Walker McKay, my good friend, wrote me the other day as a follow up to my last entry, "Are we just now figuring this out?" He is exactly right when he says:
"Bill: I don’t think we have lost the message of conservatism for a generation, but maybe the Republican party has lost conservatives for a generation. I think the message of conservatism is stronger now than ever, there just isn’t a viable “party home” for it."
Thanks to Walker for the input.
Monday, June 29, 2009
Friday, June 26, 2009
Are we just now figuring this out?
Recently, I received an email from Republican U.S. House member Joe Wilson (SC-2) discussing the fact that "Spending is out of cotrol in Washington." http://joewilsonforcongress.com/home/2009/06/spending-is-out-of-control/
(This realization is only slightly later than his endorsement of John McCain for President.)
http://www.fitsnews.com/2008/01/22/joe-wilson-is-tardy/
http://shotpolitics.com/wilson-staff-loses-release-endores-mccain-anyway.htm
Below is the reply I sent regarding his correspondence:
Dear Mr. Wilson:
Thank you for your recent email correspondence entitled, “Spending is out of control.” As I read it, I was struck by the fact that if we as Republicans had simply had this outlook on spending during the period when we were the majority party we wouldn’t be facing the spending crisis you discuss in your correspondence. Because you chose not to stand up to the Bush administration on the expansions of government under their watch, or to the appropriators within our own party, we lost the faith of many of the voters even within our own party. I fear that your request for action may be too little, too late, and that we may have lost not only the majority, but also the message of conservatism for a generation.
(This realization is only slightly later than his endorsement of John McCain for President.)
http://www.fitsnews.com/2008/01/22/joe-wilson-is-tardy/
http://shotpolitics.com/wilson-staff-loses-release-endores-mccain-anyway.htm
Below is the reply I sent regarding his correspondence:
Dear Mr. Wilson:
Thank you for your recent email correspondence entitled, “Spending is out of control.” As I read it, I was struck by the fact that if we as Republicans had simply had this outlook on spending during the period when we were the majority party we wouldn’t be facing the spending crisis you discuss in your correspondence. Because you chose not to stand up to the Bush administration on the expansions of government under their watch, or to the appropriators within our own party, we lost the faith of many of the voters even within our own party. I fear that your request for action may be too little, too late, and that we may have lost not only the majority, but also the message of conservatism for a generation.
Sunday, May 31, 2009
Power vs. Principle
The recent government takeover of General Motors and various financial institutions is distasteful to the business community and political conservatives. However, the nature of our national demographic means that this type of government intervention is more likely. Politicians will come under increasing pressure to meddle in the private sector to protect the financial well-being of the baby boomers as they reach their “golden years.”
If the speech given by Senator Lindsey Graham at the South Carolina Republican convention is any indication, then we will see more politicians willing to compromise principle to get reelected. Senator Graham vehemently challenged the delegates that “if you want to win, you’d better decide to moderate on issues to get something done.” Senator Graham went on to mention that because President Obama is such a likable guy that conservatives will have a tough time defeating his agenda.
So we already see the death of fiscal responsibility as there is no strident opposition to the Obama administration and influential members of Congress like Senator Graham have adopted the go-along-to-get-along mentality. If there isn’t the political will today to try to stop the taxpayer funded bailouts (with no union concessions) then how will there be any political will to ask for stewardship on any other issue that affects the boomer retirement hopes. Who will argue the other side for the future generations who have to pay for the government bailout of the pensions of the current retirement generation? The silence on government takeovers will allow the “likable” liberals to enact an agenda that erodes any hope of a resilient American economy in the future. Conservatives need to get the guts to answer the question, “What hill are we willing to die on,” and then stick to the principles of our founders.
If the speech given by Senator Lindsey Graham at the South Carolina Republican convention is any indication, then we will see more politicians willing to compromise principle to get reelected. Senator Graham vehemently challenged the delegates that “if you want to win, you’d better decide to moderate on issues to get something done.” Senator Graham went on to mention that because President Obama is such a likable guy that conservatives will have a tough time defeating his agenda.
