As President Obama said while campaigning to be President of the United States, “You can put lipstick on a pig, but it’s still a pig!”  How true.  Yesterday President Obama reached for the lipstick to dab on four proposals suggested by the Republicans to the massive pig of a health care proposal clinging to life.  The four proposals are:

1. Use undercover medical professionals to conduct investigations to fight waste and fraud in Medicare, Medicaid and other Federal programs.
2. “Demonstrations of Alternatives” to the current malpractice mess.
3. Increasing doctor reimbursement for Medicare.
4. Expanding Heath Savings Accounts (HSA).

The pig smiled.  She thought she looked beautiful.  Just don’t try to put a bikini on her because, as President Obama famously said, she’s still a pig.  Let’s look at the President’s magnanamous attempt at bipartisanship in detail.

1)  Undercover Medical Professionals to Uncover Fraud

It is estimated that somewhere in the neighborhood of $100 billion is lost or stolen each year from Medicare and Medicaid.  This program has been in place for 40 years.  If those numbers are consistent over that period, that’s $4 TRILLION.  Gone. Stolen from you and me.  How much better shape would we be in if we had that money back?  That’s government efficiency for you.

The President of the United States is the chief law enforcement officer in the country.  The amount of Medicaid and Mediecare losses each year are four times the entire budget of the Department of Justice.  How’s this for a proposal?  Create a Medicare/Medicaid fraud unit within the FBI and fund it so that we can stop thses losses.  If you stop the fraud, it’s free money.  What you save in fraud should more than pay for the FBI funding.  Why take medical professionals and give them law enforcement duties.  Are you going to ask police to operate on you?  Mr. President it’s your job to enforce the laws and prevent this widespread fraud.  You don’t need a new act of Congress.  Just Do It!

2) Tort Reform –No; “Demonstrations of Alternatives” — Yes

Trial lawyers are one of the biggest contributors to the Democratic Party.  Do you think such “Demonstrations of Alternatives” will amount to anything other than hush money?  “Shut up , we’re looking into tort reform.”  The counter argument is that Americans have a right to their day in court when they have been injured.  True enough, and I am reluctant to arbitrarily limit their awards through a fixed dollar limit.  I would take aim squarely at the lawyers.

John Edwards, one-time Senator and presidential candidate, was involved in about 63 cases as a personal injury attorney and amassed a fortune of about $70 million.  In one particular case, he stood before the jury and took on the persona of a child in the womb crying out for oxygen to appeal to the emotions of the jury and win the case.  Oddly enough he voted against a ban on partial birth abortion.  Gee, in the once case it’s a child who can actually speak while still in the womb!  But on the other hand it is just a mass of tissue at birth that can be disposed of with the trash.  We have learned a lot about the moral character of John Edwards.  He is the poster boy for the old joke, “How do you know a lawyer is lying?  His lips are moving.”

Here is a simple solution to tort reform.  Fixed fees for attorneys and loser pays.  The lawyers should set their hourly rate and bill according to hours worked, not how much they can squeeze out of the jury.  The award should be for the benefit of the injured party, not the lawyer.  The second part is to prevent frivolous lawsuits.  The loser pays the legal fees of the winner.  The argument here will be that the tables will be turned and no one will sue corporations for damages because of the risk of paying their legal fees.  Right now lawyers are running a lottery fishing for lawsuits of any kind becasue they know that most corporations will settle for less than it would cost to defend the suit, even if they know they are right.  All customers of that corporation pay more for their products (e.g., drugs, medical devices) and the lawyer gets rich.  I am sure that if such a proposal as this gets passed a new market for “legal fee insurance” will open up where a plaintiff with a strong case can buy insurance to cover the cost of the other sides legal fees if they do lose.

3) Increasing Doctor Reimbursement for Medicare

So much for bending the cost curve down.  The real way to curtail spending on health care is to eliminate 3rd party payers.  (see It can be done).

4)  Increase Health Savings Accounts

These plans exist today, however, they are not all available across state lines (see It can be done).  I had such a plan in New York while employed by a company, but when I went out on my own I could not buy the same plan in New York State.  We don’t need ObamaCare, we just need states to allow these plans to exist within their borders or allow individuals to buy across state lines.

The Pig Lives!

Three of the  four Republican proposals that Presidident Obama likes don’t cost anything.  But he $1 trillion to $2 trillion health care castastrophe is still alive and until we slay that beast and start over we will go from a serious health care problem to a fiscal crisis and end up with both.  If you don’t believe me, read how the model for ObamaCare is working in Massachusetts.

