Politicians

New Deal Economics

A great op-ed piece by Amity Shlaes in the Wall Street Journal responding to Paul Krugman’s incessant campaigning on why New Deal spending works. Unfortunately our President-Elect seems to subscribe to Mr. Krugman’s brand of misguided economics.

Some highlights from the WSJ piece:

The New Deal is Mr. Obama’s context for the giant infrastructure plan his new team is developing. If he proposes FDR-style recovery programs, then it is useful to establish whether those original programs actually brought recovery. The answer is, they didn’t. New Deal spending provided jobs but did not get the country back to where it was before.

This reality shows most clearly in the data — everyone’s data. During the Depression the federal government did not survey unemployment routinely as it does today. But a young economist named Stanley Lebergott helped the Bureau of Labor Statistics in Washington compile systematic unemployment data for that key period. He counted up what he called “regular work” such as a job as a school teacher or a job in the private sector. He intentionally did not include temporary jobs in emergency programs — because to count a short-term, make-work project as a real job was to mask the anxiety of one who really didn’t have regular work with long-term prospects.

The result is what we today call the Lebergott/Bureau of Labor Statistics series. They show one man in four was unemployed when Roosevelt took office. They show joblessness overall always above the 14% line from 1931 to 1940. Six years into the New Deal and its programs to create jobs or help organized labor, two in 10 men were unemployed. Mr. Lebergott went on to become one of America’s premier economic historians at Wesleyan University. His data are what I cite. So do others, including our president-elect in the “60 Minutes” interview.

Later, Lee Ohanian of UCLA studied New Deal unemployment by the number of hours worked. His picture was similar to Mr. Lebergott’s. Even late in 1939, total hours worked by the adult population was down by a fifth from the 1929 level. To be sure, Michael Darby of UCLA has argued that make-work jobs should be counted. Even so, his chart shows that from 1931 to 1940, New Deal joblessness ranges as high as 16% (1934) but never gets below 9%. Nine percent or above is hardly a jobless target to which the Obama administration would aspire.

What kept the picture so dark so long? Deflation for one, but also the notion that government could engineer economic recovery by favoring the public sector at the expense of the private sector. New Dealers raised taxes again and again to fund spending. The New Dealers also insisted on higher wages when businesses could ill afford them. Roosevelt, for example, signed into law first his National Recovery Administration, whose codes forced businesses to pay an above-market minimum wage, and then the Wagner Act, which gave union workers more power.

As a result of such policy, pay for workers in the later 1930s was well above trend. Mr. Ohanian’s research documents this. High wages hurt corporate profits and therefore hiring. The unemployed stayed unemployed. “If you had a job you were all right” — the phrase we all heard as children about the Depression — really does capture the period.

Great stuff, and scary in terms of the plans our future President has for this country. Read the full article here.

Dems Wrong Yet Again – Temporary Stimulus Doesn’t Work

This all makes such perfect, logical sense. I can’t believe they refuse to see it.

From the Wall Street Journal . . . .

The incoming Obama administration and congressional Democrats are now considering a second fiscal stimulus package, estimated at more than $500 billion, to follow the Economic Stimulus Act of 2008. As they do, much can be learned by examining the first.

The major part of the first stimulus package was the $115 billion, temporary rebate payment program targeted to individuals and families that phased out as incomes rose. Most of the rebate checks were mailed or directly deposited during May, June and July.

The argument in favor of these temporary rebate payments was that they would increase consumption, stimulate aggregate demand, and thereby get the economy growing again. What were the results? The chart nearby reveals the answer.

The upper line shows disposable personal income through September. Disposable personal income is what households have left after paying taxes and receiving transfers from the government. The big blip is due to the rebate payments in May through July.

The lower line shows personal consumption expenditures by households. Observe that consumption shows no noticeable increase at the time of the rebate. Hence, by this simple measure, the rebate did little or nothing to stimulate consumption, overall aggregate demand, or the economy.

These results may seem surprising, but they are not. They correspond very closely to what basic economic theory tells us. According to the permanent-income theory of Milton Friedman, or the life-cycle theory of Franco Modigliani, temporary increases in income will not lead to significant increases in consumption. However, if increases are longer-term, as in the case of permanent tax cut, then consumption is increased, and by a significant amount.

After years of study and debate, theories based on the permanent-income model led many economists to conclude that discretionary fiscal policy actions, such as temporary rebates, are not a good policy tool. Rather, fiscal policy should focus on the “automatic stabilizers” (the tendency for tax revenues to decline in a recession and transfer payments such as unemployment compensation to increase in a recession), which are built into the tax-and-transfer system, and on more permanent fiscal changes that will positively affect the long-term growth of the economy.

