The latest news on the economy is not encouraging: a mere 39,000 jobs added and the unemployment creeps ever closer to 10% at 9.8%. In spite of this, or apparently ignorant of it, the lame duck House voted yesterday for another whopping tax increase on the most productive among us. Yes, yes, they will beat the class warfare drums about tax “cuts” for the rich, when what they are voting on is not a cut at all, but either leaving things the way they are or raising taxes. With the recovery barely showing a pulse, it is not the time to take money out of the hands of free market capitalists and put it in the hands of the government. Who do you think can pull the economy out of the doldrums, entrepreneurs or government bureaucrats?
Treasury Secretary
Democrats: Free Market Capitalists-No, Crony Capitalists-Yes
by Bill O'Connell on December 3, 2010
Inexperienced AND Clueless
by Bill O'Connell on January 2, 2010
“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 disastrous 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.
Create Jobs or Save Jobs, That is the Question
by Bill O'Connell on February 14, 2009
I’ve said it before. Barack Obama is a masterful politician. It is almost like a magician. His slights of hand are so subtle, you have to be watching very closely the hand that is not the center of attention to catch what he is really doing.
Creating Jobs
As he tried to build up support for his stimulus package the number of jobs his package would create steadily grew. It went from 3 million jobs to 4 million jobs. Further it went from 80% private sector jobs to 90% private sector jobs. Pretty impressive stuff. But what is the other hand doing?
Saving Jobs
When public opinion got behind needing to do something, the rhetoric started to shift. From creating jobs it became creating or saving jobs. Saving jobs? Just how do you measure that? How do you link that a particular employer didn’t lay off an employee because of a stimulus package to save the salt marsh harvest mouse? Once, you slipped in that innocent change and got the media to buy off on it, which is not a stretch with this president, you can really go full bore. “Why, we saved 15 million jobs!” Go ahead, prove we didn’t.
“Well the package was intended to create jobs, but then the economy went into a free fall. No, we weren’t able to create the 3 (not 4) million jobs we promised but, by golly, we saved 25 million jobs from being lost if we didn’t implement the stimulus package.” If repeated often enough and lapped up by the slobbering main stream media, a complete failure will be hailed as a masterstroke.
What Happened in the Great Depression?
FDR is still revered as the president who got us out of the Great Depression. His own Treasury Secretary, Henry Morganthau, said that eight years of spending failed to reduce the unemployment rate. But Roosevelt is still considered a hero, not a failure who couldn’t end the Great Depression after ten years. He couldn’t end it at all, really, because World War II was what eventually ended it.
Conservative Battle Plan
Conservatives lost the battle to keep this stimulus plan from going forward, and putting one in place that would work, led by tax cuts. We must expose this slight of hand. Just like sitting in the theatre watching a magic show we have to stand up and shout, “Did you just see what he did with his left hand?!!” We need to preempt this by asking liberals, “You’re not going to start saying now that the package is designed to save jobs rather than create them, are you?” If we don’t expose them, they’ll pull it off.
Avoiding or Creating Catastrophe?
by Bill O'Connell on February 10, 2009
President Barack Obama held his first press conference last night and did a masterful job of controlling the communication while dodging any hint that he let this stimulus package spin out of control, at the hands of Nancy Pelosi.
Elkhart, Indiana
I found it curious that President Obama chose Elkhart, Indiana, the RV capital of the world, as the backdrop for the current economic situation. After all, in the campaign he said that driving SUVs and RVs was irresponsible. What kind of gas mileage does an RV get? He campaigned on Cap and Trade. What would Cap and Trade do to the good people of Elkhart, Indiana if implemented? How many people are going to out and buy an RV, which can cost up to $600,000, with the $10 per week tax cut President Obama is proposing. Remember, he is dead set against across the board tax cuts, which could actually prompt an evil “rich person” to buy an RV. It reminds me of the 10% tax on luxury yachts sales that killed the boat building industry and put many blue collar people out of work.
Disaster by Design
Of all the schemes tried over the years, from the Great Depression forward, to stimulate the economy, why does this President insist on going with the ones proven not to work?
No less an authority than FDR’s Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”
Spending in the Great Depression didn’t work and that is according to the guy doing the spending. Last night President Obama mentioned the lost decade in Japan. However, all of the massive public works spending in Japan during that decade didn’t work.
What did Japan get from sustained and massive public works spending by the LDP after a real estate bubble burst in the late 1980s? According to a recent article in the IHT, one thing is clear: taxpayers ended up being saddled with the largest public debt in the developed world, totaling 180 percent of its $5.5 trillion economy.
While there are disputes over how to view the results, the Japanese appear to have learned a lesson, while US officials like Treasury Secretary Timothy Geithner, who spent time as a financial attaché in Japan after the collapse, appear to determined to repeat it on a larger scale
President Obama alluded to the “failed policies of the last eight years,” as if tax cuts created this mess. But today, Treasury Secretary Geithner opened his remarks on the bank bailout by basically saying that government action or inaction coupled with Wall Street excesses caused the financial debacle not tax cuts. They were:
- Interest rates too low for too long – driving up home prices
- Complicated financial intruments that no one understood bundling mortgages
- Failure of government oversight
- People being encouraged to borrow beyond their means (by government)
But we are supposed to believe that only government can get us out of this. So, government created the mess, they are ignoring what has worked in the past (tax cuts: Kennedy, Reagan, Bush), choosing those things that were proven failures (spending: Great Depression, Japan) and we’re supposed to be angry at Republicans for putting up a goal line stand to protect us from this impending disaster.
