January 27, 2011



January 27, 2011

In USA Today, Michael Gartner gives us a gift that will warm your heart as he tells us about his parents.

...As I said, he was always the navigator, and once, when he was 95 and she was 88 and still driving, he said to me, "Do you want to know the secret of a long life?" "I guess so," I said, knowing it probably would be something bizarre.

"No left turns," he said.

"What?" I asked.

"No left turns," he repeated. "Several years ago, your mother and I read an article that said most accidents that old people are in happen when they turn left in front of oncoming traffic. As you get older, your eyesight worsens, and you can lose your depth perception, it said. So your mother and I decided never again to make a left turn."

"What?" I said again. "No left turns," he said. "Think about it. Three rights are the same as a left, and that's a lot safer. So we always make three rights."

"You're kidding!" I said, and I turned to my mother for support. "No," she said, "your father is right. We make three rights. It works."

But then she added: "Except when your father loses count."

I was driving at the time, and I almost drove off the road as I started laughing. "Loses count?" I asked. "Yes," my father admitted, "that sometimes happens. But it's not a problem. You just make seven rights, and you're okay again."...

 

 

Amity Shlaes, in Bloomberg News, reports on how government spending stifles private-sector job growth.

...Yet what if additional federal spending for roads, bridges, schools, and work programs in states doesn’t redeem itself in jobs? Perhaps such spending actually impedes employment in the private sector. Maybe President George W. Bush killed jobs by signing off on stimulus spending. And maybe President Obama is doing more of the same.

...For the past few years Price Fishback, a University of Arizona economist, and Valentina Kachanovskaya, a graduate student at the school, have been studying the effects of federal domestic spending from the point of view of individual states during the 1930s, a period of dramatic unemployment.

...The two Arizona economists see a more modest benefit. They find that each dollar of public works spending and funding jobs for the poor did increase the average amount of personal income, or cash an individual had on hand to purchase goods and services, by $1.67. When government spending under Hoover and Roosevelt involved grants and loans, the figure was $1.39. ...

...After that, the news about multipliers gets worse. According to Fishback and Kachanovskaya, a dollar spent by Washington didn’t jump-start job creation. The money may have had no effect or even suffocated nonfarm private-sector employment. The investment did not spill over to most other sectors of the economy in a positive way. A double dip, the depression within the depression, followed record federal investment in the economy in 1936. ...

 

 

Tony Blankley has a plan of action on how we can get out from under government's regulatory reign.

...Regarding the vastly damaging economic and deeply annoying personal effect of excessive regulation, we need to take advantage of this momentary diversion of the administration toward at least rhetorical common sense. At the congressional level, as has been promised by new GOP committee chairmen such as Fred Upton at the key House Energy and Commerce Committee, we must identify, publicize and repeal as many oppressive regulations as possible.

This will require the Appropriations Committee to explicitly defund the enforcement of such regulations. And yes, unless the president genuinely follows through with his asserted intentions to rein in regulations, this will mean confrontation between the Republican House and the administration. But the GOP Congress must stand firm.

To help, the conservative media and think tanks need to bring much more focus on abusive regulations. The administration and liberals generally are delighted to let the re-regulation of America continue under the radar. ...

 

 

In the Washington Examiner, Timothy Carney discusses two political entrepreneurs joining Obama's team. Liberals worry about the unrestrained greed of big business and conservatives worry about the totalitarian drive of big government. These alliances should cause everyone concern, because they profit politicians and the big businesses they collude with at taxpayers' expense.

...But the anti-business charge against Obama was always off target. "Anti-free market" was -- and is still -- more accurate.

Immelt and Daley don't represent a new side of Barack Obama -- they represent the unhealthy collusion of Big Business and Big Government that has always been the essence of Obamanomics.

Check out Daley's resume. In the 1990s, he ran Amalgamated Bank, owned by a union and described by the Chicago Sun-Times as "one of the city's most politically connected financial institutions." Bill's brother, Mayor Richard Daley, kept the city's money on deposit at Amalgamated. Later, Bill held a seat on Fannie Mae's board, pocketing six-figure compensation from the government-sponsored enterprise that used a housing bubble and an implicit government guarantee to fill a slush fund for well-connected Democrats -- until taxpayers bailed it out in 2008.

...And Obama's kind of corporation: GE, which marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both. ...

 

 

In Baseball Crank, Dan McLaughlin says that 2012 will not look like 1996, much to liberals' chagrin.

...Undoubtedly, Obama will have the opportunity to take advantage of many of the same dynamics that favored Clinton's re-election, and he may succeed for those and other reasons. But history never repeats itself precisely. It is worthwhile to reflect on the many things that worked to Clinton's benefit that Obama can't count on:

1) The Democrats Still Hold The Senate: Clinton lost both Houses of Congress in the midterms, the third president of the past century to do so, the others being Truman in 1946 and Eisenhower in 1954. Both were re-elected; Truman used the GOP as a foil to confront, Eisenhower showed he could cooperate with the Democrats, and Clinton did some of both. Each was able in one sense or another to run on the same divided-government rationale that had helped them lose Congress in the first place.

Obama won't have the same crisp contrast with Congress; the unpopular Harry Reid is still running the Senate, and sooner or later it will become impossible to conceal that fact. History suggests that this can matter: Obama's the third President in the past century to lose only the House and keep the Senate in the midterms, and the other two - Taft and Hoover - both got slaughtered (Hoover carried just six states and drew 39.7% of the popular vote, Taft carried just two states, finished third in a three-way race and drew just 23.4% of the popular vote).

