Tuesday, July 15, 2014

Potent Quotables XXXII

Female suffrage "works in fundamental opposition to the fundamental principles of our party ... the amendment was mothered by Susan B. Anthony and her kind of northern woman who were close associates of Thad Stevens and [Frederick] Douglas[s] and who sought to put the black heel on the white neck and place the Negro in power."

--Georgia State Senator J.J. Flynt (D), 1919.

Wednesday, May 28, 2014

The Economic History Lessons We Never Learned

From The Heritage Foundation:

Are conservatives going to allow liberals to rewrite the history of the Great Recession, just as they so successfully did in writing the fictitious account of the Great Depression, which now appears in almost every American history text?

The central message of former Obama Treasury Secretary Tim Geithner in his new book Stress Test, is that the bank bailouts and the Obama stimulus plan saved us from a second Great Depression. President Obama recites that same line in nearly every speech he delivers.

This is what we call a counterfactual–what might have happened if we hadn’t done what we did. The left loves counterfactuals, because - like “climate change”–they are impossible to refute. No one can say for certain what would have happened in some parallel universe.

But getting the story right on this episode of history is a critical issue for American economic policy going forward. We let the left write the history books on the Great Depression and it was an Aesops Fable. Most Americans, my 12-year-old included, are taught that FDR’s New Deal ended the Great Depression and moved millions of Americans out of misery.

Actually as Amity Shlaes shows in her classic book The Forgotten Man, and Burt Folsom in New Deal or Raw Deal nearly every government regulatory bureau and spending program conceive during the Great Depression only lengthened the misery and disrupted the normal healing powers of a free economy. Eight years after the New Deal was launched, the unemployment rate was still in double digits, and it was not until the start of World War II, when millions of young men were put in military uniform and the nation mobilized for a global war, that the Depression ended.

Which brings us to the Great Recession in 2008 and its aftermath. What is highly inconvenient for apologists for the Obama blitzkrieg of government programs and debt in 2009 and 2010 is that at the start of his presidency, Barack Obama laid out his own counterfactual of what would have happened without the deluge of federal spending and debt.

According to the White House’s own calculations, the economy would have been better off today if the government had done nothing, rather than borrow and spend $6 trillion. The unemployment rate WITHOUT the stimulus was expected to be 5 percent today. Instead it is 6.3 percent and in reality closer to 10 percent.

Another way to put this is that if the labor force had not declined AND we had the 5 percent unemployment rate Mr. Obama says we would have had without the stimulus, there would be at least 10 million more Americans working today.

So, considering we are still 10 million jobs short and $6 trillion further in debt, here is another counterfactual to ponder: How much faster would the economy be growing today if we didn’t have the carrying cost of $6 trillion in debt to contend with? Think if we had used this money to finance a 21st century tax reform or for transitioning Social Security to a fully funded personal account system that has real assets building up each year, not a vault full of IOUs.

All this is important to remember as Geithner takes his faux victory lap around the country patting himself on the back for pulling America out of the financial abyss.

President Obama’s first chief of staff, Rahm Emanuel, let the cat out of the bag in the earliest days of the new administration by saying the president should never let a crisis “go to waste.” This burst of honesty was an admission that the left used the financial crisis as an excuse to do all the things it had wanted to do for years—redistribute trillions of dollars to their voters, reregulate the economy, build massive green energy projects, refinance the Great Society welfare state, rescue the unions with auto bailouts, print money in the trillions, and when the economy fails to perform, blame it all on George W. Bush.

The real story of the financial crisis of 2008 was a massive real estate bubble facilitated by easy money from the Fed, government policies through entities such as Fannie Mae and Freddie Mac that underwrite risky mortgage loans with near 100 percent loan guarantees, a Congress and White House that as Barnie Frank once famously put it “rolled the dice” on the housing market, and private banks, investors and home owners who got caught up in a speculation frenzy. Then we asked the bad actors such as Barney Frank to fix it. And now we’re repeating all those inane mistakes once more, with government again guaranteeing 90 percent of new mortgages, many with recklessly low down payments.

Here we go again. When we let the left write the history books, we never ever seem to learn from our mistakes.

Stephen Moore is chief economist at the Heritage Foundation. A version of this first appeared in Investors Business Daily.

Tuesday, May 20, 2014

The slow decline of America since the Great Society


The slow decline of America since LBJ launched the Great Society


By George F. Will, Published: May 16



Standing on his presidential limousine, Lyndon Johnson, campaigning in Providence, R.I., in September 1964, bellowed through a bullhorn: “We’re in favor of a lot of things and we’re against mighty few.” This was a synopsis of what he had said four months earlier.

Fifty years ago this Thursday, at the University of Michigan, Johnson had proposed legislating into existence a Great Society. It would end poverty and racial injustice, “but that is just the beginning.” It would “rebuild the entire urban United States” while fending off “boredom and restlessness,” slaking “the hunger for community” and enhancing “the meaning of our lives” — all by assembling “the best thought and the broadest knowledge.”

