Bush/Obama

What if George W. Bush and Barack Obama made the same decision independently? Would they be judged the same or would Bush be reviled and Obama praised?

In 2001, the Bush administration announced that it would boycott a UN conference on racism. The reason given was that the conference was nothing but a thinly-disguised attack on Israel. The left was up in arms. A month later, after 9/11, some on the left insisted that this boycott had inspired that act of terror.

Last week the Obama administration announced that it would boycott the 2009 UN conference on racism. They gave exactly the same reason. So, where is the outrage?

You don't see any here. This is part of a general cognitive disconnect on the left. They see everything that Bush did as wrong and evil while everything that Obama does is good and proper - even when they do the same things for the same reasons.

BTW, both presidents were correct in avoiding the conference. The conferences are part of a world-wide creeping antisemitism.

How Soon They Forget

The Huffington Post is in full attack mode over the Tea Party protests. Lincoln Mitchell is upset because the governor of Texas joked about seceding from the Union. One of the comment is unintentionally funny.

What kind of Americans openly states that they want to secede from the United States? These cowards are no more then traitors to the United States. I didn't serve in the military and shed blood for these dogs who say they represent America and want to secede because now their political party is no longer in control in Washington. Real Americans don't secede from your country. You stay by your country until you die. You instead work to build this country better. The military code of justice has the right remedy for treason. Those that want to secede are traitors and the lowest circle in Hell is reserved for traitors. This crap goes way beyond free speech. They want to secede, let them. Then have the Commander In Chief call up the US Army. We beat them once, we can surely beat them again. I'll be more then happy to shed some blood again to cut down the weeds in Texas.

The funny part is who was talking about secession just four years ago. That was when George W. Bush won reelection and the liberals wanted to join Canada. See Jesusland.

These are the same people who are calling conservatives traitors.

Who Controls the Tea Parties?

Hale "Bonddad" Stewart posting on Huffington thinks that he has found a gotcha in the Tea Parties.

My only question is this: where were these people 8 years ago? More importantly, where were these people 30 years ago?

{...}

To anyone with an ounce of common sense, it's obvious what's going on. Republican/conservative rank and file are protesting because they are out of power and their leadership is terrible. But they aren't protesting spending; they are protesting the Democratic Party's governance. And that is fine. But please, don't tell me it's about spending or debt. If that were the case, you guys should have taken to the streets years ago.

Does he have a point? No. As I posted yesterday, this is the left trying to convince itself that they don't have to worry about the Tea Party movement. There are several problems with his assertion.

Republicans leaders were not leading the Tea Parties. They had to request to be speakers. In some cases they were turned down. The big party in DC pushed the GOP Chair to a less prominent role than he requested. Many protesters make it clear that they are upset with both parties.

This has been building for some time. The Democrats stoked the movement in 2004, 2006, and 2008, running ads about the crushing debt that Bush was leaving the next generation. In the 2006 and 2008 elections, voters expressed their anger at out-of-control spending by electing Democrats.

Bonddad quotes a 2005 CATO Institute piece about Bush's spending. He conveniently ignores more recent CATO papers that include Obama's projected budget. CATO makes it clear that Obama is outspending Bush.

Bush favored large spending increases, even in years with big deficits. Obama titled his budget A New Era of Responsibility but his huge deficit spending will push up public debt as a share of GDP to levels not seen since the 1940s.

There are some other factors that Bonddad overlooks (or ignores). Bush spent a lot but managed to keep his increases quiet. Most complaints about Bush spending were tied in with the anti-war movement. As far as I can tell, no one has done a survey of Tea Party protesters to see if any were anti-war protesters. The wars totally overshadowed Bush's domestic spending.

Bush may have spent outrageous amounts but it didn't buy him popularity. His approval rating was one of the lowest on record.

The biggest spending jolts in the Bush administration came at the very end. Between September and  January, the Bush administration announced bail-out after bail-out. By the time the Big Three car makers came asking for a relatively small bailout, the public was sick of it. A new bail-out was politically unacceptable by then and Bush used TARP funds instead.

That is what led up to the current protests. Three things actually set it off:

• Passing a huge stimulus that spent the majority of its funds after the economy is expected to recover.
• A mortgage bail-out that seemed to reward people who had behaved irresponsibly at the expense of people who never missed a house payment.
• Obama's budget outline which the CBO estimates will push the national debt to unsustainable levels within a decade.

Bush doubled the national debt in eight years. Obama will double it again in six years and that is without counting the full cost of his health care plan. That is a geometric increase in spending. That is why people who sat home and grumbled during the last 30 years are now taking to the streets.

Trying to Tarnish the Tea Party

The Tea (Taxed Enough Already) Party movement is staging hundreds of protests today, April 15, across the nation. While the Tea Party protesters have a number of complaints, many of them ill-defined, they center around the growing deficit and national debt.

The Left is making a concerted effort to minimize this movement. The most common complaint is that it is "astroturfed". This refers to a centrally manufactured protest designed to look like a grassroots movement. ACORN specializes in these. The widely covered tour of AIG executive homes was organized and paid for by an ACORN-affiliated group. Only a small group was actually involved in the protest but they got disproportionate press coverage. Many stories noted that the press outnumbered the protesters. Congress is holding hearings that allege that ACORN pays people to show up for protests on demand.

The people who claim that the Tea parties are astroturfed point out that one of the main organizing web sites is paid for by someone who normally works for conservatives and that Fox News is promoting the events. Some talk show hosts and Republicans are making speeches at Tea Party events.

Strangely, these same critics never questioned the legitimacy of events sponsored by George Soros. Neither did they worry about celebrities or Democrats becoming involved in anti-Bush activities. Cindy Sheehan had a lot of organising behind her protests. No one questioned her legitimacy. Similarly, no one suggested that anti-war rallies were really anti-Bush rallies.

When the press does report on the Tea Parties, the main thread is that people are involved in a protest for the first time in their lives. This is as far as you can get from paid activists.

Possibly the silliest example of trying to tar the movement came from Arthur Delaney on the Huffington Post. He saw a clip of a protester complaining about communists college professors and a woman off-camera who called for burning books. As far as Delaney is concerned, that wraps up the Tea Party movement. To him it is all about anti-intellectualism and burning books. Delaney also conflate a Tea Party with Glen Beck's 9-12 Project. The two are separate and have nothing to do with each other. Neither are they responsible for everything that anyone says at a rally. I have seen Free Mumia signs an numerous left-wing rallies but that does not mean that the event was about freeing a cop-killer.

Of course, the real reason that the Left is trying so hard to denigrate the Tea Party movement is that, for decades, steer protests have been the property of the Left. Conservatives just didn't do things like that. That threatens their whole world-view. For years they have insisted that protests represent the voice of the people and must be listened to.

In order to reconcile the protests with their world-view they insist that the protests aren't real, that they are somehow staged. They are part of the Republican Party (or Fox News which they are convinced is the same thing) so they can be ignored.

