Thursday, February 4, 2010

Barker's Newsbites: Thursday, 2/4/10


You know the drill, folks...

(*WINK*)

"Newsbites" to be found in the Comments Section of this thread.

ENJOY...!
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17 comments:

William R. Barker said...

http://www.nytimes.com/2010/02/04/us/politics/04scotus.html?hp

“I found it fascinating that the people who were editorializing against it were The New York Times Company and The Washington Post Company,” Justice Thomas said. “These are corporations.”

The part of the McCain-Feingold law struck down in Citizens United contained an exemption for news reports, commentaries and editorials. But Justice Thomas said that reflected a legislative choice rather than a constitutional principle.

He added that the history of Congressional regulation of corporate involvement in politics had a dark side, pointing to the Tillman Act, which banned corporate contributions to federal candidates in 1907.

“Go back and read why Tillman introduced that legislation,” Justice Thomas said, referring to Senator Benjamin Tillman. “Tillman was from South Carolina, and as I hear the story he was concerned that the corporations, Republican corporations, were favorable toward blacks and he felt that there was a need to regulate them.”

It is thus a mistake, the justice said, to applaud the regulation of corporate speech as “some sort of beatific action.”

Justice Thomas said the First Amendment’s protections applied regardless of how people chose to assemble to participate in the political process.

“If 10 of you got together and decided to speak, just as a group, you’d say you have First Amendment rights to speak and the First Amendment right of association,” he said. “If you all then formed a partnership to speak, you’d say we still have that First Amendment right to speak and of association.”

“But what if you put yourself in a corporate form?” Justice Thomas asked, suggesting that the answer must be the same.

Asked about his attitude toward the two decisions overruled in Citizens United, he said, “If it’s wrong, the ultimate precedent is the Constitution.”

February 4, 2010 at 10:05 AM
William R. Barker said...

http://finance.yahoo.com/news/Firsttime-jobless-claims-rise-apf-106391038.html?x=0&.v=8

The number of newly laid-off workers filing initial claims for jobless benefits rose last week, evidence that layoffs are continuing and jobs remain scarce. The rise is the fourth in the past five weeks. The figures come a day before the Labor Department is scheduled to report the January employment figures...The unemployment rate is forecast to rise to 10.1 percent. The number of people continuing to claim benefits...do not include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government [via borrowed money and taxation]. More than 5.8 million people were receiving extended benefits in the week ended Jan. 16, the latest data available, up from about 5.6 million the previous week. [T]he increasing number of people claiming extended unemployment insurance indicates hiring hasn't picked up. That leaves people out of work for longer and longer periods of time. Some employers are continuing to cut jobs. Wal-Mart Stores Inc. said Wednesday that it will eliminate 300 administrative jobs at its headquarters. The company has cut almost 14,000 jobs in the past 13 months. Sony Pictures Entertainment Inc....said Tuesday it is laying off 450 people and eliminating 100 open positions. Among the states, Oregon reported the largest increase in claims...

February 4, 2010 at 10:24 AM
William R. Barker said...

http://finance.yahoo.com/focus-retirement/article/108747/next-in-line-for-a-bailout-social-security?mod=fidelity-readytoretire

Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Instead of helping to finance the rest of the government, as it has done for decades, our nation's biggest social program needs help from the Treasury to keep benefit checks from bouncing - in other words, a taxpayer bailout.

No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week.

The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010 (see page 74 of the CBO report). The second is $92 billion, the overall Social Security surplus for fiscal 2010 (see page 116).

This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30.

Why disregard the interest? Because as people like me have said repeatedly over the years, the interest, which consists of Treasury IOUs that the Social Security trust fund gets on its holdings of government securities, doesn't provide Social Security with any cash that it can use to pay its bills. The interest is merely an accounting entry with no economic significance.

Social Security hasn't been cash-negative since the early 1980s, when it came so close to running out of money that it was making plans to stop sending out benefit checks. That led to the famous Greenspan Commission report, which recommended trimming benefits and raising taxes, which Congress did. Those actions produced hefty cash surpluses, which until this year have helped finance the rest of the government.

But even then, it was clear the surpluses would be temporary. Now, years earlier than projected, Social Security is adding to the government's borrowing needs, even though the program still shows a surplus on paper.

If you go to the aforementioned pages in the CBO update and consult the tables on them, you see that the budget office projects smaller cash deficits (about $19 billion annually) for fiscal 2011 and 2012. Then the program approaches break-even for a while before the deficits resume.

