In February of 2009 I posted a piece entitled “Prognostications” in which I made a number of predictions about what Obama and the Democrat controlled Congress would do now that they had complete control. As I was driving back from our annual fly fishing expedition to central BC the other day I thought about that list and concluded it was time to see how I faired in my predictions. Hereafter, the list and the score thus far into the “Hopie-Changie” era.
· The Stimulus Package: Originally at some $870 billion, winding up with some add-ons at around $1 trillion, has failed miserably to prod the US out of recession. The “neo-Keynesians” that populate the Obama economic brain trust assured us that if this thing were not rammed through Congress immediately that unemployment would go above 8%. Well, it’s been hovering around 10% for many months and only that low because the millions of workers who are no longer even bothering to look for work are no longer counted in that calculation. 325,000 people dropped out of the “lookers” category last month. Congress recently passed an extension of unemployment compensation to 99 weeks, assuring that the unenthusiastic and disinterested will remain on the sidelines. The recession continues. The deficit? Greece here we come. According to the Heritage Foundation the US is poised to have the deficit exceed the GDP in the near future. Score: YES.
· Card Check Legislation: They made some feeble attempts at this but backed off to concentrate on the health care bill. Obama did reward the unions big time by giving them big chunks of GM and Chrysler stock when the two auto giants went tits up. Score one NO.
· Give More Money to the Auto Companies: The US government now own most of GM and the bondholders at Chrysler (these are the secured creditors in a bankruptcy) got stiffed. GM paid back part of the money, but that money came from previously borrowed government funds. So, you can’t really say they paid off the loan. They still owe some $40 billion. Score: YES
· Pass the Fairness Doctrine: They did not really have the courage to tackle this one and totally piss off the millions of listeners of conservative talk radio. Instead they dispatched Mark Lloyd, the Diversity Czar for the FCC to see if he can “back door” the thing through regulations. Score: NO.
· Restrict drilling for oil and gas: At the time of posting “Prognostications” Salazar had already cancelled leases and set aside huge swathes of the west where no drilling was allowed. Now, with the oil disaster in the Gulf every-thing is shut down. The irony is that if the regs had not forced the oil companies to drill in such deep water (a mile down) and instead were allowed to drill on land or in shallow water, this thing would have been fixed already. Score: YES
· Not allow the construction of nuclear power plants: Obama says they want to build them but they shut down the Yucca Mountain repository where they were to store the waste signaling their real intentions. Score: YES
· Enact cap and trade: It has already passed the House and is currently introduced in the Senate. Debate has been stalled with the intrusion of other matters like voting themselves a raise and fine-tuning their special medical program. Some GOP Senators will vote aye. Score: YES
· Toss money at solar and wind power: Money for these industries was included in the stimulus bill and much more to come with the cap and trade legislation. Score: YES
· Abandon missile defense and reduce US nuclear arms: Obama cut funding for missile defense programs, refused to provide funding to upgrade the US’s aging nuclear arsenal, cancelled the missile defense shield for Europe and made a lopsided deal with Russia to reduce the number of nuclear weapons. Score: Big YES
· Enact restrictions on gun ownership: Hillary is trying to work something through a UN agreement. Score: NO
· Appoint “living constitution” fans to Supreme Court: Sonia Sotomayor has been confirmed and Elana Kagan has been nominated and awaiting confirmation in the Senate. She’s sure to be approved. Score: YES
· Squelch school choice: The Congress withdrew funding for the charter school program in Washington, DC, thus ending a successful program and signaling the Adminis-tration’s aversion to charter schools. Of course, the Dems are much beholding to the teacher’s unions and they hate charter schools. Obama has created a program called “Race to the top” providing certain states with substantial funding. Some states are refusing to participate as the money comes with the Feds getting too involved in local schools. BTW, the June 5th edition of the WSJ has a great piece about Madeleine Sacker, an independent filmmaker, who has created a documentary called “The Lottery”. It’s about the thousands of Harlem kids and their parents who show up for a lottery to try and secure the few slots open at Harlem Success Academy. Surprise! The teacher’s union paid Acorn $500,000 to pretend to be parental protesters. Score: YES
· Abandon tort reform: Of course. Don’t be silly. Score: YES
· Attempt to make illegals citizens: They are trying to push “comprehensive” immigration reform, but not yet. Score: NO
· Put the government in charge of health care: You know all about that one. Score YES
Somehow I neglected to put tax increases in the Feb ’09 post. It did, however, appear in previous posts. Here’s a list of the tax increases the Democrats have enacted so far.
· $500 billion included in the Health Care bill.
· Double taxation on corporations doing business overseas.
· When the Bush tax cuts expire taxes on upper incomes will increase from 35% to 39.6%. Dividends will be taxed at 39.6% instead of 15%. The capital gains tax will increase from 15% to 20%. The inheritance tax will increase from 0% this year to 55%.
Congress is currently working on a bill to raise taxes by $43 billion on corporations and another bill to tax S-Corps (small businesses taxed as individuals). While the details of this one are as yet unclear, it appears to apply to independent operators like architects, accountants and the service industries. It sounds like it will hit them at about 15%. So much for the talk about helping small business and not taxing the little guy.
Another thing I did not anticipate is Obama’s muddled and wrong-headed foreign policy. He has offended and insulted the US’s allies, especially Israel, Poland and the UK while trying to suck up to the Muslim world. This has only confused our allies and emboldened our enemies. The combination of an isolated Israel and an aggressive Iran and Syria only make the likelihood of war in the Middle East more certain than not. He’s pushing Israel into a corner. Watch the price of oil when that one tees up.
As a new prediction (at least to blog readers) I feel the sum of Obama’s economic policies insure a double dip and protracted recession. You cannot crowd out capital with an annual deficit of $1.5 trillion dollars, raise taxes on individuals and corporations, driving jobs and businesses offshore, raise the price of energy with cap and trade taxes and expect a growing economy. They’ve got a lot of Harvard folks in the Administration, but they will need to get glass eyes installed in their navels if they expect to see where they are going.