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David Warren writes on the first 60 days.
… we would be wrong to think of Mr. Obama as an ideologue. I think he was perfectly sincere in denying that he was anything of the sort, and in claiming that he would be looking for bipartisan consensus. I also think he is sincere in proceeding with an agenda — on bail-outs, the environment, Medicare, life issues, foreign policy, etc. — that leaves most Republicans, and quite a few of the more conservative Democrats, utterly aghast.
How to explain this apparent contradiction? I’m afraid it is easy. As I mentioned during the presidential campaign, Mr. Obama was seriously unqualified for the job of president. He had no practical experience in running anything, except political campaigns; but worse, his background was one-dimensional.
All his life, from childhood through university through “community organizing” and Chicago wardheel politics, through Sunday mornings listening to the Rev. Jeremiah Wright, to the left side of Democrat caucuses in Springfield and Washington, he has been surrounded almost exclusively by extremely liberal people, and moreover, by people who are quick and clever but intellectually narrow.
He is a free soul, but he is also the product of environments in which even moderately conservative ideas are never considered; but where people on the further reaches of the left are automatically welcomed as “avant-garde.” His whole idea of where the middle might be, is well to the left of where the average American might think it is. To a man like Obama, as he has let slip on too many occasions when away from his teleprompter, “Middle America” is not something to be compromised with, but rather, something that must be manipulated, because it is stupid. And the proof that it can be manipulated, is that he is the president today. …
Taking a cue from a Yuval Levin Corner post today we will examine the recent Fed move.
Yesterday’s announcement from the Federal Reserve should be getting a lot more attention than it has amidst the AIG circus. …
Levin linked to a series of items. Larry Kudlow is first.
… The Obama budget raises tax rates on investors and businesses, and supports a cap-and-trade tax, universal health care, and various regulations for unionization. Meanwhile, a spate of trade protectionism is breaking out with Mexico and China. All of these are anti-growth policies. And now the Fed is ramping up its monetary pump-priming. So the obvious risk is too much money chasing too few goods producing a stagflationary recovery.
The dollar is out the window. Monetizing debt is back in style.
I go back to Art Laffer’s four prosperity killers: inflation, higher tax rates, re-regulation, and trade protectionism. You can put a check mark next to each box. …
And from Contentions, Francis Cianfrocca.
The Federal Reserve announced a momentous shift in policy yesterday. Its import was easy to miss because, as always with the Fed, it was written in a jargon only superficially resembling English. But its intention is to take actions that will deeply shift the policy landscape, probably to a much greater extent than Congress’s various stimulus plans.
The Fed announced an American version of what has been called “quantitative easing,” or QE. The Japanese have done this before, and the British got into it a few weeks ago. You can think of it, with no loss of accuracy, as inflation. …
Jack McHugh from The Big Picture.
… After months of threats, the Fed finally pushed the monetization button. Federal Reserve Chairman Bernanke and the rest of the FOMC decided today to embark upon the one strategy central bankers have always considered the dreaded last option — Quantitative Easing. It’s one thing for the Fed to push the “Easy” button and lower rates or temporarily inject reserves into the banking system, but to push the “QE” button (creating currency out of thin air with which to purchase assets) is an action reserved for only the direst of circumstances. If such a device truly existed in the Board room of the Eccles building (Fed hdqrters), it would be a red button under glass with a “Press Only in Case of Emergency” warning stenciled underneath. That market participants responded to this monetary jolt by buying stocks, bonds, and precious metals while thumping the dollar is not a surprise. How investors react over the longer term to these actions and the inevitable unintended consequences will be far less easy to predict. …
Tyler Cowen from Marginal Revolution.
… The more the Fed takes on its balance sheet, the more the long-run independence of the central bank is damaged. Monetizing so much government debt is what Third World nations do. Draining the new money from the system will someday be a problem. …
WSJ Editors also express concerns about Federal Reserve independence with “Secretary of the Fed.”
In case there was any residual doubt, the Bernanke Fed threw itself all in this week to unlock financial markets and spur the economy. With its announced plan to make a mammoth purchase of Treasury securities, the Fed essentially said that the considerable risks of future inflation and permanent damage to the Fed’s political independence are details that can be put off, or cleaned up, at a later date. Whatever else people will say about his chairmanship, Ben Bernanke does not want deflation or Depression on his resume.