[T}his year's Social Security cash shortfall is a watershed event. Until this year, Social Security was a problem for the future. Now it's a problem for the present.

February 4, 2010 at 10:24 AM
William R. Barker said...

http://www.rasmussenreports.com/public_content/politics/general_politics/february_2010/just_35_realize_most_federal_spending_goes_to_national_defense_social_security_medicare

Budget documents provided by the Obama administration show that in Fiscal Year 2009 50% of all federal spending went to national defense, Social Security and Medicare. When the cost of veterans affairs are included, that number grows to 53%. Five percent (5%) paid interest on the federal debt, and 42% was used for everything else in the budget.

However, a new Rasmussen Reports national telephone survey shows that only 35% of voters believe that the majority of federal spending goes to just defense, Social Security and Medicare. Forty-four percent (44%) say it’s not true, and 20% are not sure.

“These figures highlight a massive failure of leadership...

February 4, 2010 at 12:29 PM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704022804575041611627979190.html?mod=WSJ_Opinion_AboveLEFTTop

It will be back to the future today on Capitol Hill, when President Obama's nominee to run the Justice Department's Office of Legal Counsel is scheduled for a vote in the Senate Judiciary Committee. A year into the Obama Administration, Dawn Johnsen and her views on national security look more than ever like a relic of campaign nostalgia.

Back in the day, Ms. Johnsen's efflorescent critiques of the Bush Administration's antiterror policies while a professor at Indiana University made her a darling of the Left. In a 2008 blog about the Supreme Court's decision in Boumediene v. Bush, Ms. Johnsen claimed that U.S. detainee policies were "creating fertile conditions for the recruitment of terrorists." In March 2008 on Slate.com, she advised that the next Administration "must condemn our nation's past transgressions and reject Bush's corruption of American ideals."

That was all before the realities of fighting a relentless global terror network imposed themselves on the Obama Administration.

Recent events have produced a reality check on this rhetoric, to put it mildly. The near miss of the attempted Christmas Day bombing of Northwest flight 253, the Hasan massacre at Fort Hood, the furor over trying Khalid Sheikh Mohammed in lower Manhattan, the practical difficulties of closing Guantanamo—all this and more has served to bring Mr. Obama and his associates to the reality of fighting the modern enemy called terrorism. It is more than a law-enforcement problem.

The White House has given little indication that it is interested in spending political capital on the Johnsen nomination. And at this point it would serve the best interests of all parties to cut Ms. Johnsen loose. Her views look increasingly out-of-touch, better suited to the pot-shotting needs of a party in opposition.

February 4, 2010 at 12:29 PM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703389004575033281965244048.html

[By Michael Barone]

Ask anyone reasonably well versed in American history to name our most populist-minded president, and you'll likely hear the name of Andrew Jackson. He was the son of Scots-Irish immigrants, raised on the frontier, and he ran the first democratic (and Democratic) campaign. A gang of Jackson's roughneck supporters, so the legend goes, rushed to the White House after his inauguration and tore the place apart.

But Jackson was not a "spread the wealth" populist. On the contrary, he opposed the American System of John Quincy Adams and Henry Clay to have the government build roads and canals and other public works. He killed the central bank and paid off the national debt.

Jackson argued that government interference in the economy would inevitably favor the well-entrenched and well-connected. It would take money away from the little people and give it to the elites.

That view seems to be shared today in what I have called the Jacksonian belt, the broad swath of America settled by the Scots-Irish from the Appalachian chains in Virginia southwest to Texas. [While the] Obama administration [and congressional Democrats mainly argue] that Democratic big government and health-care programs will help the little guys. Jacksonians today, as in the 1830s, don't agree.

Jackson's arguments were not ill-founded. The Republican Party that fought and won the Civil War sponsored aid for railroads and favored corporations—and got caught up in messy scandals. That helped to spark the populist movement of the 1890s. But the populists' central policy plank was inflation. They wanted to get off the gold standard, which Republicans imposed after the greenback-fueled inflation of the Civil War, so that farmers could pay off their debts in cheap dollars.

This was economic redistribution of a sort, from bankers to farmers—and was soundly repudiated by the voters. William Jennings Bryan, the populist nominated three times by the Democrats, was beaten by two uncharismatic hard-money Ohioans, William McKinley and William Howard Taft. A Democratic Congress created the Federal Reserve in 1913, and there hasn't been a major political movement calling for inflation since.

