‘Moderate’ remorse?

I’ve been wondering lately if moderates who supported President Obama in November are starting to feel they made a mistake.

Before we start, there is certainly some evidence of confusion among moderates.   This article by David Brooks perhaps summarizes the situation best.  Moderates held out hope that Obama would be like them.  There is certainly some evidence that he has tried to be moderate in some areas, for example in foreign policy.  But his budget — and the ensuing cratering of the stock market — have made it clear that in terms of domestic policy Obama is no moderate.  You also may want to read this article, which discusses the shock among Wall Street Obama supporters, who are starting to getting some voter’s remorse.

So who cares about the stock market?  You don’t own that many stocks, so why should you care?.  The problem is that in the broadest terms, the stock market reflects confidence in the future of our economy.  If you study the ups and downs of the stock market since the 1920s, you will notice that the market is a broad indicator of faith in the future.  During the 1930s, the market stagnated because nobody saw a way out of the malaise.  During the 1940s and 1950s, as the country began to recover, the market went up, meaning we had much more confidence in our economy’s future.  During the 1970s, the market was mostly stagnant because there was a lot of pessimism.  The 1980s and 1990s were decades of renewal and optimism, at least as far as the market was concerned.  Recent history has shown the market to be stagnant, just like the 1930s and the 1970s.

My point is that the performance of the stock market is crucial as a way of understanding the overall faith in the future.    This affects you, even if you don’t own stocks because if you work in the private sector your job is dependent on people buying the stuff your company makes.  If there is no faith in the future of the economy, people will buy less of that stuff and you may lose your job.  If you work in the public sector, you are holding your job because other people are paying for your salary through their taxes.  If the economy tanks, that means lower tax receipts and budget cuts, which means you may lose your job.

So, the performance of the economy matters to everybody.  And the performance of the stock market matters to everybody because it reflects the likelihood that you may lose your job in the future even if you haven’t lost it yet.  (Not to mention, it affects the size of your 401k and other savings plans).  So, how has the stock market performed since Obama was elected? It has dropped nearly 40 percent.

Now, you may want to blame that all on Bush, and if you would like to do that, well, there’s probably not much I can say to change your mind, so I won’t even try.  If that is the way you think, however, I would ask you to to ask yourself when does Obama become responsible for the economy and when do we stop blaming Bush?  I believe we cannot blame Obama for the recent GDP drop, but we can blame him for the Dow continuing to tank.   And the reason is the incredibly leftist budget that Obama has unveiled.

But more importantly, what has happened to the economy so far this year?  As this Wall Street Journal editorial points out, the recession has gone on for 15 months (you can’t blame Obama for the recession) but there has been no attempt to restore confidence in the markets that new pro-growth measures are coming.

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year’s fourth quarter.

What is new is the unveiling of Mr. Obama’s agenda and his approach to governance. Every new President has a finite stock of capital — financial and political — to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his “stimulus” spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

My question to “moderates” who voted for Obama is:  is this what you really wanted?  Are you starting to wonder if the radical transformation of the size of government that the president is proposing is perhaps a bit too much?

Now, some disclosure:  I have always opposed Obama’s agenda precisely because I felt, based on studying economic history, that it would result in exactly what has happened:  lack of faith in the future of the economy.

I would also like to point out that if you are a moderate, you could make the argument that things probably wouldn’t have been better if McCain had won.  There still might have been a negative reaction on Wall Street, and there still would have been job losses and there still would have been a drop in the markets.  This claim ignores an important point, however:  McCain, with all his many, many, MANY faults would not have proposed the radical transformation of the economy being proposed by President Obama.  And this DOES matter because it affects Wall Street and the stock market and future prospects for the economy.

So, all you moderate Obama supporters, what do you think?  Are you happy with the president so far?  Or are you beginning to wonder if you made a big mistake?

Reminders for people who will comment here:  this is a contentious issue, but if you’d like to post here you will be polite and collegial.   Mean-spirited comments will be deleted.

This entry was posted in General by Geoff B.. Bookmark the permalink.

About Geoff B.

Geoff B graduated from Stanford University (class of 1985) and worked in journalism for several years until about 1992, when he took up his second career in telecommunications sales. He has held many callings in the Church, but his favorite calling is father and husband. Geoff is active in martial arts and loves hiking and skiing. Geoff has five children and lives in Colorado.

71 thoughts on “‘Moderate’ remorse?

  1. Geoff,
    I consider myself moderate, with a slight left lean on social issues and slight right lean on fiscal issues. And frankly, I’m still ecstatic with Obama.

    Two things to respond to the Dow’s drops–of course it’s still dropping. It would be if McCain were president, it would be if Bush were still president, it would be if Reagan came back from the dead and claimed a third presidency. It was bubbled up way beyond where it should have been, and had to deflate. Right now investors are scrambling to figure out what the economy is actually worth.

    In addition, the stock market is a horrible judge of long-term value. It reacts to news with an eye toward the short-term. And the short-term is going to hurt. It has to hurt to get the economy healthy. (In fact, that’s one of the reasons I don’t like the proposed bailouts of homeowners–the decline in value is going to come, and all we can do is cushion it, not prevent it.) Are Obama’s proposals good for the long-term? I believe so. So I don’t see the stock market’s reaction as relevant to the timeframe Obama is (hopefully) addressing.

    But yes, things will be bad for a while until they get better. The stock market is absolutely right about that.

  2. Sam B and David H, thanks for these well-reasoned and polite responses. This is the kind of discussion I would like to promote.

  3. Geoff, I was pleasantly surprised in the fall at Obama’s actions. I’ve been unpleasantly surprised at his first month. Do I have buyers remorse? Not really since I think McCain with his tendency to radically reverse himself every couple of days would be even worse than Obama. Put an other way Obama’s failures are radicalized in McCain.

    Sadly we just didn’t have a good choice on the Republican side. It was a choice between the lesser of two evils. A point I made at the time.

  4. Sam, I’d actually disagree with your analysis of the stock market. It is inherently future looking for the mid-term time period. But that’s exactly the time period Obama is working towards. If Obama has written off the short term and mid term economy and is only worried about the long term future then that is horrible. (I don’t think he has, but he’s providing no assurance or stability to the economy which is making things worse)

  5. If you want proof that the stock market is all about future expectations of the economy, take a look at the recent performance of stocks in weapons-related companies, which are booming:


    People buy stocks based on future expected returns from the company. Right now, people think most traditional stocks are worthless because the economy will not recover anytime soon. In the meantime, people are buying a lot of guns because of fear. This is an incredibly dangerous combination.

  6. The stock market is a discounting mechanism so it will likely recover before the real economy or before lagging indicators like unemployment. What it likes least is uncertainty. Right now the biggest uncertainty is the fate of some of the big banks, and, unfortunately, Timothy Geithner is not inspiring a lot of confidence with his deer-in-the-headlights look that he knows what to do about the problem.

    During my years as a professional trader I encountered plenty of scoundrels and fools, and, based on my acquaintances, I never had a particularly high opinion of the abilities in general of that now-extinct species, the investment banker. Even so, I was staggered by the incompetence and poor judgment on display over the past few years, and sad to see the extent to which the market fundamentalism I referenced in the other thread was for many, simply a screen for fraud, waste, abuse, and self-dealing.

    The mis-allocation of resources is still unwinding and we may overshoot to the downside. Unfortunately, for many years the country gorged itself with debt and household balance sheets need repair. The savings rate is dramatically increasing now which is good for long term fiscal health, but is putting the damper on consumer spending.

    In Reagan’s time, the problem was inflation, which Volcker fought with interest rate hikes. Now we face the even more insidious specter of deflation, with rates already at historic lows. Fiscal stimulus is the only solution (and an imperfect one, as most people used their most recent stimulus checks to pay down debt). I agree that there should have been more public works spending in the recent stimulus bill, but the stimulus spending that has the most immediate effect is things like extending unemployment benefits and extra aid to state and local governments to preserve jobs that otherwise would be lost.

  7. Clark,
    In general, I don’t see that. I see stock prices as far too dependant on the latest quarterly reports, the latest news from a company. If the market were really efficient, it would have already priced those announcements into the stock price. Furthermore, if it were really looking to the mid- to long-term results, a company’s meeting its quarterly or annual targets would have, at most, a mild effect on stock price.

