President Obama's federal budget has been unmasked as part fantasy, part gimmickry and part shell game. These "parts" mixed together yield a plan that shockingly adds $11 trillion in gross debt over the next ten years, propelling the nation's total indebtedness to a breathtaking $26 trillion.
With a straight face, Obama asserted his budget "will cut the deficit by $4 trillion over the next decade." Only this president could utter such a deception while proposing a budget that actually grows public debt by 73 percent from today's level in order to fund deficit spending.
Undeterred by his pledge in February of 2009 to slice the deficit in half, the president's scheme shuns austerity in favor of more spending. His budget contains $47 trillion in expenditures over the 10-year planning cycle, the largest increase in government outlays in history.
The proposal hikes spending on Social Security, Medicare and Medicaid, despite the president's assurances that his budget chips away at the programs. Together those three entitlements account for roughly 40 percent of the federal budget. It is sheer lunacy to suggest budget deficits can be arrested while entitlement costs escalate every year.
Based on his own rosy projections, the president admits his budget produces a $1.33 trillion deficit in 2012, meaning the government will have to borrow more money to cover the shortfall. This will mark four straight years of trillion-dollar-plus deficits rung up by the Obama Administration.
By the end of his first term, President Obama will have added $5 trillion to the nation's publicly held debt. No one-term president in the history of the United States has come even close to that standard. Yet Obama continues to blame everyone but himself for his broken promises to stem the tide of red ink.
In his latest lament, Obama attributed his super-sized budget to economic events "beyond his control." The president grumbled that a "lot of us didn't understand" how bad the economy was going to get. That is a stinging rebuke of his fiscal team and his own grasp of the economy.
As soon as Obama's budget thudded on the desks of legislators, it was pronounced dead on arrival. While the president blames Republicans for every impasse, his own party has not passed a budget in the Democrat-controlled Senate in nearly three years. And they won't approve his latest offering either.
Even the most ardent Obama supporter has to cringe at his budget dishonesty. For example, the president's budget achieves $1 trillion in cuts by taking credit for money it never planned to spend. Nearly every budget category grows, one exception being the Department of Defense.
The president could restore fiscal integrity over 10 years by simply limiting the growth of spending to two percent a year. The Cato Institute, a Washington think-tank, calculated that single action would result in a balanced budget by 2022. It would keep spending at the current rate of inflation.
Meanwhile, the budget envisions $2 trillion in new taxes to reduce the deficit. Yet the nation's debt continues to soar under the Obama blueprint. Even if the president confiscated every penny of income from everyone making over $1 million a year, it would reduce the deficit by only $616 billion.
The president's budget charade has been masked by the parasitic mainstream media. The Washington Post called the proposed budget cuts "draconian." USA Today hailed the balanced approach of new taxes and spending reductions. News reports neglected mentioning the ticking debt bomb hidden in the budget.
The media can no longer disguise the fact that President Obama has absolutely no intention of ending the spending spree he initiated when he assumed office. He can make all the excuses he wants.
Most Americans want no part of a budget that saddles the country with Greece-like debt.
Sunday, February 26, 2012
Sunday, February 19, 2012
President Versus Catholics: Political Theatre Starring Pope Obama
Without media malfeasance, the president's sparring match with Catholic Church leaders over health care coverage would have been exposed as nothing more than a crass effort by Obama to solidify his standing with women voters.
Instead, the media painted a picture of a truculent religious organization clinging to antiquated moral principles that are out of sync with its own members. News coverage labeled church hierarchy misguided ideologues more interested in hoodwinking their flock than in women's health.
The partisan press coated the president with Teflon, depicting Obama as willing to compromise with a recalcitrant Catholic Church bent on denying contraception to women. In the media version, the president claimed the higher moral ground by tempering his policy to placate an inflexible church.
The whole contrived muddle is nothing more than political theatre.
Let's start with the leading actor in this farcical comedy, President Obama. He was forewarned by Vice President Biden and former Chief of Staff Bill Daley, both Catholics, to exempt religious organizations from the health care provision that requires institutions to cover contraception, morning-after-pills and sterilization.
According to Washington insiders, Obama ignored their pleas and deferred to Health and Human Services Secretary Kathleen Sebelius, the former Kansas governor and practicing Catholic with a long pro-abortion record. Sebelius won over her boss by reminding him that women voters made the difference in his campaign.
In the 2008 presidential election, 56 percent of all women voted for President Obama versus 43 percent for his opponent, Sen. John McCain. The margin was even wider among unmarried women, who went for Obama, 70-to-29 percent. McCain carried men 49 to 48 percent.
Once Obama announced his decision, the mainstream media supplied the spin. News reports characterized the hubbub as a dispute over a woman's right to contraception, glossing over any mention of abortion pills or sterilization. That's because women overwhelming endorse the use of contraceptives.
There can be no doubt that Obama deliberately provoked the confrontation with the Catholic Church to score political points. Even his "retreat" from his initial ruling was political grandstanding designed to demonstrate his willingness to accommodate religious beliefs.
Obama's act of contrition is misleading because many Catholic institutions, including the San Antonio Diocese, are self-insured, meaning the church will have to pick up the tab for contraceptives, morning-after pills and sterilization for its employees.
