Rob from the Rich…
This notion may have originated with Robin Hood, but it was Karl Marx who made the doctrine infamous. The Marxist equivalent, “From each according to his ability, to each according to his needs” epitomizes communist principles. Slowly and quietly, the radical left has championed this Marxism in America for eight decades, working slowly, cautiously and mostly through stealth. With the election of the country’s most radical senator to the office of president, the left no longer needs to resort to secrecy.

Much of the Economic Destruction Plan recently passed by Congress shamelessly fosters the transfer of wealth. Due to the magnitude of that legislation, most of the public has no idea what it will do. Hearing very few objections from the electorate, Obama has been emboldened and is marching proudly forward with the Marxist agenda he trumpeted during the presidential race. (Click for a good and thorough backgrounder on Obama’s politics.)

Cap and Trade
Sources close to Obama have said he is moving forward with a proposal to tax carbon emissions. Leaving aside for a moment that our breath has been classified as a pollutant and that human-generated carbon dioxide has no demonstrable impact on the climate, Obama plans to tax businesses and industries emitting the evil gas. His little scheme is called Cap and Trade.

Under Cap and Trade, businesses will be forced to curtail their carbon dioxide emissions or buy permits if they cannot, or choose not, to reduce these emissions. The permits are sold by the government, which can set ridiculously low limits and charge whatever it wants. The European model of Cap and Trade has been operational for 4 years and has resulted in significantly higher costs while doing very little to lower emissions. American Cap and Trade will increase the jobless rate and act as significant tax on every American business and consumer as nearly all segments of the economy will be impacted.

Hey, but there is a bright side to Cap and Trade—the proceeds (after government administration expenses) will be distributed as welfare payments (tax credits) to the poor and to help people deal with higher energy costs. (Now there is some lunacy, tax energy because it is evil and give those tax funds back to the tax-payer to help pay for the more expensive energy they have to consume.)

Punish the Rich
Mr. Obama is also proposing to dramatically increase taxes on high-income earners, specifically those households earning a combined income in excess of $250,000. Their marginal rate will increase to 41.6% when their hidden deductions are phased-out. Additionally, tax rates are set to increase for capital gains (profits from selling items like real estate, stocks, or gold) and stock dividends. By the way, these last two taxes are paid by almost all investors regardless of their income levels. The plunder taken from rich will be used to fund the $634 billion overhaul of the U.S. health-care system. Unfortunately, these additional taxes won’t come remotely close to paying the proposed health-care bill. (see WSJ article)

Obama is confident that most Americans won’t be too offended that he is socking it to those dastardly rich folks. However, most of us are clever enough to realize that it is this group of people who take their money and invest it in the stock market, in businesses, in new jobs, and in the overall economy. If they are punished for making money, they will do what any sane person would do; find the best ways to avoid taxes. History shows that when the rich start conserving their money and avoiding heavy tax burdens, the economy slows, jobs dry up, and the stock market stagnates along with nearly everyone’s retirement funds. So who is really being punished, the rich who are preserving their wealth or you and me trying to scrape together enough to pay our bills and taxes?

The Lessons of Marxism
One hundred and fifty years after Karl Marx, our world can evaluate numerous examples of communism at work. As we all know, not one communist regime has been even nominally effective at building a thriving economy, lowering joblessness, driving innovation, ensuring liberty, or significantly improving lifestyles for its people. Communism and its close cousin, socialism, are however very effective at keeping a tight rein on the populace and preventing people from improving their personal economic situation. In other words, “tax the rich and give to the poor” translates into financially tethering the common guy.

So buckle-up and get ready for a wild ride. If Obama pursues the objectives he has written about and campaigned for, Cap and Trade and Tax the Rich are just the beginning of his unabashed drive to a Marxist America. Next on the agenda are: 1) socialized medicine, 2) disarming the public and/or curbing our right to bear arms, and 3) silencing the opposition through some form of the “fairness doctrine”.

There is clearly more to politics than the economy, but when there is an elephant in the room it is hard to talk about anything else. And do we ever have an elephant in the room! With the government on a seemingly endless spending spree that began two years ago, it is helpful to pause and see what impact the government intervention has had on our economy. While fiscal results are not fully available yet (and won’t be for awhile) there are some powerful indications that the government will not receive a passing grade.