Why did that consensus seem to break down during the public debates about the fiscal stimulus early this year? One reason may have been the apparent success of the rebate payments in 2001. However, those rebate payments were the first installment of more permanent, multiyear tax cuts passed that same year. Hence, they were not temporary.

Read the full article here.

Be Sure To Vote On 11/4! McCain Will Need Every One!

From Karl Rove in the WSJ…

Don’t Let the Polls Affect Your Vote
They were wrong in 2000 and 2004.

…On Monday, there were seven nationwide polls, with the candidates as close as three points in the Investors Business Daily/TIPP poll and as far apart as 10 points in Gallup’s “expanded” model. On Tuesday, the Gallup “traditional” model poll had the candidates separated by two points and the Pew poll had them separated by 15. On Wednesday, Battleground, Rasmussen and Gallup “traditional” model polls had the candidates separated by three points while Diageo/Hotline and Gallup “expanded” model polls had the spread at seven points.

Polls can reveal underlying or emerging trends and help campaigns decide where to focus. The danger is that commentators use them to declare a race over before the votes are in. This can demoralize the underdog’s supporters, depressing turnout. I know that from experience.

On election night in 2000 Al Hunt — then a columnist for this newspaper and a commentator on CNN — was the first TV talking head to erroneously declare that Florida’s polls had closed, when those in the Panhandle were open for another hour. Shortly before 8 p.m. Eastern Standard Time, Judy Woodruff said: “A big call to make. CNN announces that we call Florida in the Al Gore column.”

Mr. Hunt and Ms. Woodruff were not only wrong. What they did was harmful. We know, for example, that turnout in 2000 compared to 1996 improved more in states whose polls had closed by the time Ms. Woodruff all but declared the contest over. The data suggests that as many as 500,000 people in the Midwest and West didn’t bother to vote after the networks indicated Florida cinched the race for Mr. Gore.

I recall, too, the media’s screwup in 2004, when exit-polling data leaked in the afternoon. It showed President Bush losing Pennsylvania by 17 points, New Hampshire by 18, behind among white males in Florida, and projected South Carolina and Colorado too close to call. It looked like the GOP would be wiped out.

Bob Shrum famously became the first to congratulate Sen. John Kerry by addressing him as “President Kerry.” Commentators let the exit polls color their coverage for hours until their certainty was undone by actual vote tallies.

Polls have proliferated this year in part because it is much easier for journalists to devote the limited space in their papers or on TV to the horse-race aspect of the election rather than its substance. And I admit, I’ve aided and abetted this process.

…The last national poll that showed Mr. McCain ahead came out Sept. 25 and the 232 polls since then have all shown Mr. Obama leading. Only one time in the past 14 presidential elections has a candidate won the popular vote and the Electoral College after trailing in the Gallup Poll the week before the election: Ronald Reagan in 1980.

Mr. Rove is a former senior adviser and deputy chief of staff to President George W. Bush.

Shift from Capitalism to Socialism, European Style

From the WSJ…

The most basic explanation for why Barack Obama may win next Tuesday is that voters want economic deliverance. The standard fix for this in politics everywhere is to crowbar the old party out and patch in the other one. It is true as well that the historic nature of the nation’s first African-American candidacy would play a big role.

Push past the historic candidacy, however, and one sees something even larger at stake in this vote… The real “change” being put to a vote for the American people in 2008 is not simply a break from the economic policies of “the past eight years” but with the American economic philosophy of the past 200 years. This election is about a long-term change in America’s idea of itself.

I don’t agree with the argument that an Obama-Pelosi-Reid government is a one-off, that good old nonideological American pragmatism will temper their ambitions. Not true. With this election, the U.S. is at a philosophical tipping point.

The goal of Sen. Obama and the modern, “progressive” Democratic Party is to move the U.S. in the direction of Western Europe, the so-called German model and its “social market economy.” Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create “wealth” so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.

This would be a historic shift, one post-Vietnam Democrats have been trying to achieve since their failed fight with Ronald Reagan’s “Cowboy Capitalism.”

Of course Cowboy Capitalism built the country. More than any previous nation in history, the United States made its way forward on a 200-year wave of upwardly mobile, profit-seeking merchants, tradesmen, craftsmen and workers. They blew out of New England and New York, rolled across the wildernesses of the Central States, pushed across a tough Western frontier and banged into San Francisco and Los Angeles, leaving in their path city after city of vast wealth.

