The Democrats Are Still Running Against Bush, Like Hoover, with the Same False Blame for the Economy

The Democrats’ central premise for the 2008 Elections was that Republican policies had caused the recession and therefore must not be allowed to retain the presidency.  Their premise for the 2012 Elections is similar: it would harm the economy to elect a Republican and return to the same policies.  The Democrats are thereby using the same old tactic they used during the Great Depression, for which they falsely blamed President Herbert Hoover.

Hoover had only been in office for seven months when the stock market crashed and the Depression began.  The Depression was caused by a number of factors, including the European economy that was pulled down by Germany, and exacerbated by a number of others, not by Hoover’s policies.  The Democrats also gave Hoover no credit for any of his policy attempts to mitigate the Depression.  Once elected, they continued to blame him and the Republicans for the continued depression, even though, despite their massive policy interventions, it lasted until the start of the Second World War.  The war stimulated economic growth by necessitating a buildup of armaments and materiel.  Indeed, the Democrats continued to run symbolically against Hoover for decades, winning five presidential elections consecutively and every congressional election but two from 1930-1994, except for the Senate from 1980-1986. 

Now, the Democrats have similarly been falsely attempting to blame President George W. Bush and the Republicans for the Panic of 2008 and the “Great Recession.”  As a result, they won the 2008 election.  However, their success was short-lived, as they lost the 2010 midterm congressional elections.  Nevertheless, they intend to continue to fool American voters uninformed about macroeconomics, fiscal and monetary policy, into wrongly believing that the Republicans are responsible not only for initiating the recession, but its continuation to this day. 

A key difference between Hoover and Bush was that the latter came into office during an economic downturn and the economy began to recover after the enactment of his policies.  It not only recovered after Bush cut income taxes, which stimulated economic growth, but prospered for several years, with numbers similar to those during the Reagan and Clinton booms, with even lower interest rates.  Millions of jobs were created, income increased and poverty decreased while inflation was held down, all despite the September 11 Terrorist Attacks that represented a trillion-dollar blow to the economy.  Prosperity was one reason why Bush was reelected, unlike Hoover. 

The Democrats are trying to make the American people forget the Bush boom or somehow to conclude that his tax cuts, which they themselves have extended, for example, caused a recession five or six years after their full enactment.  Indeed, there is another parallel between the Democratic campaigns against Hoover and Bush.  The Democrats use the end of the boom-and-bust cycle to stand for the entire period.  Thus, the Depression, which began in October of 1929, is meant to stand for the entire Roaring Twenties, as if to make people forget the prosperity under Republican Administrations of that decade.  Similarly, after the Reagan boom of 1982-1990, Bill Clinton and the Democrats did not limit their criticism of President George H.W. Bush’s record to his specific policies, but blamed the entire period of record-long prosperity on Republican policies in general, as if the 80s were something other than a period of growth.

Economists, except for Marxists, agree that income tax cuts stimulate the economy by allowing people to keep more of their money to spend, while supply-side economists also recognize that tax cuts incentivize more work and investment.  Income tax cuts have led to prosperity and increased government revenue every time they have been tried in American history: by Presidents Warren Harding-Calvin Coolidge, John Kennedy-Lyndon Johnson, Ronald Reagan and George W. Bush.

Even after the Panic of 2008, the Bush Administration’s bold policies, although controversial, are credited by economists for deftly avoiding a depression.  In fact, the economy was poised to recover by mid-2009 without further governmental intervention, and did by June of that year – before President Barack Obama’s policies were fully implemented and despite his early practice of undermining confidence in the economy.

See also my last four posts, in which I explain why presidents receive too much credit or blame for the economy and why Bush was not responsible for the recession, as well as how certain Democratic policies exacerbated it and that Obama has continued many of the Bush policies he and his liberal Democratic supporters criticize.  See also my post from April of 2009, Obama Did Not Inherit the Economy from Bush, http://williamcinfici.blogspot.com/2009/04/obama-did-not-inherit-economy-from-bush.html and from May of that year, The Economy, Deficit and Debt at George W. Bush’s Inauguration, http://williamcinfici.blogspot.com/2009/05/economy-deficit-and-debt-at-george-w.html.

Bush and the Republicans Are Not to Blame for the Recession, Part III: The Bush Policies Obama Continued and the Democratic Policies that Exacerbated the Great Recession

           In my first post in the series, I examined the prosperity that was unleashed by President George W. Bush’s tax cuts, despite the economic and security challenges he faced.  The point was to refute the argument by liberals and Democrats that Bush was responsible for the current economic recession, the origins of which I explained in the second post in this series as having been caused by natural economic and global factors that were exacerbated by Democratic policies.  The purpose of this final post is to summarize and refute the specific liberal and Democratic arguments that the policies of Bush and the Republicans are to blame for the recession, especially by noting these Democratic policies and observing how the Democratic Obama Administration has followed most of Bush’s policies they blame for the recession.

I doubt that many people can even identify what specific policies of the Bush Administration allegedly caused the recession.  Presidents often wrongly receive too much credit or blame for the economy, as people assume not only that government, but particularly the federal government and especially the president is responsible.  I have identified four allegations that Bush’s policies caused the recession that are either wrong or exaggerated while the economically beneficial effects of the policies are ignored, as well as the degree to which external matters harmed the economy:

1) Tax cuts.  Bush’s across-the-board income tax cuts sparked the aforementioned economic recovery, despite September 11 and led to prosperity from 2002-2008.  The liberals’ and Democrats’ argument that tax cuts caused the recession is a novel one not supported by economists except Marxists.  Regardless, Obama extended the tax cuts in order to avoid a tax increase during a weak economic recovery, which even he recognized would have harmed the economy.

2) Deficit spending.  The argument that spending more than revenues, thereby causing a budget deficit, drives up interest rates, which, because of the over $5 trillion dollars of debt that had accumulated since the 1830s until Bush was inaugurated, cost the government even more because of interest it must pay to service that debt.  However, interest rates reached historic lows during this time.  The deficits were being reduced as percentages of the gross domestic product, despite the need to increase the defense and intelligence budget after the Clinton Administration – until the start of the recession, although the total is exaggerated, as some were in the form of loans with interest that have mostly been repaid during the Obama Administration or the purchases of stock that have been sold for profit.  Regardless, Obama increased the level of federal spending, which he argued was economically “stimulative” when he did it, which contradicts the argument that deficits caused the recession.

