Wednesday, September 16, 2009
Here's the latest from Senator Cuccinelli's "Compass" newsletter:
Finance reports were due today, and I wanted to share some interesting figures with all of you about the numbers between us and our opponent:
He had 388 donors over $100. We had 810, more than double.
He had 115 donors of $100 or less. We had 1386, over 10 times as many small donors!
Our total number of donors set the all-time record for number of donors to an AG campaign in one finance period with 2,196 (more than four times our opponent's 503). Mind you, we didn't just break the record, we shattered it. The previous record was 1,179. THIS is a tremendous measure of our grassroots support - thanks to all of you that have donated!
We outraised our opponent, $617K to $534K. We have now outraised him in both reporting periods since the convention; however, his year-long head start (he did not have a Dem nomination contest) has him up in cash by about 2 to 1, so please donate again today at www.Cuccinelli.com!
One of the most interesting factoids from our opponent is that he has 11 donors that gave $10K or more... 7 of the 11 are unions, 1 is a plaintiffs' litigation law firm, and 1 was the Democrat Attorneys General Association.
We will keep pushing to bring more people into this campaign, but we need your help! Please invite friends and family to donate too, as we still have lots of ground to make up.
Sunday, September 13, 2009
This piece appeared in "National Review" recently and was written by Heritage Foundation's Brian Riedl. This is the best summary of why the stimulus failed. It is long, but well worth the read...
Why the Stimulus Failed
Fiscal policy cannot exnihilate new demand
Conservatives have correctly declared President Obama’s $787 billion “stimulus” a flop. In a January report, White House economists predicted the bill would create (not merely save) 3.3 million jobs. Since then, 2.8 million jobs have been lost, pushing unemployment toward 10 percent.
Yet few have explained correctly why the stimulus failed. By blaming the slow pace of stimulus spending (even though it’s ahead of schedule), many conservatives have accepted the premise that government spending stimulates the economy. Their thinking implies that we should have spent much more by now.
History proves otherwise. In 1939, after a doubling of federal spending failed to relieve the Great Depression, Treasury Secretary Henry Morgenthau said that “we have tried spending money. We are spending more than we have ever spent before and it does not work. . . . After eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt to boot!”
This repeated failure has nothing to do with the pace or type of spending. Rather, the problem is found in the oft-repeated Keynesian myth that deficit spending “injects new dollars into the economy,” thereby increasing demand and spurring economic growth. According to this theory, government spending adds money to the economy, taxes remove money, and the budget deficit represents net new dollars injected. Therefore, it scarcely matters how the dollars are spent. John Maynard Keynes famously asserted that a government program paying people to dig and then refill ditches would provide new income for those workers to spend and circulate through the economy, creating even more jobs and income. Today, lawmakers cling to estimates by Mark Zandi of Economy.com that on average, $1 in new deficit spending expands the economy by roughly $1.50.
If that were true, the record $1.6 trillion in deficit spending over the past fiscal year would have already overheated the economy. Yet despite this spending, which is equal to fully 9 percent of GDP, the economy is expected to shrink by at least 3 percent this fiscal year. If the spending constitutes an injection of “new money” into the economy, we may conclude that, without it, the economy would contract 12 percent — hardly a plausible claim.
If $1.6 trillion in deficit spending failed to slow the economy’s slide, there’s no reason to believe that adding $185 billion — the 2009 portion of the stimulus bill — will suddenly do the trick. But if budget deficits of nearly $2 trillion are insufficient stimulus, how much would be enough? $3 trillion? $4 trillion?
This is no longer a theoretical exercise. The idea that increased deficit spending can cure recessions has been tested, and it has failed. If growing the economy were as simple as expanding government spending and deficits, then
The simple reason government spending fails to end recessions is that Congress does not have a vault of money waiting to be distributed. Every dollar Congress “injects” into the economy must first be taxed or borrowed out of the economy. No new income, and therefore no new demand, is created. They are merely redistributed from one group of people to another. Congress cannot create new purchasing power out of thin air.
