Tag Archives: obama

Obama Plan More Expensive Than WWII

Robert Higgs really puts it into perspective with this one.

It Would Be Cheaper to Fight World War II Again

Maybe it would be better if the government scrapped its present budget entirely, and provoked the Japanese to bomb Pearl Harbor again. Then we could fight World War II over. Yes, yes, many people would have to die, but the Pentagon could compensate these unfortunates by awarding each of them a posthumous Silver Star, and in a strictly financial sense, this plan would be much cheaper than what the government is doing now. The largest deficit of the war, incurred in fiscal year 1943, was, in today’s dollar’s, about $546 billion, or less than a third of the deficit the Obama regime (building on the Bush regime’s proligacy, to be sure) will run this year.

Helping Homeowners?

President Obama has pledged $75 billion to save 9 million homeowners from eviction.  Wow, who knew he was worth that much?

Of course, it’s not his money.  It will most likely consist of Federal Reserve Notes recently printed (or digitally created) by the Counterfeiter-in-Chief.  And the money isn’t going to homeowners.  It is going to be used to prop up banks, as well as support Fannie Mae and Freddie Mac (um, wasn’t it mortgage securitization by those GSEs that got us here in the first place?  Oh well, details, details.)  Even more disturbing is legislation in Congress that would allow bankruptcy judges to modify mortgage contracts.  Nothing will undermine the mortgage industry more than destroying the sanctity of private contracts.  Who is going to enter into a contract if they know that the government can alter the terms at its discretion?

So what would happen if the government allowed the market to cleanse itself of the mal-investment in the housing market; if the Obama adminstration did nothing.  Such a course of action would actually benefit homeowners with mortgages they can’t afford.  Of course, the big banks would suffer and that is exactly why the federal government will continue intervening in the market.

Homeowners can always walk away from their mortgages.  So, ultimately, it is the banks’ assets that we are talking about here.  For that reason, if they have no other choice, banks will work with borrowers to try to keep them at least paying something.  All the money that the government has showered on the banking industry has had the opposite effect.  The banks are shoring up their balance sheets and writing down their bad loans instead of trying to salvage their assets, i.e., instead of renegotiating their outstanding loans.

If some banks fail, they would be forced to liquidate their assets, including their home loans.  Whoever bought these loans would receive a bargain basement price and one that more accurately reflected market conditions.  Thus, their profit margains would be lower than the original lenders and they could pass those on to borrowers.  In addition, just like the original lenders, the new lenders would be much more interested in receiving some revenue than none, or, at least, none until the house could be resold.

Keep in mind that the overall price level of housing would drop if the government did not prop up the market.  The result would be that troubled borrowers would be in a much stronger negotiating position.  The lenders would be in the unenviable postion of renegotiating with the current borrowers at a lower price or with new borrowers at a much lower price.

Eventually the market will win.  Obama’s plan will not help homeowners, even those who own their homes outright.  Even if the government is able to prop up housing prices in nominal terms, the massive amount of money printing required will cause price inflation in every other sector as well.  Hence, nothing is gained, but the value of the dollar is destroyed.  Inflation hurts everyone, except those who receive the new money first.  Guess who that is?  Yep, the banking system.

Win, win for the banks.  Lose, lose for the rest of us.

Will Price Controls Return?

If they do, food shortages will follow. At least you’ll know to thank the “Messiah” when you’re eating Alpo for dinner. Obama reminds me of Nixon because of his blatant pandering and it’s because of that reason (combined with his Keynesian belief system) that I think he’d bring them back once inflation starts spiraling out of control. Dr. Robert Higgs gives us a nice history lesson on Tricky Dick’s misadventures with central planning.

Nothing illustrates Nixon’s political opportunism better than his imposition of mandatory controls over wages, prices, and rents. The President, who had served as a low-level functionary in the Office of Price Administration during World War II, had often expressed an aversion to price controls, which, he declared during the campaign of 1968, “can never be administered equitably and are not compatible with a free economy.” Yet, as James Reichley has observed, Nixon was “not prepared to take extreme political risks for the sake of economic dogmas.”

Having convinced himself that his defeat in the presidential election of 1960 had resulted from the Eisenhower administration’s failure to generate favorable macroeconomic conditions on the eve of the election, Nixon was determined not to suffer again from the same kind of mistake. His latent fears were sharply aroused in 1970 and 1971, when the new administration’s restrictive fiscal and monetary policies had a more immediate effect in raising the rate of unemployment than in reducing the rate of inflation. Click here for the full article…

No Transparency from Obama

Back on the campaign trail, candidate Barack Obama promised transparency in the legislative process. President Obama, on the other hand, now says that he will sign his new super-duper Keynesian “stimulus” bill on Monday, without benefit of transparency. He has pushed it through Congress without first publishing it online for the promised five days of citizen review. (Of course, not a single congressman has read the 11,000-page bill, either.)

