Tag Archives: This Week

Even Former Clinton Operative Stephanopoulos Doesn’t Buy Jack Lew’s Spin

Jack Lew

In the aftermath of the Supreme Court decision that upheld the Affordable Care Act as constitutional under the taxing powers of Congress, the Obama administration can’t seem to call it a tax.  Instead, they’re trying to peddle the “tax” as a penalty. White House Chief of Staff Jack Lew did his run through the Sunday morning talk shows with this entertaining spin. Even former Clinton operative George Stephanopoulos was unconvinced: “As you know, President Obama denied all along that this was a tax. Is he now prepared to defend it?”

Mr. Lew stuck to the “not a tax” spin:  “I think we have to take a step back. What is in the law is a penalty. It starts by saying all Americans have a right to health insurance. For Americans who buy health insurance or who can’t afford it and get it through a government program, there is no penalty.”

However, Stephanopolous pressed on with “you keep wanting to use the word penalty…they [The Supreme Court] found it constitutional because it is a tax, not a penalty. Here is the Chief Justice. Right here, he said, “The shared responsibility payment may for constitutional purposes be considered a tax, not a penalty.”  Lew denied it again and indirectly called the American people stupid, stating:

LEW: The Supreme Court looked at what the structure of the law was, and they saw that 1 percent of the people would be paying this charge if they chose not to avail themselves of health insurance. But more middle-class people are going to get a tax cut in this law. There’s a tax cut of $4,000 for people who need help paying for health insurance.

For the very, very few who choose to go uninsured, and who can afford it, and who are saying that if I need health care, it’s going to be someone else’s burden, it says they have to pay a charge.

You know, if you look at the past, since President Obama’s been in office, middle-class families have gotten a $3,600 tax cut. In this law, there’s a $4,000 tax cut for people who need help paying for health insurance. For that 1 percent who have chosen not to buy health insurance and just to pass the burden onto others, there’s this penalty.

STEPHANOPOULOS: But you do concede — and you keep wanting to use the word penalty — you do concede that the law survived only because Justice Roberts found this to be a tax?

LEW: You know, I think, if you look at the decision, which is a very complicated one, you know, there are arguments that support different theories. There was…

STEPHANOPOULOS: But the argument of Chief Justice Roberts is that it’s a tax.

LEW: He — he went through the different powers that Congress has and he found that there is a power, whatever you call it, to assess a penalty like this.

STEPHANOPOULOS: He called it a tax. So you’re conceding that?

LEW: I’m saying that it was set up as a penalty for people who choose not to buy insurance, even though they can afford it, and for that 1 percent, we call it fair.

Lew’s assertion of the opinion being complicated, even though the part we’re discussing is explicitly clear in the written opinion, highlights the progressive left’s inherent condescension.  I guess the vast majority of Americans, who aren’t members of educational elite with learned diction, can’t possibly understand the difference between a tax and a penalty.  How progressive of them?  Mr. Lew’s shameless spinning and distortion of the facts even has liberals in the media saying he’s wrong.

Barack Obama: The Anti-Keynesian?

New York Times columnist and economist Paul Krugman thinks Barack Obama is an “anti-Keynesian” when it comes to economic matters.
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PAUL KRUGMAN: Can I just say, on the Reagan thing, if public-sector employment had continued to expand the way it did during Reagan’s first term, instead of falling by about 600,000 as it has, right there we’d have something like 1.4 million people working in this country.

So if you actually look at the actual track record of government spending, government employment, Reagan is the Keynesian and Obama — mostly because of political constraints, although a little bit of lack of conviction on the part of his own people, has been the anti-Keynesian. He’s been the one who’s been doing what Republicans say is the right answer.

Ronald Reagan was not a Keynesian.  As Milton Friedman noted in his speech at the opening of the Cato Institute in 1993, “Reaganomics had four simple principles: lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy.  Four cornerstones that led to the following:

Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years. Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency. The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but much lower in the post-Reagan years.

Yet, Obama is anti-Keynesian after spending $830 billion dollars on a failed stimulus program that had left the unemployment rate over 8% for over 38 months.  A program that would never allow unemployment to rise above 8% and would produce robust economic growth.  All of this would be induced by deficit spending. The president stated that the stimulus would create 2.5 million “shovel ready jobs” for infrastructure projects.  In fact, in an interview with Peter Baker of The New York Times, the president admitted that “he let himself look too much like “the same old tax-and-spend Democrat, realized too late that there’s no such thing as shovel-ready projects and perhaps should have let the Republicans insist on the tax cuts in the stimulus.”  In addition, his Vice President, Joe Biden, reiterated the Keynesian approach of this administration three years ago by stating that we must spend our way out of bankruptcy.

Also, to say”[Obama’s] been the one who’s been doing what Republicans say is the right answer” is patently false.  Republicans aren’t for class warfare legislation, like the Buffet Rule tax reform, that institutes a mandatory 30% tax on millionaires, but leaves the charitable donation deduction.  Hence, the rich, also known and the job creating and investing class, could donate their way out of taxation.  Furthermore, Republicans never were for spending a trillion dollars on a new health care entitlement, Obamacare, that will cut 20 million Americans from their coverage while making 49 million more citizens dependent on government run medical services.