This is intuitively clear in the case of funding new spending with new taxes. Yet funding new spending with new borrowing is also pure redistribution, since the investors who lend
Even during recessions — when total production falls, leaving people with less income to spend — Congress cannot create new demand and income. Any government spending that increases production at factories and puts unemployed individuals to work will be financed by removing funds (and thus idling resources) elsewhere in the economy. This is true whether the unemployment rate is 5 percent or 50 percent.
For example, many lawmakers claim that every $1 billion in highway stimulus will create 47,576 new construction jobs. But Congress must first borrow that $1 billion out of the private economy, which will then lose a roughly equivalent number of jobs. As transportation-policy expert Ronald Utt has explained, “the only way that $1 billion of new highway spending can create 47,576 new jobs is if the $1 billion appears out of nowhere as if it were manna from heaven.” Removing water from one end of a swimming pool and dumping it in the other end will not raise the overall water level. Similarly, moving dollars from one part of the economy to the other will not expand the economy. Not even in the short run.
Consider a simpler example. Under normal circumstances, a family might put its $1,000 savings in a certificate of deposit at the local bank. The bank would then lend that $1,000 to the local hardware store. This would have the effect of recycling that spending around the town, supporting local jobs. Now suppose that, induced by an offer of higher interest rates, the family instead buys a $1,000 government bond that funds the stimulus bill.
The mistaken view of fiscal stimulus persists because we can easily see the people put to work with government funds. We don’t see the jobs that would have been created elsewhere in the economy with those same dollars had they not been lent to
In his 1848 essay “What Is Seen and What Is Not Seen,” French economist Frédéric Bastiat termed this the “broken window” fallacy, in reference to a local myth that breaking windows would stimulate the economy by creating window-repair jobs. Today, the broken-window fallacy explains why thousands of new stimulus jobs are not improving the total employment picture.
Keynesian economists counter that redistribution can increase demand if the money is transferred from savers to spenders. Yet this “idle savings” theory assumes that savings fall out of the economy, which clearly is not the case. Nearly all individuals and businesses invest their savings or put it in banks (which in turn invest it or lend it out) — so the money is still being spent somewhere in the economy. Even in this recession, with tightened lending standards, banks are performing their traditional role of intermediating between those who have savings and those who need to borrow. They are not building extensive basement vaults to hoard cash.
Since the financial system transfers savings into investment spending, the only savings that drop out of the economy are those dollars literally hoarded in mattresses and safes — and there is no evidence that this is occurring en masse. And even if individuals, businesses, and banks did distrust the financial system enough to hoard their dollars, why would they suddenly lend them to the government to finance a stimulus bill?
Once the idle-savings theory collapses, so does all the intellectual support for government spending as stimulus. If there are no idle savings to acquire, then the government is merely borrowing purchasing power from one part of the economy and moving it into another part of the economy.
Even foreign borrowing is no free lunch. Before
I’ve purposely ignored the Federal Reserve, which actually can inject cash into the economy, but not in a way that constitutes stimulus. Congress can deficit-spend; Treasury can finance the deficit spending by issuing bonds; and the Federal Reserve can buy those bonds by printing money. Any economic boost is then due to the Federal Reserve’s actions, not the deficit spending — and of course the Federal Reserve will have to raise interest rates, slowing the economy again, to bring the resulting inflation under control.
If government spending doesn’t cause economic growth, what does? Growth happens when more goods and services are produced, and the only true source of this is an expanding labor force combined with high productivity. High productivity in turn requires educated and motivated workers, advanced technology, adequate infrastructure, physical capital such as factories and tools, and the rule of law.
Government spending could boost long-run productivity through investments in education and infrastructure — but only if politicians could target those investments better than the private sector would. And it turns out that politicians cannot outsmart the marketplace. Mountains of academic studies show that government spending generally reduces long-term productivity.
Furthermore, most government programs that could increase productivity don’t work fast enough to counteract a recession. Education spending cannot raise productivity until its student beneficiaries graduate and enter the work force. It can take more than a decade to build new highways and bridges.