In baseball they call it a brush back pitch, a high hard one.  It lets the batter know that they don’t own home plate, and if they try to get too comfortable there they may be inviting a little “chin music.”  Jim Bunning, Republican Senator from Kentucky and a Hall of Fame baseball pitcher with a perfect game on his resume, just gave the Democrats a brush back and they don’t like it one bit.

Out of Control Spending

You would have to be Rip Van Winkle not to know that spending is out of control  and America is speeding toward bankruptcy.  President Obama and Nancy Pelosi have tried to hoodwink the country by implementing what is called “Paygo” short for Pay As You Go.  The idea is that you cannot spend money without first funding it either through cutting speding somewhere else or raising taxes.  The last element is the real reason Democrats support it, so that they would be “forced” to raise taxes.  Here is how the Wall Street Journal described Paygo back in January.

The truth is that paygo is the kind of budget gimmick that gives gimmickry a bad name. As Mr. Obama knows but won’t tell voters, paygo only applies to new or expanded entitlement programs, not to existing programs such as Medicare, this year growing at a 9.2% annual rate. Nor does paygo apply to discretionary spending, set to hit $1.4 trillion in fiscal 2010, or 40% of the budget.

The Democrats passed Paygo to appear fiscally responsible.  Jim Bunning merely called them on it.  He is not opposed to spending the money.  He has the courage, though, to stand up and say, Mr. President we’re broke, and we are accountable to the American people to be good stewards of the money they give us to run this government.

“If we can’t find $10 billion to pay for something that we all support, we will never pay for anything on the floor of this U.S. Senate,” he said. – Jim Bunning, Floor of the U.S. Senate, 3/1/2010

Immediately was heard much wailing an gnashing of teeth, that the lone Republican, had the temerity to challenge the “flexibility” of the Democrats to apply their rules willy nilly to tighten their grip on their power while trying to appear like the kindly nannies they really are.  Rules are passed to much fanfare in front of the cameras and then ignored with a scoff or a sneer, when they really mean something.

Gimmicks Instead of Guts

Democrats have proved uncapable of controlling their spending.  With the mad push of profligacy that came with winning the Presidency and both houses of Congress with large margins, they now find themselves unable to dial it back without an intervention or a rehabilitation program.  So they pass Paygo, and ignore it; convene a debt reduction commission and name Andy Stern of the SEIU union to it.  If that is not a clue to what’s coming I don’t know what is.  What does a labor union president know about reducing debt?  All they know how to do is take someone else’s money and put it in their own pockets, so you can bet their solution to the debt problem is taxing you to the eyeballs.

Rather than the scorn that is being heaped upon him, Senator Bunning deserves our thanks.  Find the money first, then spend it.  Enough of the IOUs.  We cannot afford this liberal spending binge.

Stand strong, Senator, the Tea Party Patriots hear you and help is on the way.

President Obama has just created a panel to figure out how to get our debt under control.  Even when he makes a decision, such as this one, it is to pass the buck to someone else to do the heavy lifting.  His attempt to overhaul health care turned into the Harry and Nancy Show.  Obama campaigned and gave speeches while Pelosi and Reid shut out the Republicans and created the bill that could not be passed.  Obama is now trying to put lipstick on that pig, by calling for a bipartisan meeting.  But instead of starting over and getting ideas from everyone, they are basically going to pick over the stinking corpse of the bill that the Democrats could not get passed.  It is obvious that the real objective is to either get some Republicans to sign on or to use the meeting as a club to beat the Republicans as the “party of No.”

Stop Me Before I Spend

This president can’t seem to control himself and he finds that he painted himself into a corner.  If he tries to raise taxes on those who make less than $250,000 per year he will be breaking a major campaign promise.  If he stops spending on his own, he will lose the left which is about the only support he has remaining.  So he calls in Alan Simpson and Erskine Bowles to co-chair a committee charged with making the president a tailor made fig leaf, to allow him to cut spending and raise taxes, while shrugging his shoulders and saying, “I can’t go a gainst the excellent advice of this august commission.”

If he wants to cut spending, he can just cut spending.  He doesn’t need a commission to do so.  How about an across the board spending freeze, except for national defense, until the the economy grows enough to balance the budget and not with gimmicks like increasing discretionary spending now 24% and then saying you will freeze that same spending for the next threee years?  How about freezing government hiring?  How about returning $500 billion in unspent stimulus money and $400 billion in repaid TARP money, plus interest, to the Treasury?  Don’t hold your breath.  That would require someone with executive experience who knows how to make a decision, rather than deliberating, like a legislator.  Sarah Palin comes to mind, as does George Bush (I & II), Bill Clinton, Ronald Reagan.  These experienced executives knew how to put together a budget and make decisions.  Chris Christie in New Jersey was just sworn in last month as governor and he immediately identified the problem as too much spending and got to work cutting it back.  All that President Obama seems to know how to do is talk. 

