Friday, February 13, 2009

At Least the Mice Aren't Being Foreclosed Upon

Now that the Senate and House have agreed on a version of the stimulus plan, details are finally leaking out about how the $800 billion (so far) will be spent. I for one, can’t wait until the mice start working and contributing to our economy.

Some Porkulus numbers
“The $500-per-worker credit for lower- and middle-income taxpayers that Obama outlined during his presidential campaign was scaled back to $400 during bargaining by the Democratic-controlled Congress and White House. Couples would receive $800 instead of $1,000. Over two years, that move would pump about $25 billion less into the economy than had been previously planned.

Officials estimated it would mean about $13 a week more in people's paychecks this year when withholding tables are adjusted in late spring. Next year, the measure could yield workers about $8 a week. Critics say that's unlikely to do much to boost consumption.”

Wow, what am I going to do with all that money? Maybe I can buy a combo at Burger King. This is ridiculous. If I got paid every week, that would give me about $670 a year. Spread over a year, that is not going to go very far. I could put that extra $13 into a high yield savings account and at the end of the year I would have an extra $673. But then I wouldn’t be stimulating the economy. And that would be unpatriotic.

And then there is this $70 BILLION nugget…

“But nothing could shake negotiators from insisting on including $70 billion to shelter middle- to upper-income taxpayers from the alternative minimum tax …The Congressional Budget Office
estimates that provision will have relatively little impact on the economy.“

I think it’s time to ask Arlen Specter for his GOP membership card. He supposedly helped keep one of his pet projects in the bill.

“Scaling back the bill to levels lower than either the $838 billion Senate measure or the original $820 billion House-passed measure caused grumbling among liberal Democrats, who described the cutbacks as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who are feeling heat from constituents for supporting the bill.

Specter played an active role, however, in making sure $10 billion for the National Institutes of Health, a pet priority, wasn't cut back”

And then there is the money designated for mouse habitat protection. Thanks Nancy!

“Lawmakers and administration officials divulged Wednesday that the $789 billion economic stimulus bill being finalized behind closed doors in Congress includes $30 million for wetlands restoration that the Obama administration intends to spend in the San Francisco Bay Area to protect, among other things, the endangered salt marsh harvest mouse.”

Dems were so quick to attack the Bush White House for releasing news information on Friday so it wouldn't get noticed in the slower weekend feeds. Funny how the stimulus information is coming out on a Friday as well. I guess the public only gets 48 hours to comment as both houses of Congress expect to vote on this Monday.

Judd Gregg Withdraws Cabinet Nomination

Judd Gregg announced yesterday that he was withdrawing himself for consideration for the Commerce cabinet position. Those against the stimulus and Obama’s power grab couldn’t be happier.

As it turns out, neither party could probably be happier about it. Senator Gregg had abstained from the economic package vote, much to the dismay of Obama. White House officials said since he had abstained from the vote, that he wasn’t fully on board with the Obama team. Maybe Gregg had more altruistic motives for not voting. Since he had been nominated for the Cabinet post, he may have wanted to be seen as neutral in the stimulus vote and for it not to look like his vote had been bought.

Another issue was the attempted hijacking of the Census from the Commerce Department. The census was always under the management of Commerce. Obama announced a few days ago that he wanted it under control of White House Chief of Staff. There is no clear reason why he wanted this to happen. The only thing that could be inferred was that he wanted the districts redrawn favorably to Democrats after the census was complete.

The census is one of the primary responsibilities of the Commerce Department. For the White House to hijack it is utterly shameful. This article By John Fund of the Wall Street Journal gives great insight on how the census could help with political boundaries.

“In 1999, the Supreme Court ruled 5-4 in Department of Commerce v. U.S. House that sampling could not be used to reapportion congressional seats. But it left open the possibility that sampling could be used to redraw political boundaries within the states.”
Maybe Gregg also realized he would be much more important as a GOP senator than as a figurehead in the Obama Cabinet.

Thursday, February 12, 2009

The Octuplets and Our Own Freedoms

Much has been said about the mother of the recently born octuplets, Nadya Suleman.
Conservative pundits are outraged that she was allowed to have all of these kids when she already had 6, and doesn’t have a clear source of income. She lives with her parents, and receives food stamps. CNN reported this morning that she has already set up a website to solicite donations and tell about her family, I guess.