...3) Obamacare passed; Hillarycare didn't: As unpopular as the Clinton Administration's health care plan was, it wasn't a major issue in the 1996 campaign because it had failed and, with Republicans controlling both Houses of Congress, it wasn't coming back. (Ditto Clinton's destructive BTU tax). Not so Obamacare, which remains very much a live issue. There's clearly a decisive majority supporting repeal right now in the House, and possibly a majority could be mustered in the Senate (certainly if the GOP gains more seats in 2012), but obviously not enough votes to override Obama's veto. Unless Mitt Romney wins the nomination, the GOP will almost certainly run a presidential candidate who can and will mount a full-throated campaign in favor of repealing the bill. The same will be broadly true of a number of Obama's big-spending, big-regulating initiatives. ...

 

 

Pajamas Media has news that makes us admire Texas even more.

The not at all slow death of the Texas Democratic Party continues.  I’ve just gotten word via press release that nine local Democrats up in northeast Texas just switched parties to become Republicans.  From the release

In what is believed to be one of the largest number of officeholders to change party affiliation in Texas, Lamar County GOP Chairman John Kruntorad and State Representative Erwin Cain announced today that 9 local elected Democrats have joined the Republican Party.   This announcement follows unprecedented election gains by the GOP in 2008 and 2010 as Northeast Texans increasingly identify with the conservative platform of the Republican Party. ...

They join a few dozen who switched from D to R in Texas leading up to the 2010 elections, and the two state Reps. who switched parties after the elections (bringing the total of state Reps. switching from D to R, to three).  And today’s group of switchers is jumping ship in an area that has been considered yellow dog Democrat for generations.

 

The Economist reviews a new book about India by Patrick French.

ONE of the startling features of India’s economic progress is how much opposition it stirs at home. Across the political divide, many people are still sceptical of the two-decade-old reform programme that underpins the boom, including leading lights of the ruling Congress party. Their gripes are often rhetorical—even India’s communist parties have grudgingly embraced capitalism in the three states where they rule. But critics still need to be reminded how badly India was served by its former mixed economy.

...While presenting few new ideas, Mr French has a sometimes surprising tendency to lay claim to established ones. That Western power will be diminished in relative terms by Asia’s rise, that Indian politics is becoming ever more dynastic and that the country’s Hindu nationalists need to freshen up their manifesto are all commonplace. Mr French suggests them as insights. Meanwhile he decries lazy journalists who “make a living by reporting ceaseless tales of woe” from India; but these are a dying lot. In recent years, foreign reporting of the country has often gone too far the other way, lauding India’s economic growth with only occasional easy-to-spot regard to the country’s manifold problems.

Mr French is a fine reporter, with an appealing fascination for all things Indian, as his book makes clear. Despite its flaws, it is an accomplished portrait of momentous times in a remarkable country.

 

Schumpeter's Notebook Blog in the Economist blogs that India is a work in progress.

MANAGEMENT theorists have fallen in love with India in much the same way that they fell in love with re-engineering fifteen years ago. India is synonymous with rapid growth, frugal innovation and exciting new business models.

I agree with all that (and have promoted it myself). But it is important to remember that India is also a mess.

...The local newspapers are certainly full of stories of India’s economic boom. As usual the advertisements are more interesting than the business pages. There are endless ads for MBAs (not all of them entirely plausible), English courses, computer classes: all signs of a country that is pulling itself up by its boot-straps. But the news pages are full of darker stories—about the Naxalite rebellion, about institutional incompetence and corruption and about the general mess that is Indian politics. ...

[pic]

[pic]

[pic]

 

 

USA Today

A Life Without Left Turns

by Michael Gartner

 

My father never drove a car.

Well, that's not quite right.

I should say I never saw him drive a car. He quit driving in 1927, when he was 25 years old, and the last car he drove was a 1926 Whippet.

"In those days," he told me when he was in his 90s, "to drive a car you had to do things with your hands, and do things with your feet, and look every which way, and I decided you could walk through life and enjoy it or drive through life and miss it."

At which point my mother, a sometimes salty Irishwoman, chimed in:

"Oh, bullshit!" she said. "He hit a horse."

"Well," my father said, "there was that, too."

So my brother and I grew up in a household without a car. The neighbors all had cars — the Kollingses next door had a green 1941 Dodge, the VanLaninghams across the street a gray 1936 Plymouth, the Hopsons two doors down a black 1941 Ford — but we had none. My father, a newspaperman in Des Moines, would take the streetcar to work and, often as not, walk the 3 miles home. If he took the streetcar home, my mother and brother and I would walk the three blocks to the streetcar stop, meet him and walk home together.

Our 1950 Chevy

My brother, David, was born in 1935, and I was born in 1938, and sometimes, at dinner, we'd ask how come all the neighbors had cars but we had none. "No one in the family drives," my mother would explain, and that was that. But, sometimes, my father would say, "But as soon as one of you boys turns 16, we'll get one."

It was as if he wasn't sure which one of us would turn 16 first.

But, sure enough, my brother turned 16 before I did, so in 1951 my parents bought a used 1950 Chevrolet from a friend who ran the parts department at a Chevy dealership downtown. It was a four-door, white model, stick shift, fender skirts, loaded with everything, and, since my parents didn't drive, it more or less became my brother's car.

Having a car but not being able to drive didn't bother my father, but it didn't make sense to my mother. So in 1952, when she was 43 years old, she asked a friend to teach her to drive. She learned in a nearby cemetery, the place where I learned to drive the following year and where, a generation later, I took my two sons to practice driving. The cemetery probably was my father's idea. "Who can your mother hurt in the cemetery?" I remember him saying once.