3) Trade.  Bush was one president out of the last five from Ronald Reagan to Obama who have negotiated free trade agreements.  In fact, Obama signed two major free trade agreements that were negotiated by the Bush Administration.           The increase in exports has contributed to economic growth, while the decrease in the cost of imports has helped mitigate inflation.

4) Deregulation or lack of adequate regulation.  The main causes of the financial crisis that led to the Panic of 2008 was the collapse of the real estate market, which was the result of regulations from the Democratic Carter and Clinton Administrations to encourage home ownership, but which encouraged lenders to make bad loans to those who were not creditworthy.  Although the Bush Administration added to this encouragement, it warned repeatedly about the dangers of adequate standards for credit for loans made by the federally-backed Fannie Mae and Freddie Mac mortgage entities, but the Democratic Congress, including then-Senator Obama, declined to act to protect the American taxpayer. 

Many bad mortgages had been bundled together with good mortages as investments by banks that were unable to distinguish which were good and which were not, which critics blame on a lack of adequate bank regulations.  Some liberals and Democrats blame the Bush Administration for the banking deregulation, but the most significant banking deregulation occurred during the Clinton Administration.  Regardless, the collapse of the real estate market did not cause the economic downturn that led to the recession, but it did exacerbate it.  Whether or not the economy would have recovered before going into recession is difficult to determine, but deregulation or lack of adequate regulation was not to blame.

In short, of the four Bush Administration policies the liberals and Democrats claim caused the recession, Obama has continued two of them and increased another while he and his party were heavily responsible for the other one.

Bush and the Republicans Are Not to Blame for the Recession, Part II: The Real Causes of the Recession and the Democratic Policies that Exacerbated It

           In my first post in this three-part series, I examined the prosperity of the Bush years that was stimulated by his income tax cuts.  The purpose of this post is to identify the true causes of the recession and the factors that exacerbated it.

What accounts for the current recession that ended the Reagan boom of 1982-2007/8 was not federal fiscal policy, but the natural business cycle of boom and bust.  Unless equilibrium is maintained, usually by artificial government intervention, economic growth causes inflation, which, in turn, slows down economic growth.  The recession that began in 2007 or 2008 was triggered by a rise in oil prices that began in 2005 for the first sustained period since before Reagan, which was the result of increased global demand (e.g. more factories producing more goods require more oil, more purchases of vehicles, etc.).  The rise in energy prices caused inflation, which, in turn, necessitated a rise in interest rates from central banks around the world like the U.S. Federal Reserve in order to counteract rising prices by reducing the money supply. 

The current recession might have been mild and brief like its 1990-1991 and 2001-2002 predecessors, but for the exacerbating factor of rising interest rates.  Many risky mortgages became problematic once debtors could no longer afford to make payments because of the higher interest rates.  Exotic investments based upon these mortgages were undermined in value and the entire credit system was poisoned, which nearly brought down the entire global financial system.  This financial crisis became known as the Panic of 2008. 

These risky mortgages were encouraged by the policies of the Democratic Carter and Clinton Administrations to increase home ownership, particularly among blacks and the urban poor.  The Bush Administration added only slightly to this policy, but warned repeatedly about the risk of these loans to the federally-backed mortgage lenders.  The Administration’s warnings to the Democratic Congress, of which Barack Obama was a Senator, were ignored.

A depression has thus far been avoided thanks to lower interest rates and other actions by the Fed and foreign central banks, as well as other aid provided by the Bush and Obama Administrations, but the Panic has left enough scars to make this recession the worst since the Great Depression.

In Part III of this series of posts, I shall examine the Bush policies for which liberals and Democrats blame him for the recession, refuting all their arguments and observing how all of policies they cite are either Democratic policies that exacerbated the recession or Bush policies that have been continued by President Barack Obama’s Democratic Administration. 

Bush and the Republicans Are Not to Blame for the Recession, Part I: The Bush Prosperity

           In my last post, I explained that presidents in particular, the federal government as a whole, or even government in general receive too much credit or blame for the economy, which is not even the responsibility of government.  Government is charged with the primary duty of protecting liberty, which itself necessitates some harm to the economy in the form of taxation, in exchange for the benefit of allowing commerce.  Nevertheless, it is possible to analyze the economic affects of specific government policies. 

As I noted in my May of 2009 post, The Economy, Deficit and Debt at George W. Bush’s Inauguration, http://williamcinfici.blogspot.com/2009/05/economy-deficit-and-debt-at-george-w.html the economy had been experiencing a downturn since 2000, during the Clinton Administration.  Bush took office in 2001. 

The tax cuts Bush signed into law began to stimulate economic growth, but before they could fully take effect for that tax year, the September 11 Terrorist Attacks occurred, which represented a trillion-dollar blow to the economy.  As expected, the economy went into a recession, although it was mild and brief.  By 2002 the economy was in recovery, on its way to five or six years of prosperity.  The 2002-2007/8 period of relatively robust economic growth was characterized by low unemployment (and the creation of 8 million jobs), low inflation (despite sharply higher oil prices since 2005) and low interest rates, which combined to increase personal income and decrease poverty. 

Then the current recession began in 2007 or 2008, which seems to have made people forget about the lengthy period of prosperity that immediately preceded it.  It is difficult to understand how Bush’s policies were responsible for several years of prosperity, and then suddenly could have been supposedly responsible for an economic downturn, if the apparently contradictory belief that presidents are chiefly responsible for the condition of the economy is true.

It should be noted that perhaps the most significant contribution Bush and the Republican Congress made for the economy were their policies that prevented any further terrorist attacks after September 11, in addition to fulfilling the primary government responsibility of protecting liberty.

In the next post in this series, I shall identify the real causes of the current recession and the factors that exacerbated it.

Presidents Receive Too Much Credit or Blame for the Economy

It is often stated that people give presidents receive too much credit or blame for the economy, but the popular misconception about presidential management of the economy is seldom ever corrected. 

