Commentary Magazine


Topic: phony accounting

The Truth and Barack Obama

Who knew that Barack Obama’s real ambition is to be Howard Kurtz?

In his commencement address at Hampton University, the president once again decided to act as if he were America’s Media-Critic-in-Chief. In Obama’s words:

You’re coming of age in a 24/7 media environment that bombards us with all kinds of content and exposes us to all kinds of arguments, some of which don’t always rank that high on the truth meter. And with iPods and iPads; and Xboxes and PlayStations — none of which I know how to work — (laughter) — information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment, rather than the means of emancipation. So all of this is not only putting pressure on you; it’s putting new pressure on our country and on our democracy.

Later in the speech, Obama added this:

So, allowing you to compete in the global economy is the first way your education can prepare you. But it can also prepare you as citizens. With so many voices clamoring for attention on blogs, and on cable, on talk radio, it can be difficult, at times, to sift through it all; to know what to believe; to figure out who’s telling the truth and who’s not. Let’s face it, even some of the craziest claims can quickly gain traction. I’ve had some experience in that regard.

There are several things one can take away from the president’s remarks.

The first is that there’s a certain irony in being instructed by Obama about avoiding arguments that “don’t always rank that high on the truth meter.” This instruction, after all, comes from a man who, throughout the health-care debate, repeatedly made false and misleading arguments about the effects of ObamaCare on bending the cost curve, on the deficit and debt, on whether people will be forced to leave their employer-based policies, on whether his plan advocated Medicare cuts, on whether it would subsidize abortions, and much else.

Mr. Obama is also the person who, when he was running for the presidency, promised all health-care negotiations would be broadcast on C-SPAN (They weren’t.), that he would accept public financing for his campaign (He didn’t.), that he would put an end to “phony accounting” (He hasn’t.), that lobbyists will not work in his White House (They do.), that he would slash earmarks by more than half (He has not.), that he opposed giving Miranda rights to terrorists (He favors them.), that he was against an individual health-care mandate (He supported it.), and that he would resist the temptation “to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long” (He succumbed to the temptation.).

Where, I wonder, does Mr. Obama rank these statements on his cherished Truth Meter?

And what are we to make of the fact that the very paragraph from Obama’s speech where he laments the lack of truth in public statements includes — you guessed it — a false statement by Obama?

In his commencement address, Obama insists he doesn’t know how to work an iPod. But here’s an item that appeared on the Huffington Post on June 25, 2008:

WASHINGTON — Bob Dylan. Yo-Yo Ma. Sheryl Crow. Jay-Z. These aren’t musical acts in a summer concert series: They’re artists featured on Barack Obama’s iPod.

“I have pretty eclectic tastes,” the Democratic presidential contender said in an interview to be published in Friday’s issue of Rolling Stone.

Is that distant sound we hear the Truth Meter going off again?

By now Obama has spoken out against the New Media often enough to know that he both despises it and is obsessed with it. For all of his talk about his eagerness to listen to others, “especially when we disagree,” as he put it on the night of his election, Obama clearly resents being challenged. He gets especially exasperated and condescending when his challenger has made the better argument. That is, in fact, a trait of Team Obama; we see that attitude on display almost every day in the person of Robert Gibbs, the snidest and least likable press secretary in our lifetime.

The president and his aides are clearly used to being cosseted. They seem to believe the American public should treat them as reverentially as staff members of the New Yorker do.

It may seem odd for a man who presents himself as a public intellectual who cherishes open-mindedness and vigorous debate to be so relentlessly critical of the diversity of voices and viewpoints now in the public square. But remember this: Barack Obama is a man whose attitudes and sensibilities have been shaped by the academy, an institution that is the least (classically) liberal and open-minded in American life today. A stifling conformity and an unwillingness to engage arguments on the merits, combined with a reflexive tendency to attack the motives of those who hold opposing views, are hallmarks of the modern university. They are also, alas, hallmarks of America’s 44th president. But Mr. Obama is learning the hard way that America is not one big Ivy League campus. Here, differing opinions are heard, whether they are welcomed by those in power or not. The public will not bow down before any man or any office. And politicians who treat dissenting voices as if they are a Tower of Babble, to be mocked and ridiculed into silence, eventually receive their comeuppance. So shall Obama.