* ACTUALLY... WHILE NOT ACTUALLY BEING HONEST AND "CALLING" FOR INFLATION, THE HIGH-DEFICITS/LOW DOLLAR POLICY OF THE OBAMA ADMINISTRATION, CONGRESSIONAL DEMOCRATS, AND FED CHAIRMAN BEN BERNANKE SETS THE STAGE FOR INFLATION. [My insert -- Bill]

The reaction to the stimulus package's vast increases in government spending and the health-care bills, with their redistributive taxes, has been unmistakably negative. If you have any doubts about this, check out the election returns in Massachusetts.

Why has the politics of economic redistribution had such limited success in America? One reason is that Americans, unlike Western Europeans, tend to believe that there is a connection between effort and reward and that people can work their way up economically. If people do something to earn their benefits, like paying Social Security taxes, that's fine. But giving money to those who have not in some way earned it is a no-no. Moreover, like Andrew Jackson, most Americans suspect that some of the income that is redistributed will end up in the hands not of the worthy but of the well-connected.

Last year Mr. Obama and his policy strategists seem to have assumed that the financial crisis and deep recession would make Americans look more favorably on big government programs. But it turns out that economic distress did not make us Western Europeans.

Now the president and his advisers seem to be assuming that populist attacks on the rich will rally the downtrodden masses to their side. History does not provide much hope for this audacity. William Jennings Bryan, whose oratorical skills outshined even Mr. Obama's, got lower percentages of the vote each time he ran.

February 4, 2010 at 12:30 PM
William R. Barker said...

http://www.ft.com/cms/s/0/a82cfe04-10f5-11df-9a9e-00144feab49a.html

Moody’s Investors Service fired off a warning on Wednesday that the triple A sovereign credit rating of the US would come under pressure unless economic growth was more robust than expected or tougher actions were taken to tackle the country’s budget deficit.

In a move that follows intensifying concern among investors over the US deficit, Moody’s said the country faced a trajectory of debt growth that was “clearly continuously upward”.

Steven Hess, senior credit officer at Moody’s, said the deficits projected in the budget outlook presented by the Obama administration outlook this week did not stabilise debt levels in relation to gross domestic product.

“Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the triple A government bond rating,” the rating agency added in an issuer note.

This week, the White House forecast a $1,565bn budget deficit for 2010, which represents 10.6 per cent of gross domestic product and is the highest such ratio of debt to GDP since the Second World War.

“Everyone has reason to be concerned about the US economy right now and the US dollar,” said Tony Tan, deputy head of the Government of Singapore Investment group. At the heart of investor concerns is whether countries such as the US with its rising debt burdens has the political will, or the sense of consensus, to take decisive measures to cut debt.

Crucially, projections of the overall debt-to-GDP ratio for the US are seen rising from 53 per cent in 2009 to 73 per cent in 2015 and 77 per cent by 2020.

Moody’s, however, says this understates the overall US debt level.

“Using the general government measure, including state and local governments as well as the federal government, which is used internationally, this ratio would be well over 100 per cent in 2020.”

February 4, 2010 at 12:30 PM
William R. Barker said...

http://kudlow.nationalreview.com/

[By Larry Kudlow]

This $100 million AIG bonus story is truly outrageous. Here’s a company that remains TARPed and bailed-out to the staggering tune of $124 billion, courtesy of the taxpayers. AIG already has received $230 million in prior bonuses from the taxpayers. Let me state unequivocally: This is not free-market capitalism.

I’m making this case against AIG bonuses as a market-based conservative, not as a left-wing populist. As I have argued before regarding commercial-bank bonuses, TARPed firms on the taxpayer dole should forego bonus payments.

You know, if AIG had been put into bankruptcy, as they should have been, all these bonus contracts would have been nullified, as would shareholders, creditors, and all the rest. I don’t understand why we’re sitting by and allowing these bonus payments to be made.

February 4, 2010 at 1:45 PM
William R. Barker said...

http://corner.nationalreview.com/post/?q=MWQ2ODFlYzJiYmRlZDAwYjZhNDg3YTVmYzExMTg4YTE=

Attorney General Eric Holder has penned a five-page response to senators who demanded answers about his decision to Mirandize and charge Umar Farouk Abdulmutallab, the Christmas Day bomber, as a criminal defendant. It is a full-bore justification of the law-enforcement approach to combating terrorism...

