Is This an Obama Epiphany?

I seriously doubt it, but hearing Obama talk about GM provides at least a glimmer of hope that he just might be getting it. "If all of us are doing our part, then this restructuring, as painful as it will be in the short term, will mark not an end but a new beginning for a great American industry" the President proclaimed. Yes, but why isn't what's good for General Motors good for America? Why does he think the country does not need a painful resetting, but instead just needs some big fat government spending?

I suspect in Obama's mind GM is a plain-old business (which of course it is), and so he's a lot more comfortable with the notion that it ought to sink or swim like any business, while he's rather intimidated by those financial institutions with their mysterious Doomsday powers. Thus the banks and AIG get bail-out after bail-out despite being far more irresponsibly run than G.M., which is mostly suffering from a double-whammy shock of a tripling of gas prices followed by, once the gas prices went back down, a major recession.

Still, maybe there's some hope that Obama will hear his own words and actually recall and understand them next time the financial industry steps into his view. Perhaps he will realize that there's lots of "haircuts" and compromises that could be going on there as well. Maybe the thought will pop into his head that Goldman Sachs doesn't have to be paid in full on every deal they've ever entered into - particularly not when taxpayer dollars are on the line.

Obama to Detroit: Drop Dead?

From WaPo: "Neither General Motors nor Chrysler submitted acceptable plans to receive more federal bailout money, the Obama administration said as it set the stage for a crisis in Detroit that would dramatically reshape the nation's auto industry."

Funny how if your business involves moving money around or paying off CDS bets by the billions to foreign banks, you're prima facie viable and worthy of tens of billions in Federal bailout money; but if your business actually makes real stuff - that Americans actually buy and would have to be made up for in more $billions of imports if you stopped making it - USG suddenly gets real picky about your business model.

Are You a Crazy-Ass Racist?

Probably, at least according to the super-secret liberal e-mail group called JournoList. Mickey Kaus reveals a long string of e-mails among these elites of perfectly liberal opinion. The title of the thread is "Marty Peretz is a Crazy-Ass Racist" - yes, that's Marty Peretz of the liberal New Republic. What terrible thing did he do, you must be thinking. Did he use the N-word against a little-old lady? Did he call for the reinstatement of Jim Crow laws, or voice regret over the emancipation of the slaves? Not quite. What he did was raise some concerns about Mexican-American relations:

"Well, I am extremely pessimistic about Mexican-American relations, not because the U.S. had done anything specifically wrong to our southern neighbor but because a (now not quite so) wealthy country has as its abutter a Latin society with all of its characteristic deficiencies: congenital corruption, authoritarian government, anarchic politics, near-tropical work habits, stifling social mores, Catholic dogma with the usual unacknowledged compromises, an anarchic counter-culture and increasingly violent modes of conflict. Then, there is the Mexican diaspora in America, hard-working and patriotic but mired in its untold numbers of illegals, about whom no one can talk with candor."

Now the part I bolded above might be a thoughtless use of a stereotype - I have no idea how to measure the work habits of Mexicans, and not sure Peretz has any real knowledge to back that up. But otherwise, isn't all of the above at worst plausibly true, if not clearly true. I'm not sure what exactly he means by "Catholic dogma with the usual unacknowledged compromises", but if it has anything to do with the disturbingly high illegitimacy rates among Latino immigrants in the U.S., I think I have an idea.

The most questionable part is where he praises Mexican immigrants as "hard-working and patriotic." Is there much evidence of Mexican-Americans as particularly patriotic or having a particularly strong work-ethic outside of the illegal-immigrant sweatshop culture? Most ironic are his last words where he ruefully notes that "no one can talk with candor."

This group of liberals - Jonathan Chait, Eric Alterman, Matthew Yglesias and company - are real pips. Could there be any chance of reasonable discourse with such a group on, say, education policy? Well there can't, because the whole point of their conversation is to advertise their liberalness. They're really not even particularly interested in advancing an agenda. Policy discussions bore them - their liberalism doesn't lead them to propose policies - policies rather serve to confirm their liberalism.

They wouldn't, for example, exert one iota of brain energy on what the actual outcome of "comprehensive immigration reform" might be. They need only know that supporting it demonstrates their post-human perfection, in direct contrast to the neo-nazis who would prefer to see the number of illegal immigrants reduced. They don't advance agendas - agendas advance them. And so the accuracy of Peretz's comments is completely irrelevant - like craters on the moon, his musings suggest a flaw in the presumed perfection of the heavens - that there should be any doubts regarding the unalloyed equality of humanity; thus anyone raising these flaws must be dispatched to the rack lest such reckless talk be thought acceptable. The theology must be defended against all doubters!

Or consider energy policy. Does a single one of them consider for a moment exactly how we are supposed to achieve their angelically minimal carbon emission goals? Has the thought occurred to them how the utopia of Europe has minimized its use of (for them much more expensive) fossil fuels? The answer is through nuclear and diesel - oops - two fuels that the American liberalentsia utterly disdains. But it doesn't matter - proposing specific solutions is beneath them - the very exercise of calling for fossil-fuel reductions gives them that warm, fuzzy, superior feeling they crave. The theology is all that matters.