For the next 45 years or so, until she was 90, my mother was the driver in the family. Neither she nor my father had any sense of direction, but he loaded up on maps — though they seldom left the city limits — and appointed himself navigator. It seemed to work.

The ritual walk to church

Still, they both continued to walk a lot. My mother was a devout Catholic, and my father an equally devout agnostic, an arrangement that didn't seem to bother either of them through their 75 years of marriage. (Yes, 75 years, and they were deeply in love the entire time.) He retired when he was 70, and nearly every morning for the next 20 years or so, he would walk with her the mile to St. Augustin's Church. She would walk down and sit in the front pew, and he would wait in the back until he saw which of the parish's two priests was on duty that morning. If it was the pastor, my father then would go out and take a 2-mile walk, meeting my mother at the end of the service and walking her home. If it was the assistant pastor, he'd take just a 1-mile walk and then head back to the church.

He called the priests "Father Fast" and "Father Slow."

After he retired, my father almost always accompanied my mother whenever she drove anywhere, even if he had no reason to go along. If she were going to the beauty parlor, he'd sit in the car and read, or go take a stroll or, if it was summer, have her keep the engine running so he could listen to the Cubs game on the radio. (In the evening, then, when I'd stop by, he'd explain: "The Cubs lost again. The millionaire on second base made a bad throw to the millionaire on first base, so the multimillionaire on third base scored.") If she were going to the grocery store, he would go along to carry the bags out — and to make sure she loaded up on ice cream.

As I said, he was always the navigator, and once, when he was 95 and she was 88 and still driving, he said to me, "Do you want to know the secret of a long life?" "I guess so," I said, knowing it probably would be something bizarre.

"No left turns," he said.

"What?" I asked.

"No left turns," he repeated. "Several years ago, your mother and I read an article that said most accidents that old people are in happen when they turn left in front of oncoming traffic. As you get older, your eyesight worsens, and you can lose your depth perception, it said. So your mother and I decided never again to make a left turn."

"What?" I said again. "No left turns," he said. "Think about it. Three rights are the same as a left, and that's a lot safer. So we always make three rights."

"You're kidding!" I said, and I turned to my mother for support. "No," she said, "your father is right. We make three rights. It works."

But then she added: "Except when your father loses count."

I was driving at the time, and I almost drove off the road as I started laughing. "Loses count?" I asked. "Yes," my father admitted, "that sometimes happens. But it's not a problem. You just make seven rights, and you're okay again."

I couldn't resist. "Do you ever go for 11?" I asked.

"No," he said. "If we miss it at seven, we just come home and call it a bad day. Besides, nothing in life is so important it can't be put off another day or another week."

My mother was never in an accident, but one evening she handed me her car keys and said she had decided to quit driving. That was in 1999, when she was 90. She lived four more years, until 2003. My father died the next year, at 102. They both died in the bungalow they had moved into in 1937 and bought a few years later for $3,000. (Sixty years later, my brother and I paid $8,000 to have a shower put in the tiny bathroom — the house had never had one. My father would have died then and there if he knew the shower cost nearly three times what he paid for the house.) He continued to walk daily — he had me get him a treadmill when he was 101 because he was afraid he'd fall on the icy sidewalks but wanted to keep exercising — and he was of sound mind and sound body until the moment he died.

A happy life

One September afternoon in 2004, he and my son went with me when I had to give a talk in a neighboring town, and it was clear to all three of us that he was wearing out, though we had the usual wide-ranging conversation about politics and newspapers and things in the news. A few weeks earlier, he had told my son, "You know, Mike, the first hundred years are a lot easier than the second hundred." At one point in our drive that Saturday, he said, "You know, I'm probably not going to live much longer." "You're probably right," I said. "Why would you say that?" he countered, somewhat irritated. "Because you're 102 years old," I said. "Yes," he said, "you're right." He stayed in bed all the next day. That night, I suggested to my son and daughter that we sit up with him through the night. He appreciated it, he said, though at one point, apparently seeing us look gloomy, he said: "I would like to make an announcement. No one in this room is dead yet." An hour or so later, he spoke his last words:

"I want you to know," he said, clearly and lucidly, "that I am in no pain. I am very comfortable. And I have had as happy a life as anyone on this earth could ever have."

A short time later, he died.

I miss him a lot, and I think about him a lot. I've wondered now and then how it was that my family and I were so lucky that he lived so long.

I can't figure out if it was because he walked through life.

Or because he quit taking left turns.

Michael Gartner has been editor of newspapers large and small and president of NBC News. In 1997, he won the Pulitzer Prize for editorial writing.

Bloomberg News

Obama Spending Drive Will Suffocate Job Growth

by Amity Shlaes

Private-sector jobs will be created. That’s the argument President Barack Obama will present tonight in his State of the Union address to justify his plan for any federal spending increases.

The president will pay lip service to the idea that the era of throwing cash at the economy is over. Yet either because strapped state governors and unions are pressuring him or because he believes it, Obama is likely to insist that domestic outlays are investments, not waste.

So far, gains in private-sector employment haven’t sufficed to bring unemployment below an unacceptable 9 percent. The president will say that federal spending on infrastructure and other grants are necessary to lower unemployment to tolerable levels.

You can also expect the president or pundits to mention a so-called multiplier effect, in which a federal dollar of spending generates more than a dollar’s worth of economic activity.

