Subjective Bipartisanship—2000 Election, Citizens United and Obamacare

Posted by PITHOCRATES - September 26th, 2013

Politics 101

Democrats are like Petulant Children whenever they don’t Get their Way

Bipartisanship is a funny thing.  Subjective.  The Democrats are always demanding that the Republicans be bipartisan.  And stop being such extreme ideologues.  For after all they won the election.  And the Republicans lost.  So the Republicans should just give in and give the Democrats whatever they want.  And shut their pie holes.

The Democrats say the Republicans should cede defeat.  And quit fighting them.  Just like the Democrats do.  When they lose an election or a Supreme Court decisions they just go on their way, whistling a happy tune.  When Al Gore lost to George W. Bush in 2000 the Democrats said, “Gee whiz we sure wanted to win.  But, oh well, the Republicans just made a better case to the American people.  It’s obvious that the people want them.  Not us.  So congratulations, President Bush.  And Godspeed.  We look forward to working with you to give you whatever you want.  For after all, you won the election.”

You probably don’t remember that.  And for a good reason.  It never happened.  Because the Democrats are like petulant children whenever they don’t get their way.  Just look at them now.  The people who are supposed to be so tolerant are calling the Republicans terrorists, anarchists, fanatics, extremists, etc.  Saying things like they’re holding the American people hostage.  For ransom.  That they have a target on the middle class.  The kind of hate speech they say is responsible for gun crime.  The kind of speech they blamed the Tucson shooting on.  Even the mainstream media apologized for using a gun metaphor on air.  When it was all the rage to frown on that kind of speech.  But when it comes to attacking the Republicans the Democrats unload double-barrel shots of it.

Chief Justice Roberts changed the Individual Mandate in Obamacare to a Tax

Obamacare passed purely on partisan lines.  It was NOT bipartisan.  Only Democrats voted for it.  When they had control of the House, the Senate and the White House.  But even then they had to bribe some Democrats to vote for it because they knew their constituents were against it.  There was the Louisiana Purchase.  And the Cornhusker Kickback.  And they were right to be reluctant about voting for Obamacare.  For some lost their jobs because of it.  And the Democrats lost control of the House of Representatives.

The Republicans continue to oppose Obamacare.  As do the people.  As polls show the majority doesn’t want it. Then came the Supreme Court decision.  And Chief Justice Roberts.  Who said the individual mandate (the government forcing the people to buy something for the first time in U.S. history) was, in fact, a tax.  Despite President Obama and the Democrats insisting that it wasn’t a tax.  Because people did not want a massive new tax.  So instead of finding Obamacare unconstitutional (which it is) he said the government forcing Americans to buy something for the first time in U.S. history was constitutional because he changed the individual mandate to a tax.

So the Democrats say the Republicans should just drop their opposition to Obamacare.  And they should quit their attempts to defund Obamacare.  For the Supreme Court has settled the matter once and for all.  And the Republicans need to do as the Democrats do.  Respect the Court’s decision.   Just like they respected the Court’s decision to stop the endless recounting of ballots until the Democrats could find enough ballots to count to overturn the outcome of the 2000 presidential election.  And how they respected the Court’s decision in the Citizens United case that said corporations could make political donations just like people.  And unions.  That pours money into Democrat coffers for political action whether the union rank and file wants them to or not.

The Democrats had No Interest in being Bipartisan when George W. Bush was in Office

You probably don’t remember any of this either.  And for good reason.  It never happened.  Because the Democrats are like petulant children whenever they don’t get their way.  President Obama insulted the Supreme Court Justices during a State of the Union address following the Citizens United decision.  Which was unprecedented.  And childish.  They attack this decision to this day.  And vow to overturn it.  For it’s okay for them to disagree with the Supreme Court.  But not the Republicans.

They have attacked George W. Bush with a vengeance.  Called his presidency illegitimate following the 2000 election.  Yet when he won reelection in 2004 they didn’t stop being extreme ideologues.  They didn’t shut their pie holes.  They didn’t start supporting the War on Terror.  They didn’t stop trying to defund the Iraq War.  In fact, they stepped up their attacks on him.  Even though his reelection proved he was legitimate.  They called him an idiot.  A liar.  An embarrassment.  A crazy cowboy.  Late night television belittled him.  And the mainstream media played along.  The Democrats had no interest in being bipartisan when George W. Bush was in office.

The Democrats are petulant children.  When they don’t get their way it’s no holds barred.  As they do everything in their power to derail the opposition’s policies.  But when the Republicans stand firm with the American people in their opposition to Obamacare they are terrorists, anarchists, fanatics, extremists, etc.  For you see, there are two sets of rules.  One for the Democrats.  And one for the Republicans.  It’s a little like that saying about customers.  Rule number 1: The customer is always right.  Rule number 2: When the customer is wrong see rule number one.  Only with the Democrats it’s like this.  Rule number one: The Democrats should be in power and should be allowed to do whatever they want to do.  Rule number 2: When the Republicans are in power see rule number 1.

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FT170: “If liberals believed in being bipartisan they wouldn’t harass conservatives with the IRS.” —Old Pithy

Posted by PITHOCRATES - May 17th, 2013

Fundamental Truth

The Right should Rubberstamp Everything the Left wants Just like the Left did for George W. Bush

If you ever have watched the Daily Show with Jon Stewart you’ve probably noticed a recurring theme.  He gets exasperated.  A lot.  When it comes to the lack of bipartisan cooperation on the side of the Republicans.  And by bipartisan he means just giving the Democrats what they want.  Just to give up their core beliefs.  And vote for things that violate everything they stand for.

It’s the conservatives that really annoy him.  And Democrats in general.  Especially Tea Party conservatives.  Who just won’t buckle under.  And give the Democrats what they want.  Like the Republican establishment.  RINOs.  Who like the ruling class in Washington.  And want to be a part of it.  Unlike those Tea Party conservatives.  Who sound like a broken record.  We need limited government.  And lower tax rates.  Not an expanding federal government.  Paid for with higher tax rates.  And their opposition to Obamacare despite it being law really gets stuck in their craw.

President Obama’s reelection was a mandate.  At least that’s what the Democrats thought.  That the people approved of the president.  And everything he did in his first term.  That shellacking the Democrats took in the 2010 midterm elections?  Causing the rise of the Tea Party in the first place?  Because of those backroom deals?  That the Democrats made to pass Obamacare into law?  That was just an anomaly.  It meant nothing.  That was only some tin-hat wearing crazy people.  Tea-baggers, they called them.  No.  Real America reelected President Obama.  Because they wanted him to do more.  So the conservatives should just accept that.  And rubberstamp everything the Democrats want.  Just like they did for George W. Bush.

Based on the Demographic Numbers one Must Question if the Obama Presidency is Legitimate

Oh, wait a minute, they didn’t do that.  They fought him relentlessly.  Especially after the Democrats won big in the 2006 midterm elections.  Taking back both the House.  And the Senate.  For they hated George W. Bush.  And never accepted him as legitimate.  What with the debacle of the 2000 election.  Where to this day they say the Republicans stole that election.  Thanks to the Supreme Court.  Making Al Gore a millionaire in the process.  Peddling his global warming fear.  But poor Al Gore got robbed in 2000.  Because the Republicans cheated.  And suppressed voter turnout.  The only way Republicans can win elections.  Or so say the Democrats.

