Why Stimulus Did Not Work: Economic Advisers

First, I must say a few words about the current recession as the president's programs are directly related.

This recession was caused by the US Congress. There no doubt about that fact. It was a multistage, multi-year bipartisan effort. They refused to alter any of the Fannie Mae and Freddie Mac legislation that was propping up an unrealistic boom in real estate sales and was the underlying cause of overpriced properties. Also, it was the US Congress that overreacted during a previous economic scandal: Enron. This resulted in the mark to market rule that arbitrarily forced financial institutions report their asset loses without regard to the effect. Along with congress, the FTC, SEC, and DoJ, failed to provide proper oversight of the mortgage securities exchange market. Of course, since this president was a member of congress, he did not inherit anything. He helped create it.

As an aside, I do not let President Bush off the hook for his part in this. While his administration attempted several times to influence congress to change the mortgage rules, they did not stress the problem enough nor did they take their concerns to the American people in any memorable way. President Obama wants his version of health care to become law, so he has made speeches to the American people more than 30 times. (This should be a lesson to politicians everywhere)

What made the president go along with this form of "economic stimulus" after promising to cut "pork" and earmarks and cut the deficit?

The answer has two parts:

1. The President has no personal knowledge of the capitalist system.

2. His advisers told him it would work, and his advisers have no practical knowledge or experience in the capitalist system.

When you look at the president's White House biography, you learn that he has no experience working for or managing any private sector enterprise. None. He has never created jobs nor held one in the private sector. You learn that he has always worked in "jobs" that rely on the generosity of others. He "worked his way through collage" on someone else's dime, did community work for some churches, was handed the job of President of the Harvard Law Review, went to Chicago to work as a community organizer registering voters, taught in Chicago school system, then state senator followed by US senator for a short period. That led to being President of the United States of America. Oh, I forgot, but does being hired as a lawyer for ACORN count as a private sector job?

No private sector work and no paying his own way. It is only natural that he would embrace a public policy that grabs money from those who earn it and ensure his own future by handed it off to his supporters. You know, "spreading the wealth".

So, knowing nothing about capitalism, how does arrive at his decisions to nationalize health care, authorize an economic stimulus package and tout his vague plans to help create jobs in America? How does he run a one year deficit 4 times his predecessor's worst fiscal year? And then, say he's not finished yet, he wants to add another $1 -2 trillion dollars to the deficit. Trillions he and the country do not have. He either doesn't know what he's doing or is trying to deepen the economic crisis to make Americans dependent on him. After all, it worked for FDR with 3 terms.

President Obama and the legacy media always refer to the Stimulus package as if the president sat down and wrote it. We know that is not correct as his "recovery and reinvestment" plan was put together by the US Congress. His involvement was limited to assuring them he would sign it. I'm of the opinion that to this day, he does not know what is in it.

The Obama stimulus package has proven to be exactly what its opponents warned of; An 8000 part pork package that is the envy of leftists in governments everywhere. It is a conglomeration of old and new lobbyist's "gimmes" pulled out of the drawer and patched together by unwitting Democrat staffers and lobbyists as payback for political support. In this respect, it is very similar to the Wall Street and autoworker bailouts. Additionally, no one has been able to identify any significant help that it has or will provide in any quantifiable way.

For a few months, the White House and their sycophants have been saying that the stimulus "brought the economy back from the precipice".

The fact is it has not.

We can know this as nothing has changed. Well, there is the exception of the White House/sycophant talking points; that has changed, but the economy has not. The White House predicted a maximum unemployment rate of 8% when selling Stimulus and it is now, a short 6 months later, approaching 10% (9.7%).

While they claimed it would save jobs, it has actually prolonged the pain as millions of Americans continue to lose their jobs, closely followed by losing their homes and their American dream. Not to mention the continued decimation of millions of retirement accounts. All of which was unnecessary.

The White House's surrogates and the president were touting last week's employment numbers; bragging that the 150 union employees that went back to work is a positive sign of recovery and that we are losing jobs at a slower rate. In the case of union employees, common sense might tell us that the Obama administration just spent $4 billion on their "Cash for Clunkers" (CfC) program which artificially spiked vehicle sales for about 2 weeks. As it is now, the car sales markets are even more depressed than they were before CfC.

Other clues into his lack of knowledge include the president's remarks in Elkhart, Indiana, on February 9th, 2009, when he said,

"We have inherited an economic crisis as deep and as dire as any since the Great Depression."