The fact is that the Tea Parties are separate from the Republicans. They would be just as outraged if the Republicans were in charge. In fact, this sentiment comes from a pool of frustration that the Democrats tapped in 2006 and 2008. In both elections the Democrats ran as the party of fiscal responsibility. Just yesterday in an economic speech, Barack Obama said that we can no longer borrow and spend. These people agree with him and want a budget that reflects this sentiment.

Obama often defends his spending by pointing out that George W. Bush started it. This is true but it does not mean anything to the Tea Party protesters. They want the government to cut spending, not increase it until interest on the national debt equals the total of all discretionary spending. The Republicans are talking fiscal responsibility right now but they doubled the national debt under Bush. The Democrats promised to bring back the balanced budgets of the Clinton administration them passed a budget outline that will double the debt again in six years (and that's after raising taxes and making unlikely assumptions about the economy).

The truth is that Democrats have never been fiscal conservatives. Now that the Progressives have taken over they don't even pretend to care about the deficit. Congressional Republicans had a good record under Clinton but they threw it away under Bush. Bush and Karl Rove decided that limited government does not bring in enough votes so they abandoned this group. The Democrats courted them in 2006 and 2008 but quickly proved to be worse than Bush.

At its core, the Tea Party movement represents the forgotten libertarians, the people who think that government is already too big and don't want to see it growing bigger and more powerful. Their hero is Ronald Reagan. This is the counter to the Obama-progressives currently running the country. This represents a big swing vote from a segment that has been ignored for years.

Rather than leading this movement, the Republicans are in a position to benefit from it. This will mean turning away from the easy compassionate conservatism of both presidents Bush and returning to the party of Reagan. If they fail to follow through then this group will probably stay home at the next election.

Obama and the Pirates

After several days in which Somali pirates held an American cargo ship captain, the Navy rescued him. They talked the pirates into attaching a tow rope so that the lifeboat they occupied could be towed to calmer waters. The toe rope was shortened until the boat was only around 100 feet from the snipers. Three pirates were killed.

President Obama gets credit for authorizing this action and the use of lethal force. This may help his credibility among our enemies. He has proved that he will order the death of foreign nationals in order to save an American.

That resolved the short-term crisis but not the long-term problem of piracy. There are several possible results:

• Somalis may think twice about pirating in the future. This is very unlikely. There is too much money to be made by piracy. In fact, four ships have been hijacked since the rescue.
• Somalis may leave American-flagged ships alone but continue raiding other ships. This is probably the best that we can hope for but it is still unlikely. Again, there is too much money involved.
• Somalis may escalate attacks against US-flagged ships. Some pirates promised this when they heard of the dead pirates. I am skeptical. Right now crews are willing to surrender to the pirates because they can count on good treatment. If the pirates start beating or killing captives then ships will be more likely to fight back.
• Nothing will change. This is most likely given the events of the last couple of days.
  

So where does that leave us? Pretty much back where we started. Probably the only way of stopping the pirates is to start attacking their bases. Announce that any port that shelters a ship taken by pirates will be shelled. At the same time warships need to patrol the Somali coast to keep foreign ships away. The whole mess started because foreigners started dumping toxic waste in Somali waters and poaching on their fishing (hopefully in different areas). The pirates may not like returning to fishing but it could be made an attractive option.

I expect President Obama to take the opposite approach - try to stop the pirates through increased patrols. Historically this has never worked. The surest way to eliminate pirates is to deny them safe harbor.

Chaos and Order

A common idea in science fiction and fantasy is that the world is divided between chaos and order. Usually, but not always, the hero is a champion of order.

Over the last few years politics have reordered themselves into a similar grouping. The leaders of the Democratic Party including the President and the Secretary of State insist that they are progressives instead of liberals. As they have pushed their agenda, the Republicans opposing them have coalesced around small government/open market principles. These correspond roughly to order anf chaos.

The chaos in question is the free market. Progressives look at aspects of free markets such as pay inequality and boom/bust cycles with horror. Their impulse is to bring order to this untidiness though increased regulations. The current batch of progressives draw from a long history. This is at least the third time in the last century that they have pointed to an economic bust and insisted that capitalism is dead, that it doesn't work. During the 2008 campaign, Barack Obama insisted that each economic problem could be solved through more regulation. Now that he is president, the list of industries that he plans to regulate is constantly growing.

This dates back to the first half of the 20th century and the first Progressive era. American progressives were fascinated with the changes going on in Europe. A number of them, particularly the editorial staff of The New Republic, made pilgrimages to the USSR to see progress of the Five Year Plans and other reforms. The less-radical wanted to follow the example of Italy and Germany where the government kept private ownership but established strong economic controls.

On the other hand we have the libertarians. They celebrate free, open markets. They insist that markets may not be pretty but they are the most efficient way of producing and distributing goods. What looks like chaos to the outsider is an orderly, self-correcting system. It is not random but it has too many inputs to control and any attempts at taming the chaos will bring unforeseen and undesirable consequences elsewhere. This view has parallels in chaos theory which holds that small changes in initial conditions can lead to large changes in behavior. This is often called the Butterfly Effect.

You can see this breakdown on most of the major objectives of the Obama administration. They want to control banks, large financial institutions including insurance companies and automotive manufacturers. Later this year they will propose some form of universal health coverage. They plan to reshape the power grid. They are appalled by income equality and are changing this through caps on earnings and through additional taxes on the upper end.

Their insistence that everything is knowable and therefor controllable convinces them that global warming models are correct and that urgent action is needed.

The libertarians have a completely different take on all of these issues. Yes, pay inequities exist but wealth has its own multiplier effect. Eliminating wealth hurts other portions of the economy. A one-size-fits-all approach does not fit all. Some people, especially those in their 20s, prefer to spend their money on food and shelter rather than insurance. Not everyone wants or needs the tiny, unsafe econoboxes that the progressives want produced. Climate is too complex for models to predict with enough accuracy to bet our economy on.

There attitudes are not the exact opposites of each other which means that each side sometimes finds itself talking past the other. In a recent meeting between the president and the heads of several banks, the bankers tried to explain that cutting executive pay would just rob their firms of talent. Obama didn't want to hear this and cut them off. From his point of view, no one should be paid millions of dollars, ever.

Personally, I side with those who think that open markets are preferable to regulated ones. Too often well-meaning attempts end up making things worse in the long-run. Here are a couple of examples:

Around 1990, President George G. W. Bush and a Democrat-led Congress decided to reduce the deficit by raising taxes. One new tax that was tailored to only hurt the rich was a new sales tax on yachts. It turned out that most boats covered by the new tax were purchased by upper-middle class boating enthusiasts. The new tax made new boats too expensive for these people to afford. As a result, the boat-building business had major layoffs. Between lost income tax and unemployment benefits, the tax cost the government much more than it brought in.

