Obama: Twelve months on, the star falls back to earth

Obama: Twelve months on, the star falls back to earth

October 31st, 2009

UK Independent

Obama has plummeted back to earth

If there was a degree of déjà vu for fans of Barack Obama crammed inside a university athletic arena in Hackensack, New Jersey, the other evening, it was entirely deliberate. They only had to close their eyes and listen to the deafening chants of “Yes We Can” to imagine they had been transported back to the heady days of a year ago when their candidate was on the verge of seizing the White House and making history.

Even with open eyes they could have felt some of that old frisson. Event organisers wandered the hall wearing shirts proclaiming “Yes We Can 2.0”, as if they were selling the latest Windows update, and a giant banner stage-right gave top billing to Obama. The name beneath his, Corzine, might almost have been an afterthought.

This was not a re-election rally for Mr Obama – not yet, please – but for Jon Corzine, the former boss of Goldman Sachs and now governor of New Jersey. He had invited the president to speak because, when Jersey voters go to the polls next Tuesday – New Jersey and Virginia are the only states where governorships are in play this year – it is not at all clear that they won’t ditch him in favour of his Republican opponent, Chris Christie. The latest polls say it’s too close to call.

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ObamaCare’s Scary October Surprise

ObamaCare’s Scary October Surprise

By Robert Knight

Stung by a rising tide of resistance and a closing window of opportunity, House Democrats have unleashed a new version of ObamaCare, weighing in at 1,990 pages and with a $1 trillion price tag. House Speaker Nancy Pelosi promises to ram it through quickly, exhibiting a disdain for her countrymen that makes Marie Antoinette look like a populist.
The Democrats are going for broke, which means we’ll all be broke if this is not stopped. The “Affordable Health Care for America Act” (HR 3962) is so comprehensive that it even micromanages restaurant menus and vending machines. That’s a clear signal that this is not about health care. It’s about whether the people of the United States will allow power-mad Washington politicians to plunge us into the kind of top-down socialism that is strangling Western Europe and has devastated economies and destroyed freedom wherever it is imposed.
President Obama promised “transparency” and that any bill would be written in public. That was a lie. This monstrosity was hatched behind closed doors. Obama further promised that his health care initiative would not “add a dime to the federal deficit,” which he has already tripled since taking office. It was another lie. No one can honestly believe that a gargantuan takeover of the nation’s $2.5 trillion health care industry will save taxpayers money. No government program results in savings. Each one grows exponentially; creates dependent constituencies that lobby for yet more tax dollars; and empowers bureaucrats for whom mission failure ensures more staff, more money, and more power. There is simply no governing restraint such as a profit motive or anxious stockholders. The voters? Surely you jest. They are far, far away and kept in check by a compliant leftist media. At least, so far.
Does anyone really believe that a government plan consisting of nearly two thousand pages will simplify things and leave us a freer people?  
Instead, it will saddle us, our children, and our grandchildren with trillions in debt and will make every family in America beholden to the whims of government health bureaucrats. The bill is a true Halloween horror, with scary stuff throughout. Taxpayers will be forced to pay for abortions. Committees in both houses of Congress defeated thirty different amendments barring such funding. Illegal aliens will be covered, since there is no language that would enforce any prohibition against them. Among the thirteen new taxes found in the bill by Americans for Tax Reform is the “medicine cabinet tax,” which bars people from paying for non-prescription medicine with tax-deferred health savings accounts. Senior citizens will bear the brunt of “savings” that are supposed to partially pay for the bill, with $500 billion in Medicare cuts. Liberal pundits continue to ridicule Sarah Palin’s colorful but accurate term “death panels,” but government control, cost-cutting and Medicare penalties against docs who provide “too much” care will lead to bureaucrats literally deciding who lives and who dies. The bill also includes punitive taxes on people earning higher incomes, which epitomizes the Marxist dream of confiscation and redistribution.
Obviously, the Washington elites did not fully get the message when Americans revolted by the millions this summer and early fall. Instead, Pelosi, Reid, and Obama threatened the health insurance industry Chicago-gangster-style, warning them to shut up or else. They’re about to do the same to the rest of us, threatening us with penalties if we don’t buy insurance. If we don’t pay the penalties, we go to jail. They don’t even pretend that this is constitutionally legal. When Pelosi was asked by a reporter exactly what in the Constitution permits the federal government to force people to purchase a service, her answer was, “Are you serious? Are you serious?” before moving on to another question.
ObamaCare supporters were stung when the Congressional Budget Office and Joint Committee on Taxation reported that the first House version would add more than $1.5 trillion in new federal spending over the next 10 years. So in the Senate, they went back to the drawing board, wrote the Baucus version, and tried to pretend that splitting off a proposed 10-year, $247 billion Medicare doctors’ fee “fix” would not count in health care reform. This was their way of feigning observation of Obama’s pledge not to “add a dime.”  But even the liberal Washington Post editorialized against this sleight-of-hand in a piece entitled “2.47 trillion dimes,” and the proposal went down in flames, with all forty Republicans, twelve Democrats and one Independent voting against it on October 21.
In the House, they continued to scribble. The Congressional Budget Office came out with its report on October 29 and concluded that the new bill would cost a bit over $1 trillion over 10 years but that collecting “penalties paid by individuals and employers” would bring the cost down to a mere $894 billion and reduce the federal deficit by $104 billion. The House also came up with a separate “doc fix” bill that would suspend cuts in Medicare payments to doctors. Like the “doc fix” defeated in the Senate, it wouldn’t add to the actual costs in the health care bill, thus preserving the illusion that the big bill will cost less than $1 trillion.
The ongoing takeover attempt of our health care system is proof that Congressman have regrown their tin ears now that they’re back in the Beltway bubble, insulated from constituents. But they are not immune to pressure in the form of phone calls, faxes and e-mails, at least not if they arrive by the boatload.
Maine Senator Olympia Snowe, the lone Republican in the Senate Finance Committee to vote for the Baucus bill, has said she will oppose any plan that emerges with a “public option.” That’s because although Obama, Pelosi, and Reid say it would merely create a competitor for private insurance and bring down costs, a public option would actually cause the collapse of the private insurance market. Employers would jump ship, opting to pay a fine rather than provide insurance. A study by the Lewin Group estimates that 88 million Americans would lose their private insurance if a government competitor is created.
Over the next few days, don’t be surprised if the “public option” is dropped or amended to buy off Blue Dog Democrats and perhaps even some Republicans. Harry Reid and Nancy Pelosi put it back in with a nod and a wink as if to appease the far-left liberals who were making lots of noise. But quietly dropping it would be a small price to pay to get something — anything — into the law that can then be expanded until it crushes private care and morphs into truly socialized medicine.
Watch what they do, not what they say.
Robert Knight is Senior Writer/Correspondent for Coral Ridge Ministries and a Senior Fellow for the American Civil Rights Union.

