Saturday, April 18, 2009

Obama, Chavez share book, pleasantries By Stephen Dinan


April 18, 2009

  • Venezuela President Hugo Chavez (right) hands President Barack Obama the book "The Open Veins of Latin America" by Uruguayan writer Eduardo Galeano during a UNASUR countries meeting Saturday at the Summit of the Americas in Port-of-Spain, Trinidad and Tobago. (Associated Press)

Continuing an interesting back-and-forth in U.S.-Latin American relations, Venezuelan President Hugo Chavez sought out President Obama at a joint meeting Saturday morning to give him a book attacking capitalism and American intervention in the Western Hemisphere.

"Las Venas Abiertas de America Latina," or "Open Veins of Latin America," by Eduardo Galeano, describes centuries of invasions and other attempts to influence Latin American affairs by outside powers, including the U.S.

Mr. Chavez handed the book to Mr. Obama after the American president spoke at a meeting of leaders from the Union of South American Nations (UNASUR), which was taking place on the side of the Summit of the Americas in Trinidad.

"I thought it was one of Chavez's books,'' Mr. Obama told reporters afterward. "I was going to give him one of mine.''

A senior administration official later said the exchange appeared to be a publicity ploy by Mr. Chavez.

"Anybody who's been at international conferences with Chavez knows that if there's a camera around, he's going to find a way to get in it," said the official, who was in Mr. Obama's meetings and who the White House had brief reporters. The White House made the official available to reporters on the condition of anonymity.

The book exchange comes a day after Mr. Obama sought out and shook hands with Mr. Chavez and his close ally, Bolivian President Evo Morales, at the opening ceremonies of the summit. And it comes after a week-long engagement with Cuba which saw Mr. Obama lift some of the strictest parts of the U.S. trade and travel embargo on that nation, and which saw Cuban President Raul Castro indicate he would now be open to talking with the U.S. on expanding political freedoms.

But at the UNASUR meeting Saturday South American leaders called for Mr. Obama to lift the embargo entirely, and several of them, including Mr. Chavez, criticized the U.S. for past actions in the hemisphere, according to the senior administration official.

"His comments about President Obama expressed the hope that things have changed. He was civil in his remarks. He was critical of the past, however," the official said.

Mr. Obama is spending Saturday in a series of meetings and working sessions.

"I have a lot to learn and I'm very much looking forward to listening," the president said in his opening remarks to the UNASUR meeting. The opening remarks were open to reporters to cover, and Mr. Chavez walked over to Mr. Obama as the reporters were being ushered from the room.

Friday, at the opening ceremony of the summit, Mr. Obama acknowledged that the U.S. has made some errors, though he didn't say what he thought those errors were. But he also said other countries in the hemisphere must stop blaming the U.S. for all problems.

"I think it's important to recognize, given historic suspicions, that the United States' policy should not be interference in other countries, but that also means that we can't blame the United States for every problem that arises in the hemisphere. That's part of the bargain," Mr. Obama said, drawing applause from the assembled leaders.

Thursday, April 16, 2009

How To Judge Elected Representatives


By WALTER R. BORNEMAN | Posted Wednesday, April 15, 2009 4:20 PM PT

History offers fascinating perspectives. The founding fathers would be aghast at the mere suggestion of federal dollars being spent on everything from swine odor in Iowa to blueberry production in Georgia, not to mention pesky cormorants in Michigan.

The first major attempt to pass a bill that constituted what might be termed pork barrel spending occurred in 1817.

South Carolina's John C. Calhoun proposed to use $1.5 million to improve the nation's fledgling system of roads and canals.

The National Road west from Cumberland, Maryland, was already under construction, but Calhoun's plan promoted multiple projects — internal improvements, they were called — to benefit other transportation arterials around the country.

It did not enjoy smooth sailing.

New England was opposed, as that region generally was to any measure that encouraged westward expansion and pulled the commercial and political fulcrum of the country away from Boston.

The South, despite Calhoun leading the charge, was divided, wary that the country's midsection might benefit more than it.

Pennsylvania cheered the loudest in support of the measure because it saw the corridor west from Philadelphia as a natural beneficiary and Pittsburgh the logical transportation hub west of the Appalachians.

