Body Parts

Obama's Fallacious Views on the Charitable Deduction Reveal His Ideology

A good discussion by Joseph Ashby in American Thinker opens Obama's doctrinal trunk to reveal its hidden vices.

Sarah Palin Soul & Fire Video Trailer

Be still my heart. Be patient my hope. Be confident my expectations.

Obama Bets on Government, Not Markets, for GM

Government Motors. Obama doesn't have a clue about markets and competition; but he believes with all his soul that any organized human activity is better managed by government and intellectuals than by free markets. It doesn't matter that this ideological myth has repeatedly been disproved in nearly every country that worked by it, it's old black magic to Obama and has him in its spell. Government five year plans, management, regulations, politicking among Dem voter groups, reviews, and lobby projects will be a vastly bigger burden for GM to carry than its massive debt. (And Obama clearly stated that he will impose political concepts, such as clean and green, on GM's automobile design.) Ford and the foreign auto makers with plants in the US must be salivating at the prospect of picking up most of the market share that GM has left. They're free and flexible and nimble; they'll dance around the new GM with its antiquated Eurosocialist nationalization model, long abandoned in Europe. Meanwhile, GM's collapse will further destroy the industrial Midwest; and GM's collapse in foreign countries, where it is largely successful and profitable, will deepen what many observers fear is the oncoming global depression. The de-industrialization of the US is now a free-fall, led by Obama without a parachute, The One who has the delusion he can fly. God help us all.

Update. April 1, 2009. Patterico's Pontifications laments on this theme.

Obama the Affirmative Action Candidate

Harvard Professor, Henry Louis Gates, Jr., argues that Obama was not an affirmative action candidate, because no one did him any favors (he remarked in discussion recently on C-SPAN--sorry I can't retrieve a reference). Not true. The American press, which was responsible for objectively reporting the election campaigns, repeatedly failed to be objective, when they were expected by the American public to be objective (distinguished from the candidates' campaigns which no one expected to be objective). They repeatedly suppressed or failed to provide coverage and to do investigative reporting, that might result in unfavorable reactions, of Obama's personal biography, his education, his organizing career, or his career as an attorney. The New York Times' apparent suppression of a story about Obama's connection to ACORN is illustrative. A dishonest, unobjective press coverage of him and his campaign was the favor done to Obama and this kind of favor is symptomatic of affirmative action hiring (see more discussion of this topic here).

Updated. March 31, 2009.

Government Spending on "Infrastructure" Is Not Necessarily "Investment"

Obama repeatedly justifies governmental spending on public infrastructure as investment. Yet a little scrutiny would reveal that little of it is "investment" in an economic common sense way.

By investment, we usually mean building/creating/discovering real assets, which, as brought into production, return a stream of income (see Wikipedia's treatment). Investment is closely related to wealth. Wealth is an asset that is capable of returning a stream of income (see Wikipedia's treatment). For instance, spending money for geological exploration to discover unknown deposits of oil is investment, because, when successful, it creates asset wealth. When the oil is pumped out of the ground, distilled, and sold, the asset is returning income.

How could governmental spending in education, transportation infrastructure, and medical care be considered "investment"? What Obama probably means is that better educated, healthier people are going to be economically more productive than uneducated, unhealthy people. And with better roads and bridges, they will be able more efficiently and effectively get to work to do all that producing for which he hopes. Such a rationalization sounds reasonable; but close examination shows it is largely bogus.

Education. To be economically productive, workers need vocational skills and vocational education. Public k-12 and liberal arts college education do not, however, directly give them much in vocational skills or vocational education. Students learn to read and write and do arithmetic; but generally these skills are not directly employable. Usually, employers must train new workers to apply these skills to specific job situations. Most people recognize the disconnect between a general education and the ordinary job, for, when given the opportunity, they prefer to obtain directly vocational education, as in high school and community college vocational programs (auto mechanic, welding, cosmetology, etc.) and in private vocational tech institutes. A general education is mainly useful for preparing teachers to teach in schools and colleges; that would be vocational education for them. But teachers relationship to economic production is distant, at best. So spending in education is not directly investment.

Transportation. America's transportation infrastructure is already in place. Obama's programs only will maintain it and/or spruce it up; but they will not economically, qualitatively change transportation's role in the productive economy. To change the productive economy significantly, infrastructure spending would have to change the market so as to introduce major efficiencies. For instance, the railroads in the nineteenth century, by increasing speed and reliability of transport and reducing transportation costs (compared to animal-drawn wagons and canals), enlarged the markets for goods in which a single price governed. Thus, large farms in the Midwest could compete with farms in the East for the Eastern urban food market. This change in the markets sparked the great agricultural revolution of the American Midwest and made the US one of the world's biggest agricultural producers (and exporters). No current government spending on transportation repair will have anything like that effect. Rather, the spending is mainly make-work for state and local departments whose tax-based funding is declining and for construction contractors who need contracts to stay in business. There is no significant gain in economic production here. This is not really "investment".

Medical care. Does extending governmental subsidized health care to the middle class and to under-insured or uninsured persons help economic production? In several ways, governmentally sponsored health care could help produce income and thereby be an investment. Workers who are injured on the job would be healed and returned to the workforce, thereby contributing to production and not being a drain on public funds. Also, persons who are not in the labor force, because they are too ill or disabled, would be treated and made capable of entering the labor force. In the first case of injured workers, increased governmental health care spending is not additive, because such workers are already covered under worker's compensation. In the second case of readying workers for the labor force, we need to ask what demographics we are talking about. Many of the recipients of governmentally subsidized health care will be children, who are not going to be in the labor force for many years, if at all. Other recipients are persons, often women, who will opt not to join the wage labor force, so their health care does not directly benefit production. Some persons who benefit from, e.g., public health insurance, will be persons who don't need it because they are fundamentally healthy and they are already in the labor force. Finally, of adults who might enter the labor force if their health were to be improved, some will and some won't. The result is that a minority of recipients of public health care will be added to the productive labor force; which means that the investment effect of governmental health care spending is minimal.