In this theatrical production, the Catholic Church was relegated to the role of supporting actor. After disapproving of the Obama administration's policy, the church mollified its position when the president offered a compromise. Later the hierarchy reversed course and signaled its opposition.
Catholic leaders have no one to blame but themselves for the controversy. Many backed Obama's election, despite his well-documented endorsement of abortion. The Catholic Health Association and Catholic Charities both enthusiastically supported Obama's health care overhaul.
Now the weak-kneed Catholic bishops want their objections to be taken seriously. Their protests ring hollow when they refuse to back efforts to overturn the Patient Protection and Affordable Health Care Act. They have forfeited their leadership role by allowing the president to usurp their moral authority.
Religious freedom is not the only casualty in this one-act play starring Barrack Obama. The president has prescribed to an entire industry (insurance companies) how to run its business. There is no constitutional basis for his action. That should alarm every businessperson and every American.
The last word on this staged hoax belongs to self-appointed civil rights activist and Obama supporter, Al Sharpton. He explained that the president had to "dictate" to the Catholic Church to violate its own religious tenets in order to preserve separation of church and state.
As church "dictator," perhaps the president will make it official and crown himself Pope Obama.
Instead, the media painted a picture of a truculent religious organization clinging to antiquated moral principles that are out of sync with its own members. News coverage labeled church hierarchy misguided ideologues more interested in hoodwinking their flock than in women's health.
The partisan press coated the president with Teflon, depicting Obama as willing to compromise with a recalcitrant Catholic Church bent on denying contraception to women. In the media version, the president claimed the higher moral ground by tempering his policy to placate an inflexible church.
The whole contrived muddle is nothing more than political theatre.
Let's start with the leading actor in this farcical comedy, President Obama. He was forewarned by Vice President Biden and former Chief of Staff Bill Daley, both Catholics, to exempt religious organizations from the health care provision that requires institutions to cover contraception, morning-after-pills and sterilization.
According to Washington insiders, Obama ignored their pleas and deferred to Health and Human Services Secretary Kathleen Sebelius, the former Kansas governor and practicing Catholic with a long pro-abortion record. Sebelius won over her boss by reminding him that women voters made the difference in his campaign.
In the 2008 presidential election, 56 percent of all women voted for President Obama versus 43 percent for his opponent, Sen. John McCain. The margin was even wider among unmarried women, who went for Obama, 70-to-29 percent. McCain carried men 49 to 48 percent.
Once Obama announced his decision, the mainstream media supplied the spin. News reports characterized the hubbub as a dispute over a woman's right to contraception, glossing over any mention of abortion pills or sterilization. That's because women overwhelming endorse the use of contraceptives.
There can be no doubt that Obama deliberately provoked the confrontation with the Catholic Church to score political points. Even his "retreat" from his initial ruling was political grandstanding designed to demonstrate his willingness to accommodate religious beliefs.
Obama's act of contrition is misleading because many Catholic institutions, including the San Antonio Diocese, are self-insured, meaning the church will have to pick up the tab for contraceptives, morning-after pills and sterilization for its employees.
In this theatrical production, the Catholic Church was relegated to the role of supporting actor. After disapproving of the Obama administration's policy, the church mollified its position when the president offered a compromise. Later the hierarchy reversed course and signaled its opposition.
Catholic leaders have no one to blame but themselves for the controversy. Many backed Obama's election, despite his well-documented endorsement of abortion. The Catholic Health Association and Catholic Charities both enthusiastically supported Obama's health care overhaul.
Now the weak-kneed Catholic bishops want their objections to be taken seriously. Their protests ring hollow when they refuse to back efforts to overturn the Patient Protection and Affordable Health Care Act. They have forfeited their leadership role by allowing the president to usurp their moral authority.
Religious freedom is not the only casualty in this one-act play starring Barrack Obama. The president has prescribed to an entire industry (insurance companies) how to run its business. There is no constitutional basis for his action. That should alarm every businessperson and every American.
The last word on this staged hoax belongs to self-appointed civil rights activist and Obama supporter, Al Sharpton. He explained that the president had to "dictate" to the Catholic Church to violate its own religious tenets in order to preserve separation of church and state.
As church "dictator," perhaps the president will make it official and crown himself Pope Obama.
Sunday, February 12, 2012
Obama Plays Keystone Cops With Oil Pipeline
By dragging his feet on the Keystone XL pipeline project, President Obama has pandered to a handful of environmental groups while disregarding the economic interests of his own country and its trusted ally Canada. His decision to delay a ruling on the pipeline until after the election is politics at its worst.
The president attempted to deflect criticism by blaming (surprise!) Republicans for imposing a "rushed and arbitrary deadline" on approval of the $7 billion pipeline project. It is a lame excuse considering the State Department has been reviewing the proposal for more than three years.
When Republicans pounced on the issue, Obama's allies in the media and the Democrat Party resorted to disparaging the project. Their limp criticism appeared at odds with the president's own energy and environmental agencies, which reported the pipeline would pose "no serious impact" to the environment.
One of the sensitive environmental issues raised by the State Department was the building of the pipeline over an aquifer in Nebraska. Even that was a red herring because the project builder TransCanada has operated a pipeline for years over an aquifer in the eastern part of that state. There have been no oil spills.