Yet what if additional federal spending for roads, bridges, schools, and work programs in states doesn’t redeem itself in jobs? Perhaps such spending actually impedes employment in the private sector. Maybe President George W. Bush killed jobs by signing off on stimulus spending. And maybe President Obama is doing more of the same.

Spending Studies

That’s the conclusion of recent research by many economists, most notably Robert Barro, who has made the case that the multiplier is less than one, or that the economy is set back a bit for every public dollar spent.

For the past few years Price Fishback, a University of Arizona economist, and Valentina Kachanovskaya, a graduate student at the school, have been studying the effects of federal domestic spending from the point of view of individual states during the 1930s, a period of dramatic unemployment.

The authors’ findings, published in a National Bureau of Economic Research paper, suggest that the government will suppress private job creation, or possibly kill jobs, if fresh big spending becomes law.

Fishback and Kachanovskaya start their research with the presidency of Herbert Hoover, who, along with Congress, increased federal spending by 52 percent from 1929 to 1933. Adjust to reflect deflation, and the Hoover figure is a disconcerting 88 percent.

Selling the Stimulus

They note that President Franklin Roosevelt also increased federal spending, albeit at a slightly slower rate. Both administrations pushed the message that such spending would create net new jobs. “Emergency employment was directly provided for varying periods for nearly 200,000 men and indirectly for a much larger number in industries that supply necessary material and services,” said Hoover’s Department of Agriculture. Under Roosevelt, officials calculated their multiplier: three dollars worth of economic activity was generated by one highway dollar.

The two Arizona economists see a more modest benefit. They find that each dollar of public works spending and funding jobs for the poor did increase the average amount of personal income, or cash an individual had on hand to purchase goods and services, by $1.67. When government spending under Hoover and Roosevelt involved grants and loans, the figure was $1.39. One example of such grant-or-loan spending was the Veterans Bonus bonds of 1936 that were convertible to cash.

No Jump-Start

After that, the news about multipliers gets worse. According to Fishback and Kachanovskaya, a dollar spent by Washington didn’t jump-start job creation. The money may have had no effect or even suffocated nonfarm private-sector employment. The investment did not spill over to most other sectors of the economy in a positive way. A double dip, the depression within the depression, followed record federal investment in the economy in 1936.

These disappointing data matter because if ever there was an emotional case for federal spending to create jobs, it was the 1930s. Today, unemployment of about 9 percent is considered horrifying. In the 1930s, however, unemployment was between about 9 percent and 25 percent. Intuition tells us that in a country so desperate, federal outlays would increase private employment. They didn’t.

The two economists say that today federal spending would be even less likely to create jobs. Other economists view government job creation differently but arrive at similar conclusions. “What is the logic that says if the private sector isn’t creating jobs then the government can step in and do that?” asks Lee Ohanian, a labor scholar at the University of California Los Angeles.

Perverse Effect

Ohanian’s study of the Great Depression suggests that political pressure and new statutes also designed to help private-sector workers did just that, for some. The moves raised wages. However, the higher wages discouraged employers from hiring new workers, keeping unemployment high.

Research by economic historian Robert Higgs shows federal stimulus spending during times of high unemployment slows hiring because employers don’t know how long or deep the stimulus will be.

All of this tells us that states looking for handouts from Washington might want to reconsider. They may be hurting their constituents’ ability to get jobs. The research also tells us that the best thing President Obama can do to help unemployment drop on his watch is to eschew more plans for spending altogether.

Ohanian is completing a book; Fishback is refining his thesis. The academic evidence will continue to mount, until federal spending is harder to justify, even when it is labeled “investment.” If the cloud of this recession has a silver lining, it is that Americans are beginning to understand that spending help, even the investment variety, isn’t the best way to get respectable growth.

Washington Times

Regulations and rhetoric

President promises to lighten the burden while bureaucrats load up

by Tony Blankley

Last week, President Obama wrote an article in the Wall Street Journal head- lined "Striking the Right Balance on Regulations," in which he announced that he had issued an executive order to review all government regulations on a cost-benefit ratio basis. In itself, this is a good idea, although the president makes it explicit that the cost-benefit analysis must take account of intangible "benefits" such as "equity, human dignity, fairness and distributive impacts." Plenty of leeway there for career regulators and liberal political appointees to justify almost any oppressive regulation they may stumble over.

That's startling from the same administration that has saddled the American economy and our personal lives with more new legislatively-mandated regulations in the last two years than we have ever experienced in such a short time.

Consider that the president's enacted health care and financial laws by themselves rigorously increase regulation of more than 25 percent of the entire economy. Health care now embraces about 17 percent of the economy, while finance is about 10 percent. So with those two laws alone, the health and finance industries will be subjected to years of new regulatory oppression. In fact, it will take years just to promulgate and start enforcing those new regulations.

At a less visible level, the administration has been busy re-regulating across the board at a furious rate. For instance, a Weekly Standard article describes a new regulation that has taken most phosphates out of dishwasher detergent. Without sufficient phosphates, dishwashers cannot properly clean dishes, as you may be noticing at home.

No rational person can expect that the new executive order by itself will actually result in significantly fewer regulations. Even a government that fervently believed in deregulation - like the Reagan administration - found it exasperatingly difficult to force the regulatory bureaucracy to even slow down, let alone reverse course. And the Obama administration - whatever orders it may be getting from the top - is filled with political and career staff members who are in favor of ever more regulations.

But what does it say about the seriousness of purpose and steadiness of policy of an administration that first regulates with abandon, then proclaims the opposite policy?