Forget Daschle; Never Mind Sebelius

If Obama wants someone who can really sell his healthcare plan, he need look no further than late night TV:



Now if he can also recruit Vince, his troubles will be over.

Rush vs. Frum

David Frum is in a battle against Rush Limbaugh for the soul of the conservative cause. Frum has scored a coup of sorts by getting the cover story in Newsweek - Why Rush is Wrong. Frum's old colleagues at National Review are up in arms at his impertinence.

What they all fail to see - since there doesn't seem to be any appetite for even the tamest bit of introspection - is that they are each and every one irrelevant in the wake of their unabashed cheerleading through the last 8 years of disaster. Frum is as responsible as anyone (not named Bush or Cheney) for the Iraq debacle. And Rush was a persistent apologist for each and every Bush initiative, as were the bulk of the editors at National Review. The only exception I recall was Bush's illegal-immigrant amnesty proposal - that was too much for even this crowd.

Did any of them sound any warnings about the hideous trade deficit Bush was cultivating - Or did they excuse them as being "pro-growth"? Were they critical of Bush's "ownership society", or inclined to embrace it? Did they wholeheartedly support the Iraq war and damn anyone who dared question it?

In short, none of them have any credibility with the American people. If Republicans hope to achieve any electoral success, they'll need leadership not associated with G.W. Bush.

In general, I'd say Frum is more confused than Limbaugh. He seems to feel that the future of conservatism lies in supporting gay rights and the hopeless cause of courting Mexican immigrants. There's no hope for Frum. If Rush, on the other hand, could somehow find a way to repudiate the Bush years while saving face, he might just be able to contribute to a Republican resurgence. I fear though that another year of Obama's scorched-earth campaign against Americans' net worth will leave the populace so demoralized George Washington himself couldn't successfully lead such a resurgence.

Hillary Gets Grilled by NPR Reporter

NPR reporter Michelle Kelleman interviewed Hillary Clinton in Brussels this morning. Oh, it was brutal. The ruthless NPR reporter badgered the Secretary of State, boring into her with one searing challenge after another. How Mrs. Clinton managed to keep her composure during this inquisition is beyond me - I was barely able to keep listening, the hostility was so palpable.

Here's a sample:

[Q]The Russians seem really interested in arms control, and I wonder if you can give us a sense of how the Obama administration is going to approach that topic differently from the Bush administration.

[A]We're going to believe in arms control and nonproliferation as a core function of our foreign policy. As you remember, Michele, there was a great deal of confusion and infighting...

The whole interview runs like that - an uninterrupted series of one grueling probe after another. Why these reporters feel they need to show their toughness by cross-examining their guests and playing "Gotcha!" I'll never understand. How is the Obama administration supposed to function under such relentless scrutiny?

Go ahead - have a try yourself - the link is below - but I'm warning you, you'll be cringing the whole time.
Michelle Kelleman interviews Hillary Clinton.

How Will It Play Out?

A year from now, how will things look? Here's some ideas:

• The Obama stimulus package has revitalized the nation's economy, leading to a surge in consumer spending. China and Japan are so impressed with this performance, and now look so favorably on America's plans to invest in wind and solar energy and education they eagerly buy up all new Treasury issues rather than pump money into their own domestic economies. America is clearly on the rebound, and Americans are optimistic about the future.
  
• Due to widespread civil unrest, including some high-profile self-defense shootings re-labeled as hate crimes, President Obama has declared Martial Law across most of the country, deploying National Guard and even regular armed services personnel in most large cities to quell rioting.
  
• Unemployment has reached 15%; many of the most familiar and venerable companies have ceased to exist; most retail stores and restaurants are shuttered; pension funds are largely liquidated; several states and a number of cities have defaulted on their bonds; meanwhile, in Washington, President Obama has convened an "Education Summit" to look for "common ground" on ideas for reforming our education system.
  
• Citing a national emergency like no other in our nation's history, a group of military officers have taken control of the government and instituted emergency measures in order to halt the hyperinflation that has decimated the dollar in the wake of China and Japan's dumping of U.S. Treasuries to fund their own stimulus measures.
  
• Barack Obama is still president, but his position is largely ceremonial as a small group of senators and congressmen have formed, with the implicit backing of most of their colleagues, a de facto executive council governing the country via a novel use of the appropriations process, rendering Obama's vetoes useless and ensuring cooperation of departmental executives.
  
• Due to a string of failures in the banking and insurance sectors, forced consolidation has resulted in only two or three banks and two or three insurers remaining. The Obama administration exercises tight control over their operations, and they effectively act as arms of the executive branch. In fact, most of the economy is now running under the authority of federally-mandated "councils" consisting of coalitions of financial, labor, and community organizations who direct employment, location, supply and pricing decisions for firms. Shortages are common and unemployment remains high, but otherwise conditions are stable and no widespread panic or hunger is in evidence. Health care is effectively nationalized. The Ways and Means committee passes a new tax bill raising rates on wealthy taxpayers earning over $80,000 a year.
  