Of course the numbers don’t agree with that.  The demographics.  Then.  And now.  In 2001 liberals were at 17%.  Moderates at 38%.  And conservatives at 43%.  Today liberals rose to 20%.  Moderates fell to 32%.  And conservatives rose to 46%.  Conservatives are the majority.  Then.  And now.  (See In U.S., Nearly Half Identify as Economically Conservative posted 5/25/2012 on Gallup).  So conservatives can win elections.  Based on these numbers.  And should be able to do so easier than liberals.  So it must be the liberals.  They must be the ones cheating.  And suppressing voter turnout.

So Bush was legitimate.  Based on the numbers.  And it is doubtful the people want the Republicans to rollover.  Or rubberstamp the Democrat agenda.  For they did retain the House in 2012.  As they should have won the Senate.  And the White House.  Based on the horrible economy.  The killing of 4 Americans in Benghazi.  And Obamacare.  That the majority just doesn’t want.  Which begs the question.  Is the Obama presidency legitimate?

This Bipartisan Spirit of the Left is Fear and Intimidation of their Political Opponents

So how did President Obama win reelection?  And how did the Democrats hold onto the Senate?  Well, there was the mainstream media.  Which is liberal.  Following in the tradition of their godfather.  Walter Cronkite.  Only out of the closet.  For there are no closet liberals these days.  There’s Hollywood.  Television.  The music industry.  The public schools.  And our universities.  All liberal.  Just a small sliver of the population.  But a highly leveraged sliver.  As they have greatly amplified voices.  Which gives them legitimacy.  As television and movies sway a lot of people.  Especially the young.  Who our teachers program in our public schools.  And our professors brainwash in our universities.  Despite all of this, though, we’re still a conservative people.  While liberals still hold at 20%.  So there must be something else.

Which brings us back to cheating.  And voter suppression.  Liberals hate the Tea Party.  And conservatives.  Blaming them for their loss of the House.  In that 2010 shellacking.  Ever since then liberals have slandered the Tea Party.  Called them racists.  And every other dirty name in the book.  Including tea baggers.  They hated these people.  And were not going to allow a repeat of 2010.  With President Obama in the White House it put the liberals in charge of the executive branch of government.  Giving them power.  Which they used.  By having the most feared agency of the federal government harass the conservatives.  Especially the Tea Party.  As groups applied for tax-exempt status the IRS harassed them.  Asking them for a lot information.  Personal information.  That they could use against them.  Such as releasing the names of their major donors to liberal websites.  Who destroyed and intimidated these donors as best as they could.  Some of these people faced costly audits by the IRS.  Even suffered through costly audits from the Labor Department.  The message was clear.  If you tried to exercise your First Amendment right against the Obama administration beware.  For you will feel the wrath of the federal government.  Muzzling the opposition.  Making it easier to win.  Despite the horrible economy.  Benghazi.  And Obamacare.

This is the bipartisan spirit of the left.  Fear and intimidation.  And when that doesn’t work they speak in an exasperated voice.  Of Republicans.  And their refusal to work with the Democrats.  In a bipartisan manner.  Expressing their frustration.  That 46% of the population won’t just give in to 20% of the population.  Giving up their core beliefs.  And to just vote for things that violate everything they stand for.  Something the Democrats never did for George W. Bush.  But it is a moral outrage when the Republicans won’t do it for President Obama.

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FT143: “When liberals say ‘unite and work together’ they really mean ‘divide and conquer’.” —Old Pithy

Posted by PITHOCRATES - November 9th, 2012

Fundamental Truth

President Obama didn’t Moderate any of his Positions after the Punishing Losses of the 2010 Midterm Elections

During President Obama’s victory speech following the 2012 election he said there are no red states and no blue states.  Just the United States of America.  Which was a common theme during all his campaign stops.  He kept saying that together we can do these great things.  If we unite we can overcome any obstacles.  Yet he did anything but unite people during his campaign.  Instead he was a great wedge driver.  To drive people away from each other.  And into opposing camps.  To foment anger between these disparate groups.  And to peel these groups away from the Republicans.

We heard compromise talk like this following the 2008 election.  And what happened then?  There was no uniting or working together.  When it came to the stimulus bill the President and Nancy Pelosi shut the Republicans out.  When the Republicans offered suggestions President Obama brushed them aside.  Saying elections have consequences.  And that the Republicans could make all the suggestions they’d like but it wouldn’t matter.  Because he wasn’t listening.  Nancy Pelosi acknowledged that the Democrats wrote the stimulus bill in its entirety without any Republican input.  Why?  Because they won she smirked.  The Democrats weren’t interested in any bipartisan compromise then.  So it isn’t likely they are now.  Unless it’s the kind of bipartisan compromise they like.  The kind where the Democrats get what they want.  And the Republicans surrender unconditionally.

So there’s ancient history (2008-2010) and the words from the recent campaign that tell us not to hold our breath for all of that uniting and working together to materialize.  It just won’t happen.  For the president didn’t moderate any of his positions after the punishing Democrat losses of the 2010 midterm elections.  So why would he after a triumphant victory of the status quo in 2012?

Democrats warned America that if Mitt Romney became President he would take the Country back to the 1950s

The Democrats have no interest in bipartisan compromise.  Because to compromise you have to give up stuff you want.  And let others have a little of what they want.  But when you look at the negative campaign ads of the past election there can be no compromise.  For the Democrats did not battle the Republicans in the arena of ideas.  They demonized their opponents for thinking differently than they did.  Looking for issues of opportunity to seize.  Such as the war on women.

Catholicism does not permit birth control or abortion.  Extreme positions to some, perhaps.  But not to Catholics.  Who choose to be Catholics.  When Obamacare forced Catholics to provide free birth control and the abortion pill in their health care benefits they took offense.  As did the Republicans.  For the First Amendment states in part, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”  And forcing Catholics to provide birth control and the abortion pill clearly prohibited the free exercise thereof.  So the Catholics, and the Republicans, protested this violation of a First Amendment right.  And the Democrats responded to this protest by calling it a war on women.  Where Republicans wanted to take birth control and access to abortion away from women.  As well as wanting women to die from cancer.

The Democrats helped organize the Occupy Wall Street movement to stoke up hatred for rich people.  In anticipation for the Republican nominee they were already planning to campaign against.  Mitt Romney.  A rich person.  But not just any rich person.  But an old rich white man.  Who worked in high finance.  Which, of course, tied him to Wall Street.  A man disconnected from the common people.  And from contemporary times.  The Democrats warned America that if Mitt Romney became president he would take the country back to the 1950s.  Take away women’s birth control and access to abortion.  As well as happily letting them die from cancer.  In addition to cutting taxes for rich people.  While raising taxes on the poor and middle class.  When he wasn’t busy closing down factories and shipping jobs overseas.  And, of course, stacking the deck against blacks, Hispanics and anyone else that wasn’t as white as he.

