Tag Archives: government

An Influence on Bank Lending

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Professor Alan Blinder, of Princeton University, has another laugher in The Wall Street Journal.  This time he wants the Fed to “encourage” private bank lending—in an environment where the intended market is vary chary of taking on debt, new or additional—but without “without interfering in private credit-allocation decisions.”

His idea is stimulated by a scheme (in both the British and American English senses) of the Bank of England’s, itself generated out of the premise that UK banks aren’t lending enough to suit the government suits.  Essentially, Blinder wants to ape the BoE scheme of giving private lenders preferential rates on central bank lending according to how much lending the private lenders are doing.

Hmm….

First, Blinder operates from a false premise.  It’s impossible for government to “encourage” without “interfering in private decisions.”  The whole point of government encouragement to execute exactly that interference.  To claim that compliance is voluntary and so not interference is disingenuous sophistry.  Banks are out to make money for their owners, just as any business must—its fiduciary duty drives it to—make money for its owners.  The offer of a goodie for doing what government wants is no less a cudgel than providing a penalty for not doing.

Second, Blinder gives his game away in the penultimate paragraph of his piece:

Last, but certainly not least, there is the crucial question of what types of bank lending to subsidize.

Of course, the sole purpose of a subsidy is to drive the recipient to a government-desired behavior.  The whole point of government encouragement to execute exactly that interference.

The Obama Debt Plan

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John Hinderaker, of Power Line, commented on President Obama’s plan to pay down the national debt, as demonstrated by Obama’s mid-year budget plan update.  Obama also is campaigning on his plan to “pay down the debt in a balanced way.”

Here’s what his “balanced plan” does to our national debt, illustrated by the following graph from Power Line, and The Washington Times.

That’s a rather startling increase in the size of this paid-down debt.  “But wait,” some of you might object.  “What about the debt as a per cent of our GDP, a perhaps better way to assess the size of our debt?”

Our 2011 GDP was some $15 trillion, and it’s projected to be in the neighborhood of $24 trillion by 2021 (my calculation based on data in Table 1-6 of the CBO’s report “Budget and Economic Outlook: Fiscal Years 2011 to 2021.”

That makes our national debt 98.7% of GDP in 2011, and 105.8% of GDP by 2021.  This is how Obama intends to “pay down the debt in a balanced way” via Obamanomics’ New Math.

He Built This

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…and it’s not pretty.  The costs of Obamacare are starting to come home to roost, now that its various mandates are starting to take effect.  Gerri Willis has a listing; this is a brief summary.

The requirement that lets grown adultschildren stay on mummy and popsy’s health insurance policy until they’re 26 will cost $3,400 per grown adultchild per year.  But there’s an additional cost: employers are beginning to not include such policies at all in their benefits package; they’re too expensive.  There’s yet another cost: colleges where Buffy or Junior might go—and might have gotten coverage as students—are beginning to drop the policies: they’re too expensive.

But wait.  There’s still the little 26-year-old tyke’s pre-existing condition that’s required to be covered.  Except that coverage still is hard to find.  Willis writes

Insurers in 20 states have given up offering child-only insurance plans.

Those child-only plans matter because that’s all that’s left after those other policies have been withdrawn from the market.  RTWT.

There’s more, though.  Medical equipment manufacturers are being forced to cancel plans for medical equipment manufacturing in the US.  Cook Medical, the US’ largest privately held maker of medical devices, with annual revenue of more than $1.8 billion and employment of around 4,000 people in the Bloomington, IN, area and 10,000 worldwide, is an example.

Cook says it will have to cancel plans to build an additional five manufacturing plants, each employing 300 people when those plants were scheduled to open.  The medical device tax that’s another important part of Obamacare, will cost Cook Medical $20 million this year alone—that’s the price of one of those additional manufacturing plants.

It gets worse—or better, if you like the Obamacare move.  Follow the Fox News link to the larger article and video at Indianapolis Business Journal.  Executive Vice President of Strategic Business Units at Cook Medical, Pete Yonkman, described one of those unintended consequences that are so monstrous and so ubiquitous in Obama’s centerpiece.  With this medical device tax, Cook can’t economically bring a new technology to patients and hospitals in the US; Cook instead is looking to Asia.  Moreover, as this technology is developed in Asia, that’s where the expertise will be developed.  As a consequence of that, that’s where the engineering, and then manufacturing, jobs will appear:

It’s important to have that [engineering and scientific expertise] around your manufacturing base[.]

And this: Yonkman noted that

One of the fastest growing areas in our company every year is always our regulatory team having to deal with the increased burden coming from…increased regulation….

A medical device manufacturer’ fastest growing area has nothing to do with its device manufacturing or sales.

And finally this: Obamacare’s medical device tax is a 2.3% tax on medical devices; however, the impact is greater than just this immediate 2.3%.  Yonkman said the impact on actual earnings is another 15%.

He’ll stop that from being built.

Broadening Attacks on Vote Sanctity

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Now President Obama is having his DoJ attack Pennsylvania’s Voter ID law.

