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RedState's Morning Briefing for Wednesday, March 11, 2009
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Morning Briefing for WEDNESDAY, March 11, 2009
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1. Did Obama’s administration cook the stimulus books?
Get ready for another stimulus boondoggle when the biggest spending bill in history fails to meet the overly optimistic projections set by the Obama administration.
2. Chas Freeman Withdraws
One less extremist running the country
3. Put General Motors Down
it is time for GM to take that trip to the vet
4. Omnibusted: $410,000,000,000.00 Omnibus Spending Bill Passes Senate
The bill passed the Senate by voice vote after 62-35 vote to defeat a GOP filibuster.
5. Pelosi: We Hate Spending Trillions of Your Money, But We Love America Enough to Spend Much More
House Liberals Have Already Decided on Stimulus II
1. Did Obama’s administration cook the stimulus books?
Get ready for another stimulus boondoggle when the biggest spending bill in history fails to meet the overly optimistic projections set by the Obama administration.
Via Greg Mankiw, we learn of new research on Keynesian Government Spending Multipliers, which suggests the Obama administration used overly optimistic estimates to support President Obama’s ever-shifting goal — create or save 3.5 million jobs.
The multiplier is the amount that a change in government spending or tax cuts will increase GDP. For instance, a multiplier of one means that a $1 increase in government spending results in a $1 increase in GDP. A multiplier greater than one means that a spending increase or tax cut has secondary effects that further boost GDP.
According to the Heritage Foundation experts, to sell Obama’s massive bailout boondoggle, the so-called stimulus, the administration relied upon a report prepared by Christina Romer, chair of the President’s Council of Economic Advisers, and Jared Bernstein, the Vice President’s chief economist.
Romer and Bernstein rely upon the wrong multiplier.
2. Chas Freeman Withdraws
One less extremist running the country
Barack Obama’s first choice to head the National Intelligence Council has withdrawn his name for consideration. We can be thankful for his doing so.
Freeman is a member of that school of diplomacy that sees the United States as being the root of a lot of the evil in the world. He’s referred to by the Director of National Intelligence Dennis Blair as a “briliant, iconoclastic analyst.” You and I would call him barking mad.
According to Freeman, Tibet isn’t struggling for independence they’re having a “race riot.” And naturally “Israeli violence against Palestinians” is a key barrier to Mideast peace. I searched for the quote about Palestinian violence having something to do with the mess to no avail.
You’re going to hear a lot of hooey about how the “Jewish lobby” scuttled an utter savant of diplomacy because of their slavish subservience to Israel and Israel’s interests. Don’t believe it. Chas Freeman is withdrawing because he, to the untrained observer, appears to be a wholly owned subsidiary of the Saudi government.
3. Put General Motors Down
it is time for GM to take that trip to the vet
By any reasonable measure, GM, or at least its North American operation, is mortally wounded. The auto industry in the US is a mature one with very little room left to grow. The industry in general, and GM in particular, is saddled with excess and inefficient manufacturing capacity, extortionate union contracts which, for reasons known only to them, management agreed to, and enormous pension and health care liabilities to a pool of retirees which now outnumbers current employees.
At this juncture we’ve “loaned” GM $13.4 billion and GM’s CEO Rick Wagoner is asking for $16.6 billion more if it is to survive. Let’s not kid ourselves. Unlike the Chrysler bailout (for a much better analysis of what the 1979 bailout did and didn’t do, you should read James Hickel’s The Chrysler Bailout Bust), we’re not getting this money back and if $13.4 billion didn’t stop the hemorrhaging, then another $16.6 billion is just a larger band aid.
It is encouraging to see that many Republicans are coming to this conclusion, no matter how belatedly. Over the weekend, John McCain, Richard Shelby, and John Boehner all advocated letting GM go into bankruptcy.
While this is useful as a sign that reality is setting in, it is also akin to telling a fatally ill patient that he’s going to be fine. Chapter 11 is not going to help GM, or Chrysler for that matter, because their problem is not debt. Their problems, which predate the current economic downturn, are anemic sales and sky high overhead that can no longer be foisted off on consumers.
The only solution for GM is liquidation.
4. Omnibusted: $410,000,000,000.00 Omnibus Spending Bill Passes Senate
The bill passed the Senate by voice vote after 62-35 vote to defeat a GOP filibuster.
Let’s hear it for the Democratic Congress and President Obama, who have managed to spend nearly $1,200,000,000,000.00 before we even hit the Ides of March.
Robert Gibbs, Obama’s clean, articulate, incredibly skilled press secretary (/snark) said to day that this will help begin the process of getting America back onto a fiscally-responsible track. We haven’t yet heard from President Obama whether the 9,000+ earmarks in this bill qualify it as “a spending bill free of earmarks,” as he called the almost-entirely-pork “stimulus” bill on multiple occasions.
5. Pelosi: We Hate Spending Trillions of Your Money, But We Love America Enough to Spend Much More
House Liberals Have Already Decided on Stimulus II
“We have to keep the door open,” Pelosi said. “The word of the day is confidence. Confidence in our markets, confidence in lending, confidence in our financial institutions.”
Democrats leaned on the same group of economists they heard from before — including Allen Sinai, chief global economist at Decision Economics Inc.; Rebecca M. Blank, Robert S. Kerr senior fellow at the Brookings Institution; and Alan Blinder of Princeton University — to craft a stimulus bill that was $819 billion when it came out of the House before it was scaled back by Senate and House negotiators…
“What characterizes the current environment is a loss of faith,” Zandi said, noting that faith is part of what separates a recession from a depression.
This is Orwellian.
The Democrats have decided that it’s not possible that the stimulus won’t work/hasn’t worked. They know that it must; if it hasn’t already, it’s only because it wasn’t big enough. It can’t be because the whole strategy was wrong, or because it was only passed a month ago. It simply wasn’t big enough. Never mind that the Obama-Reid-Pelosi debt spending plan cost more than the Iraq War and the New Deal combined. It still wasn’t big enough.
And how do they know? They talked to the same team of advisers who sold them the first ’stimulus’ bill. A team of economists who advised borrowing and spending hundreds of billions now advise spending more. Wow. Who expected that?
But House Democrats don’t want to spend this money - heavens no! They’re just brave enough to listen to the advice of a bunch of hand-picked advisers, whose strategy they implemented just ahead of the largest stock market drop in decades. And much as they hate wasting your money, they’re brave enough to waste trillions more - as long as their advisers tell them they must.
One question for Ms. Pelosi: what level of debt would be too much to put on the backs of our children and grandchildren?
