In case you haven’t noticed, California is fast becoming a third world economy. Its government has ceased to provide basic services (its schools now rank 48th; its prisons were ordered to release more than 50,000 inmates because of inadequate healthcare). The Wall Street Journal editors explain:
The Golden State — which a decade ago was the booming technology capital of the world — has been done in by two decades of chronic overspending, overregulating and a hyperprogressive tax code that exaggerates the impact on state revenues of economic boom and bust. Total state expenditures have grown to $145 billion in 2008 from $104 billion in 2003 and California now has the worst credit rating in the nation — worse even than Louisiana’s. It also has the nation’s fourth highest unemployment rate of 9.3% (after Michigan, Rhode Island and South Carolina) and the second highest home foreclosure rate (after Nevada).
Governor Schwarzenegger is trying to bully the legislature into a package which includes $14B more in new taxes. That move, if it gets through, plus the general deterioration in the quality of life is likely to increase the outflow of people, and, with it, high earners and businesses whose revenue the state needs. In short, the state is a basket case.
Those in the other 49 should take note. This is what a high tax, overregulated, union dominated economy looks like. And in the information age it is increasingly easy to relocate businesses — to another state or another country. So as we look to the federal government it might be a good idea to keep the California experience front and center. Do we want to dramatically increase the size of government, pass volumes of new environmental and other regulations, pass card check to give unions an even greater influence in the economy, and ( if the Congressional Democrats have their way) raise taxes?
For decades now, we have seen that as goes California, so goes the nation. Let’s hope that is no longer true.
the real life of real people.
Real people have lost 50% of the value of their stock plans twice since 2001. The “masters of the Wall Street Universe” get the blame,twice. The government and healthcare are the only segments left that are hiring real people. Real People often say,thank God that Social Security didn’t go private. Nobody is blaming Obama’s socialism for their losses. Everyone that needs a job knows where to apply.
Expect to see, within the month, a “Dump Geithner” campaign, orchestrated behind the scenes by Carville et al., followed by a somber statement from Number One: “I cannot say how much I admire the courage of Tim [because I don't -- he had to be threatened with tax evasion prosecution to get him to go] in deciding to step down . . . . This is a wonderful opportunity [for some other nonsense to divert the public] . . . .”
As the Grateful Dead sang: “What a long, strange trip it’s been.” Except, of course, for those who suddenly find themselves flying off the bus.
The elite journalists, I repeat, got Obama wrong. The troglodytes got him right. As our national drama continues to unfold, bear that in mind.
Now that Obama is in charge, it is time to speak truth to power. Isn’t that what the left always says?
Free market policies including much lower corporate (and personal taxes) generally less regulation (though of course some regulation of the moral hazardous Democratic cleptocrats at Fannie and Freddie) would have resulted in much stronger growth, unemployment in the 3s and a cheap dow at 15,000 to 16,000. At least. There would have been a down cycle but obvisouly at much higher levels of employment. The government is employing people but in doing so it and those it employe are crushing the private economy and creating a much lower overall employment base.
No. This is, OVERWHELMINGLY, a government failure. Private markets can certainly be excessive and even corrupt but this particular phenomenon was caused by the pressure to lend imposed by the CRI, the loans and even then the loans would not have been made so easily without the gov’t backed, egregiously undercapitalized, unregulated (mostly Democrat protected) Fannie and Freddie. Sure, Wall Street participated and profited but this particular scam was given them by the government.
Obviously the easy money was probably the biggest culprit here, but again this is a government (in this case Greenspan abeted by Bush) failure.
All of this is not to say that there is not short sighted cowardice, corruption and greed on Wall Street. These are only Homo Sapiens after all. These defects are, however, exacerbated rather than curbed by the government and mitigated by the reality of markets.
The “greed” mantra. Where is it in the voluminous federal statutes that expand daily that “greed” is prohibited? As one of the seven deadly sins, it’s in there with wrath, pride, envy, lust, gluttony and sloth. None of them are prohibited by federal statute, either. Wrath bothers me. Watching some jerk berate a flight attendant, for instance. Maybe that should be illegal. Or gluttony. How about those all-you-can-eat buffets? Disgusting, eh? Let’s pass some legislation. But the greed deal, where’s the line between ambition and greed? How do you measure greed? By the gallon or the carat or the kilo? By the dollar maybe. Ergo someone that makes more money than I do is greedier than me, right? What about the talent thing? Does that matter? Why should a heart surgeon make more than a truck driver? That truck might be full of expensive stuff, that the driver is responsible for. Isn’t that worth something? And the government, when they want all that money, aren’t they being greedy as well? Spending it on junk, paying salaries to losers. Why not let me buy junk and spend it on losers?