Holder writes: “I am confident that, as a result of the hard work of the FBI and our career federal prosecutors, we will be able to successfully prosecute Mr. Abdulmutallab under the federal criminal law.”

No one has ever doubted that.

Even if Abdulmutallab had never uttered a word in response to questioning, there were 200 witnesses on the plane he tried to blow up, not to mention the defective bomb discovered in his underpants, which should provide plenty of evidence to prosecute and convict him. They didn’t need a confession to convict him, so why Mirandize him at all?

Well, Holder explains, everyone did everything by the book. [The problem is, it's "the book"] itself...excludes the intelligence services from participation and prioritizes law-enforcement interests over intelligence gathering when a foreign terrorist is captured on U.S. soil.

Sure, the attorney general writes, he’ll let the intelligence services know what the Justice Department plans to do, and may even entertain their objections, but he’s driving the car, and those other agencies need to stay in their lane. Under this system, the attorney general would even Mirandize Osama bin Laden if he were captured in the U.S.

The attorney general also drags out the old Richard Reid comparison, saying the shoe bomber was treated just like the underwear bomber. How about a little bit of context here? President Bush authorized detaining terrorists as enemy combatants in November 2001, about two months after 9/11. The shoe bomber was arrested in December 2001, only a month later. At that point, there was no system in place to handle enemy combatants and no military commissions. Attorney General Holder, who stresses the importance of following the rules, should understand that.

Also, the shoe bomber was arrested, charged, and convicted well before the Supreme Court in 2004 gave its approval to holding terrorists — even U.S. citizens — as enemy combatants outside the criminal-justice system. It’s now more than eight years since Reid’s arrest, and there can be no question that Abdulmutallab, a Nigerian national who flew to the U.S. to commit an act of war, could have been held as an enemy combatant. Nonetheless, the attorney general suggests that there is some legal doubt on this point.

Mr. Holder’s preference for law enforcement over intelligence gathering comes through clearly in his letter from beginning to end. He even tries to twist a decision that former attorney general Michael Mukasey made when he was a judge into a justification for Mirandizing Abdulmutallab. Mukasey ruled that Padilla, who was being held as an enemy combatant, was entitled to consult with lawyers — for the limited purpose of challenging his continued detention as an enemy combatant. Judge Mukasey did not write that Padilla was entitled to have a lawyer present during interrogation, or that he had a right to remain silent, or that he should have been Mirandized. To the contrary, he ruled that Padilla could be held as an enemy combatant without a trial, though he could ask a court to free him.

If detained as an enemy combatant, Abdulmutallab would certainly have had the right to consult with a lawyer to challenge his detention. We’re pretty sure he would have lost, since he did, after all, try to set off a bomb on an airplane. But he would have had no right to have a lawyer present during his interrogation, no right to remain silent, and no right to be Mirandized.

February 4, 2010 at 1:46 PM
William R. Barker said...

http://article.nationalreview.com/423463/rigging-the-numbers/andrew-c-mccarthy?page=1

“We need to develop a greater resiliency in this country on security issues,” Sarah E. Mendelson of the Center for Strategic and International Studies told the New York Times. “The administration needs to remind the American public that we have convicted 195 international terrorists in federal courts since 2001.”

That 195 number is making the rounds. It is both false and an exercise in hypocrisy.

The figure is mined from “In Pursuit of Justice,” a report published by Human Rights First (HRF) in May 2008 and updated last July. But the report does not claim that 195 international terrorists have been convicted. Rather, it says that 195 defendants have been convicted so far in 119 cases that have some connection, however attenuated, to terrorism. [T]the cases HRF is talking about are, in the main, cases that no one disputes can be handled safely and efficiently by the civilian courts. For example, let’s say the FBI is investigating al-Qaeda and it interviews a person suspected of having relevant information. That person lies during the interview, so the prosecutors indict him for making false statements, and he pleads guilty. Under the HRF’s standards, that gets tallied as a conviction in a “terrorism case.” But it hardly means the defendant is an international terrorist, let alone a KSM.

The same holds true for crimes like financial fraud and material support. These often involve people in the U.S. who are not themselves terrorists. Instead, they either contribute money and other assets to the jihadist cause (e.g., by contributing money to “charities” that are actually fronts for al-Qaeda or Hamas), or else help terrorists surreptitiously move their funds from place to place.

