Wednesday, February 25, 2009

The Good, the Bad and the Ugl(ier) – Obama’s Address to Congress

"We will rebuild, we will recover, and the United States of America will emerge stronger than before." Barack Obama

If I were to grade Obama's speech last night, I would give him a 95. I do not know who the speechwriter was, but he wrote one heck of a speech. There was an optimistic tone in Obama's speech, a change of pace from his usual blame-bush, talking-down-the-economy diatribe that has been the hallmark of Obama's press conferences. I guess he took Bill Clinton's advice. I even became a little choked up when he spoke of Leonard Abess, the bank president in Miami who in this era of greed took a 60 million dollar bonus and gave it out to all 399 employees or Ty'Sheoma Bethea who went to the Public Library and wrote a letter to Congress describing the decrepit state of her school, and how they have to stop teaching six times a day because of the ceiling leaks. The cameras panned over to Michelle Obama as she beamed a smile to young Ty. Republican or Democrat, you had to be touched by those scenes.

There was of course one huge distraction as Obama delivered his speech. Obama did look presidential, but that lady in back of him, you know the one I am speaking about, the one who rarely stood up during any of Bush's speeches, the one who looked like she wanted to jump in Obama's lap – yes that's the one – Nancy Pelosi. Didn't someone have a rope? Could we not have tied that lady to the chair? When Obama talked about healthcare or any one of a myriad of Nancy's pet projects, she jumped up like a giddy schoolgirl and began clapping her hands. When Bush left office, Pelosi said that it felt like a 10-ton anvil had been lifted. I guess she wasn't kidding. There is just something wrong watching Pelosi be so happy.

If I were sitting in the joint sessions of congress (still waiting for my invitation), I would want to make sure I was alert, attentive and mouth closed because you never know when the cameras are going to be watching. The cameras panned the audience and stopped at Rep. Charles Rangle. It looked like he was waiting to catch flies as he sat with his gaping mouth wide open.

The underlying theme of Obama's speech, of course, was that Government not the individual is the solution to the ills of society. "This plan will require significant resources from the federal government - and yes, probably more than we've already set aside." We all know that Obama believes the government is the solution – an about face from the Reagan perspective that the government is the problem not the solution.

Obama spoke about living in an era with a lack of regulation. "Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day." Of course, it was the Republicans who for three years warned of Fannie Mae and Freddie Mac, and pushed for regulations of these institutions, and it was Chris Dodd and Barney Frank, two high ranking Democrats, who blocked every form of regulation and it was Clinton who repealed the Glass-Steagall act that separated the different forms of banking. It worked for fifty years. There has to be a balance with regulation. Regulation cannot be too onerous as to prevent business from competing on a global scale, but yet it has to be enough to provide oversight because of the human condition. I am sure everyone has heard of that little vignette of man's fall from grace in the Garden of Eden."Because we cannot consign our nation to an open-ended recession. And to ensure that a crisis of this magnitude never happens again. Inherent in any capitalistic system is the tendency towards greed and corruption. There will never be enough regulation to stop it. A recession of this magnitude will happen again. When? No one knows, but be assured it will happen again. How long it lasts depends in large part on how government reacts to it.

Obama said he was going to be transparent, and to prove it, he cited his website which will tell us where the money is going, I have a hard time believing anything about Obama's transparency when he puts Biden in charge, "we've all seen how quickly good intentions can turn into broken promises and wasteful spending. And with a plan of this scale comes enormous responsibility to get it right. That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort - because nobody messes with Joe." Now, does that instill confidence knowing that Vice President Biden is in charge of oversight? Is that The fox guarding the hen house? The Obama administration has been keeping Biden under lock and key because they are afraid of his next gaffe. Of course, how does this transparency resonate when a more than 1,000 pages of spending pork is shoved down our throats that Congress has not even read? We were promised 48 hours before the final vote of the Senate, but it appeared on the net all marked up, not even a clean document, six hours before the final vote. If this is transparency, I think we are in trouble.

Obama then repeated his statement that this trillion dollar bill (with interest) has no pork. I guess that depends on what your definition of pork is – similar to Bill Clinton's definition of sex. reports the following:

Obama said the bill doesn't contain "a single earmark." But whether one calls them "earmarks" or not, the Senate certainly added items that will benefit particular states. For example: $50 million for programs under the California-Bay Delta Act and $500 million for National Institutes of Health facilities in Bethesda, Md.

