Common sense made difficult 2


By Tom Quiner

The “King of Pork” is dead.

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Senator Robert Bird of West Virginia died today.  I will leave it to others to honor (or pillage) his illustrious career.  I would, though, like to analyze the essence of Obamanomics in light of Mr. Byrd’s passing.

Mr. Byrd was an unapologetic supporter of pork barrel spending.  He considered his proudest achievement the billions of dollars he brought to West Virginia in Federal pork barrel spending.  He believed Federal spending was the ultimate stimulus to a state’s economy.  No one brought more “bacon” home to his state than Senator Robert Byrd.

So does federal stimulus spending really stimulate the economy?

No.  Read my post from June 21st (Is more big government really the answer?) for a discussion of federal spending as it applied to the Great Depression.

A new study by three economists from the Harvard Business School sheds new light on the impact of federal pork barrel spending on local economies.  Professors Lauren Cohen, Joshua Coval, and Christopher Malloy were stunned to discover that pork spending hurt more than it helped.

A few specifics:

• When a Senator becomes chair of one the top three congressional committees, his/her state experiences a 40 to 50 percent increase in pork spending.  The average is about 20 percent in the House.

• Rather than boosting capital expenditures, the average firm in those states reduced capital expenditures by roughly fifteen percent once the pork began to flow.  The researchers based their findings on 40 years worth of data.

• Firms significantly cut physical and R & D spending.

• Firms reduced employment.

• Firms experienced lower sales.

How could pork-barrel spending hurt instead of help?  The researchers theorize that the federal stimulus dollars crowd out spending the private sector planned to do itself.  The Tennessee Valley Authority of 1933 is one example.  Federal spending creates uncertainty, too, because the dollars may not be there tomorrow if their powerful Senator retires … or dies.

You can read the entire study here: “Do Powerful Politicians Cause Corporate Downsizing?

The essence of Obamanomics is that government spending creates jobs.  They may create government union jobs, but it comes at the expense of the private sector jobs and economic growth.  New research from Harvard rejects the underpinnings of Obamanomics.

The joke goes that “economics is common sense made difficult.”  With Obamanomics, the joke comes at our expense.

***

My condolences to Senator Byrd’s family on his passing.

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Democrats owe Americans an honest budget Reply


By Tom Quiner

Is America heading in the right direction or the wrong direction?

According to poll results at www.RealClearPolitics.com, 61.7 percent of Americans say we’re heading in the wrong direction.  One year ago, the number was 48 percent.

Why is dissatisfaction growing?

Certainly some of the biggest concerns are runaway deficits and the unprecedented expansion of the federal government under President Obama and a Democratic Congress.

Moderate Americans are worried:  how can we possibly afford all the new spending and all of the new unionized government employees the President has added to the government payroll?

What could the President and Congress do to instill some confidence with the American people?  They could submit a balanced budget to the American people.

They could submit a budget that shows new fiscal restraint in government spending.

They could submit a budget that shows Americans we’re on a path back to solvency.

The President and Congress won’t do it.  Even more, they refuse to even submit a budget at all.

Let me put it in perspective.  The Democrats have escalated government spending way beyond the Bush years, way beyond anything America has ever seen.  The only question is whether Obama deficits will triple or quadruple Bush’s deficits from 2008 (although it is only fair to mention that Democrats also controlled Congressional purse strings since 2006).

Now Democrats are totally in charge.  What have they done?  They broke the bank and refuse to even offer up a budget of any sort for 2011.

We’re witnessing a repugnant act of political cowardice.  House Majority Leader Steny Hoyer excuses their refusal to craft a budget on the grounds that it isn’t possible without the input of a “deficit commission” assembled by the President that won’t offer budget suggestions until, you guessed it, after the midterm elections in November.

My response is simple:  Congress spends the money; they’re ones who got us into this mess with assistance from the President; they owe it to the voters to present a budget now as they have historically done.

Grover Norquist, who heads Americans for Tax Reform, says, “It makes it appear that the whole point of the deficit commission from day one was to hide from what Congress is really doing and let Congressman run in the November election claiming to be for some imaginary budget restraint that they’re not actually ready to vote for.”

In other words, the whole thing is a con, once again at taxpayer expense.

Senator Judd Gregg, ranking member of the Senate Budget Committee, put it this way:  “The majority simply doesn’t want to highlight to the American people how much unpaid-for spending is planned for the next ten years, and how staggering our deficits will be as a result.”

Democrats have controlled government purse strings for three and a half years.  They owe the American people an honest budget for next year.  They need to show us how they plan to undo the structural damage they have done to our nation’s finances.

Their refusal to do so explains why 61.7 percent of Americans believe we’re headed in the wrong direction.

Their refusal explains why a staggering 71 percent of Americans (according to RealClearPolitics.com) disapprove of the job Congress is doing.

Let us reconsider ObamaCare 2


Last March 18th, Richard Foster, chief actuary for the Center Medicare and Medicaid Services, presented with Congress’ 2700 page health care bill. His job was to assess the impact ObamaCare would have on America. Unfortunately, Congress wasn’t interested in waiting for his analysis.