The U.S. emerged a superpower, and the tool of that ascent was simple — the pursuit of economic growth. Now China, India and Brazil, embracing high-growth Cowboy Capitalism, are doing what we did, only their cities are bigger.

Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, “Mothers, don’t let your babies grow up to be for-profit cowboys. It’s time to spread the wealth around.”

READ IT HERE, [an itemized list of European yoke-style government policies Obama-Reid-Pelosi will install.]

Hillary Backers: Obama’s Pattern of Fraud

There seems to be a pattern here…

From Newsmax this morning (FULL ARTICLE HERE)…

With accusations of voter registration fraud swirling as early voting begins in many states, some Hillary Clinton supporters are saying: “I told you so.”

Already in Iowa, the Obama campaign was breaking the rules, busing in supporters from neighboring states to vote illegally in the first contest in the primaries and physically intimidating Hillary supporters, they say.

Obama’s surprisingly strong win in Iowa, which defied all the polls, propelled his upstart candidacy to front-runner status. But Lynette Long, a Hillary supporter from Bethesda, Md., who has a long and respected academic career, believes Obama’s victory in Iowa and in 12 other caucus states was no miracle. “It was fraud,” she told Newsmax.

Long has spent several months studying the caucus and primary results.

“After studying the procedures and results from all 14 caucus states, interviewing dozens of witnesses, and reviewing hundreds of personal stories, my conclusion is that the Obama campaign willfully and intentionally defrauded the American public by systematically undermining the caucus process,” she said.

Sounds like ACORN.

In Hawaii, for example, the caucus organizers ran out of ballots, so Obama operatives created more from Post-its and scraps of paper and dumped them into ice cream buckets. “The caucuses ended up with more ballots than participants, a sure sign of voter fraud,” Long said.

In Nevada, Obama supporters upturned a wheelchair-bound woman who wanted to caucus for Hillary, flushed Clinton ballots down the toilets, and told union members they could vote only if their names were on the list of Obama supporters.

In Texas, more than 2,000 Clinton and Edwards supporters filed complaints with the state Democratic Party because of the massive fraud. The party acknowledged that the Obama campaign’s actions “amount to criminal violations” and ordered them to be reported to state and federal law enforcement, but nothing happened.

In caucus after caucus, Obama bused in supporters from out of state, intimidated elderly voters and women… Thanks to these and other strong-arm tactics, Obama won victories in all but one of the caucuses, even in states such as Maine where Hillary had been leading by double digits in the polls.

…Without these caucus wins, which Long and others claim were based on fraud, Clinton would be the Democrats’ nominee running against John McCain.

…Long has compiled many of these eyewitness reports from the 14 caucus states in a 98-page, single-spaced report and in an interactive Web site: www.caucusanalysis.org.

ACORN involvement

The Obama campaign recently admitted that it paid an affiliate of ACORN, the controversial community organizer that Obama represented in Chicago, more than $832,000 for “voter turnout” work during the primaries. The campaign initially claimed the money had been spent on “staging, sound and light” and “advance work.”

ACORN was known for its “intimidation tactics,” said independent scholar Stanley Kurtz, a senior fellow with the Ethics and Public Policy Center in Washington, D.C., who has researched Obama’s long-standing ties to the group.

Fully 30 percent of 1.3 million new voters ACORN claims to have registered this year are believed to be illegitimate.

Jeff, a precinct captain for Clinton from Davenport, Iowa, thought his caucus was in the bag for his candidate, until just minutes before the voting actually began.

“From 6-6:30 p.m., it appeared as I had expected. Young, old males, females, Hispanics, whites, gay and lesbian friends arriving. Very heavily for Ms. Clinton, a fair amount for Edwards and some stragglers for Obama,” he said.

That makeup corresponded to what he had witnessed from many precinct walks he had made through local neighborhoods.

“My mind began to feel victory for my lady,’ he said. “THEN: at 6:50 p.m., over 75 people of African-American descent came walking in, passed the tables and sat in the Obama section. I knew one of them from my canvassing. I knew another one who did not live in this precinct. And aside from four or five families that live on Hillandale Road, there are no other black people in this unusually white precinct. And one of those black couples were in my Hillary section,” he said.

Thanks to the last-minute influx of unknown Obama supporters, Obama won twice the number of delegates from the precinct as Hillary Clinton.

After it was over, “a very large bus was seen in the parking lot afterwards carrying these folks back” to Illinois, Jeff said.