The letter from DoJ to Pennsylvania’s Secretary of the Commonwealth can be viewed here.  Not only is Obama objecting to protecting the sanctity of a legitimate vote by trying to block efforts at screening “voters” who are ineligible, in this letter he’s also demanding a potful of wholly irrelevant personally identifying information on voters and potential “voters.”  Here’s a sample from his DoJ’s letter:

  • The current complete Pennsylvania voter registration list, including each registered voter’s full name, address, date of birth, identifying numbers (including driver license, social security, or other numbers), voter history, and race.
  • The current complete Pennsylvania driver license and personal identification card list, including each individual’s full name, address, date of birth, identifying numbers (including driver license, social security, or other numbers), and race.

There are a total of 16 different items of information being demanded, including the legitimate request for clarification of the apparent disconnect between the governor’s statement that 99% of eligible voters already have acceptable ID, and the commonwealth secretary’s statement that 758,000 registered voters lack acceptable ID.  However, this question’s legitimacy only exists on the basis of a legitimate concern for voter eligibility and has nothing to do with any voter ID requirement itself.  Since the administration’s attack on the Pennsylvania law has no legitimacy, the question about the disconnect is irrelevant.

Moreover, a voter’s voting history is wholly irrelevant to such an inquiry: what other fishing expedition is Obama’s DoJ conducting, sub rosa?  Nor is the individual’s address or age relevant.  Nor is the voter’s race, except that this administration intends to play, again, its race card.  In fact, the prior question that must be answered is whether legitimate voters are being removed from the voter registration lists in any significant number.  Only then can a question of racial motivation come into play.  (Disparate impact has no legitimate role, here, only motive.)  Since DoJ hasn’t established that legitimate voters are being removed in Pennsylvania, the entire investigation is bogus.

Finally, the Supreme Court already has upheld a substantially identical Voter ID law passed by Indiana.

Why is Obama running this, then?  So he can add names and addresses to his campaign and fund-dunning mailing lists?  So he can target those who might vote or support the wrong candidate?

Defense Cuts on the Stump

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President Obama, speaking before the VFW the other day, had some interesting words to say about defense, and cuts to our defense capability that are looming.  Naturally, I have a few words to say about what he said.

People in Congress ought to be able to come together and agree on a plan, a balanced approach that reduces the deficit and keeps our military strong[.]

Indeed.  When are the President and his fellow Progressives in the Senate going to get out of the way of a bipartisan solution and allow one, instead of throwing our nation’s security away on his demand to raise taxes on his disfavored group of Americans?  After all, it’s Obama’s demand that taxes be raised, rather than spending be cut elsewhere—like in our bloated entitlement programs—that’s standing in the way of salvaging our defense establishment.

And there are a number of Republicans in Congress who don’t want you to know that most of them voted for these cuts. Now they’re trying to wriggle out of what they agreed to.

Nah—they’ve made no bones about this.  Obama held a gun to their heads and forced the idiocy of sequestration during the debt ceiling “negotiations” when he threatened to destroy our economy if he couldn’t get his tax increases, even to the point of cynically blowing up an agreement that had been reached—including revenue increases, if not tax rate bumps—with his last-minute (literally) demand for an additional $1 trillion increase in taxes.

Instead of making tough choices to reduce the deficit, they’d rather protect tax cuts for some of the wealthiest Americans, even if it risks big cuts in our military.

Again, indeed.  Instead of making tough choices to reduce the deficit, Obama is ready to impose destructive cuts on our military in order to get his taxes on his disfavored Americans, and I’ve got to tell you, Mr Obama, I disagree.

As we look ahead to the challenges that we face as a nation and the leadership that’s required, you don’t just have my words, you have my deeds.

President Obama’s deeds are especially frightening.  His “deeds” include the idle chit-chat that’s allowing Iran to get nuclear weapons.  His “deeds” include the idle chit-chat that’s allowing the Syrian boss Assad to butcher his own citizens—19,000 of his fellow Syrians—and to move his chemical weapons arsenal and prepare it for use against surviving Syrians dissidents.  His deeds include surrendering to Russian demands and throwing Poland and the Czech Republic into the teeth of the Bear and cancelling a plan to build missile defense installations in those two countries.  His deeds include surrendering American foreign policy to the veto authority of Russia and The People’s Republic of China, especially vis-à-vis Iran and northern Korea.

His deeds include his claimed end to a war in Iraq that was already won and done, with only a SOFA to facilitate American troop presence for training to be negotiated.  Without any American presence—Obama’s crowning achievement here—Iraq is falling apart under terrorist attacks and secular and religious strife, and al Qaeda is resurgent.

His deeds include winding down the war in Afghanistan with an announced withdrawal schedule and nothing left behind.  He’s snatching defeat from the jaws of victory, as the Taliban are still in the field and effective, while the Afghan army is neither.

House Armed Services Committee Chairman, Buck McKeon (R, CA) has the right of it:

President Obama played no small part in setting the time bomb that is sequestration.  Indeed, automatic defense cuts were included in the Budget Control Act at his insistence.  Now he owes our troops his best efforts to defuse the cuts.  Ultimatums from the campaign trail are not enough.

The challenges we face as a nation are legion, the future is near, and the leadership Obama has demonstrated and the deeds he’s done, make change imperative.