Perhaps a clue can be found in last weekend's New York Times Magazine article by Peter Baker, which reported: "President Obama gathered his economic team in the West Wing's Roosevelt Room to review themes for his State of the Union address. ... The ideas presented to him ... seemed familiar and uninspired. "You know, guys," he said, according to someone in the room, "I've told you before, I want you to come to me with ideas that excite me." Nothing he was hearing excited him.

Well, excitement is nice. But other than the absence of correct free-market policies, what is holding back the American economy more than any factor is the uncertainty of economic, legislative and regulatory policies being driven by the current administration.

One could say of the current United States government what Winston Churchill once said of the 1930s British government about its inconstancy. He charged on the floor of the House of Commons: "So they go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent."

What can the GOP and conservative voters across the country do about an administration that ranges between wrongheadedness and inconstancy? We need to be a polestar of right-headedness and constancy.

Regarding the vastly damaging economic and deeply annoying personal effect of excessive regulation, we need to take advantage of this momentary diversion of the administration toward at least rhetorical common sense. At the congressional level, as has been promised by new GOP committee chairmen such as Fred Upton at the key House Energy and Commerce Committee, we must identify, publicize and repeal as many oppressive regulations as possible.

This will require the Appropriations Committee to explicitly defund the enforcement of such regulations. And yes, unless the president genuinely follows through with his asserted intentions to rein in regulations, this will mean confrontation between the Republican House and the administration. But the GOP Congress must stand firm.

To help, the conservative media and think tanks need to bring much more focus on abusive regulations. The administration and liberals generally are delighted to let the re-regulation of America continue under the radar.

What we need on our side for fighting regulations is something like L. Brent Bozell's Media Research Center acting as both a researcher and clearinghouse to effectively monitor and publicize liberal media excesses.

Many conservative think tanks do a good job of studying government regulation, but we desperately need big private funding to gather all that research and focus it in ways easily accessible to the media, Congress and the public.

With the right resources and attention, 2011 could be a banner year for the deregulation of American life.

 

 

Washington Examiner

Immelt, Daley, and Obama's antipathy to free markets

by Timothy P. Carney

 

Since his party's November shellacking, President Obama has worked hard to show America that he is not anti-business, notably by picking General Electric CEO Jeff Immelt and Chicago banker Bill Daley for prominent posts in his administration. But their selection does not mean Obama is "pro-business," at least as the term is commonly understood. The president is no champion of open markets and free competition. His idea of being friendly to business means more government subsidies and corporate-government cooperation, both of which are mother's milk to Immelt and Daley.

Obama joined Immelt on Friday at a GE plant in Schenectady, N.Y., to announce his appointment as chairman of the President's Council on Jobs and Competitiveness. Like Obama's pick of Daley as White House chief of staff, the selection of Immelt sparked applause from the U.S. Chamber of Commerce and, in the eyes of the media, defused the Republican charge that Obama is anti-business.

But the anti-business charge against Obama was always off target. "Anti-free market" was -- and is still -- more accurate.

Immelt and Daley don't represent a new side of Barack Obama -- they represent the unhealthy collusion of Big Business and Big Government that has always been the essence of Obamanomics.

Check out Daley's resume. In the 1990s, he ran Amalgamated Bank, owned by a union and described by the Chicago Sun-Times as "one of the city's most politically connected financial institutions." Bill's brother, Mayor Richard Daley, kept the city's money on deposit at Amalgamated. Later, Bill held a seat on Fannie Mae's board, pocketing six-figure compensation from the government-sponsored enterprise that used a housing bubble and an implicit government guarantee to fill a slush fund for well-connected Democrats -- until taxpayers bailed it out in 2008.

This is Obama's kind of businessman: a banker who leverages his political connections for profit.

And Obama's kind of corporation: GE, which marches in sync with government, pocketing subsidies, profiting from regulation, and lobbying for more of both. Just look at the GE ventures Obama chose to highlight Friday.

Obama appeared on stage with Immelt in Schenectady, sounding more like a pitchman for GE stock than a head of state. The factory makes turbines, which Obama bragged GE would be selling to a power plant in Samalkot, India. That sale is no triumph of free trade -- Obama's Export-Import Bank is providing at least $400 million in subsidized financing to grease the skids.

Subsidies are GE's lifeblood, and Immelt's own words make that clear. In his op-ed announcing his appointment, Immelt called for a "coordinated commitment among business, labor and government," and wrote that, "government should incentivize ... investment in innovation." He also advocated "partnership between business and government on education and innovation in areas where America can lead, such as clean energy, are essential to sustainable growth."

This is Immelt's style. Days after Obama's inauguration, the chief executive officer wrote to shareholders of a post-bailout "reset" in the global economy. "In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."

Sure enough, wherever Obama has led, GE has followed. Obama has championed cap and trade in greenhouse gasses, and GE has started a business dedicated to creating and trading greenhouse gas credits. As Obama expanded subsidies on embryonic stem cells, GE opened an embryonic stem-cell business. Obama pushed rail subsidies, and GE hired Linda Daschle -- wife of Obama confidant Tom Daschle -- as a rail lobbyist. GE, with its windmills, its high-tech batteries, its health care equipment, and its smart meters, was the biggest beneficiary of Obama's stimulus.

To get these gears in sync isn't cheap: The company has spent $65.7 million on lobbying during the Obama administration -- more than any other company by far. So much for Obama's war on lobbyists.

For much of the media, the nuances will be lost: You're either pro-business or anti-business. But the distinction is crucial between making a profit through subsidy, regulation, and bailouts on one hand, and competition and innovation on the other hand. The latter creates wealth. The former consumes it.