If this passes, be afraid, be very afraid
Can’t Anybody Here Play This Game?
by Bill O'Connell on January 31, 2009
“Can’t Anybody Here Play This Game,” is what Casey Stengel reportedly said while watching his team, the New York Mets. The same could be said of the Democrats when it comes to paying taxes. The Democrats are the ones who rail against tax cuts for the rich. They don’t believe in lower tax rates to stimulate the economy, but if these wealthy Democrats find taxes problematic, they just don’t pay them.
We now hear of another nominee, Tom Daschle, former Senate Majority Leader, has a $140,000 tax problem. $140,000! Most Americans would like to make that in income, let alone owe that in taxes. This follows on the heels of Treasury Secretary Timothy Geithner paying back taxes of $34,000 and Charlie Rangel, Chairman of the House Ways and Means Committee that writes the tax laws, paying $10,800 in back taxes. We’d probably have a balanced budget if all these rich Democrats only paid the taxes they owe rather than fighting against tax cuts for everyone.
Here’s Daschle’s excuse for his tax problem:
“Mr. Daschle told committee staff that he had grown used to having a car and driver as Senate majority leader and didn’t think to report the perquisite on his taxes, according to staff members.”
Two things come glaringly into view here. First is the overall arrogance that these “public servants” feel they deserve privilege. They have no concept that in the real world not everyone has a car and driver provided by their employer. In this case the employer is all the Joe Sixpacks out there. The second thing is that these problems were discovered and fixed, in the cases of Daschle and Geithner, only after they were nominated for positions in Obama’s cabinet. So, what if they weren’t nominated? Do you think that this tax revenue that is legally owed to the government (you and me) would still be in their pockets?
We have the chairman of the committee that writes the tax laws failing to pay his taxes. We have the Treasury Secretary who oversees the Internal Revenue Service failing to pay his taxes. We have the former Senate Majority Leader who ran the senate that passes all laws failing to pay his taxes. Do you think it’s too hard to figure out how to comply with our tax code?
It’s time to scrap the tax code and go to a simple flat tax that you can file your return on a post card. Let’s put the $200 billion that Americans spend each year on tax compliance back into the economy. Let’s make sure that all these rich Democrats pay the taxes they owe. Do these two things and we probably won’t need a stimulus package.
Resolved: The Income Tax Should Be Changed to a Flat Tax
by Bill O'Connell on January 14, 2009
It couldn’t be more clear that the Obama administration should immediately begin the conversion from our convoluted tax code, to a flat tax that could be filed on a post card. How can I make such a claim?
Well, Charlie Rangel, Chairman of the House Ways and Means Committee, the committee that writes the tax laws, seems to have forgotten to pay his income taxes on a villa that he owns in the Dominican Republic. More recently we learn that Timothy Geithner, Obama’s nominee to be Treasury Secretary, didn’t pay Social Security and Medicare taxes for several years. The Treasury Department includes the Internal Revenue Service which enforces the tax laws that Mr. Rangel’s Committee writes and collects the money.
So if the tax laws are so complicated that the individual in charge of writing the tax laws cannot understand them enough to follow them, and they are so complicated that the individual in charge of enforcing those tax laws, doesn’t understand what he is charged with enforcing, don’t you think it’s time we simplified the tax laws? If these highly educated, very experienced, extremely intelligent people cannot comply with the tax code, what hope does the average Joe have? Perhaps that is why it is estimated we spend $200 billion per year in tax compliance. Couldn’t that money be more productively be employed elsewhere in the economy?
What do you think?
Hope and Change, Well, Never Mind
by Bill O'Connell on November 28, 2008
As Barack Obama builds his Administration team you can sense the frustration starting to build on the left and among those who are still paying attention. In an article in yesterday’s New York Times, Obama Describes Team as Experienced Yet Fresh, you can anticipate the eloquent gymnastics you are about to read as you would watching the young Chinese girls at the Beijing Olympics.
The Perception of Change
As the agent of hope and change, some people are beginning to wonder that if this is so, why is he populating his administration with so many people from the Clinton administration, causing one pundit to ask if we wanted a return to the Clinton Administration we would have voted for Hillary. The master politician responded to this line of thinking thusly, “Americans would be ‘rightly troubled’ if he overlooked experience to create the perception of change.’” Let me see if I have this right. If you actually change, it is a perception of change, but if you don’t change, it is real change? I got it.
He went on to elaborate, “What we are going to do is combine experience with fresh thinking. But understand where the vision for change comes from first and foremost: It comes from me.” Okay, let me take a hack at that one. Barack Obama is bringing together all these people with long resumes in government, with years of experience, and confident in knowing what to do and how to do it, but they are all going to follow Barack Obama’s direction and apply fresh thinking to their settled ways. Or might they say, yeah kid, go back to the Oval Office and we’ll call you when we need you.