As I have noted in earlier posts, presidents do not manage the economy, as they would in socialist systems, as the Constitution of the United States grants relatively little economic power to the federal government.  The economy is not the responsibility of government.  The responsibility of government is to protect the rights of the people.  Protecting the people from all enemies foreign and domestic is the primary economic benefit of government. 

There are mostly indirect economic aspects to other federal government policies, but not an economic policy, per se.  The federal government, like other governments, affects the economy through its fiscal policy (taxing and spending), but it only represents about one seventh of the economy.  The federal government also influences the economy through regulatory policy (e.g. it is illegal to steal or defraud).  Monetary policy affects the economy, but it is controlled by the Federal Reserve.  Although the Chairman of the “Fed” and its Board members are appointed by the president, they operate independently of the president and Congress and their terms of office overlap presidential administrations.  One area where the federal government does have an economic role is in promoting trade because trade is an aspect of foreign relations.  The government makes trade permissible and obtains favorable terms, but it is up to the people to make the trades themselves.  In short, although the federal government does not have economic responsibilities, its policies do have an impact on the economy.  Note I do not refer only to the president, but to the federal government as a whole because Congress shares responsibility for policies that affect the economy.

Contrary to the idea that government’s purpose is to promote the economy, the duty of protecting liberty necessitates that government harm the economy to some degree in order to allow commerce to occur freely.  For example, taxes are a drag on economic growth because they remove money from the entire economy for the operation of government.  Regulation is necessary, but burdensome, even if kept to a minimum.  The federal government must impose trade sanctions on foreign states as part of foreign policy.  It is the responsibility of government to harm the economy as little as possible in accomplishing its end. 

A lack of basic knowledge of economics, the purpose of government and the U.S. Constitution has led many people to give too much credit or blame to government, especially the federal government and to presidents in particular, for the state of the economy.  Also, they do not acknowledge sufficiently the affect of various external matters, such as the policy of other governments (e.g. the States), natural disasters, scientific discoveries, or foreign events that benefit or harm the economy, making it even more difficult to give all the credit or blame to the federal government, let alone the president.  See also my post from August of 2011,  External Influences on the Economy Are an Excuse for Obama, but not for Bush, http://williamcinfici.blogspot.com/2011/08/external-influences-on-us-economy-are.html.

It is a current popular misconception that somehow President George W. Bush is responsible for the current recession although few people could identify exactly which of his policies were supposedly harmful to the economy or why, just as few people could identify which policies of President Bill Clinton were supposedly beneficial to the economy until his later compromises with the Republican Congress to cut taxes. 

In my next three posts, I shall discuss how Bush’s fiscal and trade policies, which President Barack Obama has largely followed, are not responsible for causing the current recession, while identifying its real causes and those long-term Democratic federal government policies that exacerbated it.

Commentary on Andrew McCarthy's Analysis of the Islamist Enemy

Andrew McCarthy has written an outstanding analysis in National Review on defining the Islamist enemy in the War on Terrorism: http://www.nationalreview.com/articles/331787/real-foreign-policy-failure-andrew-c-mccarthy.  I cited McCarthy, the federal prosecutor of the blind sheik behind the first World Trade Center attack and other plots in my post from November of 2010, The Anti-Anti Terrorist Left, http://williamcinfici.blogspot.com/2010/11/anti-anti-terrorist-left.html.

McCarthy analyzes the religious motivations of the enemy and criticizes the use of such terms as “extremist” or “radicals” to describe them.  He identifies the Islamist enemy specifically as those who support sharia (Islamic law), regardless of whether they are themselves militant.  I have long made a distinction between non-militant Muslims and militant Muslims (Islamists engaged in Islamic holy war to spread Islam by conquest), regardless of whether the latter intended to impose sharia, but his identification of our particular enemy in the War on Terrorism as all those who support sharia also makes sense, as he observes such Muslims are the allies of the militants if they approve of violent acts in favor of imposing sharia.  McCarthy notes the incompatibility with liberty of sharia.

I would like to develop briefly a few of McCarthy’s points.  He is right that it is not useful to label the enemy as “extremist.”  This political label is empty, as it simply identifies one as having a polar opposite viewpoint from someone with the completely contrary viewpoint who thus necessarily is also an extremist.  Indeed, calling someone a “Muslim extremist” implies that he is extremely Muslim, meaning that he is a consistent, faithful Muslim, which does not seem to be what is intended by this label.  McCarthy is also correct that it is not accurate to describe the enemy as “radicals.”  A radical, from the Latin for root, is one who believes in tearing something up at its roots, whereas the Islamists believe that they are getting back to the roots of Islam.

Moreover, these expressions, such as also referring the enemy as “fanatics,” presuppose the requirement of non-Muslims to judge what is true Islam and what is not.  Even within Islam, although there are respected scholars, there is no longer any human authority (a caliph) to make such a judgment, let alone among non-Muslims, especially certain Western policymakers who insist they know what is true Islam and what is not.  Therefore, as I have posted repeatedly, it is necessary for us to recognize the express religious motivation of militant, including terrorist, Islamists, regardless of our opinion about whether or not it represents the true religion of Islam.

The Pennsylvania General Assembly Completes a Productive Session

           The Republican-majority Pennsylvania General Assembly has completed a productive legislative session.  The session is most notable for the passage of two balanced budgets – on time and without raising taxes.  The budgets closed a $4.5 billion budget shortfall leftover from Democratic Governor Ed Rendell’s Administration.

            Among the scores of bills the Commonwealth’s legislature passed that were signed into law by Governor Tom Corbett, a Republican, were the following significant measures, all of which I have posted about over the last two years:  renewal of the phase-out of the capital stock and franchise tax; elimination of the inheritance tax on family farms; imposition of a principled natural gas impact fee, as opposed to a tax; welfare reform; small business regulatory reform, tort reform (more fairness in seeking damages from lesser defendants whose liability was minor); educational choice (educational scholarships for businesses to award to parents); expansion of the Castle Doctrine; greater regulation of abortion clinics – equal to regular medical procedure clinics; banning bath salts and texting while driving; corrections reform and voter identification, requiring all voters to produce a photographic identification in order for their ballots to be counted. 