    That’s not to say that stock market valuation doesn’t tell us anything about a company’s long-term prospects; I just don’t think it tells us much. What a company needs to do to make its earnings this quarter is often (though clearly not always) different than what it needs to do over the long term.

    Moreover, I don’t think Obama has written off the short-term (although I wouldn’t mind if he did); I do think he is willing to accept that some things that will hurt in the short-term will ultimately strengthen the economy in the long-term.

    There are, of course, things left untouched that I would rather be touched (I recognize that it’s politically unviable, but eliminating the mortgage deduction and the tax-free treatment of the first $500,000 (for married couples) of gain on a house would do a lot to prevent another housing speculative bubble) and is undoubtedly doing things that I would rather not be done (like providing mortgage relief for some group of in-risk-of-default mortgagees). Still, overall, I like the openness and direction of what he’s doing.

  8. Right now, people think most traditional stocks are worthless because the economy will not recover anytime soon. In the meantime, people are buying a lot of guns because of fear. This is an incredibly dangerous combination.

    I suspect weapons related companies are doing well because they see Obama ramping up in Afghanistan. (Which I think may become Obama’s Iraq) There is a ramp up in small weapons purchases but that’s because there is a justifiable concern that Obama will try and restrict people right to own guns. But seeing that as “an incredibly dangerous combination” seems silly. Most of the people buying guns are doing it more out of a kind of identity politics or sport. That is they are buying now because they have to buy enough to last the Obama presidency. The same thing happened before Clinton’s crime bill. (I bought up a lot myself)

    Sam, I think it clear that stocks are falling right now because of uncertainty. I think the stock market could recover more if they knew what Obama and Treasury were going to do. They don’t. Add in the info about AIG and that put fear about the whole industry which is why stocks went down across the board.

    While I’m not one of those who thinks the market has some remarkable wisdom neither am I one willing to simply discount it.

  9. I agree with Clark’s first comments, above — a McCain presidency would be doing the same dumb things that Obama is doing, and what Bush did before him: Spend like crazy and deflate the currency to cushion the blow.

    I didn’t vote for Obama, but I was at least looking forward to a pullout from Iraq and a reversal of the “state secrets defense” in the courtroom. Now even both of those have disappeared.

    Newsflash: Politician reneges on campaign promises! Film at eleven!

  10. Clark,
    I’m with you on that much–stocks are falling because of uncertainty. Part of that uncertainty is what the Obama administration will do. Part of it is what will show up on balance sheets next. Part of it is uncertainty over when (or if) Americans will consume again. And part is uncertainty over what the value of the companies is. Certainly the uncertainty over the next move by the administration is helping keep stocks down, but even if an intricately-detailed plan were laid out today, I doubt the stock market would go up very quickly; I suspect all it would do would be to smooth out the peaks and valleys.

  11. Geoff, I don’t pretend to know a thing about the stock market or its role in the overall economy. And while I get your point and tend to agree with it, I think you’re using the wrong vehicle to drive it home.

    My concern is less with the stock market and more with Obama’s spending and the fundamental changes to our economic philosophy he’s proposing. The Lefties here may spurn at this statement, but like it or not we are passengers on the Concord Jet to socialism.

    I have several friends and relatives who voted for Obama because they “wanted to be part of history.” They didn’t listen to my warnings about Obama because they were too caught up in the glitz and glamor. Most of them now are shocked by what Obama has done/proposed in just his first month and have totally backpedaled. They’re finally seeing his strawman tactics and picking up on his sleight of hand.

    I’m glad to see them coming to their senses, but it’s so frustrating to see it happen after the fact, after they “made history.” I can only hope Obama faces a moderate backlash.

  12. Since Bill Clinton took all the credit for the economies recovery when he was elected, I think it is only fair that Obama get all the blame for the economy’s woes since he was elected. It only seems fair, even though I personally think it didn’t make any difference who was elected President, the economy would still have continued tanking.

  13. Mike Parker, I support Obama’s position on Iraq, but I find it ironic that all of the Bush-haters on the Iraq issue have fallen strangely silent now that Obama has adopted a strategy pretty similar to what McCain would have adopted — while at the same time expanding our role in Afghanistan. I think this supports my theory that if there had been a Democratic president in 2002-2003, he would have done pretty much what Bush did.

  14. Ditto what Sam B. said. As a moderate who voted for Obama–I feel exactly the same way. I find it ludicrous to blame the woes of the economy squarely on either President.

  15. Geoff,

    Here’s my take.

    Like you, I think the U.S. would have take the foreign policy actions it did over the past 6-7 years regardless of who was president. The folks on the left and the Ron Paul Righties got a lot of mileage out of casting GWB as a uniquely evil warmonger, etc., but I think they’re mistaken. A different president from another party might have made some changes to the detail around the edges, but the overall picture wouldn’t change much. The overblown rhetoric just reveals a misunderstanding about how little the executive really can do.

    I think many conservative people are now making the same mistake that left people did 6 years ago. They think they are seeing something unique, and the ascribe it to a man and an ideology. I have very little doubt that if GWB were still president, a very similar stimulus package would now be in place. Conservative people may not want to believe that, but just consider: One year ago, who among the loyal Republican base would have thought that Bush would have pushed for and approved the Bailout package last Fall? Very few, I’m guessing, and yet he did it.

  16. Mmiles and Sam B (and others who may want to chime in), let me ask you to engage in a thought experiment. Clark may be able to add some thoughts because he has a small business. I have owned several small businesses, so I think I can comment on this with some authority.

    It is Jan. 2009. Obama is about to be inaugurated. The country, including you, small business owner, are expecting Obama to announce some changes in the economy, but you’re not sure what they will be. In addition, you don’t know what kind of budget Obama would propose.

    Imagine that instead of what we got — a “stimulus” bill filled with pork and very little stimulus and a budget that massively increases the size of government — we got the following from President Obama in the last six weeks:

    –We need to keep the Bush tax cuts because you can’t announce tax increases during a recession. Any tax increases need to wait until we get through these challenging economic time.
    –All “stimulus” moneys will be focused on specific, targeted areas where money must be spent in the next 18 months. Obama says he will veto any bill that does not include this provision.
    –Any new large government program must wait until the economy recovers.
    –The Obama administration’s goal will be to decrease overall government spending by 2011 after a temporary stimulus.

    Now, I can tell you as a small business owner who has hired and fired people that that kind of announcement would create a completely different environment for the stock market and for employment and future investment prospects than what you are seeing today.

    People react in a rational manner, for the most part. If you are a small business owner and you see that taxes are likely to go up, it is a disincentive for you to invest in your business and try to grow it. You take your profits and you put them in money market accounts or you buy gold. You don’t go out and hire new people and try to grow your business.

    What we are seeing today is a direct reaction to the anti-business agenda of the Obama administration. It has taken a recession and deepened and lengthened it by adopting anti-growth policies at exactly the wrong time.

    You cannot blame the existing recession on Obama, and you can’t blame events that took place in 2008 on him either.

    But you can blame the fact that the malaise is deepening squarely on our current president. That’s just how things work.

  17. Mark Brown, I don’t disagree with you that if McCain had been elected, for example, we would have gotten some kind of stimulus package and a budget that had some of the same elements as Obama’s plan. But we would not have gotten the announcement of tax increases in the middle of a recession and we would not have gotten a lot of the anti-business rhetoric and we would have gotten a lot less pork. Would that be enough to restore confidence? I don’t know, but it would have been better than what we have now, which is business confidence in a free fall.

  18. I guess we see McCain differently, Geoff. I see him as opportunistic and incompetent. I would not be willing to bet much money at all that he would not have actually made things even worse than they are.

  19. For the record, while I supported the war at the time it was announced, I think it ludicrous to assume an other President would have handled Iraq the way Bush did.

  20. Geoff,
    In general, I disagree with your points 1 and 3. I think the Bush tax cuts were a bad idea when they happened (as they were combined with spending increases, rather than decreases), and should be rolled back earlier than their expiration in 2011. We either have to keep borrowing money or take a certain amount of pain. I’d rather get the pain (including tax increases) upfront. And, in my non-economist understanding, government spending (including increased government programs) should function as part of a Keyesnian recovery.

    I certainly agree with your point 2–the money does need to go to places where it will be spent in the short-term; I like your 18-month timeframe.

