The View From 1776

Why the Reviled Tea Party Was Right about Obamacare

Read Liz Peek’s assessment on The Fiscal Times’s website.

Posted by .(JavaScript must be enabled to view this email address) on 10/09 at 07:45 PM
  1. Why the Great Tea Partiers Were Always Correct about ObummerDoesn'tCare

    The article is kind of weak, these days kind of like Grahamnesty, McCain, Boehner, and that senator who Levin had on his show yesterday, Ron Johnson. "Oh, no. Let's not use every tool at hand. We might succeed. Let's aim lower, not try very hard, keep the excessive and unconstitutional spending going unabated."

    I'm starting to think it's NOT because they lack spines, but that the political class is more or less enthusiastically opposed to the citizenry. They want to impoverish the citizenry, reducing our earnings, depleting savings and investments, taxing and seizing our property. They want to make it easier for them to abuse the citizenry. Hence their quickness to exempt themselves, to guarantee pay for the federal government employees for time they're not working. That's the kind of thing at the top of their priorities.
    Posted by .(JavaScript must be enabled to view this email address)  on  10/10  at  07:04 AM
  2. Liz's article starts by complaining about the spending of TARP funds to keep the economy from crashing into a depression. Just last week it was reported that all of the TARP funds have been paid back to the government WITH INTEREST! So, it turns out that Obama's (and Bush - lets give him some credit, since the program started under him) saving the economy with the TARP program saved our bacon.

    Unless you favor living in economic depression conditions with millions out of work, you should be careful about what you discredit.

    The other unappreciated story in this drama is that deficit is falling like a rock. This is (or should be) taking the wind out of the sail of the austerity crowd, particularly with further cuts will damage vital services and the infrastructure of the country.

    In this light, failing to pay the bills congress has racked up ("debt ceiling") is a particularly egregious insult on the body politic by the Tea Party. This shut down is costing the tax payers $300,000,000 per day and a default will damage the country to the tune of hundreds of billions of dollars in higher interest payments on the debt.

    Why on earth does this cabal believe that they should cause this catastrophe just to damage the President?

    Posted by .(JavaScript must be enabled to view this email address)  on  10/10  at  10:03 AM
  3. J. Jay,

    Liz Peek’s article may start with a complaint (perfectly valid one by the way), but yours starts with a bald-faced lie regarding the nature of that complaint (if complaint there be – doubtful, other than some slight Tea Party disparagement). Her complaint was about yet another government spending spree that doubled the deficit in record time. But, that is not the only falsehood you peddle, as I will soon show. Your rant would be despicably deceitful except for one thing … you uncritically and unabashedly believe every sentence, word and implication of this nonsense.

    Your assumption federal spending (under Democrat auspices) prevented the economy from crashing fails in three particulars. First is that the economy did, in fact, crash despite the so-called stimuli. Second is that the spending, rather than preventing a crash (aka, recession), accelerated and extended it many months. Third is you have no evidence, and no possibility of producing said evidence, as can prove or, even, imply what you claim for the spree; i.e., that it had anything but a negative effect on recovery.

    It is something of a stretch calling Peek’s observation a ‘complaint’. Any fair reading of her op-ed has to conclude she was giving us an analysis of the RNC v Tea Party Congressional rift rather a condemnation Democrat spending habits. If there was any complaint in it, it was directed at the Tea Party for being, in her estimation, too doctrinaire; and not especially supportive of the shutdown. Thus, your allegation is speculative at best and the obnoxious lying of a self-deluded partisan at worst. Given your history of slandering out-of-hand anything and anyone remotely conservative, I can only conclude you deliberately misrepresent the article’s character.

    Once again, J. Jay has been taken in by his own Party’s propaganda. A careful look at what Obama said (see http://www.politifact.com/new-hampshire/statements/2012/oct/25/barack-obama/barack-obama-says-banks-paid-back-all-federal-bail/ - i.e., "We got back every dime used to rescue the banks …") versus actual TARP repayments reveals that while the President is technically correct, he too is misrepresenting by omission. Missing from his statement is that Banks represent only about half the total TARP disbursements, and a substantial amount of non-bank loans remain unpaid. Also missing from his comments are some $360-million in transfer payments made from commercial banks to a ‘community development’ holding corporation (created for the purpose and with no real business being in the TARP except for getting Democrats to agree to the bill and as a scheme for selectively funneling money to liberal/socialist organizations – some of which funnels right back to Democrat candidates). Of the $570-million dispersed to CDCI, only $6-million is repaid (see http://www.fas.org/sgp/crs/misc/R41427.pdf , page 6). Also unaccounted for is $38.5 billion given to Tarp Treasury Housing Programs, which I assume is written off with no intention of repayment. Also unmentioned is that some of TARP was repaid using other government money, making TARP part of a larger shell game. Overall, outlays do equal repayments on paper, but this only hides favored companies getting write-offs and sweetheart deals at the expense of others falling under the TARP umbrella.