Liberals must Divide and Conquer as their Records don’t allow them to run any other Campaign

You see, the Republicans are hateful people.  For example, they’re bigots and homophobes because they oppose gay marriage.  So it’s okay to hate Republicans.  Because they hate gay people.  While at the same time they hate women because they want all women to be barefoot and pregnant.  In a marriage.  So on the one hand Republicans are hateful people for trying to prevent gay people from marrying.  While on the other hand they’re hateful people for trying to encourage women to get married.  Making marriage a fascinating issue.  For if gay people want it marriage is a beautiful thing.  An expression of love between two people.  But for single women who want a career it’s nothing less than slavery.  Pure male subjugation of women.

Odd, isn’t it?  How Democrats can be on both sides of the same issue.  For they can both love and hate marriage.  And they can hate Republicans for both opposing and promoting marriage.  How can that be you ask?  Easy.  For marriage is not what’s important to Democrats.  What’s important to them is using marriage to demonize Republicans.  It’s about the hate.  And the opportunity to drive a wedge between people.  To drive people into opposing camps.  That have a common enemy.  Republicans.

Democrats don’t have a great success record for their policies.  They can’t hold up the Carter years as a success.  For they were horrible.  They like to point to the Clinton years as vindication for their policies.  But his economy was helped by Japan’s Lost Decade.  And an inflationary binge that caused the dot-com bubble.  As well as the run up to the subprime housing bubble.  Neither of which burst during his presidency.  Though he was largely responsible for them.  And the Democrats couldn’t point to anything in the Obama years as a success.  So they didn’t run on their record.  But attacked their opponent.  By demonizing Mitt Romney.  Getting one group after another to hate Mitt Romney and the Republicans.  And to vote against them.  Not for the Democrats’ successful policies.  For they had none.  So when liberals say ‘unite and work together’ they really mean ‘divide and conquer’ as they have always done.  As they always must do.  For their records don’t allow them to run any other campaign.

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Primary and General Elections

Posted by PITHOCRATES - December 15th, 2011

Politics 101

The Founding Fathers pledged to each other their Lives, their Fortunes and their Sacred Honor

People have protested and died fighting for the right to vote throughout history.  The American Revolutionary War was over taxation without representation.  Meaning that the American colonies wanted representation in British Parliament.  Something the British government did not allow.  Worse, they started taxing the Americans.  Who had no representation in Parliament.  And this did not go over well with the American colonists.  They had had enough.  They wanted a say in their government.

So the Founding Fathers committed treason.  They signed the Declaration of Independence.  And fought 8 years to have that say in their government.  It took awhile.  And a lot of the signers of the Declaration of Independence suffered for their treason.  They lost their property.  Their wealth.  And even their families.  Who suffered all sorts of brutality at the hands of the British.  These traitors.  Who defied their king.  But the cause persevered.  And the Americans won their independence.  As well as their right to self-government.

Back then people cared.  Enough to pledge to each other their lives, their fortunes and their sacred honor.  But today?  People have other priorities in life.  Where reality television is more important in their lives than having that say in their government.  For they have no idea what the Founding Fathers paid to give us this cushy life of plenty.  And just assume the good times will continue to roll.  Especially if they keep voting for whoever promises to give them more free stuff.

Candidates move to the Center after Winning their Party’s Nomination and become someone Completely Different

In the country that struggled for 8 years to get the right to vote.  In the country that inspired people all around the world to follow them in the pursuit of happiness.  In the very bastion of liberty and self-government.  In America.  Guess how many people vote today in a typical presidential election.  Little more than half of eligible voters.  And that’s in the general election.  It’s far worse in the primary election.  Where we see maybe half of that turnout.  Which is rather sad.  Considering that these are the people who actually pay attention to politics.  For this is where a political party chooses their candidate for the general election.  You see, each party has a platform.  A set of political ideas.  Their core philosophy.  And the people choose who they think will best advance their party platform in the primary election.

So during the primary election candidates try to be that candidate.  The one who will best advance the party platform.  Typically the conservative moves as far right as possible to show his or her conservative bona fides.  And the liberal moves as far left as possible to show his or her liberal bona fides.  Here they’re trying to appeal to the party base.  The hardcore.  Those who are as far away from the political center as is possible.  Those who don’t give a whit about compromise or bipartisanship.  They want a purebred candidate that will take the country where they feel it should be.  They don’t want someone who will reach across the aisle and compromise away their most cherished principles.

The population roughly breaks down to 40% conservative, 20% liberal and 40% moderate/independent.  Which is all fine and dandy during the primary election.  But it’s a bit of a problem during the general election.  For that 40% moderate/independent forms the political center.  That area the candidates run away from during the primary election.  So they must scramble back to it after winning their party’s nomination.  And hope that most of those in the center didn’t pay attention during the primary.  To make the lying easier.  To no longer be who they said they were during the primary.  But to be someone completely different.  Someone who can reach across the aisle.  Someone who can compromise away their base’s most cherished principles.  Someone who believes politics should be bipartisan.  Or, better still, nonpartisan.  In other words, the last person their base would want.

When the Choice is between two Moderates, Democrats will always Choose the Democrat Moderate

Liberals have to run to the center.  For their base only amounts to about 20% of the electorate.  But it’s not quite the same for conservatives.  At 40% of the electorate they don’t have to run the center.  They only need another 10% or so of the vote to win.  So running to the center actually hurts them.  Because a lot of that political center is Democrat.  And if the vote comes down to 2 moderates they’re going to vote for the Democrat moderate over the Republican moderate every time.  Because all things being equal, a Democrat will vote for a Democrat.

When the Republicans ran a moderate who campaigned as someone who would reach across the aisle and compromise away his base’s most cherished principles, John McCain didn’t get the moderate vote.  They voted for the Democrat.  Who lied during the general election and ran as a moderate.  Sometimes he even talked like a conservative.  Even though Barack Obama was as liberal as they came.  At least based on his voting record in public office.

When Republican Ronald Reagan won his party nomination he didn’t run to the center.  He remained a conservative.  And he won.  Because a lot of Democrats voted for him.  The Reagan Democrats.  Because there was a real difference between him and Jimmy Carter.  There was a conservative and a liberal.  And the Reagan Democrats decided to vote for the conservative because they liked the conservative message better than the liberal message.  But when the choice is between two moderates who promise to reach across the aisle more than the other there’s no real difference between the candidates.  And no reason to vote for the other guy when he or she is no different than the one from your own party.

Ignoring the Primary Elections ignores the Philosophical Debate and turns the General Election into a Populist Contest

It is a shame the level of voter apathy in the country that stands for self-government.  Almost half of the eligible voters ignore politics 3 years out of 4.  And only vote in the presidential general election.  It’s a shame because we have a 2-party system.  Like it or not.  There are only two core political philosophies to choose from.  For those in the middle don’t have a philosophy.  A party.  A party platform.  A primary election.  Or a political convention.  They only get involved once every 4 years at the general election.  And ultimately end up voting for a Democrat or a Republican.  Even though they refuse to identify themselves with either party.

But ignoring the primary elections ignores the party platforms.  The meat and potatoes of the philosophical debate.  And turns the general election into nothing but a populist contest.  True democracy.  Mob rule.  With the winner often being the one who promises the most to the least politically informed.

