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ABC TURNS PROGRAMMING OVER TO OBAMA; NEWS TO BE ANCHORED FROM INSIDE WHITE HOUSE
Tue Jun 16 2009 08:45:10 ET

On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care -- a move that has ignited an ethical firestorm!

Highlights on the agenda:

ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.

The network plans a primetime special -- 'Prescription for America' -- originating from the East Room, exclude opposing voices on the debate.

The Director of Communications at the White House Office of Health Reform is Linda Douglass, who worked as a reporter for ABC News from 1998-2006.

Late Monday night, Republican National Committee Chief of Staff Ken McKay fired off a complaint to the head of ABCNEWS:

Dear Mr. Westin:

As the national debate on health care reform intensifies, I am deeply concerned and disappointed with ABC's astonishing decision to exclude opposing voices on this critical issue on June 24, 2009. Next Wednesday, ABC News will air a primetime health care reform “town hall” at the White House with President Barack Obama. In addition, according to an ABC News report, GOOD MORNING AMERICA, WORLD NEWS, NIGHTLINE and ABC’s web news “will all feature special programming on the president’s health care agenda.” This does not include the promotion, over the next 9 days, the president’s health care agenda will receive on ABC News programming.

Today, the Republican National Committee requested an opportunity to add our Party's views to those of the President's to ensure that all sides of the health care reform debate are presented. Our request was rejected. I believe that the President should have the ability to speak directly to the America people. However, I find it outrageous that ABC would prohibit our Party's opposing thoughts and ideas from this national debate, which affects millions of ABC viewers.

In the absence of opposition, I am concerned this event will become a glorified infomercial to promote the Democrat agenda. If that is the case, this primetime infomercial should be paid for out of the DNC coffers. President Obama does not hold a monopoly on health care reform ideas or on free airtime. The President has stated time and time again that he wants a bipartisan debate. Therefore, the Republican Party should be included in this primetime event, or the DNC should pay for your airtime.

Respectfully,
Ken McKay
Republican National Committee
Chief of Staff

MORE

ABCNEWS Senior Vice President Kerry Smith on Tuesday responded to the RNC complaint, saying it contained 'false premises':

"ABCNEWS prides itself on covering all sides of important issues and asking direct questions of all newsmakers -- of all political persuasions -- even when others have taken a more partisan approach and even in the face of criticism from extremes on both ends of the political spectrum. ABCNEWS is looking for the most thoughtful and diverse voices on this issue.

"ABCNEWS alone will select those who will be in the audience asking questions of the president. Like any programs we broadcast, ABC News will have complete editorial control. To suggest otherwise is quite unfair to both our journalists and our audience."

Developing...

Leap in U.S. debt hits taxpayers with 12% more red ink

By Dennis Cauchon, USA TODAY

Taxpayers are on the hook for an extra $55,000 a household to cover rising federal commitments made just in the past year for retirement benefits, the national debt and other government promises, a USA TODAY analysis shows.

The 12% rise in red ink in 2008 stems from an explosion of federal borrowing during the recession, plus an aging population driving up the costs of Medicare and Social Security.

That's the biggest leap in the long-term burden on taxpayers since a Medicare prescription drug benefit was added in 2003.

The latest increase raises federal obligations to a record $546,668 per household in 2008, according to the USA TODAY analysis. That's quadruple what the average U.S. household owes for all mortgages, car loans, credit cards and other debt combined.

"We have a huge implicit mortgage on every household in America — except, unlike a real mortgage, it's not backed up by a house," says David Walker, former U.S. comptroller general, the government's top auditor.

USA TODAY used federal data to compute all government liabilities, from Treasury bonds to Medicare to military pensions.

Bottom line: The government took on $6.8 trillion in new obligations in 2008, pushing the total owed to a record $63.8 trillion.

The numbers measure what's needed today — set aside in a lump sum, earning interest — to pay benefits that won't be covered by future taxes.

Congress can reduce or increase the burden by changing laws that determine taxes and benefits for programs such as Medicare and Social Security.

Rep. Jim Cooper, D-Tenn., says exploding debt has focused attention on the government's financial challenges. "More and more, people are worried about our fiscal future," he says.

Key federal obligations:

• Social Security. It will grow by 1 million to 2 million beneficiaries a year from 2008 through 2032, up from 500,000 a year in the 1990s, its actuaries say. Average benefit: $12,089 in 2008.

• Medicare. More than 1 million a year will enroll starting in 2011 when the first Baby Boomer turns 65. Average 2008 benefit: $11,018.

•Retirement programs. Congress has not set aside money to pay military and civil servant pensions or health care for retirees. These unfunded obligations have increased an average of $300 billion a year since 2003 and now stand at $5.3 trillion.

Tax Dodge Myths

By Robert J. Samuelson
Monday, May 11, 2009 

The U.S. tax code is "full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share."

-- President Obama, May 4

Like it or not, ours is a world of multinational companies. Almost all of America's brand-name firms (Coca-Cola, IBM, Microsoft, Caterpillar) are multinationals, and the process works both ways. In 2006, the U.S. operations of foreign firms employed 5.3 million workers. Fiat's looming takeover of Chrysler reminds us again that much business is transnational.

For most people, the multinational company is a troubling concept. Loyalty matters. We like to think that "our companies" serve the broad national interest rather than just scouring the world for the cheapest labor, the laxest regulations and the lowest taxes. And the tax issue is especially vexing: How should multinationals be taxed on the profits they make outside their home countries?

Listen to President Obama, and the status quo seems a cesspool. Pervasive "loopholes" engineered by "well-connected lobbyists" allow U.S. multinationals to skirt American taxes and outsource jobs to low-tax countries. So the president proposes plugging loopholes. Some jobs will return to the United States, he said, and U.S. tax coffers will grow by $210 billion over the next decade.

Sounds great -- and that's how the story played. "Obama Targets Overseas Tax Dodge," headlined The Post. But the reality is murkier; the president's accusatory rhetoric perpetuates many myths.

Myth: Aided by those overpaid lobbyists, American multinationals are taxed lightly -- less so than their foreign counterparts.

Reality: Just the opposite. Most countries don't tax the foreign profits of their multinational firms at all. Take a Swiss multinational with operations in South Korea. It pays a 27.5 percent Korean corporate tax on its profits and can bring home the rest tax-free. By contrast, a U.S. firm in Korea pays the Korean tax and, if it returns the profits to the United States, faces the 35 percent U.S. corporate tax rate. American companies can defer the U.S. tax by keeping the profits abroad (naturally, many do), and when repatriated, companies get a credit for foreign taxes paid. In this case, they'd pay the difference between the Korean rate (27.5 percent) and the U.S. rate (35 percent).

Myth: When U.S. multinationals invest abroad, they destroy American jobs.

Reality: Not so. Sure, many U.S. firms have shut American factories and opened plants elsewhere. But most overseas investments by U.S. multinationals serve local markets. Only 10 percent of their foreign output is exported back to the United States, says Harvard economist Fritz Foley. When Wal-Mart opens a store in China, it doesn't close one in California. On balance, all the extra foreign sales create U.S. jobs for management, research and development (almost 90 percent of American multinationals' R&D occurs in the United States), and the export of components. A study by Foley and economists Mihir Desai of Harvard and James Hines of the University of Michigan estimates that for every 10 percent increase in U.S. multinationals' overseas payrolls, their American payrolls increase almost 4 percent.

Myth: Plugging overseas corporate tax loopholes will dramatically improve the budget outlook as multinationals pay their "fair" share.

Reality: Dream on. The estimated $210 billion revenue gain over 10 years -- money already included in Obama's budget -- represents only six-tenths of 1 percent of the decade's tax revenue of $32 trillion, as projected by the Congressional Budget Office. Worse, the CBO reckons that Obama's endless deficits over the decade will total a gut-wrenching $9.3 trillion.