While it is very clear that she has no way of adequately providing for the needs of her kids financially, she says she will stop her life for them and will love them and be with them. So, what she is really saying is that she is going to be a stay-at-home mom. Great. Because to have a job and pay daycare for 14 kids would be like going to work and shredding your paycheck.

Many people are angry that she will be receiving governmental assistance for 14 kids. Hey I’m upset about it, too. But what other recourse is there? Some people have said the government or family services needs to step in and do something, like placing the kids with other familys that have the means to take care of them.

I say this. Be very, very, very careful. Government intervention would set a dangerous precident that the government has the authority to tell us how to raise our kids. This would be a serious intrusion of privacy and would be a major concern for those that have a parent stay home with kids while another works. Imagine a social worker showing up and telling you that both parents have to work so you don’t receive foodstamps, even if the other income just barely covers child care costs. Or what if the house is just a little bit dirty. Right now, there isn’t a clean dwelling rule to receive assistance.

Reproductive rights would also be targeted by government intervention. For the government to set a cap on the number of kids one can have or to control women’s reproductive rights would be downright totalitarian. That would be just like having China’s one-child rule in this country.

While many people are rightfully upset about her receiving assistance there really isn’t much to do about it, as I see it. As a society, we are hamstrung by the same freedoms that we enjoy for our own families. And isn’t that the way it should be? The best we can hope for is that Ms. Suleman is successful in this long journey with her own family.

Wednesday, February 11, 2009

For Andy

For Andy

Who's Really in Charge?

Is this Obama’s Stimulus plan or the Pelosi-Reid plan?

Kathleen Parker bought up a good point in
today’s editorial at

There was a time last week when Obama looked younger than usual. Not youthful so
much as not fully formed. He seemed out of place in his presidential role. In a
word, he seemed haunted. Had he been visited by the ghosts of Christmas future?

Or had he looked across the table into the eyes of Nancy Pelosi and Harry
Reid and realized that he was not among friends? Obama's lack of authority over
the stimulus package has underscored the value of political experience and
toughness -- and given weakened Republicans the leverage they needed to launch
an aggressive attack.

She brings up a valid argument about Obama being wet behind the ears. Obama never even had to face a re-election for his Senate seat. He ran one time, and then he ran for President. Meanwhile, Democratic generals Reid and Pelosi have been at this for a much longer time and are well schooled in the machinations of DC politics.

Maybe Obama really did have utopian wishes. Who knows? Chances are, Obama had absolutely no say in the stimulus, except to say he wanted no pork in it. Then the behind the scenes wheels began to turn and everyone started to submit their laundry list of wishes, and it became this $800 billion hot air balloon.

It just came on the news that the House and Senate have been able to agree to a new bill. Can’t wait to see the voting break down.

Let's Stimulate the Government

Quick fact check about Porkulus and the un “ear marks.”

For example, the latest version contains $2 billion for a clean-coal power plant with specifications matching one in Mattoon, Ill., $10 million for urban canals, $2 billion for manufacturing advanced batteries for hybrid cars, and $255 million for a polar icebreaker and other "priority procurements" by the Coast Guard.

from the Wall Street Journal, displays a lot about how the stimulus is being earmarked for federal programs and buildings.

Title VI, Financial Services and General Government, says that
"not less than $6,000,000,000 shall be used for construction, repair, and
alteration of Federal buildings." There's enough money there to name a building
after every Member of Congress.

The Bureau of Land Management gets $325,000,000 to spend fixing federal
land, including "trail repair" and "remediation of abandoned mines or well
sites," no doubt left over from the 19th-century land rush.

The Centers for Disease Control and Prevention are getting $462,000,000 for
"equipment, construction, and renovation of facilities, including necessary
repairs and improvements to leased laboratories."

The National Institute of Standards gets $357,000,000 for the "construction
of research facilities." The Oceanic and Atmospheric Administration gets
$427,000,000 for that. The country is in an economic meltdown and the federal
government is redecorating.

The FBI gets $75,000,000 for "salaries and expenses." Inside the
$6,200,000,000 Weatherization Assistance Program one finds "expenses" of
$500,000,000. How many bureaucrats does it take to "expense" a half-billion

The current, Senate-amended version now lists "an additional amount to be
deposited in the Federal Buildings Fund, $9,048,000,000." Of this, "not less
than $6,000,000,000 shall be available for measures necessary to convert GSA
facilities to High-Performance Green Buildings." High performance?

