It appears being bestowed a Nobel Prize for economics doesn't improve one's economic acumen, for in the course of roughly 60 seconds Sunday, Paul Krugman said Franklin D. Roosevelt's decision to raise taxes in 1937 deepened the Depression, but it's okay to raise taxes 70-plus years later when the economy is in trouble.
Interesting contradiction, wouldn't you agree?
What precipitated this bizarre, almost instantaneous economic flipflop on Sunday's "This Week" was ABC's George Will bringing up a little history by stating that net investment was negative throughout most of the 1930s because of the uncertainties about the economy and government's activist role during that period.
Nobel Laureate Krugman took issue with this premise (video embedded below the fold, relevant section at 6:57):
So what exactly is the government doing with your money? Fox Business Network's Alexis Glick would like to know.
Treasury Secretary Henry Paulson announced Nov. 12 he would be redirecting the $700 billion bailout to focus on propping up financial institutions instead of buying troubled mortgage assets, which was the original intent of the rescue plan.
Glick, the host of FBN's "Money for Breakfast," told the CBS's "The Early Show" Nov 13 that the Treasury Department's move away from the original plan to buy up troubled mortgages "does not make sense" and was "actually pretty outrageous":
[T]he markets responded to that yesterday ... Look, the original intent of this Troubled Asset Relief Program was to purchase troubled assets. And I think the marketplace started to adjust several weeks ago when we started to see the size and magnitude of the capital injections.
Can I have permission to utter the S-word ("socialism")?
Ken Thomas's Associated Press report today (link is dynamic, subject to change, and will probably be gone in a week) on auto industry bailout ideas emanating from Washington includes these items, all of which expand soc- ... soc- ... socialism:
Legislation proposed by Barney Frank involves the government taking ownership stakes in the companies.
Lawmakers want to use funds that were meant only for the financial sector bailout.
A note that the current bailout is over and above the $25 billion in government-guaranteed loans that has already been approved for "development of fuel-efficient vehicles."
News that auto industry suppliers want in on the bailout action
The United Auto Workers wants a separate $25 billion "to help cover future health care obligations for retirees and their dependents."
British premier Gordon Brown, a former chancellor of the Exchequer -- analogous to the U.S. Secretary of the Treasury -- delivered a thinly-veiled entreaty to President-elect Barack Obama to eschew trade protectionism in a November 10 speech, reports Kevin Sullivan of the Washington Post Foreign Service. Post editors buried Sullivan's 18-paragraph article on page A15:
LONDON, Nov. 10 -- Prime Minister Gordon Brown on Monday warned that trade protectionism would worsen the global financial crisis, a remark widely perceived as aimed at U.S. President-elect Barack Obama.
In a speech lauding the "global power of nations working together," Brown called for "rejection of beggar-thy-neighbor protectionism that has been a feature in transforming past crises into deep recessions."
Obama's campaign rhetoric struck some allies as protectionist, particularly his calls for tax incentives to discourage companies from relocating jobs away from the United States.
Showing once again that its opinion pieces serve a dual purpose as a news source, a Monday Wall Street Journal editorial noted that Democrats have quietly dropped a central plank of their successful 2006 effort to gain a congressional majority (HT Hot Air):
Late last week the leader of the House Blue Dog Coalition, Tennessee Democrat Jim Cooper, announced that with Barack Obama about to enter the White House, "I'm not sure the old rules are relevant anymore." Why not? Because, Mr. Cooper said, "It would be unfair to the new President to put him in a budget straitjacket."
Democrats ran on "paygo" in 2006, promising to offset any new spending increases or tax cuts with comparable tax increases or spending cuts. Once in charge on Capitol Hill they quickly made exceptions, waiving paygo no fewer than 12 times to accommodate some $398 billion in new deficit spending -- not that the press corps bothered to notice.
The Journal then goes on to explain what Paygo was really all about:
Talk about "change." The latest version of president-elect Barack Obama's ever-evolving ideas for "community service" promises to pass out quite a bit of it to America's college students.