Because of these sectional concerns, Calhoun's bill narrowly passed the House by two votes and the Senate by five.

But then Calhoun got a real shock. President James Madison drew him aside at a reception at the president's temporary quarters — the Executive Mansion was still being re-constructed from its torching by the British—and told Calhoun point blank that he could not sign the bill on constitutional grounds.

Architect of the Constitution and strict constructionist that he was, Madison felt that such an appropriation for internal improvements was not within the enumerated powers granted Congress.

He also feared that it would dangerously disrupt the partition of powers and the intended focus between the state and federal governments. Madison vetoed the bill one day before his term ended.

Thereafter, federal funding of internal improvements became a hotly debated issue, with Henry Clay's emerging Whig Party being generally in favor and Andrew Jackson's Democrats opposed to such appropriations.

In 1846, Jackson's handpicked political heir, James K. Polk, vetoed a then-staggering appropriation of $1,378,450 (the entire national debt was only about $17 million) for forty separate improvement projects to rivers and harbors on the Great Lakes.

"Should this bill become law," President Polk prophetically told Congress, "the principle which it establishes will inevitably lead to large and annually increasing appropriations and drains upon the Treasury, for it is not to be doubted that numerous other localities . . . will demand, through their representatives in Congress, to be placed on an equal footing with them."

Polk stopped the pork in 1846, but Congress has let the pig loose again and again.

Ironically, Polk's Democrats went on to become the free-spending Democrats of FDR's New Deal and in subsequent Congresses, Republicans, too, became transfixed with bringing the bacon home to their respective districts.

The Republican Party platforms of 1856 and 1860 added railroads to the long-debated category of internal improvements and not only called for a railroad to the Pacific, but also urged substantial government aid in its construction.

Democrats supported the railroad, but the party maintained its longstanding opposition to the direct use of federal dollars for the effort, particularly if the route was to be a northerly one.

During the Civil War — with Southern Democrats absent — the Republican-controlled Congress generously funded the first transcontinental railroad with guaranteed bonds and land grants.

In the war's aftermath, heated political posturing sought to confer similar benefits on various southern transcontinental routes.

But at least these transportation projects were of a scope that generally qualified as "national interest."

By 1896, national interest had been watered down to the point that one satirical cartoon featured a California lobbyist "hooking a chunk of River and Harbor Pork out of a Congressional Pork Barrel."

After the New Deal, the floodgates were open. Attempts to close them frequently met with political rejection.

"As groups win their battle for special expenditures," Illinois Democrat Senator Paul Douglas warned to no avail, "they lose the more important war for general economy."

Douglas attributed his 1966 loss for a fourth term in part to his unwillingness to "deliver" federal pork to his state.

Despite enormous economic priorities and the 2008 election year hype of Alaska's now infamous "bridge to nowhere," pork remains king, unchallenged in Congress save for a few courageous critics. Meanwhile, Massachusetts — its 1817 opposition to internal improvements long forgotten — has channeled billions of dollars of federal pork into Boston's "Big Dig."

When it comes to tax dollars entrusted to its care, Congress appears beyond reforming itself. There is a collective lack of fortitude to turn off the spigot.

Ultimately, only voters can decide that their elected representatives' effectiveness should be judged not by tax dollars directed from federal coffers, but rather by how much of their own tax dollars they get to keep in the first place.

Of that, James Madison and James K. Polk would approve.

Borneman's biography of James K. Polk, "Polk, The Man Who Transformed the Presidency and America" (Random House, 2008), has just been released in paperback.

Fleeing The TRAP


By INVESTOR'S BUSINESS DAILY | Posted Wednesday, April 15, 2009 4:20 PM PT

Banking: The bailout might have worked with a different administration and a different Congress. But it was poisoned by politics. Financial firms large and small have every reason to head for the exits.

Read More: Business & Regulation

We're writing here about the Troubled Asset Relief Program, known as TARP. But that's no typo in the headline above. The bankers whom TARP was supposed to help now are coming to see it as a snare and a delusion. The longer they stay, the more talent, autonomy and vitality their businesses will lose. Stay long enough and they might as well work at the DMV.

A half-dozen small banks have bailed from the bailout by raising private capital and paying back the capital infusions they had received from the Treasury.