Whether Obama's proposals would create any jobs in the United States is an open question. In highly technical ways, Obama would increase the taxes on the foreign profits of U.S. multinationals by limiting the use of today's deferral and foreign tax credit. Taxing overseas investment more heavily, the theory goes, would favor investment in the United States.

But many experts believe his proposals would actually destroy U.S. jobs. Being more heavily taxed, American multinational firms would have more trouble competing with European and Asian rivals. Some U.S. foreign operations might be sold to tax-advantaged foreign firms. Either way, supporting operations in the United States would suffer. "You lose some of those good management and professional jobs in places like Chicago and New York," says Gary Hufbauer of the Peterson Institute.

Including state taxes, America's top corporate tax rate exceeds 39 percent; among wealthy nations, only Japan's is higher (slightly). However, the effective U.S. tax rate is reduced by preferences -- mostly domestic, not foreign -- that also make the system complex and expensive. As Hufbauer suggests, Obama would have been better advised to cut the top rate and pay for it by simultaneously ending many preferences. That would lower compliance costs and involve fewer distortions. But this sort of proposal would have been harder to sell. Obama sacrificed substance for grandstanding.

Tincture of Lawlessness

Obama's Overreaching Economic Policies

By George F. Will
Thursday, May 14, 2009 

Anyone, said T.S. Eliot, could carve a goose, were it not for the bones. And anyone could govern as boldly as his whims decreed, were it not for the skeletal structure that keeps civil society civil -- the rule of law. The Obama administration is bold. It also is careless regarding constitutional values and is acquiring a tincture of lawlessness.

In February, California's Democratic-controlled Legislature, faced with a $42 billion budget deficit, trimmed $74 million (1.4 percent) from one of the state's fastest-growing programs, which provides care for low-income and incapacitated elderly people and which cost the state $5.42 billion last year. The Los Angeles Times reports that "loose oversight and bureaucratic inertia have allowed fraud to fester."

But the Service Employees International Union collects nearly $5 million a month from 223,000 caregivers who are members. And the Obama administration has told California that unless the $74 million in cuts are rescinded, it will deny the state $6.8 billion in stimulus money.

Such a federal ukase (the word derives from czarist Russia; how appropriate) to a state legislature is a sign of the administration's dependency agenda -- maximizing the number of people and institutions dependent on the federal government. For the first time, neither sales nor property nor income taxes are the largest source of money for state and local governments. The federal government is.

The SEIU says the cuts violate contracts negotiated with counties. California officials say the state required the contracts to contain clauses allowing pay to be reduced if state funding is.

Anyway, the Obama administration, judging by its cavalier disregard of contracts between Chrysler and some of the lenders it sought money from, thinks contracts are written on water. The administration proposes that Chrysler's secured creditors get 28 cents per dollar on the $7 billion owed to them but that the United Auto Workers union get 43 cents per dollar on its $11 billion in claims -- and 55 percent of the company. This, even though the secured creditors' contracts supposedly guaranteed them better standing than the union.

Among Chrysler's lenders, some servile banks that are now dependent on the administration for capital infusions tugged their forelocks and agreed. Some hedge funds among Chrysler's lenders that are not dependent were vilified by the president because they dared to resist his demand that they violate their fiduciary duties to their investors, who include individuals and institutional pension funds.

The Economist says the administration has "ridden roughshod over [creditors'] legitimate claims over the [automobile companies'] assets. . . . Bankruptcies involve dividing a shrunken pie. But not all claims are equal: some lenders provide cheaper funds to firms in return for a more secure claim over the assets should things go wrong. They rank above other stakeholders, including shareholders and employees. This principle is now being trashed." Tom Lauria, a lawyer representing hedge fund people trashed by the president as the cause of Chrysler's bankruptcy, asked that his clients' names not be published for fear of violence threatened in e-mails to them.

The Troubled Assets Relief Program, which has not yet been used for its supposed purpose (to purchase such assets from banks), has been the instrument of the administration's adventure in the automobile industry. TARP's $700 billion, like much of the supposed "stimulus" money, is a slush fund the executive branch can use as it pleases. This is as lawless as it would be for Congress to say to the IRS: We need $3.5 trillion to run the government next year, so raise it however you wish -- from whomever, at whatever rates you think suitable. Don't bother us with details.

This is not gross, unambiguous lawlessness of the Nixonian sort -- burglaries, abuse of the IRS and FBI, etc. -- but it is uncomfortably close to an abuse of power that perhaps gave Nixon ideas: When in 1962 the steel industry raised prices, President John F. Kennedy had a tantrum and his administration leaked rumors that the IRS would conduct audits of steel executives, and sent FBI agents on predawn visits to the homes of journalists who covered the steel industry, ostensibly to further a legitimate investigation.

The Obama administration's agenda of maximizing dependency involves political favoritism cloaked in the raiment of "economic planning" and "social justice" that somehow produce results superior to what markets produce when freedom allows merit to manifest itself, and incompetence to fail. The administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption.

georgewill@washpost.com

How banks were bullied into making bad loans

'Community activists' applied high pressure 
to get risky mortgages, shake down payoffs

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Posted: April 05, 2009
7:11 pm Eastern

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WorldNetDaily

Bruce Marks, head of the NACA

WASHINGTON – Using tools provided by the federal Community Reinvestment Act, community organizers led by a self-described "banking terrorist" applied bullying tactics to secure high-risk mortgages and to shake down lending institutions for billions of dollars – actions that likely contributed to the "mortgage meltdown" that triggered the worst economic crisis since the Great Depression.

That's the substance of a new report by the Capital Research Center on the Neighborhood Assistance Corporation of America headed by Bruce Marks.

Get a Christian perspective on the "Bankruptcy of Our Nation" and find out how you can still protect yourself and your family in the coming hard times.

"Time and again, NACA has combined the street tactics of protest and demonstration with public policy tools such as the Community Reinvestment Act to pressure banks into expanding their operations in poor neighborhoods," says the report authored by David Hogberg. "NACA typically extracts self-serving concessions from banks, forcing them to provide it with funds that it then uses to make mortgage loans to low-income borrowers. NACA rolls the fees it earns servicing these loans back into its campaign of bullying banks."

In 2007, the year before the crash, NACA obtained $10 billion in bank commitments for its own loan commitments with what the group admits were aggressive, hounding intimidation tactics.

"NACA has been accused of being overly aggressive and personal," explains the group's website. "NACA wears this as a badge of honor, leaving no stone unturned and often hounding CEOs from their shareholder meetings to their homes. The rationale is simple: lenders have a personal and often devastating impact on the lives of the people who they refuse to provide affordable credit to or take advantage of through predatory loans and scams."

NACA earned that reputation by first targeting Fleet Financial Group of New England, which was accused of lending money to private mortgage companies that, in turn, lent money at "loan shark rates." NACA filed lawsuits against Fleet and worked with local media on disparaging news coverage. NACA's "shock troops," known for wearing yellow shirts, disrupted speeches by bank officials, including one by CEO Terrence Murray at the Harvard Business School.

Four days later, Murray met with Marks and agreed to settle all suits for $350 million.

According to Capital Research Center, that money was used to launch the next attacks on First Union Bank of North Carolina, headed by Edward Crutchfield, dubbed "Fast Eddie" by NACA.

NACA attempted to crash a shareholders meeting and then began invading Crutchfield's personal life.

