Who, exactly, does Alan Blinder mean by “us” in that phrase, “helped keep us from falling into the abyss” ?
So the next time you see Chairman Bernanke, congratulate him for threading the needle. And the next time you see members of the House and Senate who voted for TARP and the stimulus package, give them a hug and say thank you for taking two monumentally tough votes that helped keep us from falling into the abyss.
I think of President Obama every time I see this how-to guide for parents: “How to explain to your child that you’re going to sell him.”
According to the English-Russia web site where I first saw it, it’s one of a series of fake book covers designed to ward off kibbitzers. You put your real book inside it. People will leave you alone to read in peace.
Unfortunately, in the case of President Obama it’s no joke. Like when he put pressure on German Chancellor Angela Merkel to agree to the euro bailout for Greece. I don’t know why he wanted to put his fingerprint on that act of selling people down the river, unless it was his way of writing the contents for the above book.
Here’s a good article explaining who he was helping and who is being sold to pay for it: Greek Myths and the Euro Tragedy by John H. Cochrane in the May 18 WSJ.
And here is one about the health care plan that he said would allow us to keep our existing health plans: No, You Can’t Keep Your Health Plan (by Scott Gottleib in the same issue of the WSJ). It’s like he was explaining to us, “Certainly you can keep walking. We’re going to break your kneecaps, but nobody’s going to stop you from trying.”
David H. Stevens of the U.S. Department and Urban Development wrote a letter to the WSJ (“FHA is Fulfilling Its Mission Well“) in which he responded to an August 11 editorial (“The Next Fannie Mae : Ginnie Mae and FHA are becoming $1 trillion subprime guarantors.“).
Stevens says he doesn’t like the comparison of the FHA to subprime lenders. He says the FHA operates entirely from its self-generated income.
Great! If everything he says is true, it means we don’t need an FHA, or at least not one backed by the U.S. Government. The organization can go private and compete on equal terms with other lenders. Wouldn’t that be a great way for Obama to get back at his critics who say the relationship between private industry and the government is a one-way street? He could give an example of an institution that’s back on its feet. Mission accomplished! Then people might trust him more the next time he wants to intrude into ownership of private business.
Alas, I went back and read not only Mr. Stevens letter but the original editorial. The editorial talked about how the HUD Inspector General has raised the alarm on growing default rates, and told of a likely need for for more tax dollars.
Who do we think is going to be taken to the woodshed by the Obama White House: Mr. Stevens or that HUD Inspector General?
One of the great thing about government ownership of the means of production is that development doesn’t need to be held back by environmental constraints. Take the nationalization of GM and Chrysler, for example. Now that a powerful government monopoly owns large portions of those two companies, they are able to walk away from responsibility for their polluted properties. (Detroit Free Press article here.) It’s not quite the same as what happened around the Sea of Azov, but there are significant similarities.
Ford, which is in a very different relationship to these same monopolists, still bears responsibility for its environmental problems. Dirty capitalists like that should expect to pay the price.
It’s not just the environment. It should also be pointed out that the same process of nationalization can also help us deal with our health care problems.
Some of the descriptions of the the cash-for-clunkers program make it sound like an attempt to show that trickle-down economics works, after all. The money goes from the government to dealers, not from government to customers. Dealers of course use the money (or rather, the hope of getting reimbursed) as a way to lower prices and compete for customers. How much of the discount actually ends up in consumer hands will be hard to say, given that the dealer price from which a discount is taken is a squishy concept at best. But it gives them something to work with, so probably a good share of it really is trickling down to consumers.
Next thing to do: Find out how the CBO scored this program. If one billion wasn’t enough and now they need three, does that mean Obama’s health care program is quickly going to be three times as expensive as originally planned, too?
If there is any doubt as to what federal bailout money is intended to purchase, the Obama administration’s behavior towards Sen. Jon Kyl of Arizona is telling us plainly: The money is intended to buy political obedience and to suppress dissent.
The same will be true of federal money spent to bail us out of health care difficulties.
This photo was taken last November 29 from the Marantette Bridge just outside of Mendon, Michigan. I often stop here for photos and a rest break when riding my bicycle through Mendon, but this time I had come by car, so it’s not really appropriate for The Spokesrider, where I’ve already posted several articles about this place.
I think of this place every time I read about South Carolina’s governor, Mark Sanford. He does not want to accept stimulus money — there are strings attached — but the left is threatening to make life very difficult for him if he doesn’t take it.
Maybe they’ve broken him by now. I have paid attention only to the headlines and haven’t kept up.
I also think of this place when I read about the Obama administration exerting enormous pressure on banks to accept bailouts, or when I read about how the Bush administration forced CEO Ken Lewis to accept government money to buy out Merrill Lynch (and forced him to keep quiet about some aspects of it).
Back in November 1833 the U.S. government was using similar tactics to finish the conquest of the Potawatomi Indians in Michigan, take their land, and evict them from Michigan. Some of the pressure tactics took place across the river, in the vicinity of the house behind the trees. That house was not built until a year or two later. In November 1833 this was part of the Nottawasepe Indian Reservation, and there was a log-cabin trading post here. It was a good place for a treaty meeting.