Obama’s flagrant busing of out-of-state caucus participants from Illinois was so obvious that even Joe Biden — today his running mate, then his rival — pointed it out at the time.

At a campaign stop before the Jan. 3 caucus at the JJ Diner in Des Moines, Biden “said what we were all thinking when he got on stage and said, ‘Hello Iowa!’ and then turned to Barack’s crowd and shouted, ‘and Hello Chicago!’” another precinct captain for Hillary told Long.

Thanks to Illinois campaign workers bused across the border into Iowa, all the precincts in eastern Iowa went for Obama, guaranteeing his win in the caucuses, Long said.

Obama supporters were also bused into northeast Iowa from Omaha, Nebraska, where Obama campaign workers were seen handing out “i-pods and free stuff: T-shirts, clothes, shoes, and free meals” to students and people in homeless shelters,” according to eyewitness reports Long collected.

In Iowa City, red and white chartered buses with Illinois license plates arrived from Illinois packed with boisterous African-American high school students, who came to caucus for Obama in Iowa after being recruited by Obama campaign workers.

…In state after state, Hillary was leading Obama in the polls right up until the last minute, when Obama won a landslide victory in the caucuses.

The discrepancies between the polls and the caucus results were stunning, Long told Newsmax. The most flagrant example was Minnesota. A Minnesota Public Radio/Humphrey Institute poll just one week before the Feb. 5 caucus gave Hillary a 7-point lead over Obama, 40-33.

But when the Minnesota caucus results were counted, Obama won by a landslide, with 66.39 percent to just 32.23 percent for Hillary, giving him 48 delegates, compared with 24 for Clinton.

“No poll is that far off,” Long told Newsmax.

Similar disparities occurred in 13 of 14 caucus states.

In Texas alone, she says, there were more than 2,000 complaints from Hillary Clinton and John Edwards supporters of Obama’s strong-arm tactics.

One Hillary supporter, who appears in Gaston’s new film, “We Will Not Be Silenced,” says she received death threats from Obama supporters after they saw her address in an online video she made to document fraud during the Texas caucus. “People called me a whore and a skank,” she said.

John Siegel, El Paso Area Captain for Hillary, said, “Some people saw outright cheating. Other people just saw strong-arm tactics. I saw fraud.”

Another woman, who was not identified in the film, described the sign-in process. “You’re supposed to sign your names on these sheets. The sheets are supposed to be controlled, and passed out — this is kind of how you maintain order. None of that was done. The sheets were just flying all over the place. You could put in your own names. You could add your own sheets or anything. It was just filled with fraud.”

Other witnesses described how Obama supporters went through the crowds at the caucus telling Hillary supporters they could go home because their votes had been counted, when in fact no vote count had yet taken place.

“I couldn’t believe this was happening,” one woman said in the film. “I thought this only happened in Third World countries.”

On election day in Texas, Clinton campaign lawyer Lyn Utrecht issued a news release that the national media widely ignored.

“The campaign legal hot line has been flooded with calls containing specific accusations of irregularities and voter intimidation against the Obama campaign,” she wrote. “This activity is undemocratic, probably illegal, and reflects a wanton disregard for the caucus process.”

She identified 18 separate precincts where Obama operatives had removed voting packets before the Clinton voters could arrive, despite a written warning from the state party not to remove them.

The hot line also received numerous calls during the day that “the Obama campaign has taken over caucus sites and locked the doors, excluding Clinton campaign supporters from participating in the caucus,” she wrote.

“There are numerous instances of Obama supporters filing out precinct convention sign-in sheets during the day and submitting them as completed vote totals at caucus. This is expressly against the rules,” she added.

But no one seemed to care.

…In a letter to Rep. Lois Capps, a Clinton supporter calling himself “Pacific John,” described the fraud he had witnessed during the caucuses.

“On election night in El Paso, it became obvious that the Obama field campaign was designed to steal caucuses. Prior to that, it was impossible for me to imagine the level of attempted fraud and disruption we would see,” he wrote.

“We saw stolen precincts where Obama organizers fabricated counts, made false entries on sign-in sheets, suppressed delegate counts, and suppressed caucus voters. We saw patterns such as missing electronic access code sheets and precinct packets taken before the legal time, like elsewhere in the state. Obama volunteers illegally took convention materials state-wide, with attempts as early as 6:30 am.”

The story of how Obama stole the Democratic Party caucuses — and consequently, the Democratic Party nomination — is important not just because it prefigures potential voter fraud in the Nov. 4 presidential election, which is under way.