    The TARP deal could easily have gone sour (see http://mises.org/daily/4762 ) with several of the larger players defaulting or out of business, in which case we would be eating losses now rather than a slight ‘profit’. Once paid off, of course, the profits end, so, in reality, we barely broke even. Moreover, there is some question just how accurate the government’s accounting is as more than one alternative source alleges TARP is slightly less than repaid (e.g., http://projects.propublica.org/bailout/list and http://www.propublica.org/article/the-bailout-by-the-actual-numbers ). In terms of an annualized return on investment, TARP’s performance is weak. So this deal (from the taxpayer standpoint) is all risk for very little gain.

    Also missing from Obama’s recounting is that TARP was not just about propping up financial institutions (see – http://www.nytimes.com/2011/03/30/opinion/30barofsky.html?_r=0 ). Its acceptance by a Democrat dominated Congress was predicated on funds being lent out primarily to meet social objectives, chief among which was bailout-receiving financial institutions [supposedly] using them to rescue underwater homeowners and preventing a further implosion of the housing market. That never happened. Instead financial institutions sat on their share of the money, using it as a buffer and an asset for attracting investors. It should be noted, the linked article was penned by a former TARP Inspector General who favors the TARP concept as legislated; especially its ‘community reinvestment’ aspect. His gripe is only that the housing bailout and social objectives were ignored and TARP accountability is non-existent. I assume from the venue and specific complaints this writer is a thorough going Obama supporter despite his disillusionment with TARP.

    As usual, J. Jay begs the wrong question; i.e., that it matters less that Tarp was repaid than that its objectives are ill-defined, economically warped, a self-perpetuating precedent, and that its negatives far outweigh its positives (few real positives from the taxpayer perspective). As with Obama-Care, he never questions these objectives. To most Americans (once they start thinking about such things), the objectives of TARP are worse than warped; they are Constitutionally repugnant and morally doubtful. Polls taken at the time and for a longtime after indicate TARP was overwhelmingly unpopular, just as Obama-care is unpopular now. Much of that opposition had less to do with TARP’s repayment chances, and far more to do with its propriety and potential for usurpation and abuse. It may matter little to J. Jay that TARP is fundamentally corrupt, but it does matter to most who care about such things, and who worry about our country’s future.

    Even if it were solely about propping up failing banks and corporations, however, in what sense was it good policy to prop up failure. Unless, it was government that caused those companies to fail to start with, there was (and remains) no conceivable reason to prevent them failing; and then only as a remedy for actual damages in which future meddling is banned. Failure and bankruptcy allow a weak hand to be reshuffled; resulting in replacement and/or restructured businesses as are more efficient and competitive. Propping up a failed business (i.e., corporate-welfare) guarantees a less competitive, less vibrant, and less productive business environment. There was some restructuring to satisfy TARP requirements, but far less than bankruptcy imposes, and too much expended in propping up Obama’s fledgling regime.

    J. Jay assumes just because money is repaid, all is well. Real world is never like that. If you take forcibly something from A to give B, you create both winners and losers. While the banks were making money off our money, what became of our own portfolios? He forgets that for the 2½ years following TARP, retirees and small-investors watched in agony as our retirement and 401K plans lost over 1/3 their pre-TARP value. While that value has (in most cases) been recovered, how much more might those accounts be worth today assuming the bailouts never happened? If you project expected earnings with and without TARP from just before its implementation, the non-TARP dollar value would almost certainly be higher. It may only be a small (though not inconsequential) difference in the long run, but it is still unrecoverable by us; and small only because spread over a large number of victims. Essentially, it is an invisible added tax. Thus, we should ask: repaid to whom? While the Federal Government got all its money back, I have yet to see a single dividend check … and never will. Thus, TARP is funded out of tax increases resulting directly from it; plus expanded money-printing and new debt assumption. Fiat money inflates the currency while debt burdens future generations. The only winners from this, then, are banks, automakers, and politicians. The rest of us are told to ‘patriotically’ take it on the chin and like it.