The fact is in February our recession was the worst economic crisis since the Carter administration 1979. If it were as bad as the Great Depression, unemployment would be at 12%-19%, not 8%.

O.K, who was it that said to 'look to those who he surrounds himself with if you want to know about them?' Oh that's right, the president said it in one of his campaign speeches.

His economic advisers must have advised him that all the pork would be a good thing. The problem that his advisers are real-world-clueless as well.

The president's economic advisers would be the Council of Economic Advisers and the National Economic Council (along with his political advisers). These are folks who also have little or no actual experience in the private sector.

They study, analyze, teach and advise. But actually doing it? It never happened.

The evidence is clear. Simply look to the White House web site the president's economic advisers:

National Economic Council (from the White House)

"The National Economic Council (NEC) was established in 1993 to advise the President on U.S. and global economic policy. It resides within the Office of Policy Development and is part of the Executive Office of the President. By Executive Order, the NEC has four principal functions: to coordinate policy-making for domestic and international economic issues, to coordinate economic policy advice for the President, to ensure that policy decisions and programs are consistent with the President's economic goals, and to monitor implementation of the President's economic policy agenda."

"Lawrence H. Summers is the Director of the National Economic Council and was appointed by President Barack H. Obama on November 24, 2008."

White House biography about Lawrence H. Summers

"Until January, he was the Charles W. Eliot University Professor at Harvard University. He served as the 27th president of Harvard University from July 2001 until June 2006. From 1999 to 2001, he served as the 71st United States Secretary of the Treasury following his earlier service as Deputy and Under Secretary of the Treasury and as Chief Economist of the World Bank. Summers has taught economics at Harvard and MIT. His research contributions were recognized when he received the John Bates Clark Medal, given every two years to the outstanding American economist under the age of 40, and when he was the first social scientist to receive the National Science Foundation’s Alan T. Waterman Award for outstanding scientific achievement. He is a member of the National Academy of Science and has written extensively on economic analysis and policy publishing over 150 articles in professional economic journals. Lawrence Summers received his B.S. from MIT and his Ph.D. in economics from Harvard. He and his wife Elisa New, a professor of English at Harvard, have six children."

Council of Economic Advisers (from the White House)

"The Council of Economic Advisers (CEA) is a group of three respected economists who advise the President of the United States on economic policy.[1] It is a part of the Executive Office of the President of the United States, and provides much of the economic policy of the White House. The council prepares the annual Economic Report of the President."

President Obama's CEA:

The current Chair of the CEA is Christina Romer, the two other current members of the CEA are Austan Goolsbee and Cecilia Rouse. The two nominees were confirmed on March 10, 2009

White House biography for Christina Romer

"Romer was the Class of 1957-Garff B. Wilson Professor of Economics at the University of California Berkeley. Before teaching at Berkeley, she taught economics and public affairs at Princeton University from 1985-1988.

Until her nomination, she was co-director of the Program in Monetary Economics at the National Bureau of Economic Research and served as Vice President of the American Economic Association, where she was also a member of the executive committee."more...

White House biography for Austan Goolsbee

"Goolsbee was the Robert P. Gwinn Professor of Economics at the University of Chicago Booth School of Business. He was an economic adviser to Barack Obama’s 2004 Senate race before becoming a senior economic adviser to Senator Obama’s 2008 Presidential campaign." more...

White House biography for Cecilia Rouse

"Rouse is currently on leave from Princeton University, where she is the Theodore A. Wells '29 Professor of Economics and Public Affairs. She has been a senior editor of The Future of Children and the Journal of Labor Economics" more...

Zero real world experience

It appears that there is approximately zero real world experience at working with and understanding the American version of capitalism and forces effecting free markets in this administration. And because of that fact, the rest of us who are not well connected, such as Wall Street executives, powerful lobbyists, or any object of this administration's favor, will be picking up the tab.

Anyone who has even a passing notion of the economic history of this country (and some others) would know that excessive spending will do nothing to help the economy grow, and most likely holds it down. They would also know that the way government can stimulate the economy is to lower the cost of doing business. Lowering taxes worked for Presidents JFK, Ronald Reagan, Bill Clinton and George W. Bush.

