Tuesday, January 29, 2008
Personal Asides: Bushs Stimulus Package a Disappointment: Why Did He Do It? To Keep the Presidency Republican, Naturally: Rising Above Principle .Ah, Teddy Kennedy Wants to See a Return to Kennedy Camelot with Obama. Lets See: How Was it Again?
The So-Called Stimulus.
What I want to know is this: why in his final year in government, when he is not running, when he has much to point to for proof of his intransigence against fad politics why has the president proposed a Keynesian stimulus package on the fallacious pretext that it can jump start the economy when there is absolutely no proof that the economy is in troubleand the so-called cure will prompt the government to borrow lavishly providing a higher tax burden on somebody to show phony transfer payments for abjectly political purposes? And why havent the so-called analytical media tried to supply a reason, especially if it is not pretty?
As the Chicago economist Brian Wesbury shows (he won the WSJ prize for guessing to the last decimal point how the economy would do two yars ago), while retail sales fell 0.4% in December and fourth quarter real GDP rose at a sickly 1.5% annual rate, real GDP spurted at 4.9% annually in the third quarter, retail sales topped 1.1% at years end; personal income is up 6.1% and small business earningswhen you deduct income taxes, rent mortgages, car leases and loans, debt service on credit cards and property taxesrose 3.9% higher than inflation. Wesburys models based on monetary and tax policy show the GDP will grow 3% to 3.5%, the probability of recession is at an un-frightening 10%--all of this prior to any Bush fire alarm bells ringing off the hook calling for a stimulus.
Since then the Fed cut interest rates by 175 points there is a strong possibility that there will be a surge in growth in 2008. His most telling argument: What Federal Reserve Chairman Ben Bernanke estimated as a $100 billion loss on sub-prime loans would represent only 0.1% of the $100 trillion in combined assets of all U.S. households and U.S. non-farm, non-financial corporations. Even if losses ballooned to $300 billion, it would represent less than 0.3% of total U.S. assets.
The reason is something that no analyst has yet pronounced. Bush knows far better than this. He is doing it to goose the economy later down the road in mid-2008 and so protect the Republican candidate for president for attacks by the Democrats. He is doing it not for economic reasons but for international ones. He has calculated that either John McCain or Mitt Romney would be infinitely better for the country than either Barack Obama or Hillary Clinton. It shows how seriously Bush views 2008, knowing that the pendulum swing naturally favors the Democrats.
For that reason since the Democrats are committed to withdrawal from Iraq he is ready to rise above economic principle to deliver the political goods to forestall a Democratic triumph such as occurred in 1960 when the economy slumped due to the Feds mismanagement by Arthur Burns enabling Kennedy to devise the slogan Lets get this country moving again. He doesnt want the Democratic nominee to get elected on the basis of the old tried and failed liberal nostrumsarea redevelopment, more urban renewal involving housing, transportation, water, fresh air, space, schools, libraries, hospitalsand win on those issues. So he is willing to apply the old Keynesian nostrum to give us a booster shot to obviate the demagoguery. In essence, goose us with Keynesianism so that we may not have a worse prospect than John McCain or Mitt Romney as president.
Thats why were hearing this nonsense about tax rebates of $600 per individual and $1,200 a couple refundable, meaning they will go to 35 million voters who dont pay income taxes. The last tax rebate happened in 2001 which saw modest growth but did nothing to spur investment or job growth. The big change didnt come until after the 2003 tax cuts. Now the White House seems to have dropped its bid to make the tax cuts permanent in order to accommodate congressional Democrats.
Its all designed to keep the presidency Republican in 2008. Its so important that Bush can afford to compromise his perch with which he can frame the economic debate, deserting his once adamant demand for pro-growth policies, extending the tax cuts and cutting capital gains. The president has surrendered his once solid reputation on which strong economic demands can be based. Now it will be up to Mitt Romney to make the case why it is insufferably bad policy to provide tax rebates to people who dont pay any income taxes. But as to why Bush did it? Consider the prospect of another John F. Kennedy coming to the White House spurred by a wish to emulate what is falsely called the Kennedy Camelot years.
Theres at least one more squeeze in the liberal whoopee cushion. Any vague mistiness that Barack Obama evokes for change and hope, stems from the colossal hoax played on the American peoplefrom which they have already awakenedwith the Kennedy delusion. The grimacing old fraud, Ted Kennedy, used the old clichés in referring to Obama yesterday. He is a man of grit and grace. To which David Axelrod who knows hokey political showmanship when he sees it said, I dont think anybody believes that Ted Kennedy would endorse a candidate who wasnt thoroughly committed to the goal of--. Now its universal health care but the same bromide can be used for anything Axelrod needs.
I know hes ready to be president on day one, said Teddy. Just like his big brother who had a term and a half in the Senate, enough to give a little more oomph to the let the word go forth bromide in his inaugural but who was so paralyzed by the failure of the Bay of Pigs invasion launched three months down the road from the inauguration an invasion that failed because JFK suffered a failure of nerve by canceling its air cover, losing 1,100 and forcing this country to humiliatingly pay $53 million in food and medical supplies to barter their release. Such a failure of nerve that continued that he had to have an executive committee peopled by retreads like Dean Acheson run the crisis team for him generating a weakness that led Nikita Khrushchev to believe he could seal off East Berlin from the West without interference (he was right) as Kennedy himself admitted to the journalist Charles Bartlett and emplacing nuclear weapons in Cuba spurring the Cuban Missile crisis, all due to Kennedys immaturity and inexperience and leading the arrogant Kennedy tribe to retain the Mafia to try to rub out Castro.
Ah those lazy, hazy, misty, womanizing, hedonistic, insufferably arrogant, days of Camelot. At least now perhaps we can see why Bush is prepared to jettison anything to forestall the possibility of Kennedy re-treads coming to power. If a phony rebate will do it and if other Keynesians antics would prevent it, I suppose we should gulp hard and accept them.