Saturday, February 7, 2009

The Senate Stimulus Bill, Newport Beach, and all America stands for

I am not the type of person to mope around very long. I believe I have a pretty resilient spirit, and I am a deep believer that the only long term realism is optimism. I can not recall a time that very bad news personally, professionally, or ideologically has kept me down for more than a short while. I confess that since the inauguration of this new President, a tidal wave of reality has hit me that has tested my long-term optimistic resolve. Thankfully, I am a person of faith.

No President in the last one hundred years has had a more disastrous first two weeks than President Obama. The massive amount of centrist voters who voted for him have had their hopes for a Clintonian pragmatism shattered in a matter of days. "Change" has proven to be an entire cabinet of tax evaders and scandal-ridden creeps, or in the better case, Clinton administration re-treads. Bipartisanship has meant a 100%/100% divide on his very first piece of legislation ever submitted (every Democrat voting affirmatively, and every Republican voting negatively). In fairness, Obama does not deserve to be associated (that we know of) with this debacle in the Illinois gubernatorial matter, but it is not at all what he wanted to see happen in his first month as the President-elect. The whole country seems to be feeling the vibe that this man is not quite done campaigning, and nothing seems to bother the American electorate more than people in office who feel the need to eternally campaign. It is a necessary evil, as far as us Americans are concerned, when running for office, but when one governs and speaks in office as Obama has the last two weeks, the reality kicks in that some people are better at sales than management. I have seen even some of my own friends "sold" by this guy, and I think they are about to start the slow, humble crawl back to principle.

The truth is, I am not nearly as worried about Barack Obama as I am the state of the American dream. There is no person in America who is currently more loathed and discriminated against than the "wealthy". When George McGovern was decimated in the 1972 election after running a perversely populist and class envy-driven campaign he famously said, "Our pollsters knew how many people in America were not rich. They just apparently did not know how many people in America wanted to be rich."

The quotes below were delivered by our President and Vice President in recent weeks, describing their perspective on class struggle in America.

"Over the course of America's last economic expansion, the middle class participated in very few of the benefits. But now in the midst of this historic economic downturn, the middle class sure is participating in all of the pain. Something is seriously wrong when the economic engine of this nation -- the great middle class -- is treated this way."

"The things that affect people's daily lives. I will be the guy honchoing that policy ... There is a great divide in this country between the rich and the middle class. The affluent have their social lives, their mansions, their millions and their prosperous friends. The wealthy prance around like they are better than the rest of us. The wealthy have connections that get them what they need. We see the rich using their connections to receive at no cost, what the rest of America has to buy with their own hard earned dollars."

I wish that this was just rank political rhetoric, because at least then I could take the familiar position of having no respect for a politician because they lacked principle and integrity. Unfortunately, there is a chance these guys actually mean this nonsense, and as far as I am concerned, the utterly false and libelous notions shared above represent the death of the American experiment. It is imperative that we take our stand, now.

The issue of executive compensation will end up being a defining moment in our country's history. TARP has teed up the greatest opportunity for wealth-distributors the Democrats ever could have dreamed for. The very definition of naivete is one who believes that the steps taken by the Obama administration this week represent the end of this discussion. We are just getting started. I actually stated the other night that I wonder if the economic conservatives in this country are now having their "Roe v. Wade moment", a reference to the awakening that took place in social conservatives in 1973 after the passing of that insidious law. This is not a TARP issue at all, for if it were, why did Claire McCaskill, who I would now rather see thrown out of office than any Senator in this country, state that all employees of these companies should be capped at total compensation of $400,000, because no one "deserves to make more than the President" (except for the President, apparently, who made $1.7 million in 2006). Why did Barney Frank just say yesterday that these limits ought to be applied to non-TARP companies as well? Why has the government told firms like Goldman Sachs, Morgan Stanley, and JP Morgan, that they can not pay back the TARP funds that they never asked for to begin with. Class warfare is alive and well, and this issue may seem palatable to people who hate Wall Street, and hate the rich. Their egregious violation of the 10th commandment notwithstanding, do people not understand what the broad effects of this mentality are going to be? No one will be more decimated by this evil than churches and non-profit organizations who depend upon donor dollars (despite Barack Obama's $7,000 of charitable giving off of $1.7 million in income, the fact of the matter is that 80% of non-profit giving comes from the evil wealthy; only Al Gore and Barack Obama sit in their limousines and plot the destruction of other rich people's futures).

I have no interest in this article becoming an apologetic for the rich and elite. It goes without saying that I like the rich and elite, for the same reason that it goes without saying that you do too. Your paycheck has always come from someone presumably richer than you. The economic system you function within has always worked off of people taking risks and investing capital and labor into endeavors that create wealth. This is basic economics, but it is also America. Any and all discussions right now of the need for charity and public assistance are unhelpful, as long as we affirm that assistance for those in need is better addressed by strategies that acknowledge the dignity of human beings, and disavow the theft and inefficiency of wealth redistribution. What we are becoming is a country that's DNA is being re-programmed, and this is more evident in our rhetoric about successful people than any other area I can think of.

The stimulus package the Senate will vote on (and barely pass) next week is a travesty. It is a pork-laden fiasco, and a blatant contradiction of nearly all economic wisdom we collectively developed over the last 80 years. Not even Lord Keynes himself would approve of this debacle.

There is more money (cash) on the sidelines than any time in world history. There is absolutely no reason for government spending to "stimulate" anything. All they have to do is set policies in place that will motivate companies to "stimulate" their own balance sheets. A variety of tax credits will do exactly that. Technology credits. R&D credits. Energy credits. Labor incentives. I pray my readers can understand how counter-intuitive what present policy is to actual effective action - government is incapable of optimally allocating capital, by definition. Not only are markets the best arbiter of how to allocate capital, they are presently in a position to do so very, very well. This cash on corporate balance sheets will "stimulate" economic growth beyond our wildest dreams with the proper balance of pro-growth policies (credits, tax cuts, incentives, etc.). I could get into extensive detail of what policy measures would bring about positive effects in the short term, and the long term, but it would distract from the point of this writing. No sane person believes that the government is in a better position to allocate capital than the free market (yes, I do believe Robert Reich and Paul Krugman ought to be considered insane).

The government is in a position to do a few things better than the private sector, and those things are: (a) Re-allocate capital along the lines that are most effective for political and special interest purposes; (b) Place the current generation and future generations in unfathomable amounts of debt; and (c) Redistribute the wealth that has been created by the most productive people in society to less productive people, thereby creating incredible moral hazard, and de-motivating wealth creators from future productivity.

So, I ask you, what exactly are we hoping Uncle Sam is going to accomplish with this bill? The ideological divide is spreading, and the present administration is cognizant of this horrifying fact. We are at a tipping point. The DNA of our country is on the line, and I mean that as much as I have ever meant anything I have written.

Despite everything, I am a long term optimist. I believe God has smiled upon this country. What I am pleading with my readers for now is to stand taller than ever against the horrid onslaught of socialist legislation and rhetoric you are inundated with on a daily basis these days. The idea of a center-left politician being President who passed NAFTA, cut capital gain taxes, and instituted massive welfare reform (read: Bill Clinton), are over. This man is no Bill Clinton. Obama will be gone in 4 or 8 years, but for the sake of your children and grandchildren, we have to make sure this politics of envy and theft go with him. In this turning point of our country - stand tall for freedom, prosperity, and morality. I have no intention of letting this issue go. I hope you will join me. It is time to bring to fight to them.

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