But, no, the economic advisers, the US Congress and the President himself, have no plans to lower taxes or fees on any American. Instead, he imposes a 35% tariff on imported tires from China, raises excise taxes, and threatens to raise taxes (2.5%) on middle/lower income Americans, and even more on those who actually produce the jobs (while lowering their charitable deductions. This is nearly exactly what President Hoover did to "help" American workers in 1930. He added tariffs on imports and increased taxes on anyone with an income during The Great Depression.

Hmmm. Maybe it wasn't intended to improve the economy?

With any luck the president will fail to enact any more of his that-sounds-good policies.

Move it Right

Orwell Would be Aghast or How the President is Faking You Out.

President Obama embodies the spirit and soul of author George Orwell's vision of the future. When speaking he introduces a little truth, never fills in with details, sprinkles in some double-speak, misinformation, using his winning form of propaganda and seems to be mired in doublethink. The legacy media's news programing uses a burgeoning form of newspeak by slavishly catering to his agenda, not asking the hard questions or reporting the details of his proposals and plans.

Put the fear in them

President Obama has based his presidency in crisis management to gain public support for his government's helping all Americans. He makes speeches ensuring a fearful electorate that he is looking out for our welfare and then uses the various monetary crises to obligate trillions of dollars that we do not have. (Why he would want to bankrupt the United States is beyond me, but it seems to be the goal. If not, then he is getting horrible advice from his advisers and will continue to borrow, print and spend this country into a hole that could become beyond correcting.)

Doublethink

The president says that current government spending trends "cannot be sustained". OK, so he has one right. But he said that the day after signing a $420 Billion budget for half of the fiscal year. It seemed he came to his senses as if he believed we had obligated too much already. That was a few short weeks after he signed $787 Billion "stimulus Package". Throughout this time, he has been saying that he would not allow any so-called "earmarks" (read as "pork barrel projects). All of this massive spending was on the heels of TARP, $700 billion that he supported and voted on in the US Senate.

Of course, this president has done nothing wrong because he inherited all of this mess.

Does it get any more Orwellian than this?

Why, yes it does. In nearly all of his speeches he will say one thing while urging congress to do the opposite.

Consider that he claimed that there is no room in his administration for lobbyists, then he hired at least twelve lobbyists to work in the White House and chose former Senator Tom Daschle to join his cabinet.

Candidate Obama emphatically and repeatedly claimed that he would put an end to earmarks. (An earmark is a type of "pork barrel" project) Then, at his very first opportunity to sign a a spending bill, he sells and signs a bill (the Stimulus Package) that is exclusively earmarks. Thousands and thousands of earmarks.

And, he still wants to spend another $1.4 Trillion for a government takeover of health care insurance in the United States. He wants it now, before congress breaks in August.

He then said if you want to keep your current insurance plan, you can have the same coverage you have now. But he can produce no documents or study to show where private or employer paid health care insurance will be unaffected by his "competitive Public" plan. But we are all aware of what happened when Hawaii decided to provide insurance to cover everyone.

He claims that the stimulus package has saved or created over 150,000 jobs, but cannot point to any of them. All the while, unemployment continues to raise well beyond his predictions. We lost another 467,000 in June alone.

While campaigning, he and his minions lambasted Senator McCain for suggesting that employer paid health care insurance might be taxed as income (along with a tax deduction for paying for it). Now, the president wants to tax the same benefit with no suggestion of an offsetting tax deduction.

He said no one making under $250,000.00 annually would have their taxes raised. That 95% of Americans would receive a tax cut. What was the first thing newly inaugurated President Obama did? Raised taxes on cigarettes by 67 cents per pack. The vast majority of cigarette smokers are poor to middle class in America (that's under way under $250K per year). Then comes the Cap & Trade bill that introduces over $800 billion in new taxes on everyone that exhales.

In the automobile industry bailouts, he said that he did not want to run the car companies and followed that by firing General Motors' CEO, then telling GM that they weren't building cars that way he liked and if they didn't change their evil ways, he was going to pull the bailout funding from them.

Newspeak

Showing his ever increasing control over the media, the president declared that we are no longer fighting a "global War on Terror". It has been replaced with the more correct term "Overseas Contingency Operation"

During his campaign the media and Obama supporters would ostracize anyone mentioning his middle name, Hussein. Furthermore, only African Americans and his other supporters could talk about race. Unless, of course, they were gloating over the possibility of America's first black president.

Through out this presidency, the media have only told one side side of the story. Barack H. Obama's side, and they are just getting started.

Orwellian or not?