    J. Jay fatuously argues “Unless you favor living in economic depression conditions with millions out of work, you should be careful about what you discredit”. Coming, as that does, from the least careful, most fact-challenged, ‘least-fiscally informed, happy-to-spend-while-the-country-goes-in-the-toilet’ commenter to this site, I nearly hurt myself laughing. At 7.5% unemployment, we are still (at minimum) 2.1% more unemployed than pre-TARP. Even some Keynesian economists have admitted unemployment should have returned to pre-2009 levels by this point, but, of course, only non-Keynesians make the obvious connection between current policies and recovery-resistant unemployment. Ergo, it is J. Jay who, by his own argument, favors “millions out of work”. Not really of course, but the policies he favors have that as an empirically established outcome. Of course, not all remaining unemployment is attributable to TARP, but most (if not all) of it is attributable to misguided statist attempts at controlling the economy and class-based outcomes, TARP being only the latest in a long series of such foibles. Washington politicians, with Obama dictating the path ‘forward’, promised TARP would prevent the housing and economic meltdowns. It did not. They swore (U3) unemployment would never rise above 8%. It exceeded 10% and stubbornly stayed above 9% for 30 months. Even now, with many jobs converted to part-time, real U3 unemployment is higher than BLS reports it; and, there is, for the first time in decades, a significant widening between actual and reported rates (see http://www.shadowstats.com/alternate_data/unemployment-charts); with actual unemployment continuing to rise even as U3 falls. Obviously, something smells at BLS.

    Another J. Jay canard relates to his “deficit is falling like a rock” rubbish. The deficit has, indeed, fallen, but his crediting it to stimulus rather than austerity is absurdly counter-factual, and hardly ‘rock-like’. Rather, it has been inching down against the upward pressure of continued (mostly Democrat) spending. The lessening (what there is of it), is entirely due to conservatives forcing limits on what Obama and his spend-it while-we-can crowd can get away with it. Continuing resolutions, despite obvious shortcomings, have succeeded in stemming the ‘stimulus tide’ since the Tea Party infiltration of Congress (January 2011 to present), and would not have happened otherwise. Under Obama and a Democrat-dominated Congress and Senate, debt rose to the highest rate in U.S. history. In 2010, Democrats ran on preventing a Republican reversal of its expansionist policies. Ergo, had the Tea Party failed to take the house, we would be spending as irresponsibly now as then. Under Obama and a Democrat Senate checked by a Republican/Tea-Party Congress, a shaky balance has been asserted that neither fully suppresses the socialist spending urge nor allows it free rein. The market has improved somewhat (though hardly impressive) during this ‘Tea-Party’ period, though not before. In part that is due to decreased debt anxiety; but it is also due to greater accountability, fewer regulatory upsets and fewer Justice Department attacks against enterprise. Thus if there is any correlation we can make, it is between falling debt & the tepid market rebound and Tea Party influence counteracting the liberal/socialist wrecking ball. Projections now, however, are the deficit is set to rise again (despite sequestration) as Obama-Care kicks into high-gear. Market skittishness appears to be increasing in lock-step with that, even more than from shut-down anxiety. Here again, much depends on which market sector you are looking at (or look at selectively).

    Raising the debt-ceiling does not get bills paid, at least not the way J. Jay believes. This is just one more stick with which Democrats excite public panic while browbeating fiscal conservatives. For it to have any effect on paying bills, it would have to be directed at paying bills and/or paying down the deficit only. Both the legislative drafts and Democrat history, however, show debts are paid down no faster after Democrat demands are met. Only as a ‘carrot held out’ have they any slight effect, and that is too little to make serious a dent in their habit. The only way to really get this rolled back is to replace enough Senators, Congressmen and President with reliably fiscal-conservatives. And, our best chance of that is to replace most of those with Tea-Party affiliates not especially partial to Washington. Rather than reducing the deficit, raising the debt ceiling represents (in Democrat eyes) a license to keep on spending and racking up more debt. The absolute best we can hope is that Republicans will hold Democrats to some kind of [real] accounting; but, the chances of that are somewhere between slight and nonexistent. To put this in terms even J. Jay can follow. Raising the debt-ceiling is tantamount to raising the credit-card limit of an account-holder with the worst possible teenaged credit abuser (routinely spends more than earns, maxes out every credit card, pays minimums only, uses one credit card to pay down another, impulse buyer, horribly wasteful, addicted to buying, often buys junk because no real incentive to buy quality, generous to a fault among pals – using other people’s money, falsifies credit applications to keep the habit going, &c).

