When Rep. Joe Barton apologized to BP Chairman Tony Hayward for Pres. Obama’s $20 bln “shakedown,” he used some indelicate words, but his point was valid. BP itself did not deserve an apology; it is fairly clear that they took irresponsible risks in their operations, and in any event caused an epic disaster. Barton should have apologized to the British people who trusted the US’s rule of law enough to invest their wealth in the US economy. Obama sidestepped the well-established laws designed to justly punish BP by extracting $20 bln that surely will never benefit deserving victims as much as unions and bureaucrats. More noteworthy than $20 bln is the destruction of the US’s reputation as a land of laws. Hugo Chavez is expected to capriciously extract tribute from oil companies, not Obama.
As with Obama’s shakedown of Chrysler bondholders and his threat to bankrupt anyone who builds a new coal fed power plant, the law is subordinate to his ego and will. Also, the fact that Obama went outside his authority and the law to get cash alone shows the limited mindset of Washington itself. For all the delays and failures in the Gulf, the one thing that was not hindering the recovery effort was a lack of money. BP has already spent billions of dollars and has not signaled any intent of slowing down. The solution does not require more money. The solution requires more engineering, something about which Washington and Obama know nothing.
This is hardly news that the Government throws money at disasters. When the World Trade Center, itself a government make-work project, was destroyed by terrorists, the Federal Government allocated about $20 bln to aid Lower Manhattan. Manhattan and New York City are, of course, the richest places on earth; there is no lack of money in NYC. What ground zero needed was a reprieve from the City’s crushing regulations, union wage scales, and unreal taxes. Approaching nine years later, the $20 bln has done little to rebuild ground zero, which is mired in red tape and political infighting.
Oklahoma City should, in retrospect, be grateful that the Federal Government did nothing to prop up its citizens after Timothy McVeigh bombed the Murrah Federal Building. Instead of nearly a decade of NYC’s indecision and bickering, the site of McVeigh’s bombing is a reverent park, and life moves on. Oklahomans do not cotton to the implied victimhood of $20 bln in federal money. Oklahoma City has done just fine without handouts and left wing ideology, while NYC with its $20 bln remains mired in no job growth and no Lower Manhattan recovery.
Why does the Federal Government throw $20 bln at problems that need anything but more money? Shout Bits wonders if some focus group once determined that $20 bln was the right number to convince the average voter that the Government was serious and concerned. Of course the amount is arbitrary. Pres. Bush and Congress requisitioned $116 bln in response to Hurricane Katrina, more than enough to rebuild all the modest housing destroyed by the storm. Of course all that money did no good for the people of the Delta. As with NYC, and probably BP, government bureaucrats misspent the money, tied up projects with red tape, and actually made matters worse. New Orleans was impoverished long before Katrina due to government corruption, not a lack of stimulus money.
The problem for Washington is that it has no skills to restore disasters like Oklahoma City, 9/11, Katrina, and now BP. The only thing Washington ever does is throw money at a disaster, and by consequence imposes its oppressive regulations on the entire effort. Rest assured that without Washington, foreign oil skimmers would have worked the Gulf long ago. Most people are better able to recover their lives when Washington leaves them alone. Instead of throwing $20 bln at the next disaster, Washington should try suspending the regulations and government red tape that really prevent a swift recovery. Extorting $20 bln from BP for an unsupervised White House slush fund might make for good political theater, but it does nothing to aid the actual Gulf recovery.
As Shout Bits completes its second year of commentary, some readers have justly criticized it for becoming more negative in the face of Washington’s vigorous assault on freedom and prosperity. Shout Bits can only plead that it had no idea how radical and high-handed Pres. Obama would be. A leftist, certainly, but Obama has also shredded property rights (e.g. the Chrysler theft and BP shakedown) and any semblance of ethics (the various blatant payoffs to lawmakers to enact socialized medicine). It is hard to remain optimistic even in the greatest nation. Still, here are some words of hope: everything Obama has done will be undone eventually, and the best advice is to live like Obama never happened.
Of course Obama and his Democrat lieutenants have dealt a serious blow to the US with their regulation, spending, and socialist takeovers, but their excesses are nothing new. Countries like Russia already tried the collectivist route and failed. Other countries like Greece and much of Old Europe tried socialism-light, and are only now failing. Obama’s socialist experiment comes very late to the party, with the US emulating Europe just as Europe is ready to give in and admit failure. While it has taken 60 to 70 years for Europe’s socialist experiment to fail, Obama’s experiment will not last nearly as long. Europe socialized long before its debts became un-payable, but the US enacted the final piece of socialist paradise when its debts were already clearly out of hand. The bill for Washington excess will likely come due before Obamacare even fully takes effect.
Reality will force the failure and repeal of everything Obama has done, along with the creeping socialist agenda of nearly every modern President before him. If not, the US itself will fail like Greece. Either way Obama’s theft or destruction of the US system of freedom and prosperity will not stand even to the end of the new decade. As an absolute certainty, something will change, and that is good news.