If we start advertising now, we may get enough resumes to review to find a replacement by 2012.

A recent article in the New York Times, “Once Stigmatized, Food Stamps Find Acceptance,” talks about how Food Stamps are now, thankfully, accepted and people can get the help they deserve. 

I remember the first time I encounteed food stamps.  I was in line at the grocery store behind a woman with a cart piled high and among its contents were soda, potato chips, and other tasty luxuries.  When the bill was tallied, she took out her book of food stamps and handed them to the cashier.  I related this story to a friend who told me that you can’t use food stamps on junk food so it must have been applied against the other items in the cart.  Even so, I thought back to when I grew up.  We weren’t poor but we were no where near rich.  Things like soda and potato chips were a rarity reserved only for those times when relatives were coming from a distance for a visit.  Otherwise it was home brewed ice tea and supermarket generic cookies.  But even those treats weren’t purchased through a subsidy of our food staples.

New York is now actively reecruiting new food stamp recipients in all languages imaginable.  It seems that it is not enough to provide the service but you have to make sure that everyone who can get food stamps is taking advantage of them.  Let’s see, government employees paid by taxpayers going all out to make sure that a taxpayer funded program is using as much taxpayer money as possible including a program on Rikers Island (the city jail) to enroll inmates as the leave.  The article describes one woman who was actively recruited to join the program:

A big woman with a broad smile, Ms. Bostick-Thomas swept into the group’s office a few days later, talking up her daughters’ college degrees and bemoaning the cost of oxtail meat.

“I’m not saying I go hungry,” Ms. Bostick-Thomas said. “But I can’t always eat what I want.”

Okay, I’m going to go out on a limb here.  By a “big woman” can we take that observation to mean she is not lacking in caloric intake?  She says she doesn’t go hungry.  She talks about her daughter’s college degrees.  So why are taxpayers tasked with helping her eat what she wants?  And what is that anyway?  Steak? Lobster?  Twinkies?  Ice cream?  Why aren’t the daughters with their college degrees helping their mother?  Maybe they could invite her over once a week and feed her the foods she favors?  And if they are not local, why not ship her a box of Omaha Steaks?  Why does some other taxpayer have to pick up the tab for her after they worked hard to feed their own family?

The Other Side of the Coin

On the other side of the coin, from the budget of the same Department of Agriculture, we pay farmers not to grow food in the form of farm subsidies.  Why?  Well, if we didn’t, the prices of farm products, aka food, would become too cheap for the farmers to make a decent living.  In my simple economic model of supply and demand that would seem to indicate that maybe we have more farmers than we need.  But you see farming is a way of life as much as it is an occupation, and taxpayers must be sensitive to preserving that way of life whether or not it is economically justified.  I am sure there are several million unemployed people in this country who would like to have their jobs subsidized.  Unemployment compensation is when the government gives you a check (actually its funded by your employer) when you lose your job.  Farm subsidies are when the government (no employer funding here) pays farmers to keep working at their job.

Add to that another government program to pay farmers to produce corn to make ethanol, another uneconomic subsidy.  Ethanol is pitched as a substitute for gasoline, but it takes a lot of energy to make it, it cannot be transported via pipeline like petroleum products, and when the corn is diverted to produce ethanol, the cost of almost all food goes up.  Corn is used for feed for cattle, as seed to produce corn, for corn syrup as a sweeter.  So on top of regular farm subsidies, we have ethanol subsidies to further drive up food prices.  In the case of corn syrup, sugar could be a substitute, but our government places a very high tariff on imported sugar, to protect our domestic sugar producers.

Coming Full Circle

So, on the one hand we have several government programs, funded by taxpayers, that drive up the price of food.  Then we have another program, taxpayer funded, to help people buy food because food is too expensive.  And then we have government workers and programs, taxpayer funded, that are actively marketing the food stamp program to overweight people, who never go hungry, have college educated children who could help them but don’t seem to, so that the recipient can eat the things she wants to.  But if you see a problem with this, don’t worry.  Michele Obama is about to use more taxpayer dollars to launch a program to fight childhood obesity.  Can we get off this Merry-Go-Round?

