It is fascinating to me to listen to the GOP representatives complain about the spending portion of the Obama stimulus plan. It is as if the past eight years have been erased from their collective memory banks. The last eight years just vanished. I am not going to accuse them of hypocrisy or political gamesmanship, since those charges are just too easy to make. I am not even going to say that the GOP representatives are simply slavishly following the order of Rush to sabotage the Obama administration.
No, I am just stating a fact that the GOP politicians have been born again and have re-discovered fiscal conservatism. Praise the Lord. And I am not being cynical when I point out that their new found fiscal responsibility and opposition to spending, even spending needed to prevent the nation from sliding into a depression, has occurred only after losing power. I would just be making a point when I say that the GOP during W's reign seemed to enjoy spending Chinese money as much as the Democrats and the nation's debt did grow from 5.7 trillion to 10.6 trillion under W's watch. CBS News This can be calculated with data from the treasury department. Debt to the Penny (Daily History Search Application)And that is not tagging W with the entire 1+trillion dollar deficit before the stimulus spending that is already baked in the cake for the government's fiscal 2009 year.
So it is not difficult to understand how the party, that has forgotten about Hoover, would soon similarly erase the last eight years from their collective memory. I am curious when -if ever- they will engage in even the slightest course correction in their standard dogma to account for facts. Bob Herbert and Frank Rich have had some interesting observations on this subject. NYTimes.com Occasionally, a political party has to re-evaluate its dogma. The Democrats did it when they started to advocate tax cuts for most Americans, taking a page out of the Reagan play book, and to make changes in their approach to some social programs like welfare. (And, it is very hard for a Democrat to accept that billions spent on a social program may not be accomplishing much and possibly may even be causing more harm than good.) It is also my understanding that it was the GOP that abandoned the pay go rules. At some point, when the GOP heads deeper into minority territory, when it looks like losing less seats in Congress is a victory of sorts, there may be a re-examination of some of their standard dogmas. One that I would suggest is to figure out how government spending could be transformational and where it could actually help to facilitate growth over the long term. In a deep recession, government is the only entity actually capable and/or willing to increase spending to fill the gap in demand left by consumers and businesses hunkering down. Possibly, at some point in the distant future, the GOP will evolve, to be not only the party of restraint but also a party capable of forming intelligent decisions on where to direct federal spending to accelerate growth and opportunity for the nation's future. Banks: Forget About Long Term Holds/Simulus as Transformational/More Discussion on Black Swan and Taleb's book/Bankruptcy of Ideas in the GOP The current GOP is simply incapable of thinking along those lines.
There are those in the GOP who say that they lost the last election because the party abandoned fiscal conservatism. While the charge of losing their fiscally conservative beliefs when in power is certainly a fair and accurate assessment, and does make one wonder just how heart felt those beliefs actually were, it had nothing to do with the victories the Democrats enjoyed during the last election. The GOP now fears that the Obama administration might actually pull the nation out of the current mini-depression and that explains their new found opposition to government spending. But the reason the GOP lost the Presidency and seats in Congress in 2008 had to do with the widespread belief that the GOP is simply incapable of dealing with the current crisis. They were incapable of doing it in 1932 and nothing has changed in the intervening years. Sure, not everyone agrees with that point, but enough people do accept it to change their vote from Republican to Democrat. When the GOP lost states like Indiana, Virginia and North Carolina, you would think that there would be a serious re-evaluation of their standard dogmas. Instead, they are simply regurgitating the same spiel to an audience that has grown far less receptive to even listening to it. They have after all convinced millions that they support meaningful tax cuts for the middle class and are not simply furthering the gap between the rich and everyone else with their tax policies. If they want to be Rush Limbaugh's party of angry white men, with certain obvious biases and prejudices, as well as the assorted zealots which they have learned to manipulate with ease, then so be it. Possibly a new party will come along to act as an intelligent counter-weight to what may be end up being a resurgent Democrat majority for years to come. Hoping that Obama will fail does not sound like a game plan to me.
