Libertarian Leanings

Supply Side

Today the Wall Street Journal reports that the slowdown in economic growth is becoming a worry. 

Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.

"It's very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer," said Nigel Gault, an economist at IHS Global Insight. He expects an annualized, inflation-adjusted growth rate of less than 3% in coming quarters—better than the first-quarter's 1.8% rate, but too slow to make a meaningful dent in unemployment.

Maybe the economists are all wet about what drives a recovery.  Housing isn't going to rebound soon.  Consumer spending is in the tank until consumers have less reason to worry about their jobs. There will be no consumer or housing driven recovery this time.

The Reagan and Bush II recoveries were initiated by tax cuts and regulatory relief.  Granted, there  is a limit to what you can do with tax cuts, since there is a limit to how far you can cut taxes.  But our president has already promised us tax hikes -- in the interest of fairness, of course. 

That leaves regulatory relief as pretty much the only thing left to try. An article on the subject by Stephen L. Carter, a professor of law at Yale University, tells why.

The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward.

Demand for his product is up. But he still won't hire.

"Why not?"

"Because I don't know how much it will cost," he explains. "How can I hire new workers today when I don't know how much they will cost me tomorrow?"

He's referring not to wages, but to regulation: He has no way of telling what new rules will go into effect, or when. His business, although it covers several states, operates on low margins.

He can't afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he's hiring nobody until he has some certainty about cost.

As long as we have a president who doesn't understand that the economy is driven by individual initiative, not government initiative, our recovery is on hold.  No amount of social or economic engineering is going to pull us out.  Investors have to believe there is reason to invest in US businesses, and businesses have to believe their profits will not be eaten away by regulation and taxes.  Then we'll have a recovery.  It will be a supply side recovery.

Department of Payback

You just can't kill it, no matter how hard you try. 

Yet it is an explanation that has long been politically seductive, in countries around the world.

What could be more emotionally satisfying than seeing others who have done better in the world as the villains responsible for your not having done as well? It is the ideal political explanation, from the standpoint of mass appeal, whether or not it makes any sense otherwise.

It has been the Democratic party's philosophical foundation for a couple of decades.  Over and over we hear that Americans, rich Americans in particular, are not taxed enough.  To prove it, Democrats overspent us into the biggest deficit and debt in US history, on bailouts and stimulus programs that don't work.

I can imagine that Barack Obama is dumb enough to actually believe such blame game nonsense, and apparently Thomas Sowell can imagine it, as well.  And that's a problem.

False theories are not just an intellectual problem to be discussed around a seminar table in some ivy-covered building. When millions of people believe those theories, including people in high places, with the fate of nations in their hands, that is a serious and potentially disastrous fact of life.

Despite a carefully choreographed image of affability and cool, Barack Obama's decisions and appointments as President betray an alienation from the values and the people of this country that are too disturbing to be answered by showing his birth certificate.

Too many of his appointees exhibit a similar alienation, including Attorney General Eric Holder, under whom the Dept. of Justice could more accurately be described as the Dept. of Payback.

Seductive though it may be, the blame game is a losing argument, a fact which will be reinforced in November of 2012.

Federal Lawlessness

Victor Davis Hanson:

The new lawlessness at the federal level, however, is far more serious, because it is predicated on “social justice”: those deemed “in need” shall be exempt from the law; those “not in need” shall not.

A good example is illegal immigration.  Democrats believe the influx of illegal aliens represents a demographic shift that runs in their favor, and so the word "illegal" has been purged from from their immigration vocabulary.  They now refer to "undocumented immigrants."

Voters Still Sour on the Democrats

Voters pondering their political preferences over the Memorial Day holiday weekend reaffirmed their general disatisfaction with the Democrats.  This according to Rasmussen.

A new Rasmussen Reports national telephone survey finds that 43% of Likely U.S. Voters say they would vote for their district’s Republican congressional candidate, while 37% would choose the Democrat instead.

The latest numbers are from surveys conducted during the seven days ending May 29, 2011.

President Obama isn't doing much better with the voters in Rasmussen's surveys.

The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Thirty-four percent (34%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -11 (see trends).

Surveys are as of yesterday.

Bruins Advance

The Boston Bruins advanced to the Stanley Cup finals after edging the Tampa Bay Lightning 1-0 in game 7 of he Eastern Conference finals.

BOSTON – The Boston Bruins are in the Stanley Cup finals for the first time in 21 years. Now they have a shot at their first NHL championship in 39.

They advanced Friday night with a 1-0 win over the Tampa Bay Lightning in Game 7 of the Eastern Conference finals behind Tim Thomas' second shutout of the series and Nathan Horton's goal with 7:33 left in the third period.

Consumer Spending Hasn't Caught On To Inflation

Hot Air reports:

[Reuters]then manage to misreport the real DPI, which is defined by the BEA as “DPI adjusted to remove price changes,” in order to account for inflation:

When adjusted for inflation, spending nudged up 0.1 percent last month after gaining 0.1 percent in March.

No, it went down by “less than 0.1%,” not up.  Inflation on all prices rose 0.3% in April, and in “core” prices by 0.2%.  The overall PCE index has risen 2.2% over the last 12 months, which isn’t a bad rate of inflation if the economy was actually growing significantly.

So is tepid consumer spending holding prices down?  What will inflation look like at when consumer spending takes off?  Of course, that will depend upon whether or not anybody can get a job.  Chances seem slim as long as Obama resides in the White House.

Will She or Won't She?