Again, the NACA website explains: "NACA hounded Fast Eddie at every turn. Thousands of postcards were sent to his home and neighbors, informing them of First Union's practices. NACA drafted the 'Fast Eddie Report,' which contained Crutchfield's personal information, and sent it to all of his neighbors and the neighbors of First Union's directors and top officers. NACA wanted Crutchfield to understand that he had a personal impact on people's lives by denying them credit, and thus his personal life would be affected as well."

News was spread that Crutchfield was having an affair with a subordinate. NACA began sending protesters to the school his child attended.

Crutchfield and First Union soon settled for a $150 million payoff.

NACA has received similar payoffs from NationsBank, Bank of America and Citigroup.

In 2007, Countrywide Bank was targeted. It quickly acquiesced to demands for a settlement that included a stipulation to restructure its borrowed troubled loans. A year later, Countrywide was insolvent – touching off a string of bank defaults and government bailouts that have cost taxpayers trillions.

"NACA could not operate as it has without the Community Reinvestment Act," says the CRC report. "The CRA is a federal law, first enacted in 1977, that banned the real estate practice of 'redlining' communities, singling out geographical areas where a bank would make no loans. To comply with the CRA, banks had to show that they did not discriminate in making loans in poor and black neighborhoods."

That compliance got tougher in 1995 when President Clinton upped the ante, forcing banks to demonstrate statistically they were making their quota of loans in low-income neighborhoods and encouraging community activist groups like NACA to file complaints against banks.

Families learning of $163,000 tax 'bomb'

Economics prof says deficits heading toward 'banana republic levels'

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Posted: April 04, 2009
12:10 am Eastern

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WorldNetDaily

An economics professor from Stanford is warning Americans soon will discover a $163,000-per-family tax "bomb" inside President Obama's budget plans, which have pushed U.S. deficits toward "banana republic levels."

The alert comes from Michael J. Boskin, who praised some of Obama's economic plans in a Wall Street Journal column but saw red flags waving for other provisions.

Boskin, a fellow at the Hoover Institution who chaired the Council of Economic Advisers under President George H.W. Bush, crunched the numbers and found that while Obama inherited a growing and significant budget deficit, his plans will add $6.5 trillion of debt.

"What does $6.5 trillion of additional debt imply for the typical family? If spread evenly over all those paying income taxes (which under Mr. Obama's plan would shrink to a little over 50 percent of the population), every income-tax paying family would get a tax bill for $163,000," he wrote.

"(In 10 years, interest would bring the total to well over a quarter million dollars, if paid all at once. If paid annually over the succeeding 10 years, the tax hike every year would average almost $34,000.) That's in addition to his explicit tax hikes," wrote Boskin.

"While the future tax time-bomb is pushed beyond Mr. Obama's budget horizon, and future presidents and Congresses will decide how it will be paid, it is likely to be paid by future income tax hikes as these are general fund deficits," he said.

"We can get a rough idea of who is likely to pay them by distributing this $6.5 trillion of future taxes according to the most recent distribution of income-tax burdens. We know the top 1 percent or 5 percent of income-taxpayers pay vastly disproportionate shares of taxes, and much larger shares than their shares of income. But it also turns out that Mr. Obama's massive additional debt implies a tax hike, if paid today, of well over $100,000 for people with incomes of $150,000, far below Mr. Obama's tax-hike cut-off of $250,000. … In other words, a middle-aged two-career couple in New York or California could get a future tax bill as big as their mortgage," he warned.

Boskin notes that Obama's administration did inherit a large deficit.

"All presidents present the best possible case for their budgets, but a mind-numbing array of numbers offers innumerable opportunities to conjure up misleading comparisons," he said. "Mr. Obama's characterizations of his budget unfortunately fall into this pattern. He claims to reduce the deficit by half, to shave $2 trillion off the debt (the cumulative deficit over his 10-year budget horizon), and not to raise taxes on anyone making less than $250,000 a year.

"While in a Clintonian sense correct (depends on what the definition of 'is' is), it is far more accurate to describe Mr. Obama's budget as almost tripling the deficit. It adds $6.5 trillion to the national debt, and leaves future U.S. taxpayers (many of whom will make far less than $250,000) with the tab. And all this before dealing with the looming Medicare and Social Security cost explosion," he said.

He said the Congressional Budget Office "baseline cumulative deficit" for 2010-2019 is $9.3 trillion. Obama's proposals, he writes, add to that $6.5 trillion.

"Finally, what of the claim not to raise taxes on anyone earning less than $250,000 a year? … Every dollar of debt he runs up means that future taxes must be $1 higher in present-value terms. Mr. Obama is going to leave a discounted present-value legacy of $6.5 trillion of additional future taxes, unless he dramatically cuts spending. … Call it a stealth tax increase or ticking tax time-bomb," he said.

Boskin praised Obama's plans to permanently index the alternative minimum tax and other provisions, but he said the growing trillion-dollar deficits in the latter years of Obama's plans "are so large for a prosperous nation in peacetime – three times safe levels – that they would cause the debt burden to soar toward banana republic levels."

WND previously reported when Lawrence J. Haas, former communications director for Vice President Al Gore, said Obama "wants to make permanent all the tax cuts from those years [2001 and 2003] for people making up to $250,000 a year and frankly to redistribute income a bit in a fair way so he would raise taxes on those above $250,000."

His comments came in an interview with Greg Corombos of Radio America/WND, 

Haas explained the income redistribution plan:

"The tax cuts from 2001 and 2003 provided a disproportionate amount of the benefits for those in the top one, two percent of earners, so in essence what the president is attempting to do is make things a little bit fairer by way of asking those who have done so well in recent years to pay a little bit more … [while continuing] tax relief for people at the bottom, in the middle, in all candor who have struggled in recent years."

In a 2001 radio station interview, Obama said he thought wealth "redistribution" was appropriate:

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court, I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order and as long as I could pay for it I’d be OK

But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the Founding Fathers in the Constitution, at least as it's been interpreted, and the Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can't do to you. Says what the federal government can't do to you, but doesn't say what the federal government or state government must do on your behalf.

And that hasn't shifted and one of the, I think, tragedies of the civil rights movement was because the civil rights movement became so court-focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.

Frustrated Americans cheer Obama's tough auto moves

Mon Mar 30, 2009 4:17pm EDT
By Daniel Trotta

NEW YORK (Reuters) - Some frustrated U.S. taxpayers cheered President Barack Obama's tough steps to shore up the reeling auto industry on Monday but critics called his decision to fire General Motors' chief a heavy-handed power grab.

Obama forced out General Motors chief executive Rick Wagoner, pushed Chrysler LLC toward a merger with Italy's Fiat SpA, and threatened bankruptcy for both, marking an escalation in Washington's involvement in rescuing the faltering economy.

Skeptics asked whether it was an early sign of a more activist administration or an isolated example. GM shares tumbled 30 percent on the news and the Dow Jones Industrial average sank nearly 4 percent.

Experts called it potentially the most significant presidential intervention in the private sector since Harry Truman tried to seize the steel industry during the Korean War in 1952, only to be rebuffed by the Supreme Court.

"I don't think the president should be running the economy. They should have let the company go bankrupt. The guy would have lost his job anyway," said Edward Prescott, a 2004 Nobel laureate in economic sciences.

As a candidate last year, Obama supported rescuing the financial sector, and since then he has shifted to attacking the bonuses and corporate jets for companies taking taxpayer money to pushing out a CEO and replacing members of the board of directors.

"Politics is certainly entering the process. GM should have gone into bankruptcy in the fall. We would be much further along with the workout by now," added Randall Filer, a professor of economics at Hunter College in New York.

Stephen Schork, editor of an industry report on the energy and shipping markets, feared Obama was trying to engineer a hasty conversion to green energy. "They are expressing abject hostility toward the hydrocarbon industry," Schork said.

WILL POPULAR SUPPORT HOLD?