Politics has come a long way since the Founding Fathers pledged to each other their lives, their fortunes and their sacred honor.  It’s probably a good thing they’re not here to see what has become of their self-government.  They wouldn’t like what they would see.  Especially the voter apathy.

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Barney Frank can’t win Reelection because of Redistricting so he Retires

Posted by PITHOCRATES - December 3rd, 2011

Week in Review

Barney Frank shared something with Nancy Pelosi.  They had congressional districts that were so full of liberals that neither ever had to campaign for reelection.   Which says a lot considering barely 20% of the populace is liberal.  So you know they had some favorable district lines.  But, alas, for poor Barney the slam dunk is over.  The new district lines adds so many conservatives that it almost is representative of the population.  Which is approximately 40% conservative, 20% liberal and about 40% moderate and independents.  And without a stacked deck, there is no way Barney Frank can win an election (see Barney Frank, Top Liberal, Won’t Seek Re-election by ABBY GOODNOUGH posted 11/28/2011 on The New York Times).

Earlier in the day, Mr. Frank announced at a news conference that he had decided to retire at the end of next year after his Massachusetts district was recently redrawn and it became clear that he would have to fight harder than he wanted for re-election.

Even before this redistricting things were already looking down for Frank.  The architect of the subprime mortgage crisis (he and Chris Dodd were responsible for the Congressional oversight of Fannie Mae and Freddie Mac) had to fight last election.  For one of the first times in his life.  And he didn’t like it.  This time around would have been worse.  And he knew it.  He’d lose.  So he decided not to run.  For it’s one thing not having majority power.  Which is no fun.  But it’s a whole other thing to have to fight and scratch your way to the minority power.  Go through all of that for what?  Just to have someone tell you can’t do whatever the hell you want?  No sir.  This congressman will just take his toys and go home.

Now, Mr. Frank said, the notion that wrangling between Democrats and Republicans is “a competition between people of good will with different views on public policy” has vanished. For that, he blames Newt Gingrich, the former House speaker and current Republican presidential candidate with whom he has a tense history.

“Newt’s the single biggest factor in bringing about this change,” Mr. Frank said. “He got to Congress in ’78 and said, ‘We the Republicans are not going to be able to take over unless we demonize the Democrats.’ ”

You see, this is why no one likes Barney Frank.  He’s such an arrogant liar.  Demonize Democrats?  Who was that taking Newt Gingrich out of context, saying that he wanted to take seniors’ Medicare away so they could whither on the vine and die?  That was the Democrats.  Demonizing Newt Gingrich.  And the Republicans.

Bipartisan is a one-way street for Democrats.  When they’re in power there’s no need for bipartisan cooperation.  Because they’ll rule as they please despite any Republican opposition.  Because they won.  And elections have consequences.  But once they fall from majority power how they cry that Republicans aren’t playing nice.  By not letting the Democrats still set the agenda.

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LESSONS LEARNED #77: “Liberals only call for bipartisan compromise when they’ve lost majority power and can no longer dictate policy.” -Old Pithy

Posted by PITHOCRATES - August 4th, 2011

The Liberal Ruling Class hails from the Ivy League

Liberals hail from the Ivy League.  Where they’re taught important life skills.  Arrogance.  Conceit.  And condescension.  It is here at these universities that they learn to hold everyone in contempt.  Yes, there are some out there with true liberal bona fides that didn’t go to the Ivy League, but they are the exception.  Not the rule.  These people may bleat the liberal line as well as the Ivy Leaguer, but they are not going to ascend to the Ruling Class.  And though they won’t admit it, the Ruling Class holds most of these liberals in contempt, too.

Amassing wealth and power in a few, elite hands is nothing new.  Even in early America.  The Planter Elite of the Deep South were a small minority of the population.  But they held the wealth and power in the Deep South.  And they wielded it during the Philadelphia Convention.  They held the founding of the new nation hostage.  Unless the land where all men were created equal had slavery there would be no new nation.  So there was slavery.  And the Ruling Class of the Deep South gave themselves extra political clout in the new federal government.  Thanks to the Three-Fifths Compromise.  The minority planter elite were able to inflate their numbers by counting 3/5 of each slave.  Thus inflating their numbers in the House of Representatives.

So for the first 50 years or so of the new nation the new federal government spoke with a decidedly southern accent.  And often dictated policy in the new nation.  And for those 50 or so years the Deep South was happy to be part of the union.  Because they sort of ran the show.  Then all that immigration into the north started to change the balance of power in the House of Representatives.  Which left the presidency (where they did whatever they could to make sure the president would be sympathetic to southern views and willing to compromise to save the union).  And the Senate.  And to maintain power in the Senate they had to hold on to slavery. 

The Planter Elite used Slavery to Concentrate Wealth and Power in their Hands

The Ruling Class, the Planter Elite (approximately 5% of the Southern population), used slavery to concentrate wealth and power in their hands.  It was truly an old-school aristocracy in the Deep South.  The ‘landed aristocracy’ in these states owned these states.  And up to the mid 19th century they took this disproportionate power to Congress.  They advanced and blocked legislation to protect their slaveholding interests.  To maintain their minority rule.  Their power.  And their wealth.

As immigration began to tip the balance of power away from them they turned their focus to the Senate.  Each state got two senators.  Population numbers didn’t matter.  What mattered was that there wasn’t more ‘free’ states than ‘slave’ states.  And that there was no prevailing antislavery sentiment.  As there was throughout the northern states at the time.  Not only did they eschew slavery, they weren’t even returning runaway slaves to their rightful owners.  So while they could the Planter Elite would use the power of the federal government to override any state law they felt counterproductive to their interests.  And dictate policy to these recalcitrant northern states.

For you see, slavery is a lot like socialism.  It doesn’t work well when those trapped in it can escape it.  And that was a problem for the Deep South.  Their slaves were escaping to these northern states.  And these uppity northern state governments refused to return this southern ‘property’.  Not only were they taking a financial loss on these runaway slaves, but this northern sanctuary was encouraging more slaves to run away.  This would not do.  So they passed the Fugitive Slave Act of 1850 compelling them to return these slaves to bondage.  Or be fined and/or jailed.  This did not go over well in the North.  And it placed the country on the road to civil war.

The Civil War was a Battle between Privileged Aristocracy and the Equality of Self-Government

All during the run up to the Civil War, the Ruling Class, the planter elite of the Deep South, participated in the democratic process.  Because for a long time they were free to dictate a lot of U.S. policy.  From a stacked deck (thanks to the Three-Fifths Compromise).  And repeated threats of secession if they didn’t get their way.  Politicians on both sides of the slavery issue made compromise after compromise to keep the union together.  But that all changed with the election of Abraham Lincoln.  A Republican.   Which was the party taking a moral stance on the issue of slavery.  This did not bode well for the Ruling Class. 

South Carolina seceded first.  Then the rest followed.  The planter elite in these states led their states out of the union.  And into civil war.  Arguing that Lincoln’s federal government was going to infringe on their states’ rights (in particular their right to continue the institution of slavery).  They called it the War of Northern Aggression even though they fired the first shot at Fort Sumter in Charleston Harbor.  And they told their brave soldiers to fight these Yankee invaders to protect their country (i.e., state), their families and their way of life.  And they did.  Some 300,000 dying in the process.  But not to maintain the institution of slavery.  For 95% of all Southerners didn’t own any slaves.  They fought to protect their country, their families and their way of life.  Most of which was a life of backbreaking labor on a small patch of land they called the family farm.  That was in no way threatened by the North.  But the Ruling Class lied.  To protect their interests.  Their wealth.  And sacrificed a generation of their own people.  Because to them, they were as expendable as the slaves on their plantations.  Actually, they were more expendable.  For Confederate soldiers didn’t show up on their balance sheets.  But slaves did.