In stalling the project, Obama has curried political favor with the Sierra Club, Friends of Earth, National Resources Defense Council and other environmental groups opposing the pipeline. Meanwhile, the tone-deaf president has angered a majority of the public, antagonized Canada and rankled 15 unions backing the pipeline.
Fifty-three percent of likely U.S. voters favor moving ahead with the 1,661-mile pipeline that would carry 700,000 barrels of crude from Alberta, Canada's oil sands to refineries in the U.S. The survey was conducted by Rasmussen Reports, a public opinion research company often employed by Democrats.
Upon hearing Obama's decision, Canadian Prime Minister Stephen Harper expressed "profound disappointment" and hinted his nation may sell the crude to China. Any disruption in the flow of oil would have dire consequences because Canada is a major supplier of crude to the U.S.
Currently, Canada ships 99 percent of its crude exports to the U.S. Canada accounts for 90 percent of all proven crude reserves outside the Middle East. That country's output is expected to double over the next eight years as oil sand deposits yield increasing amounts of crude.
Canadians weren't the only ones feeling snubbed by Obama. The president of the union representing pipeline construction workers minced no words in condemning the president's delay tactics.
"The administration should hug a jobless construction worker instead of hugging a tree," said Terry O'Sullivan, president of the Laborers Union International. "Blue collar construction workers across the U.S. will not forget this."
Oil companies joined in the drumbeat of denunciation for Obama's political sidestep. None were more vocal than the CEO of Valero Energy, a San Antonio-based company which had planned to be a shipper and purchaser of the Canadian oil.
Here's what Valero's Bill Klesse wrote in an employee memo, obtained by the Diatribe:
"Due to the administration's misguided policies, refiners like Valero will have to buy more oil from other sources outside the U.S. and Canada. Consumers will bear the additional shipping cost, not to mention the additional greenhouse gas emissions and political risks.
"With all the issues facing our country, its is absolutely unbelievable our federal government says no to a company like TransCanada that is willing to spend over $7 billion and put Americans to work on a pipeline."
Obama's action is beyond implausible. In holding hostage the pipeline project, the president has abdicated his leadership role and sacrificed American jobs for tawdry political reasons.
What could be more preposterous?
The president attempted to deflect criticism by blaming (surprise!) Republicans for imposing a "rushed and arbitrary deadline" on approval of the $7 billion pipeline project. It is a lame excuse considering the State Department has been reviewing the proposal for more than three years.
When Republicans pounced on the issue, Obama's allies in the media and the Democrat Party resorted to disparaging the project. Their limp criticism appeared at odds with the president's own energy and environmental agencies, which reported the pipeline would pose "no serious impact" to the environment.
One of the sensitive environmental issues raised by the State Department was the building of the pipeline over an aquifer in Nebraska. Even that was a red herring because the project builder TransCanada has operated a pipeline for years over an aquifer in the eastern part of that state. There have been no oil spills.
In stalling the project, Obama has curried political favor with the Sierra Club, Friends of Earth, National Resources Defense Council and other environmental groups opposing the pipeline. Meanwhile, the tone-deaf president has angered a majority of the public, antagonized Canada and rankled 15 unions backing the pipeline.
Fifty-three percent of likely U.S. voters favor moving ahead with the 1,661-mile pipeline that would carry 700,000 barrels of crude from Alberta, Canada's oil sands to refineries in the U.S. The survey was conducted by Rasmussen Reports, a public opinion research company often employed by Democrats.
Upon hearing Obama's decision, Canadian Prime Minister Stephen Harper expressed "profound disappointment" and hinted his nation may sell the crude to China. Any disruption in the flow of oil would have dire consequences because Canada is a major supplier of crude to the U.S.
Currently, Canada ships 99 percent of its crude exports to the U.S. Canada accounts for 90 percent of all proven crude reserves outside the Middle East. That country's output is expected to double over the next eight years as oil sand deposits yield increasing amounts of crude.
Canadians weren't the only ones feeling snubbed by Obama. The president of the union representing pipeline construction workers minced no words in condemning the president's delay tactics.
"The administration should hug a jobless construction worker instead of hugging a tree," said Terry O'Sullivan, president of the Laborers Union International. "Blue collar construction workers across the U.S. will not forget this."
Oil companies joined in the drumbeat of denunciation for Obama's political sidestep. None were more vocal than the CEO of Valero Energy, a San Antonio-based company which had planned to be a shipper and purchaser of the Canadian oil.
Here's what Valero's Bill Klesse wrote in an employee memo, obtained by the Diatribe:
"Due to the administration's misguided policies, refiners like Valero will have to buy more oil from other sources outside the U.S. and Canada. Consumers will bear the additional shipping cost, not to mention the additional greenhouse gas emissions and political risks.
"With all the issues facing our country, its is absolutely unbelievable our federal government says no to a company like TransCanada that is willing to spend over $7 billion and put Americans to work on a pipeline."
Obama's action is beyond implausible. In holding hostage the pipeline project, the president has abdicated his leadership role and sacrificed American jobs for tawdry political reasons.
What could be more preposterous?