So we already see the death of fiscal responsibility as there is no strident opposition to the Obama administration and influential members of Congress like Senator Graham have adopted the go-along-to-get-along mentality. If there isn’t the political will today to try to stop the taxpayer funded bailouts (with no union concessions) then how will there be any political will to ask for stewardship on any other issue that affects the boomer retirement hopes. Who will argue the other side for the future generations who have to pay for the government bailout of the pensions of the current retirement generation? The silence on government takeovers will allow the “likable” liberals to enact an agenda that erodes any hope of a resilient American economy in the future. Conservatives need to get the guts to answer the question, “What hill are we willing to die on,” and then stick to the principles of our founders.
The Rule of Law and Liberal Hypocrisy
This past week, President Obama cut a deal to save General Motors that cast aside the existing contracts between the company and the companies bondholding creditors. Normally these moves could only take place in a rightly constituted bankruptcy court. However, in the current economic environment, we have obviously suspended the rule of law in an effort to return political favors to labor unions while hiding behind the stalking horse of saving the economy.
While unions were given concessions for their investment stake in the company at a dollar-to-dollar basis, including preferred stock paying a 9% dividend, bondholders were told to accept equity stakes at ten-cents-on-the-dollar or get nothing. This level of government intervention into capital market contracts is growing almost by the day as the current administration, with no business experience, plays with taxpayer money to make politically driven decisions about whom to save in the recessionary economy.
As The Wall Street Journal reported today,
Even after nine months of extraordinary government intervention, the scope and complexity of the General Motors Corp. rescue present a thicket of conflicts unlike any seen before in Washington.
The federal government is likely within weeks to emerge as the principal owner of a storied U.S. corporation whose factories and products touch the lives of tens of millions of Americans. It will simultaneously serve as the company's regulator, tax collector, customer, pension backstop and lender.
The Obama administration is making up the rules as they go. The only hope to keep the federal government from continuing to become increasingly entrenched in the affairs of private enterprise is for state pension funds and other large institutional creditors to stand up and say enough of the Obama administration running roughshod over creditors’ rights.
At this point we have put significant taxpayer funds into dying business models. Why should the taxpayer expect anything different when we continue to see the Washington attitude of “it’s our money to use as we see fit, and we’ll do what it takes to maintain power.” The Obama administration seems to have added the sentiment, “So whatcha gonna do about it; we’re in charge now.”
While unions were given concessions for their investment stake in the company at a dollar-to-dollar basis, including preferred stock paying a 9% dividend, bondholders were told to accept equity stakes at ten-cents-on-the-dollar or get nothing. This level of government intervention into capital market contracts is growing almost by the day as the current administration, with no business experience, plays with taxpayer money to make politically driven decisions about whom to save in the recessionary economy.
As The Wall Street Journal reported today,
Even after nine months of extraordinary government intervention, the scope and complexity of the General Motors Corp. rescue present a thicket of conflicts unlike any seen before in Washington.
The federal government is likely within weeks to emerge as the principal owner of a storied U.S. corporation whose factories and products touch the lives of tens of millions of Americans. It will simultaneously serve as the company's regulator, tax collector, customer, pension backstop and lender.
The Obama administration is making up the rules as they go. The only hope to keep the federal government from continuing to become increasingly entrenched in the affairs of private enterprise is for state pension funds and other large institutional creditors to stand up and say enough of the Obama administration running roughshod over creditors’ rights.
At this point we have put significant taxpayer funds into dying business models. Why should the taxpayer expect anything different when we continue to see the Washington attitude of “it’s our money to use as we see fit, and we’ll do what it takes to maintain power.” The Obama administration seems to have added the sentiment, “So whatcha gonna do about it; we’re in charge now.”
Thursday, April 30, 2009
Punishing a true stimulus
Recently, a bill was introduced by California Representative Henry Waxman that, if passed would effectively raise the marginal tax rate on oil and gas companies. What amounts to a punitive measure by a liberal member of the U.S. House is in keeping with the policy measures of an overly ambitious Democratic Party majority. The repeal of the Section 199 deductions for oil and gas companies will hurt our interests in three key ways.
First, a tax increase on oil and gas will pass through to consumers at a time when we can least afford to see consumer spending on goods and services erode further. According to the Bureau of Labor Statistics, we have seen the steepest drop in consumer spending since the beginning of the measurement. Further taxes on energy will only prolong this downturn.
Second, U.S. national security is undermined when we raise taxes on U.S. oil and gas companies. The issue of energy independence is not one where we have an option; we must allow our oil and gas companies use their resources for research and development for new sources of energy, not for tax dollars to be spent on government programs that have little or no return on investment.