Now c’mon Chuck Martel, you know better than that. People who work for govrenment only do so because they want to help other people rather than themselves. Why even John McCain spoke incessantly of serving somethin greater than our self interest. Becuase you know, like, trying to accumulate fame, glory and power cannot under any cirucmstances be interpreted as pursing self-interest whereas anyone who make millions/billions by creating thousands/tens of thousands of jobs and shareholder value is necessarilly pursing self interest with not attendant value to society.
Cavalier,
With respect to the mortgage meltdown, there are two other major contributing factors, both regulatory failures of Bush appointees. The Fed under Greenspan failed to impose loan to value limits for member banks loaning against mortgage backed securities, as it does for corporate securities. This gave rise to the practice of banks loaning private mortgage investment companies over 95%. Fannie and Freddie lost market share to private mortgage companies, and reduceded loan standards in part to meet this competition.
Securities firms noticed that the private mortgage investment companies that they were packaging and selling to were making huge profits, and the securities firms wanted in on the action. But the SEC had net capital regualtions which required securities firms to put up 15% cash when buying mortgages or mortgaged backed securities. Securities firms were not happy with the limited profits to be had at financing these investments at 6.6 to 1, when clients got 30 to 1 from banks. So the securities industry, led by then Goldman Chairman Paulson, lobbied SEC Chairman Chris Cox to do away with the net capital rules, which he did. Many securities firms like Bear, Lehman, and Merrill bought so many mortgages and mortgage backed securities at 30 to 1 that they became insolvent when even a few mortgages went bad.
7
Excellent points.
On a different note, if you all haven’t read this David Frum ( I know) piece, its worth the time.
http://www.newsweek.com/id/188279/page/1
I think democrats are starting to realize the problems at treasury. I don’t want to link to any of them but I’ve reada number of threads at lefty sites with sober assesments by stock market minded liberals explaining that it’s become a problem. they get shouted down but they get their point across.
the democrats are having to learn in a matter of weeks that alot of what they believe in and have been agitating for and against doesn’t work. I hope they can figure out a sensible way forward because the republicans are not a substantial opposition right now. they’ve all been resting on their laurels for decades and are totally unprepared for this or any crisis.
@9 Interesting lester : “the democrats are having to learn in a matter of weeks that alot of what they believe in and have been agitating for and against doesn’t work. ”
Strangely enough the American people know that it doesn’t work – -which is why they couldn’t run as naked liberals (thats an ugly image) but as stealth ones. Funny also that all the Foreign Policy alternatives they put forth haven’t seen the light of day either as for all intents and purposes this is really the third term of George W. Bush.
Alan Greenspan is a “Bush appointee”?
By the way, have I mentioned that Obama is a lazy cuss?
Before any conservatives get elated that Geithner is a tool, Obama is a know-nothing fraud, and the Dems are socialistic moonbats spending other people’s money and that the economic disaster will shift things shortly back to the Republicans, I say……not so fast.
Look, I am a conservative, but also a harsh realist. Obama has settled on a grand coalition, a coalition of educated, young, very rich, and poor to lower middle class people along with the usual gays/blacks/unionizers and seized power. This coalition isn’t going to leave him, ever.
This economy could go even worse than the Great Depression, and they won’t leave him.
America has changed. The ruling nexus doesn’t involve people who favor limited government, strong defense, and strict immigration, and certainly not people of a religious persuasion.
Face it. We are at the exact polar opposite of 1981.
A new President, a tough economy, and a post-election teflon for the new POTUS.
The real fear is if Obama turns out to be the Reagan of 1983, the one with the rebounding economy, increased (even!) popularity, and a surefire winner in the next election.
Face it. No matter what Obama does or doesn’t do, this country doesn’t want Republicans or conservatives. It pains me to say it, but we are the distrusted minority similar to Mondale’s 1984. We will not recover until AFTER Obama leaves and his second/third tier lackeys are not as popular or skilled as he is (Bush 1, 1989-93), and we have ourselves a Clinton (1993) that takes advantage of this and finally win again.
I say minimum 12 years….maybe more if the Republicans don’t get lucky in 12 years with a “Clinton” like figure.
Obama’s coalition is that strong, and that inelastic to economic turmoil. It sucks.
8. I read the Frum article. To me he’s taking aim at the wrong target.
The only reason Frum is talking about Rush is because there are no R leaders (in part because of Frum’s previous boss). And, maybe, that’s his strategy…to shame some of the brighter Rs into actually leading. If that’s his goal, then I’m on his side.
We were the party of Phil Gramm, Dick Armey, and Newt even after Reagan. Do we have political leaders like that? No.
Liberalism/Leftism is, in my view, a very fragile position intellectually. It is really only about power/control and getting $$ or services from someone else.
The results of Liberalism/Leftism are pretty indefensible given its track record both here and the world. Yes, there may be a bit of hormesis in some instances, but generally the poison will kill you.
12 Tex:
Yeah, I’m real worried too…but that powerful nexus missed 47% of the voters. And against, lets be fair, a 70 something guy that was less than compelling.
We already have reports that there are 14 senators that want to form a centrist group.