Monday, February 6, 2012
Tarmac Tete-a-Tete: Racial Politics and Double Standards
A dramatic news photo of Arizona Governor Jan Brewer wagging a finger at President Obama has sparked a rhetorical blitzkrieg from media pundits and civil rights activists.
The desert dust-up played out on a Phoenix airport tarmac during the president's visit to the city. News cameras captured what appeared to be a tense conversation between the president and the governor. However, reporters and their microphones were out of earshot so no third-party account exists.
Yet that hasn't stopped the media from speculating about the spunky GOP governor's purported tongue-lashing of the president. Even Obama, downplayed the incident when asked about it on ABC's evening news. The president responded with a shrug, "This is not a big deal."
Brewer's version of the tete-a-tete offered some context. "He (Obama) brought up my book and he was a little tense," she said in a radio interview. "He said he read (an) excerpt and didn't think I was very cordial. I said we'd have to agree to disagree. He was a little thin-skinned and tense, to say the least."
This falls woefully short of the definition of incivility. But that matters little to those who view every critical pinprick of Obama through the prism of race.
"What she did on that airport tarmac was by any reasonable standard a gross act of disrespect to the president," opined USA Today columnist DeWayne Wickham. He added that Brewer's actions were just the latest in a string of right-wing inspired displays of utter contempt for the president.
Activist Al Sharpton went even further, calling the incident proof that some people "cannot stand the fact that this is an African-American who is now one of the most powerful individuals on the planet." The NAACP joined in the chorus, saying the tiff reinforced stereotypes of "whites being superior to blacks."
Brewer was taken aback by the verbal mugging. She has every right to be miffed, particularly in light of the media's callous attitude toward the disrespectful scorn heaped on Obama's predecessor, President George W. Bush.
Who can forget the infamous shoe-throwing incident in Baghdad in 2008? An Iraqi journalist hurled a pair of shoes at Bush during a news conference. The shameful stunt was meant as an insult. Instead of vilifying the protagonist, the media and Democrats had a field day making light of the rebuff.
The episode became the chatter of late-night television, a viral hit on the Internet and was propagandized by Middle Eastern media to stoke the hatred of the U.S. president and his policy toward Iraqi. Where was the outcry about this obvious show of disrespect for the country and its leader?
The shoe incident was benign compared to some of the vitriol directed at Bush during his eight years in the White House. For example, a movie released in 2007 called "Death of a President," chronicled a fictitious assassination of the former President. It was lauded in the media instead of excoriated.
Protestor Cindy Sheeham confessed in her book "Peace Mom" that she fantasized going back in time to kill the infant George Bush to prevent the Iraq War. She wasn't the only author to talk about murdering the president. Nicholson Baker's novella "Checkpoint" features two people discussing assassinating Bush.
Not a single mainstream media outlet raised a peep about the animosity shown toward the president. Whatever Brewer or the president said or didn't say that day on the Phoenix tarmac, it surely doesn't rise to the level of contempt and derision endured by Bush.
Regrettably, the race-baiters in the media and black community could not pass up the desert dis as an opportunity to raise the specter of prejudice and bigotry. Americans had better get used to this ugly tactic. In the upcoming election, disparagement of Obama and his policies likely will be skewered as naked racism.
It's a sad state of affairs because President Obama's election was supposed to transform racial relations in the U.S. Instead, the media and the president's allies have seized every opportunity to further divide the nation along the lines of color.
That is not what voters had in mind when they elected the country's first African-American president.
The desert dust-up played out on a Phoenix airport tarmac during the president's visit to the city. News cameras captured what appeared to be a tense conversation between the president and the governor. However, reporters and their microphones were out of earshot so no third-party account exists.
Yet that hasn't stopped the media from speculating about the spunky GOP governor's purported tongue-lashing of the president. Even Obama, downplayed the incident when asked about it on ABC's evening news. The president responded with a shrug, "This is not a big deal."
Brewer's version of the tete-a-tete offered some context. "He (Obama) brought up my book and he was a little tense," she said in a radio interview. "He said he read (an) excerpt and didn't think I was very cordial. I said we'd have to agree to disagree. He was a little thin-skinned and tense, to say the least."
This falls woefully short of the definition of incivility. But that matters little to those who view every critical pinprick of Obama through the prism of race.
"What she did on that airport tarmac was by any reasonable standard a gross act of disrespect to the president," opined USA Today columnist DeWayne Wickham. He added that Brewer's actions were just the latest in a string of right-wing inspired displays of utter contempt for the president.
Activist Al Sharpton went even further, calling the incident proof that some people "cannot stand the fact that this is an African-American who is now one of the most powerful individuals on the planet." The NAACP joined in the chorus, saying the tiff reinforced stereotypes of "whites being superior to blacks."
Brewer was taken aback by the verbal mugging. She has every right to be miffed, particularly in light of the media's callous attitude toward the disrespectful scorn heaped on Obama's predecessor, President George W. Bush.
Who can forget the infamous shoe-throwing incident in Baghdad in 2008? An Iraqi journalist hurled a pair of shoes at Bush during a news conference. The shameful stunt was meant as an insult. Instead of vilifying the protagonist, the media and Democrats had a field day making light of the rebuff.