    As to your fourth point, I understand where you’re coming from, as a small-government conservative. I don’t see less government spending as a positive in and of itself. It certainly is beneficial if the spending cut is pork. But if, instead, the adminstration were to cut valuable programs (in my opinion, examples of good government spending include funding education, welfare, and the military–the levels at which we fund them are probably out of whack, but I wouldn’t want to throw the baby out, too).

    I have to admit that I don’t understand what you see as Obama’s anti-business stances. The higher tax rate? He’s raising rates (actually, that’s not true–he’s letting Bush’s tax cuts expire on their own terms) on individuals, but I’m not aware of plans to raise the corporate tax rate. He certainly is advocating more regulation of certain industries, but I would argue that such increased regulation has proven itself necessary.

    I’m done for today–I’m hoping to get out of the office soon. But thanks for a forum that, so far, has remained (for the most part) both civil and interesting.

  21. Clark,

    Ludicrous or not, I don’t think there is any question that we would have entered Iraq. And once we were in, the range of available, doable options became very narrow. As Obama is now finding out.

  22. Sam B, I hope you come back tomorrow and read this article:


    Let me provide you with another thought experiment regarding the tax increases on those making more than $250k per year. That seems like a lot of money — I make a good living but I won’t make $250k this year.

    But let’s say you are a lawyer with a small practice. Let’s say you bill 30 hours a week at $300/hour. That’s $9000 a week times 50 weeks a year — you’re pulling in $450k a year. Well, you get to deduct your business expenses, and after you do that your actual taxable income is closer to $300k per year. Certainly a good living by any standard.

    Now let’s say you have a secretary and a paralegal working for you part-time. You pay those out of the $450k. Now, let’s say you are looking at a huge tax increase for those making over $250k. What will you do?

    Well, I have actually been in that situation, and what you do is you make sure your taxable income does not exceed $249,999 each year. Because the extra taxes you would pay is not worth the extra work involved. And perhaps this means you have to fire the part-time paralegal. And it means you work less.

    Now, you may love the extra time with your family, but your working less has affects on the economy if there are thousands upon thousands of businesses doing the same thing. Our theoretical lawyer has just fired one part-time paralegal. Well, what if thousands of businesses fire thousands of part-time people because of the disincentive to work?

    I hope you can see that these tax increases — while they may seem “fair” to you — have actual effects that are devastating to tens of thousands of jobs and have ripple effects throughout the economy. So, if our theoretical lawyer is working less, he/she won’t buy the new Mercedes, won’t buy the condo in Vail, won’t buy the new Rolex. This means the Mercedes dealership loses out, the real estate agent in Vail loses out and the Rolex salesman loses out. Well, nobody sheds any tears for them, but what about the people THEY employ and on and on. See what I’m getting at?

  23. Geoff, I completely disagree with your characterization of the stimulus bill, that you present not as your opinion but as an objective fact:

    Imagine that instead of what we got — a “stimulus” bill filled with pork and very little stimulus

    I guess one person’s “pork” is another person’s stimulus. A lot of economists thought that massive govt spending was exactly what we needed for stimulus. You may disagree, but that’s your opinion. It was a sincere stimulus bill, no scare quotes needed, whether it was the one you would have written or not. Let’s approach policy differences like adults.

    Also, seems a bit odd to write a whole post wondering how moderates feel about Obama without looking at a single poll. I get that you were trying to solicit first-hand narrative accounts. But still. Any poll will show you that moderates like Obama about as much as they did when he was elected, though not as stratospherically high as the few days around the inauguration. Sampling:

    President Barack Obama’s popularity among Republicans is on the rise following his nationally televised address to Congress, a poll says.


    Gallup daily tracking

  24. Sister blah, thanks for the Gallup information. Interesting. Some poll results you may be interested in compare Obama to other presidents at this point in their presidencies.


    Two points: Obama’s approval ratings are decreasing and his disapproval ratings are increasing, and — horrors — he is actually doing worse at this point in his presidency than the much-hated W!

    As for the difference between stimulus and pork, there actually is a big difference. Again, let’s do a thought experiment: if all government spending were good for stimulating the economy, why don’t we spend 10 times as much as we do now? Well, the easy answer is of course the deficit, but the more important answer is that it depends what you spend money on.

    The point of stimulus is to inject money into areas where you get immediate return. So, you say that the money should be spent on road projects, and you get the money to contractors so they go out and hire people to go build roads. That clearly IS stimulus money, and I agree with that part of the stimulus bill.

    Here’s a partial list of stuff that is NOT stimulus but instead is pork:


    Let me take Amtrak as an example. Amtrak is a huge money-loser. The only reason it is around is because of government funding. What should be happening in a free economy is that it be allowed to go out of business and be replaced either by buses or airplanes or toll roads or — imagine that — a train system that actually made money! In the end, this will employ more people because a more efficient business will grow, hire more people and expand. A money-losing business supported by the government is a waste for everybody, but especially for taxpayers forced to pay for it in a “stimulus bill.”

  25. One problem with the $250,000 figure is that the value of $250,000 in New York City or San Francisco is radically different than the value in Provo, UT.

  26. I think we also need to recognize that the members of the Senate are the worst culprits in the current spending bender. Whether O, GWB, HRC or McCain were president, the senators would all still be there, and they would all be determined to ship the swag home by the boxcar load.

    Again, let’s remember this isn’t unique. Reagan’s budget director, David Stockman, compared participants in the budget process to hogs at the trough. I hate to keep repeating myself, but I’m going to anyway: The executive is a structurally weak office. The person who occupies it has a hard time having much influence on the nuts and bolts of government, beyond his ability to lead and inspire.

  27. Clark, we have had this discussion many times in the last few years, but I will concede that Bush was incompetent in his execution of the Iraq policy if you will concede that Eisenhower and FDR were incompetent of their execution of World War II and Lincoln and his various generals were incompetent of their execution of the North’s strategy in the Civil War. Many, many more deaths resulted from FDR and Lincoln’s incompetence than Bush’s in Iraq.

    Bottom line: in a war, excrement happens. Excrement happened in Iraq, but relatively little of it by historical standards.

  28. Lincoln and FDR did not enjoy an overwhelming technological advantage. Nor did they wait for three years before learning from their mistakes and trying other strategies.

  29. 1. Not a moderate — a moderate conservative Republican who never supported the Obama candidacy.

    2. Not shocked by what’s gone on. Was paying attention.

    3. The President didn’t write the stimulus bill. He won’t write the Budget either (not personally), and the Budget he sends won’t matter — they never do. Never be distracted by a Budget. Pay attention to Appropriations Bills and Continuing Resolutions — that’s where money is spent.

    4. The President is dependent on a couple of people named Nancy and Harry, and the people they are dependent upon. Those people are responsible for all the pork in Federal spending (ever penny of it), and they do it to please the people they are dependent upon.

    5. Nobody knows how to run something as complex as our whole economy. They can’t. So they’re making it up as they go along. Sometimes it works better, and sometimes things get ugly. It’s kinda ugly right now, but it’s been worse. People aren’t starving in hordes, nor are they forced to cross the frozen Mississippi with the hounds at their heels. They haven’t even had to cancel American Idol (too bad, really).

  30. Geoff, I don’t want to get derailed into an Iraq debate. I just want to point out that it was not inevitable that anyone looking at the President’s data (as opposed to what was in the media) would have thought an invasion was the right way. Further even had someone started the runup to war when the inspectors were offering new data many might have reconsidered. Many might have assumed that a guerilla war was an obvious thing given Hamas, the Viet Kong etc. Others might have sent more troops. Others might have simply bombed Iraq an bunch and focused more on Afghanistan.

    The point is that there were numerous places where different people would have made different decisions. This isn’t a point about Bush. Just that to say anyone who was President would have made the same choices as Bush boggles the mind. It’s very dubious that someone with the Real Politic hawks from Reagan would have made the same decisions. A Jimmy Carter, for better or worse, would have made different decisions.

    Once again this isn’t a judgment on Bush, as you seem to be taking it. Rather it’s just pointing out that the claim of inevitability in politics is often bogus. That’s not to say that some choices don’t have strong forces pushing for them due to circumstances. It’s hardly surprising that Obama has kept many Bush policies, for instance.

