The Great Overreach

by Jonah Goldberg

The stimulus bill has failed. Barack Obama has failed. The Trojan Horse of Hope and Change crashed into the guardrail of reality, revealing an army of ideologues and activists inside. Now, before I continue, let me say that Barack Obama will still be popular, he will still get things done, and he will declare victory after signing a stimulus bill. But Obama's moment is gone, and politics is about nothing if not moments. The stimulus bill was a bridge too far, an overplayed hand, 10 pounds of manure in a 5-pound bag. The legislation's primary duty was never to stimulate the economy, but to stimulate the growth of government, the scope of the state.

Of course, this was more than a budgetary ploy. Democrats had good reason to believe that this was their moment. For the first time in a generation, they truly own the political commanding heights. They've won a string of elections, including the momentous presidential contest in which their candidate never really ran to the center the way Democrats normally do. He stayed on the liberal left all the way through Election Day, so liberals figured voters knew what they were getting with Obama. Indeed, that's why the president keeps saying "I won," as if that settles the issue. Funny how that argument didn't work for the last president when he tried to reform Social Security.

The economic crisis was almost too good to be true. Like FDR and Lyndon Johnson, Obama was poised to act on Rahm's Rule of Crisis Exploitation in a way that would not only guarantee a newer New Deal and an even greater Great Society, but would also receive bipartisan approval. That's why Obama wanted so much GOP support -- so as to ratify the left turn to European-style social democracy, particularly when voters cottoned on to the con.

But that didn't happen. Obama and his party were undone by their hubris. There was just too much muchness in the bill. The once impressive support from conservative economists evaporated. Right-wing radio has been having one long tailgate party celebrating Obama's overreach. According to the polls, voters are souring on the whole thing. Republicans finally discovered testicular fortitude -- and they seem to like it. There is still probably bipartisan support for a stimulus bill, but only for a measure intended to stimulate our market-based economy rather than one that hastens its Swedenization. Again, Obama's presidency has many victories ahead of it, and Democrats still run the show. But the perfect storm of liberalism has dissipated to mere scattered showers.

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Crisis, Catastrophe: Are These Words of Hope?

By Charles Krauthammer

"A failure to act, and act now, will turn crisis into a catastrophe." -- President Obama, Feb. 4.

Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.

And so much for the promise to banish the money changers and influence peddlers from the temple. An ostentatious executive order banning lobbyists was immediately followed by the nomination of at least a dozen current or former lobbyists to high position. Followed by a Treasury secretary who allegedly couldn't understand the payroll tax provisions in his 1040. Followed by Tom Daschle, who had to fall on his sword according to the new Washington rule that no Cabinet can have more than one tax delinquent.

And yet more damaging to Obama's image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama's name, was not just bad, not just flawed, but a legislative abomination.

It's not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It's not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.

It's the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus -- and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress' own budget office says won't be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said...

After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone. I thought the awakening would take six months. It took two and a half weeks.

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Let's Start Brand New Banks

A clean slate would keep TARP money away from bad banks

Everyone agrees that the United States urgently needs a few good banks. Turning bad banks into good banks is a difficult and risky way to get them. It's simpler and safer to start entirely new banks. In this context, "good" means a bank with assets and liabilities that are easy to value using market prices. At a good bank, officers, regulators and investors can be confident about the value of the bank's capital.

The government has $350 billion in Troubled Asset Relief Program (TARP) funds that it can use to encourage new bank lending. If this money is directed to newly created good banks with pristine balance sheets, it could support $3.5 trillion in new lending with a modest 9-to-1 leverage. Right out of the gate, the newly created banks could do what the Fed has already been doing -- buying pools of loans originated by existing banks that meet high underwriting standards.

If the TARP funds go to existing banks, much of them will end up stuck in financial institutions that are still bad after the transfer. We know from the previous round of TARP that giving more capital to bad banks generates very little net new lending.