Another example from the Bush (41) administration - acid rain became a major issue. Congress rushed to pass legislation that required low-sulfur emissions. This hit the coal mining industry in the east hard to the benefit of the western states. More recently, a study just put out by NASA indicates that this legislation is the main cause for Arctic temperature rises. The study indicated that the best way to cool the Arctic would be to resume burning high-sulfur coal. Ironically, this came from someone who works for James Hansen. Hansen has called for outlawing all coal-fired generators. Acting on Hansen's recommendations may actually make things worse instead of better.

Global warming is an example of the two sides talking past each other. The progressives want to take action right now and can't understand why anyone would wait. The libertarians are not convinced that there is a problem and see the cure as being worse than the problem. They want solid assurances that there is a problem.

This is the state of the American political debate right now.

An Obstinate President

In January, President Obama met with House Republicans, asking for their support for his stimulus bill. They tried to explain to him that it was a bad bill that they could not support. His response - "I won the election."

Many fiscal conservatives felt that the failing economy would have the silver lining of making Obama slow his plans for transforming America. This was quickly proven wrong when Obama unveiled his budget which included plans for several expensive changes to government.

The Congressional Budget Office announced that Obama's budget was optimistic. They projected deficits so large that even Obama's budget director admitted that they would be unsustainable. When asked how this would affect his plans, Obama brushed off the question as nothing but projections based on different sets of numbers. He went on to say that he was not going to pass problems onto our children (just a huge debt).

Many European countries are further in debt than is healthy. European economists say that Obama's stimulus is like pouring gasoline on a fire. Regardless, Obama told the G20 that they needed their own global stimulus.

During the campaign Obama was roundly criticized for suggesting that he would meet with hostile foreign governments without precondition. He sent an appeal to Iran, anyway. Their response was a set of preconditions that they had before they would meet with the US. Obama made a second appeal through YouTube. Iran responded with the same set of preconditions.

In a late-March meeting, officials from the country's largest banks tried to explain why bank executives were paid so much. Obama cut them off, saying that "I'm the only thing standing between you and the pitchforks." Not mentioned was that he had been shaking a figurative pitchfork a few days prior.

In case after case, the President makes up his mind regardless of facts or practicality. If someone questions him he silences them with a curt remark.

I have suggested before that Progressives think that they are the smartest people who ever lived. How else can I explain Obama's insistence in having things his way no matter who disagrees?

President Bush was often criticized for refusing to second-guess himself but he often backed down from proposals. Obama appears to be even less introspective than Bush. He decided what course he is going to take and does not recognize obstacles. How many of Bush's critics are willing to make the same complaint about Obama?

Government Control

(and why it's a bad thing)

The US government is taking over General Motors. The President already fired the head of GM and the government will have a say in the make-up of the new board of directors and in future operations.

Another key stakeholder in the company, of course, would be the government, which has lent the company money but does not own any shares. And many analysts believe that whoever the shareholders may be, the government's interest will matter most.

"Obviously, the government has a voice as an investor," said Charles Elson, head of the Weinberg Center for Corporate Governance at the University of Delaware. "But it's not like the government speaks as one voice among many. It becomes the overwhelming voice."

First, this was probably inevitable given GM's requests for bail-out money. The out-going Bush administration was willing to hand over large sums with few strings but the incoming Obama administration is still hungry to put its stamp on everything it can.

A little background - Detroit in general and GM in particular have been trying to restructure themselves back into the forefront of auto manufacturing for decades. Twenty years ago, Michael Moore made his name with Roger and Me, his attempt to confront Roger Smith, the head of GM, over layoffs. Moore wanted Smith to bring prosperity back to Flint Michigan. In retrospect, Smith didn't do anywhere near enough restructuring and Flint was never going to be the paradise that Moore painted it. Had GM rehired all of the unemployed in Flint, then the request for a bailout would have come years earlier.

This is where outside influence in large corporations becomes a problem. The current leadership may not be able to save their company but they are at least focused on that task. Once government gets involved then other factors are introduced.

During the early days of the Iraq war, many liberal hawks said that it was important that Saddam be overthrown but not by this (Bush) administration. Of course, that was the administration that we had and waiting another 2-6 years for a new administration wasn't going to stop Saddam's atrocities.

We are in the same position with GM. It needed to be saved but not by this administration. Obama and the Congressional Democrats have several things on their plate. They recently increased the CAFE millage requirements. They are hostile to executive pay. Members of Congress have talked about requiring GM to produce smaller, more efficient cars. Detroit is a basket case because their costs are so high that they can only make money selling low-millage SUVs but the market for that dried up.

Granted, Obama has ordered GM to get concessions from the unions to reduce manufacturing costs. That should help but the government can't resist using its influence for social good. Assuming that GM survives and continues under government control then we will see ever increasing restrictions on how they do business. This is inevitable. It is how government works.

Look at the last budget and the number of earmarks. Control of GM represents another opportunity for earmarks. This might take the form of pushing the Volt electric car or targeting plants according to an influential congressman's constituency. It doesn't matter. What matters is that these decisions will be made for political reasons, not business ones.

Beyond that, what is there to suggest that the President and Congress are competent to run a large business? They can't balance a budget and most of them (starting with the President) have never run a large company. Many of them are motivated by ideology and a number of the most ideological are in top positions.

This has been tried before. Lots of times in lots of countries. Government control of business just doesn't work.

Gun Control, Mexican Style

During the campaign, Obama was coy about his plans for gun control. He made conflicting statements but the upshot was that gun owners had reason to believe that gun control would not be a priority in his administration. This followed the common wisdom among Democratic leadership that this was too sensitive a topic to touch. The number of single-issue, pro-gun voters were enough that Al Gore lost his home state and therefor the election in 2000. Clinton made gun control a priority in his administration and this was a factor in the Republican takeover of Congress in 1994. Given this record and Obama's other priorities, it would seem foolish for him to take on an additional interest group.

That's not how things are playing out. The MSM has been full of stories about rising levels of violence in Mexican border towns caused by drug lords. These stories always say that the guns fueling the conflict come from the US. They often add the claim that these guns are bought legally at gun shows then smuggled across the border.

A closer look at the stories shows that the gun show story is fiction. The Mexican gangs are using fully automatic weapons and grenades, weapons that are not legally available in the US. The press, which tends to be anti-gun, is dutifully repeating this. Here is an example from MSNBC

"I feel very strongly we have a co-responsibility," Clinton told reporters, adding: "Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians."

Criminals are outgunning law enforcement officials, she said, referring to guns and military-style equipment such as night-vision goggles and body armor that the cartels are smuggling from the U.S.

"Clearly, what we have been doing has not worked and it is unfair for our incapacity ... to be creating a situation where people are holding the Mexican government and people responsible," she said. "That's not right."

Clinton said she would repeat her acknowledgment as loudly and as often as needed during her two-day visit to Mexico City and the northern city of Monterrey. Officials said her priorities included encouraging the administration of Mexican President Felipe Calderon to increase its battle against rampant corruption by promoting police and judicial reform.

In the 1990s, President Clinton failed to convince the country that we had to ban informal gun purchases through gun shows in order to save ourselves from gun violence. Now President Obama and Secretary of State Clinton are trying to outlaw gun show sales in order to protect the Mexicans from US guns.

