If conservatives are paying attention to the facts rather than the overheated rhetoric of some on the right, they will find a lot of facts in recent days that ought to allay their unease with John McCain (whose campaign, full disclosure, I advise on foreign affairs).
One of the claims that some conservatives make is that McCain, of all people, is soft on terrorism because he wants to close Guantanamo and not waterboard detainees. But that hardly means he wants to house them in a Hilton, give them a nice robe and comfy slippers, and let them hold back information about plots against the United States and our allies.
Yesterday the Senate voted, 51-45, to pass a Democratic-crafted bill that would force the CIA to use only the 19 approved interrogation methods in the Army field manual. McCain voted no. Here is a news article that explains his position:
Sen. McCain voted against the measure and said the law he negotiated with the Bush administration in 2006 allows some government agencies to use “some additional techniques” along with those in the Army Field Manual. “I’ve made it very clear that I believe waterboarding is torture and illegal,” Sen. McCain said. “But I will not restrict the CIA to only the Army Field Manual. That’s my position, and that’s been my position.”
On a related note, while he wants to close Guantanamo because rightly or wrongly it has become an international embarrassment, McCain also wants to transfer the detainees to the maximum-security prison at Fort Leavenworth where their living conditions would probably be more grim. And as this horrified post by a liberal blogger notes, he would not grant detainees the constitutional rights of normal criminal defendants; he would proceed with trials under the military tribunal system.
The day before casting his vote on the interrogation bill, McCain voted on the wiretap bill the administration has sought. As this editorial notes, he voted in favor of giving telecom companies immunity for their cooperation with the government, while his likely opponent, Barack Obama, voted against immunity (Hillary Clinton was not present). In short, McCain supports maintaining the electronic surveillance that has kept us safe, notwithstanding the caterwauling of some self-appointed civil libertarians.
Meanwhile, this excellent op-ed by Kevin Stach demolishes attempts to paint McCain as a tax hiker or an opponent of tax cuts. Stach shows that he has had a careerlong devotion to tax cuts which led him to, among other things, vote against the 1990 budget deal crafted by the George HW Bush administration. So why would he vote against the 2001 tax cut plan put together by the George W. Bush administration?
Stach explains that:
what is not remembered is that, two weeks earlier, Mr. McCain voted to approve the final version of the Budget Resolution — the blueprint used by congressional committees for spending and tax bills — which included $1.35 trillion in tax cuts (the Bush proposal) coupled with a $661 billion cap on discretionary spending. When the promised spending cap never materialized, Mr. McCain denounced the wasteful earmarks and pork-barrel spending that he felt jeopardized the budget, and lodged the now famous protest vote against the tax cuts.
This is hardly the record of a liberal.
Here’s the Democrat solution for the economy. I challenge anyone to show how this improves anything besides the growth of government! None of this will ever cancelled and none of it improves our economy unless we accept socialism as our only policy.
The Spending Plan is Out
Posted by: Amanda Carpenter at 11:48 AM
I just got a copy of the $825 billion spending plan outlined by the Democratic-controlled House Appropriations Committee.
It is frightening.
Take a looksee here if you don’t believe me.
The highlights of this bill, allegedly crafted to save us from the Wall Street crisis but is obviously being used to fund every hail Mary liberal, entitlement cause under the sun, includes:
(Note, anything I put it quotes is because A. it comes directly from the memo and B. it’s so vague and/or ridiculous I don’t know what it actually means. And, no this is NOT the full list. This is a PORTION. )
-$6 billion to weatherize “modest income homes.”
-$6 billion to provide internet in “underserved” areas
-$6 billion for “higher education modernization.”
-$20 billion in health information technology to “prevent medial mistakes.”
-$20 billion to increase food stamp funding
-$87 billion to provide a “temporary” increase in Medicaid funding
-$300 million to provide rebates for people who purchase Energy Star products
-$600 million for the federal government to buy brand new energy efficient cars
-$400 million for state and local governments to buy brand new energy efficient cars
-$2.4 billion for carbon capture demonstration programs
-$350 million to research using energy efficient technology on military bases
-$300 million for grants and loans to state and local governments for projects that reduce diesel emissions, “benefiting public health and reducing global warming”
-$500 million for energy efficient manufacturing demonstration projects.
-$400 million to build major research facilities “that perform cutting edge science”
-$1.5 billion for expanding “good jobs in biomedical research”
-$400 million “to put more scientists to work doing climate change research”
-$600 million for satellite development and acquisitions, including climate sensors and climate modeling.
-$250 million “to address long-term economic distress in urban industrial cores and rural areas distributed based on need and ability to create jobs and attract private investment.”
-$650 million to continue the coupon program to enable American households to convert from analog television transmission to digital transmission.
-$300 million for the National Wildlife Refuges and National Fish Hatcheries
-$50 million for the National Endowment for the Arts
-$400 million for “ready-to-go habitat restoration projects”
-$2 billion to provide child care services for an additional 300,000 children in low-income families while their parents go to work.
