Tag Archives: Obama

The President’s Half-Truths & Expired Theories

On Wednesday, Harvard’s campus newspaper The Harvard Crimson ran an opinion piece by the President addressing the economy and student loan debt. Unfortunately, the op-ed was riddled with flawed logic, inaccurate statements, and deficient ideology that the American people shouldn’t endure.

First of all, it is worth noting that state-centric approach the President has taken to solve the woes of our time. Speaking to his jobs proposals that did not fair well on the hill, the President said “the best way to attack our economic challenges and put hundreds of thousands of people back to work is through bold action in Congress.” The idea, and the hubris needed to accept it, that the federal government wields sufficient power over the fourteen and a half trillion dollar U.S. economy and can, at will, micromanage it back to health is a bit disconcerting. Such ideas stem from overconfidence in government action and a flawed understanding of a market economy.

Hubris aside, the President bolsters the case for his jobs bill by repeating a faslehood tackled by the watchdog group FactCheck.org. He says:

[…] it’s been so disappointing to see Republicans in Congress block jobs bills from going forward—bills that independent economists say could create millions of jobs though the kinds of proposals supported by Democrats and Republicans in the past.

According to FactCheck.org, “the median estimate in a survey of 34 economists showed 288,000 jobs could be saved or created over two years under the president’s plan.”

Secondly in his piece, the President addressed student loan debt with this:

Living with that much debt forces you to make some tough choices. And when a big chunk of every paycheck goes towards student loans, it isn’t just painful for you—it’s painful to our economy and harmful to our recovery.

Here, the President is insinuating that the economy is suffering from a lack of spending in the private sector as graduated college students make down payments on the loans with money they would have otherwise spent. Unfortunately for Mr. Obama (and for his Keynesian cohorts), that is not the case. According to economic data, personal consumption is at much higher levels today than prior to the recession. And furthermore, consumption is not the engine of an economy, it is production that makes wealth. We should be removing all barriers for the producers of this economy to continue and expand production. With one of the highest corporate income taxes in the world, mounting regulation, and massive deficit spending, accompanied with a growing movement in the downtown regions of many U.S. cities which demand further sacrifice from producers, it is no wonder why the economy is stagnant.

Progressives, such as President Obama believe in a perverted understanding of liberty.  According to them, liberty was not just the freedom from oppression by others, it was the freedom to achieve the most in one’s life — that all peoples were entitled to explore themselves and grow to be the best they can be. From this shore, progressives justified extraordinary breaches of individual liberty including the establishment of the welfare state, extensive regulation of commerce, and atrocious distributions of wealth.

The President seeks to accomplish the same thing as he echos the cries of the Occupy Wall Street hippies for the wealthy to “pay their fair share” in taxes in order to help the country eliminate its deficit problems; as he designs to spend more money we do not have on stimulus projects that do not work.

The President should not get carte blanche to propagate half-truths and expired economic theories. The President can do us all a favor by doing two things: instruct the federal government to move out of the way of the producers of this country and let the marketplace restore itself, and reconcile his progressivism with Jeffersonian liberty in favor of the later.

Tagged , , , ,

Obama’s Energy Solution: More Government

President Obama took his weekly radio address to speak towards the growing gas prices across the country and offered a variety of solutions. The common denominator of most of his solutions however, was the direction of, funding from, and oversight by the federal government.

At the onset, President Obama announced the creation of a task force to search and destroy “manipulations in the market that might affect gas prices” with particular focus on speculators. Speculators have been the go-to escape goat on oil prices by both the left and right. Unfortunately, the President’s efforts are misguided. Speculators are those trained individuals who — with advanced knowledge of supply, demand, and the effects on each by current events — buy and sell oil at risk to themselves. If they speculate that in light of a new fervent uprising in Iraq or Nigeria will shake the production of oil, they will buy oil, increasing its price. If an oil company strikes a new bountiful oil well, they will sell, and prices will decrease. We rely on speculators’ insight and knowledge of the oil market to give us oil at its market price.

President Obama seems to view things differently. Such high gas prices shouldn’t be so, facts or market signals be damned. Instead, he seeks to root out, regulate, or annihilate the very components of the oil market that make it tick. Just as a contractor has the experience and know-how to complete a project on time and on budget, so too do speculators have the skill to buy and sell oil based on the facts of production. To assume the federal government could “resolve” anything related to speculation is an insulting irony.