  31. Geoff,
    It’s not tomorrow yet, but everybody at home’s asleep, so I thought I’d drop in really quickly.

    Thanks for the article. There’s nothing new in there, and nothing surprising. Taxing carried interest and ending overseas deferral have been on the table for a long time–various bills addressing carried interest have been proposed for at least the last two years, and the Bush administration pushed to end overseas deferral, through sections 409A and 457A of the Internal Revenue Code and through anti-inversion legislation that came online in (IIRC) 2004 or 2005. The (as yet unspecified) corporate revenue-raisers seem more in the nature of closing loopholes than raising taxes, although I’ll grant you that, when concrete proposals come down, I could end up being wrong.

    As for the raised marginal rates–yes, someone on the margin may determine not to earn that extra dollar that is the difference between $250,000 and $250,001. But most economically rational people won’t quit working at $249,999 (or $250,000–I forget where the break point is) because the additional $1 won’t cause the previous $249,999 to be taxed at a higher rate. It will only cause that dollar and the rest in excess of $250,000 to be taxed at a higher rate. That is because the first $250,000 will be taxed the same irrespective of how much a person ultimately earns. I don’t have tax tables in front of me, but let’s assume the marginal rate below the (projected) 39.6% rate starts at $150,000. My tax is $30,000 plus 36% of the amount above $150,000 and below $250,000.01. That means that if I earn $250,000, I’ll pay $66,000 in taxes. If I earn above $250,000, I’ll pay $66,000 plus 39.6% of the amount above $250,000. And maybe in my personal calculus, my leisure is worth more than the 4.6% difference between the current top marginal rate and the projected top marginal rate. In that case, I will stop working at $250,000, or will otherwise work less than I would have. But above $250,000, I still bring home $0.601 for every dollar I earn. (I realize that’s not entirely true, what with state and local income taxes, which can be deducted but not credited against my federal income tax, but that’s more complicated than I want to think about this late.)

    Is an additional 4.6% a breaking point? I doubt it for most people. For all the complaining people are doing, historically, Obama’s not proposing a terribly high top marginal rate. See here: http://www.truthandpolitics.org/top-rates.php 39.6% is well below the top marginal rate for most of the Reagan administration, for example.

  32. It’s very dubious that someone with the Real Politic hawks from Reagan would have made the same decisions.

    I question this claim, Clark. Jeanne Kirkpatrick formulated much of Reagan’s foreign policy, and Richard Perle and Paul Wolfowitz are her acolytes. Wolfowitz even served in the Reagan foreign policy bureaucracy.

  33. Geoff, I agree that there is a lack of confidence now. You are attributing it to the content of the stimulus package, and perhaps you are right. However, could it not also be that the team Obama has assembled simply does not inspire confidence, regardless of the policies they promote? As far as I am concerned, Tim Geithner could propose 50% tax cuts across the board, and he would still look like a guy who doesn’t know what he is doing.

  34. Though I’m sure some here will question it, I consider myself a left-leaning moderate (though I’m not entirely sure what qualifies one as a moderate). I am pleased, though not thrilled, with Obama at this point. I guess I just don’t like to focus on the negative and prefer to be optimistic. Someone on this very blog once suggested such an attitude is more productive that the alternative. 🙂

    Geoff, regarding your comment that “Obama’s approval ratings are decreasing and his disapproval ratings are increasing”: not according to this recent poll, which puts his approval ratings at a personal high. Interestingly, the poll also suggests that many Obama supporters are not as enthusiastic about his handling of the economic situation thus far. The article summarizing the poll’s results is worth the read.

  35. Mark, I believe the divides between the real poltic folks and the neo-conservatives were obvious long before Iraq. Look at the responses to Bosnia if nothing else.

    My point is that there were two main groups in the Republican party. Perle and Wolfowitz were one side but there was quite an other strong side. Why assume any Republican would only have listened to the neocon side? I’m not saying that only Bush would have. (Far from it) I’m simply saying it’s erroneous to assume that everyone would have done what Bush did.

    However even under Reagan Kirkpatrick wasn’t a real poltic hawk. She was anti-communist of course. But there were other advisors, many of whom were very significant, who were more on the real politic side of things rather than the neo-con side. To say that “Kirkpatrick formulated much of Reagan’s foreign policy” is a bit misleading (IMO). Most of Reagans ideas were formed while Kirkpatrick was still a Democrat. (Recall that when she was appointed UN ambassador by Reagan she admitted she’d never been around a Republican before)

    But in

  36. Nobody knows how to run something as complex as our whole economy. They can’t. So they’re making it up as they go along. Sometimes it works better, and sometimes things get ugly

    That is why they shouldn’t. The contemporary banking system is based on the idea that the Fed can solve all substantial economic ills based on superficial knowledge of macroscopic quantities. A serious historical analysis readily demonstrates that fractional reserve banking is structurally unstable. What we have done in the twentieth century is try to eliminate the instability of fractional reserve practices in small banks by combining all banks into a government endorsed quasi big bank.

    That is merely postponing the inevitable. Fractional reserve banks have historically failed by the thousands during serious financial crises. Now that we have a systemic crisis either the whole system will fail or everyone will pay in some gut wrenching combination of taxes, defaults, and inflation.

  37. 34 — Clark, Iraq would have been invaded regardless of which major party was in the White House after 9/11. Remember that Gore was not only part of the administration that made regime change the national policy regarding Iraq, but would not have been able (as Bush was) to pass off any degree of responsibility for the security holes that made 9/11 possible on the previous administration, since he was in the previous administration. He would have needed to prove that he wasn’t soft on terrorists by being tough on the terrorists he could find. Also remember that his running mate was Joe Lieberman, who was more anti-Baathist and pro-Iraq-war than Cheney, which is why he’s the least popular Democrat in the Senate. The details of how it would have been handled would have been different to some degree, but the troops doing the job wouldn’t have been significantly different, and you’d need to have some specific reasons to believe that a Gore/Lieberman administration would have been more brilliant at figuring out how to manage the situation after the regime change was accomplished to claim a significant improvement over what happened in the real world (fantasy-land what-ifs, entertaining though they are, aren’t real).

    40 — Except that they’ve done pretty well at building a powerful and productive economy — whether because of or in spite of their choices is difficult to distinguish. Crises and failures will always happen. Cycles can’t be totally flattened out. Stability is an unrealistic expectation — it’s not going to happen no matter what. So we choose between varying unstable systems, tweak them based on new ideas and experience, and wait for them to fail so we can learn some more.

    I don’t know how you get people to accept short-term pain and delayed gratification. I tend to think it would help if people had a little more understanding of the elements of basic economics — high-school level stuff would do. It would reduce their vulnerability to snake-oil salesmen at every level.

  38. Blain, to say that regime change was a policy is not to say an undermanned invasion would have been the approach to take. This is just wishful thinking and ignores the fact that individuals have different views. I’m amazed people think any person would have acted the same as Bush. (That’s independent mind you of Bush’s own failings or successes)

  39. A big factor in the execution of the war, independent of the decision to go in, was Donald Rumsfeld’s vision of transforming our military. He was quite open about changing into a nimble force that could take on a job like Iraq with little fuss, and do the same thing again the next year whereever it might be useful to do so. Undermanning the invasion wasn’t an oversight; it was a (wrong) strategy.

  40. My wife and I are both moderates, and both of us are still very happy with our decision to vote for President Obama. First of all it’s only been two months, get back to me in eight to twelve months and we’ll talk. It’s much too soon, the mess we were in can’t be fixed overnight.

    Second, I seriously doubt anything would be better under McCain, nothing he showed during the election leads me to believe he had more or better ideas than President Onbama’s team.

  41. Clark — But having a policy that the goal was regime change is one factor of the five I listed that contributes to my conclusion that the Ba’athist regimes days were numbered once the planes hit the buildings regardless of who won the election in 2000. And the other factors must be fairly solid since you didn’t even try to acknowledge or address them.

    Frankly, I think you’re overestimating how much presidential choices in times of crisis are influenced by their own personal views, as well as overestimating the differences of view between different individuals who have received high-level intelligence briefings. I’m not saying that anybody agrees 100% with anybody else here — I know I don’t agree with myself 100% of the time — but, rather, that people who have been given the same information tend to have similar understandings. The briefings Bush received in early 2001 weren’t all that different than the briefings Gore received in late 2000.

