Sunday, March 29, 2009

The Myth of "Wall Street vs. Main Street"

Liberal commentators and politicians have been using populist rhetoric during the current financial crisis for political advantage. In particular they have been complaining about financial bailouts by the federal government for banks, stockbrokers and other large corporations involved with trading on the New York Stock exchange on Wall Street, which are collectively referred to as "Wall Street." In contrast, the liberals' populist argument suggests, the federal government should be helping the "little guy," as Franklin Roosevelt would have put it, who resides proverbially on "Main Street."

Of course, even these liberal commentators recognize that the federal bailouts for these large corporations are not some new form of corporate welfare, intended as a kind of political payoff for the wealthy, but are intended to protect the economy from the failings of businesses, particularly in the financial sector of the economy, that would be especially harmful in terms of drastically reducing the availability of credit for all who seek it.

But my main point is to expose this rhetorical metaphor of "Wall Street vs. Main Street" as phony. First of all, Wall Street is the Main Street, in the sense that it is the financial capital of the world, although Pennsylvania Avenue in Washington, D.C. is increasingly supplanting Wall Street in this regard. The more important reason that the metaphor is phony is because the distinction between Wall Street and "Main Street" is blurring. "Main Street" is represented on Wall Street more so than ever before. As of a few years ago already, a majority of Americans were owners of stock -- a majority! Being a stock-owner is no longer a privilege available for only the wealthy few, for today many Americans own stocks in their employee pension plans, if not as willing investors of significant parts of their financial portfolios.

Liberals cannot have it both ways -- demagoguing "Corporate America" while complaining about how lower class Americans are losing their net worth because of the decline in the value of stocks -- of "Corporate America." They must come to understand that government policies that disincentivize investment, like corporate taxes and capital gains taxes, harm not only businesses, which, in turn, harms the economy, but directly harm lower class Americans, who live on "Main Street," and who are the owners of "Corporate America" -- on Wall Street.

Analysis of Obama's Recent Comments

Barak Obama made two recent comments about the economy and the budget at his most recent press conference that are worthy of analysis.

On the economy, the new president referred to the economic expansion of 2002-2007 as "fleeting prosperity," which he attributed to President George W. Bush's policies (i.e. his tax cuts), as if to minimize their effectiveness. First of all, at least in his left-handed compliment, Obama acknowledged the prosperity of the earlier part of this decade at all. Democrats and other liberals have preferred to point to the economic downturn Bush inherited or the mild and brief recession caused by the September 11 attacks as characteristic of the economy of the 2000s. As I note in a previous post, they often tend to ignore the economic record entirely and focus on the fiscal record, pointing to the budget deficits as some kind of an economic barometer.

On those deficits, Obama sought to discredit Congressional Republicans on the subject of fiscal responsibility for having voted for them during the Bush Administration, as if they have no moral standing to criticize Obama's deficit spending. Again, two points are necessary in order to contrast the Bush deficits with those proposed by Obama: 1) the economic growth sparked by Bush's tax cuts allowed the budget deficits to remain proportionate to the size of the economy, and 2) the U.S. had suffered a damaging attack, both in terms of life and the economy, and gone to war to prevent any further such attacks, a situation for which economists and policymakers nearly universally accept budget deficits as fiscally necessary. Obama, however, proposes deficits that would increase in proportion to the size of the economy, extending well past the time even he predicts the economy will have recovered from the current recession, even though he also proposes to reduce military spending.

But the reason I mention Obama's characterization of Congressional Republicans as fiscally irresponsible is that although many Republicans did support wasteful domestic spending during the Bush Administration, there were also many principled conservative ones who did not. Therefore, neither these conservative Republican members of Congress, nor conservative principles themselves, were discredited by the deficit spending during the Bush Administration. Nonetheless, the spending of the Bush would seem to pale in comparison to that already approved and proposed by Obama, which gives conservatives all the moral standing necessary to criticize Obama.