The "America Serves" (link is to Google cache) and "Service" sections of Team Obama's Change.gov site have, uh, changed quite a bit over the past day or so after many, including Kerry Picket of Newsbusters, noted that the "service" proposals require youth conscription, i.e., a non-military draft.
As of 8 AM this morning, Team Obama's cleanup operation is nearly complete, with almost all coercive language purged.
But one item noted last night by Charles Johnson of Little Green Footballs remains in the "Service" section (a copy for future reference is here if/when the existing link changes), with a stunning quantitative modification:
The first term of President Barack Obama will bring nationalized health care, attacks on the coal industry, higher government spending and higher taxes, according to Business & Media Institute Vice President Dan Gainor.
On “Fox & Friends” Nov. 6, Gainor highlighted BMI’s most recent Special Report, America 2012, a look at what some of Obama’s major policies proposals will do to the American economy and to Americans’ wallets. The report also examines how the media promoted liberal, big-government proposals throughout the 2008 presidential campaign.
Gainor told viewers the commonly reported number of some 47 million uninsured Americans is “wildly wrong. They [both presidential candidates and the media] were claming 47 million people without insurance, the number probably closer to eight to 15. You don’t have as much of a problem if you’re pushing that.”
Obama will “try to put forth the plan for nationalized health care that the media have been supporting throughout the campaign,” Gainor said. But during the campaign, the media failed to examine the cost of Obama’s proposal, which some estimates put as high as $452 billion, Gainor added.
Who's going to be the leader of the financial world in the role of Treasury Secretary under President Obama? It may be Democratic New Jersey Gov. Jon Corzine, who has pushed for an additional economic stimulus package to the tune of $300 billion to support infrastructure projects.
CNBC's Carl Quintanilla asked Corzine outright on "Squawk Box" if he would accept a job in the Obama administration as Treasury Secretary. "If it's offered, governor, will you say no?" Quintanilla asked.
"Squawk Box" co-host Joe Kernan encouraged Corzine to consider accepting the job if offered, even as the former U.S. senator expressed his contentment as governor. "You could save the world" as Treasury Secretary, Kernan said.
As election results rolled in, the hosts on CNBC's election coverage speculated what a win by Democratic presidential nominee Sen. Barack Obama might mean.
CNBC "Kudlow & Company" host Larry Kudlow warned Obama shouldn't misinterpret the election results to unleash an attack on vital parts of the economy.
"My point is Obama can not go far to the left if he is winning states like Ohio and New Mexico and let's say Virginia and the others," Kudlow said. "In other words, these red states that are hotly contested are sending a message to Sen. Obama he must in fact govern as the moderate."
Perhaps this is coming a little late with the election already underway, but the idea the current economy is as threatened as it was during the Great Depression is unfounded, according to the Nov. 4 USA Today.
"Failed banks. Panicked markets. Rising unemployment. For students of history, or people of a certain age, it all has an all-too-familiar ring. Is this another Great Depression? Not yet," John Waggoner wrote for USA Today
Soup lines, Hoovervilles and other Depression-era imagery have become commonplace in the media. Journalists have compared the current downturn to the Great Depression hundreds of times. On the networks (ABC, NBC and CBS) alone, there were 70 comparisons in the first six months of 2008. Since July 1 that number more than doubled to 157. But as Waggoner pointed out - the similarities aren't even close.
If the Republicans had a few more spokesmen like Haley Barbour, the political landscape might look a lot different. The Mississippi governor's down-home good humor and razor-sharp wit are a formidable combination. Barbour's killer combo of skills was on display on this evening's Hardball. When Chris Matthews challenged his criticism of Obama's tax credit plan, Barbour good-naturedly backed him down with an impressive disquisition on New Deal history. When he was through, Matthews had to admit that Haley was right.
I'd encourage people to view the video, not only for the entertainment value, but as a case study of how to defeat a member of the liberal media.
Reporter Clive Crook really likes Barack Obama and in a November 3 op-ed practically endorsed him for president. But, the Financial Times reporter worries, the Illinois senator has some loopy economic ideas.