At the same time, Obama's approval ratings have held firm above 60 percent in most public opinion polls. In a Cincinnati coffee shop, retiree Sharon Schmidt, 74, said she supported the decision to push Wagoner out.

"If GM is going to take a big bailout from the federal government, the people who brought it to this state should probably go," Schmidt said. "These bankers and so on are making million dollar bonuses? They should be gone, too."

In a Dallas suburb, accountant John Shaffer, 47, also approved. "I feel he was fired to force the unions and bond holders to seriously negotiate with the company. So I think it was good," he said.

Stephen Hess, a presidential scholar at the Brookings Institution, said Obama's action lacked any historical parallel because the circumstances of the financial crisis were unique and he could succeed because he seemed to have a good "internal gyroscope" on reading the mood of the public.

"So far people are with him," Hess said. "There will be a lot of people who say: At last somebody is doing something."

Opposition from Republicans in Congress was fast and fierce.

"With sweeping new power the White House will be deciding which plants will survive and which won't, so in essence, this administration has decided they know better than our courts and our free market process how to deal with these companies," said Republican Senator Bob Corker of Tennessee.

But in a sign Obama may find some support from the Republican minority, Representative Darrell Issa of California said Obama has "struck the right chord in seeking balance between supporting the American auto industry and calling for a much-needed restructuring."

Big Brother Gov't Could Own the News

By CAITLIN MILLAT

Updated 5:19 PM EDT, Thu, Mar 26, 2009


Struggling news outlets like the New York Times could soon be owned by the government in a Big Brother-style system.


A new Senate bill that would give government funding to struggling newspapers could result in complete state control of the press, critics say.

Democratic Sen. Benjamin Cardin of Maryland proposed a bill this week that would allow newspapers to operate as tax-exempt nonprofits in order to keep the sinking industry afloat.

The government funding could make participating papers less likely to criticize the administration in power - a problem for a democracy that's founded on the freedom of the press, those who oppose the bill say.

"It would de-claw participating newspapers, which couldn't endorse candidates or freely question the party in power," Ken McIntyre, a media and public policy fellow at the conservative Heritage Foundation, told Fox News.

"Reporters and editors are supposed to be wary skeptics of politicians and bureaucrats on behalf of readers -- not beholden to the government's favor," he said.

The new legislation would prohibit the papers from making official endorsements of any political candidates. This could cause a problem for the outlets' editorial pages, which frequently make explicit reference to which candidate or cause the paper supports.

Editorial sections aren't mentioned specifically in Cardin's bill.

"Since the Bill of Rights was passed, the government has never had a voice in the press. This is a very dangerous provision," blogger Alan Mutter told Fox.

"It's very unhealthy," he said.

Cardin said the bill could be the only option for newspapers who are close to shutting their doors.

"This may not be the optimal choice for some major newspapers or corporate media chains," said Cardin, "but it should be an option for many newspapers that are struggling to stay afloat."

No other Senators have voiced public support for the bill.

House OKs $410B bill to boost domestic spending

Feb 25 05:15 PM US/Eastern

WASHINGTON (AP) - The Democratic-controlled House approved $410 billion legislation Wednesday that boosted domestic programs, bristled with earmarks and chipped away at policies left behind by the Bush administration. The vote was 245-178, largely along party lines.
Republicans assailed the measure as too costly—particularly on the heels of a $787 billion stimulus bill that President Barack Obama signed last week. But Democrats jabbed back.

"The same people who drove the economy into the ditch are now complaining about the size of the tow truck," said Rep. James McGovern, D-Mass., pointing out the large increase in deficits that President George W. Bush and GOP-controlled Congresses amassed.

From the GOP side, Rep. Jeb Hensarling of Texas said the legislation was "going to grow the government 8.3 percent ... but the family budget which has to pay for the federal budget only grew at 1.3 percent last year."

The debate occurred one day after Obama told Congress in a prime time television address that he intends to cut deficits in half over the next four years, and one day before he submits tax and spending plans for the coming year. Given the extraordinary costs of the financial industry bailout and the stimulus, the White House projects this year's budget shortfall will be $1.5 trillion, triple the previous record of $455 billion in 2008.

In a symbolic bow to the recession, Democrats included in the spending measure a prohibition on a cost-of-living increase for members of Congress for the year.

Overall, the legislation would provided increases of roughly 8 percent for the federal agencies it covered, about $32 billion more than last year.

The bill is intended to allow smooth functioning of the government through the Sept. 30 end of the fiscal year. The Senate has yet to vote on its version.

After persuading lawmakers to keep earmarks off the stimulus bill, Obama made no such attempt on the first non-emergency spending measure of his presidency. The result was that lawmakers claimed billions in federal funds for pet projects—a total of 8,570 earmarks at a cost of $7.7 billion, according to Taxpayers for Common Sense. Majority Democrats declined to provide a number of earmarks, but said the cost was far smaller, $3.8 billion, 5 percent less than a year ago.

Among the earmarks was one sponsored by Rep. Howard Berman, D-Calif., who secured $200,000 for a "tattoo removal violence outreach program" in Los Angeles. Aides said the money would pay for a tattoo removal machine that could help gang members or others shed visible signs of their past, and anyone benefiting would be required to perform community service.

Rep. Mark Kirk, R-Ill., said the bill included at least a dozen earmarks for clients of PMA Group, a lobbying company now at the center of a federal corruption investigation.

"It's simply not responsible to allow a soon-to-be-criminally indicted lobbying firm to win funding, all borrowed, in this bill," he said. No charges have been filed against the firm or its principals, although the company's offices were raided earlier this month, and it has announced plans to disband by the end of the month.

Federal prosecutors are investigating PMA Group's founder and president, Paul Magliochetti, who is a former top aide to Rep. John Murtha, D-Pa., chairman of the House Appropriations subcommittee that funds defense programs.

In remarks on the House floor, Republican leader John Boehner urged Obama to veto the legislation, citing earmarks.

At the White House, press secretary Robert Gibbs responded only in general terms whether that was possible.

"There is great concern in this building and by the president about earmarks," Gibbs said. "Without having looked specifically at a piece of legislation, I'm hesitant to throw out that four-letter word, `Veto.'"

After eight years without control of the White House, congressional Democrats also used the legislation to target several policies of former President Bush.

Under the bill, Mexican-licensed trucks are banned from operating outside commercial zones along the border with the United States. The Teamsters union, which supported Obama's election last year, had sought the move. The Bush administration backed a pilot program to permit up to 500 trucks from 100 Mexican motor carriers access to U.S. roads.

Bush administration restrictions on travel to Cuba were loosened in the legislation, to permit more frequent visits and expand the list of family members permitted to make trips to see relatives on the Communist nation-island.

Rep. Doc Hastings, R-Wash., took aim at a provision that he said would vastly broaden the government's ability to invoke the threat of climate change to halt economic development. "Most all of the shovel-ready projects on the trillion-dollar stimulus bill would in fact be at risk," he said.

Nominally, the provision halts implementation of a Bush-era regulation that lists the polar bear as a threatened species, and Rep. David Obey, D-Wis., and chairman of the House Appropriations Committee, said it would merely give the new administration 60 days to decide its fate.

Democrats also inserted a provision into the bill to end a program that allows students in the District of Columbia to use federal funds to attend private schools of their choice. Boehner, who helped establish the program as part of a political bargain several years ago, called the move "hideous."

'Nationalize' the Banks

Dr. Doom says a takeover and resale is the market-friendly solution.
By TUNKU VARADARAJAN

New York

Nouriel Roubini is always dressed in black-and-white.