    (Continued in next post)
    Posted by .(JavaScript must be enabled to view this email address)  on  10/19  at  09:53 AM
  4. (Continued from #3)

    J. Jay bemoans this shutdown is (supposedly) costing taxpayers $300-million/per day, but is not the least perturbed the government cost us far more than that each and every day it is fully operational; and with no more to show for it. In fact, each day the government runs at full tilt is a day some hard-working citizen is being screwed, a day of greater waste, of politicians engaged in revolving-door crony-capitalism, a day of bureaucrats harassing poor slobs trying to make a decent living, a day of EPA artificially driving up the cost of fuel, of limited options, of new regulations that enervate an economy it is meant to energize. Given government is a drag on production and an absence of government unleashes the entrepreneurial appetite, the cost of a really long shutdown would be, in all likelihood, more than compensated by productivity increases; and should theoretically, therefore, be a net gain. That it did not in this case (or any previous) is because it did not run long enough (and did not cut activities likely to affect commerce) for the changed circumstance to have effect. We’ve never had a shutdown of sufficient duration and depth to test this theory, of course; and I doubt our masters (of either party) relish us finding out just how little they really matter to our wellbeing. Given the cost of government is higher than its absence and because this is an experiment worth trying, I favor a shutdown for as long and deep as it takes to determine its value (or lack thereof) to society; or unless and until some crisis presents itself for which only a federal response is reasonable.

    In reality, the government never really shutdown. That makes J. Jay’s claim of $300-million a day specious at best, and has all the earmarks of a number plucked from thin air. Only about 17% of ‘non-essential services shutdown (see http://kenhoma.wordpress.com/2013/10/07/nums-how-much-of-the-government-is-actually-shut-down/ ), leaving all the really ‘essential’ stuff operational (in fact, there’s a whole lot more fat on this pig that could be cut without the least distress to 99% of us). Obama’s trained toadies calculated a figure of $300-million, so, of course, he believes it. $300-million sounds like a lot (and is to most folks), but is chump change to what the feds spend daily (i.e., $8.17-bn). It represents less than 0.4% of daily outlays; which, when put in context, is far from the calamity J. Jay makes of it. J. Jay has no problem spending $18-trillion of your dollars ($49.7-tn/day), but agonizes over $300-million. Please, someone give him mouth-to-mouth resuscitation!! What! No volunteers? I have yet to see an accounting of the actual cost (including savings from waste and other benefits) from the shutdown, so must suspend judgment until better information is forthcoming (but don’t hold your breath). Unless you are part of the pig (or a crony-capitalist subsidiary), it is unlikely you felt any pain from this shutdown whatsoever – or relieve from federal intrusion. This makes the catastrophic caterwaul of Democrats (like J. Jay) so much hype with which to stampede the unwary. Even welfare recipients were shielded from the effects of this shutdown, because most of the real money is dispensed at the state level; and their collective pig-troughs were unaffected.

    Rather than worrying over political ‘damage to the President’ (a hazard every President must deal with), J. Jay should be more concerned with damage regularly inflicted by his Party on ordinary taxpayers: taxpayers who are the backbone of the country and source of those very funds (taxes) whose pilferage he (in almost the same breath) staunchly defends; and precisely those (us) he vilifies as ‘anti-taxpayer’. He acts as though the Tea Party were a true political party rather than a grassroots taxpayer-resistance movement composed of people he pretends to protect; even as he denounces their (our) opposition to being fleeced. Thus his argument reduces to: Taxpayers act against their (our) own best interest by opposing federal plundering of our earnings and savings to be spent on someone else or squandered on projects incapable of attracting private investment. Can anything he says be more preposterous than this?

    If, indeed, the shutdown costs ever so slightly more than spending as usual, but is the only recourse left us with which to reign in extravagant government, then of course we must hazard the short-term cost as weighed against a long-term benefit. Money saved on wasteful government and dysfunctional social programs is money that can pay down our debt far more rapidly than any shutdown increases it. Of course, at no time was debt-servicing halted (or threatened by the shutdown, so even that canard of J. Jay’s collapses.

    examples of DOJ targeting: http://www.capstoneadvisorygroup.com/news/95 ; http://thehill.com/blogs/floor-action/senate/280109-gop-senators-ask-doj-to-explain-targeting-of-oil-and-gas-companies-over-bird-deaths ; http://news.cnet.com/8301-13578_3-57412861-38/doj-is-likely-to-lose-e-book-antitrust-suit-targeting-apple/ ; http://online.wsj.com/news/articles/SB10001424127887323838204578654411043000772
    Posted by .(JavaScript must be enabled to view this email address)  on  10/19  at  09:54 AM
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