Achieving better results with less money needs to be the central goal and objective of federal spending. The Democrat response will be to throw money at any issue, irrespective of the results actually achieved or the costs. An example in the recent stimulus bill is the increased money allocated to Head Start by the House Democrats. The article by a scholar at the the conservative think tank, the American Enterprise Institute, in the Sunday NYT illustrates one of my problems with Democrat Party. NYTimes.comThe House stimulus bill throws 2.1 billion more at the Head Start Program with no strings attached. The advocates for this program convinced Congress to eliminate in 2007 the National Reporting System that collected data about how well each Head Start center was doing in furthering the programs objectives. Why? The Clinton adminstration had done a comprehensive evaluation of 483 centers and found that little headway was being made by them according to this article. There was little meaningful difference between those children in the program, in their ability to read or identify letters in the alphabet, and those children who were not part of Head Start. Some centers did very well whereas others performed poorly. Rather than trying to find out why some centers succeeded and others failed, the Congress just suspended the reporting of performance information in 2007. Keeping a child in Head Start for a year costs $22,600 according to the authors of this opinion article. Why would anyone spend 2.1 billion more money without first trying to determine the reasons for differences in performance among the Head Start Centers? The authors have a good point but it is not the kind of point that will persuade Democrats to change course in a way that would make this kind of program more productive for less money. It would be fair to say that the more favorable studies on the effectiveness of the Head Start program are not mentioned by the authors of this article so their bias is tilted to proving a point or worldview that they probably already held even before looking at any data on Head Start in their careers. Some of the mixed and favorable studies are discussed in this link: Head Start - Wikipedia, the free encyclopedia
My problem is the that most of these social programs that are worthy could be made more effective with less money if that was the objective. But that is not the Democrats' objective. Their objective is simply to appropriate a lot more money with no criteria for improving results when the Democrats have the power to do so.
I would agree with anyone making the statement that Ken Lewis was blinded to the risks of acquiring Merrill Lynch by what I would his most dominant personality characteristic, a desire to build an empire. For Bank of America and Merrill Lynch, Love Was Blind - NYTimes.com The bank had no need to acquire Merrill unless it was doing so with a huge federal cushion at the outset. I do not understand why the authors of that article would say that Lewis' legacy "may" be in doubt. How would you have a positive legacy after doing 120 billion in deals since becoming CEO and at the end of that process the bank is worth less than 30 billion and has virtually no dividend? Ken Lewis Made 120 billion in Acquisitions since 2001 and BAC is Worth 28 billion: Good or Bad?/GE & FII results/More on WFR/No on Geithner His legacy is already written in stone.
I frequently read articles where the author has ignored the overwhelming weight of the evidence and simply concentrates on a few facts that fits and confirms, as opposed to challenges, their pre-existing worldview. There are those who blame Congress for requiring Fannie and Freddie to buy subprime mortgages and the Community Reinvestment Act as the sources of the current credit crisis. This talking point of Rush Limbaugh and Ann Coulter finds its way into the news media as some kind of urban legend, and the most recent example is an article by Scott Powell, who is clearly a biased partisan in this week's Barron's. The Culprit Is All of Us - Barrons.com
The general thesis is to blame the Democrats, who were not in power, and regulations oddly enough, rather than the relaxation or elimination of regulations, for the credit mess. Seeing revisionist history written in real time is always interesting and it does succeed in fooling people susceptible and pre-disposed to accepting this chain of reasoning. I have discussed this issue as it was expressed by Powell's fellow travelers, Rush and Ann, in several earlier posts. I am linking some of them along with other points that highlight the simplistic opinions of those who wish to blame the poor and minorities for this crisis.
It is impossible to have an intelligent conversation with anyone who ignores the vast bulk and weight of the evidence simply because it is inconsistent with a cherished worldview. Instead, they will always pick and choose whatever information confirms their previously held beliefs and ignore everything that does not fit into their closed loop of a brain.
A front page story in the Sunday NYT about the housing crisis in Fort Myers, Florida is indicative of the scope and complexity of the problems. In Florida, Despair and Foreclosures - NYTimes.com
First, you have the growing unemployment among middle class families that leads to more foreclosures with unemployment in the county rising to almost 10% from 3.5% in March 2007.
Second, the median home price rose to $322,300 in 12/2005 and has since fallen to $106,900.
Third, first mortgages and home equity loans were taken out on the inflated values of the homes during the housing bubble caused in large part by easy credit conditions and abnormally low interest rates under Greenspan. That is just a toxic mix of problems. In just the past two years, 100 homes were seized in a housing development called Lehigh Acres where marijuana was being grown and apparently marijuana growing is the only growing part of the local economy.
Maybe Andrew Tobias needs to write a self-help book for the financial wizards on how to get by on a mere $500,000 a year. Just look at their problems, a nanny costs 45 grand, co-op maintenance fees 96 thousand, private school for one youngster 32 thou, and so on. NYTimes.com Maybe the answer is to move the financial capital of the U.S. to Nashville where they could get by very well on just $100,000.