September 27, 2010

The 2010 Election: Turning Point…or Point of No Return?

by Hal Gershowitz

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In mid August under the heading “The Perversion of American Democracy:  Death by a Thousand Cuts” we opined that in a series of continual steps the current Administration was subverting the underpinnings of our form of government by usurping and exercising power proscribed by the Constitution.  Over time, we said, this can amount to the death of federalism by a thousand cuts.

Sadly, we may have understated the speed with which our 234-year-old constitutional system with its built in allocation of power between the national government, the states and individuals and the checks and balances between the three branches of the federal government is eroding.  What is now more visibly apparent is the biggest power grab by an imperial Executive Branch in the last 75 years and the Congressional elections of 2010 may be our only real chance to stop the bleeding before we wake up and find a fundamentally different America. Far fetched? Alarmist? We don’t think so.

In case after case, the public has shown its disapproval of the policies of the current Administration, both in its legislative agenda and the pompous pronouncements of the president and his appointees.  There was no consensus to radically change our health care system so the Administration resorted to deceit, legislative bribes and procedural chicanery to get it done.  The damage to health care delivery and affordability is only now beginning, but for Mr. Obama who promised fundamentally to change America, it is a cornerstone of the change (with more to come) he really had in mind.  It signals that more and more Americans in the years ahead will be dependent on big government.

Although it has been pulled back from this year’s legislative agenda because of widespread opposition, the so-called cap and trade legislation is nothing more than a device for the government to control a vast swath of the economy, a coveted goal of the political left.

Then, perhaps the granddaddy of them all:  the misdirection of a trillion dollars of  “stimulus” money that added massive debt but produced few private sector jobs.  Instead this money has been used to maintain or expand the number of people employed by state and local government.  Instead of forcing states and cities to face the unsustainable burden of stubbornly maintaining and expanding bloated public payrolls and the unfunded, and often outrageous, benefit programs facing them, the Administration, under the guise of saving jobs, is bent on expanding public payrolls to the point where the private sector cannot produce sufficient economic expansion (and the additional tax dollars such expansion would yield) to cover the load.  What is the alternative for state and local governments when stimulus dollars are no longer available to help balance their budgets?   They can’t print money so they either must raise taxes or default on their debt as Harrisburg, Pennsylvania came close to doing two weeks ago.

And on top of that the Administration wants to raise taxes on the “wealthy” (defined as those individuals who make over $200,000 per year).  Mr. Obama inveighs against the additional national debt that would be attributable to not raising taxes on this “wealthy” group by saying that he can’t justify not raising the taxes of millionaires and billionaires.  Amazing isn’t it how everyone earning over $200,000 suddenly became millionaires, let alone billionaires?  They must be investing more wisely than the rest of the populace and not be keeping their savings in bank deposits or CDs now generally paying one percent or less as a result of government policies.

There is a common thread here and it is all coming together at warp speed.  The thread is redistribution of wealth and it is accomplished by programs that punish private productivity and reward those who depend on the government.  “The wealthy must pay their fair share,” our president tells us.  Apparently, the fact that the top five percent of earners pay sixty percent of federal income taxes, the bottom fifty percent pay only three percent of the collected taxes and more than forty percent now pay no tax at all is not fair share enough.  By recent estimates, thirteen percent of Americans pay no income or payroll taxes.  On the other hand, more than forty-four percent of Americans live in households that are receiving one form of government subsidy or another. To be sure these benefits cannot be summarily withdrawn but they must be controlled, reduced or capped.  But the continued march toward more socialist type programs will irretrievably change our form of government and hobble our once successful capitalist engine.  We are simply heading in the wrong direction.

Alberto Alesino, a professor of political economy at Harvard pointed out in a recent Wall Street Journal op-ed piece that a review of over two hundred fiscal adjustments (economic expansion or retraction) in 21 countries over a 40-year period shows that spending discipline and tax cuts are the way to spur economic growth.  To the contrary, past recessionary adjustments were attributable mostly to tax increases.  This isn’t exactly rocket science. There is no faster way to reduce most any activity than to tax it.