The Confederate soldier fought valiantly.  But lost.  In what was a battle between the Old World.  And the New World.  Between the privilege of aristocracy.  And the equality of self-government.  Between the Ruling Class.  And ordinary Americans.  The balance of power shifted.  Away from the Deep South.  But, alas, not to the people.  Instead, to the North East.  To the Ivy League.  Where another Ruling Class would rise.  And take over the reins of government.  Keeping class warfare alive and well in the United States.

Tea Party Republicans are Decidedly Anti-Ruling Class

The players may change but the Ruling Class lives on.  Those who feel entitled to an elevated position because of their birthright.  Or wealth.  Most often both.  Which is what you need to get into the Ivy League.  And you have to think correctly.  Which isn’t too much of a problem for they make sure you do so in their curriculum.  Which is heavy on liberal progressivism.  And light on staying out of other people’s business.

Case in point, Obamacare.  Universal health care.  The holy grail of liberalism.  The people didn’t want it.  Based on the polling.  And the town hall meetings.  They didn’t want the government intruding into their health care.  But they had both houses of Congress.  So they could do just about anything they wanted.  Dictate policy.  And sneak things through in the dead of night.  Which they did to make Obamacare law.  Strictly along pure partisan party lines.  Some of their members paid the ultimate price and lost in the following election.  But they take care of their own.  The Ruling Class.  Though out of office, they’re never out of power.

That is until a bunch of uppity freshmen Republicans descended on Congress.  Tea Party Republicans we call them.  And decidedly anti-Ruling Class.  And they’ve become a problem.  For they won’t accept the established order.  They can’t be bought.  And they don’t care if they get reelected.  The boobs.  All they care about is keeping their campaign promises.  Which is anathema to the Ruling Class.

And soon the shoe was on the other foot.  The Ruling Class lost the House in the 2010 midterm election.  And had to deal with obstructionism.  And by obstructionism I mean responsible governing.  Per the will of the people.  From that contemptible Tea Party.  For they are interfering with the natural order of things.  That is, letting liberals do whatever they want.  So now the liberals cry foul.  And demand bipartisan compromise.  Until they can dictate policy again.  They way it should be.  According to the Ruling Class.

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FUNDAMENTAL TRUTH #77: “Liberals only call for bipartisan compromise when they’ve lost majority power and can no longer dictate policy.” -Old Pithy

Posted by PITHOCRATES - August 2nd, 2011

English Law and Capitalism gave People Freedom few knew in the 18th Century

Politics is a class struggle.  The ruling class against everyone else.  The ruling elite fights to keep the power in the hands of the privileged few.  While everyone else tries to wrest it away.  So they can live a better life.  Free from tyranny.  And oppression.

Life was pretty good in British North America.  The colonies were growing.  Their English law and free market capitalism gave people freedom that few knew in the 18th century.  Over in Europe the masses were poor and worked for subsistence.  Over in British America, though, a thriving middle class was emerging.  Like I said, life was pretty good.  Until the French had to go and spoil everything.

Great Britain and France were at war.  Again.  And this one was a world war.  The Seven Years’ War (the French and Indian War in North America).  Great Britain ultimately prevailed.  And made all French North America British.  We call it Canada today.  But conquering a world power and managing an empire that stretched around the globe was expensive.  And to make matters worse, the treasury was running low.  They needed more tax revenue.  But Britain’s land owning aristocracy was already heavily taxed.  And they were none too keen on paying any more.  So what to do?

Well, there was this.  There was a vast continent on the other side of the Atlantic with a lot of wealth that just got a whole lot safer thanks to some brilliant, and very expensive, military engagements.  Surely, they would not refuse to pay for some of the safety they gained in the recent war.

The London Ruling Class wouldn’t let a bunch of Backwoods Upstarts challenge their Authority

Well, as it turned out, yes, they could.  And did.  And don’t call me Shirley.

At the time, the American colonialists were proud Britons.  They loved their way of life.  And the representative government enshrined in Parliament.  Based on the Rule of Law.  Only thing was that they had no say in Parliament.  No representation.  Which was fine.  For awhile.  Being that far from the seat of government had its advantages.  But it was a different story when that distant power started flexing its muscle.  And a great power desperate for money could be rather presumptuous.

Now the colonists were reasonable people.  They were willing to make some kind of bipartisan deal of fair-share sacrifice.  But they wanted to talk about it.  They want to sit in Parliament.  And they wanted more say about their future on the new continent.  They were already very unhappy with some of the treaty details the British made with the French.  And the Indians.  Forbidding western expansion?  And allowing the French Canadians to practice their Catholicism in their very backyard?  No.  These would not do.  Americans had to have more say in America’s future.  And the British response?  “Shut your bloody mouths you insolent swine.  You do as we say.  And like it.”

I’m paraphrasing, of course, but you get the gist.  The ruling class in London wasn’t about to listen to a bunch of backwoods upstarts challenging their authority.  No, they were going to dictate policy from London.  And the Americans were going to accept their second class status and do as they were told.  Well, long story short there was a rebellion, the colonies declared their independence from Great Britain and a new confederation of states was born.

After Winning Independence the States got Drunk on Democracy

The Revolutionary War lasted from 1775 until the Treaty of Paris formally ended the war in 1783.  It was a long and bitter war.  Especially in the South where it evolved into a civil war between Patriot and Loyalist.  Independence did not come easy.  Nor was it cheap.  Like Great Britain, the young confederation of states racked up a large war debt.

With the common enemy defeated the several states went their own ways.  And threatened to destroy what they just won.  Some states were fighting over land.  Over tariffs.  Trade.  The united confederation of states wasn’t very united.  And they were more on the road to becoming another war-plagued Europe than the great nation envisioned by George Washington and the others who had served in the Continental Army.  Who saw the greater America.  Beyond the borders of their own state.

And the worst danger was democracy.  Mob-rule.  Religious persecution.  And the general feeling you didn’t have to do anything you didn’t want to.  The people were drunk on democracy.  They were voting themselves whatever they wanted.  In debt?  No problem.  We’ll pass debtor laws to protect you and rip up those contracts you signed.  Or we’ll give you worthless money we’ve printed to pay your debts.  And we’ll pass a law forcing creditors to accept this worthless money as legal tender.  Even though it’s worthless.  The Rule of Law was collapsing.  As was the new ‘nation’.

Madison and Jefferson feared the Power a Permanent Government Debt Gave 

This was quite the pickle.  An oppressive ruling class was bad.  But so was mob-rule.  They needed something else.  Something between these two extremes.  That would somehow strike a delicate balance between responsible governing.  And liberty.  The solution was federalism.  As created in a new Constitution.  Drafted during the summer of 1787 in Philadelphia.  Which created a new central government.  That shared power with the states.