Yes, your just read that correctly. A reporter for one of the Anglosphere's well-respected financial newspapers admits he'd vote for Obama were he an American citizen -- Crook is a subject of Her Majesty Queen Elizabeth II -- but he hopes his stump speech populism is all a vote-getting gimmick.
As you read this, imagine the clamor, if not outright outrage, if a conservative-leaning foreign journalist like say Mark Steyn endorsed McCain only to question his foreign policy prescriptions (emphases mine):
In the last Conventional Wisdom feature before the election, Newsweek magazine assigned a sideways arrow for the Democratic vice presidential contender while giving the thumbs down to Gov. Sarah Palin for "sink[ing]" the campaign with a "lack of gravitas."
In doing so, the CW feature dismissed the damaging impact of Sen. Joe Biden's "rhetorical flourishes." Yet among Biden's recent foot-in-mouth moments was one that inadvertently broadcast the Democratic ticket's tax-hiking designs by significantly lowering the $250,000-a-year tax bar the Democratic campaign previously had set.
As the Wall Street Journal noted on October 29, the "'tax cut' threshold keeps falling":
It's obvious The Washington Post's "Style" section is broadening it horizons beyond fashion, music, books and other fluff, plus of course - Howard Kurtz's media column and the comics. The editors of that section are tackling important events that changed history by commemorating them as milestones.
Normally such attention is given to anniversaries that fall more under the definition of a landmark: the 25th, 50th, 75th, etc. But with the American public seeing the economy as the top issues in the presidential election - and the media tendency to compare current economic conditions to the Great Depression already well-established - the Post has deemed the 79th anniversary worthy of attention.
Jeff Cohen, founder of FAIR—a self-described progressive media watch group—now a professor of independent media at Ithaca College, invited me to address his class of student bloggers this afternoon. Asked to name some of the fairer MSM journalists, I included David Gregory on my short list. That could understandably come as a surprise to those who remember Gregory from his days as NBC's chief White House correspondent, when he earned the ire of the Bush administration for his often-aggressive style. But I've found that Gregory plays it pretty much down the middle in his new role as host of Race for the White House on MSNBC.
By coincidence, on this evening's show Gregory vindicated my confidence with some tough questioning of an Obama surrogate on the issue of taxes and spending. Gregory went so far as to suggest that Obama's indication that he might not press for immediate implementation of tax increases on higher earners makes McCain's case. Gregory's guest was Rep. Chris Van Hollen (D-Md.), Chair of the Democratic Congressional Campaign Committee. When Van Hollen suggested Obama might postpone his tax-increase plan, Gregory moved in . . .
Bob Shrum has made an addition to the growing list of things you can't say about Obama, because it's racist: don't you dare suggest Obama's never done anything hard.
Dem Shrum issued his diktat while debating Ed Rogers, a veteran of the Reagan and Bush 41 White Houses, on today's Hardball. Shrum seized on and distorted Rogers' statement, manifestly made in the political sense, that Obama had "never done one hard thing," to play the race card.
The Oct. 26 New York Times took on Sen. Barack Obama's elusive health insurance mandate for employers -- the "play-or-pay" rule that would force businesses to pay a new tax if they didn't contribute a "meaningful" amount toward their workers' insurance. In the debates, Sen. John McCain asked more than once how much businesses would be fined, and Obama declined to say.
Now we know why. Just 'cuz.
“We made a decision even before the plan was rolled out not to decide,” David M. Cutler, a Harvard economist who speaks for the campaign on health care, told the Times. “It’s not that there’s a decision out there that we’re not telling. It’s literally that we’ve decided not to decide.”
In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt's New Deal and determined it actually prolonged the Depression by seven years.
Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy.
Cole and Ohanian asserted that Roosevelt thought excessive business competition led to low prices and wages, adding to the severity of the Depression.
"[Roosevelt] came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies," Cole said in a press release dated Aug. 10, 2004.
