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Posted at 7:30 AM ET, 12/27/2010

Morning Bits

By Jennifer Rubin

Grover Norquist debunks the idea Obama was the big winner in the lame duck. "For two years the Democrats refused to extend the 2001 and 2003 tax cuts for any American. The size of the Obama humiliation in passing the two-year extension of 2001 and 2003 was not just the tax cut for higher-income Americans. It was the whole bill. He spent two years - as did Reid and Pelosi - not extending it for anyone. And Obama swallowed cutting the death tax from 55% to 35%.The big enchilada that Obama, Reid and Pelosi fought for, demanded and lost was a $1.2 trillion omnibus crammed with 6,000+ corrupt earmarks. They were stopped and all the corrupt pork now sits on the side of the road rotting."

A bipartisan group decries religious intolerance in the Middle East. "Democrats and Republicans on Capitol Hill are fervently pressing the White House to stem mounting attacks on Christians in Iraq."

Bill Kristol spots the New York Times denouncing overspending by the states. "I must have missed the many Times editorials over recent decades condemning such overspending. But no matter. What a concession! Not just a few years of overspending--decades! For surely if there have been decades of overspending, there need to be serious cuts in or elimination of many programs that have ballooned in recent decades--not just some spending trims, or returns to (say) 2009 or 2008 levels. So, Govs. Christie and Daniels and Kasich--and Cuomo--and all the rest, go for it. Cut the size and scope of state government. Make up for decades of liberal big government welfare state overspending. And when criticized, cite the New York Times."

Bob Woodward derides the idea that we've got our act together on Afghanistan war strategy, remarking on Joe Biden's declaration that troops will be out by 2014, no matter what. "Does your head spin? Yes, it does, because--what they've told us is the beginning of the end of the war is July of next year and the end of the war is 2014. What they haven't told us is how they're going to do it. And how it will work. And there still is this disconnect between Obama and his White House and the military about where this is going." Yikes.

Sen. Tom Coburn (R.-Okla.) demolishes the notion (put forth by David Brooks and others) that we're really not at a critical fiscal juncture. "What most of America doesn't understand is if we don't put our house in order, we are going to look like Greece or Ireland or even Spain and Italy, which are coming, or even maybe ultimately Japan. And so, time is of the essence for us. And you're seeing economists around the world starting to worry about whether or not we're going to make the substantive changes to austerity that we need to make in our country to correct our course and to create the confidence that we don't wind up like in Ireland."

Deputy foreign minister Danny Ayalon denigrates the Palestinians self-declaration of statehood. "Deputy Foreign Minister Daniel Ayalon has compared recognition of a Palestinian state to using the "like" button on Facebook, writing in his personal blog last week that "the state of Facebook is more real than the state of Palestine."

Robert Gibbs deflates the hopes of the left, once again. "On Sunday, White House Press Secretary Robert Gibbs was asked when Gitmo was going to be closed, as the two-year deadline for the president's initial closure promise nears. 'It's going to be a while before that prison closes' he told CNN's 'State of the Union.'" Translation: not until the last detainee dies of old age.

Arianna Huffington denies she's "leftwing." You can see the degree clarity and honesty promoted by the No Labels crowd. (None.)

By Jennifer Rubin  | December 27, 2010; 7:30 AM ET
Categories:  Morning Bits  
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Next: Friday question answered

Comments

Please stop giving Grover Norquist credibility by quoting him. Did J-Ru stop listening to Tom Coburn when asked about Norquist (who is the single biggest albatross of the Republican Party and all conservatives)?

Senator Coburn knows Norquist is an ideological extremist who needs to be neutered NOW, before January 5, 2011.

Let the Palestinians declare statehood. Then the PA can fight their civil war with Hamas, and then Israel can fight a legitimate war against whoever remains standing if the survivors fire one shot over their virtual border. The postWW2 experiment with limited war has failed, e.g., North Korea. Since the UN can not even deal with an election in the Ivory Coast, does anyone really give the UN ANY credibility? Launch a Stuxnet designed to take the UN down...


Posted by: K2K2 | December 27, 2010 8:15 AM | Report abuse

The trouble with Coburn's statements is

a) They are vague. Claims of waste fraud and abuse always are.

b) They are not backed up by facts. He just makes dogmatic assertions, and we are supposed to believe that were handed down on a stone tablet.

c) He ignores history.

Here is a message I wrote which contaims some of the facts and history.