Confidence in Stimulus Plan: On February 3rd, Gallup reported the results of their polling on Obama’s economic stimulus plan. The question was asked, “…how concerned are you that it [the stimulus plan] would not stimulate the economy quickly enough?” Of those responding 78% were either very concerned or somewhat concerned that the stimulus would not help the economy in a timely way.

A day later, Rasmussen reported that 58% of Americans did not support the stimulus plan and that half of Americans believed the stimulus plan will end up doing more harm than good.

Inflation: The Labor department reported that wholesale prices increased by 0.8% last month, well ahead of the 0.2% increase that economists had expected. This amounts to an annualized inflation rate of 10%. During the same period, consumer prices increased 0.3%, indicating an annualized rate of 3.7%. Knowing that consumer price increases lag wholesale price increases, we can anticipate even more consumer price inflation. This increase in prices should have been very predictable given the massive increase in the supply of money (think the government printing more money). In the last quarter of 2008, the money supply grew between 12-13%—an annualized rate of more than 50%. According to the “quantity theory of money,” economists expect prices will rise if the money supply increases. That theory is proving true today.

During recessionary periods it is not unusual to see price deflation. Consumer spending slows and businesses lower prices to encourage more spending. But when the government is madly printing money, this can overpower the deflationary tendency and result in markedly higher prices. To the consumer (you and me) inflation is like a tax. If we spend $50,000 year to provide for ourselves and our families and prices grow by 5%, next year we will spend $52,500 without changing our lifestyle or buying more things. Unless we get a raise to make up for the higher prices (does your employer do that?), we will find it harder to support our families on the same income.

So why does the government print more money? Controlling the money supply is a powerful tool the government uses to keep the economy within a healthy range. When done correctly, we benefit, and when that power is misused, we suffer. Earlier in the decade, the government mismanaged the money supply, contributing to the current economic crisis. By pumping up the money supply in the years following 911, the government contributed to the growing housing bubble.  Sometimes, though, the government backs itself into a corner and is forced to increase the money supply. When the federal government spends more money than it has, it must get the money from somewhere. Washington can either borrow money or print money (wouldn’t it be nice if we could do that!). In 2009, it is expected that the government will collect less than half of what it will spend, resulting in a $1.4 trillion deficit. Add to this all the money being spent in a vain attempt to help the economy, and we can fully anticipate that the government will be forced to increase the money supply, which will drive inflation rates higher still.

Wall Street: Without doubt, the financial minds on Wall Street are subject to certain frailties, greed among them. However, when they speak collectively about governmental impact on the economy, they can be quite persuasive. In the last several months, they have spoken with a loud and powerful voice. During a recession, we anticipate contractions in the market and some level of losses. It is no secret we have seen such contractions in recent months—and then some! By superimposing political events on the Dow Jones Industrial Average over the last 5 months, we get a solid sense of what the better financial minds in our country think of how the government is dealing with the economy.  We see market losses higher than a recession would normally cause and we learn that Wall Street significantly lacks confidence in the bank rescue (officially called the Troubled Asset Relief Program or TARP), the election of Obama, Obama’s presidency (one of the biggest drops ever for an inauguration), and the stimulus plan.

From Google Finance Beta

Consumer Confidence: Bloomberg, a member of the top tier financial media, reports that “U.S. consumer confidence collapsed this month.” Not prone to melodramatics, Bloomberg’s use of the word collapse does not go unnoticed. They indicate that the size of the drop in confidence was not only surprising, but very unusual historically. Consumer confidence is influenced by a number of things, including media reporting on the economy, government commenting on the economy, and the economic conditions of themselves, friends and families. Consumer Confidence is also an indicator of consumer spending and general economic changes. If confidence is low, consumers tend to spend less, which in turn slows the economy. The graph below shows clearly that, despite government spending for the last two years to revive the economy, Consumer Confidence continues to slide. The drop in Consumer Confidence then took a nosedive as the government discussed and subsequently enacted the bank rescue plan (TARP). It will be interesting to examine the data for the first quarter of 2009 to see how the stimulus plan actually impacts Consumer Confidence.