No opponent of civilian trials for enemy combatants is claiming that everyone who is connected in any way to a terrorism case should be transferred to the military courts. The quarrel here is over how to handle real operatives of al-Qaeda (and its components, like al-Qaeda in the Arabian Peninsula). We are talking about jihadists who are captured plotting, carrying out, or having carried out attacks against the United States — not just anyone who happens to get ensnared in the broad net of a terrorism investigation.

A handful of the 195 convicted defendants counted by HRF really were terrorists, but that doesn’t change the fact that there are better ways than civilian trials to try enemy combatants. Calling a prosecution “successful” just means that we convicted the defendant; it does not mean that national security was well served.

If, because of civilian due-process rules, we had to reveal national-defense information that we could have kept secret in a military commission — or if we had to spend hundreds of millions of dollars to address security concerns that could have been obviated by having a military trial in the safety of Gitmo — then the country would have been better off getting the same result in a military commission. That is common sense.

February 4, 2010 at 1:46 PM
William R. Barker said...

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=520060

When the specifically targeted and named Troubled Asset Relief Program was enacted, we were told it was a necessary and wise investment. It would stabilize the financial system and keep credit and money moving. We would even get our money back and then some.

Many banks didn't want the money or need it. Some were told to take it or they'd be audited. So they took it. The banks, eager to break free from federal interference, paid the money back with some interest. The money was intended to be returned to the Treasury for deficit reduction. But an administration that touts a token discretionary spending freeze has no such intention.

This is more than government failing to keep a promise. This is a patently unconstitutional act, as Republican Sen. Judd Gregg of New Hampshire tried to point out to Office of Management and Budget Director Peter Orszag on Monday over administration plans to transfer bailout funds to a new small-business loan program.

"This is the law," Gregg said, holding up the TARP guidelines he helped write in 2008. "Let me tell you what the law says. Let me read to you again, because you don't appear to understand the law. The law is very clear. The monies recouped from TARP shall be paid into the general fund of the Treasury for the reduction of the public debt."

Gregg added that TARP was not a political slush fund, saying, "It's not for a piggy bank because you're concerned about lending to small businesses and you want to get a political event when you go out and make a speech" in Nashua.

This and other misuses of TARP money are not only illegal, but also unconstitutional, as Fox News contributor and constitutional scholar Andrew Napolitano has argued. The power of the purse is given by the Constitution to Congress. Congress cannot abdicate or cede that responsibility to the executive branch. Nor can the administration appropriate that authority to itself.

"The administration lacks legal authority" to use TARP monies for anything it chooses outside the bill's specific intent, says Andrew Grossman, senior legal policy analyst at the Heritage Foundation. "If the authority is as broad as the administration and some lawmakers say, then it is unconstitutional. Congress cannot pass the buck and give unlimited power to the executive."

The administration seems to have discovered a new universal law of perpetual motion — that money once extracted from the taxpayers or borrowed from others can never be returned whence it came.

[BTW] This isn't just taxpayer money we're talking about. It's borrowed foreign money as well, largely Chinese money

February 4, 2010 at 1:47 PM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703389004575033222236113024.html?mod=WSJ_Opinion_LEFTTopOpinion

[By Ann Marlowe - a New York-based writer who travels frequently to Afghanistan.]

PART 1 --

We are rapidly lurching toward disaster in Afghanistan. We're on the brink of losing the country, not to mention the lives of some of our finest young men and women.

Between the spring of 2002 and 2006, I saw nothing but progress. Afghanistan never would be Switzerland, but it was on the road to becoming a normal developing country.

But from last year to this, we have made the wrong choice at a number of junctions.

First, we allowed a fraudulent election to occur. Worse, we allowed Abdullah Abdullah to think we did not back his candidacy, pushing him to withdraw from the runoff he had earned. Under Mr. Abdullah, Afghanistan would have had a chance for a fresh start.

Many said that Mr. Abdullah, as a non-Pashtun, couldn't rule Afghanistan. Well, they used to say a non-Sunni couldn't rule Iraq. Non-Pashtuns are 60% of the Afghan people. It's time one of them had a chance to rule.

In his State of the Union address, President Obama claimed, "We will reward good governance, reduce corruption, and support the rights of all Afghans—men and women alike." Starting when?

A second mistake was when Mr. Obama decided that sending more troops was the answer but spent little time figuring out what these troops were supposed to do. Are security problems best addressed through military action, or could we accomplish more with tribal leverage and improved governance? This remains unexplored.