In 1964, 76 percent of Americans trusted government to do the right thing “just about always or most of the time”; today, 19 percent do. The former number is one reason Johnson did so much; the latter is one consequence of his doing so.

Barry Goldwater, Johnson’s 1964 opponent who assumed that Americans would vote to have a third president in 14 months, suffered a landslide defeat. After voters rebuked FDR in 1938 for attempting to “pack” the Supreme Court, Republicans and Southern Democrats prevented any liberal legislating majority in Congress until 1965. That year, however, when 68 senators and 295 representatives were Democrats, Johnson was unfettered.

He remains, regarding government’s role, much the most consequential 20th-century president. Indeed, the American Enterprise Institute’s Nicholas Eberstadt, in his measured new booklet “The Great Society at Fifty: The Triumph and the Tragedy,” says LBJ, more than FDR, “profoundly recast the common understanding of the ends of governance.”

When Johnson became president in 1963, Social Security was America’s only nationwide social program. His programs and those they subsequently legitimated put the nation on the path to the present, in which changed social norms — dependency on government has been destigmatized — have changed America’s national character.

Between 1959 and 1966 — before the War on Poverty was implemented — the percentage of Americans living in poverty plunged by about one-third, from 22.4 to 14.7, slightly lower than in 2012. But, Eberstadt cautions, the poverty rate is “incorrigibly misleading” because government transfer payments have made income levels and consumption levels significantly different. Medicare, Medicaid, food stamps, disability payments, heating assistance and other entitlements have, Eberstadt says, made income “a poor predictor of spending power for lower-income groups.” Stark material deprivation is now rare:

“By 2011 . . . average per capita housing space for people in poverty was higher than the U.S. average for 1980. . . . [Many] appliances were more common in officially impoverished homes in 2011 than in the typical American home of 1980. . . . DVD players, personal computers, and home Internet access are now typical in them — amenities not even the richest U.S. households could avail themselves of at the start of the War on Poverty.”

But the institutionalization of anti-poverty policy has been, Eberstadt says carefully, “attended” by the dramatic spread of a “tangle of pathologies.” Daniel Patrick Moynihan coined that phrase in his 1965 report calling attention to family disintegration among African Americans. The tangle, which now ensnares all races and ethnicities, includes welfare dependency and “flight from work.”

Twenty-nine percent of Americans — about 47 percent of blacks and 48 percent of Hispanics — live in households receiving means-tested benefits. And “the proportion of men 20 and older who are employed has dramatically and almost steadily dropped since the start of the War on Poverty, falling from 80.6 percent in January 1964 to 67.6 percent 50 years later.” Because work — independence, self-reliance — is essential to the culture of freedom, ominous developments have coincided with Great Society policies:

For every adult man ages 20 to 64 who is between jobs and looking for work, more than three are neither working nor seeking work, a trend that began with the Great Society. And what Eberstadt calls “the earthquake that shook family structure in the era of expansive anti-poverty policies” has seen out-of-wedlock births increase from 7.7 percent in 1965 to more than 40 percent in 2012, including 72 percent of black babies.

LBJ’s starkly bifurcated legacy includes the triumphant Civil Rights Act of 1964 and Voting Rights Act of 1965 — and the tragic aftermath of much of his other works. Eberstadt asks: Is it “simply a coincidence” that male flight from work and family breakdown have coincided with Great Society policies, and that dependence on government is more widespread and perhaps more habitual than ever? Goldwater’s insistent 1964 question is increasingly pertinent: “What’s happening to this country of ours?”

Read more from George F. Will’s archive or follow him on Facebook.

© The Washington Post Company

Monday, May 19, 2014

How Harry Reid is ruining the Senate

The following is a transcript from the Journal Editorial Report which aired this past Saturday on the Fox News Channel. I happened to catch it at the gym in the middle of my 10-mile run. The "Journal" in the title of the show is The Wall Street Journal and the host is Paul Gigot. If you don't want to read it, the video is available here.

Harry Reid's Senate blockade


"Washington doesn't work" -- that was President Obama's message at a high-dollar fundraiser in Manhattan this week where he told attendees that, quote, "We have a party on the other side that has been captured by ideology that says 'no' to everything." But if the president wants to get to the true root of gridlock in Washington, he may also want to look at the Democratic-controlled Senate where Majority Leader Harry Reid has essentially shut down debate, refusing to allow a vote on all but nine -- that's right -- nine Republican amendments since last July and stopping several bipartisan bills cold.

For more, I'm joined by Wall Street Journal columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

So, Kim, why don't describe for us just what Harry Reid is doing.

KIM STRASSEL, WASHINGTON COLUMNIST: Look, here has been the long- standing deal in the Senate, Paul. The minority party would agree to move on to a bill, to gives the vote for cloture, to actually start debating a bill. The majority party, in return, would allow them to debate the bill and propose amendments. And everyone got something out of it. Harry Reid has turned that on his head. He does not want his members to have to vote for some of the amendments that Republicans are putting forward because they have bipartisan support and he and the White House don't like some of these provisions. So he's just stopped all amendments and stopped all debate. And the only way Republicans can fight back is to refuse, therefore, to move on the bill.