Democrats Heap Praise on Bush’s Economic and Fiscal Policies

The Democrats have been praising the economic and fiscal policies of former President George W. Bush, albeit tacitly, especially during the 2012 presidential campaign.

First, the Democrats at their convention recently compared the “Obama recovery” to the “Bush recovery.”  They are thus making an acknowledgement that there even was a Bush recovery.  The recovery was from the economic down-turn that had begun during the Clinton Administration and that was exacerbated by the September 11 Attacks, which resulted in a short, mild recession.  The Democrats’ comparison is also an implication that there was a period of Bush prosperity, despite all the Democratic and liberal criticism of the economy and of the policies of President George W. Bush and the Republican Congress.  That admission had first come in 2008 when Democrats began citing economic statistics, describing the figures as the worst in several years, meaning that the period of several years beforehand was necessarily prosperous.

Second, United States Vice President Joe Biden acknowledged in the vice presidential debate with Republican nominee Rep. Paul Ryan that the Bush income tax cuts were for the middle class.  Instead of the usual liberal Democratic references only to the “middle class tax cuts,” as if they came from someone other than Bush, or Bush’s “tax cuts for the wealthiest,” as if Bush did not cut tax rates for all income taxpayers, the Vice President acknowledged Bush’s responsibility for the popular tax cuts he referred to as the “Bush middle class tax cuts.”  Obama has extended all of the Bush tax cuts – for both the middle class and the wealthy – in order to avoid harming the economy during this weak economic recovery. Apparently, liberal Democrats believe that tax cuts by Republicans cause recession, but cause recovery when Democrats extend them.

Meanwhile, since the presidential campaign in 2008, Barack Obama and other Democrats have complained that Bush and the Republican-led Congress increased Medicaid by implementing a prescription drug program without raising taxes to pay for the program.  Nevertheless, the Democrats are acknowledging that the Republicans expanded the program they have argued repeatedly Republicans wish to destroy.

Of course, the main Democratic praise has come not from words, but from Obama’s actions.  Not only did he extend the Bush tax cuts, he submitted two free trade agreements that Bush negotiated to the Senate for ratification, which the Democratic-majority Senate provided.  Additionally, one could argue that Obama’s deficit spending is a continuation of Bush’s, although Obama has increased it significantly.  Apparently, liberal Democrats believe that deficit spending by a Republican is harmful to the economy, but economically stimulative when they do it.  They have to believe it or else they have little foundation for the central premise of the 2012 campaign: that Bush’s policies caused the recession that the Obama Administration has been unable to recover from sufficiently and therefore, a return to office of Republicans and the implementation of fiscally conservative policies like reducing spending, borrowing and taxes would be unwise. 

In an upcoming post, I shall treat in more detail on the subject of how the liberal Democrats are wrong to blame Bush and the Republicans for the recession.

Obama Is Wasting Billions of TARP Profits

         The Troubled Assets Relief Program (TARP) is predicted to cost $25 billion, not the $700 billion initially appropriated and loaned, as borrowers have been repaying the loans with interest or the government has been selling corporate stocks it purchased through TARP for a profit.

            The controversial TARP was proposed by the Bush Administration and approved by the Democratic majority Congress in response to the financial crisis of 2008.  The Administration, which feared the seizing up of the entire financial system that could lead to a depression, proposed the program of government loans in order to protect bank depositors from the mismanagement of financial institutions with whom they had deposited money (i.e. to whom they had loaned).  Those institutions had made bad loans when interest rates were low – often to borrowers who were not creditworthy who were then unable to make their payments once interest rates rose.  Depositors, therefore, would have been innocent victims of these institutions had they not been able to borrow from the government and collapsed. 

In other words, TARP was intended as a bailout for depositors, not, as liberals, libertarians and populists on the right have falsely portrayed, as having been done for the benefit of big banks and other “Wall Street” financial institutions.  The precedent of federal protection for depositors had already been set by the federal government during the Great Depression when the Roosevelt Administration established deposit insurance, instead of allowing the private sector to offer it, as it does every other kind of insurance.  Nonetheless, these big financial institutions did benefit by receiving taxpayer money.  Even if most of the money will be repaid, the cost to the taxpayers is staggering. 

The broader concern for the economy alone was also cited as a justification for the bailouts.  It could be argued that TARP prevented the recession from becoming a depression, which would have harmed the public economically even more and thereby decreased government revenue even further, but whether the program worked or not does not justify the expansion of federal power.  However, as I have noted frequently, the economy is not an appropriate concern for government, especially not the federal government of the United States, which, unlike Socialist regimes, has relatively little direct economic authority.  Indeed, bailouts became a habit as an economic policy, as the Obama Administration extended the practice under TARP to automobile companies – strictly on economic grounds.  Bailouts like TARP should have been an exception, necessarily only to clean up the mess from government intervention in the economy, not the rule as a new form of government economic intervention.

My point about the report that TARP will have cost the taxpayers far less than originally feared, albeit an enormous amount, is that the original $700 billion figure for these loans is counted in government accounting as part of the Bush era deficits and as a corresponding increase in the federal debt, as if it were strictly an expenditure like every other outlay from the Treasury, while the repayment of these loans is counted as revenue for the Obama Administration, which partially offsets its massive spending spree.  Thus, the report confirms my prediction (See my post from September of 2009, Analysis of Obama’s Economic and Fiscal Policies, http://williamcinfici.blogspot.com/2009/09/analysis-of-obamas-economic-and-fiscal.html) that TARP would make the Bush Administration’s spending appear higher than it actually was while making the Obama Administration’s spending seem less high than it is. 

In other words, Barack Obama is the president who is essentially spending most of the bailout money instead of using the revenue from the interest form or repayment of the loans or sale of corporate stock to reduce the federal debt.  Furthermore, the report is more evidence that disproves his contradictory argument that Bush’s deficit spending was responsible for the recession while Obama’s own significantly increased deficit spending is the solution, a topic upon which I shall treat in an upcoming post.

