At the close of the Constitutional Convention in 1787, Dr. James McHenry, a Maryland delegate, followed Benjamin Franklin from Independence Hall. He recorded a question asked by a lady, directed at Dr. Franklin.

The lady asked, "Well Doctor, what have we got? A republic or a monarchy?"

"A republic," replied Dr. Franklin, "if you can keep it."


"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities." - Ayn Rand

Monday, November 30, 2009

Federal Reserve Concerns = Obama

I'm drawing the bulk of comments below from the Minutes of the Federal Reserve Meeting November 3-4, 2009. It's too much to post on a blog. I'm also relying on an analysis by Investor's Business Daily.

The unemployment rate varies from region to region. The Federal Reserve expects that it will remain in the 10% range nationwide through 2010 and won't drop much in 2011. Small businesses are not powering the "recovery" because credit is tight, there are fears of what the Obama Administration will do (taxation, more regulations, etc.) and the demand for goods and services has not rebounded. The Federal Reserve believes that the US economy will be slow in recovering, and are currently predicting a return to normal in five years, if we don't face another serious national crisis that interrupts the cycle.
"The Democrats...will be heading toward the midterm elections hoping to preserve their 81-seat margin in the House. Vulnerable incumbents will be clamoring for more economic stimulus, but the Obama administration will be constrained by the huge budget deficits needed to bail out the economy."  (IBD)
The Federal Reserve addressed its concerns for the US economy. I'll extrapolate a bit here but it's all in the meeting minutes: Corporate Bail-outs unfairly distributed billions in taxpayer dollars and added to a blooming national debt that is out of control. The "Stimulus Package" didn't stimulate much beyond serving as a vehicle for election day pay-backs. Congress continues to fiddle while Rome burns and wants to tack on $2 trillion in medical costs for a government boondoggle that many of us feel is completely unnecessary. Healthcare reform doesn't mean a public option. It means tort reform, portability, access to markets and common sense measures that won't cost the taxpayer a nickel. 

People understand that Barack Hussein Obama's agenda is all about forced redistribution (theft) of wealth with an eye toward establishing the US as a utopian socialist nation. Business understands where he wants to go and they aren't happy about it. So they'll avoid hiring, they'll avoid maintaining unrealistic inventories and they'll try to survive as best they can. That means no bonuses, no growth and no RISK.
The Fed struggled to answer the basic question that is haunting administration policymakers: Why has unemployment remained so high, even as the economy has started to grow again and the stock market has been on a tear?
The Fed's answer is that businesses, having been burned by the recession, are wary about adding more workers or making new investments. Like consumers who have just discovered the virtues of saving, their prudence — however sensible on an individual basis — is a collective drag on the economy. (IBD)
"Business contacts reported that they would be cautious in their hiring,"..."Indeed, participants expected that businesses would be able to meet any increases in demand in the near term by raising their employees' hours and boosting productivity, thus delaying the need to add to their payrolls." (Federal Reserve)

Now there is a way out. Barack Hussein Obama wouldn't take this course - but there is a way:

* Reduce the size of government. Relinquish to the States the things best handled by the States and focus on dealing with the core issues of greatest concern to the nation as a whole.

* Withdraw the US Military from Afghanistan. Continue the phased withdrawal from Iraq. Consider our national military strategy in terms of our vital interests and avoid "adventurism".

* Focus national resources on eliminating our dependency on foreign oil.

* Become a loyal ally to our friends and a scourge to our enemies. There is a difference between the two and Barack Hussein Obama doesn't understand the concept.

* Reduce federal regulations and return to a free market system. Allow businesses that can't make it to fail. Once those businesses fail the unions won't be happy because the people who buy the bones and build them back up may not have a place for union bosses at the table.

* Avoid knee-jerk reactions to the left wing whackos' dire warnings. Global Warming comes to mind.

* Dismantle the Department of Homeland Security - it's a joke to all who understand its workings. Reconsider what we do and how we do it with an eye toward eliminating massive (expensive) bureaucratic overhead and allow the legions of drones to try to find honest work. America has legitimate security concerns, but that Department, along with the Department of Education, has outlived any usefulness it might have once had.

* Allow the CIA to be the secret intelligence service of the United States once again. It's degraded to the point of redundancy and needs to be rebuilt. It will take years, but best start now.


foutsc said...

Excellent piece! A group of pointy cannot match the collected wisdom of a people and the free market.

Also, "one size fits all" is a discredited concept everywhere but with our bungling feral government.

And yes, abolish Homeland Security. That was just a chip Bush traded to liberal dems to get what we really needed to keep us safe

TSA=Thousands Standing Around

Arby said...


Secretia said...

What would put 15 million people back to work?


LL said...

Secretia wrote: "What would put 15 million people back to work?"

The only way to do it is to (1) Make credit available to small and medium sized businesses and (2) Cut taxes to the sector of America that creates the bulk of jobs.

Obama has raised taxes making it less likely for those people to go into business and he has only extended credit to huge businesses that are Union shops - and banks. The stimulus needs to reach down to the little guys who employ a LOT of people collectively. They have no apparent interest in doing that and it's a painful mistake.

scunnert said...

Over the past twenty years profits soared while wages stagnated or fell. To maintain the American lifestyle people were persuaded to go into debt. When they could no longer afford to service that debt the bubble burst.

Here's what to do to restore the US to the status of leader of the free world. Bar third world sweat shop products from the US market -returning production home. Increase wages so that folks can afford the products (Henry Ford figured that out ages ago). And close the door on immigration - both legal and illegal.

That's about it really.

foutsc said...

Scunnert: Ever heard of Smoot-Hawley? I caused a trade war, with everyone putting up import tariffs, contributing to the great depression.

Some countries can do things more efficiently than we can, so we should buy from them in those cases.

The key is for us to capitalize on our strengths. A free market where a government politburo doesn't dictate will find that sweet spot.

Government should be a referee, not a player

One Ticked Chick said...

The Fed predicts a the economy returning to normal in five years? Hopefully that's because in 5 years Obama and his job-killing policies will be a bad memory, and someone who understands how to grow an economy and stimulate jobs will be in the White House.

Fredd said...

If Obama were a chef trying to make soup, he'd first dump in a box of salt.

He would then ask his sous-chef (he's exempt from having to eat the food he prepares for others, you see), to taste it and the sous-cehf found it quite salty. Based on that input, Obama would throw in a couple of 25 pound salt licks into the pot. He would then declare, 'they can have the soup, or they can eat cake.'

Of course, there's no cake.

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