How about we shut down the Department of Agriculture?  It’s function is not in the Constitution and so it should not exist at the federal level.  End farm subsidies.  If that means we have a few less farmers, so be it.  The American people do not owe anyone other than themselves a way of life.  To the farmer who can make it, you have my complete admiration.  End ethanol subsidies.  If ethannol is a viable fuel, it should be able succed on its own, not because Archer Daniels Midland spends millions on agricultural lobbyists. Negotiate free trade agreements so that our successful farmers, instead of being paid not to produce, produce and sell their goods around the world.  Likewise end high tariffs that protect our farm products.  These steps should lower the cost of food.

With lower food costs we shouldn’t need a food stamp program.  End it at the federal level along with the Department of Agriculture. If there continues to be a need it will probably be a much smaller one and let each state decide if it wants to start its own program.  Also, with everyone saving on food there is a greater liklihood for people to contribute to food banks to help the truly needy.  But to have one government program create a problem and another government program to try to solve it is lunacy.

With our economy hurtling toward a cliff with out of control spending, we don’t need to be on both sides of a problem.

For nearly eight years we heard the left scream, “Bush Lied!” over the decision to invade Iraq.  One decision and the same refrain repeated over and over again.  Where is the scrutiny of the truth police where President Obama is concerned?

In his State of the Union address he took the unprecedented step of calling out the Supreme Court and encouraging his minions to give that rebuke a standing ovation.  Shameful.  This is not to say that Obama cannot criticize other branches of government, but there is a time and a place.  When Joe Wilson called out “LIAR!” during a previous speech by President Obama he was roundly criticized and rightly so.  Not for the criticism, but for the time and the place.  Joe Wilson called the president to apologize.  Did Obama do the same?

The timing of the act was bad enough, but the accusation he made was not true, as Samuel Alito could be seen saying, if you can read lips.  In the midst of his constitutional duty to report to Congress on the State of the Union, he uses a blatant lie to attack his guests. But that wasn’t all.  His speech was sprinkled throughout with falsehoods, not least of which was his statement on jobs.

Counting the Uncountable

To try to put a positive spin on his porkulus bill, he had to make up a statistic that no reputable economist can endorse, “jobs saved”.  In his State of the Union speech and on the Sunday morning talk show circuit, Obama and his team talked about 2 million jobs created or saved. But they weren’t all on the same page, some said 1.8 million, but regardless it is blatant dishonesty.

Jobs created is a real statistic.  As a small business owner I can tell you that when you hire someone there are a number of government agencies that you have to report it to and you have a deadline in which to do so.  There is also some paperwork involved when you eliminate a job.  But I have never, never had to report to any agency when I thought about eliminating a job and then changed my mind.  After all wouldn’t that be the definition of a job saved?

If I never thought about eliminating the position, then the job is not “saved” it just continues to exist.  If I thought about eliminating the position and did so, it would not be a job “saved” it would be a job eliminated, no?  So it is this two step process of thinking about the action and then not following through that could reasonably be thought of as a “job saved”.  How do you measure that thought process?  Hiring someone is an observable action.  Eliminating a job is an observable action.  Saving a job are two related thought processes not externally observable, they can only be “reported” by the decision maker and it cannot be independently verified.  Is that the kind of statistic upon which you want your government to base billions of dollars in spending decision?   The only added feature of Obamanomics is that some money changes hands.  Money that comes from you, dear taxpayer, and goes to the businessman.  Can you see why such a statistic is ridiculous?

Which One Is It Mr. President?  Mr. Biden? Anyone?

Let’s pretend for a moment that “jobs saved” is a real statistic.  If the president has a figure in his head of 2 million jobs created or saved, and for the aforementioned reasons the number of jobs created is a hard number reported to some agency, then the number of jobs saved should be a matter of simple math.  2 million minus the number of jobs actually created equals the number of jobs saved.  So why not report it as such?  100,000 jobs created and 1.9 million jobs saved, for example.  Why lump them together?  Because when you lump them together its harder to tell how big of a lie the president is telling.

Stimulus recipients previously reported that they had directly “created or saved” 640,329 jobs by Sept. 30, but their filings were criticized after it emerged that some people had reported saving jobs when they had actually spent the money on pay raises or paying employees who were not in danger of being laid off.