Third, it is wrong for Congress to give money to industries that are struggling and pay for it by raising taxes on those that are healthy. Such measures move us philosophically backwards in encouraging companies to produce more profit through more efficient operations. Instead it seems that Mr. Waxman and The White House have decided that in order to support out-of-control spending and government intervention in dying business models they are going to tax everything they don’t like, even if it hurts the nation as a whole. In an effort to pay for “stimulus” by raising taxes on oil and gas companies, they are actually hurting a crucial underpinning of economic recovery; low energy prices.
First, a tax increase on oil and gas will pass through to consumers at a time when we can least afford to see consumer spending on goods and services erode further. According to the Bureau of Labor Statistics, we have seen the steepest drop in consumer spending since the beginning of the measurement. Further taxes on energy will only prolong this downturn.
Second, U.S. national security is undermined when we raise taxes on U.S. oil and gas companies. The issue of energy independence is not one where we have an option; we must allow our oil and gas companies use their resources for research and development for new sources of energy, not for tax dollars to be spent on government programs that have little or no return on investment.
Third, it is wrong for Congress to give money to industries that are struggling and pay for it by raising taxes on those that are healthy. Such measures move us philosophically backwards in encouraging companies to produce more profit through more efficient operations. Instead it seems that Mr. Waxman and The White House have decided that in order to support out-of-control spending and government intervention in dying business models they are going to tax everything they don’t like, even if it hurts the nation as a whole. In an effort to pay for “stimulus” by raising taxes on oil and gas companies, they are actually hurting a crucial underpinning of economic recovery; low energy prices.
Saturday, February 14, 2009
Someone, stimulate leadership
This week, I had the opportunity to hear an elected official holding statewide office address a group of business people on the state of the economy. In the room were owners of companies who never have the luxury of just looking at the problem, but who must get up every morning and figure it out and pray for provision. The government official gave grim news on declining tax receipts, oversized state government and stated that there was “no good news.” I kept waiting for the proposal, “So here’s what I’m meeting with leaders about…” There was none. I left confused, having admittedly missed the point.
Today, Peggy Noonan summed similar sentiments in The Wall Street Journal:
Politicians keep saying, "People have to begin to understand we're in bad shape," and "People should realize it's a crisis." I think they know, Sherlock. Do you? Our political leaders are like a doctor who rushes to the scene of a terrible crash, bends over a hemorrhaging woman and says, "This is serious, lady, you can't take it lightly." She looks up at him: "Help me, do something, I'm bleeding out!" The doctor, to the local TV cameras: "I hope she knows she's in trouble."
No longer can we afford to have politicians who castigate the others with whom they share power as a way to pass the buck. You were elected to work together to solve the problems that arise, not simply report the news.
Leadership is the willingness to say, “If it goes well, it’s time to credit everyone else. If it goes poorly, it’s time to look in the mirror.” Unfortunately, we’re not seeing many examples of that today because maybe the only safe thing in the economy is to keep accruing years on a government pension by being reelected. Getting reelected today seems to mean making sure you’re showing people the problems, not proposing solutions. Solutions are messy. If it doesn’t work, it’s easier to be on the outside passing judgment and placing blame.
The wonderful thing about the people in that room is that they will survive, and they will lead, even if the public as a whole never gives them accolades. They can’t afford to simply diagnose. They have to stop the bleeding and get the patient on her feet again. They will provide the examples of leadership for the next generation and maybe even the politicians.
Today, Peggy Noonan summed similar sentiments in The Wall Street Journal:
Politicians keep saying, "People have to begin to understand we're in bad shape," and "People should realize it's a crisis." I think they know, Sherlock. Do you? Our political leaders are like a doctor who rushes to the scene of a terrible crash, bends over a hemorrhaging woman and says, "This is serious, lady, you can't take it lightly." She looks up at him: "Help me, do something, I'm bleeding out!" The doctor, to the local TV cameras: "I hope she knows she's in trouble."
No longer can we afford to have politicians who castigate the others with whom they share power as a way to pass the buck. You were elected to work together to solve the problems that arise, not simply report the news.