Maybe I'm out of the loop in this Green Energy stuff. I understand that we want to make buildings put off less CO2 and be more energy effecient. But the last time I checked, there is no such thing as a 100% effecient machine - or building for that matter.

The WSJ Gets it Right

In today’s Wall Street Journal, there was a small write-up about how Obama seemed to have the reporters pre-screened for questions during his Monday night “media event.” It was very obvious what was going on. Obama kept looking and asking for specific journalists (if that’s what they still want to call themselves).

This isn’t the first time Obama has done this with
media events.

When Obama took his obligatory trip to Iraq and Afghanistan, there was no press pool. There were no press conferences. The only journalists on the ground were from the military. Of course, they may be able to ask more pressing questions than the lapdogs in the White House press pool.

At least the Journal brought this up, even if it was a day later than I did.

Tuesday, February 10, 2009

Another bailout for the bailout

Fed chairman Geithner called for an addiitional $2 TRILLION dollars today to help out financial institutions and help get credit flowing again. Under the named "Financial Stability Plan," or the Obama-Geithner Ponzi Plan, the money will be used to do four things.

1. Clean up standards for banks. And lend banks in crisis additional capital.

2. Create a public-private fund to buy up toxic assets. They also want to encourage private ownership of some of these assets.

3. Expand consumer and business lending to kick start spending and secondary markets.

4. Commit $50 BILLION to help reduce monthly mortgage payments.

So, does this have to get passed by Congress or is more money just printed? This would put the price tag for the Obama administration at $2.8 TRILLION dollars.

Quick blurb on illegal immigrants out of work

CNN posted this story about an illegal immigrant having to return to Guatemala because he couldn't find work here. According to the story, our tougher immigration stance may be a contributor.

Immigration experts say it's not yet clear how large an immigration exodus of Latin Americans is under way. But they say anecdotal evidence suggests day laborers, like Pablo, have begun packing -- a result of the economy and tougher immigration enforcement.

Hmm, I thought we needed a new immigration policy. I guess just better enforcement is working fine, along with a sour economy.

There are unemployment numbers for everything from manufacturing to health care. Now we need to add another one for illegal immigrants.

Jack Cafferty on Pelosi

Jack Cafferty of CNN offers this brief commentary on how Pelosi is doing being in charge of the Spendocrats.

Credit House Speaker Nancy Pelosi for getting the ball rolling.
Under her leadership, House Democrats excluded Republicans from having any voice in crafting the stimulus package.

Acting like children who hadn't seen Santa Claus for eight years, House Democrats busily loaded up the bill with stuff they had been unable to get for eight years. It was payback time.

Contraception, funding for the arts, restoration of the national mall, stop-smoking programs. All while Americans lose their homes, their jobs, and their savings. It was both childish and disgraceful.

When asked if the lack of Republican support was at least partly her fault, she gave some snotty answer about not being partisan but working for the American people. Right.

The Obama Media Event, Part 1

Highlights of the Obama Press Conference from Monday night.

Q from Chip Reid: Is that a sign that you are moving away, your White House is moving away, from this emphasis on bipartisanship? And what went wrong? Did you underestimate how hard it would be to change the way Washington worked?

Obama: I don't think -- I don't think I underestimated it. I don't think the American people underestimated it. They understand that there have been a lot of bad habits built up here in Washington. And it's going to take time to break down some of those bad habits.

So, Republicans are bucking the President because it’s a bad habit to be against an $800 billion dollar spending plan?

Obama: But when they start characterizing this as pork without acknowledging that there are no earmarks in this package -- something, again, that was pretty rare over the last eight years -- then you get a feeling that maybe we're playing politics instead of actually trying to solve problems for the American people.

The only thing different about Obama and his earmarks is the language used to insert them. An Associated Press story shows how some of the money is being funneled to pet projects.

WASHINGTON (AP) -- President Barack Obama's ban on earmarks in the $825 billion economic stimulus bill doesn't mean interest groups, lobbyists and lawmakers won't be able to funnel money to pet projects.

They're just working around it - and perhaps inadvertently making the process more secretive.

The projects run the gamut: a Metrolink station that needs building in Placentia, Calif.; a stretch of beach in Sandy Hook, N.J., that could really use some more sand; a water park in Miami.

