The Economy: 2008 Archives

Massachusetts sends an all-Democratic team to Congress and they are powerful. Some even revel in their power. As in 2008.

For example, Cape Cod's own Congressman Willam Delahunt took pleasure in outing a government security official so al-Qaeda could get a good look at him. We can be sure his family didn't enjoy the Congressman's joke. He earned a place in our Hall of Shame.

Then there is the powerful and shameless rolled into one. Congressman Barney Frank did more than any other U.S. public official in bringing about the worldwide financial crisis. He was among those who pressed the Clinton Administration to loosen up mortgage lending standards so that mortgage lenders would be required to make loans to uncreditworthy borrowers. Then, to give nervous banks and other mortgage lenders somewhere to offload those risky loans, he (along with Senator Chris Dodd of Connecticut) badgered the Democrats running Fannie Mae and Freddie Mac (the latter run by another Massachusetts boy) to buy those risky loans, package them up and sell them around the world as securities backed by the U.S. government. A concerned Bush Administration and Senate Republicans tried to bring Fannie Mae and Freddie Mac under control, but Barney Frank was there, 2003-2006, blocking those efforts, saying everything was fine and no changes were neeeded. When the subprime mortgage defaults started and exploded into an unraveling of the world financial system, there was Barney Frank blaming Wall Street. Shameless.

Chicago Democrats are also powerful, but their speciality is racial politics, payoffs and corruption. The Chicago Democratic machine put its candidate for president forward, hid his problematic past with a fictionalized biography, counted (correctly) on reverse racism to elect him and raised hundreds of millions of dollars illegally online to propel him into the White House. All of those unsavory buddies, Wright, Pfleger, Rezko, Ayers, Dohrn, Khalidi, Farrakhan, were shoved offstage with the media's acquiesence. Then the Mayor Daley spinmaster and Obama campaign orchestrator David Axelrod and Chicago Congressman and Obama's choice for White House chief of staff Rahm Emanuel thought Democratic governor Blagojevich should name an Obama pick to Obama's Senate seat, all of which has now blown up into the "Senate Seat for Sale" scandal caught on tape by federal agents. The Chicago Three will now run the country from the White House, no doubt drawing on all the expertise accumulated by the Chicago Democratic machine over decades.

The biggest story of 2008 really was the turnaround in Iraq, which, as soon as it became obvious it was to be a success, disappeared from media top news. Replacing a terrrorist-supporting tyrant in the Middle East with a democratically-elected government that is an ally in the war against violent Islam is a tremendous accomplishment for which President Bush and General Petraeus will not get credit from the Democrats who opposed and ridiculed them. Or from their collaborating media.

Victor Davis Hanson reviews the year (but without the Massachusetts side notes) and calls it "A Year Like None Other." He sees three decades rolled into 2008, the Roaring 20s, the "bleak" 1930s and the Sixties. See if you agree.

Continue reading "2008 WAS A GOOD YEAR FOR THE MILITARY, NOT FOR THE POLS"

White Mark Steyn give us a few chuckles as he sees the U.S. on the road to totalitarian socialism, Peter Schiff sees the result of all this government intervention and bailouts with printing press money as soaring inflation and a stifled economy. Schiff doesn't use the term, but the message is there: There's no such thing as a free lunch.

After years of overspending and expansion of debt, a correction is coming due. It's called a recession.

The good news is that economics is not all that complicated. The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Schiff's good sense is worth reading.

There's No Pain-Free Cure for Recession

Belt-tightening is required by all, including government.

By PETER SCHIFF
December 27, Wall Street Jounal Opinion

As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.

With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.

Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.

Individuals, companies or cities with heavy debt and shrinking revenues instinctively know that they must reduce spending, tighten their belts, pay down debt and live within their means. But it is axiomatic in Keynesianism that national governments can create and sustain economic activity by injecting printed money into the financial system. In their view, absent the stimuli of the New Deal and World War II, the Depression would never have ended.

On a gut level, we have a hard time with this concept. There is a vague sense of smoke and mirrors, of something being magically created out of nothing. But economics, we are told, is complicated.

It would be irresponsible in the extreme for an individual to forestall a personal recession by taking out newer, bigger loans when the old loans can't be repaid. However, this is precisely what we are planning on a national level.

