Wednesday, February 25, 2009

Picking Apart The President

Key comments from President Barack Obama address last night, before a joint session of Congress, need to examined so we may get a better understanding of the President's thinking and the direction in which he would like to take the economy. Selected excerpts of his speech are below with comments by me, under each excerpt.
The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before. The cost of health care eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for. And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.

In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.

Well that day of reckoning has arrived, and the time to take charge of our future is here.
These are the most clever and dangerous words I have ever heard a president speak. Notice he starts off by talking about the economy, housing and the stock market, but then he slips into talks about energy, healthcare and education.

The economic crisis was not caused by energy (energy prices have collapsed), it wasn't caused by healthcare or education defects. This is a slippery attempt to bring in pet projects that have nothing to do with the crisis.

Then note he talks about living for short-term gains versus long term prosperity. True enough. But the short term gains were at the hands of money printing by the Federal Reserve, which prevented a stable non-money manipulated economy to develop. Then he talks about "wealth transfer." Now normally wealth transfer is discussed in terms of government transferring wealth from one group to another, the President has redefined "wealth transfer" to mean those who earn money in the free market economy and become rich!

He says this "wealth transfer" prevented the opportunity "to invest in our future." Again twisted definitions. For sure, he is defining the taxing, i.e., transferring from the rich to give to his pet projects as "investment". When it is only individuals that can truly "invest". To invest means to take ones own money and put it at risk in the hope of gain. When a government puts money in a project, gain may not be the first objective and certainly no one looses if the investment goes bad, the loss occurs much earlier on when the money is forcibly taken, by taxation--the taxed is always the loser.

Over the next two years, this plan will save or create 3.5 million jobs. More than 90% of these jobs will be in the private sector - jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit
Here we have the President talking a bit on nonsense, followed by twisted words again.

The "stimulus" package won't create any new jobs that it first hasn't destroyed somewhere else. The money used in the stimulus package simply won't be available from those it was taxed away from, or from those who could not borrow funds because they were crowded out by government borrowing--thus these people can't hire others. The "stimulus" is a transfer of jobs to government pet projects.

As for these being "private sector" jobs, private sector means where the thought and development of a project are created on the free market. When the government hires workers or companies to work on government designed and created jobs the proper name for it is fascism. Think I'm kidding? Webster's second definition of fascism is "a tendency toward or actual exercise of strong autocratic or dictatorial control." The supposed "private sector" work the President is discussing is not work that comes up on the free market, but the autocratic designed projects of government.

Sheldon Richman contrasts socialism and fascism here, where it is clear that what the President calls "private sector" work is indeed the definition of private sector used under fascism:

As an economic system...Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities.
The President again:

First, we are creating a new lending fund that represents the largest effort ever to help provide auto loans, college loans, and small business loans to the consumers and entrepreneurs who keep this economy running.

Second, we have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and re-finance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values - Americans who will now be able to take advantage of the lower interest rates that this plan has already helped bring about. In fact, the average family who re-finances today can save nearly $2000 per year on their mortgage.

Third, we will act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times.
As many have said, the crisis was caused by out of control borrowing, egged on by Fed money printing. The last thing you want is to egg on out of control borrowing again. Yet, this is exactly what the president is proposing in these paragraphs.

From the turmoil of the Industrial Revolution...
From the turmoil of the Industrial Revolution? Say what? The growth of industry that resulted in products once only available to kings and queens now available to the average man is turmoil? To somehow classify this as "turmoil" gives us a clue as to the kind of education the President received.

And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.
This is simply a payout to the oligarchs, specifically in this case, Boone Pickens. If there was a call for solar power or wind power, the market would supply it.

I believe the nation that invented the automobile cannot walk away from it.
Translation: The United Auto Workers were big supporters of my election campaign, so I will shovel automobile manufacturers the money they need to continue to make legacy payments to UAW workers, instead of taking the Detroit auto firms through bankruptcy reform.

Our recovery plan will invest in electronic health records..
Very scary. The new man in charge of what medicines you should and shouldn't take, because he will have all the records will be super-health lobbyist Tom Daschle and his gang of cronies. What medicines and treatments will be available to you will be based on who Daschle can shakedown. Prescription by shakedown. True treatment is going to move offshore and be the exclusive domain of the rich.

The third challenge we must address is the urgent need to expand the promise of education in America.
More government control of education. Thank God there is the Internet.

From there the President went into foreign policy, and I will leave it to others to explain those issues.

But as far as the President's economic plan, there was not even one item of good common sense.


  1. The nation that invented the automobile? Excuse me? Karl Benz and Rudolph Diesel were not Americans. Neither were Francois Isaac de Rivaz, Gustave Trouve, Gottlieb Daimler, Wilhelm Maybach, or Sigfried Marcus.

    Shall we add silly historic ignorance to his baffling economic ignorance?

  2. Here ya go. Enjoy.