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Jobs Created or Saved’ Is White House Fantasy: Caroline Baum

‘Jobs Created or Saved’ Is White House Fantasy: Caroline Baum

Commentary by Caroline Baum


Oct. 28 (Bloomberg) — Heresy, thy name is Christina Romer.

Last week, the chairman of President Barack Obama’s Council of Economic Advisers — a position that carried the title “chief economist” until Larry Summers took up residence in the White House — testified to the Joint Economic Committee on the economic crisis and the efficacy of the policy response.

Here’s the executive summary in case you missed it:

The crisis: “Inherited.”

The economy: “In terrible shape” (the inherited one).

The shocks to the system: “Larger than those that precipitated the Great Depression.”

The policy response: “Strong and timely.”

The efficacy of the policy response: a 2 to 3 percentage point addition to second-quarter growth; 3 to 4 percentage points in the third; and 160,000 to 1.5 million “jobs saved or created,” a made-up metric if there ever was one. (More on that later.)

What was most puzzling about Romer’s Oct. 22 testimony was her comment on the waning effect of fiscal stimulus.

“Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing little to growth.”

At first it was just fringe elements, such as conservative blogs and the not-really-a-news-organization Fox News, that pounced on Romer’s statement. Then other news outlets started to question her statement, which seemed to fly in the face of White House assertions that only a small portion of the stimulus — $120 billion, or 15 percent — has actually been spent. Most of the criticism of the stimulus coming from the president’s own party has been, “too little, too late,” and here’s Romer saying it’s kaput.

Thanks for That

Instead of being banished to the woodshed, Romer was consigned to the White House blog, where she slipped into professorial mode to explain the arcane distinction between the effect of the stimulus on the change in gross domestic product and its effect on the level of GDP.

Stimulus has its biggest impact on the growth rate of GDP when it’s implemented, Romer said, using a car-and-driver analogy: Step on the accelerator, the car goes from zero to 60.

Stimulus will keep the level of GDP and employment higher than they would have been even after the growth-rate effect fades, she said.

Her logic is impeccable. It’s her premise that’s flawed.

Dispensing Lucre

When the government distributes lucre or loot, people spend it. If your interest is national income accounting, spending other people’s money is great. Spending is a back-door way for government statisticians to measure what matters, which is the real output of goods and services.

But the government has no money of its own to spend; only what it borrows or confiscates from us via taxation. Oops.

“Government job creation is an oxymoron,” said Bill Dunkelberg, chief economist at the National Federation of Independent Business. It is only by depriving the private sector of funds that government can hire or subsidize hiring.

That’s why “jobs created or saved” is such pure fiction. It ignores what’s unseen, as our old friend Frederic Bastiat explained so eloquently 160 years ago in an essay.

Econometric models synthesize all sorts of variables and spit out a GDP forecast. From there they derive the change in employment using something called Okun’s Law, named after the late economist Arthur Okun, which describes the relationship between the two.

Fiction Lags Reality

Actual hiring seems to be lagging behind the model’s land of make-believe. For small businesses, which are the source of most job creation in the U.S., the government’s increased and changing role in the economy isn’t a confidence builder. Businessmen have no idea what health-care reform will mean for their cost structure or what whimsical tax policies the government might impose when it realizes those short-term deficits are running into long-term unfunded liabilities.

No wonder capital spending plans were at an all-time low in the third quarter, according to the NFIB monthly survey.

Only 30,383 jobs were created or saved by the American Recovery and Reinvestment Act, according to Recovery.gov, the government’s once-transparent Web site that has become a complex blur of numbers, graphs and pie charts. These are only the jobs reported by federal contract recipients. The Obama administration will report the larger universe of ARRA-related jobs on Oct. 30.

An extrapolation of what would have happened without the fiscal stimulus isn’t much consolation to the 9.8 percent of the workforce that is unemployed. Nor is Romer’s prescription for the economy and labor market very comforting in light of the trillions of future tax dollars that have been spent, lent or promised by the federal government.

“If you take your foot off the gas, the car goes from 60 back down to a slow crawl,” Romer said in clarifying blog post.

Gentlemen, start your engines.

(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)

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To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.