Mean House Republicans make Obama and Reid cry

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**Posted by Phineas

And they did it while pursuing intelligent, job-creating energy policy:

Defiant Republicans pushed legislation through the House Tuesday night that would keep alive Social Security payroll tax cuts for some 160 million Americans at President Barack Obama’s request — but also would require construction of a Canada-to-Texas oil pipeline that has sparked a White House veto threat.

Passage, on a largely party-line vote of 234-193, sent the measure toward its certain demise in the Democratic-controlled Senate, triggering the final partisan showdown of a remarkably quarrelsome year of divided government.

The legislation “extends the payroll tax relief, extends and reforms unemployment insurance and protects Social Security — without job-killing tax hikes,” Republican House Speaker John Boehner declared after the measure had cleared.

Referring to the controversy over the Keystone XL pipeline, he added, “Our bill includes sensible, bipartisan measures to help the private sector create jobs.”

On a long day of finger pointing, however, House Democrats accused Republicans of protecting “millionaires and billionaires, ” and Senate Majority Leader Harry Reid, D-Nev., derided the GOP-backed pipeline provision as “ideological candy” for the tea party-set.

Harry’s just mad that the ball is in his court, now, and the situation is lose-lose for him and his Munificent Sun King. Here’s the background:

The Keystone XL pipeline would cross roughly 1,700 miles from Canada’s tar-sands deposits to the Gulf of Mexico in Texas. In addition to giving us access to a reliable supply of oil from a nearby friendly nation, estimates are that the pipeline will create anywhere from 5,000 to 20,000 jobs in the US, not to mention the consumer boost from disposable income. While there are environmental concerns, the State Department has declared them to be minimal. Sounds like a great deal, right?

Not if you’re Barack Obama and the Democrats, who need to pander to the environmentalist Left to shore up their base, it isn’t. Playing to the Green Luddites, Obama delayed a decision on Keystone until, oddly enough, after the election. I guess people who need jobs matter less than donations from the Sierra Club.

Back to the bill just passed.

Obama and the (Social) Democratic leadership had wanted a continuation of the payroll tax cut and an extension of unemployment insurance (which, btw, only worsens unemployment), all paid for by increasing taxes on those evil rich folks. The Republicans, on the other hand, understanding basic economics, wanted instead to pay for the cuts by imposing a federal wage freeze. They also wanted to pass legislation mandating approval for Keystone, since, well, Republicans actually care about people who are out of work and obtaining a reliable source of energy for the US, which would otherwise go to China. (There’s that Smart Power diplomacy, again.)

Obama had threatened to veto any legislation extending the payroll tax cuts if it included authorization for Keystone XL. He gambled that Republicans wouldn’t dare let themselves be seen as allowing a tax increase and a cutoff of unemployment benefits, something he and his allies figured would redound to the Democrats’ benefit.

Well, the Smartest President Ever bet wrong.

Here’s why the Democrats now find themselves in a pickle: the Republicans have passed a bill that

  1. Brings reliable energy to the US
  2. Creates thousands of real jobs (far more than the Stimulus ever did)
  3. Extends unemployment benefits (1) and payroll tax cuts
  4. and pays for them with a fiscally responsible wage freeze.

Now Reid has to either kill all that in the Senate (2), which will hand the Republicans a large club to beat Democratic incumbents with in 2012, or he has to pass it and send it to Obama, who will then have had his bluff called and face an ugly choice: tell thousands of unemployed American workers you don’t get a good job and, oh, by the way, the unemployment checks are going to stop, or sign the bill and look weak while ticking off the same environmental groups he had just bent the knee to.

Like I said, “lose -lose” for them. Darn.

Well played, House Republicans. Well played.

via Doug Powers

Footnotes:
(1) Yeah, I just linked to an article showing how unemployment benefits retard job growth, but this is political reality. No party will vote to cut off those benefits in a rotten economy. And that’s why Obama will not veto this bill.
(2) Assuming he can hold his caucus together. Several of those vulnerable Democratic senators might well be tempted to defy their party leader and vote in favor of jobs “back home.”

(Crossposted at Public Secrets)

Video: why the New Deal was a failure

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**Posted by Phineas

Obama’s first term (1) saw a full-throated return to Keynesian economics — massive increases in government spending, debt, and (if they had gotten their way) taxes to try to stimulate the economy. As we all know, it failed miserably.

For the 2012 election, Obama has doubled-down on the Keynesianism to openly advocate policies of higher taxation, more regulation, more government-directed redistribution of income, and, yes, even more flushing tax money down the toilet stimulus spending. Obama and his people claim that this worked before under FDR, so we should do it again.

Wrong. The history of the New Deal (and its predecessor under Hoover) is almost the opposite of what we’ve been taught in school. The biggest misrepresentation of all is that it worked.

It didn’t. The New Deal was a failure that only made the misery worse, as this video from the Center for Freedom and Prosperity argues:

The real lesson we should take from the economic policies of the Hoover and FDR administrations is that big-government, statist interventions don’t work. Instead, they exacerbate the problem by hindering the self-healing properties of a free market.

In 2012, we have a choice between a party that advocates economic policies that are an empirical failure — the Democrats and the their Hoover/FDR interventionism– and one (2) offering those shown to be an empirical success, the policies of Ronald Reagan and, yes, Warren Harding.

For most voters (3), once armed with the facts, the choice becomes clear and easy.

RELATED: For more on the truth about Hoover, FDR and the New Deal, let me recommend the following:

  • Ohanian and Cole, “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis” (Journal of Political Economy, 2004) While behind online subscriber walls, you should be able to find it at any university library.
  • Amity Shlaes, The Forgotten Man
  • Jim Powell, FDR’s Folly

Footnotes:
(1) And, to be fair, the last year of Bush’s second term.
(2) Sure, the Republicans have been far from perfect, and the eventual nominee himself may be tempted by big-government “solutions,” but they’re still a far sight better than the (Social) Demcorats.
(3) Other than a certain core that, for whatever reason, prefers to cling bitterly to their cherished myths and bad ideas and be infantilized wards of the state.

(Crossposted at Public Secrets)