Who knew that Barack Obama’s real ambition is to be Howard Kurtz?

In his commencement address at Hampton University, the president once again decided to act as if he were America’s Media-Critic-in-Chief. In Obama’s words:

You’re coming of age in a 24/7 media environment that bombards us with all kinds of content and exposes us to all kinds of arguments, some of which don’t always rank that high on the truth meter. And with iPods and iPads; and Xboxes and PlayStations — none of which I know how to work — (laughter) — information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment, rather than the means of emancipation. So all of this is not only putting pressure on you; it’s putting new pressure on our country and on our democracy.

Later in the speech, Obama added this:

So, allowing you to compete in the global economy is the first way your education can prepare you. But it can also prepare you as citizens. With so many voices clamoring for attention on blogs, and on cable, on talk radio, it can be difficult, at times, to sift through it all; to know what to believe; to figure out who’s telling the truth and who’s not. Let’s face it, even some of the craziest claims can quickly gain traction. I’ve had some experience in that regard.

There are several things one can take away from the president’s remarks.

The first is that there’s a certain irony in being instructed by Obama about avoiding arguments that “don’t always rank that high on the truth meter.” This instruction, after all, comes from a man who, throughout the health-care debate, repeatedly made false and misleading arguments about the effects of ObamaCare on bending the cost curve, on the deficit and debt, on whether people will be forced to leave their employer-based policies, on whether his plan advocated Medicare cuts, on whether it would subsidize abortions, and much else.

Mr. Obama is also the person who, when he was running for the presidency, promised all health-care negotiations would be broadcast on C-SPAN (They weren’t.), that he would accept public financing for his campaign (He didn’t.), that he would put an end to “phony accounting” (He hasn’t.), that lobbyists will not work in his White House (They do.), that he would slash earmarks by more than half (He has not.), that he opposed giving Miranda rights to terrorists (He favors them.), that he was against an individual health-care mandate (He supported it.), and that he would resist the temptation “to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long” (He succumbed to the temptation.).

Where, I wonder, does Mr. Obama rank these statements on his cherished Truth Meter?

And what are we to make of the fact that the very paragraph from Obama’s speech where he laments the lack of truth in public statements includes — you guessed it — a false statement by Obama?

In his commencement address, Obama insists he doesn’t know how to work an iPod. But here’s an item that appeared on the Huffington Post on June 25, 2008:

WASHINGTON — Bob Dylan. Yo-Yo Ma. Sheryl Crow. Jay-Z. These aren’t musical acts in a summer concert series: They’re artists featured on Barack Obama’s iPod.

“I have pretty eclectic tastes,” the Democratic presidential contender said in an interview to be published in Friday’s issue of Rolling Stone.

Is that distant sound we hear the Truth Meter going off again?

By now Obama has spoken out against the New Media often enough to know that he both despises it and is obsessed with it. For all of his talk about his eagerness to listen to others, “especially when we disagree,” as he put it on the night of his election, Obama clearly resents being challenged. He gets especially exasperated and condescending when his challenger has made the better argument. That is, in fact, a trait of Team Obama; we see that attitude on display almost every day in the person of Robert Gibbs, the snidest and least likable press secretary in our lifetime.

The president and his aides are clearly used to being cosseted. They seem to believe the American public should treat them as reverentially as staff members of the New Yorker do.

It may seem odd for a man who presents himself as a public intellectual who cherishes open-mindedness and vigorous debate to be so relentlessly critical of the diversity of voices and viewpoints now in the public square. But remember this: Barack Obama is a man whose attitudes and sensibilities have been shaped by the academy, an institution that is the least (classically) liberal and open-minded in American life today. A stifling conformity and an unwillingness to engage arguments on the merits, combined with a reflexive tendency to attack the motives of those who hold opposing views, are hallmarks of the modern university. They are also, alas, hallmarks of America’s 44th president. But Mr. Obama is learning the hard way that America is not one big Ivy League campus. Here, differing opinions are heard, whether they are welcomed by those in power or not. The public will not bow down before any man or any office. And politicians who treat dissenting voices as if they are a Tower of Babble, to be mocked and ridiculed into silence, eventually receive their comeuppance. So shall Obama.