It’s important because it fits a pattern that Chicago journalists and a few national and international commentators have noticed in all of the elections Obama has won in his career.

NBC correspondent Martin Fletcher described Obama’s first election victory, for the Illinois state Senate, in a recent commentary that appeared in the London Telegraph.

“Mr. Obama won a seat in the state Senate in 1996 by the unorthodox means of having surrogates successfully challenge the hundreds of nomination signatures that candidates submit. His Democratic rivals, including Alice Palmer, the incumbent, were all disqualified,” Fletcher wrote.

Obama’s election to the U.S. Senate “was even more curious,” conservative columnist Tony Blankley wrote in The Washington Times.

Citing an account that appeared in The Times of London, Blankley described how Obama managed to squeeze out his main Democratic rival, Blair Hull, after divorce papers revealed allegations that Hull had allegedly made a death threat to his former wife.

Then in the general election, “lightning struck again,” Blankley wrote, when his Republican opponent, wealthy businessman Jack Ryan, was forced to withdraw in extremis after his divorce papers revealed details of his sexual life with his former wife.

Just weeks before the election, the Illinois Republican party called on Alan Keyes of Maryland to challenge Obama in the general election. Obama won a landslide victory.

“Mr. Obama’s elections are pregnant with the implications that he has so far gamed every office he has sought by underhanded and sordid means,” Blankley wrote, while “the American media has let these extraordinary events simply pass without significant comment.”

Hillary Clinton supporters, belatedly, now agree.

© 2008 Newsmax. All rights reserved.

U.S. Chamber of Commerce vs. Democrats

I think the chamber of Commerce knows a thing or two about how economies are built and destroyed. They clearly see a danger in letting the Democrats run away with the government. From the WSJ…

The nation’s largest business lobby, the U.S. Chamber of Commerce, has raised ire among Democratic leaders for pouring millions of dollars into an advertising push to prevent the party from winning dominance in the Senate next year…

The Chamber says it has raised enough money this year from corporations to spend about $35 million on the election, double its budget for House and Senate races in the 2006 election. The group is supporting pro-business candidates, almost exclusively Republicans in contested Senate races.

Business executives fear that Democrats, bouyed by heavy spending from organized labor, could gain enough muscle in the Senate to spark policies favoring increased unionization, higher taxes, more restrictions on trade and more regulation on the financial-services and housing sectors

The Chamber has spent $10 million on advertising on behalf of pro-business candidates in tight races since the end of August. No other single organization has spent more on Senate races, according to data collected by the Federal Election Commission. The Chamber says it will spend millions more in the final weeks of the campaign.

The Washington-based Chamber represents three million U.S. business and most of the thousands of local chambers of commerce from around the country. The lobbying federation says it doesn’t favor either party, but backs “pro-business candidates” from both. It has no legal obligation to be nonpartisan.

Overall, U.S. businesses tend to contribute similar amounts to Democrats and Republicans in their direct giving to candidates and political parties. Through Sept. 30, companies and their political action committees donated $129.6 million to Democrats and $132.6 million to Republicans.

The Chamber of Commerce is attempting to counteract another major font of funding and influence — the $300 million that organized labor will spend on campaigns during this election cycle, most of it aimed at persuading unionized workers to vote Democratic. Much of that money has gone directly to campaigns: Through Sept. 30, labor unions and their political action committees have given $52.3 million to Democrats and $4.8 million to Republicans, according to data compiled by the nonpartisan Center for Responsive Politics.

Yet another in a very long line of singularly decisionable proofs that Obama and the Democrats are wrong for America. Combine them and I’m shocked that Obama has any but the far-Left sideshow vote.

American fence-sitters are letting temporary emotion and hot-air speech-writing rule the election cycle, rather than substance, experience, and sound policy to our very painful downfall if Obama and and Democrat candidates win.

Labor Unions Prolonged the Depression

WSJ Excerpt…

By the mid-1930s, the U.S. economy appeared to be climbing out of the Great Depression. The Dow Jones Industrial Average (DJIA), which had bottomed out at 41 in 1932, was advancing. It increased 73% from the beginning of 1935 through the end of 1936, when it hit 180. The number of unemployed, 13 million in 1933, dropped to 9.5 million in 1935 and 7.6 million in 1936.

Then, in 1937, the DJIA plunged 33% in what is often called “a depression within a depression.” Joblessness skyrocketed.