Even if Mexican guns were coming from the US, the obvious solution is to close the border to both drugs and guns (and illegal workers). It is the open border that is fueling Mexican drug trade. To his credit, Obama has taken steps to secure the border but this has not slowed Hillary's speeches about American guns coming into Mexico nor Congressional talk about reviving assault weapon legislation.

Ever the opportunists, the Obama administration is using a false premise as an opening for new gun regulations.

3/31/9 Update: The campaign against guns isn't working. Law enforcement personnel testifying before Congress indicated that the Mexican weapons are coming from multiple countries, often bought and shipped to the Mexican army then diverted to the drug lords.

Power Grabs

What was the furor about the AIG bonuses really about? I'm not sure that any of the outraged could tell you except in the most general terms. Here are some of the reasons that were passed around last week:

• That bailout money was going to fund big bonus checks. (true but less than 1%)
  
• That people who caused AIG's problems were still getting bonuses. (not necessarily)
  
• That performance bonuses were going to people who lost billions of dollars. (false)
  
• That people working for bailed-out companies are still getting high salaries.

There was a level of hysteria in Congress that did not seem to be reflected elsewhere. While there were some protests about the bonuses, they never reached the level of the Tea Party protests and these are not having any effect on Congress. Why should the bonuses cause so much uproar. I think that there are multiple answers.

First a little review - the bonuses were promised in April of 2008 in an effort to keep vital people at AIG while the company wound down its money-losing section. The worry was that, even in a bad economy, the top people were in demand and would jump ship without bonuses and AIG would collapse. A collapse is undesirable which is why the government bailed out AIG in the first place. Keep in mind that in April, 2008, we were still debating if there was a recession. The stimulus bill passed in February, 2009 would have capped or eliminated these bonuses but a crucial paragraph was quietly removed in conference allowing the bonuses to proceed. By the time the furor erupted, the checks had already gone out.

President Obama originally came out sounding outraged. Barney Frank threatened the jobs of anyone who took a bonus. The House quickly voted to enact a retroactive 90% tax on the bonuses. This violates the spirit of the Constitution if not the letter.

By Saturday the MSM was reporting protests at the homes of AIG executives. This caught my attention since it seems more organized than most protests. It turns out that the protests were actually a group of people on chartered buses going from executive's house to house to leave a letter asking that the executive return the bonus and support a tax rate of 90%. The protesters were outnumbered by the press. The whole thing was organized by the Working Families Party of Connecticut. This in turn is an offshoot of ACORN which has long-standing ties with the President.

The same day Obama announced that he wanted to regulate the top salaries of all companies in the financial sector, regardless of federal funds. He was unclear about what this regulation would consist of.

By Monday the Obama administration was announcing its toxic debt reduction plan. This relied on exactly the same sort of investors that Obama had been railing against so he moderated his rhetoric for a while. The next day his administration suggested that the Treasury Secretary should be able to seize any business that he judged a danger to the economy. This was also sold as a way of keeping future bonuses from being paid.

So, what is going on?

The members of Congress involved in allowing the bonuses to go through insist that they were following the wishes of the Obama administration. Their outrage is probably a cover for their complicity.

The Obama administration seems to be at cross-purposes with itself. Is it in favor of the bonuses or against them? Probably both, but for different reasons.

There is a strong case to be made for the bonuses. If it is worth pouring billions of dollars of bail-out money into AIG then it is worth keeping enough of the management in place to prevent a total collapse of the company. Also, we are supposed to be a nation of laws. This means that contracts are honored, even if you don't like them.

On the other hand, the outrage is also useful for the Obama administration. It is taking advantage of the furor to propose new international regulations, to propose some level of control over executive pay of private companies, and to extend control that the government has over banks to other industries. There is even an element of increasing tax rates back to the confiscatory levels of the 1950s.

Put together and we have an unprecedented power grab. I don't know if the Obama administration is up to the follow-through on this but they have proposed taking over our financial sector. Add in their plans to take over the medical sector of the economy and we will soon have the government controlling more than half the economy.

Then there is the news that the EPA classified CO2 a pollutant. This potentially gives the president control over the rest of the economy plus how people live.

Now, ask yourself - do you trust these Bozos to run the economy? Follow-up question for anyone who answered yes - the Republicans will eventually come back in power. Do you trust them with the economy?

Inflation and Bonds

The Fed announced that it is buying long-term bonds in order to drive down the rates. This will have two effects:

The good - lower rates for fixed-term mortgages.

There are three ways to stimulate the economy - reduced interest rates, tax cuts, and increased federal spending. Of these, reduced rates are the most successful. To date, increased federal spending has never worked because it comes too late and is targeted wrong. According to Woodward's book, the Agenda, Paul Volker convinced Bill Clinton early in his presidency that lower interest rates were the best way to solve his recession. Short-term rates are already as low as they can get so the only possible target is long-term rates. This will allow people to refinance their houses and get hundreds of dollars in their pockets. It will probably boost house building.

The bad - inflation.

The government does not have any money to buy these bonds so it is printing new money. This is inflationary. The Fed knows this and is counting on it. The same announcement said that they felt that the current inflation rate was too low to support a recovery. Deflation has been a worry.

Here's where we get into undesirable trade-offs. Inflation started picking up last year. It was triggered by Chinese demand for oil and for copper and steel. This pushed up the prices of manufactured goods. At the same time, Congress mandated an increased amount of corn should be turned into ethanol for fuel. This pushed up the price of corn. It also pushed up the price of other grains as farmers switched to corn. This affected the price of corn-fed meat (beef and chickens) and of products sweetened with corn syrup.

The Fed worried about inflation and pushed the prime rate up. This caused variable rate mortgages to go up. Since a large portion of sub-prime mortgages were variable-rate, this caused the loan-default rate to climb, triggering our current crisis.

This latest is just one of several infusions of cash that the Fed has pushed into the economy. At some point the recession will end and people will start spending that extra cash. This is likely to raise the inflation rate a lot.

At the same time, people's wages are frozen or shrinking. Lots of workers have accepted a cut in wages or at least a freeze. Inflation means that their dollars will not go as far.

As far as I can tell, all of this means that most people's standard of living is going to go down. I don't see any alternative with fixed wages and renewed inflation. I don't expect any relief from the current administration, either. Obama has made it clear that he values fairness over growth.

The Bonuses and Transparency

Remember when both Obama and the Democrats promised transparency? That was supposed to include posting legislation to the Internet days in advance of voting on it. It was also supposed to match amendments to sponsors.

Remember when the final version stimulus bill reached Congress? It was over 1,000 pages long. It arrived after midnight and was voted on around noon the next day. No one voting on it had a chance to read it - it was too urgent for Congress to know what they were approving (that was on a Friday - Obama waited until the following Tuesday to sign it).