A third problem is that the timetable laid out by Mr. Obama and Gen. Stanley McChrystal ignores the clear unreadiness of the Afghan National Army (ANA) to take over security responsibilities. The commanders I've talked with in Southern Afghanistan estimate that it will take at least three years for the ANA to fly solo, and longer for the police. So why is Mr. Obama still referring to July 2011 as the date the ANA can take over?

A fourth mistake: Last week, we caved in to the Pakistanis yet again. We pledged to give them aid and even drones, even as they say they're not mounting any more assaults on the Taliban in the Federally Administered Tribal Areas this year.

Fifth, and worst, Gen. McChrystal seems to be doing his best to hearten the insurgency and dismay Afghan progressives. Our commanding general told the Financial Times last week that the point of the surge was to bring the Taliban to the negotiating table, rather than clearing and holding insurgent-ridden areas of Afghanistan.

* To be continued...

February 4, 2010 at 1:48 PM
William R. Barker said...

* Continuing... PART 2 --

Gen. McChrystal gets it wrong on other issues. He envisions Pakistan—a country that provides sanctuary to the Taliban—as a facilitator of talks, though most Afghans believe Pakistan is trying to destabilize their country. He imagines the United Arab Emirates or Saudi Arabia—both the source of dubious charities that fund the insurgency—as venues for the talks. And he remarks that insurgent leader Gulbuddin Hekmatyar is "most likely to cut a deal," noting that he is a "former prime minister."

Hekmatyar is better known as a psychopath who began his political career by throwing acid in the faces of female students when he attended Kabul University in the 1970s. He's on our list of international terrorists and should be captured or killed—not negotiated with.

Happily, some officials see the situation for what it is, as shown by the recently leaked November cables from U.S. Ambassador (and retired Lt. Gen.) Karl Eikenberry to Secretary of State Hillary Clinton. In his Nov. 6 and 10 cables, Mr. Eikenberry wrote: "More troops won't end the insurgency as long as Pakistan sanctuaries remain." I was told in November by Lt. Col. Dave Oclander, a battalion commander of the 82nd Airborne in Zabul province, that about a third of the insurgents are in Pakistan on R&R at any given time—a luxury our troops and the ANA don't have.

The ambassador suggested that the administration invest in development (electricity, water and education) and governance, since they are a direct path to stabilizing the country. He deplored "further militarization of our effort, instead of civilianization and Afghanization which are our real aims."

When the American Embassy requested $2.5 billion for the budget for development and governance last summer, the request was rejected. But the surge will cost perhaps 10 or 20 times that much annually, without building a government Afghans can trust. Why should we send 30,000 more Americans to hand over the country to its worst elements?

February 4, 2010 at 1:49 PM
William R. Barker said...

* This one goes with Newsbite #11 --

http://www.realclearpolitics.com/articles/2010/02/02/transcript_senator_judd_gregg_greta_obama_budget_100160.html

[GRETA] VAN SUSTEREN OF FOX NEWS: All right, today you had quite a showdown with with Peter Orszag.

SEN. JUDE GREGG [R-NH]: Well, you know, they've sent up a budget which by their own terms is unsustainable. It puts us on a path which is basically going to lead us to fiscal insolvency as a nation, in my opinion, and I think in a lot of other people's opinion. It's a huge deficit machine, is what they've proposed, and that leads to debt. And the debt is not sustainable. It gets passed on to our kids, and basically, will lower the quality of life of our children, and that's not fair.

I feel very strongly that when you send a budget like that up, you should also send up some fairly big ideas for how you're going to address it in the out years, how you're going to keep us from going off the road, how you're going to keep us from passing on to our kids a nation that can be afforded. And there are no big ideas in this budget on the issue of fiscal discipline. None. There are some ideas, and I support their freeze concept; but the freeze is $10 billion. Compared to a $1.6 trillion deficit, it's really not going to get us there.

VAN SUSTEREN: Well, one of the things that he brought up that, obviously, you were quite heated about, was the whole idea of taking some of the returned TARP money and giving it to community banks to the tune of $30 billion for lending. You say that that's not legal or not authorized by the statute.

GREGG: No. The way TARP was set up, you know, we borrowed this money - we borrowed it from Americans and we borrowed it from the Chinese, and we took it and we used it to stabilize the financial industry during a severe crisis which would have basically bankrupted Main Street had all these banks failed.