From Bloomberg

Senator Judd Withdraws as U.S. Commerce Secretary Nominee
Despite the gloom of a recessionary economy, despite the agony of the non-stop skid on Wall Street, despite Congressional refusal to allow a debate or even allow the public to see the Economic Destruction Plan prior to the vote, and despite the President spouting gloom and doom to achieve his socialist agenda, there is one ray of sunlight that pierced the American storm clouds.

Senator Judd Gregg of New Hampshire has withdrawn his name for consideration as U.S. Commerce Secretary. No dyed-in-the-wool conservative, Judd is roughly as conservative as John McCain–who according to the American Conservative Union, was President Obama’s Republican nomination to his otherwise socialist-leaning cabinet.

In his press release, Senator Judd said, “However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the census there are irresolvable conflicts for me.  Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns.  We are functioning from a different set of views on many critical items of policy.”

Kudos to the Senator. Would that more of our elected officials had the courage and conviction to take a firm stand for the welfare of the country.

Let’s take a look at the character issues of some of Obama’s other nominees.

Obama’s Nominees of Questionable Integrity
Obama-the-candidate said, “…when it comes to hiring people in my administration, the litmus test we’ll apply will not be based on party or ideology, but qualification and experience.” Additionally, Obama pledged to have the most ethical administration in history, and specifically promised that no lobbyists would be employed. Since this is supposed to be change we can count on, let’s do a quick assessment, checking for competence and integrity.

From USA Today: “A USA Today review of Obama hires shows that 21 have registered as federal lobbyists…” (This was reported exactly one week after the inauguration, making for a short-lived promise).

Maybe we should check in on Obama’s promise of “the most ethical administration in history.” Here are the highlights:

Tom Daschle: Withdrew from consideration as head of Health and Human Services when he couldn’t stand the heat for being a tax cheat.

Nancy Killefer: Withdrew from consideration as the country’s Chief Performance Officer when word leaked out she was a tax cheat.

Bill Richardson: Withdrew from consideration as Commerce Secretary when it became apparent his confirmation would be hampered by a grand jury investigation over how state contracts were issued to political donors while he was the governor of New Mexico.

Timothy Geithner: Approved as Secretary of the Treasury despite proof that was presented to the Senate (which he corroborated with his own testimony) that he was a tax cheat.

Hillary Clinton: Approved as Secretary of State despite very significant conflicts of interest stemming from donations to her husband’s foundation by foreign entities and questionable donations from foreigners to her campaigns. Additionally, she has been plagued with scandal after scandal throughout her political life.

Eric Holder: Approved as Attorney General although he: is anti-gun and inclined to restrict the second ammendment, he pressed Clinton for the pardon of the Mark Rich (a fugitive financier), and he worked to force the deportation of a juvenile refugee (Elian Gonzalez) back to Cuba.

Steven Cu: Approved as Secretary of Energy though he advocates very high gasoline prices, is opposed to off-shore drilling, clean coal, and nuclear energy. As a blind follower of debunked global warming theories, he believes his main mission in this office is to vigorously pursue unproven and non-viable energy alternatives.

Arne Duncan: Approved as Secretary of Education despite the very dismal failure of Chicago public schools while he presided over them. He is a strong advocate of significantly increased federal spending (naturally with strings attached) on education and greater federal influence on curriculum.

Janet Napolitano: Approved as head of Homeland Security though she nearly bankrupted Arizona while governor, failed miserably to protect her state from the dangers of illegal immigration, and helped derail the Clarence Thomas Supreme Court nomination with her advice to Anita Hill.

Cecilia Muñoz: Hired as a  White House aide though she was formerly employed as a lobbyist by La Raza (Spanish for “The Race”), a radical Mexican nationalist organization that aggressively seeks to undermine American sovereignty and regularly attempts to thwart national security. La Raza has been called the Mexican version of the Black Panthers.

Hilda Solis: Nominated as Secretary of Labor in spite of (or per perhaps because of) her many connections to organized labor – she is the daughter of a union organizer and a former union demonstrator.  She is also a member of the House Progressive Caucus, a group of the most liberal members of the House of Representatives.

Lisa Jackson: Nominated as Administrator of the EPA despite that both liberals and conservatives find her lacking any compelling qualifications.