Imagine that a week before a presidential election, a radio interview surfaced in which the Republican candidate had called for, say, the abolition of Social Security. Now imagine the broadcast networks' reaction to that nugget: "We interrupt regularly-scheduled programming for this Breaking News," followed by 24/7 coverage with talking heads pondering the devastating impact on America's seniors, the overall economy, the future of Western civilization, etc. Nobel laureate Paul Krugman would be booked from now till election day, offering his pained pronouncements.
But how do those same networks react when a radio interview [YouTube after the jump] surfaces of Barack Obama in a call for the redistribution of wealth, in which he laments the Supreme Court's insufficient radicalism in pursuing redistribution and refers to the civil rights movement's failure to develop a better strategy to bring about wealth redistribution as a "tragedy?
If you want to see an example of the media employing a subtle undercurrent of disdain for Republicans and praise for Democrats, you can't get any better example than the masterful effort at left leaning propaganda that the Boston Herald unleashed on October 26. Even the headline is artful for the negative image in which it casts McCain’s actions while simultaneously presenting Obama as the innocent victim. The subtlety is amazing and really must be seen to be believed.
With the very headline we see that nasty McCain and the obviously innocent Obama as the Herald sternly informs us that, "John McCain keeps swinging socialist hammer at Barack Obama." That mean, "hammering" McCain "swinging" that obviously absurd claim that the Marxist is a socialist! Imagine. The negative image of McCain being an aggressor is painfully obvious.
Megan McArdle, a blogger for TheAtlantic.com who has said she's voting for Obama, slammed the media in an appearance on Reason.tv's "The Talkshow" for not bringing up Sen. Joseph Biden's past as a "corporate sellout." McArdle said that was quite relevant when the Democratic candidates try to oppose financial deregulation in campaign appearances.
"And here is where I am willing to say the media is giving Obama a pass on a bunch of stuff that they shouldn't be ... It's ridiculous that no one is bringing up every time - every time Obama says anything about financial deregulation, Joe Biden's history should be trotted out and it's not and I'm not sure why," McArdle said to host Nick Gillespie.
Surprisingly, the October 21 "View" mentioned Congressman John Murtha’s "my constituents are racist" comments. Though Joy Behar called it a "stupid thing to say," they were much gentler on Murtha than on Michele Bachmann, who stated that Obama has associated with anti-American individuals.
Joy Behar labeled Bachmann a "red baiter" and alluded to the McCarthy era. Whoopi Goldberg asked "it okay for someone to start attacking your beliefs in your country because you don’t agree with their views?" Sherri Shepherd, who has confused historic time lines, recalls growing up in the McCarthy era before other co-hosts reminded her she was not yet born. Even the token Republican, Elisabeth Hasselbeck, would not defend Congresswoman Bachmann.
Is this a case of labeling one anti-American for a simple disagreement? A transcript of a recent "Hardball" interview demonstrates that she clearly alluded to Obama’s associations, William Ayers and Reverend Wright, who are indeed anti-American.
Covering a "sober summit" held in Lake Worth, Florida that "focused on boosting jobs and capping the rising costs of healthcare," Miami Herald's Lesley Clark noted that Sen. Barack Obama was joined on stage by the Democratic governors of the swing states of Colorado, Michigan, New Mexico, and Ohio:
''A crisis like this calls for the best ideas, the brightest minds, the most innovative solutions from every corner of this country,'' said Obama, who invited the Democratic governors of four key election states to share a stage with him, along with a small business owner from Miami, former Federal Reserve chairman Paul Volcker and the CEO of Internet giant Google.
Yet the 2008 Fiscal Policy Report Card by the libertarian Cato Institute found a C-average among those Democratic governors. By contrast McCain supporter Florida Gov. Charlie Crist (R) earned an "A." Michigan's Gov. Jennifer Granholm -- who portrayed Gov. Sarah Palin (R) in Sen. Joe Biden's debate prep -- and Colorado's Gov. Bill Ritter were assigned "D"s for their advocacy of tax hikes (emphasis mine):
On Monday’s Good Morning America, in a fact check of John McCain’s statement that Barack Obama “gives away your tax dollars to those who don’t pay taxes,” reporter Jake Tapper cited the Tax Policy Center’s analysis of the McCain and Obama tax cuts to stamp McCain’s charge “false.”