The episode became the chatter of late-night television, a viral hit on the Internet and was propagandized by Middle Eastern media to stoke the hatred of the U.S. president and his policy toward Iraqi. Where was the outcry about this obvious show of disrespect for the country and its leader?
The shoe incident was benign compared to some of the vitriol directed at Bush during his eight years in the White House. For example, a movie released in 2007 called "Death of a President," chronicled a fictitious assassination of the former President. It was lauded in the media instead of excoriated.
Protestor Cindy Sheeham confessed in her book "Peace Mom" that she fantasized going back in time to kill the infant George Bush to prevent the Iraq War. She wasn't the only author to talk about murdering the president. Nicholson Baker's novella "Checkpoint" features two people discussing assassinating Bush.
Not a single mainstream media outlet raised a peep about the animosity shown toward the president. Whatever Brewer or the president said or didn't say that day on the Phoenix tarmac, it surely doesn't rise to the level of contempt and derision endured by Bush.
Regrettably, the race-baiters in the media and black community could not pass up the desert dis as an opportunity to raise the specter of prejudice and bigotry. Americans had better get used to this ugly tactic. In the upcoming election, disparagement of Obama and his policies likely will be skewered as naked racism.
It's a sad state of affairs because President Obama's election was supposed to transform racial relations in the U.S. Instead, the media and the president's allies have seized every opportunity to further divide the nation along the lines of color.
That is not what voters had in mind when they elected the country's first African-American president.
Sunday, January 29, 2012
An Obama Fairy Tale: "How I Saved The Auto Industry"
President Obama's truth-challenged state-of-the-union address was successful in a least one respect: creating more jobs for fact-checkers. His speech was studded with dubious claims of his presidency's middling achievements, none more egregious than his assertion he single-handedly saved the auto industry.
In what amounted to a televised political stump speech, the president stroked his ego by trumpeting the following: "On the day I took office, our auto industry was on the verge of collapse...and tonight, the American auto industry is back."
No question the industry has rebounded, but the president's actions had virtually nothing to do with the auto makers' resurrection from the grave. His declaration ignores both history and reality. However, he has made this pronouncement so many times that the media never bothers to confront its veracity.
First of all, the president did not bail out the auto industry. The government scooped up $80 billion of taxpayer money and forked it over to just two companies: General Motors and Chrysler. Ford declined to participate in the giveaway and recuperated just fine.
Despite pumping billions into the auto enterprises, the government was unable to prevent their collapse. General Motors and Chrysler filed Chapter 11 bankruptcy in 2009. Both firms had been losing millions of dollars for years because of glaring mismanagement, shoddy product quality and plump union contracts that made them uncompetitive.
When the two mega corps emerged from bankruptcy proceedings, management shed jobs, shuttered plants and forced investors to take a $27 billion haircut on bonds issued by the enterprises. These initiatives were facilitated by the Chapter 11 filing, enabling the companies to regain their financial footing.
In the interest of space, let's look at what this meant for one firm, General Motors. Prior to bankruptcy, employment at the company was 266,000. At the beginning of this year, the multinational workforce had shrunk by 64,000 jobs to 202,000. The story is similar at Chrysler.
Along the way, GM closed 17 factories and parts centers. In addition, the company lopped off more than 1,100 dealerships across the U.S. Many suppliers scaled back operations or went out of business. As a result, tens of thousands of jobs vanished. No one has ever calculated the damage to the economy.
Therefore, it is patently false to claim the administration saved industry jobs by bailing out GM. To skirt the truth, the administration always adds the disclaimer that job losses would have been a lot worse had the government not intervened. But there are no facts to support the contention, just supposition.
Lastly, the president bragged in the past that taxpayers would recoup every penny the government invested in GM and Chrysler. The White House retreated last June, admitting that taxpayers would likely lose about $14 billion on the bailout. Oddly enough, the president did not mention this in his speech.
Obama suffered other mental lapses as well in his address. For instance, he never explained why the government still owns 26.5 percent of GM, despite his repeated promises the feds would exit the business. Nor did he reveal why the government has not demanded GM cough up the remaining $25 billion it owes taxpayers.
You would have to suspend reality to find one scintilla of credible evidence that raiding the U.S. Treasury has done anything to save General Motors or Chrysler, much less the entire auto industry. Yet President Obama persists in spinning this fairy tale for an adoring media.
It proves that if you repeat a lie often enough, it becomes reality when you have a partisan press.
In what amounted to a televised political stump speech, the president stroked his ego by trumpeting the following: "On the day I took office, our auto industry was on the verge of collapse...and tonight, the American auto industry is back."
No question the industry has rebounded, but the president's actions had virtually nothing to do with the auto makers' resurrection from the grave. His declaration ignores both history and reality. However, he has made this pronouncement so many times that the media never bothers to confront its veracity.
First of all, the president did not bail out the auto industry. The government scooped up $80 billion of taxpayer money and forked it over to just two companies: General Motors and Chrysler. Ford declined to participate in the giveaway and recuperated just fine.
Despite pumping billions into the auto enterprises, the government was unable to prevent their collapse. General Motors and Chrysler filed Chapter 11 bankruptcy in 2009. Both firms had been losing millions of dollars for years because of glaring mismanagement, shoddy product quality and plump union contracts that made them uncompetitive.