There are thousands of projects like those that once would have been gotten money upfront but now are left to scramble for dollars at the back end of the process as "ready to go" jobs eligible for the stimulus plan.

The result, as The Associated Press learned in interviews with more than a dozen lawmakers, lobbyists and state and local officials, is a shadowy lobbying effort that may make it difficult to discern how hundreds of billions in federal money will be parceled out.

"'No earmarks' isn't a game-ender," said Peter Buffa, former mayor of Costa Mesa, Calif. "It just means there's a different way of going about making sure the funding is there."

So, now a water park is considered infrastructure. This bill is so loaded with garbage that it looks like it’s not going to create any long term economic growth at all. If the government is going to create jobs through building highways and bridges, then won’t that just make those departments bigger and a bigger tax burden?

QUESTION: Thank you, Mr. President. In your opening remarks, you talked about that if your plan works the way you want it to work, it's going to increase consumer spending. But isn't consumer spending, or over-spending, how we got into this mess? And if people get money back into their pockets, do you not want them saving it or paying down debt first, before they start spending money into the economy?

MR. OBAMA: Well, first of all, I don't think it's accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies, based on shaky assets. And because of the enormous leverage, where they had $1 worth of assets and they were betting $30 on that $1, what we had was a crisis in the financial system.

If people could afford the houses they were taking out mortgages for, we definetly wouldn’t be in this mess. The only shaky asset I can readily think of is a family with an income of $60,000 a year taking out a $200,000 loan with zero per cent financing. It sounds a lot better to be blaming the banks than citizens for the mess we are in.

Kudos to Chuck Todd from NBC for asking a tough question. Too bad no one else could follow up on it. It’s not a press conference if every question is planned ahead of time.

Monday, February 9, 2009

The Affect of Tax Cuts

I found an interview with noted economist Robert Barro talking about the stimulus and the effect of this on the overall economy. One part of the interview discusses tax cuts and their history on the growth on the economy.

Here is the link.

And I take it from the Wall Street Journal piece you wrote last week... well, the piece is just specifically about measuring multipliers, but I take it that you are fairly skeptical in general that fiscal policy will boost aggregate demand.

Right. There's a big difference between tax rate changes and things that look just like throwing money at people. Tax rate changes have actual incentive effects. And we have some experience with those actually working.

What would you say is the best empirical evidence there?

Well, you know, it worked to expand GDP for example in '63 and '64 with
the Kennedy/Johnson cuts. And then Reagan twice in '81 and '83 and then in '86. And then the Bush 2003 tax-cutting program. Those all worked in the sense of promoting economic growth in a short time frame.

I'm the middle of a study where I am trying to estimate this overall, going back to 1913 -- sort of constructing some measure of the overall effect of the tax rate at the margin, at the moment. I'm just looking at that now, actually...

You're talking about the multiplier on a dollar of...

Well both things, but here I'm talking about the tax rate stuff. Get some measure of the effect of marginal tax rate that comes from the government -- federal, state, local. And then you can see what it looks like going down or going up and how the economy responds. And then, in addition to that, the government might be spending more or less money on either military stuff or not on military stuff. And we can estimate that at the same time. With the government spending stuff, the clearest evidence is in wartime. It's not that it's the most pertinent, but it's the clearest in terms of evidence because it's the dominating evidence at those times, especially during the world wars.

Slow news weekend

It was a slow news weekend. Pundits are probably waiting with rapt attention as the Obama Show comes on tonight in its primetime glory. Today, His Greatness is in the Midwest aiming to let us all know that it is in our best interest to make sure the stimulus bill passes the Senate.

Obama implored Congress to take action, saying the nation can't afford to wait. "Economists from across the spectrum have warned that if we don't act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits."
When he says “economists from across the spectrum,” is he talking about Paulson, Bernanke, and Geitner?


One thing I noticed in the bill is making auto loan interest a tax deduction. This appears in the Senate version at an $11 billion clip. Although most dealerships and automakers are rolling out every incentive imaginable to get people on the lot, this line of the stimulus actually makes sense.

Most people with good credit are going to get a low rate or zero per cent financing anyway. Persons with slower credit are going to be paying more in interest, and thus dragging down their spendable income for four to six years. Making the interest paid a tax deduction is a great way to (hopefully) give them some money back at tax time and make ownership easier.

We already do it for homes, why not cars, if only temporarily.

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