I have known him for nearly two years, and have seen him in a variety of situations -- en route to class at New York University's Stern Business School, where he's a professor; over a glass of wine in his boyish loft in Manhattan's Tribeca; at an academic conference, seated sagely on the dais; at a bohemian party in Greenwich Village, at . . . oh . . . 3 a.m. -- and he always, always wears a black suit with a white linen shirt.

And so, in black-and-white he was, earlier this week, when he rushed into the office of Roubini Global Economics, his consulting firm in downtown Manhattan, and offered a breathless apology to this correspondent, who'd been waiting for half an hour. "Really sorry I'm late! Charlie Rose taped for way longer than he said he would."

Mr. Roubini -- a month short of 50 -- is in huge media demand, the nearest thing to a rock-star among the economists who hold our fate in their hands these days. The peculiar thing, of course, is that he's in demand because he specializes in predictions of gloom. (He has earned himself the sobriquet of "Doctor Doom.") In person, though, he's anything but a downer.

The man has instant impact on public debate. An idea he floated only last week -- that our "zombie banks" be temporarily nationalized -- aired first on Forbes.com, where he writes a weekly column. It has evolved, in the space of just a few days, from radical solution to almost received wisdom.

Last Sunday on ABC, George Stephanopoulos asked Lindsey Graham, the conservative Republican senator, what he thought about all this talk of bank nationalization. Mr. Graham said that he wouldn't take the idea off the table. And on Wednesday, Alan Greenspan told the Financial Times that "it may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring."

Mr. Roubini tells me that bank nationalization "is something the partisans would have regarded as anathema a few weeks ago. But when I and others put it in the context of the Swedish approach [of the 1990s] -- i.e. you take banks over, you clean them up, and you sell them in rapid order to the private sector -- it's clear that it's temporary. No one's in favor of a permanent government takeover of the financial system."

There's another reason why the concept should appeal to (fiscal) conservatives, he explains. "The idea that government will fork out trillions of dollars to try to rescue financial institutions, and throw more money after bad dollars, is not appealing because then the fiscal cost is much larger. So rather than being seen as something Bolshevik, nationalization is seen as pragmatic. Paradoxically, the proposal is more market-friendly than the alternative of zombie banks."

In any case, Republicans must now temper their reactions, he says. "The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."

So, will the highest level of government be receptive to the bank-nationalization idea? "I think it will," Mr. Roubini says, unhesitatingly. "People like Graham and Greenspan have already given their explicit blessing. This gives Obama cover." And how long will it be before the administration goes in formally for nationalization? "I think that we're going to see the policy adopted in the next few months . . . in six months or so."

That long? I ask. "Six months from now," he replies, "even firms that today look solvent are going to look insolvent. Most of the major banks -- almost all of them -- are going to look insolvent. In which case, if you take them all over all at once, you cause less damage than if you would if you took over a couple now, and created so much confusion and panic and nervousness.

"Between guarantees, liquidity support, and capitalization, the government has provided between $7 trillion to $9 trillion of help to the financial system. De facto, the government is already controlling a good chunk of the banking system. The question is: Do you want to move to the de jure step."

Yet another reason why bank nationalization is a good idea, Mr. Roubini continues, is that "we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.

"So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they're stronger! Nationalization -- or 'temporary receivership,' if you like, if the N-word is a political liability -- is an occasion to undo the sort of consolidation that has created an even bigger systemic problem. And the only way to do it is by essentially taking them over and breaking them up."

Here, I ask Mr. Roubini whether he has been more right -- more prescient -- in his reading of the economic downturn than all the other famous bears in America. After all, judging by the attention paid to him in the press, it is hard not to conclude that he is the leading guru of the current recession, or "near-depression," as he often calls it. My question, remarkably, induces in him some diffidence. "I don't want to personalize the analysis, you know . . . because, first of all, there were many people who got many of the elements right.

"People like [Robert] Shiller were very worried about the housing bubble. People like Steve Roach were worried about an economy based on asset bubbles leading to consumption bubbles that were unsustainable. People like Ken Rogoff talked about global imbalances in the current account deficit not being sustainable. Nassim Taleb has been worrying for a while about 'fat tail' events . . . . So lots of people signaled concern about things. I was one of those who put the dots together and thus gave a more fleshed-out picture."

To Mr. Roubini, the most interesting question isn't the one of who got it right. Instead, he asks why we "over and over again, get into these periods of irrational exuberance, when not only is there an asset bubble and a credit bubble, but people believe these are sustainable over a long time -- Wall Street, policy makers, rating agencies, academics, journalists . . . ."

What exactly is Nouriel Roubini's economic philosophy? "I believe in market economics," he says, with some emphasis. "But to paraphrase Churchill -- who said this about democracy and political regimes -- a market economy might be the worst economic regime available, apart from the alternatives.

"I believe that people react to incentives, that incentives matter, and that prices reflect the way things should be allocated. But I also believe that market economies sometimes have market failures, and when these occur, there's a role for prudential -- not excessive -- regulation of the financial system. The two things that Greenspan got totally wrong were his beliefs that, one, markets self-regulate, and two, that there's no market failure."

How could Mr. Greenspan have been so naïve, I ask, hoping to get a rise. "Well," says Mr. Roubini, "at some level it's good to have a framework to think about the world, in which you emphasize the role of incentives and market economics . . . fair enough! But I think it led to an excessive ideological belief that there are no market failures, and no issues of distortions on incentives. Also, central banks were created to provide financial stability. Greenspan forgot this, and that was a mistake. I think there were ideological blinders, taking Ayn Rand's view of the world to an extreme.

"Again, I don't want to personalize things, but the last decade was one of self-regulation. But in the financial markets, without proper institutional rules, there's the law of the jungle -- because there's greed! There's nothing wrong with greed, per se. It's not that people are more greedy now than they were 20 years ago. But greed has to be tempered, first, by fear of losses. So if you bail people out, there's less fear. And second, by prudential regulation and supervision to avoid certain excesses."

How does Mr. Roubini think the media has covered the financial crisis? "The problem," he says -- after first stating to me that he intends "no offense!" -- "is that in the bubble years, everyone becomes a cheerleader, including the media. This is the time when journalists should be asking tough questions, and I think there was a failure there. The Masters of the Universe were always on the cover, or the front page -- the hedge-fund guys, the imperial CEO, private equity. I wish there had been more financial and business journalists, in the good years, who'd said, 'Wait a moment, if this man, or this firm, is making a 100% return a year, how do they do it? Is it because they're smarter than everybody else . . . or because they're taking so much risk they'll be bankrupt two years down the line?'

"And I think, in the bubble years, no one asked the hard questions. A good journalist has to be one who, in good times, challenges the conventional wisdom. If you don't do that, you fail in one of your duties."

U.S. explores converting stakes in banks:

Fri Feb 6, 2009 6:47am EST
(Reuters) - U.S. officials are examining ways to convert government stakes in banks into ordinary shares as banks accumulate losses, the Financial Times said, citing people close to the discussions.

Policymakers are considering an idea that the government change its existing holdings in the banks, which have taken the form of preferred shares -- non-voting stock that carries a fixed dividend -- into convertible preferred shares that could be converted into common stock, the paper said.

Under this proposal, the shares would automatically convert into common equity if there was a decline in the bank's health, as measured by its tangible equity ratio, for example, the paper reported.

The government may also make future capital injections in the form of such convertible preferred shares, the paper said.

The Obama administration is considering an expansion of the Federal Reserve's consumer-lending facility, known as the Term Asset-Backed-Securities Loan Facility (TALF) that could potentially buy up toxic assets clogging the system, the Wall Street Journal said, citing people familiar with the plans.

Under TALF, announced in November 2008, the Federal Reserve Bank of New York will lend up to $200 billion to holders of securities backed by student, auto, and credit-card loans.

