Tuesday, February 17, 2009

Obama Hoisted on His Own Petard

Re: my gripes about Obama's double-talk regarding bi-partisanship (see here and here), here is an absolutely fascinating passage from his 2006 book The Audacity of Hope (presumably written when Republicans were still in control of Congress):

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"Genuine bipartisanship," he wrote, "assumes an honest process of give-and-take, and that the quality of the compromise is measured by how well it serves some agreed-upon goal, whether better schools or lower deficits. This in turn assumes that the majority will be constrained -- by an exacting press corps and ultimately an informed electorate -- to negotiate in good faith.

"If these conditions do not hold -- if nobody outside Washington is really paying attention to the substance of the bill, if the true costs . . . are buried in phony accounting and understated by a trillion dollars or so -- the majority party can begin every negotiation by asking for 100% of what it wants, go on to concede 10%, and then accuse any member of the minority party who fails to support this 'compromise' of being 'obstructionist.'

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I could not come up with a better description of what happened in the last two weeks if I tried.

Hat tip: Bill McGurn of the Wall Street Journal today

More Cost of Energy Stuff

Remember my blog post (here) where I conjectured that the recent economic slump might trace its origins to a massive increase in the cost of energy?

Well, listening to JP Morgan's Chief Economist while at an ACG-NJ meeting this morning, a thought occurred to me: The two largest post-war economic crises are today and 1982.

Look at this chart below of the real cost of a barrel of oil:



(Click in the image to enlarge)

Interesting, eh? Seems like we've been here before... I am starting to convince myself that I might be right.

People keep talking about the sub-prime crisis being the cause of our economic slump. I don't think that's right. I think an energy crisis caused the beginning of a sub-prime crisis, which caused the current economic slump to be worse than ever before.

Friday, February 6, 2009

The Stimulus of Partisan Warfare

Last week, after reading several hundred of the 700 page stimulus bill passed by the house, I chided myself for not knowing what was going on (see here).The bill read exactly as it is: an orgy of spending on the far left’s long-standing Christmas list.

The fact that it had been crafted by Nancy Pelosi and the House Democrats left open the possibility that Obama had originally been intending to contrive a stimulus bill in earnest, but that he was forced to capitulate when the process in the House took on a life of its own. At least that’s the way I wanted it to be.

Well, based on Obama’s comments last night at a Democratic retreat in Williamsburg, he was in on the plan from the very beginning. Here are some of his comments regarding the stimulus bill:

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THE PRESIDENT: Now, I just want to say this — I value the constructive criticism and the healthy debate that's taking place around this package, because that's the essence, the foundation of American democracy. That's how the founders set it up. They set it up to make big change hard. It wasn't supposed to be easy. That's part of the reason why we've got such a stable government, is because no one party, no one individual can simply dictate the terms of the debate…

So I welcome this debate. But come on, we're not — we are not going to get relief by turning back to the very same policies that for the last eight years doubled the national debt and threw our economy into a tailspin.

We can't embrace the losing formula that says only tax cuts will work for every problem we face; that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or falling schools and crumbling bridges and roads and levees. I don't care whether you're driving a hybrid or an SUV — if you're headed for a cliff, you've got to change direction. That's what the American people called for in November, and that's what we intend to deliver.

So the American people are watching. They did not send us here to get bogged down with the same old delay, the same old distractions, the same talking points, the same cable chatter. You know, aren't you all tired of that stuff?

AUDIENCE: Yes!

THE PRESIDENT: They did not vote for the false theories of the past, and they didn't vote for phony arguments and petty politics. They didn't vote for the status quo — they sent us here to bring change. We owe it to them to deliver. This is the moment for leadership that matches the great test of our times. And I know you want to work with me to get there.

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Obama admits it: this isn’t a stimulus bill! This is the beginning of his “Change.” What does foreign oil or healthcare or SUVs have to do with stimulus? Nothing. This is his big, grand opportunity, only two weeks into the new administation. A new beginning. And oh, what a beginning. A trillion dollar beginning. Boy, does this ever set the bar low for incremental change.

And here I was, naively believing Obama’s pre-election rhetoric about a new post-partisan world! This bill is the old, hyper-partisan world on speed and crack, driving a turbocharged crotch rocket.

Guess what, Mr. Obama. This is now war. And you are in our sights. I haven’t been this mad in a long, long time.