It’s important to understand the historic nature of what the Fed is doing. In buying $300 billion worth of long-end Treasurys, it is directly monetizing U.S. government debt. This is what the Federal Reserve did during World War II to finance U.S. government borrowing, before the Fed broke the pattern in a very public spat with the Truman Administration during the Korean War. Now the Bernanke Fed is once again making itself a debt agent of the Treasury, using its balance sheet to finance Congressional spending. …
IBD editors close it out.
… As for those who argue a major cash infusion is desperately needed to end our “credit crunch,” we’d only note that credit, while tight, isn’t close to being in a crunch. Consumer and business loans are running 7.7% ahead of last year, and total commercial bank lending is up about 4.8%.
In short, money is being lent, and the economy is perking up even without benefit of a federal bailout effort that could add $9 trillion or more to our national debt over the next decade.
It may be that Bernanke, a good economist, is tired of waiting for Congress and the White House to do what needs to be done and is moving to do what he can. If so, we applaud his courage and leadership. We just hope we’ll be able to applaud the results.
We broke our AIG bonus vow of silence for David Harsanyi last week. We do it again for Mark Steyn.
Are you outraged by these AIG bonuses?
No, no. For Pete’s sake, you’re an A-list congressional big shot. Try to get a bit of feeling into “outraged.” The president’s teleprompter puts it in italics, bold, capitalized and underlined: OUTRAGED !
That’s better. Don’t forget to furrow your brow and fume. No, not like a camp waiter when you send back the arugula salad drizzled in an aubergine coulis. We’re looking for primal, righteous anger: You’re outraged, OUTRAGED that bonuses are being handed out at companies the American taxpayer is bailing out. Yes, to be sure, the bonuses were specifically provided for in the legislation, but, like all busy senators and congressmen, you don’t have time to read every footling trillion-dollar bill before you vote in favor of it. And yes, true, the specific passage addressing these particular bonuses was, in fact, added to the bill in your name, but that was nothing to do with you – you just did that because the White House asked you to, and just because their people called your people and some intern in your office drafted some boilerplate with your name on it is no reason for you to be denied 10 minutes of grandstanding on MSNBC. It’s an outrage to suggest you’re anything other than outrageously outraged! …
And Charles Krauthammer starts with the bonuses and morphs to the omnibus spending bill.
… That bill, we now discover, contains, among other depth charges, a Teamster-supported provision inserted by Sen. Byron Dorgan that terminates a Bush-era demonstration project to allow some Mexican trucks onto American highways, as required under NAFTA.
If you thought the AIG hysteria was a display of populist cynicism directed at a relative triviality, consider this: There are more than 6.5 million trucks in the United States. The program Congress terminated allowed 97 Mexican trucks to roam among them. Ninety-seven! Shutting them out not only undermines NAFTA. It caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade coming out of 40 states.
The very last thing we need now is American protectionism. It is guaranteed to start a world trade war. A deeply wounded world economy needs two things to recover: (1) vigorous U.S. government action to loosen credit by detoxifying the zombie banks and insolvent insurers, and (2) avoidance of a trade war.
Free trade is the one area where the world indisputably turns to Washington for leadership. What does it see? Grandstanding, parochialism, petty payoffs to truckers and a rush to mindless populism. Over what? Over 97 Mexican trucks — and bonus money that comes to what the Yankees are paying for CC Sabathia’s left arm.
Speaking of trade wars, Club for Growth lists some of the tariffs newly applied by Mexico.
David Harsanyi, upon learning GW Bush signed a book deal, had this to say.
When news broke this week that former President George W. Bush planned to pen a book exploring the tough decisions of his presidency, my initial thought was: Who cares?
But then I remembered that this kind of assault on our intelligence never ends. And it is not confined to a political party or ideology, and no creed, race or religion is immune from the generic dullness of books authored by politicians. ..
… The most obnoxious of all these books, though, have to be the ones where elected officials give you advice about the real world. A perfect example of this is Nancy Pelosi’s most recent offering: “Know Your Power: A Message to America’s Daughters.” The only thing this book taught me is that men are all-powerful chauvinist pigs who spend their time trying to impede the progress of women — well, except women who are third in line for the presidency, I guess.
Then again, the less consequential your political career, the more books you get to write. Jimmy Carter is the author of dozens of books. …
Borowitz reports Cheney will write W’s book.
… A spokesman for Dick Cheney said that he would finish writing the memoir in 2009 and would finish redacting it in 2010.
Mark Steyn Corner posts.
More from the blog of Barack’s teleprompter.
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