Getting the new constitution ratified wasn’t easy.  Most of the old Patriots from the Revolutionary days hated the thought of a new central government.  They didn’t trust it.  This was just King George all over again.  Only on this side of the Atlantic.  The wrong side.

Alexander Hamilton and James Madison worked tirelessly for ratification.  They wrote a series of essays explaining why it was the best compromise possible.  These essays became the Federalist Papers.  An extensive set of checks and balances would greatly limit the powers of the new federal government.  And the only thing the new central government would do would be the things the several states couldn’t do well.  Coin money, treat with other nations, raise an army and navy, etc.

Hamilton and Madison succeeded.  The constitution was ratified.  And the United States of America was born.  And soon thereafter Hamilton and Madison (and Jefferson who was out of the country during the Constitutional Convention) parted ways philosophically.  Hamilton wanted to assume all the states’ debts and fund it.  It was the right thing to do because they had to pay it to be taken seriously on the world stage.  But this scared both Madison and Jefferson.  They feared the power a permanent government debt gave.  Money and government was (and still is) a dangerous combination.  All the world powers consolidated money and power in their capitals.  And all the great mischief of the Old World was a direct result of this combination.  It’s what lets the ruling class oppress the people.  Money and power concentrated into the hands of a privileged few.

Had Liberals lived during the Revolution they would have been Loyalists

Fast forward a few hundred years and we see exactly what Madison and Jefferson feared.  The federal government is bloated beyond the Founding Fathers worst nightmares.  And handling such vast sums of money that would even make Alexander Hamilton spin in his grave. 

We’ve come full circle.  We began by rejecting a distant ruling class.  And we now have a distant ruling class again.  In Washington.  Made up of liberal Democrats.  And obedient RINO Republicans who toe the liberal line.  And the nation has a permanent debt so large that we’ll never pay it off.  Thanks to out of control government spending.  It’s as Madison and Jefferson feared.  All of that spending and debt require ever more taxation.  And ever more borrowing.  And whenever taxation and borrowing is not enough, they manufacture a crisis to scare us into raising both taxes and the borrowing limit.  For we have no choice.  Because if we don’t the consequences will be unbearable.

This is the liberal way.  Big Government.  The bigger the better.  With all power concentrated into as few hands as possible.  Their hands.  The privileged few.  The ruling elite.  Who like to dictate policy when they have majority power.  And cry foul when they don’t.  For the only interest they have in bipartisan compromise is when they can’t have their way.   

Liberals like to invoke the Founding Fathers (and Ronald Reagan) whenever they can in some twisted explanation of why they would support their policies (i.e., the new central government was created to raise taxes and therefore would approve high taxes).  But their actions are clearly more consistent with King George and his ruling class than the Founding Fathers.  And had they lived during the Revolution, no doubt they would have been Loyalists.  To support and maintain the ruling class.  And their privilege.

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Debt Ceiling Debate – The Beginning of the End

Posted by PITHOCRATES - July 31st, 2011

The Republicans will get Screwed

Politics is a murky business.  You hear a lot of sound bites from politicians.  And a lot of spin from the ‘objective’ media.  (I put ‘objective’ in quotes because it’s easier than writing that I’m winking.)  But you don’t know what’s going on behind closed doors.  What kind of deals they’re making. 

There’ve been a lot of news updates today on the negotiations to raise the debt ceiling.  From there was a deal to Nancy Pelosi saying the House Democrats may not support the Senate plan Harry Reid delivers.

So we don’t really know anything yet.  About the only thing we can know for certain is that the Republicans will get screwed.  As they always do in these types of deals.

Future Spending Cuts means no Spending Cuts

So what do we know?  Not a lot.  Word is that the Republicans are winning the tax hike fight.  There apparently will be no new taxes.  But they’re going to pay a steep price for that win (see Sen. Reid signs off on bipartisan debt-ceiling compromise by Alexander Bolton posted 7/31/2011 on The Hill).

It would cut about $1 trillion in spending up front and set up a select bicameral committee to put together a future deficit-reduction package worth $1.7 trillion to $1.8 trillion.

Failure of Congress to pass the future deficit-reduction package would automatically trigger cuts to defense spending and Medicare. An aide familiar with the deal said the Medicare cut would not affect beneficiaries. Instead, healthcare providers and insurance companies would see lower payments.

The last bipartisan agreement to cut spending happened over the negotiations to extend the Bush tax cuts last December.  And it was hell to agree on $100 billion in spending cuts.  And when the smoke cleared, that $100 billion was only about $30 billion.  So, yeah, I’m sure picking the $1 trillion in spending cuts will be easy-peasy with bipartisan love.  And no one will use the ‘taking hostages’ language like they did last December.

Future spending cuts?  Yeah, right.  You know what ‘future spending cuts’ mean in Washington?  No spending cuts.

And you couldn’t ask for worse triggers if you’re a Republican.  Gut defense spending?  It’s a dangerous world out there.  And most of the danger stays off our shores because the bad guys fear our military might.  Because our military protects and defends the United States against foreign enemies.  That’s in the Constitution.  One of the things the Commander in Chief is supposed to do.  But national health care isn’t.  And that’s where we’re heading with this trigger.

Provider reimbursements are already pushing providers out of Medicare.  This trigger will kill Medicare.  Which the proponents of Obamacare will love.  You can already hear the rhetoric.  “Oh, no.  Calamity.  Greedy providers dropping out of Medicare?  That’s just mean.  The government must step in and do something to provide for these seniors.  I mean, if no one else will provide for them then government should.”  And then Bob’s your uncle we have a national health service.

Health Care is easy when the Government runs It

And lest we forget the utopia of national health care, let’s take a look at a British newspaper (see NHS funding ‘moved away from poor areas’, says Labour posted 7/31/2011 on The Telegraph).

Changes to funding formulas means poor health rates will be given less consideration when cash is allocated, the party said.

It suggested areas like Manchester and the London borough of Tower Hamlets would lose out to parts of the wealthy south east, such as Surrey and Hampshire.

Labour based the claims on an assessment of funding reforms by public health bodies in Manchester.

But the government has disputed the allegations and claimed Labour’s figures were misleading.

Health care sure is a lot easier when government runs it.

This is the future that trigger gives us.  And if you thought the debate to raise the debt ceiling was bitter, you ain’t seen nothing yet.  The numbers will be bigger.  As will the stakes.  For they will be, after all, life and death. Who gets health care cash.  And who doesn’t.  And dies.

You know the Future is Bad when George Orwell’s 1984 is the Cheerful Option

When a deal is struck and the details come out, there’s a good chance the credit rating agencies aren’t going to be impressed.  Those future spending cuts are exactly the kind of thing they didn’t want to see.  So they will probably still downgrade U.S. sovereign debt.  Which will be a bitter pill to swallow.  After having to witness this farce.

So, without all the details available yet, here is my prediction.  Actually spending cuts will be less than $100 billion.  The credit rating agencies will downgrade the U.S. bond rating.  The trigger will activate the defense and Medicare cuts.  Defense spending will be gutted, leaving the United States the paper tiger it was at the end of the Vietnam War.  Medicare will collapse.  And Obamacare will morph into a full blown national health service.  Government spending will swell to beyond Greece levels.  There will be austerity riots.  Civil war.  Again.  And this experiment in self-government will come to an end.

