- The Washington Times - Monday, February 16, 2009

SELLING FEAR

”Here’s something new: Instead of the customary attempts to put an optimistic gloss on the state of the economy, our governments are doing exactly the opposite,”Dominic+Lawson” >Dominic Lawson writes in the London Times.

”Over here Ed Balls tells us, more or less, that this is the worst recession since dinosaurs roamed the primordial swamps. Meanwhile, President Barack Obama declared last week that ‘if we don’t act immediately, our nation will sink into a crisis that at some point we may be unable to reverse.’ As The Economist commented, with some alarm: ‘The notion that [America] might never recover was previously entertained only by bearded survivalists stockpiling beans and ammunition in remote log cabins.’

”Obama’s dire assessment was on the surface the more surprising - wasn’t he supposed to be the great uplifter of the national mood, in the spirit ofFranklin D. Roosevelt’s ‘The only thing we have to fear is fear itself’? It seems all the odder because Obama has explicitly drawn on folk memories of FDR’s New Deal, telling television viewers to ‘keep in mind that in 1932, 1933 the unemployment rate was 25 percent.’ ”

Mr. Lawson added that “the young president seems to want to take us back to some of the failed policies of the 1930s, under the mistaken impression that they were a great triumph.”

SERIES OF MISSTEPS

Elections have consequences. That is what democracy is about after all,” Lawrence B. Lindsey writes in the Weekly Standard.

”Barack Obama is correct when he states that his victory last November gives him the right, or more specifically the power, to have things his way when it comes to handling the nation’s economic challenges,” said Mr. Lindsey, a former governor of the Federal Reserve and director of the National Economic Council in the early years of the George W. Bush administration.

“The country, moreover, could use some decisive economic action. The financial system is a mess, unemployment is rising and will keep increasing. The government will likely run a deficit of 10 percent or more of GDP both this year and next - roughly twice the share of the Reagan deficits and roughly three times the size of President Bush’s deficits. To fight the credit contraction, our central bank is expanding its balance sheet at a pace that might lead a visitor from another planet to confuse the United States with Argentina.

“This makes it all the more frustrating that less than a month into his presidency, Obama has made a complete hash of economic policy, utterly squandering his mandate in a series of missteps that suggest he has not made the transition from campaigning to governing. This, even as Obama never stops reminding us in his constant televised appearances that the economy is slipping fast and time is of the essence.

“The problems began with the inexplicable decision by the administration not to submit its own economic-stimulus package, but instead delegate the job toNancy Pelosi and the barons on the House Appropriations Committee. Appropriations is the reptilian brain of the political process. It is where all the back scratching, logrolling and pork barreling gets done. Macroeconomic coherence is just not part of the skill set of House Appropriations members. So even rebuilding the nation’s infrastructure got short shrift. Instead, the package was loaded with largesse for fellow politicians and civil service employees back home. The standard was not the proclaimed ‘shovel-ready’ but ‘social-worker ready.’ ”

DOUBT, UNCERTAINTY

”Anyone trying to understand why the credit mess keeps getting messier needs only to have sat through Wednesday’s hearing of the House Financial Services Committee,” the Wall Street Journal said in an editorial.

”The eight bank CEOs were mere props. The stars were the politicians, who managed to demand more loans for consumers while simultaneously giving lenders new cause to wonder if they’ll ever be repaid. This gathering of the esteemed Committee on Doubt and Uncertainty occurred as markets desperately need less of both,” the newspaper said.

“Chairman Barney Frank’s hearing was intended to flay the CEOs for not lending enough. It fell flat as political theater because banks have actually increased their lending in recent months. The people who aren’t lending more are investors in nonbank financing such as asset-backed securities.

”In fact, the nonbank credit market is normally much bigger than bank lending. But new issues backed by auto loans, credit cards and the like have been rare this year, as markets wonder how the government’s next move will change the value of such investments. Buyers and sellers of existing securities are ‘sitting on the sidelines,’ according to Asset-Backed Alert, waiting for still another Washington recalibration of risk and reward.

“Most investors who lend in these markets are not recipients of financial bailout money, so Congress can’t simply browbeat them into making another big bet on the American consumer. They’ve been burned badly. They need reassurance that our capital markets operate with a consistent set of rules. The Committee on Doubt and Uncertainty offered only the assurance that the rules will keep changing.”

SPEECH IMPERILED

”Americans are about to learn that when it comes to protecting their civil liberties, they can’t relax no matter which party is in power in Washington,” Detroit News editorial-page editor Nolan Finley writes.

”After spending eight years wailing about President George W. Bush’s relentless disregard for the Bill of Rights, Democrats are preparing to launch an assault on the most precious individual freedom of all - free speech,” Mr. Finley said.

”They are trying to shut down conservative talk radio, the primary source of criticism of their programs and policies.

“Michigan Sen. Debbie Stabenow was reportedly leading the effort, though she now says ‘that’s not my issue.’ Good thing, since it would have been an obvious conflict of interest. Her husband, Tom Athans, is a co-founder of Air America, the left-wing network that’s never caught fire with radio listeners. …

The impact of the Fairness Doctrine would be to drive the Rush Limbaughs, Sean Hannitys, Bill O’Reillys and Frank Beckmanns off the air. Few stations can afford to devote hours to unprofitable liberal programming just to keep the conservative shows on the air. …

“This is censorship, poorly masked. And whether you cheer Limbaugh or detest him, if you don’t stand up for his right to speak against the tide, you’ll ultimately lose your right to do the same.”

- Greg Pierce can be reached at 202/636-3285 or gpierce@washingtontimes.com.

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