In September of that year there had been a treaty meeting in Chicago, by which the Potawatomi people of Illinois, Wisconsin, and Michigan had succumbed to pressure to accept money from the government to pay off their debts, and to agree to move to the west side of the Mississippi River. The Potawatomi people tried to resist and started out by saying they would be glad to accept the hospitality of the U.S. government but had no intention of selling land and moving west. It took several days to break them down. James Clifton describes what happened in his book, “The Prairie People” (2nd ed., page 239):
…Two days later, confusion was generated by many of the assembled okamek, who declared they were ignorant of just exactly which lands the government wanted. The good Democrat Porter, President Jackson’s personal appointee, then had sternly to remind the assembled Potawatomi that what Old Hickory wanted badly enough he was prone to take by force. Thereafter there was a suspect five-day gap in the journal of what transpired, of the sort that encourages attorneys to raise the issue of collusion and conspiracy. When the official record again begins on September 26, the treaty was already written and ready to be marked and certified. During the interim, Commissioners Porter and Owens … apparently had introduced their own secret weapons, Subagent Ardent Spirits, Colonel John Silver, and the Reverend Utmost Chicanery….
But the Commissioners apparently felt they had not sufficiently bought out the Nottawasepe Indians from Michigan. They came to the Marantette trading post a month later to conclude a supplemental agreement with the people here, and to make a payment that would go directly to them without going through the Illinois and Wisconsin leaders.
By that time, the Nottawasepe people were having second thoughts. They decided among themselves to keep their land and to refuse to accept the money. But the Commissioners eventually got one of the okamek to break and to sign. Once he signed, the others had to sign, too, or they would be left out of the treaty payments, which meant they would be marginalized and lose influence even among their own people.
In 1839, the year before they were finally evicted from Michigan, the man who had first broke and signed was murdered by one of those who had resented what he had done. But by then it was too late.
(The treaty documents about this affair are online here. Some of the information above is from the 1877 history of St. Joseph County. That publication says the supplemental treaty meeting took place in December 1833. But that account is based on what people remembered 40-some years later. I’m basing the early November date on court records from a lawsuit that resulted from a dispute over whiskey and brandy on the treaty grounds. I presume the information in the court documents was given under oath, and anyway, it’s a record much closer to the time of the actual event.)
Then as now, the government can tighten the screws really hard when it wants someone to take the money. Yesterday’s WSJ had an editorial (“Busting Bank of America“) that summarized how Ben Bernanke and Hank Paulson did it to Ken Lewis. If Mark Sanford or any of the Bank CEOs succeed in resisting similar pressure from the Obama administration, it can only be at the cost of becoming broken and ruined men, shunned by both friends and enemies for having behaved courageously.
Here’s a cute rhetorical trick. The Reuters headline says, “Obama leading U.S. ideological shift.”
That’s like putting out a headline back in the 400s saying, “Atilla the Hun leading European ideological shift.”
Or at the 1821 Treaty of Chicago, by which the United States provided a massive bailout to the Potawatomi Indians in exchange for their ceding most of their Michigan Territory: “Gov. Lewis Cass leading ideological shift in the Northwest.”
A less genteel way for Reuters to put it would be, “Obama leading shift to robber-baron capitalism.” Or, “Obama wages aggressive war of conquest.”
I presume it has happened in the movies if not in real life: The parents scrimp and save to send the kid to college. They work extra jobs on weekends and evenings so he can get through the pre-med program. Then, instead of making them proud, he drops out and rejects their ways by becoming a flower child.
Or it could happen in both the movies and in real life. Christopher McCandless graduated from college but rejected his parents’ materialistic ways. He gave the rest of his educational savings ($25K) to Oxfam and became a nomad, communing with nature and giving his parents no clue as to where he had gone. He wandered from California to South Dakota to Alaska, where he died of starvation and had the movie “Into the Wild” made from his story.
Some parents will be angry at an ungrateful child like that. Some will be manipulative and controlling. Some will handle it with loving resignation.
But what if the parent is Uncle Sam? In that case there will be no loving resignation. There WILL be anger and manipulation. The parent will NOT relinquish control, because the parent has the tax system and prison system on his side.
This type of parenthood is made clear from a letter in today’s WSJ, about doctors who are opting out of the system of government health care by refusing to take any Medicare patients. Henry A. Kolesnik from Tulsa, Oklahoma wrote:
I think it is a doctor’s right to opt out from Medicare by turning away patients, provided that he can prove that his education and training was not received at any insititution that was funded or subsized by taxpayer dollars.
Robert Kugel of Burlingame, California explains how it will be done:
If more physicians become like Marc Siegel and opt out of government insurance plans, look for state and federal governments to impose “opt-out fees” on the grounds that “it’s only fair.” Doctors will be charged a tax on their services (and pass it on to patients). The tax probably will start out at a modest level and then ratchet up to 100% or more, with the increases defended as a better alternative to rationing health care “for those that aren’t wealthy enough to pay the tax.” Such a tax will allow governments to deny that they are coercing doctors to stay in the system, while accomplishing that very goal.
And when Uncle Sam is the parent, he can also point out how kind he was to make it possible for the children to go to college in the first place — something the parents could never have done if he hadn’t taken their money to make it possible.
I continue be amazed at people who have so little sense of self-preservation as not to understand the implications of bank bailouts and manufacturing bailouts for health-care bailouts. But it was heartening to see in today’s WSJ that at least one person besides myself does understand. It was Bruce Anderson, a letter writer:
As a staunch conservative, I say hooray for President Obama and his plan to pick up GM’s warranty obligations. When people get a taste of standing in a post office-quality line to argue with a government clerk over whether their dead transmission was caused by wear and tear and, thus, is not covered by Mr. GoodGovernmentWrench, then they might get an inkling of what government-run health care is going to look like. Better to learn this lesson fighting over brake pads than over a kidney.