Victor Davis Hanson: Obamafusion [Why is Wall Street Worried? — Let us count the ways]

pajamasmedia.com ^ | March 6, 2009 | Victor Davis Hanson

[Tolik]

Why is Wall Street Worried?—Let us count the ways.

1) The proverbial Wall Street capitalists believe that, with new federal income tax rates, the removal of FICA ceilings, increases in capital gains rates, decreases in deductions, and simultaneous tax raises, not only will Obama remove incentives for innovation and productivity, but that he does not seem to care about - or perhaps appreciate - the consequences?

2) On the spending side, investors see too many subsidies and entitlements that may Europeanize the populace and erode incentives, while creating so much debt that in the next decade, should interest rates rise, the federal budget will be consumed with servicing borrowing and entitlement obligations. A redistributive economy in which government ensures an equality of result is Wall Street’s worst nightmare. Debt can only be paid back by floating more foreign debt, issuing more US bonds at home, raising taxes, or printing money—all bad options in the mind of the investor.

3) Too many are beginning to think Obama is, well, a naïf—and hence dangerous. He chest-thumps speeches Geithner cannot deliver. He says we are near the Great Depression—but then, after the stimulus package passes, suddenly hypes future growth rates to suggest that we will be out a recession, soon after all? Add in all the talk of high-tax, Al-Gorist cap-in-trade, wind and solar, socialized medicine in the midst of a financial crisis, and at best Obama comes across as confused and herky-jerky, and at worse, clueless on the economy—as if a Chicago organizer is organizing a multi-trillion-dollar economy. Talking about ‘gyrations’ and confusion about profits and earnings, and offering ad hoc advice about investing do not restore authority.

4) Given the amount of debt the US is incurring (and the decades needed to pay it off), given the loose talk about the ‘rich’, and given the rumors about nationalization, investors are unsure whether the United States will remain a safe haven for investment, or even offer a climate for profit-making, since it would either be taxed to the point of seizure, or its beneficiaries would be culturally and socially demonized. Ultimately perhaps some will accept that as the price of doing business in a socialist US, but for now it creates doubt. This is not a defense of Wall Street (a year ago Richard Fuld and Robert Rubin were our Zeuses on Olympus who strutted like gods), simply a warning that we are going from excess to stasis, and the cure will be as bad as or worse than the disease.

5) Uncertainty. Who is now our Commerce Secretary? Which cowards is the Attorney General talking about? What did Geithner mean about pernicious oil and gas companies? What is with this Solis, and card check? How hard is it to ensure a Richardson or Daschle is clean? In other words, market watchers see after five weeks chaos, and think there is no sure and steady paradigm in which they can make careful business decisions and anticipate with some surety future risk.

So the perfect storm forms, and millions of individuals come to millions of identical conclusions: “Cut your losses with these guys, and get your cash out before it gets worse” rather than “Wow, what bargains! I gotta get in before the window of profit opportunity closes.”

But is there an alternative?

Do Republicans offer an antithesis? Can they explain the Bush deficits and take responsibility for them, as well as the Republican congressional creepiness from 2002-06 (Craig, Stevens, Cunningham, Foley, etc)? And most importantly, will they offer counterproposals—a stimulus much smaller, mixtures of loan guarantees, tax cuts, and (some) public works alone, coupled with spending caps as soon as GDP growth returns? Can they articulate how the market corrected, say, in 1980-3, without our government going socialist? Can we get a plan not merely to balance the budget, but to pay off the debt? If not, legitimate criticisms of Obama fall on deaf ears without some positive alternative.

Obamania

The rants of Sec. Geithner about oil and gas companies and global warming were quite unusual. Does he grasp that the transition to his solar and wind nirvana requires some rather tough hombres working tonight on rigs in the Gulf, and some brave engineers driving a Jeep in a Libya or out in the Kuwaiti desert looking for more oil, or some poor fellow freezing out in the Arctic Circle so that Mr. Geithner can be driven in his government limo to the hearings? Solar panels do not power the President’s chopper—yet. And Hillary flew to the Middle East on fossil fuel engines not via clipper ship.