The Obama administration is trying to expand the TALF to provide financing for other older assets, such as mortgage-backed securities, the WSJ said.

The Treasury did not immediately reply to a Reuters email, which was sent outside of normal business hours, seeking comment.

U.S. Treasury Secretary Timothy Geithner will unveil the Obama administration's intensely awaited plan for strengthening the financial system in a Monday speech, a Treasury official told Reuters on Thursday.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Andrew Macdonald)

Obama Hails Stimulus Passage as 'Major Milestone'

By Michael D. Shear
CHICAGO -- President Obama today called congressional passage of his stimulus plan "a major milestone" in efforts to turn around the nation's economy, and he said he would soon sign the massive legislation into law.

The comments, in his weekly Internet and radio address, came just hours after a late-night vote in the Senate gave final approval to the $787 billion spending and tax cut plan.

In the address, Obama said the plan would "ignite spending" in the country, and he praised the members of Congress -- almost exclusively Democrats -- who "came together in common purpose to make it happen."

He also promised skeptical listeners that the government's poor track record of wasting money would not be repeated this time.

"Our goal must be to spend these precious dollars with unprecedented accountability, responsibility, and transparency," he said.

"Once the plan is put into action, a new Web site -- recovery.gov -- will allow any American to watch where the money goes and weigh in with comments and questions. And I encourage every American to do so," he said. "Ultimately, this is your money, and you deserve to know where it's going and how it's spent."

The president warned that the stimulus package, one of the largest spending plans ever passed by Congress, was only part of what will be necessary to right the economy.

He said the weeks to come will require efforts to fix the banking system, get the housing industry back on its feet and reform regulatory structures that failed to catch the problems in the first place.

He also promised to submit a budget later this month that will "begin to restore the discipline these challenging times demand."

He said deficit spending is necessary to jump-start the economy. But he said that the country's "long-term" goal must be to tame the deficit.

"Our long-term economic growth demands that we tame our burgeoning federal deficit; that we invest in the things we need, and dispense with the things we don't," he said.

After weeks of sobering, even depressing speeches, Obama's address ended on a hopeful note, quoting former president John F. Kennedy, who said, "Do not pray for easy lives. Pray to be stronger men. Do not pray for tasks equal to your powers. Pray for powers equal to your tasks."

Obama said: "America, we will prove equal to this task. It will take time, and it will take effort, but working together, we will turn this crisis into opportunity and emerge from our painful present into a brighter future. After a week spent with the fundamentally decent men and women of this nation, I have never been more certain of that."

The Stimulus Package Exceeds the GDP of All But 14 Countries

by MICHAEL KRASKIN
FEB 12TH 2009 12:45PM
The Gross Domestic Product of a country is the market estimate of the collected value of all goods and services produced by that country in a given year. Not including the EU as a single entity, the United States had the highest in 2007 according the IMF with a GDP of $13,807,550,000,000. By this estimate, the stimulus package, valued at $789,000,000,000 represents 17.5% of our total GDP (gulp).

It's really hard to wrap my mind around just what $789 billion is, as I've never had to deal with numbers that large in my life, especially with regards to finances. In fact, I need to keep counting 0s just to make sure I'm representing these numbers correctly. One way I tried to put this into perspective for myself was to take a look at the IMF 2007 report to see how our little 17.5% stimulus matched up against the GDP of other countries. I was hoping to list for you every country it exceeded.

Turns out, it's a lot easier to list the ones that it didn't. I'll list the ones that did below the fold.

Countries With a Higher GDP Than $789 Billion

Australia
Mexico
India
Russia
Brazil
Canada
Spain
Italy
France
United Kingdom
China
Germany
Japan
United States


Please note, South (and North) Korea appear to be missing from the IMF's data. Other lists I have found show South Korea as having a GDP in excess of $789 billion. I will endeavor to find out why this is left off of the list the IMF provides on its website.

UPDATE: I just had an interesting back and forth with Erick Erickson of Red State. He pointed out that if the temporary programs in the bill don't turn out to be temporary, that likely puts the cost at $3 trillion, meaning the only countries with a GDP in excess of the bill are the US, Japan, Germany, and China. Read Erick's assessment of the likelihood of job creation here.

For the 157 countries on the IMF's chart that have a GDP under $789 billion, click below the fold.

Kiribati
São Tomé and Príncipe
Tonga
Dominica
Guinea-Bissau
Solomon Islands
Timor-Leste, Dem. Rep. of
Comoros
Samoa
Vanuatu
St. Kitts and Nevis
St. Vincent and the Grenadines
Grenada
Gambia, The
Seychelles
Liberia
Djibouti
St. Lucia
Burundi
Maldives
Guyana
Antigua and Barbuda
Bhutan
Belize
Eritrea
Cape Verde
Lesotho
Sierra Leone
Central African Republic
Suriname
Togo
Mauritania
Swaziland
Fiji
Rwanda
Barbados
Montenegro
Malawi
Tajikistan
Mongolia
Guinea
Niger
Moldova
Benin
Nicaragua
Papua New Guinea
Haiti
Bahamas, The
Burkina Faso
Mauritius
Mali
Chad
Namibia
Malta
Congo, Republic of
Macedonia, Former Yugoslav Republic of
Madagascar
Mozambique
Cambodia
Armenia
Afghanistan, Rep. of.
Georgia
Nepal
Congo, Democratic Republic of
Albania
Senegal
Jamaica
Gabon
Uganda
Paraguay
Brunei Darussalam
Honduras
Botswana
Equatorial Guinea
Bolivia
Myanmar
Ghana
Bosnia and Herzegovina
Jordan
Tanzania
Bahrain
Ethiopia
Panama
Côte d'Ivoire
Iceland
El Salvador
Cameroon
Trinidad and Tobago
Estonia
Cyprus
Uzbekistan
Uruguay
Lebanon
Turkmenistan
Costa Rica
Kenya
Azerbaijan
Sri Lanka
Guatemala
Tunisia
Lithuania
Syrian Arab Republic
Bulgaria
Serbia
Oman
Dominican Republic
Belarus
Ecuador
Slovenia
Sudan
Luxembourg
Croatia
Angola
Libya
Qatar
Bangladesh
Slovak Republic
Morocco
Kazakhstan
Peru
Egypt
New Zealand
Algeria
Hungary
Ukraine
Pakistan
Philippines
Singapore
Chile
Israel
Romania
Nigeria
Czech Republic
Malaysia
United Arab Emirates
Colombia
Hong Kong SAR
Portugal
Thailand
Finland
Argentina
Ireland
South Africa
Iran, Islamic Republic of
Denmark
Greece
Austria
Saudi Arabia
Taiwan Province of China
Norway
Poland
Switzerland
Indonesia
Belgium
Sweden
Turkey
Netherlands

'Obamaland' Author Predicts Obama Will Spend America Into Another Depression

Posted 02/12/2009 ET


HUMAN EVENTS editor Jed Babbin's exclusive interview with James Delingpole, author of “Welcome to Obamaland: I Have Seen Your Future and it Doesn’t Work”:

Jed Babbin: James Delingpole: You claim to have seen America’s future because Britain is living it. What do you predict for us under Obama’s administration?

James Delingpole: Because it’s easy to see his path to spend America into another depression. And don’t forget: Your Speaker of the House, Nancy Pelosi, wondered aloud why they call it “the Great Depression.” She mused that it wasn’t so great. But that’s where you’re headed.

JB: Why?

JD: They’ve got an agenda that can only be described as a smorgasbord of expense and misery. Higher taxes. Number two, aruinously expensive, ever-expanding, ever-worsening universal heath care system. I predict increased government interference in areas of your life where you might feel that government has no darned right to interfere. For example, things like your freedom to hunt, how you look after your pets -- even rules governing how you dispose of your trash. You might even have spy cameras in your trash cans like we do in England.