While Obama's favors for the likes of GE, Google, Pfizer, and Boeing should demolish his finely honed image as the scourge of the special interests, the real problem is not hypocrisy -- or that GE's profits and share prices are soaring. The problem with Obamanomics is that it kills the very entrepreneurship that Obama is always touting.

Newsweek's Jonathan Alter, in a new afterword to his chronicle of the Obama administration, notes that the Obama White House struggled to come up with policies to stimulate small business. Here's why, Mr. Alter: Big government will always benefit the biggest businesses with the biggest lobbying budgets.

The pundits will say Obama is warming toward business. Immelt's and Daley's appointments show us which businesses.

Baseball Crank

Why 2012 Is Not 1996

by Dan McLaughlin

A little history can be a dangerous thing, and in advance of Tuesday's State of the Union Address by President Obama, political commentary will be focusing on Obama's ability to replay 1995-96, when President Clinton rebounded from a similar rout in the midterm elections to more or less coast to re-election (while Clinton finished below 50% of the popular vote, it was only a "coming home" of Republicans in the campaign's closing weeks that averted a more lopsided result; the outcome was not seriously in doubt).

Undoubtedly, Obama will have the opportunity to take advantage of many of the same dynamics that favored Clinton's re-election, and he may succeed for those and other reasons. But history never repeats itself precisely. It is worthwhile to reflect on the many things that worked to Clinton's benefit that Obama can't count on:

1) The Democrats Still Hold The Senate: Clinton lost both Houses of Congress in the midterms, the third president of the past century to do so, the others being Truman in 1946 and Eisenhower in 1954. Both were re-elected; Truman used the GOP as a foil to confront, Eisenhower showed he could cooperate with the Democrats, and Clinton did some of both. Each was able in one sense or another to run on the same divided-government rationale that had helped them lose Congress in the first place.

Obama won't have the same crisp contrast with Congress; the unpopular Harry Reid is still running the Senate, and sooner or later it will become impossible to conceal that fact. History suggests that this can matter: Obama's the third President in the past century to lose only the House and keep the Senate in the midterms, and the other two - Taft and Hoover - both got slaughtered (Hoover carried just six states and drew 39.7% of the popular vote, Taft carried just two states, finished third in a three-way race and drew just 23.4% of the popular vote).

2) The GOP Candidate in 2012 Will Not Be A Leader of The GOP Congress: A hugely underrated factor in Clinton's revival was the fact that his opponent was also one of the leaders of the Congressional Republicans across the table from him; in addition to Bob Dole's other flaws as a candidate (his age, his status as an ideas-free compromise-driven moderate, his lack of executive experience), Dole couldn't run a campaign independent of Newt Gingrich and the rest of the Congressional GOP, which not only tied him down on particular issues but also diminished him in the eyes of the public, as Clinton alone would negotiate with - and face down - a team of which Dole was only one representative. Whoever the GOP nominates in 2012 will have the ability a presidential candidate usually has to declare some level of independence from his or her Congressional party.

3) Obamacare passed; Hillarycare didn't: As unpopular as the Clinton Administration's health care plan was, it wasn't a major issue in the 1996 campaign because it had failed and, with Republicans controlling both Houses of Congress, it wasn't coming back. (Ditto Clinton's destructive BTU tax). Not so Obamacare, which remains very much a live issue. There's clearly a decisive majority supporting repeal right now in the House, and possibly a majority could be mustered in the Senate (certainly if the GOP gains more seats in 2012), but obviously not enough votes to override Obama's veto. Unless Mitt Romney wins the nomination, the GOP will almost certainly run a presidential candidate who can and will mount a full-throated campaign in favor of repealing the bill. The same will be broadly true of a number of Obama's big-spending, big-regulating initiatives.

4) The Economy: The unemployment rate is the most obvious of numerous economic indicators showing the U.S. economy in bad shape in 2011: unemployment, as low as 4.3% when voters elected the Democrats to control Congress in November 2006, was 6.5% when Obama was elected and 8.5% when he was inaugurated, and he expended much political capital arguing that his "stimulus" package would fix this with federal spending on "shovel-ready" projects; instead it peaked at 10.6% in January 2010, and remains above 9% a year later. These are very high numbers historically; since 1960, the unemployment rate has been above 6% on election day five times, and the only time the party in power wasn't booted was 1984, when the 7.2% rate was the lowest it had been since before President Reagan took office and had plunged more than three points in two years. By contrast, the unemployment rate in 1996 was 5.4%, down from 7.4% when Bill Clinton was elected. If Obama can't make the argument that Presidents Reagan and Clinton made - that they were not only making major headway on unemployment but in better shape than they were when elected (in Reagan's case, the slight drop in unemployment was accompanied by an enormous drop in interest rates and inflation and a stock market boom) - he'll face an electorate that is much more suspicious of entrusting him with the economy for four more years.

5) War: It is little remarked today, but a significant factor in Clinton's loss of prestige in 1993-94 was as a result of his obvious unreadiness to be Commander-in-Chief and resulting series of fiascos in the deployment - or not - of American troops. The timeline of that period shows a straight line from Clinton's indecsiveness in Somalia (the "Black Hawk Down" battle of Mogadishu) to the ignominious withdrawal of U.S. assistance from Haiti in the face of opposition armed mainly with machetes, to the genocide in Rwanda that followed when it was apparent that the U.S.-led "New World Order" would not have the will to back up its own rhetoric.