Nevertheless, it didn’t stop Paul Krugman from making more patently false remarks on ABC’s This Week.

KRUGMAN: Can I just — these are — these are — we’re talking as if $1 billion was a lot of money, and in $15 trillion economy is not. Solyndra was a mistake as part of a large program, which has been — by and large had a pretty good track record. Of course you’re going to find a mistake. I think, to be fair, that’s probably true in Massachusetts, as well.

But this is — this is ridiculous, that we are taking these tiny, tiny missteps which happen in any large organizations, including corporations, including Bain — Bain Capital had losers, too, right, even from the point of view of its investors? So this is ridiculous.

And the fact of the matter is, this president has not managed to get very much of what he wanted done. He — it’s terribly unfair that he’s being judged on the failure of the economy to respond to policies that had been largely dictated by a hostile Congress.

First of all, concerning clean energy initiatives, Solyndra is the tip of the iceberg.  Furthemore, it’s not just $1 billion dollars as:

CBS News counted 12 clean energy companies that are having trouble after collectively being approved for more than $6.5 billion in federal assistance. Five have filed for bankruptcy: The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy and Solyndra.

SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose – even as taxpayers were forced to back a whopping $3 billion in company loans. Nobody from the Energy Department would agree to an interview.

How safe were the loans?

[Economist] Peter Morici replied… It’s, it is a junk bond…but it’s not even a good junk bond. It’s well below investment grade. Was the Energy Department investing tax dollars in something that’s not even a good junk bond? Morici says yes. This level of bond has about a 70 percent chance of failing in the long term,” he said.”

Furthermore, Robin Millican, Policy Director for the Institute for Energy Research, has stated how the Section 1603 program has allocated $20 billion dollars in cash payments, not loans that need to be repaid, to companies that install solar, wind and geothermal properties.  Congress wants to extend this program for an additional year at the tune of $3 billion dollars.

Lastly, the president has achieved most of his domestic agenda.  Obamacare was the signature achievement in the president’s first term.  In addition, there was Cash for Clunkers, Dollars for Dishwashers, Cash for Caulkers, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.  If Mr. Krugman thinks the president is dealing with a hostile congress, he only needs to look at the docket that shows this hostility has produced a multitude of legislation aimed at creating jobs and curbing the debt and deficit.  Most of the bills have been blocked by the Democratic controlled senate.

(h/t Noel Sheppard)

The Free Lunch Agenda

Conservative commentators and economists, especially George Will, have given lectures and speeches and have written columns about the moral hazard that is rising in the country. If you saw it, I hope you were appalled at the new study that shows virtually half of all Americans do not pay federal income taxes. Forty-nine and half percent of Americans pay no income taxes and receive most of the benefits; thus, they have no vested interest in curbing the size of government of which they are dependent on. Conservatives have known this to be a problem for some time, but liberals ignore the socio-economic consequences. They ignore it because it is an integral part of their  agenda. More people dependent on government equalizes outcome, and you do that by getting everyone to feed on a government program.  President Obama is fully behind this agenda, hence the dark day when Obamacare was passed.

I’m glad that Jack Cafferty of CNN’s The Situation Room mentioned the decrease in tax participation on his blog this past winter.  Nevertheless, the left will stringently advocate that such expansion of government programs and reliance on them are net positives.  We see this with Valerie Jarrett and White House Press Secretary Jay Carney idiotically stating that unemployment checks promotes economic growth.  However, we on the right know that such absurd endeavors offer no incentive for the unemployed to seek employment and that spending of other people’s money to keep them perpetually lethargic is fundamentally unfair.  On ABC’s This Week last January, Austan Goolsbee, the former Chairman of the Council of Economic Advisors for President Obama, had the temerity to say that the economy had a huge boom last quarter, but is being weighed down by government shrinking too rapidly.  Is the government shrinking too rapidly?

According to MyGovCost.org, which is an affiliate of The Independent Institute, the Obama administration has permanently increased the size and expenditure of government by 16.5% in four years.  In fact, the site states that government expenditure is one-sixth bigger today than originally projected four years ago.  Investors Business Daily revealed earlier this month that government dependency had increased by 23%  in two years!  That is 67 million people reliant on a federal program.  You cannot have a shrinkage of government when 67 million people are added onto a federal program and total federal spending has increased.  Mr. Goolsbee is dead wrong.

This is the left-wing dependency agenda. It’s the delivery of free lunches for 151.7 million Americans.  To make a comparison, the number of people in 1984 who did not pay federal income taxes was at a mere 14.8% or 34.8 million Americans.  If the president wants to talk about the fundamentally unfair landscape of America, he should focus on the people who don’t contribute one cent to the government coffers.  Half pay their fair share so the other half can coast through life.  It is serfdom in all but name.  Yet, the president wants to keep expanding government spending, taxation, and destroy freedom and personal responsibility in the process.  With half of the country not paying any income taxes, it makes the future passage and signage of the Ryan budget into law even more politically treacherous, even though it strives to avert inevitable fiscal disaster.  Without a doubt, the slothful will fight to keep their goody bag as we slowly become a dictatorship of the lazy.