Friday, March 20, 2009

Inherited Debt vs. Inherited Deficits

The Obama Administration is using the excuse for the massive, record-breaking federal budget deficits it proposes for the next several years that it inherited these deficits from the Bush Administration. The Obama Administration has inherited the debt, as all presidents since Martin Van Buren in 1837 have, which is the accumulation of the annual budget deficits, but inheritance of the budget deficit is another matter.

Although it is true that the 2009 budget was partly set under George W. Bush, part of it was the huge $410 billion spending bill that Barak Obama recently signed into law, in addition to his $787 million so-called "stimulus" bill. Leaving aside the fact that Obama only inherited part of this fiscal year's deficit, the Obama Administration will propose its own budgets for the following four years, pending congressional approval. In other words, even if Obama had inherited the deficit fully for this year, he is responsible for proposing all subsequent budgets. He can propose to balance the budget if doing so were his goal. In short, one can only inherit a deficit for the current fiscal year, but afterwards not.

Obama inherited an economic recession that has led to massive federal spending and reduced government revenue, so his Administration could argue that it inherited the situation that will cause deficit-spending to continue. However, Obama has added unnecessarily to the spending himself and even his projections are for robust economic growth, so he cannot use the economy as a total excuse for his proposed budget deficits. Indeed, the deficit would be even higher should the growth be less than he hopes. The few significant spending reductions Obama proposes are from the withdrawal of troops from Iraq, which had begun under Bush anyway, and other massive cuts in defense spending in wartime. Thus, Obama has proposed record-breaking deficits, which would also represent the highest percentage of the gross domestic product since World War II, despite projecting a greatly-improved economy and massive cuts in defense spending. Obama has not proposed any other significant spending cuts that would gradually reduce, let alone eliminate the budget deficit.

We should not allow the Obama Administration to fool the American people into blaming the massive budget deficits Barak Obama proposes on anyone other than Obama and the Democratic Congress that would approve them.

Attack vs. Criticize

The media often reports that some politician has “attacked” another, especially when the alleged attacker is a Republican or conservative. To some degree, the press likes to foment fights in order to generate stories by pitting politicians against each other. Apparently, it is not enough for the media to just to report what one politician has said about another, so it has to make more of the politician’s statement than it is.

It has gotten to the point that any time one politician expresses a disagreement with another, however gently, such criticism is labeled an “attack.” Thus, the word attack has been so overused as to become diluted. Pearl Harbor or September 11 were attacks. Mild expressions of criticism within the context of political discourse are not.

Unless someone is physically assaulted, or so thoroughly lambasted in a personal way verbally as if assaulted, we should avoid calling every critcism an attack.

Thursday, March 19, 2009

Ron Silver, In Memoriam

Hollywood lost one of its best representatives with the recent death of actor Ron Silver, but the rest of America is probably mourning his loss more than Tinseltown.

Silver will be remembered as unusual for his intellect and the courage of his convictions. Unlike typical liberal actors, he could think for himself, even if no one around him were able to reach the same conclusion, and he could bravely speak out in favor of his beliefs, at the risk of losing friends or job opportunities. Of course, Silver could do so because he could back up his opinions with historical facts. He possessed an amazing combination of talent, that of being able to be both a student of history and an accomplished actor, which gave him the gift of being able to cite appropriate, lengthy quotations -- verbatim -- when making his point, and with the skill only an actor could demonstrate.

Before September 11, Silver was known as one of those typical liberal actors, although he had been in favor of strongly prosecuting the Cold War, unlike many on the left. At Bill Clinton's first inauguration, for example, Silver had infamously expressed outrage at the military flyover, until he realized that now that a liberal Democrat was Commander in Chief, "those are our planes."

But one of the many things to change on September 11 was the attitude of some liberals. Silver was an outspoken leader among them who realized the nature of the threat to the life and liberty of all free people posed by Islamic terrorists, as well as the need to act decisively to counter this threat without sacrificing freedom. He even recognized that there was little distinction between the Islamic terrorism of al-Qaeda and tyrants like Saddam Hussein. Although he remained a liberal on other issues, Silver's recognition of the critical importance of security led him to support conservative Republicans like Rudolph Giuliani and George W. Bush -- even to the point of speaking at the Republican National Convention in 2004. Silver's outspokenness cost him some work in his field, but he died with the satisfaction of knowing that he was right.

With the passing of Ron Silver from the scene, the cause of liberty has lost one of its most eloquent and unique supporters, but we shall continue his legacy as long as we courageously stand for freedom. May he rest in peace.

Monday, March 16, 2009

Personal Notes

I am sorry that I have been unable to post lately, as I have been intensely focused necessarily on local political matters. I am eager to return to posting, as I am never at a loss for topics, between both timely and timeless issues, and I have been enjoying my blog very much. Thank you for your patience. I appreciate your support! Please feel free to continue to suggest topics or to post comments.

As perhaps is obvious, there does not appear to by any way to indent paragraphs in these posts, which I hope does not make reading them difficult.

Saturday, March 7, 2009

Media Errors on Afghanistan and Iraq

The ignorance of the media is disturbing, especially because the errors that it purveys are accepted as accurate even by commentators and politicians. The inaccurate information all of these individuals spread undermines the foundation of knowledge held by the public, which, in turn, causes citizens to be uninformed or falsely informed when they cast their votes in elections for public office.

Inaccuracy also undermines confidence in the media, commentators and policymakers, as well as distracts from any accurate information they attempt to convey. The media cannot even seem to get basic pronunciation or facts right about Afghanistan or Iraq, even though these two countries have been of enormous importance to the world.


In Afghanistan, I have identified at least three common errors these sources of information get wrong. Sometimes, they use the word "Afghani/s" for things that are of or related to Afghanistan or to refer to its people. However, the correct word is Afghan. Afghani refers strictly to the currency of Afghanistan.

The media refers to certain individuals in Afghanistan as "using only one name," as if to imply that the individual has more than one name, but chooses not to use it. But many Afghans have only one name, so the media should say that certain individual "has only one name." The same error is made in regard to Indonesians and others.

The media often states that Soviet troops were in Afghanistan for ten years. They derive this figure from the years 1979-1989 that the Soviets were in Afghanistan, ignoring the fact that the Soviets invaded December 26, 1979 and left on February 15, 1989 -- after being there only a little over nine years. In other words, the media rounded up the number of years, instead of rounding it down because it probably did not bother to check the dates. Yet, if a person were one minute away from his 100th birthday when he died, the press would round his age down to 99 because the latter figure would represent his legal age.

I will take the opportunity to point out yet another media error here because it involved a recent battle with the Taliban in Afghanistan. In one story, one of the wire services reported that "more than 20" Taliban were killed in one battle and another five Taliban killed in another battle in Afghanistan on a particular day. The media then drew the conclusion that "at least 25" Taliban were killed in battles that day, which demonstrated either its carelessness or its ignorance of basic math and logic. More than 20 people must mean at least 21. Twenty-one plus five equals at least 26, not 25.


In regard to Iraq, the media's pronunciation is below professional standard. First, it is necessary to explain that Arabic is a non-alphabetic language. Therefore, Arabic must be rendered into an alphabetic language phonetically. For universal pronunciation, it is rendered specifically into the Latin Alphabet, in which vowels are pronounced consistently. Thus, Arabic words are to be pronounced as they are rendered -- phonetically, in the Latin Alphabet. Yet, the media seems insistent on pronouncing Arabic words and names as if they were English words, or, in other words, randomly.

Here are three common examples of the correct pronunciation versus the most common incorrect one: Iraq (ee ROCK), not (eye RACK); Mosul (mo SOOL), not (MO zul) (if it were supposed to be pronounced with a Z sound, it would have been rendered "Mozul;" Abu Ghraib (AH boo gra EEB), not (AH boo GRAYB) (if two vowels were intended as a diphthong, it would have been rendered that way, such as "Grayb." I have never heard one member of the press or politician yet pronounce the last example correctly. In short, the media cannot even pronounce words phonetically -- even well-known ones.

Another area of media error concerns the different religious and ethnic groups in Iraq, which the media tends to conflate. For example, it almost always refers to the main groups in Iraq as "Shi'ites, Sunnis and Kurds." Yet Kurds are Sunnis. In other words, this reference would be like saying "Christians, Jews and Blacks," as if Blacks were not Christian. What the media means to say, but seldom ever does, is "Shi'ite and Sunni Arabs, and Kurds."

Shi'ites present another challenge for ignorant members of the press. They suddenly learned the word Shia to refer to the sect itself, which they began to use as an adjective as never before in order to describe things of or related to Shia Islam, instead of saying "Shi'ite." Worse, they invented the word "Shias" to supplant Shi'ites to describe adherents to Shia Islam.

A major area of media confusion and inaccuracy arises from the name of the current war in Iraq. Although it gets it right in Afghanistan by calling that conflict the "Afghan War," and never the "Afghanistan War," it usually refers to the war in Iraq as the "Iraq War," instead of the "Iraqi War." It would be like calling it the "Korea War" instead of the "Korean War." Note: it should be called the "Vietnamese War," not the "Vietnam War."

The issue of the name of the war in Iraq raises a larger problem. The media now refers to what it called the 1991 "Persian Gulf War," -- a name it invented -- as the first Gulf War. The first war in the Persian Gulf was the Iraqi-Iranian War of 1980-1988 (which the media calls the "Iraq-Iran War," which would be like calling it the "Russia-Japan War," instead of the "Russo-Japanese War,") which, as I noted in a recent post, involved attacks on shipping in the waters of the Gulf. However, the Liberation of Kuwait -- the name chosen by the Administration of President George H.W. Bush, was largely not fought over the waters of the Gulf. It makes more sense to distinguish the first and second American-lead campaigns against Iraq as the Liberation of Kuwait and the Liberation of Iraq (the latter being the name chosen by the Administration of President George W. Bush), not only because these were the official names of these wars, but also because they most accurately express the different purposes of those wars.

If the media cannot get even basic pronunciation and facts right about the major issues of the day, we cannot have any confidence in it, nor can we have much confidence in policymakers who repeat the same errors.

Van Buren vs. Reagan and Bush

I thought a historical example of the folly of the liberal argument that the budget is all that matters for the economy would be interesting.

It is inconsistent that liberal historians rate President Martin Van Buren relatively poorly, considering that he balanced the budget during a depression, the Panic of 1837. They fault The Little Magician for not having done more, even though there was nothing more he could have or should have done. But if liberals believe that Ronald Reagan's or George W. Bush’s deficit-spending was harmful to the economy, as if the budget is the same as the economy, they ought to hail Van Buren as among the greatest presidents, regardless of the condition of the economy. In other words, if Reagan and Bush were bad for the economy because they were bad for the budget, even though the economy was in prosperity during their administrations, then Van Buren must have been good for the economy because he was good for the budget, even though the economy was in depression. Indeed, the fact that the Panic of 1837 did not end, despite Old Kinderhook’s fiscal restraint, suggests that fiscal policy does not necessarily determine the economy, for the budget and the economy are not the same thing.

Van Buren should be given credit for balancing the budget, and not blamed for the depression, while Reagan and Bush should be credited with the fiscal (taxes and spending), monetary and trade policies that contributed to economic prosperity, despite the deficits.

The point is not to suggest like liberal economist John Maynard Keynes, who influenced Franklin Roosevelt, that deficit-spending is good for the economy, but that it is not accurate to judge economic performance strictly by observing whether the federal budget is balanced. Again, liberals really do not care about whether the budget is balanced, or even whether the economy is in prosperity. All they care about is that taxes are high on the upper classes and businesses.

Friday, March 6, 2009

On the Federal Budget

The federal budget represents the revenue and expenditures of the federal government of the United States. It is intended to fund the federal government so that it can fulfill its primary obligation: to protect the rights of American citizens. The budget is not the same thing as the economy, which is the commerce in which the people engage with each other. The budget – it size and whether it is in surplus or deficit – is a factor of how the government is doing, whereas the economy is a factor of how the people are doing. Although the budget and the economy affect each other, they are not the same. The federal budget is less than a quarter of the size of the gross domestic product (GDP), the total value of all goods and services produced.

The budget has occasionally been balanced, but in most years it has been in deficit. The accumulation of annual budget deficits is called the “national debt.” The national debt has existed throughout American history, except briefly during the 1830s, when President Andrew Jackson became the only Chief Executive to retire it. Deficits have been necessary for wars or other emergencies, but the practice of deficit-spending as an economic policy designed to stimulate growth by putting money into the economy was introduced by President Franklin Roosevelt during the Great Depression. There have been relatively few balanced budgets in the modern period.

Liberal economists and politicians criticized Presidents Ronald Reagan and George W. Bush for the massive deficits produced during their administrations, blaming them for all sorts of supposed economic ills, as if the budget is the same as the economy. The liberals completely ignore the economic prosperity of 1982-1990 and 2002-2007, during the Reagan and Bush administrations, respectively, and hope that people forget about the economic growth of those periods. But if liberals were consistent in the belief they have held since Roosevelt that government spending stimulates the economy, then they would credit Reagan’s and Bush’s deficit spending with the prosperity of the 1980s and 2000s. Yet they continue to blame Bush’s deficit-spending for the current economic recession. What liberals are really blaming is not the overspending by those presidents, but the Reagan and Bush tax cuts, even though the tax cuts were primarily responsible for the prosperity enjoyed during their administrations by allowing people to keep more of their own money. This liberal attack on tax cuts is designed to justify tax increases in order to fund more spending -- under the phony guise of opposing deficits.

Presidential candidate Barak Obama criticized Bush’s deficit-spending and promised change. So far, the only change in the budget he is bringing is to rack up even larger deficits that take up an even larger share of the economy. A review of American history suggests that small or temporary deficits apparently are relatively harmless, but large, permanent deficits require the government to borrow huge sums of money and to pay a substantial amount of interest. Thus, whatever short-term stimulus Obama’s deficit-spending would engender, it will be costly in the long term.

Even in the mean-time, deficit-spending takes money out of the economy and only returns it after the bureaucratic middleman takes his cut. The spending appropriated by government distorts the free market not only because it is less efficient than that directed by the people with their own money, but also because government tends to direct taxpayer dollars poorly, that is to say, to projects and programs in which private individuals would not necessarily invest money if given the choice.

In short, Obama’s proposed tax increases to pay for his deficit-spending will have the opposite effect on the economy of a stimulus, while his spending spree will necessitate high taxes well into the future in order to pay off the increased debt.

Wednesday, March 4, 2009

Political Updates

I was surprised by the criticism of Louisiana Governor Bobby Jindal's Republican Response to Barak Obama's address to the Joint Session of Congress. The reformist governor suggested a good dose of fiscal conservatism and liberty as the antidote to Obama's taxing, spending and socialism. The criticism focused primarily on Jindal's delivery, but I only had read the transcript, which proves that much of politicians' popularity or unpopularity is based upon the impression they give through appearing on television instead of their ideas. The most famous example was that a majority of those who only listened to the Kennedy-Nixon debate of 1960 on radio believed that Richard Nixon won, while a majority of those who only watched it on television believed that John Kennedy won the debate.

The bill that would grant the District of Columbia a Representative in Congress is even more unconstitutional than I first realized, as the offsetting provision for the second seat in Utah would also be an at-large seat, like Utah's current one. Two at-large seats, instead of seats from two districts, would violate the "one-man one-vote" principle, as every citizen of Utah would thereby be represented by two members of the House of Representatives.

Pennsylvania Political Update

A Republican won the special election for the Pennsylvania Senate yesterday, giving the GOP a 31-19-vote majority in the upper chamber of the General Assembly. The Republican victory represents a net-gain of 1 seat in the 2008 election cycle, as the vacant seat had been held by a Republican, despite Obama/Biden’s half-million-vote victory in the Keystone State.