Freedom Line Blog

According to a new Gallup poll, a majority of Americans now blame President Obama for the current state of the U.S. economy.  By a 53% to 47% margin, surveyed adults say that Obama shares a “great deal/moderate amount” of blame, while they also believe that George W. Bush continues to share blame by a 69% to 30% margin.  But notice something interesting.  For all the talk of hyper-partisanship from Republicans, the primary reason Bush’s numbers look worse is that Republican survey respondents split 50% to 50% on whether Bush shares some blame.  Democrats, in contrast, were far less willing to admit that their guy Obama shares blame, disagreeing by a 75% to 25% margin.  Independents by a 60% to 40% margin say that Obama shares some blame.

Here’s another noteworthy fact.  For all of Obama’s talk that he and his wasteful trillions of “stimulus” spending saved our economy from “the next Great Depression,” government economic figures show that we actually began our cyclical recovery before Bush had left office.  That’s a point that must be highlighted to voters as we approach a pivotal 2012 election in which Americans must choose between two governmental philosophies.  But in the meantime, at least most of us now recognize Obama’s role in our continuing economic struggles.

NBC News reports a breath of fresh air for ailing U.S. manufacturing workers: Companies that once outsourced jobs to China are starting to bring some of them back.  Some of the reasons:

Labor costs are soaring by 40 percent a year, as migrant workers are becoming pickier, since there are more job opportunities at home. Also China’s one-child policy means there is no longer such a huge pool of young, dexterous workers. Bank lending is tightening and China’s currency is also appreciating by around 6 percent a year against the U.S. dollar, not quickly enough for US and European policymakers, but sufficient for factories on low margins to feel the pain.

Of course, slapping a new tax on USA-based job creators will stifle any trend towards manufacturing growth China’s growth might enable.

Mr. President, have pity on the working man…

Yesterday was a victory of sorts for those of us who want Congress to clip the wings of the regulatory state.  In a near-perfect party-line vote the House of Representatives passed a measure prohibiting the National Labor Relations Board (NLRB) from harassing businesses like Boeing for moving to business friendly states.

Earlier this year, the liberal majority on the NLRB sued Boeing for opening up a new factory in South Carolina – a right-to-work state – instead of expanding its existing manufacturing presence in Washington state, a union shop state.  For the first time in its history, NLRB interpreted its congressionally delegated authority to include the power to punish a private business for relocating some of its operations to more profitable climes.

Congress now has an opportunity to correct NLRB’s overly broad interpretation.

NRLB’s unprecedented decision merits a brush back response like the one the GOP-controlled House delivered yesterday.  Though the measure is likely to die in the Democrat-controlled Senate, the Boeing-NLRB tussle should be some Republican presidential candidate’s Exhibit A on the regulatory overreach of Obama’s federal government.

Unions can only grow if businesses grow first.  It’s time for the liberals at the NLRB and elsewhere to remember that simple truth.

H/T: Washington Times

The Los Angeles Times reports that California’s unemployment is now 12.1 percent statewide, 25 percent higher than the national average, and second only to Nevada’s 13.4 percent.

For decades, California politicians have prided themselves on being “first in the nation” on numerous job-killing efforts such as fanciful global warming regulations, onerous land use regulations, and stupefying bans on products like Mylar balloons and plastic bags at grocery stores.

Recently, Troy wrote a painfully insightful piece on yet another attempt to wage war on business by Los Angeles Mayor Antonio Villaraigosa (higher taxes on commercial property).

California’s political class cannot resist the siren song of being the first to put the screws to the engines of economic growth.  If Villaraigosa’s plan becomes reality, perhaps the Golden State will finally be first in a category no one should want: unemployment.

There’s been quite a bit of media buzz surrounding the recently announced bankruptcy of Solyndra, the California solar panel company that couldn’t turn a profit even after a $535 million loan from the federal government.

But what started out as Exhibit A in the case against subsidizing green jobs into existence has morphed into the latest scandal engulfing the Obama Administration.  At issue is a suspicious connection between a Solyndra investor’s work as a bundler for the Obama campaign and the sweetheart loan given to the company.