In December, the White House Office of Management and Budget changed its guidance, telling recipients they should start counting every worker whose salary was funded with stimulus money, rather than guessing whether the jobs would have existed in the absence of the federal plan. Opponents of the program accused the administration of “moving the goal posts” to make the plan appear more successful. — Wall Street Journal, Latest Stimulus Report Fuels Jobs Pressure, Feb. 1 2010

So companies using stimulus money to give people raises was counted as jobs saved!  We have 10%-17% of our workforce idled and taxpayers are being fleeced to give people raises and this administration is calling that successful policy.  When do we start firing people in this administration?  How about Janet Napolitano?  How about Eric Holder?  or are we saving their jobs too so that the numbers look good?  The other reports are just as galling: $1000 purchase of a lawn mower is credited with saving jobs;  using stimulus money to purchase boots with each boot (left and right) being counted as a job saved because someone had to make the boots; stimulus money going to create jobs in Congressional districts that do not exist.  Does anyone have any confidence that this administration has a clue about how to run a government?  This is beyond embarrassing.

The Next Stimulus

But fear not, since the first stimulus was so successful, President Obama is teeing up the next one, but don’t worry this one is only $100 billion.  Doesn’t that just make you feel warm all over?

The Joke is on You

Joe Biden just held a press event to reveal how he was going to help the middle class.  The man who has a hard time reaching into his own pocket for more than $1 a day in charity to give to his fellow man, has no problem reaching into your pocket and give the fruit of your labor to someone else.  It’s a win-win.  It doesn’t cost Joe Biden and it helps him keep getting elected and drawing a salary that you pay for.

Here is what he revealed:

1. Nearly Doubling the Child and Dependent Care Tax Credit — in an economy that has over 10% unemployment this administration is focusing on helping those who already have a job and income.  I’m all for tax cuts, but not targeted cuts.  Cut income tax rates and jobs will be created.  I don’t believe this administration knows how to aim anything well enough to hit a target
2. Limiting a student’s federal loan payments to 10 percent of his/her income above a basic living allowance — the administration is concerned about how much debt students leave college with.  Does it have any concern about how much debt they are piling on everyone, not just college graduates?  Biden pointed to the average indebtedness of around $25,000 for college graduates.  The federal debt is about $35,000 for every man, woman and child in America, not just college graduates and this administration shows no signs of stopping it.
3. Creating a system of automatic workplace IRAs — government first got involved in retirement with Social Security.  That system is bankrupt and this administration has no interest in fixing it.  When Republicans floated the idea of taking a portion of the Social Security payroll tax and diverting it to higher return private savings, the Democrats savaged them.  So the Democrat solution is to ignore the bankrupt Social Security system and start telling business what to do.
4. Expanding tax credits to match retirement savings and enacting new safeguards to protect retirement savings — again with Social Security bankrupt, they want to put more tax dollars into retirement.  How different is this than the Republican plan to take what exists and allow it to get better returns than the paltry rate it currently gets within the Social Security system? The difference is that the Republican plan wouldn’t cost anything extra.  The Democrat plan will either increase payroll taxes or increase the deficit.  Surprise!!!
5. Expanding support for families balancing work with caring for elderly relatives –I thought the Democrats had fixed this with “end of life counseling” in their health care plan, coupled with bringing back the Death Tax next year.

Fumbling and Stumbling

The way to create jobs is to let the job creators keep their money to invest in their business and expand.  Small business owners are stuck waiting to learn how much all of Obama’s social re-engineering is going to cost them and until they know that, hiring is the last thing they will do.  The only thing this administration seems to know how to do is bash business and spend money and the more they spend the longer the recover will take.  They are now planning another stimulus plan to follow the last stimulus plan that didn’t work, and the deficit continues to grow and grow and grow.

President Obama wants to create a bipartisan panel to recommend how to reduce the deficit.  He gives the back of his hand to bipartisanship when it comes to workable solutions to real problems, but he loves bipartisanship when it gives him political cover to make unpopular decisions.  All of his supporters love to say that experience doesn’t matter and that President Obama is the smartest guy in the room.  If that is true, he should not be afraid to propose bold spending cuts and shrinking government and be smart enough to explain it to Congress on his own.  If he does so, I am sure many Republicans would support him and vote for it (and almost all Democrats vote against it).  But he wants it both ways, he wants Republicans to yield to tie spending cuts to tax increases and put the package to an up or down vote.  He will then take that on the campaign trail to tell the world how Republicans voted for tax increases.  If you don’t believe me, look to history.  George Herbert Walker Bush, of the “no new taxes” pledge, got Congress to agree with spending cuts in return for a tax increase.  Bill Clinton clubbed him to death, like a baby seal, with that pledge and then enjoyed Bush’s restraint upon Congress on the spending side to generate budget surpluses.  Let President Obama take the lead.  Wasn’t that why he was elected?  Because he was a different kind of leader?  So, lead away.