In 2008 we elected a president we believed to be a political moderate and gave him an overwhelming Congressional majority with which to govern.  However, once in office, he chose not to govern as a moderate, but from the far left, and the damage to our economy so far has been substantial.  Unemployment went from just under eight percent to almost ten percent despite the so-called stimulus money and the president’s promise to create two million jobs.

Mr. Obama has put in place policies and people who, at every chance they get, will further “transform America” (as Mr. Obama put it) toward his now obvious effort to have government take over increasing swaths of the economy and, in so doing, prevent entrepreneurs and the private sector from doing what they have always done:  spur economic growth.  Thus far his policies have put the nation in grave fiscal trouble and put our cities and states on the verge of insolvency.  This profligate never ending spending of resources we no longer have, has created enormous angst throughout the country, if not a crisis atmosphere, which is why the 2010 elections have taken on such enormous importance, far more than mid-term elections typically do.  A recent Wall Street Journal editorial eloquently stated the problem:

“The moral claim of Obamanomics is that it ensures that everyone pays his “fair share,” but its early returns show this agenda is producing more poverty.  In their obsession with income shares and how many people have how much wealth, the Obama Democrats are imposing policies that ensure only that there will be less wealth for everyone to spread around.”

As former British Prime Minister Margaret Thatcher once said about such policies, “sooner or later you run out of other people’s money.”  All of this is bad enough.  But the abuse of power goes far beyond economic and redistributive policies.  The president has governed as if constitutional separation of powers requirements don’t apply to him.  Instead of subjecting his appointees to the necessity of Senate confirmation he has in over 20 cases simply appointed what should be nominees for cabinet and subsequent posts to become presidential advisors (so-called czars) with virtually unchecked authority.  This past week he named the controversial Elizabeth Warren to “set up” the new Bureau of Consumer Financial Protection, which was created under the financial reform legislation.  As a result of many of her business bashing remarks as an academic, there was extreme doubt as to whether she could muster the necessary confirmation vote in the Senate.  No problem for Mr. Obama; she takes “office” anyway, as an advisor to the Secretary of the Treasury with the same portfolio she would have had if she were the confirmed head of the new agency.

The Washington Post in its lead editorial on September 19 referred to this action as an “end run of the Senate confirmation process.”  Together with complete and utter disregard for the rule of law in the government takeover of Chrysler, where his tactics amounted to the virtual confiscation of the rights of bondholders so as to favor his union friends his actions seem more like something we would have expected from a Latin American caudillo and not an American president.

All of this turns the election on November 2 into a referendum on whether the American people send a strong message to this Administration and the current Congressional leaders that these abuses of power must stop.  The mantra of the voting public should be the slogan that, in 1775, adorned the flag of the Commandant of the United States Navy:  “Don’t tread on me.”

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3 responses to “The 2010 Election: Turning Point…or Point of No Return?”

  1. irwin yablans says:

    Far fetched,alarmist…….I think so.

    • We truly hope Mr Yablans is correct. However, we take the President at his word when he promised to “fundamentally transform America.” Indeed, we believe he is intent on doing just that. At this moment the national debt stands at $13,479,520,424,970.74 or $43,595.90 per person (elderly and retired persons, working Americans and every child and infant at birth) and growing and the Administration, with the help of our current Congress is piling it on at warp speed (We just added another $1.9 trillion last year. That a clear majority of the people clearly do not want his most transformative and most expensive program (Obamacare) hasn’t fazed the White House. Our greatest leaders, Democrats and Republicans alike, have often opined that government should not impose transformative change on the country without a clear consensus of the people. The lack of such a consensus also seems not to have fazed the President or Congress. We hope we will have the opportunity to revisit this concern in the future and acknowledge that we were wrong and over reacting. That would, indeed, be a pleasant surprise. Unfortunately, every indication suggests otherwise.

  2. Bill_H says:

    Prediction is a life skill that requires a gut understanding of cause & effect. Sadly, many people do not possess it today, and in fact it has been generally suspended as a part of the overal suspension of reason, intelligence and critical thinking required by the enforcers of Cultural Marxism. But the ability to make predictions within the electorate is a life skill that we need now more than ever if this Republic is to survive.

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