Scott Spiegel

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If At First You Don’t Succeed, Fail, Fail Again!

July 08, 2009 By: Scott Spiegel Category: Economy

Five months after the stimulus bill was passed, we can now say that we’ve witnessed the following under-stimulating results.

Payrolls are falling more than forecast, with employers having cut 467,000 jobs in June, following a 322,000-job decline in May.  Factory jobs fell by 136,000 after dropping 156,000 in May.

Unemployment is at 9.5%, the highest level in 15 years, and is projected to exceed 10% by the end of 2009.  Some economists expect it to remain at historically high levels for years.

The average workweek is at 33 hours, the lowest in 45 years.

Average weekly earnings are down to $611.

The national debt is $11.5 trillion.  The Congressional Budget Office projects the deficit for 2009 to be almost $2 trillion and for 2010 to be more than $1.4 trillion.

The Treasury is increasing its sale of debt to pay for spending.  Treasury offered $1 trillion in notes and bonds in the first half of 2009 and plans to offer another $1 trillion by the end of 2009.

Colin Powell, of all people, is alarmed that Obama’s spending orgy may be swelling government and the national debt: “I’m concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them…  [We have] a huge, huge national debt that, if we don’t pay for [it] in our lifetime, our kids and grandkids and great-grandchildren will have to pay for…”  Now he tells us!

Jared Bernstein, chief economic advisor to Joe Biden, whose office is managing the stimulus, says, “It’s working, it’s demonstrably working.”  According to Bernstein, $200 billion in stimulus money has already been obligated or spent.  Case closed!

Note to Bernstein: In order to demonstrate causality, you have to show that: (1) there was a cause, (2) there was an effect, and (3) the cause influenced the effect.  Defenders of the stimulus bill are still stuck on #1: as of June, only 10% of all stimulus funds had been distributed.  Bernstein’s $200 billion “obligated or spent” figure—eerily reminiscent of the administration’s “jobs saved or created” trope—is untrustworthy, because the administration has already been caught lying about money committed to spending projects.

Given the miserable failure of the stimulus bill, naturally Congressional Democrats want… another stimulus bill!  According to House Majority Leader Steny Hoyer, “We need to be open to… further action.”  Democratic Senator Sheldon Whitehouse said that another stimulus would “probably take place towards the end of the year.”  Second-ranking Senate Democrat Dick Durbin said he would leave any decisions on passing another stimulus bill to “the president’s evaluation”—and we all know how cautious Barack “Fiscal Restraint” Obama will be.  Stan Collender, former Congressional budget analyst, said that another stimulus bill may be possible if the economy gets worse: “Right now it doesn’t seem to be justified…  Come September, it might be.”

The first stimulus package was “a bit too small,” according to Laura Tyson, member of Obama’s Economic Recovery Advisory Board.  Paul Krugman writes in the New York Times, “O.K., Thursday’s jobs report settles it.  We’re going to need a bigger stimulus.”  Biden advisor Bernstein says, “There is no conceivable stimulus package on the face of this earth that would fully offset the deepest recession since the Great Depression.”

Let’s see: the stimulus bill committed a record $787 billion in spending.  Tyson says it should have been “a bit” bigger.  Congressional Democrats and Krugman wanted it much bigger.  Bernstein admits it would have to be infinitely big to work.  Can we give Bernstein the award for inadvertent honesty on this one?

The clincher that the stimulus bill was an abject failure—and that another stimulus bill would be a repeat failure—is the fact that Wall Street has just hit a 10-week low after talk of a second stimulus package recently began.  Amateur analysts suggest that chatter about another stimulus bill is making investors nervous, because—get this—it shows that the economy might not be recovering.  According to Hugh Johnson of Johnson Illington Advisors, “When there’s talk about another stimulus plan, that adds fuel to that fire, it intensifies the concerns about the timing and strength of the recovery.”

Is it possible, just possible, that investors are nervous, not because Congress’ hinting at a second stimulus package implies the economy is not recovering—which I think they can figure out on their own—but because Congress is hinting at a second stimulus package?

If Democrats aren’t persuaded by Republicans’ argument, backed up by ample historical data, that spending vast quantities of wealth not yet created does not stimulate the economy in the long term, could they at least admit their little experiment failed and try the Republican option for a change?

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The Democrats’ Confidence Game

June 10, 2009 By: Scott Spiegel Category: Obama

In a survey conducted in early June, Rasmussen found that Americans trust Republicans more than Democrats on six out of eleven top issues.

It’s no surprise that Republicans lead on national security: after 9/11, when Bush implemented policies to fight terrorism, Republicans’ trust ratings skyrocketed, because Americans saw the problem at hand and liked the way Republicans were dealing with it.  Years later, Obama and other Democratic presidential candidates boasted how much more effective they would be on national security—a fraud they were able to perpetrate because Bush had kept us safe since 9/11 and the threat of attack seemed remote.  Even if Americans actually came to believe that the way to defeat terrorists is to love them, Obama soon co-opted Bush’s entire war policy, thus validating Republicans’ arguments for the past eight years.