On Wednesday, the FBI raided Solyndra’s Fremont, California headquarters, and Republicans are promising increased scrutiny.  It would be bad enough if there is a pay-to-play scandal, but it’s even worse financially since the failure of Solyndra is both corrupt and incompetent.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Zero.  That’s the number of net jobs created in America last month according to the Labor Department’s monthly update, and the unemployment rate remained at 9.1%.

We are now more than two years since the recession officially ended in June 2009, and at the stage where the Obama Administration predicted that his trillion-dollar deficit spending “stimulus” would reduce unemployment to approximately 6% after topping out at 8% all the way back in the fall of 2009.  Instead, we suffered a post-war record number of months over 9%, and it continues to fester there.  By way of background, keep in mind that economists generally agree that a minimum of 150,000 to 200,000 jobs must be added to the American economy each month just to keep pace with natural population growth.  Also consider that economists had forecast a rise of somewhere near 100,000 jobs for July.

In contrast, in the same 30-month period following the effective date of President Ronald Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.4%.  We know what economic policies actually work.   What hath the opposite approach wrought?

This defines cognitive dissonance.  The Obama Administration continues to scratch its collective head, wondering why its record deficit spending “stimulus” and big government onslaught has failed to create jobs.  Meanwhile, its own Department of Justice sues an iconic American company that creates them.

Just today, AT&T announced that it is relocating thousands of jobs from overseas back to American shores.  But also today, the Obama Department of Justice – you know, the one ultimately behind the disastrous “Operation Fast and Furious” – sued to block the proposed private merger between AT&T and T-Mobile.  Ponder that irony for a moment.  The Obama Administration, which has done so much to interfere with job creation since the recession officially ended all the way back in June 2009, is suing an employer that at this very moment is orchestrating the return of thousands of jobs to the United States.

Perhaps we shouldn’t find this surprising.  After all, the Obama Administration is also in the process of persecuting Boeing, America’s largest exporter, simply for electing to locate a manufacturing plant in South Carolina.  But that doesn’t make its behavior any less despicable or destructive.  If Obama truly wants to prove to the electorate that he seeks economic recovery, he must reverse this policy course within his administration.  Immediately.

Even for Barack Obama’s supporters, this has to be getting old.

Today, responding to a question about an American economy still struggling after almost three years of deficit-driven Obama “stimulation,” he went back to the “Bush Card” with radio host Tom Joyner:

George Bush left us with a $1 trillion deficit, so it’s a lot harder to climb out of this hole when we don’t have a lot of money in the federal coffers.”

There are several problems with President Alibi’s rationalization.  Among other things, (1) the recession officially ended all the way back in June 2009, (2) the money in those “federal coffers” to which he refers actually reached an all-time high under Bush in 2007 (several years after the Bush tax cuts and well into the Iraq and Afghan wars that Obama now scapegoats) and (3) nothing seems to have stopped him so far from spending trillions of dollars that we don’t have.

But forget about those realities for a moment.  On a more basic moral level, what does it say about Obama as a man that this is what he continues to offer the nation to justify his performance and his request for a job extension?

Whatever shred of credibility Fareed Zakaria retained as a conservative pundit from his celebrated book The Future of Freedom has now been officially lost thanks to follow-ups like The Post-American World and today’s essay “Does America Need a Prime Minister?”

In the essay, Zakaria uses the recent S&P downgrade of American sovereign debt to note that “no country with a presidential system has a triple-A rating from all three major ratings agencies.”  He then uses this to support his thesis that the United States would be better served by chucking separation-of-powers and moving to a British-style parliamentary system where the executive and legislative branches are the same.  After all, Britain still has a triune triple-A rating!

How wonderfully anti-American of the Harvard PhD.  Throughout the essay one realizes that Zakaria has wandered so far from the insights of the Founding generation that he now endorses the very system – and possibility for tyranny – that the American Revolution fought to end.  So too did another PhD-turned-constitutional-scold: Woodrow Wilson, the godfather of America’s progressive movement.

Wilson believed that government needed to be professionalized and removed from popular control so that it could act quickly and decisively to cure whatever ailed the populace.  He favored the parliamentary system because it gave enormous power to one man: the Prime Minister.

