Friday, March 30, 2012

Incompetence, Not Malice

“Never ascribe to malice that which is adequately explained by incompetence.”
- Napoleon Bonaparte

Peggy Noonan had an interesting op-ed in today’s Wall Street Journal, where she notes Obama’s increasingly apparent disdain for his political opponents, and attributes this to some sort of deviousness on his part. She goes on to attribute the Obama Administration’s dogged determination to ram through their agenda including the signature healthcare legislation facing oblivion at the hands of the Supreme Court to this deviousness, this dogged insistence on “…following an imaginary bunny that disappeared down a rabbit hole” as it were:

From the day Mr. Obama was sworn in, what was on the mind of the American people was financial calamity—unemployment, declining home values, foreclosures. These issues came within a context of some overarching questions: Can America survive its spending, its taxing, its regulating, is America over, can we turn it around?

That's what the American people were thinking about.

But the new president wasn't thinking about that. All the books written about the creation of economic policy within his administration make clear the president and his aides didn't know it was so bad, didn't understand the depth of the crisis, didn't have a sense of how long it would last. They didn't have their mind on what the American people had their mind on.

The president had his mind on health care. And, to be fair-minded, health care was part of the economic story. But only a part! And not the most urgent part. Not the most frightening, distressing, immediate part. Not the 'Is America over?' part.

And so the relationship the president wanted never really knitted together. Health care was like the birth-control mandate: It came from his hermetically sealed inner circle, which operates with what seems an almost entirely abstract sense of America. They know Chicago, the machine, the ethnic realities. They know Democratic Party politics. They know the books they've read, largely written by people like them—bright, credentialed, intellectually cloistered. But there always seems a lack of lived experience among them, which is why they were so surprised by the town hall uprisings of August 2009 and the 2010 midterm elections.

The truth of the matter is, the entire Democrat Party is devoid of common sense due to their enslavement to the Progressive ideology… and their corruption.

If you want to know when our economic crisis started, look no further back than January 2007, when the new Democrat majority took over in the House after the 2006 mid-term elections. One simple rule change, FASB 157, that instituted the mark-to-market rule for assets including real estate, caused the whole house of cards that was the mortgage securities market backed by Fannie Mae and Freddie Mac and that led to the housing boom that peaked in early 2007 caused by easy money due to relaxing credit standards caused by the 1996 Community Reinvestment Act. Senate and House Democrats blocked seventeen separate attempts by the Bush Administration to reform Fannie Mae and Freddie Mac… because it was a huge income generator for Democrats temporarily out of office (like Rahm Emmanuel) and for those running for office (like Chris Dodd, Barack Obama, and John Kerry).

As Obama’s new Chief of Staff, Rahm Emmanuel was just being honest when he said, “Never let a crisis go to waste.” Most Democrat politicians have no understanding of economics or finance, and the ones who do are blinded by their ideology. Nancy Pelosi couldn’t acknowledge that the Reagan tax cuts and relaxed regulations led to the largest economic boom in American history, because that would be tantamount to admitting supply-side economics was a sound theory… which it is. And back in 2008 candidate Barack Obama announced his opposition to lower taxes even if the result was increased government revenues, in the interest of ‘fairness.’ For those Democrats who complain about the national debt increasing during Reagan’s two terms, it’s important to acknowledge two facts: Democrats controlled the House for his entire term (and that’s where budget bills originate), and the increased debt was due to the fact that while yearly tax revenues doubled over Reagan’s two terms despite the tax rate cuts, yearly spending increased by 300% during the same time period. If the Democrats had just kept spending to the rate of inflation the US would have been running a huge surplus in 1988.

Similarly, in 2008 the Democrats were convinced that the economic crisis would be short-lived, that America would snap out of it, that the recovery would happen and it would be robust because it had always been so… and so they believed any actions on their part would have no impact and they might as well take advantage of the crisis to ram a dozen years’ worth of pent-up liberal spending through before the mid-terms. And so they did, and so they spent a trillion dollars on an ineffective ‘stimulus’ program that mostly lined the pockets of Democrat-aligned interest groups. They raised the yearly deficits from the last GOP budget’s $200 billion up to over $1.5 trillion, increasing the US national debt more in the first three years of the Obama Administration than in the entire eight years of the George W Bush Administration. Because our yearly deficit is so large, and has been so large, for several years, the Federal Reserve has resorted to printing up dollars and using them to finance our yearly deficits since 2009, hiding the fact that the United States is bankrupt by definition.

Unfortunately for the Obama Administration, all of these financial shenanigans have hit the wall. There will be no more ‘quantitative easing’, or mass printing of currency, to further finance the debt, because the GOP-controlled House has put Ben Bernanke, the Fed Chair, on notice. There has been no federal budget since 2008, and no Democrat-controlled branch of Congress has passed a budget since then (on the contrary, the GOP-controlled House has passed a budget for the past two years, since regaining control in the 2010 mid-terms, but their budget bills have gone to die without an up-or-down vote in the Democrat-controlled Senate even though these budgets have received Democrat support in the House, unlike the abortive Obama-submitted budget proposals that failed to get any votes, Democrat or Republican, in the same timeframe). The debt ceiling increase negotiated by Obama and the House Republicans will be reached before the November elections… and there is no incentive any more for the Republicans to compromise.

If you want to blame anything for this, don’t blame the non-existent ‘obstructionist Republicans’ or the ‘do-nothing Congress.’ Blame the ‘do-nothing Democrat-controlled Senate’ under Harry Reid. Blame the ‘elections have consequences', ‘we won’ President Obama. You see, it really isn’t malice. Obama, Reid, Pelosi, and their fellow Democrats don’t really want to ruin the country… it’s just that they don’t know what to do, their philosophies and ideologies clearly have not and will not provide solutions, and their strongly-held yet incorrect beliefs prevent them from doing what would actually work… because that would mean their beliefs are wrong.

It’s incompetence. Sheer, unadulterated, hubristic, so-ignorant-they-can’t-even-see-it incompetence. The only way to fix it will be to remove the obstacles to the solution, Democrat control of the White House and Senate, via the next national election. And then the American people will again learn their once-a-generation lesson about not trusting Democrats with the keys to the government for another 25 years. Hopefully there’s enough left to salvage this train wreck, but be prepared to wait for several years for the recovery to happen.

No comments: