The New Clarion

The New Clarion header image 2

The Beginning of the End

February 21st, 2009 by Myrhaf · 9 Comments · Politics

Every time we read about the HR1, the government spending and Democrat reelection bill, people find new things in it that no one knew about. “Tyranny by stealth” has become the Democrat motto.

Don Luskin writes about the bill’s provision to limit executive compensation.

Consider a little time bomb planted at the last moment in the stimulus bill. It wasn’t hard to smuggle it on board: In total the bill was 1,071 pages, published as two enormous documents on the web site of the House Rules Committee late last Thursday night. It was voted into law on Friday, first by the House and then by the Senate, and it’s virtually inconceivable that a single congressman or senator actually read the entire thing before he voted.

Especially the final 12 pages. Those pages — the very last ones anyone would read before voting — had even less to do with “stimulus” than the rest of the bill. That’s were a law known as Title VII was strategically placed — a law that drastically curtails the compensation of employees of most of America’s major banks and brokerage firms.

Curtailing compensation is a form of price control. Most price controls come because inflationary policies caused by the state printing money have people screaming about high prices. The only difference here is that the controls are caused by egalitarian envy. Socialists don’t like greedy capitalists getting so much money — they think it comes at the expense of the “little guy.” Now that the state is bailing out Wall Street, politicians are determined to punish big businessmen for their greed.

Price controls create shortages. Politicians can hector people to sacrifice for the collective by taking pay cuts, but in the end they cannot defy the laws of economics any more than they can defy the law of gravity. People are not going to bust their butts on Wall Street for peanuts. Not for long, anyway.

Just when we need the best, most creative minds to guide Wall Street out of this crisis, our government is assuring that those minds will go elsewhere. If the state were trying to destroy our economy, they could not do a better job.

Another stealth provision that no one debated is the Recovery Accountability and Transparency Board, or RAT Board. It does opposite of its title, by giving politicians the power to thwart any inspector general investigation they find inconvenient.

The board would oversee the in-house watchdogs, known as inspectors general, whose job is to independently investigate allegations of wrongdoing at various federal agencies, without fear of interference by political appointees or the White House.

In the name of accountability and transparency, Congress has given the RAT Board the authority to ask “that an inspector general conduct or refrain from conducting an audit or investigation.” If the inspector general doesn’t want to follow the wishes of the RAT Board, he’ll have to write a report explaining his decision to the board, as well as to the head of his agency (from whom he is supposedly independent) and to Congress. In the end, a determined inspector general can probably get his way, but only after jumping through bureaucratic hoops that will inevitably make him hesitate to go forward.

All of Obama’s talk about transparency was a lie. (Did he mean anything he said during the campaign?)

Luskin notes Obama’s interesting choice of words in calling HR1 “the beginning of the end.”

With the Dow Jones Industrial Average making new lows, President Obama may have it exactly right. When he signed the so-called “stimulus” legislation on Tuesday, he said, “today does mark the beginning of the end.”

OK, he meant “the end of our economic problems.” But it was a peculiar choice of words for a man who is supposed to be so eloquent. It’s easily misunderstood — especially since every single effort he, his administration, and Congress have put forth to stabilize the economy has done nothing but drive the stock market lower and lower.

The beginning of the end. I fear it might be one of the few statements by Obama that has some relationship to reality.

9 Comments so far ↓

  • Chuck

    It brings to mind the wage and price freeze of the Nixon Administration. Of course, this wage freeze is just for the “fat cats.” It didn’t work, it never can work – but politicians never learn. It wouldn’t surprise me, if we start to get significant inflation, if the Obama Administration tries the other side of the coin – price freeze – as well. Which reminds me of the scene from Key Largo, where the gangster “Rocco” was quaking in fear of an approaching hurricane, and the hotel owner said: “Why don’t you point your gun at it, and make it go away?” Or words to that effect. Socialists think if they decree a product is worth a certain amount, then it is so in reality. Reality must conform to their wishes.

  • Burgess Laughlin

    I am not a constitutional lawyer, so I don’t know the details. I wonder if the Republicans will challenge this provision discouraging audits. Perhaps the principled grounds might be attempting to deny the independence of the executive branch and thus eliminating balance (as in “checks and balances”).

    An opinion from an attorney would helpful here.

    Also, perhaps a historian familiar with the Roosevelt administration can see parallels that succeeded for failed.

  • L-C

    Myrhaf: “Did he [Obama] mean anything he said during the campaign?”

    He meant what he didn’t say, that’s for sure.

    Chuck: “It didn’t work, it never can work – but politicians never learn.”

    Politicians make a profession out of never having to learn from mistakes. But the results of a regulated versus a free economy are too obvious to ignore. If politicians truly wanted a benign development of society, they would be willing to try freedom at least once. There’s not much more to the matter than keeping their hands off.

    No, what they want is to live in and with their failing policies. If they and their agenda had the slightest to gain from a prosperous market, they wouldn’t be dumb enough to not let it happen.

  • Joseph Kellard

    But what about the one thing politicians do care about: being re-elected? Does Obama really want the economy to tank so that the Republicans can gain control in Congress in two years, and threaten his job in 2012? If Obama truly knows that his policies will fail, won’t that mean he’ll be sent back to Illinois after his first term?

  • Michael Labeit

    Obama doesn’t need positive results from his economic policy. He has got empiricism on his side. Skeptical-empiricism of the type popular over the last several decades holds that we cannot gain certain knowledge of “meaningful” causal events. Thus, the economic empiricist can say that the New Deal or any other interventionist policy may have ruined commerce in the past but we can’t say for sure that similar interventionist policies will do the same today. Indeed, the economic empiricist claims we cannot identify with 100% certitude any meaningful first causes. Thus, the economic empiricist may deny the intrinsic obstructiveness of socialism because, after all, experience tell us only what things are, not why they are the way they are. Any additional experience may disprove our previous experimental hypothesis.

    When the stimulus crapage fails, all Obama needs to do is blame the failure on Bush and the Republican congressional impediments to the various stimulus and bailout bills. “We did’t act fast enough” will be his faith-assertion if he will ever be asked to account for his errors.

    On the flip side, when the economic recovers, Obama can easily claim that it was the stimulus bills that did the trick. Economic empiricism is intellectual insurance.

  • Myrhaf

    People like Paul Krugman are already preparing the defense. If the economy fails, it will be because Obama did not spend enough to stimulate the economy. He was too cautious because of the evil influence of Reagonomics in America and did not go all the way for the massive spending needed to solve our unprecedented crisis.

    Also, Obama is depending on deception and propaganda, not reason. He hopes that a postmodern press corps that worships him will craft the “narrative” that helps him stay in power. It has happened before. Look at the myth of FDR, that he “saved capitalism from its excesses” with the New Deal. It’s all nonsense — FDR created the Great Depression — and yet the liberal version is conventional wisdom to this day.

  • Joseph Kellard

    I agree with Myrhaf. I did have Obama’s left-wing adoring press in the back of my mind when I asked my questions above. If anyone or anything will save Obama from his failed policies, it will be the media sycophants who are bound to always be by the Messiah’s side. And if Obama can someway, somehow silence his critics, e.g., Limbaugh, Hannity — whether by unleashing the rabble-rousing race merchants, such as Sharpton, on any misstep (e.g. Don Imus), or directly by government censorship – all the better to save face and his presidency.

  • seine

    I like to throw out; When Obama’s stimulus fails will he blame the ‘capitalists’ for being greedy and not co-operating in saving the economy? What I wonder about is whether Pres Obama sees himself as the ‘Messiah’ between the little ACON-type people, and the ‘evil’ capitalist exploiter. His public support comes from the economically naive and the economic parasites. And as brought up the adoring press is on side.

  • Jim May

    I like to throw out; When Obama’s stimulus fails will he blame the ‘capitalists’ for being greedy and not co-operating in saving the economy?

    He might make Rick Santelli the symbol for that one.