Monthly Archives: January 2010

Change We Can Lament

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Last Tuesday, Massachusetts voters selected an anathema, a Republican, as their new Senator. Such was their disgust with the general atmosphere in Washington that the deepest blue State chose an unknown GOP novice over a reliable Democrat party-line politician. In response to the blood-bath, Obama said, correctly, that the same dissatisfaction with Washington that swept him into office also swept in Sen. Elect Brown. Obama should have left well enough alone, but he went on to say that this anger goes back eight years, implying that the real culprit was Pres. Bush. Really? So Bush’s and the GOP’s many errors and corrupt politics are to blame for a GOP victory in Massachusetts? Well, that’s the first good Bush has done for the GOP since 2004.

What Obama had hoped to say might have been that politics as usual go back a while and that he was elected to deliver “change we can believe in.” Even that would have been unfortunate because as corrupt as Washington was, Obama has made it worse. Shout Bits doubts that independent voters hoped for these examples of Obama’s sleazy politics:

  • Even before Obama was elected, he broke his promise and turned down public funding of his campaign. Of course Shout Bits is against taxpayer funding of political campaigns, but Obama made it clear that part of his transformational brand of politics was to limit his spending per the federal program. As soon as it was clear Obama could raise more than the limit, he broke his promise and ran the most expensive campaign in history. Politics as usual.
  • Throughout his political career, Obama has associated with some shady characters. Terrorist Bill Ayers launched Obama’s early political career, while Rev. Wright preached some pretty divisive rhetoric. Many politicians have shady beginnings, like Sen. Byrd’s membership in the KKK, but even after Obama’s election, he courted radicals like truther Van Jones, pedophile apologist Kevin Jennings, genocide advocate John Holdren, and documented socialist Carol Browner.
  • Obama stole the property of Chrysler’s secured debt holders and transferred the assets to the UAW. Anecdotal evidence suggests that Obama also directed the closure and retention of certain Chrysler and GM dealerships based on political favoritism – the lawsuits continue.
  • Obama pushed for the Card Check law that would have forced union organization against the will of both employees and employers. This union sop is opposed by an overwhelming majority of voters.
  • Obama’s stimulus bill was little more than a hodge-podge of left wing pork, that clearly has not helped with the unemployment problem he claimed it would target. Worse, the stimulus bill forced expansive policies on states that had little choice but to comply. While Obama’s stimulus may have helped balance 2009 and 2010 state budgets, it requires permanent budget waste thereafter. This kind of heavy handed tactic hardly counts as change.
  • Obama chastised the unconscionable tactics of the Bush ‘war on terror,’ all the while maintaining every substantial part of the Bush program.
  • Obama continued and expanded the inappropriate Bush bailouts. Obama redirected funds meant solely for financial institutions to the benefit of his union allies. Currently, Obama is trying to convert the one time TARP loans into revolving loans for his political allies – a $200bln slush fund with no accountability.
  • Despite the clear proof that the financial collapse was encouraged and fueled by irresponsible Fed policies and incompetent Washington oversight of Fannie Mae, Obama continues to hammer away on his theme that only Wall Street bankers were to blame. Obama’s only response is to harp about Wall Street bonuses and to tax the successful banks to subsidize the failures.
  • Obama sought to fund socialized medicine on the backs of those with good health care, with the exception of Congressmen and union members. Those valued constituents would be exempt from the ‘Cadillac tax.’ Perhaps this is the worst example of Obama’s corrupt cronyism.
  • Obama and the Congressional Democrats met in private to hammer out backroom deals on health care, buying off moderate Dems with tens of billions in graft. Obama ignored his transparency pledges when they mattered most.

All these missteps, failures, and revealing gaffes in one year! Obama campaigned as a transformational unifier, but he has turned out to be a hard left manipulator – the very kind of politician voters repudiated in 2008. David Axelrod thinks that there is no need for an administration shake-up in the wake of the Massachusetts election, but the real problem is that Obama never shook-up the business as usual corruption in Washington in the first place. Unless Obama realizes that his Chicago brand of sleazy politics is not what voters wanted in 2008, the mid-term elections will dwarf 1994 as they wipe the Washington slate clean.

Health Care Dies In the House?