GIGOT: So you are saying that there are actual legislation moving through the Senate that has bipartisan majority support and would pass but Reid is saying, I don't know want to you vote on this amendment or that amendment and therefore, he's closing -- he's not letting the Senate work its will on these other pieces of legislation?

STRASSEL: That's right. You saw it this week. There was a bipartisan energy efficiency bill moving ahead. But Republicans were going to propose a number of amendments that have huge sweeping support on the Republican side and the Democratic side -- acceptance of the Keystone Pipeline, for instance, speeding natural gas exports. But the White House doesn't like those provisions. It was fearful those amendments would, in fact, pass, so Harry Reid simply didn't allow any of it to come up.

GIGOT: James, I covered the Senate for a long time. I think what -- and you were in Washington for many years, too. This is -- this is extraordinary. OK. This has not happened before. And I covered the Senate, whether it was Republicans in charge or Democrats in charge. The minority party was able to offer amendments. And part of their strategy to regain the majority was to offer amendments that put the majority in a tough spot, right? They take popular measures and they'd say we want to have a vote on this. And, hey, that's life. That's in a democracy. You've got to make tough votes.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yeah. He really changed the American legislature. You talked about how we used to work in Washington, observe it. In any standard textbook, it talks about how the House majority rules. But in the Senate, it is about deliberation and compromise and consensus.

GIGOT: Minority writes have been far more protected, I mean.

FREEMAN: That's right. And the idea is the Senate will be more deliberative and craft bills with input from all sides. He's really changed that. One, with getting rid of the filibuster last year, of course. And now we are talking about --

(CROSSTALK)

GIGOT: Nominees for -- presidential nominees.

FREEMAN: Presidential nominees. Now we are talking about limiting amendments. And it is a -- it is a different American legislature. It is a -- majority rules controlled by the dominant party. And I think that what is interesting now is it is basically about playing defense. Last year, it was about offense to get nominees to the executive branch approved or to the judicial branch. Now it is basically stopping popular items from getting a vote.

(CROSSTALK)

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Can I defend Harry Reid?

GIGOT: Yes.

(LAUGHTER)

And please, our viewers, please, send mail to Henninger.

(LAUGHTER)

HENNINGER: OK.

(LAUGHTER)

Now, as a result of my colleagues, the viewers of the "Journal Editorial Report" understand why gridlock exists in Washington.

GIGOT: But you love gridlock.

HENNINGER: Well, to some excellent, we love gridlock. We described three pieces of legislation, good for the country even. They are not going to happen.

(LAUGHTER)

Why aren't they going to happen? It's because the Democratic midterm strategy is, once again, to paint the Republicans as the party as "do nothing" and opposition. We just quoted the president of the United States giving that speech.

GIGOT: Right.

HENNINGER: Harry does this. The president goes out and tells the country. There is no bigger frustration out in the country than the fact that Washington isn't doing anything. And I think that the point of all of this is to discourage Republicans, to suppress the Republican vote, because they don't understand this Senate proceduralism and they are angry at the Senate leadership for not doing anything. So I think, given the hand they have been dealt, the Democrats are running a fairly good strategy.

GIGOT: Kim, do you, A, agree with that? And, B, what would you -- why haven't Republicans, if that's right if Dan is right, why haven't Republicans in the Senate fought back more to try to get Harry Reid to change that strategy?

STRASSEL: I think you are seeing them now starting to do it this week. They blocked two, again, very popular pieces of legislation. This is likely to get a lot of attention. The other one they blocked was a tax extender bill that has a lot you of support among the business community.

GIGOT: These are tax credits for businesses.

STRASSEL: Exactly. That the business community loves. They're routinely approved every year. So the fact they blocked it is going to get a lot of attention.

Dan is right. The procedural argument is harder for Republicans to make. But what you do see is more and more Republicans trying to paint Harry Reid as himself the face of the obstruction and making the very straightforward point if you want any of this bipartisan legislation to pass, you are going the have to elect a Republican Senate in the fall. And that's increasingly their campaign strategy and it has a better chance.

GIGOT: If you put -- if nothing happens, if even important legislation doesn't pass, that will raise the pressure on Reid to do something, won't it?

FREEMAN: The Democrats have to be careful here because they have a lot of incumbent, like Mary Landrieu of Louisiana. Kim has written about, she will have a problem because her basic argument to constituents is, look how influential I am in the Senate --

(CROSSTALK)

GIGOT: Because I'm the chairman of the Energy Committee.

FREEMAN: I'm the chairman of the Energy Committee and I'm pushing all of the issues you care about, like allowing energy production. If Reid keeps stopping that from happening, I don't know what her argument is.

GIGOT: All right. Thank you, all.

Sunday, April 20, 2014

#BecauseofHim Happy Easter!

"O death, where is thy sting? O grave, where is thy victory?"
—1 Corinthians 15:55

"And the angel answered and said unto the women, 'Fear not ye: for I know that ye seek Jesus, which was crucified. He is not here: for he is risen, as he said. Come, see the place where the Lord lay.'"
—Matthew 28:5-6

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