“Obama's tax cuts only go to people who work, so by definition, it's not welfare. Some working people eligible for Obama's tax cut make so little, they do not pay income taxes. But they do pay payroll taxes and other taxes,” Tapper summarized.
In other words, McCain would have been accurate if he’d said “gives an income tax cut to those who don’t pay income taxes — and pays for it by raising income taxes on those who are already shouldering more than half of the nation’s income tax burden.”
But Monday’s piece illustrated the liberal media’s penchant for analyzing tax proposals according to a liberal yardstick — who gets how big a check from the government — rather than by analyzing how the rival tax policies will contribute to greater prosperity (by helping or hurting economic growth, rewarding or punishing job creation, etc.).
Embarrass Obama, and expect the liberal media to go after you, no matter who you are: That's what National Review journalist Byron York warned early Thursday afternoon.
He was quickly proven right by a story from reporter Larry Rohter in Friday's New York Times, "Real Deal On Plumber Reveals New Slant," in which Rohter took a wrench to Joe Wurzelbacher (aka "Joe the Plumber"), the citizen who dared to question Obama on his tax plan as the Democrat campaigned in his neighborhood in Toledo, Ohio. Obama responded with a classic paleo-liberal cliche: "I think that when you spread the wealth around, it's good for everybody."
That insight into Obama's mindset was politically fascinating, but Rohter buried it in the 11th paragraph of his story, focusing his investigation on such vital matters as "Joe's" actual first name (Samuel) and whether or not he has a plumber's license.
After smearing Joe the Plumber on Friday’s CBS Early Show, co-host Harry Smith turned to a group of his own hand selected ‘average Joes’ to defend Barack Obama’s tax plan: "I'll tell you, we have assembled a panel of 'average Joes.' Joe the plumber, the most famous person in America now. Well, we have five Joes here this morning, from various walks of life, and we're going to put their incomes to the test against the candidates' tax plans and see how it will affect them all." Financial analyst Jennifer Openshaw then proceeded to examine the personal financial situations of each "Joe" and concluded that four of them would save more money under Obama’s tax plan as promoted by his campaign.
Smith did acknowledge these projections were hypothetical: "...according to the Obama tax plan, and this, of course, is subject to passed by Congress...Talk about a pie in the sky." However, he then continued to assume it would be implemented and focused on the first guest, asking Openshaw: "He would do much better with Obama plan?" Openshaw replied: "You bet, he would do a lot better. But under McCain, what's interesting is, you know, he's got that $2,500 health care tax credit...for coverage, you know, you might not be able to cover both you and your son if you have to go find coverage someplace. So that's something to watch out for."
Story after story on the full-year results for the federal budget refers to the size of the full-year deficit for the fiscal year that just ended on September 30 ($455 billion), and how it compares to last year's deficit ($162 billion).
Almost none of them talk about why the deficit ballooned.
I wonder why?
Could it be because the Democrat-controlled Congress of Nancy Pelosi and Harry Reid allowed spending to spiral out of control?
On Thursday’s Anderson Cooper 360 program, CNN senior political analyst David Gergen followed the liberal talking points about how Joe the Plumber’s real first name is Samuel and how he doesn’t have a plumbing license. When host Anderson Cooper asked if John McCain benefitted from the attention on the Ohio laborer, Gergen replied, "Well, I think he was for a while. But I -- when we found out he was Sam the non-plumber, it changed a little bit." Gergen went on to treat Joe Wurzelbacher, who works with plumbing, as if he worked as a McCain campaign surrogate: "...I don't understand why the McCain team didn't vet the guy before they made such a -- you know, made such a focus on him on national television. I can guarantee you that the George W. Bush campaign, you know, which ran a highly disciplined campaign, would have vetted and would have known before he went out there about... his personal status."