Earlier this week, Goldman Sachs Group became the first of the big players to make its move for the exit. It said on Monday that it would buy back $10 billion in TARP capital, in part by offering $5 billion through an equity offering.

News of the stock issue knocked 9% off Goldman's market cap, leaving existing shareholders about $5 billion poorer.

Goldman's TARP escape was costly in another respect. The company's buying back its relatively cheap Treasury-owned shares, on which it pays a 5% dividend, while continuing to give Warren Buffett's Berkshire Hathaway a much sweeter deal. It pays Berkshire 10% dividends on $5 billion in preferred stock, plus warrants to buy $5 billion in stock at a strike price of $115 (with Goldman trading at about $120 Wednesday, those warrants were well in the money).

Once Goldman goes, the other strong banks will probably want to follow as soon as they can. The government might want to keep them from leaving, for good reasons (to help them get stronger) or bad (to put them under tighter control).

The leftists inside and outside the Obama administration will no doubt push for their preferred solution, outright nationalization. But the involuntary government takeover of sound banks is too close to outright dictatorship for the public to accept, as long as the public's instincts are still sound. So we expect the TARP exodus to continue and gather steam.

That would be good in the short term for taxpayers, who would get their investments back with interest. But the initial purpose of the TARP capital infusions was not to make a quick billion bucks. It was to bolster banks' capital for several years, if need be, so that they could return to normal lending. The object was to help the economy by strengthening the banks, not beating them into submission.

Obviously, Goldman and other banks fleeing TARP no longer see it as a source of strength.

What happened? One word: Politics.

Congress and the new administration could not resist the urge to stir up anti-bank populist rage. So the bankers were put on the hot seat at hearings. They were told they had to stop paying market-level bonuses to their best talent. They were told they were not lending enough, when lending too much is what got us into this mess.

Lately, they've heard mutterings from Congress that their fees and interest rates are too high. Elizabeth Warren, a Harvard law professor hired by Congress to head a panel overseeing TARP, is calling for "tough love" that might include firing of management at TARP-aided banks. She also suggests that taxpayers are "paying twice" through the bailout funds and increases in bank charges.

The left-wing organizing group Acorn is pressuring its Democratic allies in Congress to hold hearings on the banks' compliance with Barack Obama's "Making Home Affordable" foreclosure prevention plan.

Add all this up and you can see why bankers fear that the government wants to fire them and run their business. Given the logic of taxpayer aid — he who pays the piper calls the tune — this threat is clear and present as long as banks are on the federal dole. This is why they'll try to get out, even at a high cost to their shareholders.

A sound case can be made that the economy would be best served by a non-punitive TARP that gives the banks time and a long leash to restore their capital. If this were the TARP of today, then banks would not be leaving so soon, nor would it be the best course for them to do so.

But the program has morphed into something far different: Call it the TARP trap, poisoned by politics and no place where a rational banker would choose to be.

Tuesday, April 14, 2009

Pablum: The language of Obamanomics by Fred Barnes



President Obama insists he's a free-market guy. But you have to wonder whether he understands how a free economy really works. His policies and his words--especially what he said at his press conference this week--suggest his sense of what makes economies grow and how people are affected by government policies is surprisingly weak.

Some of what Obama says is just pablum and isn't supposed to be taken as serious economic thought. At least I hope not. Rather, it might be called economic morale-boosting. Nothing wrong with that, unless he actually believes what he's saying.

He said at his press conference, for example, that prosperity won't return unless we're all working together for a higher purpose than ourselves. Adam Smith, the guru of free markets, would disagree heartily with this, since he believed a strong economy grew out of individuals acting in their own behalf. But Obama talks as if he knows better. Pablum.

"Our economy only works if we recognize that we're all in this together, that we all have responsibilities to each other and to our country," he said at his press conference. Yes, we do have responsibilities to others and to our country, but are they the key to an economic recovery?

Smith didn't think so, nor does any free market economist I'm aware of. But the president seems to. He elaborated: "We'll recover from this recession, but it will take time, it will take patience, and it will take an understanding that, when we all work together, when each of us looks beyond our own short-term interest to a wider set of obligations we have towards each other, that's when we succeed, that's when we prosper, and that's what we need right now."