  42. Blain, I just don’t think those would have established it in the least. One can want regime change without necessarily planning an invasion. So we’ll just have to agree to disagree. To your other points, I wasn’t just comparing Bush to Gore. Rather to the claim that it wouldn’t matter who would have been President. Limiting to just one other person is a different question. However I’m not at all convinced Gore would have gone in the way Bush did. (And note I’m no Gore fan) I think that Gore wouldn’t have had Rumsfeld and, as John mentioned, Rumsfeld had a huge impact on the strategy. But I rather doubt Gore’s response to the UN would have been what Bush’s was. Further it’s an open question whether Gore would have bought into the overarching grand strategy of Bush’s domino theory. (A theory I actually supported and still support however sadly it wasn’t conducted competently) Without that grand strategy then there’s a good chance whomever was President (including Gore) would have held off on Iraq until Afghanistan was more stable. So let’s say hypothetically I buy into Gore planning for an invasion. Would he have tried to go in as quickly as possible like Bush? Or taken his time? If you don’t have the spring offensive then pretty much you wait six months. In six months extra time with the UN inspectors finding more evidence of no WMDs would Gore have still gone in? It’s a crap shoot.

    Note once again I’m not arguing for anything particular – just pointing out what should be obvious. That individuals make individual choices and we’re not playing a determined game.

    Also note that the top military strategist on the Democratic side at the time was Brzezinski. What was his view of Iraq? He was one of the earliest critics of the invasion. Also note that Gore was himself an early critic of the invasion as well. That said though in ’02 Gore was for the war but on different grounds than Bush.

    In 1991, I crossed party lines and supported the use of force against Saddam Hussein, but he was allowed to survive his defeat as the result of a calculation we all had reason to deeply regret for the ensuing decade. And we still do. So this time, if we resort to force, we must absolutely get it right. It must be an action set up carefully and on the basis of the most realistic concepts. Failure cannot be an option, which means that we must be prepared to go the limit. And wishful thinking based on best-case scenarios or excessively literal transfers of recent experience to different conditions would be a recipe for disaster.

    Rather prescient. Although even knowing what I know about Bush now it’s debatable whether I’d have voted for him. I should note though Gore was against going to Iraq prematurely, feeling we should finish in Afghanistan first.

    To begin with, I believe we should focus our efforts first and foremost against those who attacked us on September 11th and have thus far gotten away with it. The vast majority of those who sponsored, planned and implemented the cold blooded murder of more than 3,000 Americans are still at large, still neither located nor apprehended, much less punished and neutralized. I do not believe that we should allow ourselves to be distracted from this urgent task simply because it is proving to be more difficult and lengthy than predicted. Great nations persevere and then prevail. They do not jump from one unfinished task to another.

    We are perfectly capable of staying the course in our war against Osama Bin Laden and his terrorist network, while simultaneously taking those steps necessary to build an international coalition to join us in taking on Saddam Hussein in a timely fashion.

    So I think it fair to say that Gore would liked to have overthrown Sadaam but would not have invaded early like Bush did and not gone in ill prepared. But that extra six months to a year would radically have changed the intelligence on Iraq thereby changing the calculus.

  43. Once the MSM decide to let the American public know of Barney Frank, Chris Dodd, and the liberal Democrats’ responsibility for the mortgage crisis (caused by their forcing banks – with Freddie and Fannie’s complicity – to offer sub-prime loans to folks with no credit worthiness), the moderates will see that the foxes are in the chicken coop, and Wall Street will tank further than it has.

    Only when this becomes well-known, will it be possible for a talented, capable candidate (such as Mitt Romney) to displace the “Messiah” (Obama).

  44. Republican,
    No offense, but that’s a pretty superficial reading of the current crisis. It’s broadly acknowledged that the policies of every administration since at least Clinton (and probably further back than that) shares blame for the current crisis. As does Alan Greenspan. As do members of Congress of both parties (including Barney Frank and Chris Dodd). So do mortgage brokers who pushed overly-risky mortgages on anyone who breathed. So do Americans who felt they had the right to consume (using cheap credit) well beyond their means (including people who subscribed to a divinely-appointed right to live in a big house that they nominally owned).

    Frankly, none of that matters at this moment. Assigning blame doesn’t fix the problem. If we’re lucky, maybe it will prevent this particular bubble from coming back in the near future. The question Geoff has presented, though, is how do we (who are–or claim to be–moderates) feel about Obama in light of the current stock crisis.

    Will Wall Street tank further than it has? Almost undoubtedly, for reasons that have been discussed above and reasons that have been left undiscussed. Everything I’ve read and heard suggests that we won’t know when we’ve hit the bottom until years after we hit it. We would be in roughly the same situation in terms of stock market volatility if Romney were in the White House–the problem is too big, and too fundamental, for any administration to solve in, what, a month and a half?

  45. Geoff, Give your employees a raise so you make less. That will solve your tax woes.

  46. Clark — You’re continuing to push toward your conclusion without addressing my point. I’m merely pointing that out because it hampers the conversation when the back and forth doesn’t include hashing out the points each side is trying to make. It becomes about “I’m right,” rather than being about resolving things.

    As I see it, your point is that the differences in views and values of the parties that actually made the decisions and others who conceivably might have made the decisions would have been significant enough as to have significantly changed how the matter would have been carried out. While that’s not the way you have chosen to make your points, I think that’s a reasonable summary — feel free to tweak it if need be.

    I’ll totally stipulate that there were significant differences of views and values among the different groups, but there were also significant similarities of views and values at play, as well as specific differences that would tend to lead to similar choices for other reasons. I think the only reasonable conclusion based on these sets of points is that there’s no easy way of determining how different things would have been in an alternative world where different decision makers were at play. There were good reasons things would be different, and for things to be not too different. Whether those differences were critical is difficult-to-impossible to determine. I tend to think the differences were not critical — there was immense pressure to “do something,” and that would have tended to push the schedule toward taking action rather than a consideration process that would have produced a different outcome. It’s the same argument behind those claiming that the choices being made by the Obama administration that are controversial (the series of massive spending bills being passed) would have been the same under a McCain administration. There is the same pressure to “do something,” without much pickiness about what exactly should be done or an understanding of what it would accomplish.

    I’ll accept that we’re going to disagree about this, and I’m not really trying to force you to a different conclusion. I’m just challenging your certainty in that conclusion, as you’re challenging mine. And I think we’ve taken this thread-jack pretty much far enough.

    Sam — I don’t think anybody reasonable expects that the problem would be solved by now — or that it could be. The questions are whether or not the choices being made are going to make the problem better enough to compensate for the ways in which they will definitely make the problem worse. And the damage is definite — increasing taxes during a recession is harmful, increasing the deficit by this much is also, and there are strong reasons to be concerned about nationalizing even more of the economy in the way it’s being done. The outcome remains to be seen.

  47. No recent administration bears primary responsibility for the recent financial crisis. The most recent primary culprit was an oversight by the authors of the Bank Charter Act of 1844. They correctly understood that the unbacked issue of bank notes was hazardous to economic well being. At the time they did not properly understand that unbacked bank deposits had the same economic effect.

    The United States followed England’s lead, and we have continued to have financial crises every decade or so ever since. 1857, 1873, 1893, 1907, 1920, 1929, 1933, 1940, 1949, 1960, 1969, 1976, 1980, 1987, 1998, 2007, …

    None of the administrations immediately preceding those crises bears primary responsibility for any of them. They are endemic to the way the modern financial system operates. There is nothing that can be done to avoid them except to abandon the idea that government endorsed counterfeiting of money, easy credit, never ending inflation, and the manic depressive economic cycle those policies inevitably result in is a net good for the economy.

  48. Although I doubt that I could be described as a ‘moderate’ [a point on the political continuum still to be accurately identified], I believe that the snarky judgements presently heaped on Obama’s head are dog-in-the-manger mews of sore losers.

    Dare I mention Bush? Thanks. If anyone believes that 55 days is a sufficient length of time for an incoming president to sort out the financial mess he was bequeathed by his predecessor, then they are probably too late for a reality check to bring them back from La-la-land.