The only policy proven to increase productivity in the short term is to lower tax rates and reduce regulation. Businesses can grow only through consistent investment and an expanding, skilled workforce. Cutting marginal tax rates promotes these conditions, by creating incentives to work, save, and invest.
It’s happened before. In 1981, President Reagan inherited an economy stagnating under the weight of 70 percent marginal income-tax rates. Under Reagan, the top rate fell to 28 percent, and the subsequent surge in investment and labor supply created the strongest 25-year economic boom in American history.
Such tax-rate reductions are superior to tax rebates designed to “put money in people’s pockets.” Rebates — like government spending — simply redistribute existing dollars. They don’t increase productivity because they don’t change incentives: No one has to work, save, or invest more to get a tax rebate. The 2001 and 2008 rebates failed because Congress borrowed money from investors and foreigners and redistributed it to families. Not surprisingly, any new personal-consumption spending was matched by corresponding declines in investment spending and net exports, and the economy remained stagnant.
If conservatives wish to provide economic leadership, they must get this argument right. The stimulus is not failing because it is too small or because too much of it is being saved. It’s failing because Congress can only redistribute existing demand, not create new demand. This recession will eventually end. The more serious, long-term danger is that President Obama’s Europeanization of the economy will bring the same slow growth, stagnant wages, job losses, high taxes, and lack of competitiveness that have plagued Western Europe, leaving the United States at an ever-growing disadvantage with Asian countries not so afflicted.
To prevent this, conservatives and free marketeers will need to promote policies that support long-term prosperity. The first step will be articulating why big government does not bring economic growth.
To prevent this, conservatives and free marketeers will need to promote policies that support long-term prosperity. The first step will be articulating why big government does not bring economic growth.
Mr. Riedl is a research fellow at the Heritage Foundation.
Saturday, September 12, 2009
Monday, September 7, 2009
I have created a web page on the ReaganConservatives.us site, which includes my audio recordings of some of the talks. I strongly encourage everyone to take a look and listen/download the talks. I have also included a PDF of the "First Principles Reader" produced by the three hosts, which is an excellent document to read and keep.
I will keep everyone informed of additional events like this in Washington. Special thanks to Heritage, Hillsdale, and Federalist Society for allowing me to record and create the page...
Saturday, September 5, 2009
From "American Thinkers" Geoffrey P. Hunt....
Barack Obama is on track to have the most spectacularly failed presidency since Woodrow Wilson.
In the modern era, we've seen several failed presidencies--led by Jimmy Carter and LBJ. Failed presidents have one strong common trait-- they are repudiated, in the vernacular, spat out. Of course, LBJ wisely took the exit ramp early, avoiding a shove into oncoming traffic by his own party. Richard Nixon indeed resigned in disgrace, yet his reputation as a statesman has been partially restored by his triumphant overture to
George Bush Jr didn't fail so much as he was perceived to have been too much of a patrician while being uncomfortable with his more conservative allies. Yet George Bush Sr is still perceived as a man of uncommon decency, loyal to the enduring American character of rugged self-determination, free markets, and generosity. George W will eventually be treated more kindly by historians as one whose potential was squashed by his own compromise of conservative principles, in some ways repeating the mistakes of his father, while ignoring many lessons in executive leadership he should have learned at
But, Barack Obama is failing. Failing big. Failing fast. And failing everywhere: foreign policy, domestic initiatives, and most importantly, in forging connections with the American people. The incomparable Dorothy Rabinowitz in the Wall Street Journal put her finger on it: He is failing because he has no understanding of the American people, and may indeed loathe them. Fred Barnes of the Weekly Standard says he is failing because he has lost control of his message, and is overexposed. Clarice Feldman of American Thinker produced a dispositive commentary showing that Obama is failing because fundamentally he is neither smart nor articulate; his intellectual dishonesty is conspicuous by its audacity and lack of shame.
But, there is something more seriously wrong: How could a new president riding in on a wave of unprecedented promise and goodwill have forfeited his tenure and become a lame duck in six months? His poll ratings are in free fall. In generic balloting, the Republicans have now seized a five point advantage. This truly is unbelievable. What's going on?