Is Sarah Palin preparing for her presidential run?

Campaigns are filled with routine work. For example, on Thursday, the Pawlenty team sent out a message headlined, "Governor Pawlenty Unveils Florida Finance Team." It's not newsy, but it's the kind of thing presidential campaigns have to do. Palin's not doing it. There are no Palin campaign organizations in early primary and caucus states, or anywhere else, for that matter.

Nevertheless, the political world is filled with speculation about Palin's intentions. Until recently, most Republican insiders believed she would not run. Then...

The Left's Affinity For Corruption

The Wall Street Journal notes the disparity in the treatment afforded to former IMF head Dominique Strauss-Kahn and that of former World Band head Paul Wolfowitz.

Whatever becomes of the sexual assault charges against Dominique Strauss-Kahn, DNA evidence and all, it is now clear that the former head of the International Monetary Fund treated the organization as his sexual fiefdom. "Despite my long professional life, I was unprepared for the advances of the managing director of the IMF," wrote Piroska Nagy, an IMF staff economist whom Mr. Strauss-Kahn pursued until she agreed to a brief affair in 2008. "I did not know how to handle this," she added in a letter to a law firm investigating the affair. "I felt, 'I was damned if I did and damned if I didn't.'"

Ms. Nagy's letter—which added that Mr. Strauss-Kahn was "a man with a problem that may make him ill-equipped to lead an institution where women work under his command"—has received considerable media attention in recent weeks, and rightly so. But perhaps its real interest lies in the way none of Ms. Nagy's points seem to have found their way into the firm's October 2008 report to the IMF Executive Board.

On the contrary, the report, conducted by three lawyers at the firm of Morgan, Lewis & Bockius, concluded that "there is no evidence that the MD [managing director], either expressly or implicitly, threatened the female staff member in any way to induce her to engage in the affair or to keep it confidential." The IMF board gave Mr. Strauss-Kahn merely a wrist slap for a "serious error of judgment," along with board assurances that the episode would "in no way affect the effectiveness of the Managing Director in the very challenging and difficult period ahead."

Compare that whitewash job to the what happened to Mr. Wolfowitz.

Remember that Mr. Wolfowitz's alleged sin was that he had arranged a job transfer, along with a substantial raise, for his companion Shaha Riza, a bank employee at the time Mr. Wolfowitz took the helm in 2005.

But any suggestion that favoritism had been involved quickly fell apart when it came to light that Mr. Wolfowitz had disclosed the relationship with the bank's board before taking the job; that he had sought to recuse himself from the matter; that the bank's ethics committee had forbidden him from recusing himself; and that the committee had also directed him to arrange a promotion and pay raise for Ms. Riza "on the basis of her qualifying record" and out of concern for the "potential disruption" to her career for a conflict of interest that was not of her own making.

That was it. Yet outside of these columns, few other news outlets could be bothered to report the facts. Was it because Mr. Wolfowitz, as one of the most prominent advocates for deposing Saddam Hussein, was such a convenient media villain? Or because the board and management of the bank were so resistant to Mr. Wolfowitz's aggressive anti-corruption agenda, and all too happy to leak selective and bogus information to suggestible journalists?

I vote for the corruption angle.  Sure, his advocacy for deposing Saddam Hussein may have made Paul Wolfowitz a more tempting target, but everything the left does is about getting the leverage to maintain power, and that leverage is found in the discretion to bestow favors.  That's corruption. 

Pick an issue.  Voter identification requirements are opposed.  Democrats want the voter fraud option.  Illegal immigration is promoted.  There's a constituency there and the left wants those new potential voters.  Bailout money went to the politically connected with labor unions favored over bondholders. 

The left depends upon the power to grant favors to their friends.  With such an unappealing philosophy, how else do they hold on?

Update:  Speaking of voter fraud, the Democratic governor of Minnesota, Mark Dayton, just vetoed a law requiring Minnesota voters to provide an ID in order to vote.  Power Line's take:

The law provided for issuance of free voter IDs to any legitimate voters who, for whatever reason, have no driver's license or other form of identification. Minnesotans, aware that voter fraud has likely played a key role in recent elections, overwhelmingly support the law: the Star Tribune's Minnesota Poll, which routinely tilts left, found 80 percent support.

Nevertheless, Governor Mark Dayton vetoed the bill yesterday. That a Democratic governor is willing to fly in the face of overwhelming public opinion, even as he is fighting a budget battle with the legislature that likely will lead to a slowdown in state government, says volumes about where the Democratic Party stands on the issue of voter fraud.

Democrats stand strongly in favor of voter fraud.  It's one of the imnportant ways they win elections.

Israeli Jews Consider Obama Pro-Palestinian

President Obama’s speech to AIPAC last Sunday did not change Israeli minds about his hostility towards Israel, according to a Smith Research poll sponsored by The Jerusalem Post.

When asked in the poll whether they saw Obama’s administration as more pro-Israel, more pro-Palestinian or neutral, just 12 percent of Israeli Jews surveyed said more pro-Israel, while 40% said more pro-Palestinian, 34% said neutral and 13% did not express an opinion.

Quote of the Day

Not only have the Democrats in congress failed to produce budget, they've also unanimously rejected the one proposed by their leader, President Obama.  Ed Morrissey sums it up perfectly.

For a party that worked hard to barely retain control over the Senate, Democrats seem completely disinterested in meeting their responsibilities.  Who knew that Democrats would go on strike merely because the rabble had the temerity to strip them of control of one chamber of Congress?

Go rabble!