Either that.  Or something more cheerful like George Orwell‘s 1984.

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Raising the Debt Ceiling may be Worse than Default

Posted by PITHOCRATES - July 30th, 2011

Despite U.S. Debt Crisis, U.S. still the World’s Safe Asset of Choice

As Congress debates over the debt ceiling…blah blah blah…Armageddon.  Funny thing is, the U.S. debt problem is not that bad.  When compared to the debt problem in Europe (see Err, over here by Schumpeter posted 7/29/2011 on The Economist).

AS THE August 2nd deadline for a resolution of America’s debt-ceiling row approaches, other news is being drowned out. America’s debt debacle provokes rubber-necking fascination but the euro crisis is still the bigger threat to financial stability.

The chances (admittedly diminishing with time) are that America will get its house in order and avoid default; and that a ratings downgrade will happen but not threaten the pre-eminence of Treasuries as the world’s safe asset of choice. In contrast, the euro area’s crisis is already in full swing and policymakers, as this week’s issue of The Economist makes plain, have not found a way to stop it.

Things are worse in the European Union.  Especially the Eurozone.  And though Armageddon is at hand in the U.S., we’re still the “world’s safe asset of choice.”  So the end of the world as we know it may not be at hand.  But the out of control government spending and debt is fast approaching European levels.  So if we don’t cut our spending and reduce our deficits, we will follow lockstep behind Europe into fiscal ruin.  And then, of course, Armageddon.  

Partisan Democrats decry Republican Partisanship

So this Republican partisanship needs to end.  They need to be bipartisan.  Like the Democrats.  That is, when they’re not being partisan themselves (see For Reid, Durbin, and Obama, a (very) partisan record on debt ceiling by Byron York posted 7/30/2011 on The Washington Examiner).

A look at Reid’s record, however, shows that in the last decade his own voting on the issue of the debt ceiling is not only partisan but perfectly partisan. According to “The Debt Limit: History and Recent Increases,” a January 2010 report by the Congressional Research Service, the Senate has passed ten increases to the debt limit since 2000.  Reid never voted to increase the debt ceiling when Republicans were in control of the Senate, and he always voted to increase the debt ceiling when Democrats were in control…

At look at Durbin’s record shows that he, too, has voted along absolutely partisan lines.  In the last decade, Durbin never voted to increase the debt ceiling when Republicans were in control and always voted to increase the debt ceiling when Democrats were in control.  As for Obama, there were four votes to raise the debt ceiling when he was in the Senate.  He missed two of them, voted no once when Republicans were in charge, and voted yes once when Democrats were in charge.

So the Democrats have a history of being just as partisan as the Republicans.  Even now, as they decry the Republican’s partisanship, they refuse to compromise at all on what they’ve always wanted.  More taxes.  And more borrowing.  So they can spend a lot more.

Democrats open to Compromise, as long as it’s the Republicans doing the Compromising

And they’ve drawn a line in the sand.  No meaningful cuts without new taxes (see Senate Kills Debt Bill, Bipartisan Talks on Hold by Steven T. Dennis posted 7/29/2011 on Roll Call).

“We’ve got a closet full of triggers,” he said. But, he added, “I came to the conclusion that we are negotiating with ourselves. The Republicans will not agree to any triggers that have any revenues in it.”

And Reid noted that Democrats have drawn a line in the sand against any cuts to entitlement programs without revenue.

The Republicans refuse to raise taxes because America is still wallowing in the Great Recession.  Democrats refuse to drop their request to raise taxes.  And flat out refuse to cut entitlements.  Like Social Security.  Medicare.  And the new Obamacare.  Because, though fiscally responsible, it’s not politically expedient.  Which is going to become a BIG problem soon.

Repeal Obamacare and all our Current Troubles go Away

Health care spending will take the U.S. to European levels of spending and debt (see CMS Projections Confirm Runaway Health Care Spending by Kathryn Nix posted 7/29/2011 on The Foundry).

As the economy recovers and the major provisions of Obamacare kick in, national health spending is projected to grow at quite a clip—increasing, on average, 5.8 percent each year. By 2020, the nation will spend $4.54 trillion on health care, or close to 20 percent of GDP. (For the sake of comparison: In 2010, federal tax revenue totaled 14.9 percent of GDP, and all federal spending combined amounted to 23.8 percent of GDP.)

Of course, every cloud has a silver lining.  An S&P report calls for real spending cuts of $4 trillion or more over 10 years to avoid the credit downgrade.  And look at this.  Obamacare will cost $4.54 trillion over some 10 years.  Imagine that.  Save the AAA bond rating.  Leave Social Security and Medicare intact.  And all you have to do is cut one program that no one is receiving any benefits from yet.  Repeal Obamacare.  And all our current troubles go away.

Or you can Devalue the Currency

Of course, that’s one way of solving the current crisis.  There appears to be another.  One that is a bit more destructive (see Answers to the 7 big “what-ifs” of debt default by Lauren Young posted 7/30/2011 on Reuters).

Traders say Asian central banks, among the world’s biggest dollar holders, have been steady buyers of alternatives to the dollar such as the Singapore dollar and other Asian currencies as well as the Canadian, Australian and New Zealand dollars. “Foreigners are at the vanguard of the drop in the dollar,” says Dan Dorrow, head of research at Faros Trading, a currency broker/dealer in Stamford, Connecticut. “I don’t think anyone expects a catastrophic U.S. default. But a downgrade will make them more aggressive in moving away from the dollar…”

The bottom line? It will be more expensive to travel overseas, drink French wine or buy Japanese cars.

A little trade war anyone?  A weak currency is like a tariff.  It makes imports so expensive that we stop buying them.  And buy American instead.  Thus increasing U.S. GDP.  And there is a corollary to this.  Can you guess what that is?  Here’s a hint.  It does something to our exports.  And our vacation market.

Fixing our Economy by Destroying other Economies

A weak currency not only makes your imports more expensive, it also makes your exports less expensive.  Which helps your export market.  And encourages people to vacation in your country because those stronger, foreign currencies can buy so much more (see U.S. Economy: Growth Trails Forecasts as Consumers Retrench by Shobhana Chandra posted 7/29/2011 on Bloomberg).

The improvement in the difference between imports and exports added another 0.6 point [of U.S. GDP].

Overseas sales will remain a backstop for factories. Dow Chemical Co. (DOW), the largest U.S. chemical maker, said demand is “strong” in markets abroad.

“We captured strong growth in Latin America, and the emerging geographies more broadly, while North America experienced moderate growth,” Andrew Liveris, chief executive officer, said on a July 27 conference call with analysts.

So perhaps this is the grand plan.  Increase spending to unsustainable levels.  Incur record debt.  This spending and debt triggers a downgrade of U.S. sovereign debt.  Which devalues the U.S. dollar.  Which places a de facto tariff on imports.  And provides a subsidy for our exports.  And it makes the U.S. a vacation destination.  Until our trading partners retaliate for fixing our economy by destroying their economies.  Like everyone is saying the Chinese are doing by keeping their own currency weak.