Benghazi, Arkansas and Ft. Hood: The Obama Administration’s Pattern of Failure in Identifying the Enemy

The purpose of this post is to tie together two earlier posts in recognition of a pattern I have discerned.  Last month, I posted about the Obama Administration’s unwillingness to label the attack on the United States Consulate in Benghazi, Libya as “a militant act of jihad (Islamic holy war),” in my post, The Attack on the U.S. Consulate in Libya Was an Act of Jihad, Not Anger, http://williamcinfici.blogspot.com/2012/09/the-attack-on-us-consulate-in-libya-was.html.  I had posted in February of this year about the Administration’s refusal to recognize the 2009 attacks on the military recruiting office in Arkansas and at Ft. Hood, Texas, both of which were similar militant acts of jihad, in my post, American Casualties of Jihad in the U.S. Homeland Should be Awarded Purple Hearts, http://williamcinfici.blogspot.com/2012/02/american-casualties-of-jihad-in-us.html. 

As I have noted repeatedly, the Obama Administration’s inability or unwillingness to label correctly who the enemy is in the War on Terrorism and recognizing what the enemy’s motivations are renders the Administration incapable of identifying who the enemy is and, therefore, of defeating it.

Romney Correctly Identifies Obama’s Weaknesses in Foreign Affairs

Republican United States Presidential nominee, Mitt Romney is right that the terrorists were solely responsible for the deadly attack on the U.S. consulate in Benghazi, Libya on September 11, a point I made in my post last month, The Attack on the U.S. Consulate in Libya Was an Act of Jihad, Not Anger http://williamcinfici.blogspot.com/2012/09/the-attack-on-us-consulate-in-libya-was.html.  But Romney is also right that the Obama Administration’s decisions not to provide adequate security and its general appearance of weakness emboldened instead of deterred the enemy and resulted in the murder of the U.S. Ambassador and three other Americans.  

The American diplomatic mission to Libya, which had been attacked on more than one occasion, had repeatedly requested additional security, but the Obama Administration declined the requests.  The Administration insisted for several days that the attack, which was committed with automatic weapons and rocket-propelled grenades, was part of a protest that was a “spontaneous response” to an anti-Islamic video, until it was forced by an accumulation of evidence to acknowledge that the attack by al-Qaeda-inspired militants had been planned well ahead of time and timed on the anniversary of the September 11 Terrorist Attacks and that there had been no protest at all.  Worse, the Administration knew from the first day the true nature of the attack and yet misled the American people about it, focusing on blaming the video and attempting to assure Muslims that it did not condone such perceived insults to Islam, which made it appear weak to all sides.  It appears that the Obama Administration politically wanted to maintain the false impression that because al-Qaeda’s leader was dead, the global terrorist organization was in decline and thus no longer posed a threat to Americans.

In his recent foreign policy address, Romney rightly pointed out other examples of the pattern of President Barack Obama’s weakness in foreign policy.  In Iran, the world’s leading sponsor of terrorism, the Administration has failed to deter the Iranians from developing enough material to make a nuclear bomb and declines to declare at what point Iran’s progress in its nuclear program would be an unacceptable risk. The Iranians do not appear to take Obama’s weak statements that he has not ruled out the military option seriously.  Obama failed to stand with the democratic opposition in Iran when the theocratic dictatorship stole the presidential elections, although it turned against other Muslim dictators who were friendly to the United States.  Meanwhile, Obama has not led adequately in standing against the brutal dictator of Syria, Iran’s only major ally and another sponsor of terrorism.  These failures are part of a pattern of not standing up for Israel, the best ally of the United States.

The Obama Administration, Romney noted, also abandoned Iraq without accomplishing its goal of concluding an agreement to allow some American forces to remain in order to assure Iraqi security, which has left Iraq vulnerable to increasing violence and influence from Iran while reducing American influence dramatically.  Indeed, Iran is able to overfly Iraq in order to send aid to Syria. 

            Another example that Romney identified of Obama’s weakness is Afghanistan, where the Administration announced a timetable for withdrawal for political reasons instead of following the advice of generals to follow the strategy of withdrawing only once the conditions were appropriate.  The announcement allows the enemy, the Taliban, to wait out the Americans until they withdraw and then return to power and establish Afghanistan as a safe harbor for al-Qaeda and other militant Islamist terrorists. 

           

            Moreover, Romney also points out that Obama’s severe defense cuts, which the Administration’s own Secretary of Defense recognizes would be devastating, invite attack instead of deterring it.  Obama hopes for peace, but Romney observes that “hope is not a strategy.”  As an opposite strategy from Obama’s liberal foreign policy, Romney proposes simply to oppose enemies of the United States while supporting its friends.  He observes that American allies look to the United States for leadership in standing up to threats from dictatorships like Iran, Russia, China and Venezuela. 

            I would add a point I have repeatedly made on this blog that although Obama deserves credit for continuing most of President George W. Bush’s successful policies in the War on Terrorism, he has weakened those policies in critical respects.  I had posted earlier the same day of the attack in Benghazi that Obama’s weakness in protecting Americans could result in an attack.  See my post last month, Reflections on the 11^th Anniversary of the September 11 Attack, http://williamcinfici.blogspot.com/2012/09/reflection-on-11th-anniversary-of.html.  Examples include softening interrogation methods and publicizing our methods which allows the enemy to train resistance to them (or either killing terrorists instead of capturing them or advising them of their right to remain silent) and Obama’s failure yet to prosecute the September 11 terrorists in a military court, after his attempt to prosecute them in a civilian trial, and his attempt to close the Guantanamo Bay detention center while releasing some of the detainees there who return to the battlefield to commit more terrorism.

Austerity Leads to Tax Cuts in Italy

The Italian government’s austerity program is bearing some fruit for the Italian people.  Because of the spending cuts by Prime Minister Mario Monti, in continuation of the efforts of his predecessor, Silvio Berlusconi, Italy can now afford to cut taxes.  The government announced another round of spending cuts and tax changes.

Monti’s government was unable to attain its goal of delaying an increase in the value added tax (a kind of salees tax), but will cut the increase in half, (1% instead of 2%).  But the surprisingly good news is that it will also cut income taxes for the two lowest tax brackets by 1% each.  Although the tax cuts are small, it is hoped that they stimulate economic growth, which has been anemic in Italy, as it has been in Europe generally.  With more growth, people earn more, which generates additional tax revenue that more than makes up for the cut.

There will be some eliminations of business tax loopholes, but also additional tax incentives.