-$120 million to provide subsidized community service jobs to an additional 24,000 low-income older Americans
-$1.5 billion to help local communities build and rehabilitate low-income housing using green technologies.
-$500 million to rehabilitate and improve energy efficiency at some of the over 42,000 housing units maintained by Native American housing programs
-$10 million for “rural, high-need areas to undertake projects using sustainable and energy-efficient building and rehabilitation practices”
WE can argue until the cows come home about who started this mess (my vote the CRA dems and their cronies at Fannie and Freddie – but both parties had an opportunity to stop it) but the absolutely stupid response to the crisis was perhaps worse. Why are businesses slowing and in some cases stopping discretionary spending, even if their orders are sound? Because they don’t know what is coming. They were told on the campaign trail that certain regulations would be forthcoming, and certain taxes would increase; they just don’t know. What will depreciation schedules be? Will I be able to get some government grant? Will my largest customer get one or not? Will the government buy the poisonous assets of failed banks? How much money will TARP pay out? What will they have to do with it? What did they do with the last chunk? Wait, wait , wait. So people put there hands in their pockets. The government under leadership from both parties have put so many things out there and have done things so far away from anything remotely resembling free market economics that businesses cannot begin to predict what they will face in the next 3 to 6 months. If everyone knew the bailout would stop here and do this and others may fail if necessary everyone at least would have quit worrying.
Now we have a pork laden stimulas bill with public works programs that will do nothing to help the economy and will probably lengthen and make more severe our current economic mess, while doing additional damage to our currency and move the country closer to default.
As much as I feel the wall street bigshots helped pour gas on this fire and make it worse, the fire was started by a government who thought they knew best and screwed it up. And now we are going to let them build another fire. Lord, help us all.
“reduce the unemployment rate from 8 percent to 7 percent”
Deport about 1.5 million illegal aliens and you reduce the unemployment rate by about 1%
Certainty and sound policy are not the same. Business, particularly small business, would undoubtedly welcome tax cuts and a minimum of regulation, even though that preserves the risk of failure. Investors, particularly wealthy investors, want certainty and aren’t too particular what form it takes so long as they can count on a reliable return. In a quasi-socialist environment many businesses will be ruined but investors will happily bet on whichever industries are favored by the state, or on state financial instruments themselves. Wall Street has never had Main Street’s interests at heart. Nor has Big Business necessarily thrown in its lot with smaller potential competitors. Are Hank Paulson and the Bank of America on the same team as S.J.Wurzelbacher a.k.a. JtP? Rhetorical question.
“In short, very bad and confused government policy skews decision-making and transforms economic decisions into political calculations. ”
I belive this was the thesis of Amity Schlaes book on the Great Depression, “The Forgotten Man.”
If you truly believe your assertion that the single biggest problem facing our economy is uncertainty over where and when government stimulus money is going to be spent (a laughable proposition), then the single biggest favor you can do the economy is to make sure Republican leaders don’t interfere with the Democratic stimulus package. By your logic, the sooner this is resolved, the faster businesses will have a clear picture and the sooner they will begin reinvesting. I’ll be waiting for your editorial calling on your leadership not to delay the stimulus package. Of course, if you don’t make the call, it will prove you didn’t really believe your rhetoric in the first place. And who would, really?
People Aren’t Irrational — Government Policy Is
Jennifer Rubin
Government Policy then,must not be made by people. Jennifer,you’re irrational,do you make government policy as a subcontractor?
Certainty and sound policy are not the same. But certainty at a minimum is needed for people to be “rational actors.”
Tax cuts and a minimum of regulation actually increase certainty about a wide range of things; that is, high taxes and lots of regulation produce uncertainty. When tax rules are complicated and taxes are high, people realize there’s a break-even point at which doing sophisticated things (that are not part of your usual MO) to avoid taxes would pay off. But they can’t know what the break-even point is until they invest in advice. That’s a whole new question that lies outside their usual expertise.
The same goes for regulation in spades. Businesses, small and even large, cannot really know all the regulations that apply. They seek advice on those areas of regulation they are aware of, but there’s always the possibility that something is lurking, ready to pounce on them in the form of an inspection or a lawsuit from an employee or a customer or even a third person. A lot of their energy has to go into defense against unknown regulations, and they know that growth of the business triggers more.
That’s why as SEth points out, big businesses are often quite ready to go along with regulations, know that these will choke out competition from smaller concerns.
Brooks doesn’t seem to really understand the idea of people as rational economic actors. Smith did not think that everyone acted rationally all the time, or even that most did. His point was that the trend line for a population would be in a rational direction, because the various personal motives and impulses that govern individuals tend to cancel each other out, leaving the rational trend line as the only trend.