Why must we not look before we leap? We are in a crisis, that’s why, an “emergency.”

But of course, it would take bigger brains than the president has in his trust — or we have on tap on this spheroid we call Earth — to demonstrate why the spending is needed a mere five days earlier than his transparency promise would allow. Five days won’t add an appreciable kick to any alleged stimulus.

How the hell can anyone know what is contained in an 11,000 page bill without reading it?  Just sign on the dotted line.  Drones that don’t require a salary could do that job.  The loudest criticism was for the members of the House and Senate that didn’t sign on the dotted line.  The whole process is ass backwards.

(read it all)

Now how did THAT happen?

Andrew Sullivan notes today that President Obama has made a second gesture of support for nonbelievers. Is it possible that the reason Obama wasn’t upset by Jeremiah Wright’s tirades is because he wasn’t actually listening to them? 

Perhaps there was more symbolism in Obama’s choice of Lincoln’s Bible for his inauguration than was originally assumed. Is it just possible that for the first time since Abraham Lincoln, that we actually have a nonbeliever living in the White House?

Obama: Trying to Prevent the Great Depression in Big Government

Buffalopundit tries on his blog today to convince his readers that Obama is Trying to Prevent a Depression. His only defense though is by the way of perpetuating the Big Lies of the current administration, (some of the same old big lies of the Bush administration) that “the only real option available in the current crisis” is “Keynesian spending”, that “most economists agree” it “is the only way you halt or slow the downward depression spiral throughout the economy” and that “if people aren’t spending money, someone [The government] has to, else we have a catastrophe.”

No doubt I can agree with Alan on his pointing out the hypocrisy of the big spending Republicans in the past 8 years and their support of Bush’s Keynesian stimulus plan, but he conveniently leaves out the substantial contributions of the Democrats to the economic collapse. Why?

As far as the current so-called stimulus plan goes, the only difference between the Keynesian Democrats and a Keynesian Republicans is that the Republicans want less Keynesianism instead of more and they want to halt the far left’s most insane socialist schemes in the plan. Alan says “they’re balking, picking nits at a minute percentage of the stimulus bill, claiming that certain items are “pork” or “waste”.” I say that all the spending in the bill is “pork” and “waste”, and the politicians now selectively use the word “stimulus” as a new Orwellian synonym for the “pork” and “waste” they like— effectively confounding the proles and making the greatest single heist of the 21st Century that more palatable.

Contrary to all the big lies of neocon and progressive economic stimulators, there is an alternative to the guaranteed failure of the crackpot economics of Keynesian pump priming. The MSM and other statists would rather let it rot down the memory hole because if enacted it would cause a Great Depression in Big Government—a depression they can’t tolerate, a depression that would benefit the rest of us immensely. We can learn this from America’s Greatest Depression Fighter President of the 20th Century.

This article is also posted at Free New York

Obama the Panderer

With all the comparisons of Obama to Lincoln or FDR floating around, I’d like to add which President I think Obama reminds me most of … Richard Nixon. Why? Because, to me, he appears to be a total panderer who will do whatever it takes to advance his political career regardless of principle or personal belief. As Richard Spencer writes:

Obama wants 80 to 90 senators to vote for his 800 kajillion stimulus package. He wants the ‘vangies (that most hated constituency of his left-liberal bases) to fawn over him. He wants everyone to just love him. Even the exceedingly bleak and dire picture of the world that Obama gestured towards in the opening chords of his speech was his attempt to make sure that no matter how badly the stimulus package fails, we’ll always say to ourselves, “Think of how much worse things would be without our president!”

To the Deniers of Obama being a Fraud

Raimondo on The Same Old Change:

We keep hearing Obama is making all these business-as-usual appointments in order to disarm his critics in advance when he starts taking those really bold initiatives, but doesn’t there come a point when that somewhat dubious strategy becomes suspiciously repetitive? Is he really appointing Dennis Ross just so he can usher in a new era of equal justice and sustained peace in the region? Come off it, you Obama-ites – there won’t be any change in our foreign policy, except for the worse. Just remember: you were warned.

It’s time to admit that Barry is a two-bit phony. Here’s even more evidence!

President-elect Barack Obama, who deliberately distanced himself from lobbyists during his campaign and his transition, appointed a defense contractor’s lobbyist Thursday to become his No. 2 official at the Defense Department. Obama acknowledged that his choice appeared to break with his self-imposed rules to keep lobbyists at arm’s length.