The Voice of Experience
Painting the picture further Obama says, “I suspect that you would be troubled and the American people would be troubled if I selected a Treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever.” But an inexperienced president? No problem. Even JFK, who was elected the youngest president in our history, had served one full term in the Senate, was reelected, and was two years into his second term before becoming president. And he had a pretty rocky time between the Bay of Pigs, his Vienna meeting with Khrushchev, the Cuban Missile Crisis and Viet Nam, in less than three years. Barack Obama was four years into his first term and half of that time he spent running for president. Should we not be concerned at the lack of experience at the top?
The Definition of Freshness
To prove his point about the freshness of hope and change, he spoke of Paul Volker. Now, I think very highly of Paul Volker. I believe it was he who got inflation under control after the disasterous Carter Administration economic policies. Obama appointed Volker to lead his economic advisory board. At 81 years old, he is the epitome of freshness. How is that you wonder? Obama masterfully spins it this way, “Paul Volker hasn’t been in Washington for quite some time and that’s part of the reason he can provide a fresh perspective.” So where does that leave Obama? Is he stale because he has been in Washington or his he fresh because he has been out campaigning for the last two years?
To cap it off in a question and answer period Obama said, according to the Times, “his [Obama's] call for new ways of thinking on the economy should not be interpreted as a reflection of frustration and disappointment with the Bush administration’s recent economic-recovery efforts. He signaled his support for the latest $800 billion government bailout plan, which is intended to provide new lending for consumers as well as push down home mortgage rates.”
Anyone Out There Feeling Buyer’s Remorse?
So the purveyor of hope and change wants us all to believe that bringing back the Clinton administration is change; that 81 year old Paul Volker is fresh, but 72 year old John McCain is ancient; that Bush is the cause of all that is wrong with America, but fresh thinking should not be interpreted as frustration with Bush.
My sense has been that Barack Obama was painting himself into a corner. All the while he believed that with his adroit political and verbal skills he would be able to slip out of the corner unnoticed.
The Democrats have only held the White House for eight of the last twenty-eight years. So realistically, where else would Obama go for experienced executives? With no executive experience himself, it’s not like he can bring colleagues in from his past executive positions, like Carter from Georgia, Reagan from California, Clinton from Arkansas, and Bush from Texas. With only four years in Washington, two of them spent on the road campaigning for president, it’s not like he built a network of experienced executive branch contacts there either.
He is also in the precarious position of having built up expectations so high, there is really no where for his job approval ratings to go, once he takes office, but down. In addition to all this, he has to watch his left flank. There are a lot of grumbling noises coming from that direction from a bunch of people with balled up IOUs in their fists, thinking we got you here, where’s the payback?
Save Me, I’m Drowning!
by Bill O'Connell on October 14, 2008
What brings someone off the sidelines and into the game? I have always enjoyed history and politics. I savor a meaty conversation with both conservatives and liberals. Up until now those conversations have been private. I generally kept my views concealed from strangers. As the 2008 Presidential election draws near I have become more concerned about the loss of our liberty. Both candidates have, to one degree or another, taken liberties with our liberty.
Government has grown enormously and shows no sign of abating. The larger our government becomes, the less liberty we enjoy. The more complex it becomes, the less it is a government of the people, by the people, for the people and more a government of, by and for the bureaucrats.
One of the primary arguments against term limits is that it takes time to understand the complexity of government and if we employ term limits the politicians would be forced out of office just as they were starting to understand it. Does that scare you? It certainly scares me. I see a permanent underclass of bureaucrats who really run the government, and our representatives and we are just dragged along for the ride.
Consider the financial emergency we currently face. When Treasury secretary Hank Paulson came up with his $700 billion rescue plan it was said to consist of 3 pages. When the House of Representatives crafted that into legislation it became 110 pages. That was voted down and then the Senate produced their version. That one weighed in at 450 pages. Think about it. Suppose you are a Senator. You have to vote on this critical issue and time is perilously short. Do you have time to sit down and read a 450 page document? Not only read it but comprehend it and all of its implications? Or do you rely on staffers and lobbyists telling you what it says and how you should vote? From 3 pages to 110 pages to 450 pages in about a week and a half. That is simply staggering.
As I watched this debacle unfold, I envisioned Lady Liberty sinking into New York Harbor, struggling to tread water. The turning point for me was reading that Christopher Buckley, son of the conservative icon, William F. Buckley, Jr., was going to pull the lever for Barack Obama. Before Lady Liberty slipped beneath the waves I felt compelled to heave a lifeline to the ol’ gal and dive in.
It is my strongly held belief that to a great extent we have forgotten what liberty means. We have forgotten the principle upon which this nation was founded and the ideal for which hundreds of thousands of Americans shed their blood to protect and defend it.
It is my purpose and intent, in my own meager and humble way, to reignite that spark and, rekindle that flame so that Lady Liberty’s torch can continue burning brightly as a beacon for the world rather than a remain on the sidelines, sadly shaking my head as the torch flickers out.