Repealing Obamacare would Please the Credit Rating Agencies

So the only bright spot in the U.S. economy is other economies.  Where they’re experiencing growth.  And can easily afford U.S. goods.  Which is about the only market buying them these days.  But for the world’s largest economy (for now) to rely solely on exports can be a bit risky.  Especially if it triggers a trade war.  Which, incidentally, helped trigger the Great Depression.

No, it would probably be more prudent to keep that AAA rating by cutting spending.  Before we spend ourselves to European ruin.  That’s the key to everything.  In particular cutting the fastest growing government expenditure.  Health care.  Which makes repealing Obamacare made to order.  No one is benefitting from it yet.  So no one will even notice this cut.  Other than the credit rating agencies.  Who will stand up and applaud this action. 

For just raising the debt ceiling doesn’t solve the real problem.  In fact, raising the debt ceiling without the $4 trillion in spending cuts will just push us closer to European ruin.

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Debt Ceiling Debate is Masking the Horrific Economic News

Posted by PITHOCRATES - July 29th, 2011

The Meaning of Bipartisan Depends on your Point of View; on the Right it means Compromise whereas on the Left it means Unconditional Surrender.

In the budget debate to raise the debt ceiling, both sides have dug in.  The Left says the Right is being intransigent.  Saying they are unwilling to compromise.  Even though they have done far less in the compromise department themselves.  They want to raise taxes.  They want to borrow more.  And they will not compromise on these positions.  They refuse to pass any Republican bill in the Senate (and President Obama says he will veto any bill that makes it through the Senate) unless it completely gives way to the Democrat position. 

All the while this theatre is playing out credit rating agencies are lining up to downgrade U.S. sovereign debt due to excessive deficits, debt and out of control government spending.  Unless they see at least $4 trillion in real spending cuts (not promised cuts that never happen or baseline ‘spending cuts’ that still increase spending), the downgrades are a fait accompli.  At least according to an S&P report.

If they’re that Bad at Analyzing Data do we really want them Tweaking the Economy?

As cheerful as all that is at least we can look forward to some upbeat economic news.  Just like Obama, Biden, Bernanke, Geithner, et al have been promising with all their economic tweaks to win the future.  And the result of all that vey extensive and very expensive tweaking?  Hmm.  What would be a good choice of words?  How about abject failure (see Economy in U.S. Grows Less Than Forecast After Almost Stalling by Shobhana Chandra posted 7/29/2011 on Bloomberg)? 

Revisions to GDP figures going back to 2003 showed that the 2007-2009 recession took a bigger bite out of the economy than previously estimated and the recovery lost momentum throughout 2010. The world’s largest economy shrank 5.1 percent from the fourth quarter of 2007 to the second quarter of 2009, compared with the previously reported 4.1 percent drop. The second-worst contraction in the post-World War II era was a 3.7 percent decline in 1957-58.

The Fed’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, climbed at a 2.1 percent pace, the most since the last three months of 2009, compared with 1.6 percent in the first quarter, as higher oil and food costs pushed up the prices of other goods and services. The central bank’s longer-term projection is a range of 1.7 percent to 2 percent.

“This is the worst of all worlds for investors, certainly the worst of all worlds for the Fed,” John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said in an interview on Bloomberg Television. “A little too much inflation, not enough growth, that is a tough scenario in the U.S.”

Of course, they’ll say it was even worse than they thought.  Again.  Blame George W. Bush.  Again.  Which doesn’t fill one with a lot of confidence.  For if they’re that bad at analyzing data, do we really want them tweaking the economy?

Still, they keep telling us how bad things would have been if they didn’t act?  Why, there’d be dingoes running in the streets eating our babies.  To be honest, we’re tired of hearing about how many jobs they created and saved.  We’d probably be further ahead today if we’d taken the chance with the dingoes and they left the economy alone.

The Obama Social Engineering is giving us Carter Stagflation

Inflation.  And low GDP growth.  That is a horrible combination.  But it’s what you get when you try to use monetary policy to fix fiscal problems (see Forget About The Debt Ceiling Debate, Where’s The Economic Growth? by Kevin Mahin posted 7/29/2011 on Forbes). 

I recognize that the debt ceiling debate may make for interesting political theatre for some.  I also recognize that the spending and revenue issues underlying the debate need to be addressed sooner than later.  However,  the heightened threat of stagflation*, now present in the system, is of paramount concern to me.

*Stagflation is a financial term often used to describe an environment where inflation (i.e. prices) is high and economic growth is low.  Periods of stagflation have historically been accompanied by high unemployment as well.

We are fast approaching the malaise of the Carter stagflation.  We need fiscal policy that is conducive to creating jobs.  Instead, this administration is more concerned about social engineering at the expense of job creation.

Killing the American Automotive Industry and Killing Americans

For all the talk about the auto bailouts to save American jobs, the latest policy appears to want to kill American jobs.  When the auto industry is suffering anemic growth, the Obama administration just made it harder to be in the auto industry by raising fuel efficiency standards to 54.5 miles per gallon by 2025 (see Obama to unveil auto fuel rule deal by David Shepardson posted 7/29/2011 on The Detroit News). 

The deal would extend a May 2009 agreement that boosted fuel efficiency standards to 34.1 mpg by 2016, costing the auto industry $51.5 billion over five years.

In the current budget debates, Obama keeps saying that because of the slow economic recovery we shouldn’t go on a cost cutting spree.  That would only pull consumer spending out of the economy.  Of course he has no such empathy for the struggling auto industry.  He’s more than willing to raise their cost of doing business.  Killing jobs in the process.

Incidentally, there are only two ways to squeeze this kind of mileage out of a car.  Making it so light that it (and its passengers) would probably not survive most accidents.  Or being unable to build a car to meet this standard.

Gas Prices must Rise to between $4.50-$5.50 for the Electric Car to Succeed

But what on earth would be the reason to enact standards that automakers can’t meet?  Well, how about this (see Gas must hit $4.50 to make electric cars cost-effective by Joel Gehrke posted 7/29/2011 on the Washington Examiner)? 

Gas prices must rise to between $4.50-$5.50, the study authors suggest, for electric vehicles to become less expensive to own than gas-powered vehicles…

Of course, this omits the other method of making electric cars competitive — enact fuel efficiency standards that make gas-powered vehicles illegal to make or impossibly expensive. Given President Obama’s announcement today that fuel economy standards are set to rise to 54.5 mpg between 2017 and 2025, it seems that the electric vehicle industry is getting the government props necessary to make consumers buy the cars.

This is not how you increase domestic auto output.  Or create jobs.  This is how you change human behavior.  By forcing people to act against their will.  And in the process making us all poorer by increasing the cost of food.  How?  Gasoline and diesel are a big component of food costs.  For it takes fuel to grow food.  And to bring it to market.

The One Thing the Obama Administration is Good At

It makes you think.  Is all of this debt ceiling debate pure theatre to distract us from the destruction of the economy?  Because this destruction is pretty good as far as destruction goes.  You probably couldn’t have done a better job if you tried.  Which begs the question was this all planned?  A social reengineering of the United States brought about by the destruction of the U.S. economy? 

If so, at least you can say there was one thing the Obama administration was good at.

www.PITHOCRATES.com

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