    It is interesting to hear Mormons, normally sensible people, speak about Obama as Finis Ewig’s Cumberland Presbyterians once spoke about Joseph Smith. Smith’s character, and Smith himself, was dragged through the mud because he was seen by Christians [ahem!] as the devil incarnate, and blamed for all that was wrong with themselves and their communities, fortunes, and faith.

    Going further back, remember what the religious people that Jesus came to save turned against him and laid all manner of false charges against him in their frantic attempts to thwart his mission. They lied about him, slandered him, and no cavil was too fiendish to publish. He was, according to them, a winebibber, a glutton, a consort of bad women, bad characters – particularly tax collectors, and finally charged with the capital crime of sedition.

    Kipling wrote in his momentous poem, “If,”

    ” … And being lied about
    Don’t deal in lies.”

    It is with increasing sadness that I note that Barack Obama is getting the same kind of mendacious attention that eventually led to the death of Joseph Smith and Jesus Christ.

    One last thing: It is ridiculous that Americans apparently fail to see anything beyond their own borders. Were they to raise their eyes from their lint filled omphalosii and raise their eyes above the tops of their fences, they would see that bad things are not the curse of the US alone, in isolation.

    The rest of the world does not roll along merrily on the crest of financial waves that bolster their rapidly expanding economies, their GDPs, standards of living, and stocks and shares to all record highs undreamed of a few years ago.

    When Noah, his family, and his menagerie set out to successfully float their company while the rest of the world was in liquidation, they did not sit around and play the blame game.

    Instead of behaving as little children that regard themselves as the focal point of the universe, they were busy working together, helping to keep the tehom afloat, busily making sure that both elephants and both rhinos, and hippos did not rubberneck off the starboard side, for if they did the vessel would roll and many of them would drown.

    Setting apart faithful Latter-day Saints that take seriously the Church’s policy deprecating those that ‘speak evil of the Lord’s anointed,’ the dunning down of Obama is arguably the greatest social evil of our time, because in running Obama down, the GOP and its leaders, yes, including Saint Rush of Limbaugh who volubly wants Obama to fail to save the US, are doing two things by their actions.

    1. They make themselves look ridiculous, and
    2. They are treasonable, for if Obama fails, then the USA fails along with him.

    Latter-day Saints are called to re-enthrone excellence in all they touch, including political activism, to represent the best possible outcome to every righteous human endeavour that elevates the whole nation and not certain individuals, whether meritocrats, plutocrats, oligarchs, &c, at the expense of the overwhelming majority. The welfare of all, not just a few, is the business of God: “For behold, this is my work and my glory, to bring to pass the immortality and eternal life of man[kind].”

    Brigham Young said of Zion, “When we [Latter-day Saints] determine to build Zion, we will build it!”

    The divine pattern for Zion is:

    “And the Lord called his people ZION, because they were of one heart and one mind, and dwelt in righteousness; and there was no poor among them.” (Moses 7:17-18.)

    Said King Benjamin:

    “And now, for the sake of these things which I have spoken unto you—that is, for the sake of retaining a remission of your sins from day to day, that ye may walk guiltless before God—I would that ye should impart of your substance to the poor, every man according to that which he hath, such as feeding the hungry, clothing the naked, visiting the sick and administering to their relief, both spiritually and temporally, according to their wants.”
    (Mosiah 4:26.)

    In Fourth Book of Nephi it is faithfully recorded:

    “And they had all things common among them; therefore there were not rich and poor, bond and free, but they were all made free, and partakers of the heavenly gift … .

    “And there were no envyings, nor strifes, nor tumults, nor whoredoms, nor lyings, nor murders, nor any manner of lasciviousness; and surely there could not be a happier people among all the people who had been created by the hand of God.”
    (4 Ne. 1:3, 4 Ne. 1:16.)

    In our Dispensation the Lord has again reminded us of his precepts for establishing Zion today, saying:

    “And let every man esteem his brother as himself, and practise virtue and holiness before me.

    “And again I say unto you, let every man esteem his brother as himself.

    “For what man among you having twelve sons, and is no respecter of them, and they serve him obediently, and he saith unto the one: Be thou clothed in robes and sit thou here; and to the other: Be thou clothed in rags and sit thou there—and looketh upon his sons and saith I am just?

    “Behold, this I have given unto you as a parable, and it is even as I am. I say unto you, be one; and if ye are not one ye are not mine.”
    (D&C 38:24-27.)

    Knowing the will of the Lord in matter societal, we are to do the best that we can do, whatever insulting epithets are mud-slung by selfish political axe-grinders, to make the best world we can despite human limitations, and continue pressing onwards towards that goal until He whose right it is to rule and reign establishes a righteous community in all the world.

    “If ye are prepared, ye shall not fear.”

  49. I neglected to include the Saviour’s words to his disciples, but feel it makes a significant statement to those – including some of my friends – that are afraid of what they refer to as Obama’s ‘socialist’ policies:

    I quote Matthew 25.31-36 [vernacularised]:

    “But when the Son of Man comes in his glory, and all the holy angels with him, then he will sit on the throne of his glory. Before him all the nations will be gathered, and he will separate them one from another, as a shepherd separates the sheep from the goats. He will set the sheep on his right hand, but the goats on the left.

    Then the King will tell those on his right hand, ‘Come, blessed of my Father, inherit the Kingdom prepared for you from the foundation of the world; for I was hungry, and you gave me food to eat; I was thirsty, and you gave me drink; I was a stranger, and you took me in; naked, and you clothed me; I was sick, and you visited me; I was in prison, and you came to me.’

    “Then the righteous will answer him, saying, ‘Lord, when did we see you hungry, and feed you; or thirsty, and give you a drink? When did we see you as a stranger, and take you in; or naked, and clothe you? When did we see you sick, or in prison, and come to you?’

    “The King will answer them, ‘Most certainly I tell you, inasmuch as you did it to one of the least of these my brothers, you did it to me.’

    Then he will say also to those on the left hand, ‘Depart from me, you cursed, into the eternal fire which is prepared for the devil and his angels; for I was hungry, and you didn’t give me food to eat; I was thirsty, and you gave me no drink; I was a stranger, and you didn’t take me in; naked, and you didn’t clothe me; sick, and in prison, and you didn’t visit me.’

    “Then they will also answer, saying, ‘Lord, when did we see you hungry, or thirsty, or a stranger, or naked, or sick, or in prison, and didn’t help you?’

    “Then he will answer them, saying, ‘Most certainly I tell you, inasmuch as you didn’t do it to one of the least of these, you didn’t do it to me.’

    These will go away into eternal punishment, but the righteous into eternal life.”

    Some will call that socialism, but I call it Christianity.


  50. Ronnie, yours is an old, tired claim: that the Gospel calls for the government to help the poor, rather than for individuals to help the poor. A careful reading of the scriptures shows the exact opposite: that was Jesus and the prophets are calling for is INDIVIDUAL action by individual people helping others, not a government forcibly taking money away from other people and distributing it to others. In fact, government action decreases the incentive for individual action (“why should I give to a charity if the government is already taking money away from me?”).

    This contention is born out by this recent study, which shows a direct relationship between welfare state spending and a LACK of religiosity. The government has, in effect, replaced God:


  51. Geoff, this post


    reminded me of your post on Obama and Lula from four months ago. It will be interesting to see what comes out of this weekend’s meetings.

    In other news, I’m sure you are pleased that we are now (however temporarily) 500 points higher on the Dow than when you wrote this post 10 days ago. And that Larry Summers appears to be concerned with long-term fiscal restraint:

    He also said there was a need to dial back the stimulus once the economy is clearly out of the ditch so that the nation “does not exchange a painful recession for another unsustainable expansion.”

    For crisis spending by the government to continue after the crisis “would be a very risky thing,” he said.

  52. Geoff B: Thank you for your response. You will be less than surprised that I disagree with you.

    My claim might be old, but it is far from tired. The truth of the matter is that God has made us stewards of the earth and its resources, and further He has directed us to be as He is, including Just, Merciful, Kind, Loving, and to develop all the characteristics and attributes of Deity.

    Unless one lives in a tyrannical realm, the government IS the people.
    When ‘government of the people by the people and for the people’ is working in sync with God’s ideals of government, and if the USA, envisioned as the Promised Land [Mk II], is governed righteously, and it is evident the it is the will of the people that the principles of neighbourliness and community established by Jesus Christ with His requirement that all that confess him as Lord, Saviour, and King will embrace and practice the same active care and concern that He modelled for us.