But to Clinton's good fortune, other than the situation in the former Yugoslavia (the massacre at Srebrenica took place in July 1995), the overall global situation was unusually peaceful in 1995-96, as the world continued to reap the dividends of the end of the Cold War and associated boom in international trade. Even longstanding hotspots like Northern Ireland, Palestine and South Africa were making efforts at peace; it would be a few years before it was obvious to casual observers that the September 1993 Oslo accords were not a plausible foundation for peace. Most importantly, by 1996 there were few American troops in harm's way. And the differences between Clinton and Dole on overall national security strategy were not dramatic. The election was fought almost entirely on domestic policy.

This will not be the case in 2012. America is still at war in Afghanistan, as well as maintaining a significant presence in brittle Iraq. It is possible that tensions with North Korea and the strategic rivalries with China and Russia could calm down, but the multifaceted issue of what do do about the threat of the political project of radical Islam remains a divisive issue, and the war in Afghanistan is specifically divisive within Obama's party in a way that no foreign policy question was in 1996. It's premature to predict how the national security issues will play out, but it's hard to imagine them being as completely secondary as they were in 1996.

6) Money: In 1996, Bill Clinton was able to raise a massive warchest and start spending it very early, famously deploying direct TV ads in battleground states as early as July 1995. Obama, who is expected to raise a billion dollars for his re-election, will have no trouble doing the same, but ironically, the Republican nominee in 2012 may be helped at the front end by the chaos of the presidential field; it will be more difficult to hammer one front-runner with ads the way Clinton did to Bob Dolegingrich (as you'd have thought his name was from the ads). And it seems unlikely, in the current environment, that the opposition will simply run out of money the way Dole did between wrapping up the primaries and launching his general election campaign. I'll be very surprised if the Republicans are as hobbled by a financial imbalance as they were in 1996.

7) Obama's Not Clinton: This should be an obvious point. Obama has his strengths as a politician, notably his ability to deliver prepared speeches, but he lacks Clinton's gifts as a retail politician, he's prickly when questioned, and of course unlike Clinton - who learned triangulation as a way of regaining the governorship of Arkansas after his 1980 defeat - Obama has no real experience of moderate governance to fall back on. Clinton signed a longstanding conservative policy priority (welfare reform), and didn't campaign against it; Obama's most significant nod to the center so far was signing a temporary extension of the Bush income tax cuts, but he has promised to run against them.

8) No Oklahoma City: One of the fortuitous events that played into Clinton's hands was the Oklahoma City bombing, and while Tim McVeigh was not in a conservative of any stripe, Clinton was able to slow the Right's momentum by blaming Newt Gingrich and Rush Limbaugh for encouraging "anti-government" sentiment. Obama's allies tried the same thing with the shooting of Congresswoman Gabrielle Giffords, but their palpable desire to score political advantage from the tragedy, combined with the fact that the shooter turned out to be a left-leaning nutjob with no connection whatsoever to conservatives, fatally undermined that argument, as subsequent polls have shown that solid majorities don't blame political debate for the shootings.

All of this is before we observe other features of the landscape not existing in 1996, like blogs and the Tea Party movement, as well as the possibility that John Boehner, having lived through 1995, will not repeat all of the same mistakes made by Newt Gingrich. As I said above, none of this is an argument that Obama is necessarily doomed or can't repeat some of the aspects of Clinton's revival plus some new tricks of his own. But treating 2012 as a straight replay of 1996 is not just bad punditry, it's bad history.

Pajamas Media

Nine Texas Democrats switch to the GOP

The not at all slow death of the Texas Democratic Party continues.  I’ve just gotten word via press release that nine local Democrats up in northeast Texas just switched parties to become Republicans.  From the release:

In what is believed to be one of the largest number of officeholders to change party affiliation in Texas, Lamar County GOP Chairman John Kruntorad and State Representative Erwin Cain announced today that 9 local elected Democrats have joined the Republican Party.   This announcement follows unprecedented election gains by the GOP in 2008 and 2010 as Northeast Texans increasingly identify with the conservative platform of the Republican Party.

Those joining the Republican Party include District Attorney Gary Young; Pct. 1 County Commissioner Lawrence Mallone; Pct. 1 Justice of the Peace (JP) Don Denison; Pct. 3 JP Tim Risinger; Pct. 4 JP Ken Ruthart; Pct. 5, Place 1 JP Cindy Ruthart; Pct. 1 Constable Madaline Chance; Pct. 3 Constable Larry Cope; and Pct. 5 Constable Gene Hobbs.

They join a few dozen who switched from D to R in Texas leading up to the 2010 elections, and the two state Reps. who switched parties after the elections (bringing the total of state Reps. switching from D to R, to three).  And today’s group of switchers is jumping ship in an area that has been considered yellow dog Democrat for generations.

Economist

Over a billion people now

Modern India  -  A colourful depiction of momentous times in a giant country

India: A portrait. By Patrick French. Allen Lane; 436 pages; £25. To be published in America by Knopf in June; $30. Buy from , Amazon.co.uk

     [pic]

ONE of the startling features of India’s economic progress is how much opposition it stirs at home. Across the political divide, many people are still sceptical of the two-decade-old reform programme that underpins the boom, including leading lights of the ruling Congress party. Their gripes are often rhetorical—even India’s communist parties have grudgingly embraced capitalism in the three states where they rule. But critics still need to be reminded how badly India was served by its former mixed economy.