Obama-the-candidate suggested the performance scale on which his administration should be measured, which included several factors: diverse ideology, strong qualifications, demonstrated experience, and solid ethics. Assuming all of his other nominees were wonderful, we do see some concerning trends. That Obama would nominate the individuals mentioned above (Judd excepted) and that Congress would approve them makes one wonder if Obama-the-candidate did not really mean “Change you can count on”, but rather is satisfied with “Corruption you can bank on.”

Shame on you, Mister President. Is it really that hard to find people we can respect and have confidence in? For someone who promised integrity, competence, openness, and so much goodness, this is not a promising start.

Addressing the Economic Emergency
“Our country is plunging headlong into a horrendous recession and we risk an economic meltdown comparable to the Great Depression. The need for the government rescue is so incredibly urgent that Congress must pass the Economic Destruction Plan immediately. The slightest delay truly imperils our country.” Thus the presidential rhetoric and scaremongering is launched.

An all too complicit Congress joined the chorus and rammed through the biggest spending package ever, bigger than has been imagined by even the biggest tax & spend liberal. Without debate, without public input they forced this legislation into the shortest possible time frame. The need to enact the legislation was so incredibly critical that Nancy Pelosi, Speaker of the House, was “forced” to renege on her promise to allow the public 48 hours to review and consider the package before she proceeded to a vote. At least now we can all give a giant and collective sigh of relief as the stuttering messiah signs the legislation and rescues our nation from certain destruction.

Oh, but wait! The president has something more important to do. Instead of saving our country in our moment of desperate need, Obama felt it was more important to take a 3-day vacation and will delay signing the bill until Tuesday. He will return to Washington from Chicago tomorrow and turn around and fly back to Denver so he can sign the Economic Destruction Plan there. The symbolism is there, I’m sure, but it’s meaning eludes me. (Maybe he is earning frequent flyer miles!)

So the Democratic leadership did the president’s bidding, but at what cost? Well they don’t know exactly. In fact, no one really knows (including you and me). Why? Because no one has read it. Let’s take a quick poll.

Poll Question: Have you read the 1100 pages of the economic stimulus bill?
0%     House of Representatives  (not one member of the House has read it)
0%     Senate (not one of the 100 senators have read it)
0%     White House (no one at the White House has read it)
0%     Journalists (not one of the thousands of journalists in the country has read it)
0%     Electorate (not one of the millions of Americans has read it)

So, who has read the bill? Well, perhaps a handful of congressional staffers have read the whole bill.

Writing the Legislation
But you thought that congress wrote the legislation. Nope! Wrong! Not even close! This, like a lot of legislation, was written by non-elected folks. Conspiring to draft this legislation were unelected staffers working for liberal/socialist members of congress, fringe leftwing special interest groups, and paid mercenaries (lobbyists) who were ensuring only that the interests of their employers were addressed. This is the team that is rescuing our country!

So How Bad is the Recession?
As I have mentioned before, not all that bad. The Wall Street Journal has an excellent comparison of this recession and bad recessions of the past. (Hint: no where close to the Great Depression).

Responding to Presidential strong-arm tactics, the Senate Democrats passed the Economic Destruction Plan with the help of three defecting Republicans. Seeking to pressure the Senate, Obama attempted to make his case with the American people on the eve of the Senate vote. Breaking with long-standing protocol, the President read his statements from a teleprompter. When he took questions, his responses often took 13+ minutes each as he rambled on, obfuscating and dodging the core queries. These efforts, however, may be failing as people and elected officials begin to balk at the details of the plan.

In so doing, Obama remained consistent with his rhetoric: “We must pass the stimulus bill immediately to avert an otherwise unpreventable catastrophe. This is so urgent, we can’t take time to understand the bill, to debate the bill, or even question the bill. Trust me we must do this and do it now. So, pass that bill and get it to my desk immediately.”

The Senate has complied and is now conferencing with the House to draft a version that both can agree on. While it may be too late to protect the country from the damage of this economic destruction bill, the passage has been delayed long enough that some critical analysis is beginning to surface, even in the dominant media.

How Bad is this Recession?
Of all sources, the New York Times ran an article on Sunday stating this recession is not that bad. The article quotes Robert Gordon - a Northwestern University professor and one of the seven economists who make up an economic committee of the National Bureau of Economic Research that determines if and when we are in an actual recession. It is to these elite seven that the country turns for assessments of the national economic climate. Here are Gordon’s key points.