VAN SUSTEREN: Well, the word that I seized upon in listening to the exchange today is "shall." And when I was in law school, that wasn't a word that gave you any sort of wiggle room. It just must be. How does the White House, the administration, justify saying that they can take the returned TARP money and send it out to these community banks, this $30 billion for loans? How do they justify it?

GREGG: Well, the word is "shall," and they can't do it legally.

VAN SUSTEREN: So what happens?

GREGG: So Mr. Orszag, to his credit, said they're going to change the law. You know, I mean, well, that makes no sense at all. I mean, the whole purpose here was to borrow money, put it out, stabilize the financial markets. When it gets paid back, pay down the borrowing so our kids didn't get stuck with the debt. What they're going to do is change the law so that they borrow the money, send it out to the stabilized financial institutions. When it gets paid back, they're going to spend it on something else so the debt is still out there and our kids still have to pay for it.

VAN SUSTEREN: Do you think he knew the word "shall" was there before he showed up today?

GREGG: No.

VAN SUSTEREN: Or did you surprise him with "shall"?

GREGG: I'm not sure whether he knew it or not, but he pretty quickly confirmed that they [are] going to change the law. So he probably did know, yes. I guess I probably would have to give him credit for knowing it, yes.

* To be continued...

February 4, 2010 at 2:18 PM
William R. Barker said...

* Continuing from the previous post --

VAN SUSTEREN: So I take it you're not a big fan of the president's proposed budget.

GREGG: No, the budget is a disaster. It really is. It's more government, more spending and more debt. But the real problem isn't the short run. The short run's a problem. But the real problem is in the out years, there's no compression of the debt. Spending continues to go up, and taxes can never catch it because the spending is going up so fast. They're taking the size of the government from 20 percent of the Gross National Product up to 25, 26 percent of the Gross National Product. That's simply not affordable. That means you're adding a trillion dollars of debt to our kids' backs every year for the foreseeable future. And at the end of 10 years, not only is it not coming down, it's still going up!

VAN SUSTEREN: So if we were having this conversation 10 years from now, what would the economy look like, according to your prediction, assuming the president's proposed budget got passed?

GREGG: I personally think we'll hit the wall long before 10 years. I think within 5 to 7 years.

VAN SUSTEREN: What does that mean, "hit the wall"?

GREGG: It means that the people stop buying our debt or making it very difficult for us to sell debt, that the value of the currency is affected and that you either end up with a significant inflationary event or an event where you have to so significantly raise taxes that you reduce the productivity of the entire economy and you're no longer creating jobs.

The simple situation, the simple comparison is this. It's like a family that's been living beyond its means for many, many years and its income can never catch up with its debts. And at some point the world community says to us, I'm sorry, we're not going to fund your debts any longer. We're simply not going to lend you the money you need. I mean, we're not operating off our own economy's ability to support us, we're operating because China is willing to lend us money and other nations are willing to lend us money. Well, they're putting up some fairly significant red flags right now that says, "We're a little concerned about all your borrowing." And if we continue this borrowing, they're going to put up very severe red flags and say, "Hey, maybe we're just not going to lend you anymore, or if we do lend to you, we're going to put a price on the lending which is so expensive that it makes it very hard for you to do much else with your government besides pay down your interest."

VAN SUSTEREN: Senator, thank you, sir.

GREGG: Thank you, Greta

February 4, 2010 at 2:18 PM
William R. Barker said...

http://www.realclearmarkets.com/articles/2010/02/04/a_federal_budget_that_insults_all_budgets_97621.html

[By Bill Flax -- billflax2@yahoo.com]

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money." -- Alexis de Tocqueville

[P]oliticians love to spend. They have one overriding purpose: getting re-elected.

The last time federal spending actually lessened year over year was a slight $300 million decline in 1965.

Politicians used to be hamstrung by the rule of law, but our Constitution has been consistently ignored for most of the last century.

Since LBJ declared War on Poverty to no apparent benefit to the poor, expenditures have risen annually. Now Washington doles out more than $2 trillion on entitlements alone. Soaring healthcare costs, the destruction of the family in poor areas, crime, drug epidemics, etc. are all exacerbated by the Welfare State. Social problems grow in proportion to the funding we exhaust chasing them. This then prompts "caring" politicians to dispense even more resources sustaining the unproductive.