…We’ve been sold a bill of goods. ObamaCare tries to cheat the laws of supply of demand instead of letting supply and demand control costs and increase access to healthcare.

According to Medicare’s actuary, according to the Congressional Budget Office, according to health care benefit professionals, America will be poorer and unhealthier under ObamaCare.
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Is more big government really the answer? Reply


By Tom Quiner

The stock market crashed in October of 1929.  At the time of the crash, the unemployment rate was about 5 percent.  Two months later, it had moved up to nine percent, but dropped back down to 6.3 percent by June of the following year.

File:US Unemployment 1890-2009.gif

Unemployment never hit double digits at anytime the first year after the stock market crashed. And then the rate began to go up, and up, and away.

Obviously the stock market crash didn’t cause double-digit unemployment rates that were to come.  So what was the catalyst?  Government action.

First the Congress imposed high tariffs on imported goods in an attempt to save jobs.  Within a half a year, unemployment had reached double digits.  Then the Roosevelt administration began spending money on jobs programs.  Rather than reducing unemployment, it had the opposite effect.  Government intervention created a decade-long depression with tragic levels of joblessness.  Unemployment exceeded 20 percent alone for nearly two years.

The Roosevelt model failed.  This is the model the Obama administration is using.

The stock market crashed again in 1987.  However, the decades that followed were characterized by prosperity and high employment.  The difference?  Government restraint.  With a conservative President at the helm, the government didn’t intervene as it had 58 years earlier.

Is big government the answer or the problem?

Well, what about this monstrous oil spill in the Gulf?  The screams are loud from the political Left for more government regulation.  But before we pile more knee-jerk regulations on the energy industry, let us consider a recent AP story on May 16th, 2010.

They reported that the Minerals Management Service (MMS), the fed’s agency in charge of inspecting oil rigs to ensure safety, didn’t enforce their own policies, and worse, tried to cover it up. Here’s what AP said:

“Earlier AP investigations have shown that the doomed rig was allowed to operate without safety documentation required by MMS regulations for the exact disaster scenario that occurred; that the cutoff valve which failed has repeatedly broken down at other wells in the years since regulators weakened testing requirements, and that regulation is so lax that some key safety aspects on rigs are decided almost entirely by the companies doing the work.”

We had regulations in place.  The government was lax in enforcing them.  Is more big government really the solution?

Well, what about immigration?  We need the federal government to police against illegal immigration and enforce our borders.  Right?

This is a legitimate role of the federal government.  But they’re not getting the job done.  Even worse, they’re politicizing this critical issue, according to Arizona Senator, Jon Kyl.  Here is what Kyl alleges the President said to him:  “The problem is, if we secure the border, then you all won’t have any reason to support comprehensive immigration reform.”

I do believe there are honorable positions on both sides of the immigration debate.  But to hijack law enforcement for political leverage is unconscionable.  Regardless of what you think of Arizona’s new immigration law, you can understand their motivation when the big federal government is either unable or unwilling to do its constitutional duty.

Let us recap.

When it comes to the economy and job creation, big government has made things worse.

When it comes to their regulatory function, they have failed us repeatedly.

When it comes to protecting our borders, they are failing us.

Our government is bigger than ever.  Is more big government really the answer?

Does the President have common sense? 4


By Tom Quiner

An earnest Obama supporter looked me in the eyes shortly after the last election and said, “Obama, he’s just smarter than the rest of us.”

End of story.  In other words, there’s no further debate necessary.  If one disagrees with President Obama, they’re wrong, because Mr. Obama is smarter than the rest of us.

Candidate Obama immodestly promoted this kind of fawning fanship with his own grandiose rhetoric.  He characterized his nomination at the Democratic Convention as the historic moment when “the rise of the oceans began to slow and our planet began to heal.”

Reality has sunk in with a vengeance.

Not only can he not control the depth of the ocean, he can’t control its color.  Oil is the new color of the ocean near America’s gulf coast.  The President is not responsible for this disaster.  However, the government’s response is certainly problematic.

Photo: Coast Guard Orders Oil Sucking Barges Stopped, Against Gov. Bobby Jindal's Wishes: 59 Days into BP oil crisis, it's still difficult to figure out who's in charge.

ABC News reported on Louisiana Governor, Bobby Jindal’s, frustration with the federal government.  “It’s the most frustrating thing,” Mr. Jindal told ABC News.  “Literally, Wednesday morning we found out that they were halting all of these barges.”

The barges were stationed in Louisiana waters to suck out oil.  According to ABC, the Coast Guard halted efforts because they needed to confirm that barges had fire extinguishers and life vests on board.

Bureaucratic red tape halted efforts to clean the Gulf.  The President is boss of the federal bureaucracy.  A man of his intelligence must be heeded even if it means more severe ecological damage.  Even though we’re two months into the oil spill, that’s a worthy price to pay, don’t you think?  Bureaucratic regulations must always supercede a hasty response to an oil spill.  Regulations are more important than the ecology.

I have no doubt that the President is an intelligent man.  I have to admit, though, that I’m beginning to doubt his common sense.