• We are in a recession
• The recession likely started in August or September 2008
• It is hard to determine how long or how deep this recession will extend
• This recession will likely be worse than the recessions of 2001 & 1990-91
• This recession may not be as bad as the recession of the early 1980’s

Hmm… So it’s not sounding like the worst recession since the Great Depression. If we survived the recession of the early 1980’s without an unfathomable mountain of government spending, how necessary is such spending now?

But Obama Said…
During Monday’s national address, Obama said that he had spoken with many economists — both liberal and conservative, both Republican and Democrat — and that there was “no disagreement.” “Economists from across the political spectrum agree” on the need for massive government spending to stimulate the economy now to save the country from certain economic peril. (Just one of Obama’s many whoppers that night.) 

Maybe the President is simply too busy to read the newspaper or maybe he simply didn’t speak with enough economists. What is clear is that he failed to recognize that the Cato Institute placed an ad in major newspapers across the United States, which was signed by hundreds of economists, including Nobel laureates and other prominent scholars. Here is what the nation’s leading economists are saying with a unified voice:

• We do not believe that more government spending is a way to improve economic performance.
• Government spending did not save us from the Great Depression.
• Government spending did not solve Japan’s “lost decade” of the 1990’s.
• It is blind hope and not experience that leads one to believe government spending will help this time.
• To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

To better understand what these economists think, please see a very readable interview with Mike Munger, a Duke University economist as published by the Pope Center.

Why the Hurry? Can’t We Just Talk About It?
Perhaps the biggest, and increasingly obvious, reason is that the economic destruction bill is as much (or more) about imposing a socialist system on America as it is about government spending. Buried in this unfathomable mountain of spending are some of the greatest leaps towards socialism in the history of our republic. If the socialists in Congress and the White House can sneak this bill through under the guise of an economic emergency, thereby preventing serious consideration and debate, they will have pulled off an amazing political coup.

Lest you think these are the rantings of a right-wing nut, take a moment to read these comments from New York City’s former mayor Ed Koch, himself a lifelong liberal Democrat.

“While I support the ultimate [socialist] goals of the new Democratic congressional majority for significant changes in our society, I do not want those changes imposed through stealth. I want them debated and voted on by a Congress able to sort out the good from the bad in shaping legislation. That is not what is happening now. According to Pear’s New York Times article,
‘Democrats said the current economic crisis did not allow time for public hearings on the legislation.’ For me, this is a form of tyranny and is not acceptable. The ends here do not justify the means. There is no need or excuse for stealth.”

What Kind of Stealth Provisions
Unfortunately, the list is really, really long. Here is a very small sampling, but by researching online, even for just a few minutes, you will find these and countless other stealth provisions.

• Anti-religious measures, preventing stimulus funds to be used if a school allows religious activities in a building.
• Massive increases in government health coverage.
• Government power to monitor how a doctor is treating his patients and the ability to dictate which treatments may be used.
• Rationing of health care to those the government deems most deserving.
• Massive support and funding of unions and socio-economically preferred citizens.
• Doubling of the budget for the Department of Education, greatly expanding their power over states and communities.
• Sponsorship of radical environmental efforts.
• Nationalization of businesses and industries (also part of the broader “rescue” efforts).
• Support of radical “community activist” groups.

Do the Liberals Realize What they are Doing?
Probably not all of them. Our citizenry is horrendously ignorant of economic principles. The same is probably doubly true of our sitting Congress. Your average, run-of-the-mill liberal/progressive is probably blissfully ignorant of what is happening and the likely consequences. These are still basking in the elevation of their anointed one. But, some are clearly catching on. Even so, the socialists in the government are clearly aware and are aggressively pressing forward.

The State of New Hampshire (no conservative bastion there) has been woken from its slumber and just passed a defiant joint resolution warning the federal government, in no uncertain terms, to back off and stay within the bounds the Constitution has firmly planted around it. They see this federal power grab for what it is and are taking aggressive action. The legislature has directed a copy of this resolution be sent to the President of the United States, each member of the United States Congress, and the presiding officers of each State’s legislature. This is a call to action and a hissing threat of “do not tread on me” that we should all embrace and champion.