I believe these ideas hold sway largely because they promise happy, pain-free solutions. They are the economic equivalent of miracle weight-loss programs that require no dieting or exercise. The theories permit economists to claim mystic wisdom, governments to pretend that they have the power to dispel hardship with the whir of a printing press, and voters to believe that they can have recovery without sacrifice.

As a follower of the Austrian School of economics I believe that market forces apply equally to people and nations. The problems we face collectively are no different from those we face individually. Belt tightening is required by all, including government.

Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.

Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector. And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Inefficiency lowers productivity, stifles competitiveness and lowers living standards.

If we look at government market interventions through this pragmatic lens, what can we expect from the coming avalanche of federal activism?

By borrowing more than it can ever pay back, the government will guarantee higher inflation for years to come, thereby diminishing the value of all that Americans have saved and acquired. For now the inflationary tide is being held back by the countervailing pressures of bursting asset bubbles in real estate and stocks, forced liquidations in commodities, and troubled retailers slashing prices to unload excess inventory. But when the dust settles, trillions of new dollars will remain, chasing a diminished supply of goods. We will be left with 1970s-style stagflation, only with a much sharper contraction and significantly higher inflation.

The good news is that economics is not all that complicated. The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Mr. Schiff is president of Euro Pacific Capital and author of "The Little Book of Bull Moves in Bear Markets" (Wiley, 2008)

The president-elect says he wants to "jolt" the economy. Metaphor aside, will it do any good?

Professor Thomas Sowell sees the frenzy whipped up by the media as a wonderful opportunity for politicians to spend money on their favorite groups which they will take away from those who have earned it. Could that be?

What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them . . . .

No doubt we could all use a few billion dollars every now and then. But the question of who actually gets it will be strictly in the hands of Barack Obama, Nancy Pelosi and Harry Reid. It is one of the few parts of the legacy of the Bush administration that the Democrats are not likely to criticize.

Professor Sowell's timely warning is of what looks like a good imitation of totalitarian socialism. But who can stop them?

Read "Jolting" the Economy

The "Don't Drill Democrats" now have a "Don't Drill President-Elect" who is already examining Presidential Executive Orders with a view to shrinking, not expanding, drilling. And Democrats have vowed to reinstitute drilling prohibitions that expired on October 1 to prevent off-shore and other new drilling.

Meanwhile, our sensible neighbor to the south Brazil is having fantastic success in its off-shore drilling. A new report from the Financial Times (subscription may be required) indicates the new finds may lift Brazil's reserves from about 14 billion barrels (the U.S. figure is 22 billion barrels) to over 100 billion barrels, putting it about equal to Kuwait, ahead of Russia and only trailing Saudi Arabia. Canada is ahead of the U.S. and is growing its reserves as it continues exploration. (Add in Rocky Mountains shale potential oil reserves, also a Democratic blockage target, and the U.S. could be far ahead of all countries, including Saudia Arabia.)

The U.S. is the only major oil producing country that is denying itself access to its oil and gas resources. As a consequence, high oil and gasoline prices will be inflicted on the American people unnecessarily. Insofar as environmental concerns are argued as reasons for not drilling, they are bogus. American companies are the most technologically advanced and the most environmentally sensitive in their drilling operations. Drilling will go on all over the world, since oil will continue to be the most important energy fuel for many years, probably decades, to come.

So not only much higher taxes will be coming from the Obama administration but also high prices for energy, both of which will be a drag on the economy.

But Saudi Arabia will be grateful to the Obama administration.

Continue reading "U.S. WON'T DRILL, BRAZIL FINDING OIL BONANZA OFFSHORE"

Father- Daughter Talk…

A young woman was about to finish her first year of college. Like so many others her age, she considered herself to be a very liberal Democrat, and was very much in favor of 'the redistribution of wealth concept touted by the Obama campaign. She was deeply ashamed that her father was a rather staunch Republican, a feeling she openly expressed. She felt that her father had for years harbored an evil, selfish desire to keep what he thought should be his.

One day she was challenging her father on his opposition to higher taxes on the rich and the addition of more government welfare programs. He responded by asking how she was doing in school. Taken aback, she answered rather haughtily that she had a 4.0 GPA, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew.