You and many others say that letting all the Bush tax cuts expire would negatively impact the economy. Can you give me an example in US economic history when raising taxes did so? I can give you an example in the other direction. When Clinton was inaugurated, unemployment was something like 8.6%, not much different than when Obama took office. (I know, the state of the economy was much worse.) Clinton raised taxes and in spite of the Republican takeover in 1994, taxes remained high during his administration. Over 20 million private sector jobs were created. Bush took office with a much better economic situation, cut taxes over $2 TRILLION and practically no private sector jobs were created.

I know it sounds good to say that increasing taxes will lower demand, but suppose the extra revenue were use to repair infrastructure, boost education, etc. Is it clear, as you seem to believe, that we would not be better off? History seems to come down squarely on the side of higher taxes.

In 1946 the debt was 120% of the GDP, It went straight down to about 32% in 1973. During this period 1946 - 1973 taxes were much higher. Marginal rates were at least 70%; they were 93% under Eisenhower. The economy was better than what we now have. For example, median wages went up 3 times as fast as since 1973. CEO's earned 50 times what their workers earned; it is 500 times today. Staring in 1973, the percent of wealth and income taken by the richest 10%, 1%, and 0.1% has gone up at an ever increasing rate.

Since 1900 the two periods with the most economic inequality were the years leading to 1929 and 2008. These happened to coincide with the two periods of lowest taxes on the Rich and the greatest financial speculation. Here's a theory which fits this data.

The Rich hate to pay taxes. You may have heard of the rich guy who will spend $2 to avoid $1 in taxes. So when marginal rates are high, they will leave their money in their companies and use it to pay their workers more, improve their means of production and perhaps hire more. This works out because when there are more workers with more money, there is more demand. When marginal rates are low, the Rich take their profits out of their businesses. Since they can only buy so many houses in Barbados, they use the money to speculate. They buy Argentinean railroad bond (1920's) and CDO's, CDS's and oil futures (2000's). Notice that both these periods of low marginal rates, high inequality and great speculation led to economic disaster.

Posted by: lensch | December 27, 2010 9:32 AM | Report abuse

Jennifer,you are stubbornly sticking with Fox News for your economic opinions while Ludwig Von Mises great treatise of Free Market Economics,"Human Action",remains unread by you,and so many others.(This is where Ms Rand obtained her economic ideas)
Does the following sounf familiar?

"The “boom expansion brought about by credit expansion” Von Mises refers to sits atop a mass pyramid scheme of leverage and debt.
As credit expands, more and more unproductive debt is taken on in pursuit of marginal return investments. This process can play out over years, or even decades (as we have seen in the U.S. via a 25-year leverage and debt supercycle).
The prophecy’s “final and total catastrophe of the currency system” comes from last ditch emergency measures in the face of a debt avalanche.
An economy that is lightly (reasonably) leveraged can handle a slowdown without imploding. An economy that is leveraged to its eyeballs cannot. A catch-22 is thus created, in which the taking on of excess leverage requires the application of even more leverage (via the authorities) to save the system from itself. This feedback loop is, of course, unsustainable, barring the economy’s ability to “grow its way out” of the problem.
So the process by which the Von Mises prophecy is fulfilled can be generalized like this:
The economy has an upswing.
The upwsing starts to falter, as is natural to the business cycle.
Politicians say “Hey, let’s keep this thing going.”
The system is juiced with leverage-enhancing liquidity.
Via stimulative reinforcements, a boom mentality takes hold.
The boom continues, now in an unnatural state.
The “can’t lose” mentality sets in. Greed and hubris run amok.
Via risky marginal investments, unproductive debt accumulates.
After a period of years (or even decades), cracks reappear.
The “mountain of debt” now casts a long cold shadow.
That same mountain threatens to topple and collapse.
The authorities panic. They know the debt will crush them.
To circumvent the avalanche, the debt is monetized.
Via monetization, the economy experiences temporary relief.
But the relief is not enough… the problems persist…
…and so more monetization is applied.
As alternative to full collapse, the currency is destroyed."
http://mercenarytrader.com/2010/12/weekender-the-von-mises-prophecy-explained/

Posted by: rcaruth | December 27, 2010 9:36 AM | Report abuse

Your crowing over GITMO is just another "Rubinesque" take on life, where white is black and up is down.

As a lawyer, and as a conservative who wants to get closer to the Constitution, you and all other conservatives should be appalled by the idea, which has no basis whatsoever in the Constitution. The Founding Fathers would have been astounded and horrified of the idea of a prison without trial, without sentence, without habeas corpus, without the influence of any law but whim.