I hope we don’t have to go through a period where the cruelity of Leftism leaves a mark…but there is a little hope that the adults are showing up.
“Funny also that all the Foreign Policy alternatives they put forth haven’t seen the light of day either as for all intents and purposes this is really the third term of George W. Bush”
disagree. you have to look at what’s NOT there in that regard. forget this chas freeman stuff for a minute. the difference is the tone
tex- the way I see it both sides are sort of “stuffing ” this issue. the liberals are ramming through all this stuff about green home heaters and health acre alternatives while the republicans bloviate about the beautiful past and getting back to it and socialism when really what both sides need to do is zer oin on the problem that tim geitner hasn’t initiated a plabn for the troubled assetts and the banks that contain them.
it’s all people riding their hobby horses instead of grabbing and shaking tim geitner and larry summers
15 was for 10
The Republicans looked to the future and discovered radio!
Joe NS,
On May 18, 2004, Greenspan was appointed by George W. Bush to a fifth term as chairman of the Fed. Greenspan was most negligent during his last years in office.
I am inclined to give Geithner some slack. Not because I believe he will pull it together. I am not sure that it can be pulled together. However, it will give reps somewhat longer to figure out what in the world they believe about government and the financial sector. Sure, reps believe in principle in limited government and market solutions. But when push came to shove Paulson was able to steam roll them. It wasn’t even close. And who remembers reps making an issue of Bush’s re-appointment of Greenpsan, followed up with his appointment of Helicopter Ben. If conservatives and neo-conservatives had put up a fight on these appointments, they might have lost the elections in 2006 and 2008 but they would be much further ahead now. (Oh wait, reps did lose in 2006 and 2008). It’s not like conservatives and neo-conservatives couldn’t make Bush pay attention (remember the Harriet Miers nomination). The problem is that conservatives and neo-conservatives really didn’t have any intellectual basis or reason oppose Greenspan or Bernake. It’s time to really start paying some attention to Ron Paul and Jim Bunning.
“Patrick Ruffini gets it largely right on the intra-conservative wars.”
I don’t think much of this pair of sentences by Ruffini:
“It’s one thing to reject spokespeople with neither egghead credentials nor talent, like Joe the Plumber, or those who are positively cringe-worthy, like Coulter. Rush belongs in neither of these categories. “
Joe the Plumber would be less of an asset to the opposition if he had
“egghead credentials”. As for the scintillating Ann Coulter, she is
too original to be anyone else’s spokesperson, but
this fact calls for neither “cringing” nor “rejection”…
#1: “Everyone that needs a job knows where to apply.”
Like here:
“Ohio school gets 700 applicants — for one janitorial job! “
Obama says we are not winning in Afghanistan, and turning that war around “is going to be much more of a challenge” than was turning around Iraq. This is so self-serving it’s really rather depressing. I know opinions differ on the state of the war in Afghanistan, but Obama is managing the narrative. He can only be credited with a turnaround if we are not winning; and he can only get greater glory than Bush did for the Petraeus strategy if the challenge he faces is greater. Afghanistan is complex, but turning around Iraq certainly seemed to be quite a challenge when nobody but George Bush and Generals Petraeus and Odierno believed it was possible.
Ahithophel, don’t forget John McCain. In ascending order of importance (and credit) in assessing the Iraq turnaround are Odierno, Petraeus, McCain, and Bush. The generals opinions were mostly professional – there is definitely such a thing as United States Army politics – and of course they are to be unstintingly commended for their advocacy of and detailed planning for the Surge.
McCain, the ex-Navy Commander, also brought shrewd professional judgment to the situation, but the politics were secondary for him, in my opinion, which is to his credit. The burden on Bush was professional, as the C-in-C, but also staggeringly political.
The only opinion that mattered, finally, of the four men cited was George Bush’s. Put John Kerry or, one shudders, Barack Obama in charge, and it requires no great insight to imagine the outcome: unmitigated disaster. And the thing is, to believe that a similar, critical decision will NOT confront BO in the not so long term regarding the Afghan War would be very, very foolish. Obama’s previously expressed “resolve” on the subject should, unfortunately, be completely discounted.
Barack Obama is a lazy cuss and will always opt for an easy and personally undemanding RESPONSE to RESPONSIBILITY. His seemingly bred-in-the bone idleness is the simplest, most comprehensive explanation for his current and past behavior and is therefore the best gauge possible for predicting what he will do in the future.
A utopian notion of “transforming America,” which he himself admits he’s aiming for, is actually the path of least resistance at present – and that’s to put aside the question of whether what the United States needs is transformation – because, like daydreams and anaerobic bacteria, leftish paradise mongering flourishes in an airless environment uncontaminated by fact or contingency.
Say, have I pointed out that Obama is also a lazy cuss?
Contra, that janitorial job has some very nice aspects to it. Regular increases in salary, union shop where it is very hard to be fired, and a big fat pension. School district jobs are very sought after.