Meanwhile, note that the campaign flip-flop positions of supporting off-shore drilling, nuclear, shale oil, and coal, are now insidiously back to the original positions of ‘no—maybe’.

The Utopian Ranters

Energy Secretary Chu ranted that we warmed up the planet so Californians must pay the price by seeing their farms dry up and blow away. Attorney General finger pointed and labeled us “cowards.” So why the attack on oil companies by Geithner—and why these lectures about our supposed racism and environmental crimes? What deep psychological need does it fulfill for a Holder, our first African-American AG, to blast us as cowardly racists, or why does an elite like Geithner think fossil fuels are not the linchpin that our economy still for a bit hinges upon? They all need to go back to work, ensure the debt is paid down, and quiet down the Harvard Yard sermons.

The Worst of Both Worlds

There is much talk about Obama merely returning to the tax rates of the Clinton administration. But that is misleading for two unfortunate reasons: (1) Clinton did not tamper with FICA ceilings and other deductions in addition to the income tax hikes; (2) he had spending limits imposed by the post 1994-Congress, so at least his income tax increases led to a balanced budget. But Obama is not only raising taxes far higher in aggregate than did Clinton with the present trillion-some spending hikes, but ensuring that we will still end up with astronomical deficits. So we get the tax hikes of Clinton—but without the balanced budgets; and we get far higher deficits than under Bush—but sans the tax cuts.

Fear of Government–Part Two.

Last week I wrote of my encounters with municipal garbage trucks spewing garbage, and city bus drivers doing rolling stops into the cross walk, one hand with cigarette, one hand with cell phone—as a reflection of the old Roman worry “Who will police the police?”

In a world of government employees there is no real redress of grievances, but real difficulty of accountability (what government employee fines the government-employed bus driver for violating state law concerning driving while on a cell phone?). My latest example was Thursday afternoon.

As I drove out of  the San Jose parking lot, of the six exit pay stations, only one was open. But at the window, a city tractor and a city pick-up were parked and idled blocking the exit. The drivers were both out and talking to the parking attendant about their “lost” ticket. After watching them all nonchalantly talk—joined by the other parking attendant with his booth closed on “break”—I got out and asked the four ‘what’s up’?

You know what followed—abuse, yelling, ‘how dare you question us!’, etc. A number of backed-up drivers like me now got out and were yelling back, and finally the city employees moved through and unblocked the exit while the idle attendant ran back to open a second station to handle the irate idling cars. Total elapsed time? 24 minutes of waiting. Imagine four employees blocking the only way out the San Jose parking lot, while cars line up, their drivers watching the four josh around and apparently laugh at the fee-paying customers.

I had nightmares that this is what the new 40% government GDP USA will look like by 2012—$20 trillion now in aggregate debt to ensure a nation of city-employees lounging around the toll booth, while cars line up and drivers cool their heels. No success, no failure, no stress, no calm—just endless existence.

[Tolik]

http://corner.nationalreview.com/post/?q=NDM1ZWY1ZmJhOWU4MjU1NzE5YTgxYzM0MTNkNGM1ZjM=

Anatomy of Vero Possumus   [Victor Davis Hanson]

It is odd that after five weeks we can pretty much see the next four years:

1) Gorge the Beast on the home front. Shock-and-awe, "We're in the Great Depression" hysteria stuns the country into buying into what will be a multi-trillion dollar borrowing commitment. Once the desired social agenda is in place (and it is now), then there will be no alternative but to raise taxes and return wealth to its proper owners. (This is a variant of the Reagan-era "starve the beast" concept of cutting taxes, and supposedly cuts of wasteful spending follow — but a far more successful variant since taxing a few "greedy" is always easier than cutting everyone's entitlements.)

2) Carterism abroad. The al-Arabiya interview, the Hamas billion-dollar stimulus (the Chinese loan us the billion to give them,) and the Russian rebuff on Iran (no "haggling" please) sum up the Enlightenment arrogance that soaring rhetoric, stated good intentions, occasional abandonment of principle, and demonstration of caring and sensitivity can win over almost anyone. Of course, that assumes that disputes don't reflect genuinely antithetical values, but simply miscommunication and misunderstanding — or unnecessary "Manichean" world views of wrong and right. We've been here before between 1977-1980, so how it will end is no mystery. (No wonder they sent back to the owners the Churchill bust; whether the Brits send back one of Stanley Baldwin or Clement Attlee remains to be seen.)