When the two mega corps emerged from bankruptcy proceedings, management shed jobs, shuttered plants and forced investors to take a $27 billion haircut on bonds issued by the enterprises. These initiatives were facilitated by the Chapter 11 filing, enabling the companies to regain their financial footing.
In the interest of space, let's look at what this meant for one firm, General Motors. Prior to bankruptcy, employment at the company was 266,000. At the beginning of this year, the multinational workforce had shrunk by 64,000 jobs to 202,000. The story is similar at Chrysler.
Along the way, GM closed 17 factories and parts centers. In addition, the company lopped off more than 1,100 dealerships across the U.S. Many suppliers scaled back operations or went out of business. As a result, tens of thousands of jobs vanished. No one has ever calculated the damage to the economy.
Therefore, it is patently false to claim the administration saved industry jobs by bailing out GM. To skirt the truth, the administration always adds the disclaimer that job losses would have been a lot worse had the government not intervened. But there are no facts to support the contention, just supposition.
Lastly, the president bragged in the past that taxpayers would recoup every penny the government invested in GM and Chrysler. The White House retreated last June, admitting that taxpayers would likely lose about $14 billion on the bailout. Oddly enough, the president did not mention this in his speech.
Obama suffered other mental lapses as well in his address. For instance, he never explained why the government still owns 26.5 percent of GM, despite his repeated promises the feds would exit the business. Nor did he reveal why the government has not demanded GM cough up the remaining $25 billion it owes taxpayers.
You would have to suspend reality to find one scintilla of credible evidence that raiding the U.S. Treasury has done anything to save General Motors or Chrysler, much less the entire auto industry. Yet President Obama persists in spinning this fairy tale for an adoring media.
It proves that if you repeat a lie often enough, it becomes reality when you have a partisan press.
Saturday, January 21, 2012
You Can Bet Your Fannie There's a Scheme Afoot
The Obama Administration and the Federal Reserve are feverishly working behind the scenes to stir momentum for a massive rescue package designed to resurrect the ailing housing industry. It's all part of a synchronized stealth effort to boost the president's flagging reelection chances.
The blueprint began unfolding earlier this month when the Federal Reserve issued a little-noticed white paper recommending that mortgage behemoths Fannie Mae and Freddie Mac assume a more active role in awakening the slumbering housing market.
In its document, the Fed admitted the new direction could deepen financial losses for the two lenders. Already taxpayers have ponied up $183 billion and counting to keep Fannie and Freddie from plummeting into a financial sinkhole. The prospect of more red ink apparently doesn't faze the Fed or the president.
The white paper provides air cover for the administration to move ahead on several fronts. The president's puppet masters are taking aim at replacing recalcitrant heads at Fannie Mae and the Federal Housing and Finance Agency (FHFA) to remove potential roadblocks to their scheme.
That helps explain why Fannie Mae CEO Michael Williams unexpectedly announced he was stepping down. Almost simultaneously, the administration leaked the news that it was searching for a new chief executive to shepherd the Federal Housing and Finance Agency (FHFA), replacing Edward DeMarco.
Apparently, Williams and DeMarco are both too independent for the president. Obama wants sycophants who will advocate for aggressive government intervention to stabilize housing prices and stem the onslaught of foreclosures sabotaging the real estate market.
As head of the independent housing agency, DeMarco's role has been to regulate Fannie and Freddie. The once private firms were placed into conservatorship by FHFA on September 7, 2008, after both were threatened with insolvency when the housing market collapsed.
Since then, Fannie and Freddie have continued their downward spiral. In the most recent quarterly earnings reports, Fannie tallied $5.09 billion in losses while her mortgage brother Freddie experienced a similar hit of $4.4 billion.
By any measure, Fannie and Freddie are abject failures. The lenders were at the forefront of the sub-prime lending frenzy that subverted the housing market. The twin turkeys, which underwrite 90 percent of all the nation's home mortgages, also have a sordid history of abuse of power.
In the last decade, Fannie and Freddie have been slapped on the wrists by Congressional oversight committees for dubious campaign contributions, accounting scandals, gross mismanagement, political lobbying and influence peddling.
It begs the question: why not do away with both agencies and turn over the mortgage holdings to private companies? The answer can be found by following the money trail. Both agencies have been generous donors to Democrats, including the president.
But the president has other reasons for wanting Fannie and Freddie to return to the lax lending standards that got it into trouble in the first place. It seems Obama has finally awoken to the fact that consumer spending and thus the economy will not improve unless housing prices and property values stabilize.
As a result, his foot soldiers are scurrying to develop a massive refinancing package or possibly a housing stimulus program to resurrect the moribund real estate market. There are sure to be plenty of Congressional skeptics in light of the administration's past flops to revive housing.
For example, the president's much ballyhooed Home Affordable Modification Program (HAMP) has been an utter disaster. Despite $50 billion in taxpayer funding, even the government has admitted the program fizzled in its effort to arrest the tide of home foreclosures.
In 2011, there were foreclosure filings on 1.88 million properties in the nation, according to Realty Trac. The number would have been much higher but thousands of foreclosures are being held up by legal action pursued by states. A settlement in the case will unleash a torrent of new foreclosure notices.
That would be catastrophic for the housing market and for the president's chances for a second term.