So we know national security isn’t Democrats’ strong suit.  Perhaps to distract from their unpopular war agenda, Obama and the newly engorged Democratic Congressional majorities started talking about “a new era of transparency.”  After 384 Obama appointees turned out to be tax cheats, liars, campaign underwriters, and lobbyists, Republicans now lead on government ethics, the second-most important issue to voters.

When ethics didn’t prove to be Democrats’ trump card, Obama started traveling around the country handing out stimulus goodies and talking about projects and jobs funded by the Recovery Act.  Then ABC’s Jake Tapper started uncovering all of Obama’s lies about the nonexistent effects of stimulus spending, and economists deconstructed the lunacy of his “saved or created” jobs argument.  Now a plurality of Americans wants the unspent portion of the stimulus recalled.

In a desperate gambit, Obama took over GM and strong-armed Chrysler’s secured creditors into lousy bankruptcy terms.  The Fed spent $1.2 trillion to lower mortgage rates, which increased, and pledged so much spending that long-term interest rates are spiking.

So now—surprise!—the public trusts Republicans more on the economy, the top-rated issue.  As Rasmussen reports, “Voters not affiliated with either party now trust the GOP more to handle economic issues by a two-to-one margin.”  So the economy doesn’t seem to be Democrats’ ace in the hole, either.

In a sleight of hand, Obama then renewed his push for climate change legislation and health care reform—gargantuan spending boondoggles that would somehow miraculously save our economy, too!  Then Democrats rolled out their plans, and businesses that would actually be affected by the legislation ran screaming.

In Rasmussen’s report, Democrats get their “highest” rating for health care (47%)—but this was measured before we heard actual health care proposals from Democrats, before the AMA and the Chamber of Commerce condemned Democrats’ government-sponsored plan.  Democrats’ lead on the issue has shrunk 8 points just since last month.

The other issues where Democrats do “well” are Social Security (43%), education (44%), and abortion (41%)—all issues no one is making major legislative proposals about right now.

Democrats’ confidence ratings are like a shell game: whichever issues the nation is dealing with are correctly seen by Americans as more capably handled by Republicans, but Democrats are assumed to be wonderful—just wonderful!—on all the other concerns we don’t happen to be tackling at the moment.  As soon as Democrats get their hands on something and we see what they actually want to do to us, trust in their ability plummets, and they move on to another, more pressing priority.

The further the nation is from the reality of an issue, the more likely Democrats are to be trusted; the closer it gets to that reality, the more likely Republicans are to be trusted.

“Ending the war in Iraq” sounds reasonable—until you read the fine print and realize Democrats don’t care whether we win first.  “Renewing relations with the Muslim world” sounds kindhearted—until the president makes nominal demands to Muslim leaders and they start blowing things up again.

“Introducing ethical standards” sounds noble—until Obama nominates actual human beings to fill posts and we get a whiff of their backgrounds.  “Being the first post-racial president” sounds refreshing—until Obama nominates for the Supreme Court a former Puerto Rican separatist who thinks “inherent physiological differences” force judges to decide the way they do.

“Stimulating the economy” sounds invigorating—until it is translated into a 1,588-page doorstop that no one has time to read.  “Moving quickly to prevent an economic crisis” sounds prescient—until you find out that four months later only 5% of stimulus money has been spent and the administration is lying about funded projects.

“Cutting taxes on 95% of Americans” sounds generous—until you realize the things Obama wants can’t be paid for without raising taxes on current or future generations.  “Saved or created 150,000 jobs” sounds impressive—until the administration admits this figure is based on theory and not facts.

“Saving the planet” sounds conscientious—until you find out that it involves so many devious machinations and new ways to burden Americans that the Senate had to hire a speed-reader to recite the bill.  “Health care reform” sounds bighearted—until you hear that it will cost $1 trillion and that Democrats want a 25% national sales tax to pay for it.

You can usually tell when public figures accused of crimes are guilty—their supporters invariably take several steps back and make broad, abstract statements: “She’s an excellent teacher whom no one has ever spoken ill of!”  (But did she commit statutory rape with a student or not?)  “He has always worked to promote racial justice in his borough!”  (But did he accept kickbacks for minority contracts or not?)  “He has a lovely wife starring in ‘I’m A Celebrity… Get Me Out Of Here!’”  (But—oh, never mind.)

Similarly, for strategic reasons Democrats like to keep things intangible, “big-picture,” “forward-looking,” “high-minded”—not concrete, detailed, present-looking, practical.

Every time one of their shells is revealed to contain nothing underneath, Democrats lose the public’s trust on that issue, but the trust always seems to pop up again elsewhere.  Instead of playing Whac-a-Mole with Democrats’ confidence ratings, Republicans should reveal their entire game as the swindle it is.

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