The government has no resources. Everything it spends was created by private individuals and still belongs to taxpayers. All government can do is take from the industrious, the inventive, the hard-working and the frugal to dispense on the inefficient, the lazy, or the irresponsible. Government spending bites the very hand that feeds it.

And these resources no longer exist. We're now over $12 trillion in debt. Including future unfunded liabilities and those Washington assumed as a result of assorted bailouts and other mischief, the average family owes $471,000 - and counting - courtesy of government. The resources are gone.

Democrats wasted them on silly, self-defeating welfare programs and Republicans wasted them on silly, self-defeating foreign policies. Sometimes in fits of bipartisanship, they combined to waste them on even greater concepts. Government has no remaining resources, but to our peril it does have a printing press.

No matter what grandiose terms our elected leaders couch it under, there are only three ways to pay for this largesse. Certainly they can deprive productive enterprise of the resources necessary to generate economic growth via confiscatory taxes. But the disincentives ensconced in progressive taxation render it self-defeating. Washington can borrow, thus diverting capital from those endeavors actually prospering society. Another economic retardant. Or, they can inflate their way out of the mess by debasing our currency.

Bet on the latter. Fiat currency has proven throughout history to be as pernicious as any evil yet devised in its consequences for free society. Inflation is how they steal from us. Taxes take your money. Inflation leaves the money, but takes its value.

Complementing government expansion, other corollary trends have developed. More people economically dependant on the political establishment and fewer still paying income taxes. At all levels, government now employs over 20 million workers. We have tens of millions more dependent on entitlements, subsidies and other property redistribution. Meanwhile, almost half of us pay no income taxes.

A society where one group can vote the belongings of another into its coffers is unsustainable. Plurality doesn't convey license to override property rights, but the polity has devolved into demagoguery. The obvious solution, to cut spending and wean people off the public dole is not politically tenable. We all have relatives nearing retirement and no one wants to tell grandma to get back to work.

The two political parties birthed in arrogance play a game of chicken. Neither will risk political suicide to undertake the necessary hard choices. As long as politicians can buy votes with your money they will and they'll win.

February 4, 2010 at 2:46 PM
William R. Barker said...

http://www.bloomberg.com/apps/news?pid=20601039&sid=a.G6KFfaDdSc

Look through President Barack Obama’s proposed 2011 budget, and you’ll see a line calling for a $235 million increase in the Justice Department’s funding to fight financial fraud. Lucky for them, the people who wrote the budget can’t be prosecuted for cooking the government’s books.

Whether on Wall Street or in Washington, the biggest frauds often are the perfectly legal ones hidden in broad daylight. And in terms of dollars, it would be hard to top the accounting scam that Obama’s budget wonks are trying to pull off now.

The ploy here is simple. They are keeping Fannie Mae and Freddie Mac off the government’s balance sheet and out of the federal budget, along with their $1.6 trillion of corporate debt and $4.7 trillion of mortgage obligations.

Never mind that the White House budget director, Peter Orszag, in September 2008 said Fannie and Freddie should be included. That was when he was director of the Congressional Budget Office and the two government-backed mortgage financiers had just been seized by the Treasury Department.

The White House is already forecasting a $1.3 trillion budget deficit for 2011, which is about $3 of spending for every $2 of government receipts. By all outward appearances, it seems Obama and his budget wizards decided that including the liabilities at Fannie and Freddie would be too much reality for the world to handle. So they left the companies out, in a trick worthy of Enron’s playbook, except not quite so hidden.

Excluding Fannie and Freddie, the national debt held by the public is about $7.9 trillion. [INCLUDING THEM,] it exceeds last year’s $13.2 trillion gross domestic product!

[W]ithout all the trillions of dollars of subsidies the government has pumped into housing, home prices would get creamed even worse than they already have, spurring greater loan defaults and saddling the Treasury with ever-higher costs from the guarantees Fannie and Freddie sold. What’s sickening is that the government can’t afford the subsidies. Suddenly, that $8,000 tax credit for first-time homebuyers looks like a nasty teaser aimed at sucking America’s newlyweds into a giant Ponzi scheme.

Worst of all is the example the government is setting for its citizenry. There still have been no indictments of senior executives at any of the big financial institutions that cratered in 2008 while sporting pristine balance sheets. No wonder. The government lacks moral standing to prosecute crimes such as accounting fraud when its own books lack integrity.

February 4, 2010 at 4:01 PM

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