To appreciate how far Zakaria has wandered from core American principles about the proper way to construct a government, consider this passage from today’s essay:

In the American presidential system, in contrast, you have the presidency and the legislature, both of which claim to speak for the people. As a result, you always have a contest over basic legitimacy. Who is actually speaking for and representing the people?

In America today, we take this struggle to an extreme. We have one party in one house of the legislature claiming to speak for the people because theirs was the most recent electoral victory.  And you have the president who claims a broader mandate as the only person elected by all the people.  These irresolvable claims invite struggle.

There are, of course, advantages to the American system – the checks and balances have been very useful on occasion. But we’re living in a world where you need governments that are able to respond decisively and quickly.  In a fast-moving world, paralysis is dangerous. Other countries are catching up – if not overtaking – America.

Who are these other countries?  Members of the European Union with a currency and debt crisis several times worse than our own?  China with its unsustainable population demographics and monetary policy?  Arab dictatorships that are being toppled by the month?  Latin American oligarchies that nationalize industries to buy off the masses with the wealth of entrepreneurs?

The problem we are experiencing in Washington, D.C. is not America’s constitutional design of checks-and-balances and separation-of-powers.  If anything, the ability of the House GOP to slow down the liberal agenda to tax-and-spend the nation into bankruptcy is due solely to the very “paralysis” intended by our constitutional framework.

If Zakaria wants to end the paralysis in D.C., he should vote for pro-growth fiscal conservatives in 2012 and urge all of his readers to do the same.

In a brilliantly written refutation of the Obama-as-Genius argument, Mortimer Zuckerman explains why even taking all the money from “rich” people and corporations won’t solve the deficit problem:

Even if the government instituted a 100% tax on both corporate profits and personal incomes above $250,000 per year, it would yield enough revenue to run the government for only six months. Why? Because under Mr. Obama’s presidency, government spending has swelled to 24% of GDP from 18%.

Spending is Obama’s original sin as president.  Unless he’s willing to repent of that folly and ratchet back on the flow of money, the American economy will stay mired in a recession.

Recently, I wrote about the Social Security Trust Fund being a piggy bank for other federal spending programs.  In return, federal spenders put worthless IOUs back in piggy with an implied promise to pay back the debt with higher taxes in future years.

Now, there is word that Social Security Disability Insurance – yet another expense drawn from the empty retirement Trust Fund – will go bankrupt by 2017.  The reason for the rapid insolvency of disability insurance is simple: eligibility for disability can begin before reaching retirement age.  Per the Associated Press:

Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can’t find new ones in an economy that has shed nearly 7 million jobs.

The more President Obama’s Washington dithers on enacting policies to spur economic growth, the more unemployed people will be forced to find money wherever they can.  The vast majority of Americans want to work, but Obama’s job-killing policies just aren’t giving them the chance.

It would be an unnecessary irony if a liberal like Obama presided over an austerity government that not only raised taxes, but also cut services like Social Security that liberals love.  Yet that is the path we’re on as a recessed economy lurches from market plunges to debt downgrades to a contracting job market.

We need an “opportunity president,” and this one surely isn’t it.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

In case you missed it, Stephen Moore of the Wall Street Journal explains “Why Americans Hate Economics” with two wonderfully clear paragraphs.

The first explains where economics as a discipline went wrong:

How did modern economics fly off the rails? The answer is that the “invisible hand” of the free enterprise system, first explained in 1776 by Adam Smith, got tossed aside for the new “macroeconomics,” a witchcraft that began to flourish in the 1930s during the rise of Keynes. Macroeconomics simply took basic laws of economics we know to be true for the firm or family—i.e., that demand curves are downward sloping; that when you tax something, you get less of it; that debts have to be repaid—and turned them on their head as national policy.

The second shows where Keynesians err:

The grand pursuit of economics is to overcome scarcity and increase the production of goods and services. Keynesians believe that the economic problem is abundance: too much production and goods on the shelf and too few consumers. Consumers lined up for blocks to buy things in empty stores in communist Russia, but that never sparked production. In macroeconomics today, there is a fatal disregard for the heroes of the economy: the entrepreneur, the risk-taker, the one who innovates and creates the things we want to buy. “All economic problems are about removing impediments to supply, not demand,” Arthur Laffer reminds us.