It has no precedent in American history, but has it's closest antecedent in the Russian treatment of German POWS, most of whom never made it home alive until the 1950's, if at all.

Posted by: 54465446 | December 27, 2010 9:42 AM | Report abuse

Sorry to burst your bubble 544, but the founding fathers had prisoner of war camps and were not horrified by them. I think they would have been horrified by the idea of treating war like an episode of CSI.

Posted by: Larry3435 | December 27, 2010 11:03 AM | Report abuse

@54465446 | December 27, 2010 9:42 AM
"... the Russian treatment of German POWS, most of whom never made it home alive until the 1950's, if at all."
_____________________

Too bad the Russians released any of them.

Posted by: HenriLeGrand | December 27, 2010 11:25 AM | Report abuse

larry:

Except that GITMO is not a POW camp in any way. In fact the Bush administration strenously claimed the exact opposite, over and over again as any minimal research would show you.

GITMO is a prison, full of people who should have been executed, or never brought there in the first place.

After 5 to 7 years of confinement, it is safe to say that they no longer have any viable intelligence information to share with us. However many are indeed too dangerous to let go, yet the Bush administration lacked the courage of it's convictions to execute them, even though they maintained a consistent position in court that the prisoners had no Constitutional rights which we were bound to respect.

Now, we have our own Soviet style gulag, without even the bother of show trials or definitive sentences, a twilight prison.

Posted by: 54465446 | December 27, 2010 11:38 AM | Report abuse

And why the complete silence on Mr Paul's takeover of the House Monetary Committee,just because Paul is percieved by the far right as an antiIsraeli antisemite,that shouldn't rule out that he could be right on the economy,

"C-SPAN might just want to change its revenue model in time to catch the fireworks and/or steel-cage death matches that will start in January when Ron Paul takes over as chair of the House Banking Committee that oversees Ben Bernanke and The Federal Reserve. This will be political theater that has the potential to top the Lincoln-Douglas debates of 1858.
But better than the theater will be Paul’s educational opportunity, if he plays his cards right. That’s a big ‘if’ for sure, but here’s how it could go down: For the first time in the Internet age, in our 24-hour, live-blogging, YouTubing news history, Austrian and Keynesian economics will do battle with live actors and unscripted parts. And for the first time in generations, millions of potential voters (and just possibly including those who get their news from the “big three” networks), will hear a perspective that might as well have invaded from another planet.---Coupling that with a return to the gold standard, as Manual Hinds* recently described in his Wall Street Journal piece, “The Case Against Floating Currencies“, and the very foundation of our economy would be returned to reinforced concrete, rather than the sand that it is right now"
http://blogs.forbes.com/deanzarras/2010/12/24/econ-101-with-dr-ron-paul/
*Jennifer says she loves Hayek"The Road to Serfdom",but she refuses to discuss the winner of the 2010 Hayek Award for economic contribution. I believe that some of you are aware that you're not going to get much economic nourishment on this Blog unless you read my posts.

Posted by: rcaruth | December 27, 2010 12:02 PM | Report abuse

@54465446 | December 27, 2010 11:38 AM
"we have our own Soviet-style gulag"
__________

Hyperbolize much?

Posted by: HenriLeGrand | December 27, 2010 1:28 PM | Report abuse

@rcaruth | December 27, 2010 12:02 PM
"you're not going to get much economic nourishment on this Blog unless you read my posts"
_________

Creamed corn is not very nourishing.

Posted by: HenriLeGrand | December 27, 2010 1:33 PM | Report abuse

@rcaruth | December 27, 2010 12:02 PM
"you're not going to get much economic nourishment on this Blog unless you read my posts"
_________
Creamed corn is not very nourishing.

A lot of us below the top 2% are learning to embrace that creamed corn economy.

Posted by: rcaruth | December 27, 2010 2:08 PM | Report abuse

henri legrand wrote:

"Hyperbolize much?"


Coming from a man who suggests that it was bad that all German POWS were not worked to death?

I thought the comparison to a gulag would warm your heart! You're an inconsistent sort of fellow aren't you?

Posted by: 54465446 | December 27, 2010 2:51 PM | Report abuse

@54465446 | December 27, 2010 2:51 PM

There is no inconsistency. Neither of my remarks was an exaggeration.

Do you own a dictionary?

Posted by: HenriLeGrand | December 27, 2010 5:10 PM | Report abuse

The comments to this entry are closed.

 
 
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