The president's state of the union address is scheduled January 24. It would not be surprising for Obama to call for Congressional action to prop up delinquent homeowners and the sagging real estate industry with colossal infusions of taxpayer money.
In a period of record federal deficits, such a plan may seem preposterous. However, never underestimate the power of election year politics to influence politicians to do dumb things with your money.
The blueprint began unfolding earlier this month when the Federal Reserve issued a little-noticed white paper recommending that mortgage behemoths Fannie Mae and Freddie Mac assume a more active role in awakening the slumbering housing market.
In its document, the Fed admitted the new direction could deepen financial losses for the two lenders. Already taxpayers have ponied up $183 billion and counting to keep Fannie and Freddie from plummeting into a financial sinkhole. The prospect of more red ink apparently doesn't faze the Fed or the president.
The white paper provides air cover for the administration to move ahead on several fronts. The president's puppet masters are taking aim at replacing recalcitrant heads at Fannie Mae and the Federal Housing and Finance Agency (FHFA) to remove potential roadblocks to their scheme.
That helps explain why Fannie Mae CEO Michael Williams unexpectedly announced he was stepping down. Almost simultaneously, the administration leaked the news that it was searching for a new chief executive to shepherd the Federal Housing and Finance Agency (FHFA), replacing Edward DeMarco.
Apparently, Williams and DeMarco are both too independent for the president. Obama wants sycophants who will advocate for aggressive government intervention to stabilize housing prices and stem the onslaught of foreclosures sabotaging the real estate market.
As head of the independent housing agency, DeMarco's role has been to regulate Fannie and Freddie. The once private firms were placed into conservatorship by FHFA on September 7, 2008, after both were threatened with insolvency when the housing market collapsed.
Since then, Fannie and Freddie have continued their downward spiral. In the most recent quarterly earnings reports, Fannie tallied $5.09 billion in losses while her mortgage brother Freddie experienced a similar hit of $4.4 billion.
By any measure, Fannie and Freddie are abject failures. The lenders were at the forefront of the sub-prime lending frenzy that subverted the housing market. The twin turkeys, which underwrite 90 percent of all the nation's home mortgages, also have a sordid history of abuse of power.
In the last decade, Fannie and Freddie have been slapped on the wrists by Congressional oversight committees for dubious campaign contributions, accounting scandals, gross mismanagement, political lobbying and influence peddling.
It begs the question: why not do away with both agencies and turn over the mortgage holdings to private companies? The answer can be found by following the money trail. Both agencies have been generous donors to Democrats, including the president.
But the president has other reasons for wanting Fannie and Freddie to return to the lax lending standards that got it into trouble in the first place. It seems Obama has finally awoken to the fact that consumer spending and thus the economy will not improve unless housing prices and property values stabilize.
As a result, his foot soldiers are scurrying to develop a massive refinancing package or possibly a housing stimulus program to resurrect the moribund real estate market. There are sure to be plenty of Congressional skeptics in light of the administration's past flops to revive housing.
For example, the president's much ballyhooed Home Affordable Modification Program (HAMP) has been an utter disaster. Despite $50 billion in taxpayer funding, even the government has admitted the program fizzled in its effort to arrest the tide of home foreclosures.
In 2011, there were foreclosure filings on 1.88 million properties in the nation, according to Realty Trac. The number would have been much higher but thousands of foreclosures are being held up by legal action pursued by states. A settlement in the case will unleash a torrent of new foreclosure notices.
That would be catastrophic for the housing market and for the president's chances for a second term.
The president's state of the union address is scheduled January 24. It would not be surprising for Obama to call for Congressional action to prop up delinquent homeowners and the sagging real estate industry with colossal infusions of taxpayer money.
In a period of record federal deficits, such a plan may seem preposterous. However, never underestimate the power of election year politics to influence politicians to do dumb things with your money.
Sunday, January 15, 2012
Why An Ohio Farmer's Case Could Save Obama Care
Legal briefs trickling into the Supreme Court signal the launch of an epic battle over President Obama's brazen health care overhaul. Unless there are unforeseen delays, the court will hand down its decision in June, right smack in the middle of the presidential campaign.
In its coverage, the mainstream media has cast the legal contest as an ideological war pitting opposing views of providing health care coverage. However, the case has much broader meaning for the country and its citizens.
At stake is the future of government's power to regulate most aspects of American life. The decision in the case will frame for generations how much authority Congress will have to unleash its regulatory bullies on businesses and individuals.
Twenty-six states have joined forces to oppose the new health care law. In their court filings, the states argue Congress overstepped its constitutional authority when it mandated that Americans must purchase health insurance under threat of financial penalties.
In addition, the plaintiffs are challenging the health care law's unlawful expansion of the Medicare program. They contend the statute will force states to add more poor and disabled people to the program or face loss of federal funds.
The president's lawyers counter that Congress is entitled to regulate health care under the Commerce Clause enumerated in Article 1, Section 8 of the U.S. Constitution. For decades, courts have confirmed Congress' authority to pass laws to regulate economic activity within the nation.
However, it wasn't until 1942 that the precedent was established. Prior to that, the Supreme Court had struck down statutes that imposed regulations on economic activities within a state because the Commerce Clause expressly limits the federal government's authority to interstate matters.