The December jobs report was a disappointment for this Administration.  They expected a mere decline of 10,000 jobs and were hit with an 85,000 loss.  They will, of course, downplay the numbers and say how many jobs they “saved” even though that is a statistic no one can measure.  But what are this administration’s priorities?

Upside Down Priorities

Let’s look at the priorities of this administration:

1. Bailouts
2. Health care
3. Cap and Trade
4. Jobs
5. National Security

Leaving aside that the top three are questionable as being within the constitutional authority of the president, what does it mean to job growth? 

The Little Engine That Can’t

The engine of job growth in this country are small businesses.  If you run a small business and you don’t know what your expenses are going to be, you will be very cautious about hiring.  In the list of items above, the first four have this administration on a spending binge that can only result in higher taxes because despite the rhetoric, that’s what statists do.  They will claim they only tax the rich, but many small business owners will fit into that definition of rich without having the cash to pay the taxes because their income is plowed back into their businesses.  So until they know how big the tax bill will be, they cannot afford to commit any cash to increased payroll.  They are more likely to use overtime rather than hiring to tide them over because they can just as quickly turn off that spigot.  While that might mean more economic activity, it doesn’t translate into new jobs.

Health Care is another looming question mark.  Since no one in the administration nor Congress seems to care about reading the bills they are voting on, it carries enormous risks to small businesses when the bureaucrats start crafting regulations based on any approved regulations.  If a small businesswoman doesn’t know what the impact will be on the cost of her existing workforce, she is certainly not going to hire new workers until she knows if the impact on her bottom line will be positive or negative.

Cap and trade is another potential whack to the small business bottom line.  Either through new taxes or carbon credits, who can tell a small businessman what this is going to cost?  When in doubt, stand pat.

Righting the Ship

Until this administration jettison’s the useless cargo that is sinking this administration, their new top priority should be ”man the lifeboats!”  If this administration hopes to avoid being a lame duck for two years, they need to come forward and say health care is dead, cap and trade is dead, bailouts are over.  Don’t even say that they will take them up again when the economy recovers.  Throw them over the side and start the pumps to empty the Treasury of IOUs.  If they don’t do this, any recovery in the jobs area will be slow indeed. 

It’s the Uncertainty, Stupid

Until the uncertainty is lifted, unemployment will remain stubbornly high.  When Reagan came into office and boldly stated his goal to shrink government and cut taxes, small businesses could see immediately that the effect on them would only be positive.  Less government and lower taxes meant more money on the bottom line and with more money on the bottom line they could start hiring and they did.  The result?  Twenty-five years of economic growth.  Obama is following the Franklin Roosevelt model of spend, spend, spend.  It didn’t work then.  It’s not working now.

“The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.” – New York Times, January 2, 2010

“The Treasury Department publicly maintains that its program is on track. “The program is meeting its intended goal of providing immediate relief to homeowners across the country,” a department spokeswoman, Meg Reilly, wrote in an e-mail message.” — same article, NYT

Hot on the heels of Janet Napolitano’s performance at the Department of Homeland Security, that things worked just swell and then, er, no it was a catastrophic failure, we have another example of this administration’s ineptitude.  Let’s not let the marketplace work by flushing out the bad loans, have banks face up to the reality of their bad lending decisions, allow housing prices to reach a market level, all in a reasonably short time, no, let’s get another massive, taxpayer funded program in place to gum up the works and drag this out for years. 

A Habit of Ignoring History

In 1929 Hoover mishandled the economy in a similar way bringing in the leaders of major industries and jawboning them to keep up production even in the face of falling demand so that jobs would not be lost.  The businesses went along until that policy hit their financial statements in the form of plunging profitability.  Stock prices fell sharply and more disasterous policies followed, first by Hoover and more by Roosevelt.

In 1920-21 there was a very steep and serious recession.  However, companies cut wages and government didn’t interfere.

“The annual unemployment rate peaked at 11.7 percent in 1921, but it had fallen to 6.7 percent by the following year, and was down to an incredible 2.4 percent by 1923,” Murphy writes. “That is how a market with flexible wages and prices quickly corrects itself after a Fed-induced inflationary boom.”