There are other means of increasing worker productivity by bettering their health that in fact are investments in the sense that Obama wishes to claim for universal health insurance. For instance, spending by companies in training workers in safety on the job, in protective clothing and tools, in healthy work conditions, and by removing hazards in the workplace are certainly investments that enlarge the companies' asset wealth, increase  productivity, and maximize profit. Government inspection of mines, workshops, and mills also represents public investment in productivity of the economy. But these investments are not what Obama is hawking in his health care proposals.

As governmental spending in these three sectors is not directly investment, they do little to promote economic growth. Indeed, in as much as they are very expensive and will require commandeering private money to be funded, monies which would otherwise be available for private investment, they will have a detrimental effect on economic growth, as the CBO has pointed out.

The lack of positive economic stimulus of Obama's public spending does not mean that the spending is not justifiable on other grounds, such as social justice, which is Obama's real policy goal, or simply humanitarianism. Making people's lives better in health and richer in awareness and appreciation of the world is a worthy goal. But personal happiness is not necessarily an economic asset, and spending to increase happiness is not necessarily an economic "investment".

Sizable Job Creation Should (And Will Only) Come From The Private Sector

So the Obama administration should free entrepreneurs to create new businesses and new businesses to expand; but in fact his proposals do the opposite, suppressing new companies with new indirect taxes and regulations. Carl J. Schramm and Douglas Schoen show that the American people overwhelmingly prefer job creation in the private sector than the government sector and discuss what kind of incentives would empower private job creation. 

The Seas Aren't Rising (But Much Coastal Land Is)

A Swedish physicist argues, based on empirical evidence, rather than computer modeling, that the oceans are not rising and couldn't rise more than 4 inches if the ice melted (for thermodynamics reasons). He might have added, as he could testify by walking along the Swedish coastlines, that land is rising. In many parts of the world, land is rising so rapidly as to be observable to the unaided eye and to require rebuilding of port facilities. How could this be possible? During the last Ice Age, land under glacial ice was compressed by the weight of the ice. When the ice melted, relieving the land of the weight above it, the land began to decompress, thereby rising upward. This process is still going on. The putative rising oceans of global warming models would not even balance out this upward geological land thrust. So, even if oceans were in a secular trend of rising, which they probably aren't, they wouldn't threaten many coastal cities. 

Israeli Arabs Riots Against Israeli Jews

At Umm el-Fahm, when Israeli Jews held a march, their fellow citizens, Israeli Arabs, rioted, claiming they were offended by the Israeli flag the marchers carried. The riot demonstrates that a significant segment of Israel's Islamic Arab population, and not just isolated individuals, have become radicalized by Islamism and carry the torch for so-called "Palestinian" cause. They are so radicalized as to constitute a fifth column in Israel. The emergence of this fifth column raises a serious security issue. Some Israeli politicians have suggested that a final settlement of the political future of the so-called Palestinians will require encouraging those Israeli Arabs who wish to do so to leave Israel and join whatever so-called Palestinian political entity is created. Other politicians have suggested that they should be required to do so. Islamism is making religious and ethnic tolerance and diversity more and more difficult everywhere Muslims are a significant population. Warning bells are being rung in Israel for southeastern Europe and central Asia. Even Britain looks vulnerable. Caroline Glick provides the analysis and draws the appropriate conclusions.

Riverside Chabad House Vandalized With Anti-Semitic Graffiti

Anti-semitism is on the rise everywhere, some of it clearly linked to the global financial crisis. Hasidic Jews have had an institutional presence in Riverside for only a few years. The Rabbi has received hate email and hate phone calls. The graffiti is a new and ugly step.

New Warnings of Global Depression

From the Economist Intelligence Unit, here.

From George Soros, here.

From the New York Times, here.

Manufacturing production is collapsing in all the major industrial nations, dropping from 43% to 12% from a year ago. In the US, manufacturing has dropped 11.2%. (In Japan, for instance, Toyota's production has declined by half!) While the US drop is less severe than most others, it is significant. Two-thirds of US exports are manufactured products. The collapse of our export market will decimate US manufacturing.

Obama and his advisors are making a major mistake in how he is approaching the nation's economic problems. He does not understand that consumer spending will have a minor effect on the economic decline. He does not understand that giving money to save government jobs (those "teachers and police" he continually references as the target of stimulus money) will have a minor effect on the economic decline. He doesn't understand that creating more debt will not solve the problems, because the problems are caused by the existence of too much debt already. (The estimated global debt is exceeds the annual global economic output. There simply is no money, and there won't be enough money in the future, to pay the debt that exists; and there won't be money to pay the new "stimulus" debt Obama insists on creating.) The real issue is the collapse of the manufacturing sector and the shift of our economy to a nonproductive service sector. The real problem is how to revive and expand manufacturing, manufacturing research and development, and manufacturing employment, without protectionism and without sparking protectionism abroad. Everything else is secondary and can wait for another day. Obama's name will be on the depression that we will, it is now clear, be lucky to escape.

Revised. March 29, 2009.