Now, a month later we are finding out what was in that bill - or, in this case, was not in the bill. A cap on bonuses had been added into the bill with wide approval but it vanished in conference. Chris Dodd sort of confessed to allowing his staff to remove it at the urgings of the Treasury Department. There are a lot of rumors about who was actually responsible. It doesn't help that Dodd received a large campaign contribution from AIG.

Obviously this is not the hope and change that was promised. Arianna Huffington herself is upset about how this was handled.

This mirrors the legislative slaying of the similarly intended amendment co-sponsored by Sen. Wyden I write about below. The culprit behind the killing of the Wyden provision remains unsolved -- but Dodd fingering Treasury adds weight to Wyden's sense that members of Obama's economic team were behind the elimination of his amendment. And, in both cases, major decisions involving taxpayer money were carried out in a way that flies not in the face of fairness, but in the face of the administration's promises of transparency and accountability.

The honeymoon is definitely over.

We Own You

The message about AIG and the bonuses is that once a company takes a bail-out, the government owns them and can set or change the rules at will.

Some background:

According to at least some reports, the controversial bonuses were not performance bonuses. They were a bribe to keep the top staff from jumping ship as soon as they found out the state of AIG's finances. Without these bonuses AIG would be in worse trouble than it is now.

It is rarely discussed but AIG's problems all come from the number of mortgages that are being defaulted on. At the government's insistence under the Clinton administration, most of the traditional rules for qualifying for a mortgage, things like down payments and being able to make the payments, were tossed out in order to increase minority home ownership. These mortgages were bundled into financial instruments which were made more desirable by taking out insurance on the underlying mortgages. The default rate was fairly low for decades so AIG insured a lot of these mortgages at a low rate. When the mortgage-holders began to default, the banks put in claims to AIG. This is when we bailed them out. If we hadn't then a lot more banks would have failed.

The bonuses were not always so abhorrent to the Democrats. Chris Dodd slipped an amendment into the stimulus bill requiring that pre-existing contracts be unaffected by government money. Dodd has now reversed that position.

All of this makes people wonder if the Obama administration allowed the bonuses to go through just so that they could throw a fit about them in public? Rush Limbaugh has suggested this. The alternative is that the administration didn't realize what it was pushing for. Normally I assume incompetence over conspiracy but the Obama administration has shown a compulsive need for enemies. Did they set up AIG the same way that they targeted Limbaugh?

The rational response would be to ignore the bonuses. They can't be stopped - the checks are already in the mail. That hasn't stopped Barney Frank from threatening to fire everyone who accepts his bonus. Other Democrats are talking about enacting a retroactive 100% tax on the bonuses.

If you are not troubled by this yet then here are some things to consider:

Congressmen are threatening to fire people for accepting compensation spelled out in their employment contract. What sort of of precedent is that?

Those same congressmen are threatening to confiscate pay that they consider inappropriate, even if it is legal. Again, this is a bad precedent.

That is on top of moves that Obama has already taken to cap pay for companies that have accepted government aid. The excuse is that they want to be sure that the taxpayers' money (or the borrowed Chinese money) is being used wisely. They don't have the same compunctions when approving spending bills. Obama is pretty free with the people's money in his travelling, also. I'd like to see him cut out unneeded travel instead of going on an expensive field trip every Friday.

Now that the precedent that accepting government money gives the government control over how businesses are run, expect this to be expanded. A lot of companies get government money one way or another. The Democrats have been complaining for years about the gap between the rich and the poor. Now they are doing something about it.

Businesses have noticed. Two banks have given notice that they will return their TARP funds this month. A couple of hundred others, out of around five hundred, are having second thoughts about accepting TARP funds. I expect other businesses to start being cautious about accepting TARP or stimulus money.

If I worked for a company that had accepted government money I would be looking for a new job, even if I was not in the pay ranges that the Democrats are looking at now. I expect these businesses to lose all of their top talent which will affect their long-term viability. Also, this incident means that your employment contract might be cancelled at any time at the whims of Barney Frank.

In a separate but related story, President Obama announced his plan for helping small businesses. He ordered banks to give more loans. This covered all banks, not just ones that have received TARP funds. I wonder if he is lowering the loan standards for small businesses, just like the standard for home buyers were lowered?

Economic Change that We Were Waiting For?

Back in late 2008 there were calls for President Bush to step aside and let President-elect Obama take office early. The thinking was that only the brilliant Obama could save the economy.

A few months later and the world is wondering why anyone thought that Obama could accomplish miracles. People are beginning to admit (in whispers) that the Obama administration is worse than the Bush administration. Consider:

Two months into his administration and Obama still has not announced a plan to stabilize the banks. A few outlines of plans have been floated then withdrawn.

The Obama administration is actively anti-business. Obama doesn't wants businesses to project a sackcloth and ashes image. This has hurt the convention business in general and Las Vegas in particular. In signing the omnibus spending bill, Obama talked about future limits on earmarks, but only those going to businesses. He indicated that earmarks going to public officials are always in the public's interest but earmarks going elsewhere are always suspect.

Obama spent the weeks leading up to his inauguration and his first few weeks in office describing the economy in terms of the Great Depression in order to get his stimulus passed. Now that it is law, he is stressing that the fundamentals of the economy are sound. He blasted McCain as an out-of-touch rich guy for saying the same thing last Fall. This abrupt about face convinced everyone that they cannot trust Obama for an honest assessment of the economy.

The current economic troubles cone from real estate and banking but Obama insists that there cannot be a recovery without universal health care and energy reform. He has not elaborated how these are connected leading many to believe that he is using the economy to give himself carte blanche. There is a great deal of skepticism on how taking control of 1/6th of the economy (health care) will solve the problem of toxic debt. It has also convinced much of the country that Obama is more interested in health care than fixing the economy. This is at odds with how most people prioritize the issues.

Candidate Obama insisted that he would pay for everything through increased efficiency, elimination of wasted programs, and taxes on the richest 5%. Now that he is in office he has added a tax on energy usage to that mix. Late last week he said that he is open to taxing existing insurance benefits in order to pay for universal coverage. These last two will hit the poor and middle-class much harder than the rich.

Obama's budget plans call for the highest deficit, by any measure, in history. He then promised to cut it in half within a few years. leaving a permanent deficit much higher (as a percentage of GDP) than any point since WWII*. Even this assumes a quick recovery followed by unpresidented growth and new taxes that are not likely to be passed in their entirety. Since it is easier to pass new spending than new taxes, the real deficit will be much worse than he projects. On top of that, the $800 billion set aside for health care is described as a "down payment". This implies that the real health care costs will be much higher.

There is already talk about the first stimulus bill failing. This is probably a recognition that it is not a stimulus bill at all, just a spending bill. How could it be anything else when most of the money will be spent after 2009? We may see another stimulus proposed before the end of the year.

Obama is currently asking the G20 conference to committing to stimulus spending on the same order that we are doing. They are objecting for several reasons. A big one is the threat of hyper-inflation. This ties in with China's finance minister openly wondering about the safety of the US bonds that China already holds. It is unlikely that he thinks that the US will default on those bonds but he could be signalling worry about hyper-inflation caused by Obama's proposed budget or he could simply be warning Obama that China will not be willing to buy a limitless amount of US debt. Either of these possibilities should be keeping the Obama administration up nights.