    It is disingenuous to make distinction between individuals and government as if they were discrete species. The latter is composed of the former, and trusted by collective individuals to do always that which is proper.

    The ideal form of society is revealed as a theocracy selflessly operating under God’s law of Consecration. It is only because of human selfishness that the Saints are no longer practising according to the regulations set forth by God under which His People should live.

    But it is a serious error to believe that Saints of God are no longer required to live under the Law of Consecration. Most of us are bound to maintain Consecration, and have promised God that we will do so.

    When the Church was a discrete ecclesiosocial entity, it was also relatively small, largely agrarian, and non-industrialised, then the Lord called bishops to be agents for re-distribution of tithes and offerings contributed by the Saints, for the Saints, thus making known what the Will of the Lord was relative to human want and need.


    Since May of 2001, the Welfare Programme expanded its coverage to non-Mormon refugees, seeking safety from persecution or poverty. This also happens in other countries, many of which get substantial assistance from the Church. It has been estimated that 80 percent of welfare recipients in Salt Lake are non-LDS refugees.

    I note that you resurrect the argument that if the Government helps out the poor and needy, then everyone else will sit on their wallets. That is the cynical sibling to “If people in needs receive government assistance, they will not feel the need to work any more and consequently they will become idles, sponges, ne’er-do-wells, and drains on assets of the working citizenry.”

    That kind of thinking, it must be said, represents the worst possible case scenario. However, in practice it does not happen. We cannot be ruled by what we fear might be, for as Arthur Clough advised, “If hopes were dupes, fears may be liars.”

    The simple truth is that experience teaches us that fear has no power unless we empower it by giving in to it. Once we capitulate and let our emotions rather than reason rule us, then we create self-fulfilling Cassandric prophecies whose consequences devour us.

    Not all studies are well-founded, well-reasoned, or well interpreted. The bias of the conductors of social studies are notable in showing up in their research, their written work, their systems of investigations, and – inevitably – in their conclusions. Statistics and ‘apparent/supposed/possible/suggested’ “links” between two or more events that are synchronous, does not mean that any relationship spotted by a research team actually exists.

    Some Anti-Mormon critics have posited Hinduism as the source of Mormonism, while others have determined that the fountain-head of the Gospel of Christ is Zoroastrianism, and so on, until all the major faiths in the world are identified by one or another as the reticule from which Joseph Smith stole the fundamental substructure of the ‘Restored Church.’

    Their research is always limited, and the only reason they read anything at all is to try to find the ‘missing link’ between Mormonism and anything that is not typically Christian.

    It was once pointed out by a British newspaper that the fall in the birth rate in Great Britain was inversely proportionate to the increase in pig iron production in the USA. Which was the cause, and which the effect?

    I cannot speak to your own experience, but I lived in a socialist country that operated a welfare system to which everyone employed paid pro-rated contributions on their gross salaries or wages in the form of insurance premiums.

    In times of hardship that occasion high unemployment, the income of families hit by lay-offs and redundancies drops as a stone dropped from the top of the Empire State Building. At the same time, voluntary charitable donations decline sharply. At the same time, government welfare expenditure climbs sharply.

    In this example, there are three events:

    1. Hard times means massive unemployment – as at present.

    2. Unemployed workers take a drastic hit in their incomes – as at present.

    3. Charitable donations are reduced from a steady flow to a trickle, and, sometimes, they dry up altogether.

    You seem happy to blame the increase in Government welfare expenditure as the root cause of charitable donations drying up. The fallacy of that disingenuous argument becomes evident when we restore the context, identify the procession of the events, and re-visit the conclusion, substituting the spinmeister’s false apportionment of blame in the correct place.

    If the economy wasn’t in dire straits, along with the rest of the world, then numbers of the unemployed would not rise family

    incomes would not fall below the point where it would not sustain an average family,

  53. Continuation ….. [I was cut off in full flow!]

    A. If the economy wasn’t in dire straits, along with the rest of the world,

    B. numbers of unemployed would not rise,

    C. family incomes would not fall below the cost of sustaining an average family, and,

    D. government would not have to increase welfare/social security spending.

    In hard times, such as the present, all these have a direct or indirect causal relationship. At the outer fringe of this state of affairs are non-government funded charitable institutions.

    But it is not increased spending by government that is to blame for losses in income for charities. Because, in legal parlance, the effect of dwindling income for charities is not directly related to government spending. If the government didn’t hand out one penny in assistance for the suddenly poverty-stricken, charitable income would not remain at the status quo as your argument runs, but they would diminish to an even greater extent than they have because a large proportion of usual contributers have insufficient, even with the handouts, to maintain a reasonable standard of living.

    Thus, the relationship between Government spending and the Charities’ fiscal plight is too ‘remote’ to be named as cause and effect. Thinking that it is ‘post hoc ergo propter hoc’ is not only simplistic, but is also evidence of socio-politico myopia.

    Go Obama!

  54. Bill, the Huff Post article was surprisingly good, but it of course missed the biggest news out of Brazil, which is that Lula is going to push Obama to approve the free trade agreement with Colombia, the single most important event in Latin America right now because it sends a crucial message to the region.

    As for Larry Summers and the market, well, I hope it continues to go up. The best thing Obama can do now is send signals to the market that investments will be protected long-term and that he has some kind of solution to the banking crisis. You will notice that the main catalyst of the stock market boomlet this week was the news that Citibank was not as bad as some people thought. Also, GM announced it didn’t need an immediate $2 billion of govt money. So, the trend is clear: talk of nationalization and more government bailouts causes the market to go down — talk of companies recovering, cutting cost, improving the balance sheets causes the market to go up. The logical decision the Obama administration could make now would be to send signals to the market that it has learned its lesson and will let the market work. Obama met with some business leaders on Thursday and hinted he may be willing to lower the corporate tax rate, which is among the highest in the world in the U.S. An announcement that he would lower the rate to 20 percent, for example, would cause the market to soar and speed recovery. My guess is that it won’t happen, so we will have a stagnant market (up a little, down a little) for the near future, but I hope I am wrong. (By the way, in case you think this is just some Republican mantra about tax rates being too high, one of the primary proponents of lowering the corporate tax rate is none other than Charlie Rangel, the famous Dem from NY who understands that higher tax rates drive away business and cause the loss of jobs).

  55. “You will notice that the main catalyst of the stock market boomlet this week was the news that Citibank was not as bad as some people thought.”

    I noticed it, and I remember highlighting that very issue as the needed catalyst back in comment 8 of this thread. I bought on Tuesday morning. I have since sold the position, since I don’t trust this move. (And I certainly don’t trust Citigroup). Maybe I will have to get back in at higher prices, but I have a feeling there is still a little more pessimism to come.

    Incidentally, Rangel is my representative, but I always vote against him on principle. I’m not a fan of 40-plus year congressional careers and incumbents who always win with 85% of the vote.

  56. Ronnie Bray, a short story for you:

    I have a friend that used to be in the welding business. He worked his way to the top of one company, then started his own. He employed two other people. Last month after doing his taxes and taking note of Obama’s unadulterated anti small business policies, he became extremely disillusioned. He did the math and figured that he’d do much better financially (and stress-wise) if he simply shut down his business and let the Big Brother take care of him and his family.

    Now I didn’t ask him all of the details, but he let both of his employees go (which was tough because one of them was a relative), and shut down shop. He got a part time job at a hole-in-the-wall radiator shop and now qualifies for enough government programs and assistance that he lives comfortably now, with very little stress, and plenty of time on his hands.

    We’ve had a bit of a falling out because of that. He was never a political guy, but he voted for Obama because “that’s what everybody else was doing.” So here we have a former entrepreneur who worked hard and employed two other people, now just a slug who sits home watching Judge Judy and painting radiators black on the side.

    And you’re paying for him to do that. And he’s finding there are millions like him. Doesn’t that just make you glad? Doesn’t that just fill your socialist heart with Christlike satisfaction?

    With the Law of Consecration, I choose to give what I have. With government welfare I do not. That choice is the crux of this argument. God’s laws are kept by our own free will and choice, not by mandate from an unaccountable and corrupt government.