No narrative. Obama doesn't have a narrative. No, not a narrative about himself. He has a self-narrative, much of it fabricated, cleverly disguised or written by someone else. But this self-narrative is isolated and doesn't connect with us. He doesn't have an American narrative that draws upon the rest of us. All successful presidents have a narrative about the American character that intersects with their own where they display a command of history and reveal an authenticity at the core of their personality that resonates in a positive endearing way with the majority of Americans. We admire those presidents whose narratives not only touch our own, but who seem stronger, wiser, and smarter than we are. Presidents we admire are aspirational peers, even those whose politics don't align exactly with our own: Teddy Roosevelt, FDR, Harry Truman, Ike, Reagan.
But not this president. It's not so much that he's a phony, knows nothing about economics, is historically illiterate, and woefully small minded for the size of the task-- all contributory of course. It's that he's not one of us. And whatever he is, his profile is fuzzy and devoid of content, like a cardboard cutout made from delaminated corrugated paper. Moreover, he doesn't command our respect and is unable to appeal to our own common sense. His notions of right and wrong are repugnant and how things work just don't add up. They are not existential. His descriptions of the world we live in don't make sense and don't correspond with our experience.
In the meantime, while we've been struggling to take a measurement of this man, he's dissed just about every one of us--financiers, energy producers, banks, insurance executives, police officers, doctors, nurses, hospital administrators, post office workers, and anybody else who has a non-green job. Expect Obama to lament at his last press conference in 2012: "For those of you I offended, I apologize. For those of you who were not offended, you just didn't give me enough time; if only I'd had a second term, I could have offended you too."
Mercifully, the Founders at the Constitutional Convention in 1787 devised a useful remedy for such a desperate state--staggered terms for both houses of the legislature and the executive. An equally abominable Congress can get voted out next year. With a new Congress, there's always hope of legislative gridlock until we vote for president again two short years after that.
Yes, small presidents do fail, Barack Obama among them. The coyotes howl but the wagon train keeps rolling along.
Friday, September 4, 2009
Of course green jobs are complete fiction. For starters, nobody, including the Obama administration, even has a definition for what a green job is. Furthermore, research both here in the U.S., and abroad, has repeatedly demonstrated that subsidizing high cost renewable energies destroys more jobs than it creates.
But that is what makes Jones such a perfect fit to be Obama’s green jobs czar. It turns out that Jones is no stranger to crazy. The Washington Times Amanda Carpenter reports that along with comedienne Janeane Garofalo, ex-Rep. Cynthia McKinney (D-GA), Code Pink founder Medea Benjamin, and Howard Zinn, Jones has signed 911Truth.org’s 9/11 Truth Statement which calls for an investigation by then-New York Attorney General Eliot Spitzer into whether the Bush administration may have had foreknowledge of the 9/11 attacks.
That’s right, Obama’s hand picked Green Jobs Czar doesn’t believe al Qaeda is responsible for 9/11, instead he accusses President George Bush. Crazy is as crazy does.
(Source: Heritage Foundation)
U.S. payrolls have dropped by 6.9 million to a total of 131.2 million since the recession began in December 2007, the government data showed. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million.
The 216,000 decline in payrolls was close to market expectations of a 233,000 drop, but the unemployment rate rose higher than the 9.5% level expected. The unemployment rate was 9.4% in July.
Details of the August report were generally weak, however.
Payrolls fell in most sectors of the economy except for health care. Total hours worked in the economy dropped by 0.3%, long-term unemployment worsened, and the number of people working just part time who want full-time work reached 9.1 million, up 278,000.
The number of people who've been out of work longer than six months nudged up to 5 million, representing about one-third of the unemployed.
An alternative measure of unemployment that includes discouraged workers and those forced to resort to part-time work rose to 16.8% from 16.3%, marking the highest on record dating back to 1995.
Average hourly earnings on the month rose 6 cents, or 0.3%, to $18.65 an hour. In the past year, average hourly earnings are up 2.6%.
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