Her father listened and then asked, 'How is your friend Audrey doing?'
She replied, 'Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. She is so popular and lots of times she doesn't even show up for classes because she's too hung over.'

Her wise father asked his daughter, 'Why don't you go to the Dean's office and ask him to deduct a 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA and certainly that would be a fair and equal distribution of GPA.'
The daughter, visibly shocked by her father's suggestion, angrily fired back, 'That wouldn't be fair! I have worked really hard for my grades! I've invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!'

The father slowly smiled, winked and said gently, 'Welcome to the Republican Party!"

In efforts to make the U.S. energy independent of overseas hostile and unstable suppliers, coal will play a big part. As is often said, the U.S. is the "Saudi Arabia of coal," since the U.S. has the largest reserves of coal in the world. As drilling offshore proceeds (unless Democrats block that again) and other alternatives become commercially viable, coal is the rock solid base on which energy independence will be built. More coal is used to generate electricity in this country than any other power source and that is not likely to change soon. Developing nuclear power plants will no doubt replace some coal-fired power plants, but they won't be active for a decade or longer. Natural gas is a cleaner fuel for power plants, but availability is constrained by pipeline capacity. And, of course, there are urgent research projects underway on clean coal technology. Why not use what the U.S. has the most of, particularly since there are established companies employing thousands of Americans?

Yet Obama has promised he will drive those companies out of business, putting those workers out a job. Once again, the media has neglected or deliberately refused to do its job in exposing the real Obama and his intentions. Listen to this audio from January of this year:

This is another example of Obama's extremist ideology driving him, in this case without regard of the consequences to energy independence, the cost of electricity, national priorities and the jobs of working Americans. Some 80,000 have jobs in the coal industry, with 25% of them in West Virginia.

And in that same interview, Obama also promised that "[u]nder my plan of a cap and trade system, electricity rates would necessarily skyrocket." So much for the working family trying to make ends meet.

Update: Mike Carey, President of the Ohio Coal Association, issued this statement:

Regardless of the timing or method of the release of these remarks, the message from the Democratic candidate for President could not be clearer: the Obama-Biden ticket spells disaster for America's coal industry and the tens of thousands of Americans who work in it.

These undisputed, audio-taped remarks, which include comments from Senator Obama like 'I haven't been some coal booster' and 'if they want to build [coal plants], they can, but it will bankrupt them' are extraordinarily misguided.

It's evident that this campaign has been pandering in states like Ohio,Virginia, West Virginia,Indiana and Pennsylvania to attempt to generate votes from coal supporters, while keeping his true agenda hidden from the state's voters.

Senator Obama has revealed himself to be nothing more than a short-sighted, inexperienced politician willing to say anything to get a vote. But today, the nation's coal industry and those who support it have a better understanding of his true mission, to 'bankrupt' our industry, put tens of thousands out of work and cause unprecedented increases in electricity prices.

In addition to providing an affordable, reliable source of low-cost electricity, domestic coal holds the key to our nation's long-term energy security - a goal that cannot be overlooked during this time of international instability and economic uncertainty.

Few policy areas are more important to our economic future than energy issues. As voters head to the polls tomorrow, it is essential they remember that access to reliable, affordable, domestic energy supplies is essential to economic growth and stability.

Does the Obama tax plan work? Will it just be those rich making $250,000 or more who will bear the burden? And will those rich only see their marginal tax rate go to 39% from 35%?

The answers to these three questions are No, No and No. And, as for the new Obama marginal rate, it will be 93%, not 39%.

See why.

It's a plan to destroy a productive economy. Taking from the productive to spread the wealth to those who don't pay taxes sounds great, very European really, but it's a recipe for economic disaster.

As has been pointed out, taxes on the top 10% of households are higher in the U.S. than in any other developed nation, including socialist exemplar Sweden. And Obama intends to make them higher yet (even higher than he says, as the linked article shows.)

You don't want to be depressed, but it's instructive to watch this video. One can question the future of democracy. The folks at Power Line have made a very good point.

The top 10% of American earners pay a higher percentage of taxes than in any other developed country in the world, including the usual example of extreme socialist Sweden. And Obama is going to stick it to that 10% even more so he can spread the wealth to those he thinks "deserve it." And those who "deserve it," like the starstruck lady in this video, are delerious about not having anymore to pay for their mortgage or their gas.