So we have critics from both inside and outside the US questioning Obama's competance. This should be no surprise. After all, Obama is an activist/law professor/one-term senator. There is nothing in this resume to prepare him for taking on a world economic crisis (or even a world economic downturn).


* The deficit reached Obama-levels for a couple of years during the recession of the early 1980s when unemployment neared 10%, This is often attributed to Reagan's military build-up but a graph of those years shows that the real culpret was the dip in revenue caused by high unemployment. In contrast, Obama is raising the rate-of-growth of government to unpresidented levels.

Charitable Giving

One place that President Obama wants to raise taxes is by reducing the credits from itemized deductions. White House Press Secretary Robert Gibbs put it this way:

"Well, I do think all issues are on the table," Gibbs replied. "Let's, though, just discuss the — I assume you're talking about the charitable contribution — I mean, a middle-class family donates a dollar to charity, they get 15 cents off their income tax. Bill Gates donates a dollar to charity, he takes 35 cents off his income tax. The proposal that the White House has would simply reduce those levels to the same levels that we saw during the Reagan administration."

Taking the last first, taxes were pretty high when Reagan took office and he couldn't cut everything immediately. That line is just a red herring, anyway.

Let's look at the math behind this statement. The tax rate on the middle-class family is 15%. It rises to a top rate of 35%. That means that after deducting the income tax, the average family gets to keep $0.85 of every dollar earned but Bill Gates only gets to keep $0.65. Bill makes a lot of dollars (except last year when he lost $18 billion) so that $0.65 adds up.

Currently, both the average family and Bill Gates can give a dollar to charity and deduct it from their taxable income. This policy rewards charitable giving by recognizing that you no longer have that dollar to be taxed. The Obama administration wants to change this so that when Bill Gates gives a dollar, he would still ahve to pay taxes on it, although they would be reduced - maybe $0.26 in taxes instead of $0.35. The effect of this is to make charitable giving more epensive. It will cost Bill $1.26 to give a dollar to charity ($1 to charity and $0.26 to the government).

Remember that charitable giving is voluntary. If the government raises the cost of giving then people will just give less. Bill Gates might reduce his contribution to $0.75 so that the total cost to him would continue to be $1. The charities have figured this out and are up in arms.

The real estate industry is similarly outraged for the same reason. Obama plans to reduce mortgage deductions the same way. This will not make any difference to Bill Gates but people inbetween Gates and Obama's magic $200,000 income ($250,000 for families) will notice if their mortgage costs go up by 25%. The ones who were already stretched paying for their mcmansions may default and we will have another wave of bad credit. Even if the default rate is low this will push up the cost of buying houses the same way that a big jump in interest rates would do. This will hurt the top-end real estate market which is why the realitors are up in arms.

Realistically neither of these measures is likely to pass. That means that revenues will be below Obama's projections and the deficit will be even higher than he projected.

Obama at 50 Days

Obama is halfway through his first 100 days. How well does his performance match his rhetoric? Remember, he set a high standard for himself with comparisons to Lincoln, FDR, and Reagan. He made a lot of promises during his campaign (at least twice as many as most candidates make). Many of these were going to be top priority tasks. He also insisted that he was holding his appointees to a higher standard than every before.

Most of his accomplishments have been simple stroke-of-the-pen presidential orders reversing Bush policies. He has strung these out for maximum effect. His order on stem-cell research which was signed this week could have been signed six weeks ago.

Aside from signing new versions of a couple of pieces of legislation that Bush vetoed, Obama's major legislative accomplishment has been the stimulus bill. While the White House staff was celebrating its passage, this bill will come back to haunt him. First, it was passed as being so urgent that Congress could not be given time to read it but Obama took three days from passage until he signed it. That's three days that Congress could have used to find out what they were passing. Obviously the urgency was to keep the opposition from seeing what was included.

Combined with the omnibus spending bill that was just sent to Obama's office, discretionary spending is up 80% over last year. A lot of this goes into the baseline budget for next year which will permanently increase government spending. The Omnibus spending bill alone increases spending by 8%. Some items in the stimulus will also increase the baseline but no one has documented these, yet. This is one place that the stimulus will come back to haunt Obama.

Obama's biggest mark has been on the economy in general and the stock market in particular. Both are tanking and Obama has a lot to do with this.

While selling the stimulus, Obama stressed how bad the economy is. As soon as it was passed he submitted his first budget which projected that the recession would end in the middle of this year, long before the stimulus could have any effect. Either he lied when he said that the stimulus was urgent or he lied when he made his budget projections.

The budget proposal calls for new taxes, carbon fees, and makes a "down payment" on universal health care. It does not give details on any of these. This is contributing to the uneasiness on Wall Street. Obama's obvious disdain for Wall Street also contributes the the worsening economy.

Obama's cabinet and staff have been a major embarrassment. He has set new records for the number of officials forced to withdraw their nominations. The Treasury Department is missing most of the people at the top and is making due with a crowd of unappointed advisers instead of 17 deputies. As the economy continues to sink, this is arguably this is the most important department in the government and it is understaffed at the top.

Obama has complained that he doesn't want to spend his time working on the economy. Neither did Bush, Clinton, or Reagan, all of whom took office during a recession. When you become president you are supposed to put the country first and your agenda second. Obama seems to be pursuing both at the same time giving the impression of a government that is not focused on the economy.

There are rumors that Obama is shocked at the presidential workload. Possibly he believed Michael Moore and others who painted Bush's first nine months as constant vacation. The reality is that the President never gets a day off. Even his vacations include daily briefings. Regardless of the truth of the rumors, it is obvious that Obama does not like Washington. He takes weekly field trips every Friday to some other part of the country. After scolding bank executives for using private jets, this seems hypocritical. People have noticed.

Maybe part of the problem is that there is no one to delegate to. Of the 1,200 posts that require senate confirmation, only 73 have actually been appointed.

Foreign affairs were supposed to be a strong point under Obama. That hasn't worked out so well. On his first visit to Canada he had to assure the Canadians that he was not planning on renegotiating NAFTA. The White House staff has been so focused on domestic affairs that they slighted British Prime Minister Gordon Brown. Iran spurned his offer to talk. His administration offered to cancel plans to deploy an anti-missile that Russia objects to in exchange for Russian help dealing with Iran. Russia publicly rejected the offer which was the first that the countries that are to host the anti-missile system heard of the offer. Hillary offered to let the Russians push the "reset" button on relations but couldn't get a decent translation and instead offered the "overcharge" or "overload" button. They pushed it anyway.

Obama sent 13,000 additional troops to Afghanistan without a clear plan on what they will do. Relations with Pakistan are deteriorating. Closer to home, Mexican drug violence has made border towns no-go zones and is spilling over into the US. No one is suggesting the obvious first step - closing the border.