Leadership is the willingness to say, “If it goes well, it’s time to credit everyone else. If it goes poorly, it’s time to look in the mirror.” Unfortunately, we’re not seeing many examples of that today because maybe the only safe thing in the economy is to keep accruing years on a government pension by being reelected. Getting reelected today seems to mean making sure you’re showing people the problems, not proposing solutions. Solutions are messy. If it doesn’t work, it’s easier to be on the outside passing judgment and placing blame.
The wonderful thing about the people in that room is that they will survive, and they will lead, even if the public as a whole never gives them accolades. They can’t afford to simply diagnose. They have to stop the bleeding and get the patient on her feet again. They will provide the examples of leadership for the next generation and maybe even the politicians.
Tuesday, February 10, 2009
We aren't likely to spend our way out of this
What the Democrats would have us believe is that they are on a crusade of economic statesmanship when really it is simple legislative consumerism designed to protect political turf. I believe President Obama is sincere when he says we are in a dire situation, but it seems that he has simply given Congress a license to continue to do what they do best; spend.
Why is spending really a concern? Why shouldn’t we fund all these initiatives out of the federal coffers? Why shouldn’t we just send our Congressman up the hill to get our share?
Because according to David M. Walker former Comptroller General of the Untied States, we can’t afford to do so. In an article published last spring in Politico, Mr. Walker wrote:
"The current federal fiscal policy has created a disconnect between today’s citizens and future taxpayers. Baby boomers and current retirees benefit from today’s government spending and tax policies, while our children, grandchildren and generations to come will be expected to pay the bill for today’s excess consumption.
From a broad perspective, many in Congress think that since the U.S. is currently the world’s sole superpower, we will always be able to borrow from foreign countries whenever necessary at attractive interest rates. Unfortunately, the government — like too many Americans — has become addicted to debt.
With a federal deficit in the billions, government appears numb to running large operating budgets every year, irrespective of the state of the economy or the existence of wars. The resulting deficits and related debt burdens are set to escalate dramatically when baby boomers retire in big numbers.
To put things in perspective: Absent meaningful reforms, income tax rates would have to more than double from today’s levels for the federal government to deliver on its promises and pay its bills."
In his March 15, 2008 editorial in The Wall Street Journal, South Carolina Governor Mark Sanford expressed a similar concern when he wrote, “Since 2000, the federal budget has increased 72%, to $3.1 trillion from $1.8 trillion. The national debt is now $9 trillion -- more than the combined GDP of China, Japan and Canada. Add in Medicaid, Medicare and Social Security commitments, and as a nation we are staring at more than a $50 trillion hole -- an invisible mortgage of $450,000 for every American family.”
In his March 15, 2008 editorial in The Wall Street Journal, South Carolina Governor Mark Sanford expressed a similar concern when he wrote, “Since 2000, the federal budget has increased 72%, to $3.1 trillion from $1.8 trillion. The national debt is now $9 trillion -- more than the combined GDP of China, Japan and Canada. Add in Medicaid, Medicare and Social Security commitments, and as a nation we are staring at more than a $50 trillion hole -- an invisible mortgage of $450,000 for every American family.”
These concerns were being voiced before we began to consider spending an additional $4 Trillion on “stimulus measures” in the form of industry bailouts, interest rate cuts and spending measures. The currently debated stimulus package is supposed to be the new and improved version of the economic stimuli we have had over the last 11 months that add up to $1 Trillion. We keep spending hoping that we can maybe return to the heyday of 2006 when anyone could get a house for nothing, everyone was comfortable and consumers had their wallets open. The risks that came along with that environment have come to roost. Are we really trying to get back to those “good old days?”
American consumers have already gotten the message and begun tightening their belts. Personal consumption is down by 3.5% and savings rates have doubled year over year to 2% (the 60 year average is 7%). If only we could get government to follow suit. Sales tax and income tax will be down, but state and local governments tend to lag in dropping tax receipts so they are just now figuring out that spending like it’s 2006 won’t work. State governments from both parties are looking to the federal government for a rescue. It seems like we’re determined to treat an economic hangover with more liquor.
If over-leverage is what got us into this mess, then more spending and increasing leverage isn’t likely to be the long-term solution. Some of the stimulus might actually be worthwhile, but no one has the willpower to flow it in over time to see what actually works. What we are likely to be left at the end of it all is higher taxes, higher inflation, a weaker dollar and higher energy prices. The prevailing attitude seems to be, “As long as we get ours as the entitled society today, our progeny can figure all that out for themselves.”
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