Archive for January, 2011

Andrew Mellon

Hugo Chavez Takes Over the Federal Reserve

by Andrew Mellon

Time was when countries believed in strong currencies — strength measured not in the rhetoric of bearded wise men but of bank vaults flush with gold coin.

Venezuelan tyrant Hugo Chavez recently announced that he would be devaluing his currency on New Year’s day.  As the Wall Street Journal reported:

News of the devaluation came just after the central bank said the Venezuelan economy contracted 1.9% in 2010, the second consecutive year of declining output in the oil-rich nation after a 3.3% decline in 2009.

Both pieces of news suggest Mr. Chávez is having an increasingly difficult time balancing his populist policies with economic reality, according to economists. His government’s widespread nationalizations of private industry have sapped economic growth, while public spending has sparked inflation that the government has tried to contain by measures such as price controls.

There are a couple of striking aspects to this news.  First, in the above excerpt one could easily replace Mr. Chávez’s name with Mr. Obama’s.  Nationalizations or de facto nationalizations cripple an economy by replacing functional markets driven by the people with dysfunctional economies driven by central planners and have a secondary effect of chilling entrepreneurship, and thus competition, innovation and capital formation that drive economic growth.

Constantly imposing costs implicit and explicit on the private sector (i.e. those who must survive by providing a product demanded by consumers in quantities, of qualities and for prices willingly paid by these consumers), including the cost of propping up failed businesses and inflating asset prices, disincentivizes people from partaking in mutually beneficial commercial activity.

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Mike Flynn

Your Roundup of the RNC Chair Race

by Mike Flynn

At 1pm EST today, Americans for Tax Reform and The Daily Caller will host a debate of all announced candidates for Chair of the RNC. The 168 members of the GOP Committee will vote January 14th to select a Chair for a new two-year term, which, of course, includes the period of redistricting and the critical 2012 election.

The race for RNC Chair won’t get a lot of attention from either the media or, sadly, the grass roots, but it is an important campaign. It seems counter-intuitive, but the national GOP actually underperformed this past November. Yes, they won the House and picked up an historic 60+ seats, but it could-and should-have been 75-80 seats. They left 3-4 Senate seats on the table.  Worse, the GOP came up short in Governor’s races, which are critically important with redistricting on the agenda this year. (They lost to Jerry Brown (!), Rod Blagojevich’s Lt. Gov, and a retread who supports socialized medicine, for example.) Don’t get me wrong, it was a great victory, but, watching from the front-lines, it hurts to realize it could have been even greater, but for the disfunction of the national party.

As I have written before, the first job of the RNC Chair is to ‘do no harm.’ Don’t make gaffes on the Sunday shows or in speeches, raise lots of money and execute a robust ground game for election day. In the closing days of the midterms, the RNC pulled out of most of its election-day GOTV operations…because they didn’t have any money…because the current Chair and organization had alienated the grassroots, which cost them lots of donations. (You can see a theme, right?) Who knows how many more races the GOP could have won with a normally functioning party?

But, enough with the past. This isn’t about the RNC we had, but about the RNC we want to have. And that election is in less than two weeks.

So, let’s recap where we are on this race. Because, while most of us were gorging on College Bowl games or ignoring the world because we gorged on things that weren’t College Bowl games, several interesting things happened. So, let’s have a roundup.

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Publius

Monday Open Thread: Congress Edition

by Publius

This week, the GOP takes control of the U.S. House. Over the next few weeks they will also take control of state houses across the country. Hope=Change.

Publius

Modest Proposals to help the GOP and America

by Publius

Glenn Reynolds in today’s Washington Examiner:

With the new Congress being sworn in this week, everyone is full of advice. Well, I’m no exception. The first advice comes from Han Solo in the debut “Star Wars” film: “Don’t get cocky.” Republicans won big in the last election, but, if they think that constitutes an excuse to slip back into their old ways, circa 2004 to 2006, then they are doomed — not just as individual politicians, but quite possibly as a party. The public’s patience is quite limited, and is likely to stay so for the foreseeable future.

Second, remember that fortune favors the bold. It’s true that ordinarily in politics, most progress occurs at the margins. But it’s also true that these are not ordinary times. Big money-saving and government-shrinking proposals in the House, even if they’re shot down by the Democrat-controlled Senate, will nonetheless establish a tone.

They’re trying to hide it, but the Inside-the-Beltway permanent-government political class is currently scared. Keep them that way, while showing the public at large that you’re serious.

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Publius

GOP Prepares for New Power and Increased Pressure

by Publius

From Reuters:

Republicans roared to victory in the November congressional elections by targeting President Barack Obama’s fiscal policies and asking, “Where are the jobs?”

Once they take power from Obama’s Democrats in the House of Representatives when the new Congress convenes on January 5, they will be held accountable to answer this and other questions.

How will they keep their promise to cut federal spending and reduce the federal deficit? What will they do to pump new life into the sluggish economy still trying to recover from the worst recession since the Great Depression? Will they raise the federal debt limit or threaten a government default?

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Dan Mitchell

If I Got to Write New Year’s Resolutions for the GOP…

by Dan Mitchell

Republicans did a terrible job last time they were in power. The created a new entitlement program for prescription drugs. They further centralized education with the no-bureaucrat-left-behind legislation. They undid the positive reforms of the 1990s with central-panning subsidies and controls for agriculture. And they became earmark junkies as part of their votes to massively increase the burden of government spending.