JB: Whoa, whoa -- spy cameras in your trashcans?

JD: Yeah, sounds crazy but it’s true. We now have places where you have spy cameras in your trashcans to find out whether you are disposing of your rubbish in an ecologically-sound way or not. This is happening in England now. Then there are rules governing how much you eat, how much you drink. Actually, just out of interest, this is one of the many unpleasant side effects of a state health care system. The state believes that given that it is so generously providing you with medicine it therefore ought to take control of your body: what kind of food you eat, whether or not your smoke. Something similar applied in Nazi Germany.

JB: Let’s go right to health care. We are promised a health care system that is going to take better care of us. It’s going to bring cost down. Well, ... that’s what they’re promising. Didn’t Mr. Blair promise that too?

JD: Oh my goodness. Do you know how much our National Health Service costs in Britain?

JB: No idea.

JD: 95 billion pounds. That is about 20 billion pounds more than we spend on education. That’s about three times our defense budget. It is the single biggest government department of all.

JB: But now, that pays for everything, right? I mean, it pays everybody’s medical costs everything.

JD: Well, that’s the theory. Free universal health care at the point of need. The problem is, I think something like 60 % of doctors do not use the system. We have the lowest cancer survival rates of any, any G-8 nation. The more we pumped into our health care system, the worst it seems to have got. All that money has gone into layers of administration. Our National Health Service, I believe, is the world’s third biggest employer after the Chinese army and the Indian state railways. It’s maybe the envy of the third world, but with all the health tourists we get coming to sponge off our system. But if you’re a taxpayer who has to use this system, it’s, it’s a joke, and, if Obama’s talking about it costing you between 50 billion and 65 billion dollars…

JB: Right.

JD: If it costs anything less than a ten times that, I’m a banana. It’ll be ruinous. And, get this: once you’ve started it, it will never stop. It will suck up more, and more, and more of your money. Whichever administration comes in in eight years time to replace -- yes, I’m afraid it will be eight years -- to replace Obama, they aren’t going to be able to shut off the faucets that easily.

JB: But the issue of education: liberals are always telling us that everything they do is “for the children.” And President Obama wants a big part of his so-called “economic stimulus” bill for school construction. Is that what worries you?

JD: No, not entirely. The spending is only half the problem. With Obama and other entirely dedicated liberals, you get elitism. Excellence, and traditional learning will be replaced by touchy-feely, esteem-boosting, non-competitiveness. You’ll see old-fashioned subjects being hijacked as a way of advancing the left liberal agenda. For example, geography will no longer be about rivers, and capitals, and borders -- physical geography. It will be about feeling guilty about global warming and why it’s all our fault. History will become about -- not about the greatness of Jefferson and Washington, it will be about feeling guilty for the slave trade.

You will also see in the name of multiculturalism still further surrenders to the aggression of Islam. You will see more affirmative action programs, which of course are supposed to make things fairer but will inevitably make things less fair and create greater social resentment and greater social injustice. You will see further unsustainable immigration, both legal and illegal, but what you will not see is the assimilation that America so desperately needs if immigration is ever gonna work. You’ll see further division of America into Spanish speaking and English speaking parts, because nobody can be bothered to insist that, that immigrants learn English as they should.

JB: Now you claim to be able to see into the future for America. Why do you think Mr. Obama is going to do to England, do to America rather, what Mr. Blair did to England?

JD: Because I think they come from the same mold. For a start, they’re both ex-lawyers and they are people of the liberal left. When the English electorate, British electorate, voted in Tony Blair in 1997, I think a lot of them thought they were getting something else. A bit like people in America now see Obama as this wonderful all-purpose solution to all their problems . When Blair started talking about this wonderful thing called “the Third Way,” people really were gullible enough to believe in this emperor's new clothes, which is what it was. Blair gave this impression that he had this wonderful new idea where you could have on the one hand a fully functioning capitalist system with healthy economy and on the other hand social justice. And he would achieve this through a magical process of triangulation.

JB: Let me stop you right there. That sounds an awful lot to me like the promise of hope and change.

JD: Yea absolutely, the audacity of hope. Can I just say that hope is not an audacious thing, hope is a desperate thing. It should have been called the Desperation of Hope.

JB: Mr. Obama clearly revealed himself through Joe the Plumber with that remark about wanting to redistribute wealth. What did Mr. Blair do? Did he go about redistributing the wealth of England?

JD: Yes, he did it. As I’m sure you know he has a nasty henchmen called Gordon Brown, who was his chancellor of the exchequer

JB: And is now the prime minister.

JD: Gordon Brown is much more obviously left wing than Tony Blair, much more avowedly left wing -- he’s an old school socialist. And in order to disguise the socialist nature of the government, what they did was introduce these stealth taxes. The first thing, the first major policy move that Gordon Brown made was he gave independence to the Bank of England to set interest rates and people decided to interpret this as a sign of bi-partisan, pragmatic, business-friendly, market-savvy government. And it fooled a lot of right wing commentators, It gave Brown a false reputation for fiscal responsibility which effectively gave him pretty much a free pass over the next few years to drift as leftward as he liked. He did this very sneakily, mind you, in the form of “stealth taxes”

Rather than bump up income tax by 5%, which is effectively what you did in taxation terms, instead he hid these taxes in other forms he started taxing pensions started taxing the pension funds so that the public the public didn’t see these very complicated financial instruments. Americans should expect this same sort of stealthy taxation,.

JB: Didn’t Mr. Blair also sort of tilt British politics toward the green side? He was trying to make everything eco-friendly?

JD: Yes, he did, but that came later on in his regime. I think that whole green thing really is a phenomenon of the last 5 or 6 years rather than the first 5 years of Blair’s regime. I mean, he was in office about 10 years.

JB: So we have an issue of raising taxes, redistributing wealth going to the global warming whacko side.

JD: Yeah, I don’t think Americas realize, preoccupied as they are with their own economic woes, just how badly screwed the English economy is of all the G-8 nations (the IMF has told us this [is] the one officially least likely to come out of the recession any time soon). And the reason for that is we have just enjoyed a period of the most extreme tax and spend socialism.

We’ve been spending money that we don’t have. One of the worst things that Gordon Brown did was sell our gold reserves in order to fund this spending spree. He sold them at about a quarter of the price, I think. When he sold, it was about 200 dollars an ounce and it's now about $850 an ounce -- aquarter of the price, and then he went crazy with the money -- our money -- like it was his money and he’d just won the Lottery. And now of course he can't keep to his spending plans because he’s not getting the tax income because the economy is shrinking.

JB: In terms of some of the other things you see coming from Mr. Obama, I mean, I’m wondering if things like restrictions on political speech and free speech have come about in England and how they work. We’re looking down the gun barrel of this so-called “Fairness Doctrine.”

JD: One of the things that delighted me in coming to America is realizing how much more freely I can speak my mind over here than I can in England. This is partly of course because I’ve been talking to some good old right wing talk shows. I felt very much at home there. But it's mainly, I think, because there are various forms of censorship in Britain ranging from direct censorship -- for example we have new laws circumscribing what they call hate speech which is basically a euphemism for any criticism of Islam whatsoever.

There are new rules actually telling comedians the sort of jokes they're allowed to tell. You are not allowed to tell jokes about religion anymore. But it’s not religion in general. You know people have been mocking Christianity for years -- look at Monty Python’s “Life of Brian,” a very funny film that is still legal. But when it comes to the “religion of peace,” people start getting uncomfortable.