  57. Well, the Dow was at 8000 when Obama was inaugurated, and despite a brief trip below 7000, now sits just above 10,000, a pretty good return for 9 months.

    Of course, it’s not quite back to where it was when GW Bush was inaugurated in 2001 (10,578), but a 25% increase in less than one year seems a little better than an almost 25% decrease over a period of eight years.

  58. Bill, good to see you back here. I’ll agree that the “Obama return” has been good when the Dow gets above 12,000.

    The more relevant figure is where the Dow was when the market began to perceive that Obama would win. The number is around 9,000. If you take into account inflation plus the time value of money (you could have put it into gold, for example), 12,000 seems a good number.

    Unfortunately, unemployment and economic growth continue to be real problems. Those numbers will not improve significantly (unemployment will only fall below 6 percent again if the economy grows robustly for at least six quarters, and probably eight) with sustained tax or spending cuts. That will not happen during the Obama administration, unless Obama takes a radical change in course.

    My prediction for summer 2012: no significant economic growth and unemployment above 9 percent. Where will the Dow be? If we follow the history of the Dow over time it will go up and down and be in the range of 8000 to 12000. Not a great return.

    Unemployment stuck above 9 percent means literally millions of family out of work. This hurts the working poor most of all.

  59. Well, the Dow got above 12,000 about a year ago, then stumbled, and now is back up to 12,850. Unemployment is now 8.3%. Of course serious problems still exist, and things could deteriorate by the summer, but unless you’re willing to change the goalpoasts again, the Obama return has been more than satisfactory. It still amuses me that this post appeared within a week of a generational low, a perfect contrarian indicator for bottom-pickers.

  60. Asa British socialist living in the US with an American wife, I have followed the political furore over President Obama’s presidency with interest and often with profound despair.

    My despair is not generated by Barack Obama, but by the plethora of naysayers that seem unable to give him the slightest soupcon of credit for the good things that have happened under his watch.

    I am, frankly appalled, that Latter-day Saints, such as Mitt Romney, and others, allows their lips to speak guile for political purposes. But that is exactly what Romney, Gingrich, Santorum, et al, do continuously.

    Obama is not credited with any one of the good things he has done. It cannot be because they are unknown, but only because GOP supporters are unwilling to give him the nod for his turning around, slowly but surely, the economic slump that he inherited.

    I salute Obama for extending health care to 30,000,000 Americans that were left without cover. I salute his intentions, blocked by the do-nothing GOP in Congress to attempt to extend it to the other millions of Americans in this country that are left without healthcare.

    I remember when ‘The Millennial Star’ carried only truth. It did so from 1840 to 1972 without blemish. Would that its namesake could rise to the same level of honesty and justice today.


    Ronnie Bray

    I am, frankly, sick and tired of hearing that America is the ‘best country in the world’ when it comes to this, that, and the other, when there is not a shred of evidence to suggest that it either equals or exceeds the standards set in other western industrialised nations.

    Examining one’s own navel and thinking that the whole world is stuck somewhere inside it is shortsighted and best and deathly ignorant at worst.

    It is one thing to be patriotic: America has that sewn up. But it is another thing to be so blind to the accomplishments of, and in, other nations that all that is considered is the content of lying e-mail messages that massage American egos at the expense of the rest of the world.

    It is far beneath contempt that Right wing politicians and their supporters will ignore Obama’s accomplishments as if they did not exist. Where is the honesty among citizens of the Land of the Free?

  61. Bill, Bill, Bill. I gotta say, I’m disappointed at that comment. Based on your past comments, you actually know something about economics and the stock market, unlike most liberals. If you really think the Obama economy has been anywhere near acceptable, I don’t know what to say except that you are simply blinded by ideology. Personally, I prefer to look at actual numbers.

    Yes, the stock market is doing better than many people, including me, predicted, but it is still of its highs from just four years ago. As for unemployment, you are smart enough to know these numbers simply aren’t real. Take a look at this:


    We’ve lost 8 million workers and that’s a *good* thing?

    Three years ago, I bet against Obama in my personal portfolio. I bet the dollar would go down compared to better economies like Brazil, for example. Let’s take a look at what happened.


    The Brazilian real has soared compared to the dollar, mostly because Brazilians are developing their natural resources, unlike we poor schmucks in the US.

    Meanwhile, I bought a lot of physical gold and gold stocks as well as physical silver. How have they done?


    Why did I buy gold and silver? As soon as the stimulus was announced, I knew physical metals and commodities were the good long-term bet. I have doubled my money in three year on gold, and I am long gold. More inflation is definitely coming — I am betting on it.

    So, if you bought stocks at the bottom of the market — which is almost impossible to time exactly, you have made a 50 percent gain in the Dow. Meanwhile, I have made a 100 percent gain. But of course the market has been very unsteady. A lot of people bought at 10,000 or 11000 or 12000. They might have bought at 12,000 and panic-sold at 11,500 fearing another crash. Overall, the market is very unsteady, especially if you price it in gold. Nevertheless, I do have a diversified portfolio with some US stocks and bonds, and I am keep them hoping for a real boom (if we can get a new president).

    By any unbiased, nonideological measurement, Obama has been a disaster. The worst president in US history — by far. He has spent hundreds of billions on useless stimulus programs, he increased the number of troops in Afghanistan, he signed the Patriot Act by autopen. He gets an F-minus. And don’t give me the, “well, at least he’s not Bush.” Bush was a disaster also, but comparing Obama to Bush doesn’t get us anywhere because Bush is no longer the president and he’s not running in 2012.

    Here is an historical comparison of recent recessions and how Obama has done compared to his predecessors. It is especially useful to compare the Reagan recession because he also inherited a bad economic situation.


    To sum up: I was right three years ago, and I put my money where my mouth was and made some dough. I continue to go long on gold and on Brazil (the land of commodities) vs. the US (the land of idiotic greenies who prevent us from developing our natural resources so we all become serfs).

  62. Ronnie, thanks for commenting here, and I am happy that you have moved to the Land of the People Who Used to Be Free. Unfortunately, 11 years of Bush and Obama have ruined the country. We are in debt worse then any time since WWII and the economy is stagnant. Obama’s demonization of the free market has stifled innovation and investment. Very time something promising comes along — wow, we can develop oil and gas from the sand and soil!– idiotic greenies prevent us from putting people back to work. You cite Obamacare, which I’m not sure you fully understand. Unlike the NHS, the US has a private health care market. Unfortunately, the government still control most of the health care market through price controls and other useless measures. The result is that health care, which used to be quiet affordable in the US, is now hugely expensive. Doctors hire clerks who do nothing but fight with insurance companies and govt bureaucrats. The healthy, innovative and inexpensive areas of health care are those with little government involvement, such as Lasik surgery (I got it seven years ago, and it cost $2000 as has already paid for itself because I don’t have to get new glasses every year).

    Unfortunately, many companies are opting to drop health insurance altogether and pay a fine and shove their employees onto the government-run health care racket. Obamacare has been one of the biggest disasters in US history.

    As I say above, Obama has been the worst president in US history — by far. America is losing its luster by the day. Hopefully we can make a change in November, but I wouldn’t bet on it. That’s why I’m continuing to bet against the economy in my personal funds. So far my investments have been spot-on.

  63. Hopefully you didn’t buy any silver at the end of last April. That’s when I bought ZSL calls.

  64. I bought physical silver when it was about $21/ounce. Sitting at $33/ounce now. Of course we all wish we could have sold when it was $48/ounce, but I am going long. I still think silver, gold and platinum have a lot of upside, and I am putting my money where my mouth is.

    As for changing the goalposts, yes, I never thought we would hit a 12000 Dow in such an anemic economy. I never thought we would lose — poof — 8 million workers. I never thought the Fed would announce zero interest rates for two more years (one of the most ridiculous economic policies ever). So, if you want me to admit that the Dow is over 12000, yes, it is. And my response is: so what? If we were seeing real growth, the kind we have seen after many other deep recessions, I would give Obama credit. But we aren’t so I can’t.

  65. Bill, one last point: if you really want to prove me wrong, you should go and re-read this post in its entirety. There is a comment where I defend Bush on Iraq. Yikes! If you want proof of my stupidity, that is a much better place to concentrate. On Obama’s eocnomic performance, I have been sadly correct all along.

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