Roosevelt’s policies followed Hoovers’ with more and more government interference.  Throughout the Great Depression the programs didn’t work, government grew tremendously leaving us saddled with that legacy.  On the other hand Reagan in the 1980s pursued a policy of cutting taxes and shrinking government.  Roosevelt needed World War II to end the Great Depression, Reagan ushered in 25 years of unprecedented economic growth.  Which one does Obama choose to follow?  That’s right, Roosevelt.  Brilliant!

Inexperience on Full Display

President Obama rides into town with no executive experience, but with wondrous rhetorical skills and a hard left agenda.  He jams through a stimulus package that doesn’t stimulate.  His security policy is to undo everything that worked under Bush to keep us safe.  One of the first things Janet Napolitano does is  release a report saying that the real threat is from our returning military that might become right wing zealots,  Meanwhile Islamic terrorists, correct that, isolated extremists, continue to plot to kill us.  Now the New York Times points out that the Emperor’s mortgage program, Making Home Affordable, has no clothes.

“Whatever the merits of its plans, the administration has clearly failed to reverse the foreclosure crisis.” — NYT

When asked by a Congressional Oversight Panel what the administration was going to do in the face of this lasting not a year or two but for many years into the future, Treasury Secretary Tim Geithner said:

“What to do about it,” he said. “That’s a hard thing.” — NYT

Sounds like the seeds of another government program to fix the other government program.  Just like FDR did all through the 1930s.  Trying to stop the market with government programs is like trying to stop the tides.  You may divert it and you may end up with water in places you didn’t want it, but you are not going to stop it.

Let’s say you were having a problem with your knee.  So you go to the doctor and tell him your problem. The doctor examines you and says he has to act quickly.  He says you need an operation and if you have it, you will experience some mild pain for a brief time, but if you don’t  the pain will get worse.  How bad you ask?  On the pain scale, designed by Andrea Mankoski, you are currently at a 6, described as, “Can’t be ignored for any length of time, but you can still go to work and participate in social activities.”  He says without the operation you will probably reach a 9, “Unable to speak.  Crying out or moaning uncontrollably — near delirium.”  With the operation you will probably peak at 8, “Physical activity severely limited; you can read and converse with effort; nausea and dizziness set in as factors of pain,” but then things will progressively improve.  The pressure he is putting on you to decide is intense, so you give him the go ahead.

The good doctor performs the operation and as he predicted the pain does get worse, but it doesn’t stop.  You are beyond delirium, you are reaching level 10, “Unconscious.  Pain makes you pass out.”  Your medical proxy, demands the doctor tell her what went wrong.  The doctor shrugs and says it was worse than anybody thought, but then says the surgery is working better than expected. ”What the hell did you do in that surgery, you screw-up?” your proxy demands.   The doctor, just smiles, and turns on his heel ands walks away, leaving your proxy standing there sputtering, desperately trying to find the words to express her disbelief and outrage.  When she finally regains her composure, standing there all alone, she reaches for her cell phone to call a malpractice attorney.

Economic Stimulus Surgery

Dr. Obama told us, upon taking office, that we desperately needed a stimulus package or the unemployment rate would continue to rise.  He said without a stimulus package, the unemployment rate would rise to 9%, if we did NOTHING!  His able assistants, Harry “the Healer” Reid, and “Nurse” Nancy Pelosi, slammed through the $787 billion package.  We were saved!  Unemployment would not rise above 8% before starting to fall.  But there isn’t a happy ending to this fairy tale.  The unemployment rate rose past 8%; it rose past 9%; it rose past 10%.  So when Dr. Biden steps to the microphone and says the stimulus is working better than expected, why isn’t someone putting a straight-jacket on him and carting him off?  Why isn’t someone pointing out that the stimulus may have actually made the problem worse?  Team Obama said themselves that it would have been better to do nothing. The unemployment rate would have peaked at 9%.  Why are they getting  pass?

Non-stimulating Stimulus

Look more closely at the stimulus, which we now have had time to do.  Extending unemployment benefits does not create jobs.  Giving teachers a raise, does not create jobs.  Spending 80% of the stimulus funds so far in the Department of Labor, the Department of Health and Human Services, and the Department of Education doesn’t speak to job creation.  It speaks to a sop to their union backers and the creation of their impossible to measure metric “jobs saved.”  Only $4 billion so far has gone to the Department of Transportation and their “shovel ready” projects.  Even these, while a help to construction workers, doesn’t do a thing for laid off bank tellers, software engineers, or FedEx employees.

