Bailout Economics: The Politics of Self Destruction

This article, written by Alex Merk, takes the American perspective of Government bailouts. Given that Gordon Brown has gone down the same road, this piece also reflects the situation of the UK as well.

Bailout Economics

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Was Gordon Successful?

One of the questions of the day is “was Gordon Brown`s trip to the US a success”? As expected all of the papers are weighing in on this question today now that Prime Minister Brown has come back across the Atlantic. As far as the US media is concerned, they didn’t seem to see Brown`s trip as a momentous event – a coming together of the Titians! According to the BBC, the American media were more interested in looking at how the UK press were analysing the event rather than the proceedings themselves. Despite Obama`s current orgy of big government and record spending, he showed very little interest in Brown`s new pet project – the Global New Deal. Obama said the right things but not show the fire and enthusiasm that the world has come to expect from this man. I think even Obama realises that there is little desire from within the US to push the idea of Brown`s Global New Deal. The US economy still continues to decline and unemployment is rapidly rising – almost 700 000 unemployed in Feb. The American public are growing increasing angry with what`s going on in Washington and Obama will have his hands full with these domestic matters in the coming months. Gordon Brown left the US last night bound for London - with 17 standing ovations from the US Congress in his back pocket. When history judges this event (or should I say non-event) I don’t think it will have provided Brown with the bounce he had so desperately hoped for. Much adieu about nothing Gordon!

Obama Lied

Great article in today`s Washington Times by Tony Blankley

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BLANKLEY: Obama lied; the economy died

Big government is really his bag, but he doesn't own up to it

http://www.washingtontimes.com/news/2009/mar/03/obama-lied-the-economy-died/

I am trying to capture the spirit of bipartisanship as practiced by the Democratic Party over the last eight years. Thus, I have chosen as my lead, the proposition: Obama lied; the economy died. Obviously, I am borrowing this from the Democratic Party theme of 2003-08: "Bush lied, people died." There are, of course, two differences between the two slogans.

Most importantly, I chose to separate the two clauses with a semicolon rather than a comma because the rule of grammar is that a semicolon rather than a comma) should be used between closely related independent clauses not conjoined with a coordinating conjunction. In the age of Barack Obama, there is little more important than maintaining the integrity of our language - against the onslaught of Orwellian language abuse that is already a babbling brook, and will soon be a cataract of verbal deception.

The other difference is that George W. Bush didn't lie about weapons of mass destruction in Iraq. He was merely mistaken. Whereas President Obama told a whopper last week when he claimed he was not for bigger government. As he said Tuesday night: "As soon as I took office, I asked this Congress to send me a recovery plan by President's Day that would put people back to work and put money in their pockets. Not because I believe in bigger government - I don't."
This he asserted though the budget he proposed the next day asks for federal spending as 28 percent of gross domestic product (GDP), higher by at least 6 percent than any time since World War II. Moreover, after 10 years, Mr. Obama's proposed spending as a percentage of GDP would still be 22.6 percent, nearly 2 percentage points higher than any year during the Bush administration, despite the full costs of the terrorist attacks of Sept, 11, 2001, the Iraq and Afghan wars and the rebuilding of New Orleans after Hurricane Katrina.

Consider also his assertion in his not-quite-State of the Union address that:
"My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we're starting with the biggest lines. We have already identified $2 trillion in savings over the next decade."

But, lamentably, a few days later, The Washington Post reported: "A senior administration official acknowledged yesterday that the budget does not contain $2 trillion in spending cuts over the next decade. Instead, the figure represents Obama's total efforts at deficit reduction, including tax hikes [of more than $1 trillion] on families making over $250,000 a year. It also includes hundreds of billions of dollars 'saved' by not continuing to spend $170 billion a year in Iraq."

Only a big government man would think of calling a trillion-dollar tax increase a spending cut or "saving." Technically, of course, it is true. A trillion-dollar tax increase will reduce spending by a trillion dollars for those private citizens who were taxed. And, from the perspective of the federal government, a trillion dollars taxed is a trillion dollars saved from the greed of the taxpayers who produced the wealth - and might well want to spend or invest it in non governmental activities.

But the foregoing are merely pettifogging numbers compared to Mr. Obama's bigger ideas about energy and health care. Our president shares a fascinating idea about energy with most of what used to be known as the "small is beautiful" crowd. It is a curious phenomenon that one needs a very big government to enforce the beauty of small. As Mr. Obama's energy secretary, Steven Chu, said last year: The price of electricity in America is "anomalously low." You see how much smarter that Nobel prize winner is than you. You probably thought you were already spending enough on electricity and fuel.

And sure enough, Mr. Obama explained last week that in order to make alternative energy sources wind, solar - perhaps eventually human muscle power? - economically competitive, he intends to raise the price of carbon-based energy until it is so expensive that even solar power will be such-a-deal. This level of destructive irrationality cannot be accomplished in the private sector. It will take a very big government indeed to bring such inanities into being. (disclosure: being rational, I give professional advice to carbon-based energy producers.)
If President Obama were to try to misrepresent his positions for the next four years, there would be nothing he could say that would approach the inaccuracy of his claim last week that he is not for big government. It is the essence of the man and his presidency. He doesn't like America the way it has been since its founding - and it will take an abusively big government to realize his dreams of converting America into something quite different. If you don't know that, you don't yet know Barack Obama.

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Tony Blankley is the author of "American Grit: What It Will Take To Survive and Win in the 21st Century" and vice president of the Edelman public-relations firm in Washington

Copyright 2009 The Washington Times, LLC