3) The passive-aggressive style. We will get utopian rhetoric about a new ethical bar, followed by the nominations of serial tax dodgers, lobbyists, and DC insiders. We will hear sermons about a new bipartisanship, followed by comical attacks on talk radio, and deeming "unpatriotic" any who resent the ramming through of the largest increase in debt in a half-century. And there will be vero possumus oratory about a new unity and brotherhood, as serial attacks on private-jetting and Super Bowl-partying "rich" deliberately conflate the mega-rich with the small business-people and professionals who make between $250,000 and $500,000 and provide most of the nation's jobs and the nation's income tax revenue — and therefore must be both gouged and demonized in the process.

All that is left for central casting is the cardigan sweater and the fist pounding on the desk.

03/03 01:51 PM

[Tolik]

Combined ping to 2 ping lists

Victor Davis Hanson Ping !         Let me know if you want in or out. Links:    FR Index of his articles:  http://www.freerepublic.com/focus/keyword?k=victordavishanson His website: http://victorhanson.com/ NRO archive: http://www.nationalreview.com/hanson/hanson-archive.asp Pajamasmedia:   http://victordavishanson.pajamasmedia.com/

Nailed It! Moral Clarity BUMP ! This ping list is not author-specific for articles I'd like to share. Some for the perfect moral clarity, some for provocative thoughts; or simply interesting articles I'd hate to miss myself. (I don't have to agree with the author all 100% to feel the need to share an article.) I will try not to abuse the ping list and not to annoy you too much, but on some days there is more of the good stuff that is worthy of attention. You are welcome to browse the list of truly exceptional articles I pinged to lately. Updated on February 10, 2009.  on  my page. You are welcome in or out, just freepmail me (and note which PING list you are talking about). Besides this one, I keep 2 separate PING lists for my favorite authors Victor Davis Hanson and Orson Scott Card.

[ClearCase_guy]

Do Republicans offer an antithesis?

We continue to be clueless. It's how we lost in 2006. It's how Bush got pummeled. It's how McCain lost. We don't fight back and explain why Republican ideas are better.

Personally, I think that if the GOP pushed hard for the Fair Tax we'd get a lot of press, a groundswell of support, and throw a harsh light on Obama's ridiculous approach to budgeting.

[Le Chien Rouge]

“1) The proverbial Wall Street capitalists believe that, with new federal income tax rates, the removal of FICA ceilings, increases in capital gains rates, decreases in deductions, and simultaneous tax raises, not only will Obama remove incentives for innovation and productivity, but that he does not seem to care about - or perhaps appreciate - the consequences?”

During the election campaign,Obama was questioned on whether these tax hikes would help the economy.

Obama said probably not, but it is what’s FAIR.

52% agreed with him.

God help us.

[scooby321]

If you can't set the record straight you get those numbers.

0 doesn't send a bill to congress, why because he will throw the Congress under the bus when it fails.

[Diana in Wisconsin]

“But is there an alternative?

Do Republicans offer an antithesis? Can they explain the Bush deficits and take responsibility for them, as well as the Republican congressional creepiness from 2002-06 (Craig, Stevens, Cunningham, Foley, etc)? And most importantly, will they offer counterproposals—a stimulus much smaller, mixtures of loan guarantees, tax cuts, and (some) public works alone, coupled with spending caps as soon as GDP growth returns? Can they articulate how the market corrected, say, in 1980-3, without our government going socialist? Can we get a plan not merely to balance the budget, but to pay off the debt? If not, legitimate criticisms of Obama fall on deaf ears without some positive alternative.”

Nails it. BUMP!

[GreyFriar]

Good info

[lonestar]

ping

[KeyLargo]

UNEMPLOYMENT FOR FEBRUARY

8.1 percent!

Looks like the country under B.O. is headed towards that of Michigan.

“The job losses across many industries pushed Michigan’s unemployment rate in January up to a quarter-century high of 11.6%. That rate marked a jump from December’s revised rate of 10.2%. The last time Michigan’s rate hit 11.6% was in May 1984.”