Republicans say they’ve learned their lessons, and I’m sure many of the new Tea Party-oriented members genuinely want to expand freedom and prosperity for the American people, but it’s always wise to be skeptical when dealing with politicians.

If the GOPers really want to do the right thing and demonstrate their new-found commitment to liberty and sound governance, they should make – and keep – the following New Year’s resolutions. To keep it simple, realistic, and achievable, we have only six resolutions. Three resolutions deal with public policy and three resolutions are about resisting the seductive corruption that is so ubiquitous on Capitol Hill.

The three policy resolutions list things that House Republicans could adopt. That doesn’t mean they will make it through the Senate or get approved by the President. These are ideas that Republicans can pursue to show they are serious about doing what’s right for the country.

1. Limit the overall growth of government spending. America is in a fiscal mess because federal government spending has more than doubled since Bill Clinton left office. Bush was a big spender. Obama is a big spender. And Republicans and Democrats on Capitol Hill have been big spenders. Now that we’re in a deep hole, the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield very good results. The key to fiscal responsibility is making sure the productive sector of the economy grows faster than the burden of government spending.

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Publius

Sunday Open Thread: 55 Edition

by Publius

Today, in 1974, President Richard Nixon signed into law the 55 MPH speed limit. This should give pause to those who think that GOP control is some kind of salvation. We need to stop relying on politicians and take matters into our own hands.

Christopher C. Horner

2011 Prediction: Media to Hit New ‘Warming’ Low

by Christopher C. Horner

I was taken aback by this paragraph in a Politico story by someone a colleague of mine styles as the best reporter in DC on these issues. It reveals the media are not only telling us what to watch for this year, but getting an early jump:

Despite mounting evidence that the greenhouse gas buildup in the Earth’s atmosphere is causing runaway changes to the climate – NASA this month declared 2010 the hottest year on record – several pollsters say the American public isn’t listening. (emphases added)

Now, the reason no evidence — mounting, or otherwise — of runaway climate change was cited there is because there is no evidence of runaway climate change. Let alone man-made. There is as there always has been a continuing stream of evidence of changes in climate, because change is the sole constant in climate. But it takes an environmentalist or axe-grinding politician to say that whatever happens is evidence supporting his faith and/or agenda. The ‘runaway’ business is just absurdly hyperbolic. Which, again, is why no such evidence was actually cited.

Get this straight because you are going to get used to this: their new talking point, 2010 being the hottest year ‘on record’, wouldn’t be such evidence even though it is knowingly intoned as a self-evident example of cause-effect. This is true even if the claim by cited source, NASA — meaning James Hansen’s runaway office, known as GISS — did not reflect GISS having done two things: adjusting the historical record to make older years cooler (rewriting history) and ‘extrapolating’ data over vast stretches in the Arctic where they have none…but which happens to be where they find the warming (making history up).

None of which is secret, all of which then makes the above-cited paragraph an embarrassment.

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Publius

2010: The Year of the Tea Party

by Publius

The Hill has a month-by-month recap of 2010:

The grassroots conservative political movement made its clout felt the entire year, from the healthcare reform debate to GOP primaries and the general election last month.

Senior Democrats, ranging from Democratic National Committee Chairman Tim Kaine to Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.), aggressively attacked the Tea Party in the lead-up to the midterms, hoping that doing so would soften losses to the GOP. House Minority Leader John Boehner (Ohio) and other Republicans embraced the movement, believing its energy would benefit their party at the polls.

In the end, the Tea Party was in many ways a net asset for the GOP as Republicans grabbed control of the House and cut into the Democratic majority in the Senate.

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Of Thee I Sing  1776

It’s Time To Get Serious About Immigration, Education and Tax Reform.

by Of Thee I Sing 1776

We are headed for major trouble in these United States.  Realistically speaking, the knight on the proverbial white horse who will ride to our rescue is apt to speak Spanish or Vietnamese or, perhaps, Polish.  An infusion of young, Immigrant citizens (workers to be blunt) are what stands between America and a very bleak future, so we had better get used to the idea of welcoming newcomers to our shores who share our values, work ethic and aspirations.  Concurrently, we should also enact, on a crash basis, policies geared to stimulate steady, long-term economic growth as our highest national priority.  The Fed alternately slamming its foot on the brake and then on the accelerator must give way to sensible growth-driven policies that encourage investment, work and entrepreneurship.

There has always been a “them” and “us” faction in America seeking to batten down the hatches and bar the door to immigrants seeking a better life, or to make that doorway as narrow as possible. We’ve even passed legislation in years past to bar certain ethnicities from our shores such as the racist Chinese Exclusionary Act that was in effect for over sixty years.  The attractiveness of campaigns laced with America for the Americans rhetoric has long appealed to politicians who look no further than the next election cycle.  A little xenophobia mixed with a dash of demagoguery has secured more than one election in America.

Fortunately, America, more than any other nation, still has the world’s best track record for integrating varied cultural and religious ethnicities into the fabric of the land and America has reaped enormous rewards in the process.  Immigration has largely fueled the engine of our growth for most of our history.  And that is a lesson the moral of which has never been more important to understand than it is today.  Here’s why.

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Publius

New Year Open Thread

by Publius

Happy 2011!