The spending cuts, which are on track to eliminate the Italian government’s budget deficit by 2014, when it can then begin to pay down its massive national debt, have also lowered the state’s borrowing costs to more manageable levels.  The spread between benchmark German bonds and Italian bonds (i.e. the premium required by bondholders in interest payments in order to hold the riskier debt) is at a level of about half of what it was at the peak of the fiscal crisis.  The lower interest payments the government must pay helps further to eliminate the deficit.  

Elections in the Netherlands, Georgia and Venezuela

Dutch Parliamentary Elections

The Netherlands’ ruling center-right party won the most seats in the Dutch parliament, although not a majority.  It has formed a coalition government.  The Netherlands has been fiscally responsible and relatively prosperous.

Georgian Parliamentary Elections

A pro-Russian party defeated the pro-Western party of Georgian President Mikheil Saakashvili in the parliamentary elections in Georgia.  Saakashvili retains the powerful presidency until early 2014, meaning that power will have to be shared, for now.

The Georgian President is responsible for defense and foreign policy, but there will be less effort by Georgia to eliminate Russian dominance over the parts of Georgia it occupied when it invaded the former Soviet republic in 2008 in a conflict that Russia provoked.  Russia has established puppet rulers in Abkhazia and South Ossetia, which it may intend as a temporary step toward annexation.  As I have observed in previous posts, Russia has gone unpunished for its aggression.  See my posts from September of 2009, Obama Betrays Allies, Appeases Russia, http://williamcinfici.blogspot.com/2009/09/obama-betrays-allies-appeases-russia.html, NATO Forgives Russia for Georgian Invasion, from April of 2009, http://williamcinfici.blogspot.com/2009/04/nato-forgives-russia-for-georgian.html and December Foreign Updates: Italy, Georgia, Korea from December of 2010, http://williamcinfici.blogspot.com/2010/12/december-foreign-updates-italy-georgia.html.

Whether or not Georgia will remain democratic and free, or become more authoritarian like Russia, is a larger question than even whether or not it will defend its own territorial sovereignty.

Venezuelan Presidential Elections 

Venezuelan Dictator Hugo Chavez reportedly won reelection in the presidential election, according to the state-controlled election commission, despite exit polling that suggested the opposition candidate Henrique Capriles, a former governor, had won a slight majority.  The true winner will never be known, as the state does not permit an independent audit, although Chavez’s reported official margin was lower than his previous win in 2006.

Chavez had pushed through constitutional amendments that permitted him to seek another term.  The Dictator of Venezuela has ruled as president for 14 years, meaning he will have served for 20 years if he survives his term.

            The Venezuelan strongman, who has limited dissent and severely compromised the independence of the judiciary, had expropriated industries and doled out the country’s oil wealth to win the support of the poor and implemented other public works near the time of the election.  Venezuela holds the world’s largest oil reserves.  Chavez has limited dissent and compromised the independence of the judiciary by intimidation.  Despite double-digit inflation, high crime, electricity blackouts, and an increase in bureaucracy and public corruption, many poor Venezuelans backed Chavez’s socialist revolution. 

Under Chavez, Venezuela has allied itself with the Communist Castro regime of Cuba, providing a lifeline to the Cuban dictatorship, and has formed an anti-American alliance with other leftist regimes, such as Nicaragua, Ecuador and Bolivia as part of his so-called “Bolivarian Revolution.”  For example, the Chavez-led alliance supports the Marxist narco-terrorists in Colombia responsible for much of the cocaine shipped to the United States.  Venezuela also has supported ETA, the Basque terrorists, and has provided financial safe harbor for Hezbollah, the Iranian-sponsored Shi’ite terrorist organization from Lebanon.  Chavez has warm relations with Iran, among other members of what I call “the Axis of Rogues.”

I have called for the designation of Venezuela as a state-sponsor of terrorism in my post from February of 2012, Designate Venezuela a State Sponsor of Terrorism, http://williamcinfici.blogspot.com/2012/02/designate-venezuela-state-sponsor-of.html and posted about U.S. Congressional proposal to that effect in my post, 2,000 Visits to My Blog, from July of 2010, http://williamcinfici.blogspot.com/2010/08/2000-visits-to-my-blog.html, but U.S. President Barack Obama has dismissed Venezuela as not much of a threat to the U.S.

Response to False Democratic Accusations of Lies by Paul Ryan

I was recently asked by a political activist to respond to a Democratic set of talking points that criticized Rep. Paul Ryan of Wisconsin in his remarks at the time of his recommendation by former Massachusetts Mitt Romney to be his running mate.  Romney and Ryan are the Republican nominees for President and Vice President of the United States.  The Democrats in their talking points falsely accuse Ryan of a number of lies.  I decided to post my response to this blog.

The first false Democratic claim in their talking points is that Ryan blamed President Barack Obama for the downgrading of the U.S. credit rating.  The Democrats blame the downgrade on a Republican “threat” not to increase the debt limit (the borrowing authority of the federal government).  The Republicans insisted on spending cuts in exchange for increasing the debt limit, which was already over $14 trillion. The Republicans offered to raise it if Obama and the Congressional Democrats agreed to spending cuts without raising taxes.  Obama and the Democrats insisted on raising taxes, which, by the Democrats’ reasoning, was a threat not to raise the debt limit.  The resulting political impasse is what led to fears hyped by the media that the government would not be able to meet its financial obligations temporarily, even though it still could have kept pace because of incoming revenue. 

The fact that the debt limit was as high as it was and yet had to be raised even higher was a major factor of the credit downgrade.  Although the U.S. would not default on its debt because the Federal Reserve could print more money, the resultant inflation because of the devaluation of the dollar would make such an option economically and politically undesirable.  Therefore, doubts arise about the fiscal solvency of the U.S. to service its debt and meet its financial obligations.

The Democrats contend that Ryan was misleading because he pointed out that the General Motors plant in his hometown of Janesville, Wisconsin closed after Obama was elected.  The plant was, in fact, idled after Obama was elected, but before he took office.  Note the plant was idled, not closed.  Regardless of whether it was idled because of a lack of confidence in the incoming President, it could have been reopened had the economy recovered sufficiently under Obama.  Therefore, it is true that the plant is not currently open at least in part because of Obama’s policies. 