The Obama administration is spending us into oblivion,  while pouring gasoline on to the unemployment fire with their ill conceived and basically botched stimulus plans.  What is needed are tax cuts that will allow the market to direct the resources where they will do the most good and get the economy moving again.  Instead Obama is taxing and spending our way to economic disaster. What we need is a sharp curtailment in government spending and to shrink the size of the federal beast. Is there a good economic malpractice trial lawyer out there?

There was a commercial not too long ago where a young man looked out his window to the village green where a bundle of money had just fallen.  He calls his wife/girlfriend over to show her.  She suggests running down and getting it, but he says, no, let’s wait.  Next you see a frizzy headed guy down on the green who screams, “MONEY!!!!”  In seconds, people came out of the woodwork and scoffed up all the money while the young couple looked on.

The image of that commercial popped into my head as I considered the job summit being led by President Obama.  To me, the young couple represented the government pondering how to direct the economy to achieve this specific goal or that.  The mob on the green was the free market.  While the government dithers over what kind of legislation to write, which special interest groups to pay off to pass it, how to develop incentives to get private industry to do this or that, if they would just cut taxes and get out of the way, the free market would get to work creating jobs where they are needed, not where some bureaucrat thinks they should go.

Uncertainty

The biggest cloud overhanging this economy is uncertainty.  The Obama administration is slamming through enormous changes: a $787 billion Porkulus package, cap and trade, health care.  Businesses look at this combined with the accumulation of massive government debt, tax increases rather than cuts (yes letting the Bush tax cuts expire is a tax increase, not just the expiration of tax cuts as Speaker Pelosi tries to spin it) and they don’t know what hiring that extra employee is going to cost, let alone what it will cost to keep the employees they already have.  So they don’t hire until the dust  settles and they can calculate the impact.

“Tax incentives for job creation are “worthy of further consideration,” he said, while adding that the administration is also set on making a big push in the area of green jobs.” – President Obama at Jobs Summit

“Worthy of further consideration”?  Since conservatives have been calling for tax cuts for a year now, this kind of statement in Obama-ese translates thusly, “I have to make a nod to the right, to acknowledge that I heard them, but it ain’t happening.”  Couple that with the “big push in the area of green jobs.”  We are in the midst of the scientific scandal that the “settled science” of man-made global warming could be the greatest hoax since Bernie Madoff, and Obama wants a big push in the area of green jobs.  What if that area collapses because the urgency that Al Gore has been screaming about is no longer urgent?  It’s government planning on the order of Soviet five-year plans or Mao’s Great Leap Forward programs.  It harkens back to Jimmy Carter’s giant Synfuels project that was going to convert coal into oil, until oil prices fell and the project imploded, but not before billions of tax dollars were poured into that rat hole.

How Simulating!

If you listen to Joe Biden, the stimulus plan is working better than expected.  But let’s take a closer look.  As of about three weeks ago only $120 billion of the stimulus money had been spent. (So why is Congress looking at another stimulus with over $600 billion left to spend in the first one?)  Of that money, 80% went to the Department of Education, Health and Human Services, and the Department of Labor.  What about all the “shovel ready” projects?  Only about $4 billion has gone to the Department of Transportation.  Feel better?

Jobs Summit Attendees

So who is meeting with President Obama at the jobs summit?  Well first let’s look at who was not invited:

• U.S. Chamber of Commerce — they have butted heads with Obama over health care and climate change policies
• National Federation of Independent Businesses

I don’t know about you, but I think they might have an idea or two about how to create conditions that let the free market create jobs.  As for the attendees:

• Service Employees International Union (SEIU) officer
• President of the American Federation of Teachers — a union of workers in a government run monopoly
• United Food & Commercial Workers International Union
• CEOs of some Fortune 500 companies

How many jobs do unions create, not occupy, create?  Think of the auto industry, steel industry, public K-12 education, the Postal Service, and government in general.  Do they bring images of thriving, vibrant, engines of job creation?  Or is the image more of the basket cases of the U.S. economy?  This is not a slight against the union workers themselves, but rather of their leadership who create so many restrictions on job rules to artificially create the need for more jobs.  There motto is: why have three people do the work, when you have five do it?

As far as big business is concerned, let me dispel the thought that conservatives and big business go hand in hand.  In many cases big business looks to cut deals with the government to protect their industries and markets from upstart companies.  They have gotten big and lethargic, rather than nimble and vibrant.  Small businesses create about 80% of the jobs in the U.S. and they didn’t have a seat at the table.

So was the jobs summit about creating jobs or just jive talk?  If you want a real jobs summit see what American Solutions was hosting in Cincinnati, Ohio and Jackson, Mississippi.  They actually discussed ideas that would work.