Pay Equity Debate Equals Class Warfare

The organization,United for a Fair Economy (UFE) is proud to advance the divisiveness of class warfare. Class warfare is a tool of the liberal left and the Democratic Party in the United States. They seem to believe that by pointing out the income differences in between CEO's and their employees is providing some sort of public service.

Nothing could be further from the truth. This organization seems to be a mouthpiece for those who cannot cope with or cannot understand the American way of life and they publish salary and bonus numbers to incite voters. And this helps no one.

Here is what they say:

"CEO Pay: We believe that the lack of pay equity in the US can be addressed by changing the rules. The better informed average workers are, the more they will be empowered to generate changes."

Their premise starts off on a positive note, but then fall into their peculiar idea of fairness. So, yes, being informed certainly is better for everyone. The question I have for them is, "why would our system need to change?"

While CEO's, executives, large and small business owners make much more than their employees in most cases, this should not be a problem, but an incentive. In fact, without our system and the risks business leaders take, the standard of living in the United States and around the world would be nothing like it is today. None of the advances in medicine, materials, and transportation would be possible. Millions people around the world would be dead, or never have been alive, if not for the work and reward system that Americans embrace.

CEO's make more because they take more risks. Employees only have to show up and do the job they contracted for. An employee's only financial risk is whether the company remains successful at the location where he/she works, and that security is a result of the leadership's expertise and commitment.

Look. If you are envious of another's wealth, that should be an incentive to do the same thing. If an employee wants make as much or more than his/her CEO, there is a very simple solution. Start your own company and take all the financial risks, the many hours of sweat equity, the learning, and abilities, and apply it to your goal. If you don't feel like you can do all that, then shut up, collect your paycheck and continue to be at the mercy of statisticians, accountants and balance sheets. With hard work, persistence and good ideas anyone in country can achieve as much success as they are willing work for. This scenario has been repeated millions of times in this country.

This is the way to become successful and wealthy in a free market system. Many politicians and organizations such as the UFE clearly do not understand this basic truth. Class warfare is used as a political tool to pedal influence. They influence millions of followers (a key word) to look to them to even out the playing field and protect them, but end up being held down, in place by those same politicians. Remember these are the same people who engineered, either by expert planning or supreme stupidity, the economic crisis this country and world are in right now. If you prefer to complain about the rich getting richer and having to work for "the man", then keep following others and looking outside yourself for help.

Our politicians have the sworn duty to make the playing field as fair as possible. They very often fall short of this while looking out for their own self interests. This is due to lobbyist approved legislation designed to give the lobbyist's employer advantage over employees and competitors. This is how we get the Enrons, the high energy costs, the S&L Crisis from the 1980s and the current economic crisis that is destroying millions of jobs.

In this country, for now at least, anyone can become whatever their own strengths, talents a perseverance allows.

An RV in Everyone's driveway

President Obama decided to deliver his latest Doom & Gloom Report in the faces of the most unemployed people in America: Elkhart, Indiana. Their unemployment rate is 15% and a big industry in Elkhart used to be manufacturing recreational vehicles (RV). They are the self-described RV Capital of the World.

What Barack is not saying is that people who would normally be in the market for an RV are waiting to see what the economy is going to do. I certainly would need to know if I were going to be able to pay for an expensive "nice to have" product or will I be unemployed and lose everything. Maybe I should concentrate my resources on my house payment, groceries, utilities, kids clothing, etc., before adding a new monthly payment or draining my savings.

Those people are smarter than Barack Obama. He does not know how the economy works or what a responsible person will do in the face of his daily doom and gloom predictions; all of which are lies. (So much for political ethics)

Recall the election year 2000 and the first months of George W. Bush's Administration, in a recession started on President Clinton's watch. George W. Bush and company said that the economy was slowing down and was accused of "talking down the economy". I guarantee you that Candidate Bush's rhetoric couldn't hold a candle to Obama's scare tactics. And the media jumped on Bush, but you haven't heard a word of it in the legacy media this year.

The most preposterous element of this rush to spend hope dollars is that the people claiming to fix the problem, the US Senate, US House of Representatives and the White House, are the very people who caused the problems. Their failed policies and obstructions over the last 2 decades are what have brought us to this point. Why would anyone believe they will get us out of it by doing the same thing they have been doing.

Call, email and write a real letter to your senators and representatives in Washington DC and tell them you aren't buying their snake oil and to stop this nonsense before they cause long term damage to you and your family. And tell the President that his advisers are leading him in the wrong direction.