That wasn't a snap answer to a surprise question. It was the closing thought in his opening statement, read by Obama from a prepared text on a large screen behind the press corps gathered at the White House. A nice thought, for sure, but hardly a time-tested recipe for economic growth.

Obama also seems misinformed about America's economic record in recent decades. Prosperity was "fleeting," he said, but "our strategy is to ensure that we do not return to an economic cycle of bubble and bust." Again, this was in his text.

If he's talking about the past quarter-century, most Americans would love to return to that era. From late 1982 well into 2007, we experienced one of the greatest economic booms in the history of the world, interrupted only by two shallow and brief recessions. Prosperity wasn't fleeting. It was practically non-stop--until the housing bust and credit crisis hit last year.

In his budget and public statements, Obama makes the argument that rising health care costs, along with dependency on carbon fuels and an inadequate education system, must be dealt with first--or the economy won't recover. His domestic agenda and rejuvenating the economic are "inseparable," he said. Sorry, but there's no empirical evidence for this.

During those prosperous decades, health care spending surged, bigger cars emitting more greenhouse gases were popular, and education reform made progress only in the past several years. So these were not major impediments to economic growth, nor are they now. Instead, Obama is seeking to exploit the slump to justify congressional passage of his non-economic agenda.

That may be acceptable as a political tactic. But on either intellectual or economic grounds, it doesn't pass muster or even come close.

Obama envisions a large role for government in shaping private investment. This, too, is not a principle of free market economics. During his press conference, he declared: "What we have to do is invest in those things that will allow the American capacity for ingenuity and innovation--their ability to take risks--but [to] make sure that those risks are grounded in good products and good services." This is industrial policy with the government deciding which industries merit investment. It's the opposite of free market capitalism.

Nor is Obama up to speed on tax incentives. He dismissed the fear of charities that a proposed reduction in the tax deductibility of donations by upper middle class and wealthy Americans would curb giving. "If it's really a charitable contribution, I'm assuming that that shouldn't be a determining factor as to whether you're giving that $100 to the homeless shelter down the street."

That's easy for him to say. Every charity from museums and arts groups to hospitals is terrified by the proposed tax change. And it's a fair assumption that they know a tax disincentive when they see one. The question is whether Obama does. Perhaps not.

David Brooks noted in his New York Times column the near-absence in Obama's White House staff and cabinet of folks with experience as entrepreneurs or business executives. It's a shame. Given the state of Obama's knowledge of free markets, which he says he supports, he would benefit greatly from their advice.

Fred Barnes is executive editor of THE WEEKLY STANDARD.

Obama's Failure By Douglas V. Gibbs


March 10, 2009

For eight years the Democratic Party proclaimed that George W. Bush was a failure, and that they wanted him to fail because they did not agree with any of his policies. I disagreed with a number of George W. Bush's policies, but I never wanted him to fail. I recognized that in his policies that I agreed with, such as the war against the Islamic Jihad, success was not only preferable, but necessary.

Now the shoe is on the other foot. President Barack Obama does not have a single policy that runs in line with conservative principles, yet expecting failure is somehow not the right thing to do, according to The Left. They proclaim that by indicating one expects Obama to fail, and in turn, wants him to fail because none of his policies are good for the country, it somehow means that one desires America to fail as a nation.

Fear of America failing is the very reason it is hoped that Obama's policies will not succeed.

Conservatives, for some reason, get nervous when liberals point fingers at them and accuse them of being insensitive or unfair. It is as if folks on the right hear the leftists spew such drivel, and then ask themselves, "Am I?"

It is like when your kids come crying to you because one of the neighbor kids called them stupid. The child comes to you crying because for that split moment, because someone said so, they assume it may be possible they are stupid after all. Of course, as a loving parent, you reassure them that not only are they not stupid, but the person calling them stupid is wrong for even daring to say such a thing. When the child grows older, they reason that people who tend to accuse people of such things are usually more guilty of what they are accusing, themselves.

Likewise, whenever the liberal left proclaims that conservatives are being stupid, others on the right come running up to assure the left that such actions by the conservatives are irrational.


