The further to the left or the right you move, the more your lens on life distorts.

Sunday, September 22, 2013

Banana Republic

Just last week, Barack Obama commented on those with the temerity to suggest that maybe, just maybe, we should soberly consider what the continual raising of the debt ceiling means. No one, and I mean no one, is suggesting that the United States of America should default on our debt (although true to form, Obama created that strawman and then attacked it). But raising the debt ceiling opens the door to profligate spending (something that the President and his supporters seem to embrace with little or no consideration of the consequences). The president suggested that those who want to consider our financial situation soberly actually want to turn the USA into a "banana republic" [his words].

And then, in another speech, the President stated, “Raising the debt ceiling, which has been done over a hundred times, does not increase our debt.”

Huh? If we open the door to new debt, it's an absolute certainty that we will incur new debt. The United States has run trillion dollar deficits in each of Obama's first four years in office and is projected to run at least a $700 billion deficit this year. Is it possible that the President doesn't understand that each deficit adds to the debt?

Mark Steyn comments on the deficit and on spending:
Is all this spending necessary? Every day, the foot-of-page-37 news stories reveal government programs it would never occur to your dimestore caudillo to blow money on. On Thursday, it was the Food and Drug Administration blowing just shy of $200 grand to find out whether its Twitter and Facebook presence is “well-received.” A fifth of a million dollars isn’t even a rounding error in most departmental budgets, so nobody cares. But the FDA is one of those sclerotic American institutions that has near to entirely seized up. In October 1920, it occurred to an Ontario doctor called Frederick Banting that insulin might be isolated and purified and used to treat diabetes; by January 1923, Eli Lilly & Co were selling insulin to American pharmacies: A little over two years from concept to market. Now the FDA adds at least half-a-decade to the process, and your chances of making it through are far slimmer: As recently as the late Nineties, they were approving 157 new drugs per half-decade. Today it’s less than half that.

But they’ve got $182,000 to splash around on finding out whether people really like them on Facebook, or they’re just saying that. So they’ve given the dough to a company run by Dan Beckmann, a former “new media aide” to President Obama. That has the whiff of the banana republic about it, too.

And later in the week, the President implied that he would absolutely, positively not negotiate with the hated Republicans to help alleviate some of their financial concerns with respect to Obamacare, the debt ceiling, or the unrelenting and historically high growth of government programs. Obama's spokespeople are suggesting that he might consider negotiating with Iran's Islamist, anti-Western "moderate" President, but the GOP—never!

In fact, in the world according to Barack Obama, the only thing that matters is income inequality and the only solution is higher taxes in an effort to redistribute income to mitigate the problem.

Again Mark Steyn:
With government redistributing more money than ever before, we’ve mysteriously wound up with greater income inequality than ever before. Across the country, “middle-class” Americans have accumulated a trillion dollars in college debt in order to live a less comfortable life than their high-school-educated parents and grandparents did in the Fifties and Sixties. That’s banana republic, too: no middle class, but only a government elite and its cronies, and a big dysfunctional mass underneath, with very little social mobility between the two.

Like to change that? Maybe advocate for less government spending? Hey, Lois Lerner’s IRS has got an audit with your name on it. The tax collectors of the United States treat you differently according to your political beliefs. That’s pure banana republic, but no one seems to mind very much. This week it emerged that senior Treasury officials, up to and including Turbotax Timmy Geithner, knew what was going on at least as early as spring 2012. But no one seems to mind very much. In the words of an insouciant headline writer at Government Executive, “the magazine for senior federal bureaucrats” (seriously), back in May:

“The Vast Majority of IRS Employees Aren’t Corrupt”

So, if the vast majority aren’t, what proportion is corrupt? Thirty-eight percent? Thirty-three? Twenty-seven? And that’s the good news? The IRS is not only institutionally corrupt, it’s corrupt in the service of one political party. That’s Banana Republic 101.
Now, are we a banana republic? Of course not. But as I watch Washington's political elites* make breathtakingly irresponsible financial decisions, and demagogue anyone who suggests that we reign them in, I can only conclude that we're working hard to become one.


Ed Morrissey posts an illuminating graph that confirms that the elites in Washington DC are doing quite well, thank you, and are contributing more than their fair share to income inequality. The red curve represent median income in DC. The blue gray curve represents median income across the United States. Pay particular attention to the slope of the graph in the Obama years:

Update (9/23/2013):

As an example of the kind of delusional economic thinking that has exemplifed leaders of the Democratic party, we get this from Nancy Pelosi, as reported by The Washington Times:
House Minority Leader Nancy Pelosi says Republican-led efforts to rein in government spending are pointless because there is nothing left to cut in the almost $4 trillion-a-year federal budget.

“The cupboard is bare. There’s no more cuts to make. It’s really important that people understand that,” Mrs. Pelosi, California Democrat, said in an interview broadcast Sunday on CNN’s “State of the Union.”
The march toward economic calamity accelerates with every comment like Pelosi's.

Nothing to cut, huh? To say that contention is ridiculous is a gross understatment. To say it is dangerous is just about right. To say it is breathtakingly irresponsible just confirms business as usual in Washington, DC.