Read Less

The Spending-Limit Amendment

Last week, Representatives Mike Pence (R-Ind.), Jeb Henserling (R-Texas), and John Campbell (R-Calif.) introduced a joint resolution that would, if passed by two-thirds of each house and then by three-quarters of the states, amend the Constitution to limit federal spending to 20 percent of the Gross Domestic Product. Congress could waive the limit if a declaration of war was in effect (the last time Congress declared war was December 8, 1941, 68 years and two major and several minor wars ago). In peacetime it could override the limit by a two-thirds vote in each house.

As the congressmen explain at length here, 20 percent of GDP is the postwar historical average of federal spending. And, indeed, there is an inverse correlation between federal spending as a percentage of GDP and national economic prosperity. Michael Barone this morning has a good example of the relationship between government spending and prosperity. Current spending, enormously increased in the last year and a half, is currently about 24.7 percent of GDP. If ObamaCare etc. go through, federal spending will be at permanently higher levels.

Is this a way to go? Similar amendments have been around for at least 25 years and have never gone anywhere. Certainly the present Congress would pass a joint resolution against motherhood and apple pie before it passed this one. And even if it did, it is hard to imagine the legislatures of three-quarters of the states ratifying it. States have become ever more dependent on federal money over the past few decades and are especially so now, with state budgets bleeding red ink.

Even in prosperous times, it is not likely that state legislatures would vote to put limits on the federal gravy train. (Memo to the congressmen: the Constitution calls for amendments passed by Congress to be ratified either by state legislatures or by conventions called in each state for that purpose, at the option of Congress. The latter method has only been used once, to repeal Prohibition, when Congress knew that many state legislatures were under the thumb of “the preachers and the bootleggers.” If you’re serious about passing this amendment, conventions of citizens elected to address the matter are the answer. The Tea Partiers would have a field day.)

The proposed amendment also states that the “Congress shall have the power to enforce this article by appropriate legislation.” By not specifying how to define GDP, that’s an open invitation to cook the books, something at which Congress is very expert.

Personally, I think this amendment is misguided and might seriously hamstring the federal government under certain circumstances and lead to even worse book-cooking. California’s requirement that taxes be raised only with a two-thirds vote in each house of the state legislature hasn’t restrained state spending and only caused a grand proliferation of accounting smoke and mirrors. California is facing fiscal ruin.

I’d prefer an amendment requiring the federal government to keep honest books and have those books audited by a genuinely independent authority, which would also “score” proposed legislation as the CBO does now. But an independent authority would have the power to ask the questions, not just answer the ones Congress asks. Congress wouldn’t like that idea any better than linking spending to GDP. But it is very hard to come up with an argument as to why the federal government should be allowed to use phony accounting.

Last week, Representatives Mike Pence (R-Ind.), Jeb Henserling (R-Texas), and John Campbell (R-Calif.) introduced a joint resolution that would, if passed by two-thirds of each house and then by three-quarters of the states, amend the Constitution to limit federal spending to 20 percent of the Gross Domestic Product. Congress could waive the limit if a declaration of war was in effect (the last time Congress declared war was December 8, 1941, 68 years and two major and several minor wars ago). In peacetime it could override the limit by a two-thirds vote in each house.

As the congressmen explain at length here, 20 percent of GDP is the postwar historical average of federal spending. And, indeed, there is an inverse correlation between federal spending as a percentage of GDP and national economic prosperity. Michael Barone this morning has a good example of the relationship between government spending and prosperity. Current spending, enormously increased in the last year and a half, is currently about 24.7 percent of GDP. If ObamaCare etc. go through, federal spending will be at permanently higher levels.

Is this a way to go? Similar amendments have been around for at least 25 years and have never gone anywhere. Certainly the present Congress would pass a joint resolution against motherhood and apple pie before it passed this one. And even if it did, it is hard to imagine the legislatures of three-quarters of the states ratifying it. States have become ever more dependent on federal money over the past few decades and are especially so now, with state budgets bleeding red ink.

Even in prosperous times, it is not likely that state legislatures would vote to put limits on the federal gravy train. (Memo to the congressmen: the Constitution calls for amendments passed by Congress to be ratified either by state legislatures or by conventions called in each state for that purpose, at the option of Congress. The latter method has only been used once, to repeal Prohibition, when Congress knew that many state legislatures were under the thumb of “the preachers and the bootleggers.” If you’re serious about passing this amendment, conventions of citizens elected to address the matter are the answer. The Tea Partiers would have a field day.)