Without ever acknowledging it, our government has introduced this two-tiered legal system where there’s one rule for everyone else and another special one for the Muslims in case they get upset about anything. This is the direct form of censorship I mentioned. Then there’s indirect censorship in the form of what you might call self-censorship.

The sort of views I’m expressing in America I wouldn’t feel very comfortable on British radio.

JB: Well in terms of that, one question about the BBC itself. I mean, it seems to me that that’s part of what the American Revolution was about. Taxation without representation. Conservatives can’t get an equal voice on BBC, but everybody pays the BBC tax, right?

JD: Yes, just digressing for a second. You might make the same point about Europe. Europe is a classic example of taxation without representation. 80% of all our new laws in Britain -- 80%! -- we have no control over. They come direct from the EU and are rubber stamped by their amen corner in the British left liberal government. But, sorry, to go back to your point about the BBC, yea its absolutely true. Dear old BBC, they try, they want to be neutral, but the problem is because everyone that they employ is recruited through a left wing newspaper called The Guardian, which is where they run all their media recruitment ads, their idea of neutrality, in the center of the road, is what anyone else would call quite far left. So what do you do? As a right-winger, I’m sometimes wheeled on as the sort of freak to scare the babies and the grandmothers. I’m the comic turn.

JB: Well we see some of these things coming, and I don’t know that we can see that in America’s future. Do you think were in that much danger of this sort of thing?

JD: Yes.

JB: Why?

JD: Well, because of The Fairness Doctrine I see it happening. Look, America may try and delude itself that it has always been a land of free speech and the center ground and common sense. And you talk to any of my left liberal friends, and they would tell you that, but look at Woodrow Wilson. Look at FDR. Look at what Kennedy would have done if he’d lived. Look at Lyndon Johnson. These were all what Jonah Goldberg would call approximations of liberal fascist dictatorships.

JD: Can I give you one example which is kowtowing to the Green lobby? I cannot understand how, as the world approaches its greatest depression since the 1930s, how President Obama can talk about nailing his clothes to the mast of this whacko ideology which was developed during a time of economic plenty by krypto communists who joined the green movement because they needed a new base from which to destroy the capitalist system after the Berlin Wall came down. Does he really imagine that imposing carbon taxes on U.S. industry is going to help your economy in its direst hour of need?

JB: Now you’ve tried that already in Britain, haven’t you?

JD: Yes, we have, and, let me tell you, it hasn’t just affected us negatively in our economy, it has also affected our energy security by lessening it.

JB: And jobs, I suspect.

JD: And jobs too, yes. Because the Green Lobby has so bullied successive governments, but particularly this left liberal one, into ducking the issue of nuclear power. Nobody has plucked up the courage to say we need to generate power, nuclear power, we must build nuclear power stations. It takes about 10 years to build a nuclear power station. The result of this is that we are reliant on Russia for our gas supplies. We got rid of most of our coal because of the battle that Margaret Thatcher fought with the unions in the 1980s. We have no nuclear power. But our Labour government has committed us to following the impossible carbon-reduction agenda of the bullying EU into building all these wind farms which don’t work when it’s not windy enough and don’t work when it’s too windy. All they do really is ruin the countryside. Which is kind of weird when you think that environmentalists are supposed to love nature.

JB: Parallel to all the green stuff that we hear from Mr. Obama, I see in England something that is really much as dark and probably as restrictive of personal freedom. I’m not sure its quite as much effect on the economy. We have a very large and very active hunting and shooting community here. Now Britain has already banned fox hunting, and the Countryside Alliance folks are telling me well the next thing they’re going to do is ban shooting. Where is this coming from? Do you see roots of this here in America?

JD: Well you’ve got PETA as we’ve got PETA. The problem with the animal rights lobby is give them an inch, and they’ll take a mile. First of all, fox hunting goes, then they start coming after the shooters, next it’ll be the fishermen. They’re never satisfied. Once you believe animals have rights, what does PETA call fish now? Is it sea kittens?

JB: Sea kittens?

JB: Is this ban on fox hunting another stealth infringement on peoples’ rights and privileges? Did Tony Blair just slip that past Britons?

JD: That’s exactly what Tony Blair did. It was his way of winning over the left because, particularly with fox hunting, which is associated with the English upper class. In fact, one Labour MP explicitly stated that he saw this as revenge for the miners strike. Which is when Margaret Thatcher, in order to destroy the dinosaur unions’ power base, broke the mining unions. And you know, I mean, I’ve been fox hunting, which is the most fun thing you can do with your clothes on or off.

JB: Hmm. I’m a fan of internal combustion, not horses, so let’s leave that one there.
I would like you to think for just a moment about the restrictions of religious freedom in a number of places over hear, and over here restriction of religious freedom takes the form of people trying to drive God out of the public place. It seems to me it’s a different form over in England, that the only religion that is protected anymore is Islam. Is that true and how does that arise and do you see that that happens here?

JD: It’s because Islam is so much more shrill and less tolerant than any other religion. Despite its claims to be the religion of peace. I think one of the curses of the relative peace we’ve enjoyed since World War II and the Cold War is that people have forgotten in our society what it means to stand up for your principles, which is why militant Islam has got us over a barrel.

We’re used to this idea that we should all care for each other and live and let live and all that. And suddenly we’re confronted with this very hard-line religion which does not take prisoners and does not compromise, and our way of dealing with that so far as a society has been to think that, if we just give them a little what they want, they’ll be happy and go away. And they won’t.

JB: James, many thanks for talking to us.

JD: My pleasure.

Ruin Your Health With the Obama Stimulus Plan: Betsy McCaughey

Commentary by Betsy McCaughey

Feb. 9 (Bloomberg) -- Republican Senators are questioning whether President Barack Obama’s stimulus bill contains the right mix of tax breaks and cash infusions to jump-start the economy.

Tragically, no one from either party is objecting to the health provisions slipped in without discussion. These provisions reflect the handiwork of Tom Daschle, until recently the nominee to head the Health and Human Services Department.

Senators should read these provisions and vote against them because they are dangerous to your health. (Page numbers refer to H.R. 1 EH, pdf version).

The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.

But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (442, 446). These provisions in the stimulus bill are virtually identical to what Daschle prescribed in his 2008 book, “Critical: What We Can Do About the Health-Care Crisis.” According to Daschle, doctors have to give up autonomy and “learn to operate less like solo practitioners.”

Keeping doctors informed of the newest medical findings is important, but enforcing uniformity goes too far.

New Penalties

Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time” (511, 518, 540-541)

What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional. In his book, Daschle proposed an appointed body with vast powers to make the “tough” decisions elected politicians won’t make.

The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.

Elderly Hardest Hit

Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).

The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.

In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.

Hidden Provisions

If the Obama administration’s economic stimulus bill passes the Senate in its current form, seniors in the U.S. will face similar rationing. Defenders of the system say that individuals benefit in younger years and sacrifice later.

The stimulus bill will affect every part of health care, from medical and nursing education, to how patients are treated and how much hospitals get paid. The bill allocates more funding for this bureaucracy than for the Army, Navy, Marines, and Air Force combined (90-92, 174-177, 181).

Hiding health legislation in a stimulus bill is intentional. Daschle supported the Clinton administration’s health-care overhaul in 1994, and attributed its failure to debate and delay. A year ago, Daschle wrote that the next president should act quickly before critics mount an opposition. “If that means attaching a health-care plan to the federal budget, so be it,” he said. “The issue is too important to be stalled by Senate protocol.”

More Scrutiny Needed

On Friday, President Obama called it “inexcusable and irresponsible” for senators to delay passing the stimulus bill. In truth, this bill needs more scrutiny.

The health-care industry is the largest employer in the U.S. It produces almost 17 percent of the nation’s gross domestic product. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry. Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This stimulus is dangerous to your health and the economy.