Halfway into his first 100 days it is obvious that Obama is not FDR. His administration seems at one overwhelmed, overambitious, and arrogant. Moderates who supported him over McCain are having buyer's remorse. Even reliable liberals like Paul Krugman are calling for real leadership rather than empty rhetoric. He is not off to a good start.

The Democrats War on Science

First, I have to admit that I'm not the first one to think of this title. Here's someone else's thoughts on the subject with a link here. Of course, the title really comes form a popular book, The Republican War on Science. The premise of this book is that the Bush administration ignored or distorted accepted science in an effort to appease its base. When President Obama lifted the ban on federal funding for research on post-2001 stem cell lines, he made it clear that he saw this as restoring science to its rightful place in policy.

From the title of this post it is obvious that I have a different opinion of the Republicans' and Democrats' treatment of science. I will go over it briefly here.

Let's start with stem cell research since it got a lot of press yesterday when Obama signed his executive order. The coverage was ecstatic. At last, science returns to the White House! The problem is that this is not a scientific question. It is an ethical one with a strong political element. Is a human embryo a human being with protected rights? The Democrats say no but they do not say when it becomes human. This ties into the abortion debate which holds that a fetus becomes a human sometime around its 6th month unless it is aborted. In its efforts to support late-term abortion, the Democrats refuse to talk about ethics. Instead they turn their backs, put their fingers in their collective ears, and shout, "La, la, la." Insisting that this refusal to discuss ethics constitutes a return to science is a departure from reality worse than anything that the Republicans are guilty of. More on stem-cell ethics here.

After stem cell research, the big argument about science usually centers around global warming. Bush critics lead by James Hansen of NASA insist that the Bush administration ignored or minimized the consensus on climate change. But they don't stop there. They continue on and tell you about all of the disasters that are going to befall humanity unless we act immediately. They cross the line between scientist impartially delivering the truth and hysteric scare-monger trying to frighten you into correct behavior. They insist that only they know the truth and that any dissenters have been bought off by "big carbon". This is exactly what they accuse the Bush administration of doing - distorting scientific evidence in order to appease their base. Two top Obama appointees are know to do this. Obama's energy secretary, Steven Chu, predicted that future warming would dry up all agriculture in California by the end of the century, even though no climate models show this. Then there is Obama's science advisor, John Holdren, who, in the 1980s, predicted that a billion people would be dead from global warming by 2020. When Obama's top scientists engage in scare stories, we have to judge his entire administration as being less than honest.

But, let's accept for now that global warming is happening and that we have to do something about it quickly. James Hansen recently named coal burning power plants as the biggest targets. He refers to them as death factories. Energy Secretary Chu says that "coal is his nightmare". Obama has committed to doubling the amount of electricity generated by renewable sources by the end of his first term. The biggest renewable source of electricity is hydropower but we don't have any more rivers to dam up (and environmentalists don't like dams, anyway). Obama is mainly talking about expanding solar and wind power. These are currently very tiny sources of power. They are also unreliable since they only produce power when the wind blows or the sun shines. What's more, the nation's biggest wind farm project has been opposed by the Kennedy family because it might spoil their view.

What about nuclear power? That has the biggest potential. But Democrats have opposed new reactors for years. There is also the problem of nuclear disposal. A facility has been designated in Nevada but Obama has signaled that he will not open it, preferring to keep storing radioactive waste at the plants. This is politics, not science-driven.

Other complaints always seem to come from the left. Remember the endangered Northern Spotted Owl? Except it is the same bird as the non-endangered Southern Spotted Owl, it just lives further north. Science has shown that there is no link between vaccinations and autism but the left disagrees. Other baseless complaints come from the left, also for such things as soft vinyl and Teflon. It is the left that opposed thinning forests which is the cause of devastating forest fires.

I could go on but I think I have made my point. Democrats like to think that they are the "reality based" party but they engage in as much or more distortion of science. Science seldom gives straightforward answers. There are ambiguities and trade-offs. Worse, there are ethical considerations. Any administration that says that it is basing all of its decisions on pure science is lying in order to occupy a moral high ground that they have no right to possess.

Obama and Alinsky

It is no secret that Barack Obama is a follower of Saul Alinsky, the original radical. Obama's first job was as a "community organizer", a term and job that Alinsky invented. The goal was to organize the community into a workers' movement.

It only took a couple of years before Obama became disillusioned with Alinsky's ideal of organizing from the bottom up without a charismatic leader. He did not give up on all of Alinsky's principles, though. Alinsky established a set of rules for radicals, ways for radicals to challenge the established order. Several of Obama's recent moves can be traced straight back to Alinsky's influence.

Here are the rules with commentary as applies:

RULE 1: "Power is not only what you have, but what the enemy thinks you have." Power is derived from 2 main sources - money and people. "Have-Nots" must build power from flesh and blood. (These are two things of which there is a plentiful supply. Government and corporations always have a difficult time appealing to people, and usually do so almost exclusively with economic arguments.)

Of course, as President, Obama already has lots of power but he is pushing for more. When Obama took office it was assumed that he would have to put his agenda on hold until the economy improved. Instead he has pushed his agenda of change since day one.

RULE 2: "Never go outside the expertise of your people." It results in confusion, fear and retreat. Feeling secure adds to the backbone of anyone. (Organizations under attack wonder why radicals don't address the "real" issues. This is why. They avoid things with which they have no knowledge.)

Obama violated this rule. His people seem lost on what to do about the economy in general and banks specifically. The result is just what Alinsky predicted - fear as shown in the continuing stock maket drop.

RULE 3: "Whenever possible, go outside the expertise of the enemy." Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)

It only took Obama a couple of weeks in office before he went back into permanent campaign mode. Expect to see him visit some place in the country every Friday, pushing a simplified version of his program to the general public.

RULE 4: "Make the enemy live up to its own book of rules." If the rule is that every letter gets a reply, send 30,000 letters. You can kill them with this because no one can possibly obey all of their own rules. (This is a serious rule. The besieged entity's very credibility and reputation is at stake, because if activists catch it lying or not living up to its commitments, they can continue to chip away at the damage.)

Obama is trying to do this with his supposed attempts at bipartisanship. He is not offering Republicans the slightest crumb but he says that he is. The Republicans either have to move quite a bit to the left or look like sore losers. He also did this when his Chief of Staff forced the chair of the Republican party to disown Rush Limbaugh.

RULE 5: "Ridicule is man's most potent weapon." There is no defense. It's irrational. It's infuriating. It also works as a key pressure point to force the enemy into concessions. (Pretty crude, rude and mean, huh? They want to create anger and fear.)

Even before he took office, Obama decided that he had to have an enemy. Prior to January 20, it was President Bush. Now that he is in office and Bush is in Texas, the enemy is Rush Limbaugh. Obama and his staff are not wasting an opportunity to tie Limbaugh to the Republican party. The opening attack was when he met with House Republicans to drum up votes for his stimulus package. What was quoted from that meeting was him chiding Republicans for following Rush. A suspicious person might think that Obama never expected to get any Republican support. That it was an early chance to associate Republicans with Rush.