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At the time of this entry, Massachusetts voters are deciding on their next Senator. A fresh poll shows the GOP candidate Scott Brown up by 9 points. Given AG Coakley’s desperate thrashing to the finish line, Brown’s chances look good. Amazing as that is, the real political tsunami will hit the House. Rep. Stupak and his anti-government-funded-abortion posse may be about to hold all the cards.

Recall that a group of about 40 Representatives, led by Stupak, opposed abortion funding as a part of Pres. Obama’s health care bill. While it is hard to say exactly what the House bill says, Stupak seems to have stopped abortion funding in the House. Further, the House Bill passed by only 5 votes, giving Stupak more than enough power to tip the balance in future votes.

By contrast, abortion funding seems to be in the final Senate Bill, although nobody knows for sure. Stupak has repeatedly stated that he does not support the Senate abortion language, whatever it may be.

Assuming Sen. Kennedy’s old seat goes red, the Democrats will lack the 60 votes required to introduce a modified Senate health bill. While Sen. Reid has threatened to use the ‘nuclear option’ and bypass a cloture vote as a part of the reconciliation process, that is all bluster. Reid would assure a Dem wipeout in November by altering established Senate order. With Brown in the Senate, Reid will be powerless to amend his health bill. However, the Senate has already passed a health bill, and if the House were to pass the exact same language, no reconciliation would be necessary.

A GOP win in Massachusetts will put all of Washington’s eyes on Stupak. Every lever of Democrat pressure and persuasion will be used to get him to agree to the Senate abortion language. Still, the Stupak 40 know that by voting for government funded abortion, they will lose their seats. Reid, Pelosi, and Obama face some harsh mathematics in trading 40 or more House Seats for one bill.

What kind of pork bribery would it take for the House to approve language that could cost 40 Seats and possibly the House majority? Considering a single Senate vote went for something like $50bln in the case of Sen. Nelson, we might witness corruption on an unprecedented scale.

If nothing else, the next few hours and the ensuing weeks will be good political theater. No doubt Stupak’s palms are sweaty, and he is not looking forward to his first phone call tomorrow morning. For those who oppose socialized health care, let’s hope Stupak and his allies maintain their convictions in the face of extreme pressure.

Commander in Thief II

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As Shout Bits predicted in May 2009, the Obama Administration has no intention of letting US banks simply repay their bailout loans with interest. This week, Pres. Obama proposed a new 0.15% tax on uninsured liabilities for the largest banks. Aside from essentially adding 15 basis points to most mid-sized commercial loans over the next decade, the Obama tax simply proves that his motivations are purely political.

For starters, consider for whom the new tax does not apply: GM and Fannie Mae. Most TARP beneficiaries are well on their way to repaying their loans, and the TARP program has accrued something like a $50bln profit so far. While banks like BofA are executing their plans to get out of the government’s clutches, GM and Fannie have done nothing. GM and Fannie are comfortable being financed by a fawning government that will never call in their debts.

Obama tried mightily to prevent large banks from repaying their TARP funds by arbitrarily increasing their capital reserve requirements in the event of TARP repayment. Despite this, most banks decided that raising the extra equity capital was worth it so they could run their businesses as they see fit. Drawing from the Democrats’ one tool bag, taxes, Obama won’t let them off the hook. Obama wants a ten year (i.e. permanent) tax to punish the successful and favor the politically connected.

Lest anyone think the new tax will somehow correct whatever role big banks played in the financial crisis, take a deep breath. As everyone should know, businesses charge the market rate for their products. If every large US bank’s cost of funds goes up by 15BP, then loan interest rates must go up by the same. That is, except for very large borrowers that can get their foreign capital requirements from offshore sources like HSBC. Their cost of money will not go up. This will also have the effect of diverting capital offshore in general, where the .15% tax would not apply. So, Obama’s tax would benefit his big business allies like GM at the expense of their smaller competitors who can’t jet to Hong Kong to close a loan.

In the real world outside of Washington, capital flows to benefit the successful, while failed business models die off quickly. Of course Obama does not care about free markets, and is doing his best to eliminate them. In Obama’s world, every lever of power must pass through Washington. At the risk of hyperbole, the future of the US’s capitalist based prosperity rests on reigning in Obama’s ever more disgusting spread of government evil.