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ELSEWHERE

This is the sub-prime house that Barack built: "It is all very well for President Obama to vent his anger on all those US bankers who continued to claim billions of dollars in bonuses while expecting Washington to bail them out after the sub-prime mortgage scandal brought the banks to their knees. But conveniently overlooked has been the curious part Mr Obama himself played in the sub-prime debacle. At the heart of it was a 1995 amendment to the Community Reinvestment Act which legally required banks to lend money to buy homes to millions of poor, mainly black Americans, guaranteed by the two biggest mortgage associations, Fannie Mae and Freddie Mac. And no one campaigned more actively for this change to the law than Mr Obama, as a young but already influential Chicago politician."

Jim Cramer compares Obama to Lenin: "CNBC "Mad Money" host Jim Cramer sees some scary similarities between the words of President Obama and those of communist revolutionary Vladimir Lenin. Obama dogged Wall Street by saying there would be a time "for them to make profits, and there will be time for them to get bonuses. Now's not that time. And that's a message that I intend to send directly to them." Cramer made this comparison: "There was a little snippet last week that was, `Now is not the time for profits.' Look - in Lenin's book, "What Is to Be Done," is simple text of what I always though was for the communists. It was remarkable to hear very similar language from `What Is to Be Done?' which is we have no place for profits."

The media version of impartiality: "We always knew that Brian Williams had it out for President Bush. But now he's calling him something he likely wouldn't even call any of Obama's terrorist friends: evil. The NBC Nightly News anchor, last week on the Late Show with David Letterman, passionately described how he witnessed people line up to buy any type of Obama merchandise they could get their Messiah-worshipping hands on. Gushing as if he'd just seen his first rock concert. he told Letterman he was thrilled at seeing so many people "that excited about our new chief executive after a line of what the ordinary voter would maybe describe as bad choices or choices of evils, for years, generations." Astute listeners will note it's not him, but how "the ordinary voter" would describe Bush. According to Williams, "none of us have a party in my line of work. We all try to call balls and strikes down the center."

The unraveling of the ethanol scam : "The failure of Renew is the latest bankruptcy in the corn ethanol industry, a sector that despite billions of dollars in federal subsidies, hasn't been able to prove its long-term economic viability. About 9 percent of all the ethanol plants in the US have now filed for bankruptcy and some analysts believe the numbers could go as high as 20 percent. Even if the 20 percent figure is never reached, it's readily apparent that billions of investment dollars will be lost on the corn ethanol scam, a darling of farm state legislators. Today, about four years after Congress increased the mandates on the use of corn ethanol in gasoline, the US is nowhere close to the much-promised goal of `energy independence.' Instead, the increasing use of corn to make motor fuel has caused a myriad of problems. Chief among them: increased food prices."

Deja Vu All Over Again: "A bright new president announces he's going to have the most ethical administration in American history and, even before the new has worn off, has to accept the resignations of one after another of his top appointees when their ethical lapses come to harsh light. Sound familiar? It should. The calendar says 2009, the new president is Barack Obama, but it could be the false political spring of 1993, when Bill Clinton seemed almost as busy undoing his appointments as he'd been making them only days before. Something else hasn't changed much, either: The distinguished former appointees almost uniformly explain that they're stepping down not because they've shown rotten judgment and/or complete insensitivity to the simplest ethical requirements, but because paying attention to such matters would be too much of a "distraction" from the great service they have and could still render an ungrateful public."

Volvo to become Chinese!: "Ford Motor Co., seeking to raise cash to avoid a federal bailout, is in talks to sell its Volvo Car unit to China’s Geely Automobile Holdings Ltd., according to three people familiar with the discussions. Ford probably will get less than the $6.4 billion it paid for Sweden-based Volvo in 1999, said one of the people, who declined to be identified because the preliminary talks are confidential. Ford has also approached Chinese automakers Chery Automobile Co. and Chongqing Changan Automobile Co., the people said."

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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

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