Obama talked about the massive debt he inherited, and he wants to cut it in half. He talked about going line by line through the budget and cutting wasteful spending. He even mentioned cutting subsidies to agriculture. That is a nice idea – does that include the massive subsidies he gives to the corn industry for corn ethanol. In the month Obama has been in office he has spent more than Bush has on the Iraq war, the Afghanistan war, and the entire war on terror in Bush's eight years in office. When Obama first entered office, he signed an executive order for 400 million dollars for abortion overseas. Even if you are pro-choice, you have to know that that was a dumb move. He just passed a trillion dollar porkulus bill. Congress is going to pass porkulus 2, 410 billion dollar omnibus bill with over 9,000 earmarks, and a billion dollars to the Palestinian authority to rebuild Gaza after Israel's defense of its citizens, a result of the interminable bombing of Katyusha rockets by Hamas. The Obama administration says it will not end up in the hands of Hamas – yeah right, and I have a bridge to sell you. There is also health care that Obama will undoubtedly spend massive amounts of money on. So, how again is Obama planning to cut the deficit in half? The Obama administration is planning to spend us into oblivion – Bush on steroids.

We cannot forget the checks he said he is going to give to 95% of Americans, "the recovery plan provides a tax cut - that's right, a tax cut - for 95% of working families. And these checks are on the way." First of all, these are not checks, it is 13 dollars a week beginning Apr 1 (reduced in Jan) that will appear on your paycheck. The only thing that this picayune amount will stimulate is the foam on the two extra lattés you can now buy at Starbucks. Of course, if you live in California, the terminator will take even those 13 bucks away and then some. What the Lord giveth, the Lord taketh away. And, if the economy seems to be coming out of its doldrums, Obama will then increase the tax on those making over 250K a year just to make sure the economy doesn't quite recover. One percent of Americans already pay 40% of the tax bill. Where is Joe the plumber when you need him?

What truly demonstrates that ideology trumps common sense is Obama's energy policy. He ordered congress to pass a market-based cap on carbon pollution because of the climate change myth. Market-based cap is an oxymoron. Cap and trade schemes are by definition anti-market. Cap and trade has been tried in the European Union, and carbon emission reductions have had mixed results. Obama continued his diatribe on solar power, wind power, suntan lotion and anything else that might generate energy except nuclear power. If Obama were serious about climate change, he would begin construction of nuclear power plants. Imagine how the market would react to that. That would create thousands of jobs and reduce the cost of energy. France not only provides over 70% of their energy from Nuclear power, but every plant is standardized. Every plant is like the other and parts can be interchangeable from one plant to another. During Obama's campaign, Obama told Bill O'Reilly he believed in nuclear power, but again he lied. He has no intention of building nuclear power plants. Just imagine how building nuclear plants would stimulate the economy.

The Livermore lab is involved in improving the efficiency of wind farms, turbine designs and wind farm operations. The lab reports:

Many U.S. wind parks are yielding up to 20 percent less energy than predicted because of uncertain forecasts. This loss of energy can have complicated financial consequences, such as significant penalties if operators under-produce their forecasts or no payment for extra power they generate that is more than what was estimated.


It will take decades before any viable form of alternative energy can be used, but Obama ignores our own natural resources, nuclear energy and natural gas. All three of these would make us energy independent sooner rather than later. We can still continue research on other viable forms of alternative energy.

Obama's oratory skills cannot be denied. He is able to deliver a speech as well as anyone, but the content of his speech conceals a frightening power grab and more spending beyond anything we have seen in our lives. What could Pelosi be thinking as she jumps up and down in euphoric delight while Obama enumerates one by one Nancy's Christmas list? Obama's administration hinges on the success or failure of his spending plan. Our economy has proven to be resilient, so it is possible that the economy will recover in spite of Obama's porkulus bills. In that case, however, the result would be hyperinflation, because there would be too much liquidity in the markets chasing too few goods. History has proven in the past that Obama's trajectory is a recipe for disaster. We will recover – of that I am sure. The Great Depression did not have to last ten years and it did not have to be Great. It was because of government policy that made it the Great Depression. I just hope it doesn't take ten years to get this economy moving again.

Note: In early trading, the Dow was down more than 150 points, but recovered somewhat down 80 points and now sits at 7,270 points.

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