A principal factor in the meltdown that year was the U.S. Supreme Court’s surprise 5-4 decision in early April to uphold the constitutionality of the Wagner Act, which had passed two years earlier. This measure, which is still the basis of our labor relations regime, authorized union officials to seek and obtain the power to act as the “exclusive” (that is, the monopoly) bargaining agent over all the front-line employees, including union nonmembers as well as members, in a unionized workplace.

As Amity Shlaes observed in her recent history of the Great Depression, “The Forgotten Man,” within a few months after the Wagner Act was upheld, industrial production began to plummet and “the jobs started to disappear, with unemployment moving back to 1931 levels,” even as the number of workers under union control was “growing astoundingly.”

Given the reality of unions in the workplace, the law meant that efficiency and profitability were compromised, by forcing employers to equally reward their most productive and least productive employees. Therefore subsequent wage increases for some workers led to widespread job losses.

Pre-Depression-era growth and prosperity did not return to the private sector until the early 1950s, when the spread of state right-to-work laws prohibiting forced union membership and dues greatly reduced the detrimental effects of the Wagner Act.

The U.S. has just experienced another stock market crash, and Barack Obama, the candidate now favored to be the next president, is in favor of what amounts to a new Wagner Act.

“I owe those unions,” Mr. Obama explained in his 2006 political memoir, “The Audacity of Hope.” “When their leaders call, I do my best to call them back right away. I don’t consider this corrupting in any way . . .”

John McCain voted against card-check legislation in 2007, and has pledged to veto such legislation as president. He also supports a national right-to-work law that would repeal all current federal labor law provisions authorizing forced union dues and fees. Unfortunately, his campaign has done little to alert the nation to the dangers of the card-check bill.

Before they cast their votes, the American people ought to be aware of Mr. Obama’s commitment to the passage of a new Wagner Act, and of what the economic consequences of such a law are almost certain to be.

Very much worth a read, READ IT HERE

WSJ: Obama Would Europeanize America

Another must read from the WSJ today…

The only organization with a worse rating than the Republican president is the Democratic Congress—14% approval, 75% disapproval. But there, too, the Democrats will gain strength. They are expected to increase their majority in the House, and current polling shows that in Senate races Democrats will increase their members from the current 51 (including two independents who caucus with the Democrats) to at least 57. They may even achieve the 60 votes needed to overcome a filibuster.

So where is the new Obama administration likely to take us? Seven things seem certain:

  • The U.S. military will withdraw from Iraq quickly and substantially, regardless of conditions on the ground or the obvious consequence of emboldening terrorists there and around the globe.
  • Protectionism will become our national trade policy; free trade agreements with other nations will be reduced and limited.
  • Income taxes will rise on middle- and upper-income people and businesses, and individuals will pay much higher Social Security taxes, all to carry out the new president’s goals of “spreading the wealth around.”
  • Federal government spending will substantially increase. The new Obama proposals come to more than $300 billion annually, for education, health care, energy, environmental and many other programs, in addition to whatever is needed to meet our economic challenges. Mr. Obama proposes more than a 10% annual spending growth increase, considerably higher than under the first President Bush (6.7%), Bill Clinton (3.3%) or George W. Bush (6.4%).
  • Federal regulation of the economy will expand, on everything from financial management companies to electricity generation and personal energy use.
  • The power of labor unions will substantially increase, beginning with repeal of secret ballot voting to decide on union representation.
  • Free speech will be curtailed through the reimposition of the Fairness Doctrine to limit the conservative talk radio that so irritates the liberal establishment.

These policy changes will be the beginning of the Europeanization of America. There will be many more public policy changes with similar goals—nationalized health care, Kyoto-like global-warming policies, and increased education regulation and spending.

Additional tax advantages for lower and middle income people will be enacted: a 10% mortgage tax credit that would average about $500 per household per year, a $4,000 tax credit for college tuition, a tax credit covering half of child-care expenses up to $6,000 per year, and even a $7,000 credit for purchase of a clean car.

More important, all but the clean car credit would be “refundable,” meaning people will get a check for them if they owe no taxes, which is simply a transfer of income from the government to individuals. In reality this is the beginning of a new series of entitlements for middle-class families, the longer-term effect of which will be to make those families more dependant on (and so more supportive of) larger government. The Tax Policy Center estimates that these refundable tax credits would cost the government $648 billion over 10 years.

These are Mr. Obama’s plans. Meanwhile, congressional Democrats would increase spending for their own interests and favorite programs. More important, the Congress will consider itself more important than a freshman president who has never held an executive position, so they will do what they want and he will have to go along with most of it.

READ IT HERE