Patrick French, a British writer and historian, performs that service in his new book, “India: A Portrait”. In an admirable chapter on India’s early efforts at central planning, he describes the thinking of Jawaharlal Nehru, India’s first prime minister, as a “Keynesian idea of a mixed economy taken to extremes that Keynes would have found fiscally impossible”. Largely through government spending, newly independent India sought to increase industrial output fivefold and double incomes per head within 15 years. Its supremely optimistic planners then went on wasteful splurges in heavy industry, brought in innumerable laws to promote cottage enterprises and imposed barriers to imports and exports.

By the time of Nehru’s death in 1964, India’s share of world trade had halved. His daughter, Indira Gandhi, who succeeded him, then prescribed an even bigger economic role for the state, and the waste and mismanagement spiralled. In 1978 Coal India, a state-owned giant, lost $258m—more than the total earmarked for government welfare spending in the entire five-year plan of that time.

Such losses contributed to the 1991 balance-of-payments crisis. With less than $1 billion in reserves, India was forced to export gold to stave off bankruptcy. In desperation, Manmohan Singh, an economist and bureaucrat, was appointed finance minister and implored to do something. With a forthrightness for which he has never otherwise been known, Mr Singh promptly tore down many of the controls. He slashed tariffs, abolished licences and allowed foreign investment to flow in. India’s economy, with one or two splutters, took off. Last October, in its biggest initial public offering so far, the government, now headed by Mr Singh, sold 10% of Coal India for around $3.5 billion.

It is a testament to India’s rise that serious guides to the country, like Mr French’s, now devote as much space to business and the economy as to Indian politics, culture and religions. Once seen as unchanging, or unsalvageable, India is now widely recognised as a dynamic, innovative, soon-to-be economic powerhouse. And Mr French, a devotee of South Asia, is good on the other stuff, too. In distinct sections on politics, the economy and society, he typically gives some essential history, and then a rich colouring of contemporary characters and events, many of them sharply observed at first hand. The book is crammed with elegant portraits of important Indians, brilliant Indians, wretched Indians, and hilarious Indians like the septuagenarian Dr K. Chaudhry, who recorded himself murdering hundreds of well-known pop songs, posted them on YouTube, and became an overnight internet star.

But this can also get a mite tedious. Amid his myriad observations, Mr French offers little in the way of fresh analysis, and some that is too thin. He is too kind to the latest Nehru-Gandhi rulers, for example. Sonia Gandhi, Congress’s leader, has been much more successful than anyone had predicted, but that does not make her the shrewd strategist of Mr French’s description. And though it is true that her son and Mr Singh’s expected successor, Rahul, speaks sparingly in public, this is probably as much due to his diffidence as to the far-sighted inscrutability that Mr French sees in him. The Gandhis and Mr Singh also deserve more opprobrium than Mr French dishes out for the corruption and crude populism of India’s recent governments.

While presenting few new ideas, Mr French has a sometimes surprising tendency to lay claim to established ones. That Western power will be diminished in relative terms by Asia’s rise, that Indian politics is becoming ever more dynastic and that the country’s Hindu nationalists need to freshen up their manifesto are all commonplace. Mr French suggests them as insights. Meanwhile he decries lazy journalists who “make a living by reporting ceaseless tales of woe” from India; but these are a dying lot. In recent years, foreign reporting of the country has often gone too far the other way, lauding India’s economic growth with only occasional easy-to-spot regard to the country’s manifold problems.

Mr French is a fine reporter, with an appealing fascination for all things Indian, as his book makes clear. Despite its flaws, it is an accomplished portrait of momentous times in a remarkable country.

 

 

Schumpeter's Notebook Blog  -  The Economist

The messy, non-shining side of India

     [pic]

MANAGEMENT theorists have fallen in love with India in much the same way that they fell in love with re-engineering fifteen years ago. India is synonymous with rapid growth, frugal innovation and exciting new business models.

I agree with all that (and have promoted it myself). But it is important to remember that India is also a mess.

I came into contact with this mess in Kolkata airport this morning. The airport is even more dilapidated than Heathrow’s terminal three. And the military guards who patrol the place are even more unsympathetic than Heathrow’s staff. At least the people in Heathrow want you to hang around and shop. At Kolkata their only job is to throw you out into the arms of the hundreds of sign-waving beggars and chancers who hang around outside waiting for confused visitors.

I was a very confused visitor. My flight to Jamshedpur had been cancelled due to "weather" (though the weather struck me as perfect). I was fortunate that Tata Steel, which I'm here to visit, was looking after me. A driver picked me up and took me to a company guest house while someone from the firm helped me sort out my onward travel. A military-style figure led me through the crowds, berated various guards, gave the beggars a box around the ears, and generally sorted things out. But if I had been a tourist I would still be waiting outside the airport—or I might have been whisked off to a "hotel" by one of the waiting sign-wavers.

The local newspapers are certainly full of stories of India’s economic boom. As usual the advertisements are more interesting than the business pages. There are endless ads for MBAs (not all of them entirely plausible), English courses, computer classes: all signs of a country that is pulling itself up by its boot-straps. But the news pages are full of darker stories—about the Naxalite rebellion, about institutional incompetence and corruption and about the general mess that is Indian politics.

As messes go the area around Kolkata airport must rank high. The main road is a perpetual honking traffic jam. New buildings are being thrown up willy nilly. Old buildings are falling down. People and animals wander about in brave indifference to the traffic and construction. One of the glories of India is that what look like insoluble problems can magically resolve themselves. But the cost in wasted time and frayed nerves is extremely high.

 

 

 

[pic]

 

[pic]

 

[pic]

 

 

[pic]

 

 

[pic]

 

 

[pic]

 

 

 

[pic]

 

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download