Obama and the Democrats’ claim to have prevented more plant closures because he “saved” GM and Chrysler is specious, as a structured bankruptcy would not have meant that the automobile companies would have gone out business and that all of their plants would necessarily have closed.  It would have meant debt consolidation in order not to have lost everything to creditors while the creditors would not have lose everything.  Obama’s takeover of the automakers meant that the bondholders – in an extraordinary intervention of the government and in violation of the legal protection of contracts – lost everything, thereby undermining investor confidence in holding corporate bonds, while his supporters in the United Auto Workers were protected from losing benefits.  Also, Obama’s closures of thousands of GM and Chrysler dealerships caused the loss of over 100,000 jobs.

The Democrats claim that Ryan is wrong to say that Obama claims to have created jobs.  Obama implies that his policies created jobs: the jobs created are thus, according to him, either fully or partially the result of his interventionist government policies, instead of because of the private decisions made in a free market.  Presidents Ronald Reagan and George W. Bush, by contrast, did not claim that the government directly created jobs, but that their tax cuts and other fiscally responsible policies unshackled the market and sparked economic recovery and prosperity, which, in turn, allowed the private sector indirectly to create jobs.  The only jobs the government creates are government jobs.  The rest are created by the private sector.  Regardless, I note the figure Obama cites of 4.5 million jobs created during his administration fails to keep pace with population growth, meaning that the size of the labor force, even counting the increased number of people working only part-time as employed, is not increasing, while millions have given up looking for work, not including those who left the workforce for non-economic reasons.  Obama’s figure is thus evidence of the weakest jobs recovery since the Great Depression.

I pause here to note something about these first three Democratic accusations: they reflect the liberal view that everything economic is the result of government policies, which is why they make too much of who was president at what exact point.  They are right that both the Legislative and Executive Branches share in the responsibility for government policies and the consequences those policies have on the economy, something they neglected to acknowledge during the last two years of the Bush Administration when candidate Obama, who was then a Senator in the majority Democratic Congress, blamed President Bush and his Republican Party for everything bad in the economy the last two years of the Administration while ignoring the prosperity of the several years before Obama’s Democratic party won control of the Legislative Branch. 

Finally, the Democrats claim in their talking points that the $716 billion in Medicare cuts that are part of Obama’s federalization of health insurance are not “cuts” to Medicare for patients, but decreases in reimbursements to healthcare providers.  It is true that the $716 billion would be from reductions in Medicare reimbursements, but it is also true that these are cuts to Medicare.  Without adequate reimbursement, doctors would be even less likely to see patients on Medicare, meaning that these patients would be less able to receive healthcare.  Medicare is a welfare entitlement program that operates essentially as a subsidy for healthcare providers to treat patients enrolled in it.  Therefore, a cut in the subsidy to healthcare providers to treat Medicare patients is necessarily a “cut” to Medicare.

How Pennsylvania Had a Deficit that Corbett Had to Close, Despite a Balanced Budget Requirement

When Republican Tom Corbett campaigned for governor in 2010, he promised to close Pennsylvania’s $4.5 billion budgetary shortfall by cutting spending and not raising taxes.  As I have posted, he has kept his promise.  See Governor Corbett Signs Pennsylvania’s Budget and Welfare Reform Legislation, from July of 2011, http://williamcinfici.blogspot.com/2011/07/governor-corbett-signs-pennsylvanias.html Pennsylvania Governor Corbett Signs His Second Balanced Budget from July of this year, http://williamcinfici.blogspot.com/2012/07/pennsylvania-governor-corbett-signs.html.

Because the Pennsylvania Constitution requires the legislature and governor to approve a balanced budget, some liberal Democrats are minimizing Governor Corbett’s accomplishment of balancing the budget.  Some even doubt that he could possibly have faced such a significant budget deficit at the time of his inauguration.  They fail to understand that fulfilling the constitutional requirement of approving a balanced budget (i.e. legislatively approving a document in the form of a resolution) is not the same thing as balancing a budget (spending exactly as much as revenue).

First, a budget is an estimate of revenue and spending.  It is impossible to predict accurately either revenue or spending, for a variety of reasons.  It is impossible to predict tax revenue, for example, not only because of the difficulty of economic forecasting, but because it is impossible to predict accurately the myriad of decisions made by individuals in the private sector, such as the total number of employee pay raises or cuts, promotions or retirements, let alone the earnings or losses from stocks or businesses investing in themselves, all of which affect the economy and tax revenue, as well as decisions on how to spend income.  Tax revenue is even affected by the unpredictable earnings or losses from gambling and lotteries.  Births, marriages, movings, illnesses, disabilities and deaths, all of which also affect the economy and tax revenue, are impossible to predict with exact precision.  Even the notoriously-difficult-to-predict weather can affect the budget of governments because of natural disasters or road maintenance or repairs.  Indeed, no government budget ever is exactly balanced; there may be at times, at best, either a small deficit or surplus, but never an equalization of receipts and expenditures.  Even if a budget were exactly balanced, it would surely be more by the chance of the mutual cancellation of many errors than the clairvoyance of budget crafters.  

Second, although constitutionally required to approve a balanced budget, a legislature and governor may use accounting gimmickry to present the appearance of a balanced budget that could not really be balanced.  Such a presentation may be made in good faith or bad.  Regardless, it would be a misrepresentation to consider a budget to be balanced simply because it purports to be balanced, even though it is not.

Former Pennsylvania Governor Ed Rendell, a Democrat, raised taxes and increased spending.  Some of the spending was necessary, but some was reckless and irresponsible, which included much of the Commonwealth’s budgetary reserve (“rainy day fund”), while revenue fell far short of expectations.  Several members of the legislature expressed the opinion that Rendell’s budget was unconstitutional even at the time of its consideration because of its unrealistic economic assumptions.  Therefore, despite the approval of the “balanced budget,” it was not surprising that the state’s budget produced a deficit.  Indeed, Pennsylvania’s budget was $4.5 billion in the red by the time Corbett took office.

