November 21, 2009
Obama’s belief in government as the solve-all to America’s ills is unfortunate.
The current administration, with the support of the Democratically controlled Congress, has used its non-negotiable belief in the purity of government to expand itself at rates not seen since WWII.
Amongst other things, it has impeded labour rights by eliminating the right to secret ballot during union drives and it has encroached on the free markets by becoming America’s biggest corporation. All the while it is undertaking an overhaul of its health care system (look at the obscene size – more than 2,00o pages – of the health care bill in the picture below) that is going to cost trillions.
The Obama administration has done this by financing our future.
The massive deficits that President Obama is now running will be exacerbated by the following axis of evil (yes, Obama has one too – he just may not yet know it):
(1) reduced tax revenues from retiring baby boomers.
(2) increased government spending on social programs (medicaid, medicare and the current health care reforms amongst others), and
(3) a run up in interest rates (increasing the financing costs of Obama’s debt, leaving less money for his cherished government programs).
So, Obama is either going to have to reduce his spending, increase America’s taxes or, put off the inevitable to his successor by continuing to run these questionable, bloated and growing deficits.
For our sake, I hope he gets this under control quickly.
Douglas Holtz-Eakin has a short piece on this very topic in today’s Wall Street Journal. If you’re interested then visit this link for good read: The Coming Deficit Disaster.
July 6, 2009
I have had a long standing interest in following US politics and I found the 2008 US election to be one of the most exciting. While I don’t agree with much of the tonic President Obama is administering to the current economic illness, I think the two choices American’s had for president in 2008 were both exceptional candidates.
When Senator McCain announced Alaska Governor Sarah Palin as his nominee for vice president I was surprised. She wasn’t someone on any list of prospects I had seen. At the time I described that decision as McCain’s Hail Mary pass for the election. As we now know this didn’t pay off for him.
The position of US vice president is important primarly because the occupant of that office becomes president in the event that the incumbent becomes incapacitated. The vice president is also a member of the legislative branch of government in his or her capacity as president of the Senate. The Senate’s president casts the deciding vote in the event of a tie.
If I were a betting man I’d predict that John McCain will be alive in November 2012 – which means that, barring a catastrophe, it would have been highly doubtful that a VP Sarah Palin would haved needed to be called upon to replace McCain. Nonetheless, she would still have been ” a heart beat away from the presidency.”
The more I learn about her, the more pleased that she isn’t today’s vice president. Now she may over time become well equipped for the job of president, but she’s got a lot of work to do between now and then. This Vanity Fair article, which was linked form a recent Wall Street Journal on Palin, does a pretty good job of describing Palin, a bit of her history and, most concerning, her character.
Vanity Fair is not gospel when it comes to politics. So I take the writer’s comments with a grain of salt. Nonetheless, it’s a worthwhile read if you’re interested in the free world’s leadership.
December 19, 2008
In today’s Wall Street Journal the Bush government announced $18 billion in loans and non-voting warrants for the Detroit-three. See article at:
Bush is no longer a Commander in Chief, but is now “CEO in chief” (credit to a recent FORTUNE magazine article). I’m one who just does not believe government should in business. I don’t think they should run airlines, investment firms, train companies, shipping companies, own substantial real estate or compete with private industry.
Government has its place, it’s just not in business.
I’m also not a believer that one should reward failure. People respond to incentives (incentives and scarcity are two tenets of economics). If we create incentives for failure it will beget more failure. Incentives will work to curb behaviours for everyone from fat cat auto executives all the way down to babies and puppy dogs.
I recognize, as Bush states in his announcement, that we are in exceptional times. I also understand that letting these three employers disappear would create havoc. But why not let them go into bankruptcy? Why not force them through the process of purging of union contracts that see workers earning well over $100,000 just for being there and not even working? Why not force them to rethink their entire method of business in order to compete more favourably with tightly run and nimble competitors (Toyota, Volkswagen and Tata, for example).
There would be fallout, no doubt. Creditors would get cents on the dollar. Workers would be let go (but that $18 billion could go a long way toward retraining them or employing them in the government’s blessed infrastructure projects). Executives would get golden parachutes. But the short term pain would set the stage for a proud and profitable recovery.