Secondly, Obama seeks to expand domestic oil production, a step forward, but caveats such production with more regulation and misguided incentives, two steps backwards. The President wants to unleash new permits to oil companies for drilling off the coast of Alaska, but says in order to make the process streamlined, a new government organization is required. Such logic seems counterintuitive; how is it that more government bureaucrats and red tape will quicken leasing and not in fact slow it down? Moreover, the President wants to incentivize companies to drill in unused leases — leases that do not have production-worthy quantities of oil or gas. So while the president pushes for the end of oil subsidies, he’s more than willing to subsidize unproductive oil wells. Seems a little two-faced. The only thing different between “incentives” and “subsidies” is the name. The money still comes from you and me.

The President has taken a statist approach to solving the “problem” of high gas prices. Yes, gas prices are high, but oil is a limited resource subject to an infinite array of market conditions, current events, weather, and simple luck of the draw in drilling. To demand a set price based on nothing but wishes is anti-capitalist speak. Dictating prices didn’t work for Stalin, Lenin, or Brezhnev; it wont work for Obama.

Tagged , , , ,

Journal of Gov’t Failure: The Great Oil Spill of 2010 Part II

The failures of government that helped spawn this oil spill disaster just keep coming. Here is what I’m looking at so far:

  • Oil spill liability to private parties and the environment were capped at $75 million for responsible companies in 1990. This gave them less incentive to make responsible drilling decisions, believing that if things went wrong, they wouldn’t have to pay for damages greater than $75 million. But to be fair, BP has waived that liability, promising to reimburse all those damaged.
  • In 1995, the Republicans in Congress and President Bill Clinton in the White House signed into law the Deep Water Royalty Relief Act which incentivized drilling in deeper, more expensive, and more dangerous locations; the greater the estimated cost of drilling, the greater the royalty relief.
  • In 1998, President Clinton extended a moratorium on new leases issued by the Department of the Interior in the Gulf of Mexico. Oil companies were restricted from drilling in waters east of the Mississippi-Alabama border, constraining and pushing outward drilling leases.
  • According to the Wall Street Journal mandatory government models used by oil companies to predicting oil spill damages were never updated after 2004 and “gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.” This gave oil companies further misinformation to calculate risk and plan for worst case scenarios.
  • On top of the ethical scandals rocking the Minerals Management Services (MMS), the Obama Administration – in a futile attempt to save face – is seeking to rename the MMS to the Bureau of Ocean Energy Management, Regulation, and Enforcement. I see it more of an insult to my intelligence, but that’s just me.

Now it should be made clear that 100% of the responsibility for the spill rests on BP and their neglect for safety, and they should be made to pay for all damages they cause to both the economy and the environment.

Democrats will surely find it easy to point blame at previous Republican politicians (including their all-time favorite, President George W. Bush). Republicans could also make quick work of government bureaucracy and bolster their argument of its inefficiency, especially under Democratic leadership. But the truth falls somewhere in between. The federal government, spanning four presidencies and seven Congresses shares responsibility for fostering an unethical, unsafe, and irresponsible drilling environment.

Tagged , , , , , ,

Obama Begs Congress for Another Bailout

The Washington Post:

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.

Anyone else just have to sigh at these pleas? As Tad DeHaven over at the Cato Blog rightfully put it, “the increasing dependency on the federal government has contributed to the states’ dereliction of duty when it comes to keeping their fiscal houses in order.” He argues that, “reviving fiscal federalism is critical to getting governments at all levels in the United States to clean up their fiscal messes.”

Sounds about right to me. Like I’ve mentioned before, by bailing out failing institutions, whether it be States, General Motors, or Merrill Lynch, we are subsidizing bad behavior. President Bush did it in the latter half of his presidency, and Obama has carried the torch. Now, he wishes to carry it even further.

November couldn’t come any sooner.

Tagged , ,

Obama Scraps Leases for Oil-Shale Development

Washington Post.

SALT LAKE CITY — In his second reversal of a Bush administration decision, Interior Secretary Ken Salazar said Wednesday that he is scrapping leases for oil-shale development on federal land in Colorado, Utah and Wyoming.

Salazar rescinded a lease offer made last month for research, development and demonstration projects that could have led to oil-shale exploration on 1.9 million acres in the three states.

It was the second time Salazar has reversed the Bush administration. He also halted the leasing of oil and gas drilling parcels near national parks in Utah this month.

I disagree with the President’s approach in terms of domestic energy production. He places more emphasis on more “green” energies, while I place more emphasis on energies that dominate (and will continue to dominate) the world consumption.

I have always advocated increasing domestic energy production with serious research efforts towards green energy. I’m not an arrogant partisan; I know that oil and natural gas will eventually not be feasible, and I want my country to be able to make a relatively painless transition when the time is right.

However, the time is not right. There is a place and time for green technology and fossil fuels. I believe Obama has prematurely abandoned the latter, when the former is not ready for full-scale implementation.

Tagged , , ,