It's shocking that Obama has been able to hide his true aims until just a few days before the election. Joe the Plumber inadvertently exposed the truth with his question to Obama about higher taxes on small businesses: Obama blurted out that he wants to "spread the wealth."

Now a more shocking disclosure comes in the form of a 2001 radio interview in Chicago (found by an individual, not the media) in which Obama expresses his dismay with the U.S. Constitution's limits on governmental power and his desire for judges who will "interpret" away the "essential constraints" incorporated into the U.S. Constitution by the founders so the government can redistribute the income and savings of some people to others. The judges he wants are those with "the empathy to understand what it’s like to be poor, or African-American, or gay, or disabled, or old." How about respect for the facts, the law and the Constitution? Obama wants more than just socialism, he wants totalitarian socialism, an all-powerful government to take from those with means to give to those with needs. That kind of unrestrained power the Constitution is designed to prevent.

As is often the case the brilliant lawyer John Hinderaker of Power Line puts the cards on the table so they can be clearly read.

It is extraordinary that only now, a week before Election Day, have Barack Obama's beliefs and policies come into focus. After months of "hope," "change" and "I'm not George Bush," the truth has finally tumbled out: Barack Obama wants to redistribute America's wealth, raise taxes on those who create jobs, create vast new handout programs styled as "tax relief," and appoint judges who will radically redefine the relationship between American citizens and their government.

This last point is especially remarkable. The Founders feared arbitrary government power, and drafted a Constitution and amendments intended to protect your property from expropriation. Obama would stand this constitutional framework on its head by appointing judges who believe that the Founders were wrong, and their "error" can be corrected by court decisions to the effect that the federal government has a constitutional duty to carry out a radical redistribution of wealth.

Hinderaker quotes some points McCain made today that show the sharp contrasts between his policies and Obama's, such as this one:

Senator Obama is running to be Redistributionist in Chief. I'm running to be Commander in Chief. Senator Obama is running to spread the wealth. I'm running to create more wealth. Senator Obama is running to punish the successful. I'm running to make everyone successful.

Read all of John's post and more McCain quotes by clicking on the link above or here.

As for the disasters that would flow from Obama' judicial appointments, click here to read Professor Thomas Sowell's critique.

Sarah Palin campaigning in Colorado says Joe the Plumber got it right.

And, you know, I’ve really got to hand it to Joe over there in Toledo. Somehow, he got our opponent to finally state his intentions in plain language. And if you ask me, that makes Joe the winner of last week’s debate. Senator Obama said he wants to “spread the wealth.” He wants the government to take your money and dole it out however politicians see fit.

Barack Obama calls it “spreading the wealth.” Joe Biden calls it “patriotic.” But Joe the Plumber said it sounded to him like “socialism” … and now is no time to experiment with that!

Joe the plumber exposes Obama's plan to take tax money from you and give it to those 30-40% who don't pay any tax at all. "Spread the wealth" is how he describes using you as his piggy bank for his new federal welfare plan.

Free trade came up in the McCain/Obama debate Wednesday night. Stephen Spruiell argues this important matter does not get the attention it deserves. It is incredible that Obama and the Democratic Congress have refused to approve the free trade agreement with Colombia, our closest ally in Latin America. McCain said it was an unconscionable position. Obama claimed Colombia was killing union officials. Not true. Obama follows the line of the unions that all free trade agreements are bad in defiance of all evidence and the near universal statements of economists.

Obama opposes the Colombia deal because organized labor opposes it, and his fealty to the AFL-CIO on that and every other issue should be causing more concern than it is. Whether workers will retain the right to a secret ballot in union elections is a question that the next president will almost certainly decide, and Obama has already come out in favor of taking that right away.

Americans are on the verge of electing the most anti-trade, pro-union candidate of the last three decades, but these issues have received scant attention compared to Obama’s tax plan. Obama’s redistributionist approach to taxes is important to highlight, but his protectionism is also a form of redistribution: It would force consumers to pay higher prices for certain goods in order to benefit favored domestic industries. Joe the Plumber was the star of Wednesday night’s debate, but tax policy is not the only way Barack Obama seeks to “spread the wealth.”