• Due to a dramatic policy reversal about 8 months ago, when President Obama, under intense congressional pressure, announced an end to bailouts, forced a complete reckoning of the financial health of all troubled firms, instituted tough financial regulatory reform, and proposed a revised, austere budget with a small deficit, unemployment has been in reverse, business activity has grown and investors have returned to the markets with fresh new vigor. The recovery appears to be in full swing with no sign of retrenchment in the foreseeable future.
  

Any thoughts on which of the above is the least likely?

We're Goin' Down, Down, Down, Down

After Friday's astonishing lows, the markets really shot its load today, just crashing through any of the support levels that anyone imagined existing just a week ago. Meanwhile, we (i.e., us Americans) are throwing another $30 x 10^9 AIG's way. As the Dow approaches 6000 and the S&P 600, the meltdown of our economy appears inevitable, without even the remotest suggestion from Washington that the bailouts will even be rethought, never mind end anytime soon. This is working out more serendipitously than Obama could have ever dreamt.

What, you say, I'm crazy? Why would the president of the United States want to see his nation's economy implode? Why would he wish to see his grand plans for a greener, more educated, more health-insured, more economically-just America jeopardized by its going bankrupt?

Now I'm not saying this is part of some grand plan. I'm not even sure Obama realizes what's happening. But clearly he does not consider imploding markets a cause for concern. As far as he's concerned, he's already taken care of that. He signed an $800b stimulus package. He's proposed a budget to vastly increase spending on education - we all know that education pays for itself multiple times over (sometimes 10 times!). And of course all that energy "investment" in the budget - that will solve our industrial problems.

So this market-crashing stuff is just a temporary distraction - a bunch of rich whiners throwing a little tantrum. Besides, if things don't pick up as expected, we can just throw another $800b out there. The only real danger to the economy right now is that people are trying to save money - that's always been the problem, in fact, all that net worth greedy people like to build up, which only serves to further disadvantage those who have a different approach to personal finance.

Standing stalwart behind the president are the titans of the media. To help sell his prescriptions he can count on the New York Times, Washington Post, Time, Newsweek, NBC, CBS, ABC, CNN, and NPR. These organizations - and many more across the country - will be certain not to let a single credible, skeptical voice intrude on their cult-of-Obama storylines. To be sure, they will talk to various Republican and pseudo-conservative tools who blabber on incoherently about tax cuts and saving the housing market. But they won't talk to a single person who will actually discuss what's actually wrong with the financial system and what must be done to set it right. As far as the opposition like Fox and WSJ? See the above re: tools.

Indeed, the stars couldn't be more perfectly aligned for the triumph of Obamanomics. The market crash is wiping out people's 401k's as well as any pensions that might still be out there. Then between the stimulus package(s), the various bailouts and the super-budgets, the dollar will be next to dive as neither China nor Japan will be able to afford to fund them. This will serve to wipe out whatever cash savings these saps will have attempted to protect. Ownership of gold, of course, can simply be declared illegal.

And so with existing savings effectively wiped out and further savings impossible (due to their being no safe place to invest), Americans will have no trouble funding Obama's dreams. Yes We Can indeed. The persistence of a few huge zombie banks, completely dependent on the Obama administration for their existence, will provide the streams of "capital" to fund administration-approved "private" ventures - the various health "insurers" and green "entrepreneurs" that will spring up in Obamaland. Any income that might have been dumped into savings in the past will now be redirected to "investments" in education and infrastructure. (Can I use any more scare quotes?)

Granted, this was not Obama's precise plan back when he and David Axelrod decided he should become president. Obama envisioned that as POTUS he could harness this incredible wealth-making machine that is the USofA to accomplish all the things he would have liked to have accomplished as a community organizer if being a community organizer didn't totally suck. You know, like back when he was still talking about how "white folks' greed runs a world in need". So what to do when the white-greed machine blows a serious gasket? How do you redistribute money that's disappeared?

Well, for one thing, there isn't so much inequality anymore. The meltdown is much harsher to those with positive net worth - they've seen much of that disappear. If you have no savings, you've got nothing to lose. If you bought a house you couldn't possibly afford, and you had a crappy credit rating to begin with, you walk away. That helps. But if you can keep insolvent firms operating with bailouts, you can then also control the disposition of their revenues. Favored constituencies can continue to get "loans" regardless of ability to pay, salaries can be capped (or reduced by eliminating bonuses, which are really just a variable salary component). Private firms looking for funding will also need to play by the rules, such as locating in the right places, hiring the right people, supplying the right amounts to right locations. And why not?

You can't really argue that America's resources have been well allocated over the last 20 years. Who's to say that Obama's ideas aren't as good as anyone else's? All those quants working on Wall Street were not just wasting their talents - they were being used to wreak havoc. Put them to work developing new energy sources, designing mass transit systems, or send them off for a year of community service in the cities. And the rest of us not-so-mathematically gifted technocrats? The new age will have lots of rules and will require careful management - there's a vast bureaucracy to man (or person). We still need to work, only we'll just have to work a decade or two more than we might have thought. But that's okay - we'll have lots of vacation time, and there will be lots of part-time jobs.

So, as you watch the markets collapse, ask not why Obama doesn't do anything, but why should he?