Newt Gingrich, as much as I respect the guy, pulled that one recently, essentially calling Rush Limbaugh irrational for wanting the president to not succeed. Somehow, Newt seems to think that by desiring Obama not to succeed, that means one does not wish the country to succeed.

So, that brings to mind the question, is it right to hope that the Obama Administration fails? Is proclaiming that liberalism is a failure, and will fail every time it is injected into U.S. policy, like hoping that America will fail?

Such thinking is fusing together the hopes for the nation with its occupying force.

Do you think that it was wrong for non-Nazis to wish for Nazism to fail in Germany during the early 20th Century? Should have free people in Russia not desired that communism fail because that was like wanting their country to fail?

What is irrational is giving an ideology known to fail every time it has been used in history the benefit of the doubt. The policies of Barack Obama are failed policies time and time again. History shows that socialism is a failed ideology, no matter how it is applied. Much wiser for their own path to destruction, Russian intellects are now predicting an American collapse should Obama's policies continue on to fruition.

It is not only appropriate for conservatives to voice that Obama's policies are destined to fail, and will bring down America as they do - it is our duty to do so.

-- Political Pistachio, Conservative Commentary

Monday, April 13, 2009

Federal Takeover


By INVESTOR'S BUSINESS DAILY | Posted Monday, April 06, 2009 4:20 PM PT

Bailouts: Didn't Treasury Secretary Timothy Geithner say that it was not the administration's intent to control private companies? Then why is it reportedly reluctant to accept TARP repayments from some banks?

Read More: Business & Regulation

If it has indeed declined to accept $340 million in payments from banks in Louisiana, New York, Indiana and California, the administration is tacitly admitting that it wants to control those banks as well as others that will try to pay back the taxpayers' money they took in the Troubled Asset Relief Program.

By refusing repayment, the government can keep the leverage it bought with the bailouts. Banks that still "owe" would not be in position to reject the administration as a "partner."

This reminds us of mobsters making a small "investment" in a family-owned shop, which is not always wanted by the owners, and then using it to justify taking over the business.

Joseph DePaolo, president and CEO of Signature Bank in New York, one of the four banks making TARP repayments last week, said his company wanted to return $120 million it received because, in part, it wasn't comfortable with legislation passed that would limit compensation for salespeople. Those limits, he explained, would make it hard to recruit top professionals.

And then there's the fact that the bank didn't actually need the money. But, as we have learned, need is not relevant in the era of the bailout.

Andrew Napolitano reported last week on Fox News that he had spoken to the head of a $250-billion bank the night before who said Washington forced him to take TARP funds last September.

Napolitano said this bank "has no subprime loans, it has no bad debts, wasn't involved in credit default swaps. It didn't need any money. It didn't ask for the money and didn't want it. . . . officials from both the Federal Deposit Insurance Corporation and the Treasury said if you don't take this money, we will conduct a multi-year public audit of you."

The Fox News analyst said the bank's "board was forced to issue a class of stock just for the federal government. The federal government owns 2% of this huge bank."

That was done under the Bush administration. Enter the Obama White House. Last month, Napolitano said, Treasury told the bank "we own 2%, we're going to tell you how to run the place."

"As a result of that minority ownership, they now want to control salaries. They want to see his books, and they want to tell him who he can do business with," Napolitano reported.

Before his trip to Europe, President Obama, according to Politico, told a group of financial institution CEOs who were unhappy with the federal war on executive salaries and bonuses, "My administration is the only thing between you and the pitchforks." At the time, that sounded like nothing more than exaggeration.

An incident at the same meeting in which Geithner declined to take a fake $25 billion TARP repayment check from JPMorgan Chase CEO Jamie Dimon also seemed to be meaningful.

Later, says Politico, "Dimon also insisted that he'd like to give the government's TARP money back as soon as practical . . . But Obama didn't like that idea — arguing that the system still needs government capital."

Looking back, these are small signs that reveal the administration's desire to seize command of the nation's financial system. The bigger, unmistakable sign is the reluctance — or is it outright refusal? — to take $340 million from four banks trying to be responsible and operate on their own.

This shouldn't be happening in this country. The private sector and the state are not to be mixed. The American financial system is best directed by markets, not politics. Prosperity and liberty suffer when the latter excludes the former.