RULE 6: "A good tactic is one your people enjoy." They'll keep doing it without urging and come back to do more. They're doing their thing, and will even suggest better ones. (Radical activists, in this sense, are no different that any other human being. We all avoid "un-fun" activities, and but we revel at and enjoy the ones that work and bring results.)

See Rule 5. Rush-baiting has been a Democratic pastime for years.

RULE 7: "A tactic that drags on too long becomes a drag." Don't become old news. (Even radical activists get bored. So to keep them excited and involved, organizers are constantly coming up with new tactics.)

It is too soon to see if Obama has learned this rule.

RULE 8: "Keep the pressure on. Never let up." Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.)

No question that Obama is following this rule.

RULE 9: "The threat is usually more terrifying than the thing itself." Imagination and ego can dream up many more consequences than any activist. (Perception is reality. Large organizations always prepare a worst-case scenario, something that may be furthest from the activists' minds. The upshot is that the organization will expend enormous time and energy, creating in its own collective mind the direst of conclusions. The possibilities can easily poison the mind and result in demoralization.)

In the lead-up to passing the stimulus, Obama kept insisting that if it failed then the economy would collapse into ruin.

RULE 10: "If you push a negative hard enough, it will push through and become a positive." Violence from the other side can win the public to your side because the public sympathizes with the underdog. (Unions used this tactic. Peaceful [albeit loud] demonstrations during the heyday of unions in the early to mid-20th Century incurred management's wrath, often in the form of violence that eventually brought public sympathy to their side.)

It is too early to see if this will apply.

RULE 11: "The price of a successful attack is a constructive alternative." Never let the enemy score points because you're caught without a solution to the problem. (Old saw: If you're not part of the solution, you're part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)

So far the closest that Obama came to a compromise was cutting back the stimulus bill a bit.

RULE 12: Pick the target, freeze it, personalize it, and polarize it." Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions.

Back to Rush, again. The Obama administration has named Rush as the head of the resistance. Rush is popular within his own circle but he has high negatives among moderates. Obama is using Rush to tar the Republicans in general, forcing them to disown him and making them look weak.

Global Warming "On Hold"

If you have been paying attention to all sources then you will not be surprised to read that global warming seems to have plateaued in 2001 and planetary temperatures have declined a bit since then.

On the other hand, if you get your science news from the Discovery Channel then you only found this out yesterday. This is big news. Until now the Discovery Channel's web site has been a stream of unrelenting doom. This article on Greenland is more typical.

If Greenland's ice sheet ever melts entirely, the results would be catastrophic. The water unleashed into the ocean would be enough to raise sea level 6.5 meters (21.3 feet), jeopardizing the homes and lives of hundreds of millions of people worldwide.

For these people to admit that the world is not warming on cue shows that problems reconciling the climate models with reality can no longer be glossed over. Not that they aren't trying:

Swanson thinks the trend could continue for up to 30 years. But he warned that it's just a hiccup, and that humans' penchant for spewing greenhouse gases will certainly come back to haunt us.

"When the climate kicks back out of this state, we'll have explosive warming," Swanson said. "Thirty years of greenhouse gas radiative forcing will still be there and then bang, the warming will return and be very aggressive."

What is less clear is that this nothing but speculation. None of the climate models show the current cooling phase (referred to here as being flat). There are a couple of other stark admissions in the article:

But just what's causing the cooling is a mystery. Sinking water currents in the north Atlantic Ocean could be sucking heat down into the depths. Or an overabundance of tropical clouds may be reflecting more of the sun's energy than usual back out into space.

"It is possible that a fraction of the most recent rapid warming since the 1970s was due to a free variation in climate," Isaac Held of the National Oceanic and Atmospheric Administration in Princeton, New Jersey wrote in an email to Discovery News. "Suggesting that the warming might possibly slow down or even stagnate for a few years before rapid warming commences again."

The first admission is that they don't have any idea why the world is cooling instead of warming. The second is that some of the warming that we have been seeing is natural variation rather than human-induced climate change. This point is particularly telling since the people warning us about global warming insist that carbon dioxide is the major cause for all climate change.

A third climate-related article on Discovery.com shows the carbon-centric view of warming alarmists. For decades historians have known about a cooling period known as the Little Ice Age that peaked around 400 years ago. Many global warming skeptics (including me) point to this as an example of variable climate. In fact, the Little Ice Age was such a problem that climatologists spent a lot of time and effort trying to prove that it didn't exist. Now that these efforts have been discredited they are trying to fit a period of global cooling into CO2-based climatology. This article speculates that expanding wetlands absorbed CO2, causing the Little Ice Age. The problem with this hypothesis is that it is know that world temperatures cause variations in CO2 levels but the CO2 levels follow the temperature changes.

All of this brings me back to my main point - the models are wrong. All of them predicted continuous warming. None of them allowed for enough natural variation to even be detectable. If a natural cooling can overwhelm the greenhouse effect, at least for a while, then it is also probable that some of the observed warming has also been natural.

In fact, the current cooling means that we need to question everything about the predicted global warming. It is often said that peer review is the gold standard of science. It isn't. It is the silver standard. Peer review means that your paper has been run past some experts to see if it looks plausable. The actual gold standard is prediction and failability.

To really validate the climate models, you have to be able to run them forward for a few years and compare their predictions with real measurments. If they match then you have validated the models. If they fail then the model is invalidated and needs more work. All of the models that the IPCC used failed this simple test.

This is important when you remember that the developed world is making decisions based on flawed climate models. Barack Obama's 2009 budget includes new taxes on CO2 emmisions that will push electric rates 4-5 times what they are today. We should not be crippling ourselves based on disproven computer models.

How Bad is the Budget?

I think that this graph from USA Today shows just how insane the Obama budget is. For the last 30 years government spending increased in a fairly straight line. There was a jump when Bush took office (slightly obscured) but it was still a slow climb. Then we get to the Obama budget and it takes off like a rocket. In fact, maybe we should start calling this the Hockey Stick budget after the (discredited) temperature reconstruction.

The other thing to pay attention to is the area showing the deficit or surplus. The Bush deficit (still partially obscured) is in the ball park of the others. In fact, if he hadn't boosted spending so much then we would have been in a surplus for a year or two. Then we get to Obama. At the same time that government spending is rising, revenue is falling. Not only is he spending at unprecedented rates, he is also borrowing at a rate unheard of in the last 30 years.

It gets worse when you realize that he used fairly rosy projections for the economic recovery and for the tiny bit of cost-cutting that he plans and he included hundreds of billions in new taxes and fees. Assume that the real figures will be much worse, if he manages to pass his budget as is.

Supposedly Reagan proved that deficits don't matter but, as the chart shows, there is an order of magnitude between Reagan's deficits and Obama's.

I think that everyone in America should oppose this budget. It will bankrupt America. In the very near future, payments on all of this debt will crowd out Obama's new entitlements. There just will not be enough money to pay for all of this.