[Madame Dufarge]

No success, no failure, no stress, no calm—just endless existence.

Just the grayness of socialism. The symptoms are already present.

[Edgewood Pilot]

BTTT

[ProtectOurFreedom]

We don't fight back and explain why Republican ideas are better.

That is most certainly true for the vast herd of republicans -- they simply cannot articulate a vision of a stronger future based on conservative principles. Unfortunately, we need the once-in-a-generation truly great leader to break through and do that. Two come to mind - Reagan and Gingrich with the Contract with America. It was done before and let's pray to God Republicans can come to their senses and do it again.

[ClearCase_guy]

Nowadays, when someone like Palin comes on the scene, a lot of Republicans attack her. Or if Rush Limbaugh is attacked by the Democrats, the head of the RNC goes on TV and says, "You know, those Democrats have a point."

What did Palin and Limbaugh have in common? It's simple: Average people really like them. They have mass support and can attract cheering crowds.

The Republican Party needs to get its act together and stop attacking every Republican who stirs up mass support.

[nathanbedford]

In this series of articles by Victor David Hanson presented on this thread we have seen him deal with the economic implications of Obama's Marxism. It now remains to apply the same reasoning to Obama's social programs and to assess their combined impact on our liberty.

An American does not live by bread alone but by the words of the Bill of Rights.

Those words are about to be taken from him just as surely as his tax dollars. This administration threatens to censor talk radio, censor the Internet, deny workers the Australian ballot, dictate the appliances we might use, and tax our freedom of travel. It has encouraged or at least failed to discourage an ominous cult of personality which by the video evidence exploits and indoctrinates our youngest children. It has uttered plans to herd young adults into indoctrination camps. It has, both before and after the election, intimidated dissidents and targeted noncompliant media outlets. It has invaded the privacy of private citizens such as Joe The Plummer for propaganda ends. It condones the criminality of its own appointees who had cheated, for example, on their taxes while it promotes inquisitions into the political activities of the preceding administration. The administration has politicized the census for partisan purposes. It intimidates private businesses and threatens to sanction them for their spending decisions when their own personal perks have been far more profligate. They have colluded with the press in daily telephone conspiracies to propagandize the news.

On a a cultural level, as distinguished from a legal/constitution level, they have set one race against another, libeled American people- who elected an unqualified Negro President,-as cowards about race, set one class against another, stoked envy and jealousy in our midst, disincentivized striving for excellence, subsidized failure, undermined the rule of law, and lied repeatedly to the public. In virtually everything this administration has done on a legal, political, or cultural level this administration has sought to advance a plan for the radicalization of America laid down by Saul Alinsky in his book, Rules for Radicals.

The specter is not just one of economic misery but of moral and physical enslavement.

[JackOfVA]

52% agreed with him.

When 50% of the population pays zero income tax (granted some pay FICA tax, but still zero income tax) why is it surprising that someone who promises more "free stuff" starts with 50% support? The only thing missing is a Matthew Lesko advertisement asking if you have gotten your "free stuff" from President Zero yet.

Jack

[Homer_J_Simpson]

. . . at best Obama comes across as confused and herky-jerky, and at worse, clueless on the economy—as if a Chicago organizer is organizing a multi-trillion-dollar economy.

And worst yet - maybe zero's plan is working beautifully. A little ahead of schedule, even.

[FreedomPoster]

>>We don’t fight back and explain why Republican ideas are better.

The head of the RNC, Steele, didn’t even fight back when Republicans were characterized as Nazis by a CNN host.

We can’t let these things go unchallenged.

[Madame Dufarge]

An American does not live by bread alone but by the words of the Bill of Rights.

Those words are about to be taken from him just as surely as his tax dollars....

In my more optimistic moments, I'm not so sure that the taking will be quite as easy as the communists presume.

There's a foundation that's been constructed for America (eroded as it may have become) based on individual rights and liberty that's unique. And there seems to be a growing rage.

I'm hoping that there's still a Sleeping Giant just beginning to stir.

[nathanbedford]

I am trying to wake him up.