We reported in July on Democratic Speaker of the House Pelosi twisting House rules to prevent a required up-or-down vote on the Colombia free trade agreement from taking place. Michael Barone termed her action the most shameful act of the current Congress. It remains so, for Pelosi, the Democratic Congress and Obama.

HIstory has shown that protectionism is a recipe for disaster. Even the Democrat economist Paul Krugman in his sane days said, "A country serves its own interests by pursuing free trade regardless of what other countries may do.”

Today's op-ed in the Wall Street Journal is another look into how the financial crisis the world is now experiencing could have been averted or at least have been much more limited in scope and far less damaging.

Key paragraphs:

The strategy of [Fannie Mae and Freddie Mac] presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.

In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent. [Unable to muster enough Democratic votes for a filibuster-proof majority, the Republicans failed in their effort to get the bill out of the Senate.]

If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.

Barney Frank from Massachusetts, Chairman of the House Financial Services Committee, was of critical importance in urging Fannie and Freddie into deeper and deeper risk filled waters. The two senators from Massachusetts Kerry and Kennedy were among those Democrats (including Barack Obama, number 2 on the Fannie/Freddie campaign contributions list) who failed to help the reform legislation pass the Senate and move to the House for possible favorable action and enactment.

OPINION SEPTEMBER 23, 2008

Blame Fannie Mae and Congress For the Credit Mess

By CHARLES W. CALOMIRIS and PETER J. WALLISON

Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves. Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.

Continue reading "DEMOCRATS IN CONGRESS URGED FANNIE, FREDDIE INTO RISK-FILLED WATERS; REJECTED WARNINGS OF DISASTER"

Warnings about the mushrooming problems being created by the unrestrained lending of Fannie Mae and Freddie Mac were delivered to Congress many times.

Here is a chronology.

The Administration's Unheeded Warnings About The Systemic Risk Posed By The GSEs

For many years, the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems. Many prominent Democrats, including House Financial Services Chairman Barney Frank, opposed any legislation correcting the risks posed by GSEs.

Continue reading "COUNTDOWN TO FANNIE MAE, FREDDIE MAC DISASTER"

Two different articles appeared over the weekend about how and why the current world financial crisis came about. We touched on this subject several days ago as well, dealing not only with the financial crisis but the self-imposed oil shortfall that is driving up prices of gasoline and heating oil and everything else for average Americans.)

It's simple: It all started with Fannie Mae and Freddie Mac and loose lending standards to promote home ownership among those who realistically couldn't afford it.

In 2004 and 2005 a major effort backed by President Bush began in the Senate to rein in the two super government sponsored agencies. A reform bill, S. 190, co-sponsored by three senators, including Senator McCain, appeared to be gaining momentum, but then was blocked by Democrats in both the Senate and the House. If that bill had become law, the terrible consequences being experienced today would not have happened.

Continue reading "TODAY'S FINANCIAL CRISIS: HOW DID IT HAPPEN? WHO SHOULD GO TO JAIL? "

What do you think will work for the American economy?

Ranking states by domestic migration, per-capita income growth and employment growth, ALEC found that from 1996 through 2006, Texas, Florida and Arizona were the three most successful states. Illinois, Ohio and Michigan were the three least successful.

Texas, Florida and Arizona are right-to-work states, while Michigan, Ohio and Illinois are not. Michigan, Ohio and Illinois impose significantly higher minimum wages than Texas, Florida and Arizona. Yet with all the proclaimed benefits of unionism and higher minimum wages, Texas, Florida and Arizona workers saw their real income grow more than twice as fast as workers in Michigan, Ohio and Illinois.

Obama will pattern the federal program after what has failed in Michigan, Ohio and Illinois.

Here's the real killer example:

Incredibly, the business climate in Michigan is now so unfavorable that it has overwhelmed the considerable comparative advantage in auto production that Michigan spent a century building up. No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry. Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.

Conclusion:

The states have already tested the McCain and Obama programs, and the results are clear. We now face a national choice to determine if everything that has failed the families of Michigan, Ohio and Illinois will be imposed on a grander scale across the nation. In an appropriate twist of fate, Michigan and Ohio, the two states that have suffered the most from the policies that Mr. Obama proposes, have it within their power not only to reverse their own misfortunes but to spare the nation from a similar fate.