The proposed amendment also states that the “Congress shall have the power to enforce this article by appropriate legislation.” By not specifying how to define GDP, that’s an open invitation to cook the books, something at which Congress is very expert.

Personally, I think this amendment is misguided and might seriously hamstring the federal government under certain circumstances and lead to even worse book-cooking. California’s requirement that taxes be raised only with a two-thirds vote in each house of the state legislature hasn’t restrained state spending and only caused a grand proliferation of accounting smoke and mirrors. California is facing fiscal ruin.

I’d prefer an amendment requiring the federal government to keep honest books and have those books audited by a genuinely independent authority, which would also “score” proposed legislation as the CBO does now. But an independent authority would have the power to ask the questions, not just answer the ones Congress asks. Congress wouldn’t like that idea any better than linking spending to GDP. But it is very hard to come up with an argument as to why the federal government should be allowed to use phony accounting.

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Jobs Saved or Created?

Here is a press report on an event in New Hampshire on Tuesday:

“Now, if you hear some of the critics, they’ll say, well, the Recovery Act, I don’t know if that’s really worked, because we still have high unemployment,” the president said. “But what they fail to understand is that every economist, from the Left and the Right, has said, because of the Recovery Act, what we’ve started to see is at least a couple of million jobs that have either been created or would have been lost. The problem is, seven million jobs were lost during the course of this recession.

Uh, no. Not “every” economist has said such a thing. In fact, it might be closer to say that no serious economist has said any such thing.

For Obama to pretend that what he says is true is not only wrong; it is quite ludicrous. The “saved or created” meme has rightly evoked belly laughs from all sorts of quarters. Even the president’s own Office of Management and Budget has given up on using it. And for good reason: It is an utterly meaningless and indefensible claim. The numbers were grabbed out of thin air, made up, pure fiction. The Obama administration has proven unable to document anything like what it claims.

For Mr. Obama — who promised to do away with “phony accounting” as part of his “turn the page” politics — to continue to say such things will simply further damage to his credibility, which is already in a state of considerable disrepair.

For more on this see ABC’s Jake Tapper and Hot Air’s Ed Morrissey.

Here is a press report on an event in New Hampshire on Tuesday:

“Now, if you hear some of the critics, they’ll say, well, the Recovery Act, I don’t know if that’s really worked, because we still have high unemployment,” the president said. “But what they fail to understand is that every economist, from the Left and the Right, has said, because of the Recovery Act, what we’ve started to see is at least a couple of million jobs that have either been created or would have been lost. The problem is, seven million jobs were lost during the course of this recession.

Uh, no. Not “every” economist has said such a thing. In fact, it might be closer to say that no serious economist has said any such thing.

For Obama to pretend that what he says is true is not only wrong; it is quite ludicrous. The “saved or created” meme has rightly evoked belly laughs from all sorts of quarters. Even the president’s own Office of Management and Budget has given up on using it. And for good reason: It is an utterly meaningless and indefensible claim. The numbers were grabbed out of thin air, made up, pure fiction. The Obama administration has proven unable to document anything like what it claims.

For Mr. Obama — who promised to do away with “phony accounting” as part of his “turn the page” politics — to continue to say such things will simply further damage to his credibility, which is already in a state of considerable disrepair.

For more on this see ABC’s Jake Tapper and Hot Air’s Ed Morrissey.

Read Less

Iceberg Dead Ahead, Captain Orders “All Engines Ahead Full”

Douglas Holtz-Eakin, a former director of the Congressional Budget Office, has an article in today’s Wall Street Journal, in which he predicts — correctly in my opinion — that we are headed for a fiscal iceberg.

Our fiscal situation has deteriorated rapidly in just the past few years. The federal government ran a 2009 deficit of $1.4 trillion — the highest since World War II — as spending reached nearly 25% of GDP and total revenues fell below 15% of GDP. Shortfalls like these have not been seen in more than 50 years.

Going forward, there is no relief in sight, as spending far outpaces revenues and the federal budget is projected to be in enormous deficit every year. Our national debt is projected to stand at $17.1 trillion 10 years from now, or over $50,000 for every American. By 2019, according to the Congressional Budget Office’s (CBO) analysis of the president’s budget, the deficit will still be roughly $1 trillion, even though the economic situation will have improved and revenues will be above historical norms.