We certainly see that with the rebate checks. While the Democrats relentlessly talked down the economy and talked up taxes, why wasn’t it rational to put those rebates into savings or debt reduction? And why isn’t it rational for businesses to put the brake on it now that the president elect is proposing an orgy of new spending combined somehow with tax cuts?
I would think the smaller you are the more certainty helps you; very poor people often buy lottery tickets; it makes sense if you think there’s a good chance that something you buy for your home or money in your pocket is apt to be stolen.
The more I read David Brooks, the more his pieces follow this self-serving pattern of decrying Republicans, Democrats, and others then forcing some conclusion that demonstrates his superior intellect floating above the fray. I’m not persuaded.
You people must never have run a business. All of business investment and projection involves uncertainty. You never know how much of a new product will sell, or will sell at a given price. All of forward looking finance deals with uncertainty. You make assumptions and you calculate probabilities. If extra govt money becomes available for a project, you make capital and hiring investments to support it. If uncertainty is a problem, then for heaven sakes, shut up about cutting taxes. Why would I make an investment in 2009 when I might get a tax break in 2010? And why would I sell an investment this year, increasing economic velocity and generating tax revenues, if Republicans are promising me a capital gains tax cut in the future. If uncertainty is the problem, please never mention tax cuts again.
Jenny Rubin sounds like a broken record of ignorance. David Brooks is referring the latest research in mind, brain and behavior which shows that classical economic assumptions are fallacious in reality. The mess we are in is a direct result of the false premises of “rational actor” economics: there was nothing rational about the way Wall Street and Detroit ignored risk, nothing rational about the crazy Bush deficit spending, unfunded new entitlements and endless expensive wars, but all of these problems were rationalized by professional apologists like Rubin.
How about amateur sneerers like Alex?
Rubin was arguing against Brooks’s claim in the section she quoted that businesses and consumers aren’t acting rationally in the wake of the financial meltdown.
This is rich coming from Brooks, who marveled at Obama’s ability to recite from Reinhold Niebuhr (who as I recall was very skeptical of government action, who called Sarah ‘ a cancer on the GOP” and swooned over Obama’s Ivy League cabinet, including Geithner
Art — I’m not convinced YOU have ever run a business. JEM at #2 is absolutely right. Uncertainty about government policy is a big suppresser of investment.
Investment is, inherently, a taking of risk. Both passive investors and business owners — who are also investors by being business owners — understand that MARKET risk is the environment in which they swim. Without risk, there would be no prospect of profit. But that’s MARKET risk: unguided, impersonal; operating in fairly predictable patterns, but not politically targeted.
Risk from government policy is another thing altogether. You don’t bet and hope about government policy. That’s suicide. You just have to KNOW what it will be. That’s one of the things that make it a big moral hazard for government to have more and more policies, on everything under the sun: the increasing likelihood that existing business owners and investors (along with other constituencies) will try to influence policy to their advantage (and, inherently, the disadvantage of competitors).
Tax policy is enormously consequential for the economy, and both individuals — as investors AND consumers — and businesses need to know what tax policy will be, before they make their next financial decisions. Market analysts assess the health of companies and their securities based as much on the impact of tax law, regulation, and judicial rulings, as on true “market” forces.
For another thing, a whole lot of people are already planning, financially, for the expected tax increase when the Bush tax cuts expire. Diverting one’s financial portfolio AWAY from current income and capital gains is the approach there; and that, of course, means minimizing consumption (because you’re planning to take less income), and taxable investment profit. Lower-yield passive investments, like tax-free municipal bonds, don’t have nearly the accelerating effect on the economy that investments in higher-yield securities do. But millions of smaller investors are already accepting lower yields for their portfolios, and plan to for the foreseeable future, because we already know that taxes WILL go up after 2010.
Investors, whether business entrepreneurs or market investors, routinely bet on market factors like demographics, consumption habits, or the sheer obviousness of, or enthusiasm about, new products. But you don’t bet on government tax or regulatory policy. You wait and see what it’s going to be first — or, if you’re a big business, with deep pockets, you get in there and lobby, while you’re waiting to see what the policy will ultimately be.
Art, don’t know about your business, but in mine tax breaks do not make me more worried about spending money. Oh, but you meant “targeted tax breaks,” rewards for doing some particular kind of spending. Well, I was counting them as “regulations,” because that’s what they are. Yes, those do induce uncertainty.
So, Alex, what is the risk that people on both sides of those bad mortgages ignored? The risk that the Federal government would disown the debts incurred through Fannie Mae and Freddie Mac? Has it happened? The financial companies that suffered did so because they had no way to know the risk level of the debt they were dealing with, because that debt was incurred through Fannie and Freddie. It’s a perfect example of how bad government policy hides risk and prevents rational behavior.
Methinks David Brooks was taken too much by Barack Obama.
Perhaps the most rational thing that government can do is do nothing. But then, that would deny the reason for their existence.
Every time i come here I am not dissapointed, nice post