One example, he relied upon one-time Obama stimulus money to keep spending, which he used for part of the basic education subsidy for school districts.  School districts in Pennsylvania were warned not to expect a continuation of the same level, but many of them budgeted for the following year as if they expected the same level.  Because the spendthrift Rendell, who was running out of cash for other state needs, used the stimulus money for basic education instead of for economic stimulus, many critics of Governor Corbett are claiming that he has “cut” spending for education, when in reality education spending has not been cut, but has simply returned nearly to its pre-stimulus level, as expected.  In short, the Obama stimulus fueled Rendell’s spending spree instead of stimulating the state’s economy while disincentivizing many of the state’s school districts from determining budget priorities and adopting sound fiscal practices.

Therefore, it is not only possible for a state like Pennsylvania to have a significant budget deficit even though its constitution requires it to approve a balanced budget, it, in fact, happened in fiscal year 2010.  Thankfully, Governor Tom Corbett recognized the seriousness of the situation that threatened the Commonwealth’s economic vitality and addressed it in a fiscally responsible manner.

5,000th Visit to my Blog Tracked by StatCounter

There have been 5,000 visits to my blog since StatCounter began tracking pageviews of my blog since April 2, 2009.  The total of visits does not include my own visits.  As always, visits are defined as page views at least one hour apart.  Thank you for visiting my blog, especially those who follow it or return occasionally, as well those who post comments or who post the homepage of my blog or posts to my blog on other websites. 

If I included the total number of pages viewed (a narrower number than total pageviews, which would include reloads of the same page), the total would be around 5,650.  The reason I prefer to define visits as narrowly as I do is in order to obtain a truer reading of traffic to my blog.  For example, if a person visits my homepage and then a blog post and then returns to the homepage, all within an hour, he has visited once by my count, not three times, as hit counters would total.  If the post he viewed were on the homepage, his viewing of it does not necessarily reflect the reading of any additional material, as he may have opened it in order to comment, although it could also mean that he has copied it and sent to someone else.  If I were to include the total pageviews tracked by StatCounter, not including my own, the total hits would amount to approximately 7,500 – a figure around 50% larger than the number of visits.

A record number of visits in one day was set since my last report: there were over 100 on September 24, with a two-day total from September 24-25 of 135.  Over 100 of these visits were to the blog homepage.

Visitors have landed on 277 posts and viewed an additional 65, in addition to the 380 people who landed on my blog homepage who presumably read multiple posts.  The Rise and Fall of Islamic Civilization, Commentary on the Roman Influence on America Exhibit at the National Constitution Center and The Economy, Deficit and Debt at George W. Bush’s Inauguration continue to be the three most popular posts, having been viewed well over 1,700 times in total.  They are among eight posts than have been visited at least 100 times.  Of those whose visit to my blog commenced at a post, instead of the homepage, one out of every 11 or 12 viewed additional pages (the homepage, archive or other posts). 

My blog has received visits from all 50 States of the American Union, the District of Columbia, Puerto Rico and Guam, as well as from 106 foreign states, the Palestinian Territory and Hong Kong.  The most visits outside the United States have come from Malaysia (over 360), followed by Algeria, Canada and the United Kingdom, each with well over 100, followed by India, Pakistan and Australia, each with over 60.  Since my last report, in addition to numerous colleges, universities, schools and businesses, there have been notable visits from the U.S. Senate, the U.S. Justice Department and the European Central Bank.

Blogger, the host of this blog, tracks far more pageviews from many more visitors than StatCounter (an average of 15 per day to 6, especially from more foreign states), but the latter’s greater specificity allows for better tracking.  I shall post a separate blog hit report as tracked by Blogger, as usual.

Please continue to visit and post comments.  As always, please feel free to suggest topics or ask questions.  Again, thank you.

Pennsylvania’s Voter ID Law Stands, but not for 2012

            Pennsylvania Commonwealth Court Robin Simpson issued a preliminary injunction against the specific provisions of the state’s voter photographic identification requirement for all voters that would have disenfranchised those who attempted to cast ballots without proper photo ID.  He denied the petition of the law’s opponents for a permanent injunction, thereby letting the rest of the popular law passed by the state’s majority Republican General Assembly and signed by Republican Governor Tom Corbett stand, as his injunction is only temporary.

            See also my previous posts on Pennsylvania’s voter ID law: Corbett Signs the Voter ID Requirement into Pennsylvania Law, from March of 2012, http://williamcinfici.blogspot.com/2012/03/corbett-signs-voter-id-requirement-into.html; Update on the Pennsylvania Voter ID Law, from August of this year, http://williamcinfici.blogspot.com/2012/08/update-on-pennsylvania-voter-id-law.html; and Update on the Pennsylvania Voter ID Law: A Judge Denies an Injunction, also from August of 2012,  http://williamcinfici.blogspot.com/2012/08/update-on-pennsylvania-voter-id-law_15.html.

            Specifically, Judge Simpson cited a section in the voter ID law that required voters without photo ID not to be disenfranchised in ruling that the provisional ballots of those who were unable to produce photo ID up to six days after casting the provisional ballot would not be counted.  The Judge was ordered to issue an injunction by the state Supreme Court if he found there would be disenfranchisement.  He noted the significant efforts of the Commonwealth to educate voters about the need for photo ID and to make free access to photo IDs even easier than at the time of the Court’s first hearing, but determined that the effort would fall short by the 2012 General Election on November 6 of preventing some disenfranchisement.  Judge Simpson, however, rejected the petition of the opponents of the voter ID law to suspend the state’s efforts of educating voters about the need for photo ID, as he allowed the requirement to stand for subsequent elections. 

Thus, the General Election will resemble the Primary in Pennsylvania, in that voters in the Commonwealth will be asked to present photo ID, but not be denied the franchise without it.  Under a previous state law, first time voters will continue to be required to present valid identification in order to cast ballots. 

The Commonwealth Court ruling could be appealed to the Supreme Court.

            Alas, if the ruling stands, those who would commit voter fraud would have one last chance to impersonate voters.  But Pennsylvania would soon have elections that reflect the principle of one man, one vote, as there will no longer be any excuse for the lack of photographic identification for voters.  Although many other election reforms are necessary in Pennsylvania in order to eliminate fraud and other irregularities, a measure of confidence in the democratic process would have been established.