Knowledge becomes inaccessible only when an influential group decides that reality doesn’t fit their ideal.  The Keynesians have had their day.  It’s time for the proponents of sound money and economic growth to have their turn.

In this week’s Freedom Minute, CFIF’s Renee Giachino comments on President Obama’s 10-day holiday in the posh New England retreat of Martha’s Vineyard as the nation’s economy reels and everyday Americans are forced to tighten their family budgets.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Oh, for the halcyon days when the vice presidency was a sinecure, in the (paraphrased) words of John Nance Garner, “not worth a bucket of warm (spit).” The current presidency and the two preceding it, however, have seen our nation’s deputy-executive take on growing prominence and prestige. Which was all well and good until Joe Biden arrived on the scene. Here’s how Politico reports Biden’s take on the conservative negotiating stance during the debt ceiling debate:

Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit, according to several sources in the room.

There are two lessons here. The first is that “terrorist” is the new “nazi”; an epithet that the boorish and unimaginative throw around with no regard to the gravity of genuine evil and suffering. The second is that Biden is an extraordinarily imprudent man. While comments like his don’t deserve an airing anywhere, an experienced politician like the VP should know that they’re especially dangerous in a room full of potential leakers — especially when the consequence of a leak could be to dismantle the legislative coalition needed to pass an essential piece of legislation.

With news that the House has passed the compromise debt agreement, Biden has dodged the bullet of having his words derail a grand bargain. But he’s far from being out the woods. Now that he’s alienated the lion’s share of the Republican Caucus, don’t expect to see the VP chairing any more bipartisan task forces on Capitol Hill in the future. The vice presidency may now return to its historical role — attending state funerals and welcoming Girl Scout troops to the Rose Garden. Who said nothing good would come out of the debt ceiling debate?

Barack Obama and liberals fraudulently claim that their massive spending binge “prevented another Great Depression.”

It’s more accurate to say that their spending and regulatory onslaught stifled our natural cyclical recovery and heaped more debt upon the American people.

Today’s economic growth report card from the Commerce Department provided the latest evidence of that reality, as if any additional clarity was necessary.  For the second quarter of 2011 (April through June), American gross domestic product (GDP) only grew 1.3%.  That fell substantially below the expected 1.8% rate, which itself constitutes sluggish growth.  Moreover, first quarter GDP was revised shockingly downward to 0.4% from its initial 1.9% estimate.  That is simply pathetic and unacceptable.

In comparison, the American economy jolted to life after Ronald Reagan’s very different response to the early 1980s recession (which was actually worse than the most recent recession, despite liberals’ persistent claims to the contrary).  According to the Bureau of Economic Analysis, in the eight quarters since Obama’s wasteful “stimulus” in 2009, we’ve witnessed growth rates of 1.7%, 3.8%, 3.9%, 3.8%, 2.5%, 2.3%, 0.4% and now 1.9%.  That’s an average of just 2.5%.  But in the eight quarters following the effective date of the Reagan tax cuts, GDP exploded at rates of 5.1%, 9.3%, 8.1%, 8.5%, 8.0%, 7.1%, 3.9% and 3.3%.  That’s an average of 6.7%.

Today’s depressing report simply shows once again that lower taxes and less government create prosperity, while bigger government and more spending create stagnation.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

What to do when your industry is singled out by government regulators as a threat to public health?  If you’re in the soft drink industry, use the Freedom of Information Act against state and local governments to get documents that show how regulators use taxpayer dollars to attack legal commercial enterprises.

Earlier this month, the American Beverage Association sued New York City’s Department of Health and Mental Hygiene, which has been at the forefront of education efforts in the fight against obesity. The ABA says the city improperly withheld documents it sought through the Freedom of Information Act.

ABA spokesman Chris Gindlesperger said his group made the same request as the New York Times, but that the newspaper received more information than the ABA.

“Public health departments are going out and aggressively misrepresenting our products in advertising and using taxpayer money to do that,” Gindlesperger said.

Big government advocates are complaining that the FOI requests are “an effort to overwhelm or smother government employees, who already have too much to do.”

Then again, maybe those same government employees could lighten their load a bit by stopping the PR campaign against an industry selling a legal product to satisfied consumers.