The whole thing.

Continue reading "MCCAIN WILL GENERATE BETTER GROWTH. HERE'S WHY."

It's pretty sad when you have to read a British newspaper (or the Jerusalem Post) to get a fair view of the McCain/Palin ticket. But Gerard Baker, the U.S.correspondent for the Times of London, thankfully continues his objective commentary about the campaign that is now entering its final phase. (Excerpts follow.)

So here's why she matters.

First of all she offers an opportunity for an ailing Republican party to reconnect with ordinary Americans. She's conservative, but her conservatism is not that of the intolerant, uncomprehending white male sort that has so hurt the party in recent years. She is much closer to a model of the lives of ordinary Americans - working mother, plainspoken everywoman juggling home and office - than any Republican leader in memory.

(June 30, 2008, with her youngest, Trig, food shopping.)

The contrast with Mr Obama is especially powerful. The very fact that Mrs Palin didn't go to elite schools but succeeded nonetheless - the very ordinariness with which she so piquantly jabbed Mr Obama on Wednesday - is what will make her so appealing to Americans. And as a pro-life conservative she debunks in one swoop the enduring myth that all women subscribe to the obligatory nostrums of radical feminism.

But there's more to it than that.

The opportunity for McCain-Palin is not reaction, but reform - a reform rooted in a distant conservatism that could be due for a comeback.

Hailing from Arizona and Alaska, the Republican ticket has a chance to rekindle a western conservatism different from the old Yankee paternalist sort or the Bible Belt version. They like their guns out there (some still kill their own food) and they are pro-life and deeply pro-America, of course. But at a time of grave challenges, the themes of economic freedom and opportunity, the resistance to the idea that government holds all the answers, could resonate with voters.

This is an election, as the Democrats have realised all along, about an America on the cusp of change. With the moose-hunting, establishment-taunting Mrs Palin at his side, Mr McCain might represent a bigger change than the one that his opponents are offering.

John McCain has pledged to be on the side of the American people and to "shake up Washington," to attack the waste, the earmarks and the corruption while making certain America is prepared for whatever assaults may be launched against her. These two tough-minded mavericks can make it happen.

More...

Democrat Speaker of the House Pelosi seems to be reacting to the pressure by McCain and Congressional Democrats to drill now with the same slippery ploy that Obama used.

She is now open to consideration of offshore drilling as part of a larger energy package.

How cute. The 2007 energy bill took two years to put together and it was inadequate. Like Obama, she is trying to put off an up and down vote on drilling to provide relief to average Americans at the gas pump till after the election, indeed, until next year.

A simple up or down vote can eliminate the moratoriums on offshore, Rocky Mountains and ANWR drilling. Already, just the possibility of such a vote is contributing to oil prices coming down.

A great majority of Americans now say they want drilling now. McCain and the Congressional Republicans should keep the pressure up. Get an up and down vote on drilling now. If that doesn't work, don't let Pelosi-Obama-Reid try to sneak a renewal of the moratoriums through in an omnibus budget bill; any such bill should be voted down. Pelosi-Obama-Reid will be responsible for shutting down the government to avoid a vote Americans want.

Colombia has been battling drug dealers for decades. Under President Uribe, Colombia, a close ally of the United States, has made tremendous progress against FARC, the principal enemy of a safe Colombia. With the help of the United States, a spectacular undercover operation by the Colombian army succeeded in rescuing hostages held by FARC for years. Among them was Chatham native Thomas Howes, who was serving as a contractor in the fight against the drug traffickers.

Despite the close cooperation of the U.S.and Colombia in seeking to end the flow of drugs from Colombia into the United States, Democrat Speaker of the House Nancy Pelosi has blocked a vote on the Free Trade Agreement negotiated by the Administration with Colombia, an agreement that will create jobs for the United States and make permanent favorable trade terms for our ally Colombia.

John McCain has called on the House to end its obstruction and to vote to approve the Colombia Free Trade Agreement. Political analyst Michael Barone has called Pelosi's twisting of House rules to keep the Agreement from getting a vote on the floor the "one truly shameful act" of this Congress. Obama supports Pelosi.

No wonder this Democratic Congress has an approval rating of only 9%. People are disgusted.