This is also nothing new. The national debt was for most of American history, as Hamilton said it would be, a “national blessing.” It allowed us to fight and win our wars and to relieve suffering in an economic depression far worse than what the country is experiencing now. But in the last thirty years — the most prosperous and relatively peaceful thirty-year period in American history — liberals and “conservatives,” Democrats and Republicans alike in Washington have allowed the debt to explode for their short-term political benefit while they hid the truth with phony accounting.

How bad was it? Consider this: In 1980, the debt was 33.3 percent of the country’s GDP. By 1990 the GDP had increased by 37.6 percent in real terms. But the debt had grown much faster. It was 55.9 percent of the much larger GDP. In the 1990′s GDP increased by 39.7 percent, and the debt more than kept pace. It was 58 percent of GDP in 2000. At the end of 2008, GDP had grown 18.5 percent over 2000, and the debt was fast approaching 80 percent of GDP.  And the debt, being denominated in dollars, is made smaller by inflation while GDP is enlarged.

No one believes that the debt can be kept under 100 percent of GDP in the near future. And if Obamacare gets passed in anything like its present form, it will only makes matters far worse. As Mr. Holtz-Eakin explains, President Obama’s promise not to sign a bill that adds to the deficit is false:

. . . the bills are fiscally dishonest, using every budget gimmick and trick in the book: Leave out inconvenient spending, back-load spending to disguise the true scale, front-load tax revenues, let inflation push up tax revenues, promise spending cuts to doctors and hospitals that have no record of materializing, and so on.

If you’re disturbed by the long-term outlook for the country’s fiscal health, you shouldn’t be. You should be terrified.

Douglas Holtz-Eakin, a former director of the Congressional Budget Office, has an article in today’s Wall Street Journal, in which he predicts — correctly in my opinion — that we are headed for a fiscal iceberg.

Our fiscal situation has deteriorated rapidly in just the past few years. The federal government ran a 2009 deficit of $1.4 trillion — the highest since World War II — as spending reached nearly 25% of GDP and total revenues fell below 15% of GDP. Shortfalls like these have not been seen in more than 50 years.

Going forward, there is no relief in sight, as spending far outpaces revenues and the federal budget is projected to be in enormous deficit every year. Our national debt is projected to stand at $17.1 trillion 10 years from now, or over $50,000 for every American. By 2019, according to the Congressional Budget Office’s (CBO) analysis of the president’s budget, the deficit will still be roughly $1 trillion, even though the economic situation will have improved and revenues will be above historical norms.

This is also nothing new. The national debt was for most of American history, as Hamilton said it would be, a “national blessing.” It allowed us to fight and win our wars and to relieve suffering in an economic depression far worse than what the country is experiencing now. But in the last thirty years — the most prosperous and relatively peaceful thirty-year period in American history — liberals and “conservatives,” Democrats and Republicans alike in Washington have allowed the debt to explode for their short-term political benefit while they hid the truth with phony accounting.

How bad was it? Consider this: In 1980, the debt was 33.3 percent of the country’s GDP. By 1990 the GDP had increased by 37.6 percent in real terms. But the debt had grown much faster. It was 55.9 percent of the much larger GDP. In the 1990′s GDP increased by 39.7 percent, and the debt more than kept pace. It was 58 percent of GDP in 2000. At the end of 2008, GDP had grown 18.5 percent over 2000, and the debt was fast approaching 80 percent of GDP.  And the debt, being denominated in dollars, is made smaller by inflation while GDP is enlarged.

No one believes that the debt can be kept under 100 percent of GDP in the near future. And if Obamacare gets passed in anything like its present form, it will only makes matters far worse. As Mr. Holtz-Eakin explains, President Obama’s promise not to sign a bill that adds to the deficit is false:

. . . the bills are fiscally dishonest, using every budget gimmick and trick in the book: Leave out inconvenient spending, back-load spending to disguise the true scale, front-load tax revenues, let inflation push up tax revenues, promise spending cuts to doctors and hospitals that have no record of materializing, and so on.

If you’re disturbed by the long-term outlook for the country’s fiscal health, you shouldn’t be. You should be terrified.

Read Less




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