Ayn Rand’s Atlas Shrugged tells the story of a capitalist who gave up on a world eerily like Obama’s US. Galt, Shrugged’s hero, built a new liberal paradise of capitalism and property rights. Galt’s hidden mountain paradise, however, is as impractical as Rand’s book is tedious. Outside of idealized fiction there is simply no choice but to carry on.
Obama’s policies, every one, will fail and be abandoned. Whether Obama is replaced with a return to a rule of law, individual rights, and a capitalist system or anarchy is the choice of businesspeople and libertarians. Even though Obamacare ironically encourages people to drop their health care, pay for it anyway. Even though Obama will double the taxes on investments next year, invest in the US’s future. Even though Obama’s spending squeezes the profit out of employing people, look for talent among the unemployed. Even though Obama has claimed the lion’s prize of the wealth of this nation, for now accept what little Washington has yet to claim. If only for show, keep the capitalist engine running because someday soon the US will abandon socialism and today’s optimists will be best poised to prosper.
In other words, keep living like Obama never happened because collectivist experiments always fail and someone always emerges from the wreckage to restore prosperity. Accepting Washington as the new guardian of our lives will only extend Obama’s lost years.
Whenever someone says “you know I am good for it,” or “I am going to pay you back really soon,” or “I am just a little short right now,” it is safe to conclude that you are not going to be paid and that the person to whom you foolishly lent money is broke. When companies have a ‘temporary cash shortage,’ even for a day or two, they go bankrupt. No matter how the mainstream media wants to spin it, this week the State Government of Colorado went broke.
On Thursday, the Denver Post reported that Colorado was “temporarily short of money” and was suspending Medicaid payments. Colorado would “begin catching up on payments” next month. Try that with a cable TV bill. Further some taxpayers are still waiting on their income tax refunds which should have been paid by mid-May. This replay of California’s fiscal mismanagement is outrageous and will have consequences.
Among the many questions the Post failed to ask when it parroted the State’s official line is why did Gov. Ritter decide to cripple Medicaid providers? Why didn’t Ritter withhold the union dues the State collects from its employees’ paychecks? Why didn’t Ritter withhold payment on the various union construction projects around the state? Why didn’t Ritter withhold the paychecks of CU professors? How did Ritter decide to place the entire burden of Colorado’s illiquidity on the shoulders of small businesses that provide healthcare to the poor? Considering the State’s $18 billion budget, those small businesses must wonder how they got singled out at the bottom of the political slag heap.
The small businesses, which have payrolls and rent, yet must wait at least an extra month to get paid, just got the message: the State is no more reliable a customer than any other deadbeat. Worse still, the delayed payments came with little notice; even some deadbeats let their creditors know the check is not in the mail. The State has sent the same message to every business: don’t count on timely payments. When dealing with unreliable customers, businesses do one thing: raise prices. One of the advantages of government contracting used to be reliable payment terms, a factor that worked to the advantage of taxpayers. By punishing small businesses instead of his union cronies, Ritter has driven up the cost to run the Government for years to come. Look for Colorado’s already lower range investment grade ‘AA’ credit rating to be reviewed.
A properly run $18 billion enterprise like Colorado’s public budget should never run out of cash, and to do so is illegal. The Colorado Constitution forbids the budget deficits and debt that Ritter has illegally enacted by riding his payable accounts. Someone should lose his job and possibly be criminally punished. Ritter is simply not permitted to run a deficit and finance it by illegally withholding payments to a politically unpopular body. Despite this, the Post moved on with no further questions.
Taxpayers who are still waiting on their state refunds have also been sent a message: don’t pay estimated taxes throughout the year. If Colorado can’t pay its debts and arbitrarily decides to withhold tax refunds, the clear strategy is to never extend credit to the Government in the first place. The penalty for underpaying estimated state income taxes is less onerous than the prospect of an indefinitely delayed refund. Ritter, by singling out taxpayers and small businesses for his malfeasance, has probably reduced the quarterly float of cash Colorado used to enjoy when it was responsibly managed.
How is it that Colorado went broke? The sole reason is the repeal of TABOR, the law that requires Colorado to grow its budget no faster than inflation and population put together. Once these spending restrictions were lifted, the Democrats running the State went wild with new excessive spending on ‘green’ initiatives, union mandates, and public employee growth. When the recession hit, the same Democrats resorted to illegal tax increases and budget cuts. The State went on a bender right up to the recession, yet when reality forced Ritter back to earth, the adjustments were called cuts instead of a return to common sense. The reality is that Colorado’s politicians of both parties irresponsibly assumed that they could spend as if there would never be another recession, and when the bill came due Thursday, it was small businesses that were left stuck with the tab. Colorado politicians need to learn their place and stop ruining the good name of the people they serve.
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