But the case of Ohio farmer Roscoe Filburn changed everything. In 1941, Filburn planted more wheat than his federal allotment permitted. He used the excess wheat production to feed his chickens. He neither sold the wheat nor did he transport the grain off his farm.
Then Secretary of Agriculture Claude Wickard was outraged. He ordered Filburn to destroy his crops and pay a steep fine. Filburn refused and took the matter to court, where a three-judge panel enjoined the secretary from enforcing penalties against the farmer.
The ruling ignited a flurry of legal and political activity. President Franklin D. Roosevelt, worried the court decision could torpedo his New Deal programs, ordered his lawyers to file a motion to overturn the ruling at the Supreme Court.
Roosevelt knew he would find a receptive audience. Earlier in his term, the high court had rebuffed his efforts to expand government intervention into every element of the economy. Roosevelt publicly chastised the justices for thwarting economic recovery.
When the justices refused to bow to pressure, the president warned that he was prepared to expand the number of Supreme Court members from nine to 15 by appointing six additional justices who would be sympathetic to his agenda.
After the presidential browbeating, the "supremes" began taking a decidedly more friendly view of Roosevelt's expressed interests. Therefore, it came as no surprise when the high court ruled against the Ohio farmer on November 9, 1942.
The unanimous decision written by Justice Robert Jackson became the legal tenant for future courts to follow in upholding Congress' right to regulate not only matters that cross state lines, but practically every activity within a state as well.
Now comes Obama Care, the quintessential Congressional power grab. When it renders its decision, the Supreme Court justices will have to either overturn or reaffirm the judicial paradigm established by the Wickard vs. Filburn case.
If history is a guide, high court justices have been reluctant in the past to scrap established legal precedent. That's why those who believe the case against Obama Care is a slam dunk should heed what happened to an Ohio farmer nearly 70 years ago.
If the Supreme Court upholds the precedent, Congress and the federal government will be handed carte blanche power for unbridled regulatory intrusion, imperiling individual freedoms for future generations.
That prospect should frighten the daylights out of every American.
In its coverage, the mainstream media has cast the legal contest as an ideological war pitting opposing views of providing health care coverage. However, the case has much broader meaning for the country and its citizens.
At stake is the future of government's power to regulate most aspects of American life. The decision in the case will frame for generations how much authority Congress will have to unleash its regulatory bullies on businesses and individuals.
Twenty-six states have joined forces to oppose the new health care law. In their court filings, the states argue Congress overstepped its constitutional authority when it mandated that Americans must purchase health insurance under threat of financial penalties.
In addition, the plaintiffs are challenging the health care law's unlawful expansion of the Medicare program. They contend the statute will force states to add more poor and disabled people to the program or face loss of federal funds.
The president's lawyers counter that Congress is entitled to regulate health care under the Commerce Clause enumerated in Article 1, Section 8 of the U.S. Constitution. For decades, courts have confirmed Congress' authority to pass laws to regulate economic activity within the nation.
However, it wasn't until 1942 that the precedent was established. Prior to that, the Supreme Court had struck down statutes that imposed regulations on economic activities within a state because the Commerce Clause expressly limits the federal government's authority to interstate matters.
But the case of Ohio farmer Roscoe Filburn changed everything. In 1941, Filburn planted more wheat than his federal allotment permitted. He used the excess wheat production to feed his chickens. He neither sold the wheat nor did he transport the grain off his farm.
Then Secretary of Agriculture Claude Wickard was outraged. He ordered Filburn to destroy his crops and pay a steep fine. Filburn refused and took the matter to court, where a three-judge panel enjoined the secretary from enforcing penalties against the farmer.
The ruling ignited a flurry of legal and political activity. President Franklin D. Roosevelt, worried the court decision could torpedo his New Deal programs, ordered his lawyers to file a motion to overturn the ruling at the Supreme Court.
Roosevelt knew he would find a receptive audience. Earlier in his term, the high court had rebuffed his efforts to expand government intervention into every element of the economy. Roosevelt publicly chastised the justices for thwarting economic recovery.
When the justices refused to bow to pressure, the president warned that he was prepared to expand the number of Supreme Court members from nine to 15 by appointing six additional justices who would be sympathetic to his agenda.
After the presidential browbeating, the "supremes" began taking a decidedly more friendly view of Roosevelt's expressed interests. Therefore, it came as no surprise when the high court ruled against the Ohio farmer on November 9, 1942.
The unanimous decision written by Justice Robert Jackson became the legal tenant for future courts to follow in upholding Congress' right to regulate not only matters that cross state lines, but practically every activity within a state as well.
Now comes Obama Care, the quintessential Congressional power grab. When it renders its decision, the Supreme Court justices will have to either overturn or reaffirm the judicial paradigm established by the Wickard vs. Filburn case.
If history is a guide, high court justices have been reluctant in the past to scrap established legal precedent. That's why those who believe the case against Obama Care is a slam dunk should heed what happened to an Ohio farmer nearly 70 years ago.
If the Supreme Court upholds the precedent, Congress and the federal government will be handed carte blanche power for unbridled regulatory intrusion, imperiling individual freedoms for future generations.
That prospect should frighten the daylights out of every American.
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