone gunman takes a life in a hate crime. Law enforcement officials describe him as acting alone.
But he's not alone—not in spirit, at least.
Like Scott Roeder, the man charged in the shooting of the Wichita, Kan., doctor George Tiller nearly two weeks ago, James von Brunn, the white supremacist charged with killing a guard in an attempted shooting rampage at the Holocaust museum in Washington on Wednesday, doesn't have any current, overt links to extremist groups. Yet his violent hatred—of Jews, blacks, the government—echoes throughout the universe of right-wing extremists, who just a few years ago hailed and revered him as a "White Racialist Treasure."…
And there's one additional, highly disturbing parallel between von Brunn's intended white supremacist shooting rampage and Scott Roeder's "pro-life" killing of George Tiller: In both cases, at least some of the core beliefs of extremists were echoed, albeit in more socially acceptable language, by right wing news commentators.
Bill O'Reilly had routinely talked in recent years about "Tiller the baby killer." Other right-wing talk show hosts like Glenn Beck, Lou Dobbs and Rush Limbaugh have similarly tapped into—in somewhat coded form—some of the key concerns of extremist hate groups: that the economy has been destroyed by government-proffered "bad" loans to illegal immigrants, for example, or that FEMA may or may not—Beck equivocated for an awfully long time—be running "concentration camps" for US citizens, or that the Obama administration is declaring war on decent Americans by labeling them as "extremists."…
The result of this wink-wink anti-immigrant and anti-government rhetoric has been "a kind of mainstreaming of hate propaganda," Potok said.
5. "Them Jews" While the left tries to smear commentators on the right as racists and anti-Semites, along comes the Reverend Jeremiah Wright—Barack Obama's spiritual mentor until he became politically inconvenient—to remind us who are the real bigots.
In an unguarded moment, Wright blames "them Jews" for keeping Barack Obama away from him. He then invokes the now universal leftist conspiracy theory about how the "Jewish lobby" controls US foreign policy.
Note also Wright's repetition of his cynical assessment that Obama is just "doing what politicians do"—i.e., hiding his real convictions from the voters. Given Wright's close association with Obama over a period of decades, he's in a position to know what he's talking about.
"Rev. Jeremiah Wright Says "Jews" Are Keeping Him from President Obama," David Squires, (Hampton Roads, Virginia) Daily Press, June 10 In an exclusive interview at the 95th annual Hampton University Ministers' Conference, Wright told the Daily Press that he has not spoken to his former church member since Obama became president, and he implied that the White House won't allow Obama to talk to him.
"Them Jews ain't going to let him talk to me," Wright said. "I told my baby daughter that he'll talk to me in five years when he's a lame duck, or in eight years when he's out of office....
"They will not let him to talk to somebody who calls a spade what it is.... I said from the beginning: He's a politician; I'm a pastor. He's got to do what politicians do."
Wright also said Obama should have sent a US delegation to the World Conference on Racism held recently in Geneva, Switzerland, but that the president did not for fear of offending Jews and Israel. He specifically cited the American Israel Public Affairs Committee, an influential pro-Israel lobbying group.
6. I'm not the only one to describe President Obama's economic policies as "fascist," in the direct, literal sense of being characterized by nominal private ownership masking government control. What adds to the flavor of fascism is the direct role of the chief executive in issuing orders and dictating the terms under which large firms are to be restructured.
But what also gives the flavor of a nascent "soft dictatorship" is our leader's impertinent interest in managing every tiny little aspect of our lives. Barack Obama doesn't just want the power to dictate the salaries of bank executives. He wants the power to tell us whether we can smoke, what we can eat, how much we should be exercising, and so on.
That's the upshot of the article below, which describes how the administration plans to use a government takeover of the medical industry as the framework to turn the president into fitness-coach-in-chief, browbeating the nation over its dietary and exercise habits.
This may seem a small issue, but it is symptomatic of the biggest issue of all: that none of our political leaders seems to recognize that any aspect of life is off-limits to their meddling.
"Barack Obama Says Shape Up Now," Carrie Budoff Brown, The Politico, June 10 Obama and Congress are moving across several fronts to give government a central role in making America healthier—raising expectations among public health experts of a new era of activism unlike any before.
Any health care reform plan that Obama signs is almost certain to call for nutrition counseling, obesity screenings and wellness programs at workplaces and community centers. He wants more time in the school day for physical fitness, more nutritious school lunches and more bike paths, walking paths and grocery stores in underserved areas.
The president is filling top posts at Health and Human Services with officials who, in their previous jobs, outlawed trans fats, banned public smoking or required restaurants to provide a calorie count with that slice of banana cream pie.
Even Congress is getting into the act, giving serious consideration to taxing sugary drinks and alcohol to help pay for the overhaul….
The appointment last month of New York Public Health Commissioner Thomas Frieden as director of the CDC really made the libertarian-minded nervous.
Frieden is a big part of the reason New Yorkers no longer smoke in bars or eat trans fats at restaurants and find calorie counts on their menus. Frieden once said that when anyone in New York dies at an early age from a preventable disease, "it's my fault."
His groundbreaking approach to curbing chronic disease—heart disease, diabetes, cancer—has been mimicked in cities across the country, including Baltimore under Joshua Sharfstein, now the deputy commissioner at the Food and Drug Administration. (One example is Sharfstein inaugurating a Salt Task Force last year to study the "impact of excessive salt intake in the city.")
"Frieden's stick-over-carrot, for-your-own-good approach to public health is no longer confined to the Big Apple," the industry-backed Center for Consumer Freedom wrote on its blog. "Get ready, because the 'nanny state on steroids' is going national."