May 29, 2012
Republicans Start to Attack Obama Public Equity Record
I am glad to see that the Republicans have started to attack Pres. Obama's record on public equity investments – tit-for-tat for Democratic attacks on private equity. Karl Rove's American Crossroads group has published an excellent commercial, to which I was going to link. However, the Powerline Blog beat me to it, and also included an advertisement from the Romney campaign on the same subject. Therefore I will link to Powerline.
May 25, 2012
How Does Obama's Public Equity Record Compare to Romney's Venture Capital Record?
Yesterday, two major newspapers published columns looking at President Obama's public equity record in light of his attacks on Gov. Romney's record at Bain Capital. In the Wall Street Journal, Kimberly Strassel published "Vulture capitalism? Try Obama's Version". In the Washington Post, a column by Marc A. Theissen was entitled "Forget Bain – Obama's Public - Equity record is the Real Scandal."
Ms. Strassel suggests "Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions, run-ups in debt. Yet unlike Mr. Romney, Mr. Obama's C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard. Don't like "vulture" capitalism? Check out the form the president's had on offer these past three years: "crony" capitalism." Ms. Strassel focuses on Solyndra and General Motors, particularly the $82 billion put into the car industry, which seemed primarily designed to protect union pensions.
Mr. Theissen's Article provides a more comprehensive list of the Obama administration's public equity failures – including at least eight major investments in green energy that have become failures. In fact, his column will make a good reference tool for future discussions of Obama's failures. He concludes: "Now the man who made Solyndra a household name says Mitt Romney’s record at Bain Capital “is what this campaign is going to be about.” Good luck with that, Mr. President. If Obama wants to attack Romney’s alleged private equity failures as chief executive of Bain, he’d better be ready to defend his own massive public equity failures as chief executive of the United States."
The irony is that while Obama has been throwing money at uneconomic green energy projects, the entire economics of energy in the United States have been transformed. The development of the Barnett Shale and other major shale developments elsewhere in the country has enormously increased the availability of natural gas, and dropped its price from $12 to $2. Competition between oil and gas is more intense than ever. It is clear that the free market has produced a result far superior to President Obama's attempts to force feed new types of energy sources to us at substantial government expense.
Ms. Strassel suggests "Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions, run-ups in debt. Yet unlike Mr. Romney, Mr. Obama's C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard. Don't like "vulture" capitalism? Check out the form the president's had on offer these past three years: "crony" capitalism." Ms. Strassel focuses on Solyndra and General Motors, particularly the $82 billion put into the car industry, which seemed primarily designed to protect union pensions.
Mr. Theissen's Article provides a more comprehensive list of the Obama administration's public equity failures – including at least eight major investments in green energy that have become failures. In fact, his column will make a good reference tool for future discussions of Obama's failures. He concludes: "Now the man who made Solyndra a household name says Mitt Romney’s record at Bain Capital “is what this campaign is going to be about.” Good luck with that, Mr. President. If Obama wants to attack Romney’s alleged private equity failures as chief executive of Bain, he’d better be ready to defend his own massive public equity failures as chief executive of the United States."
The irony is that while Obama has been throwing money at uneconomic green energy projects, the entire economics of energy in the United States have been transformed. The development of the Barnett Shale and other major shale developments elsewhere in the country has enormously increased the availability of natural gas, and dropped its price from $12 to $2. Competition between oil and gas is more intense than ever. It is clear that the free market has produced a result far superior to President Obama's attempts to force feed new types of energy sources to us at substantial government expense.
May 22, 2012
Republicans Need to Focus on Size of Deficit
I have been concerned over the past several months that the Republicans are not adequately explaining the problem of the federal deficit. It is not just that the deficit exists, but that it is so enormous. While the deficit itself may not be the sole or most important issue (that is obviously the economy), it is of vital importance that Republicans clearly explain how large it is, compared to the federal budget, and what it will take to get it under control.
The Congressional Budget Office does an excellent job of issuing monthly reports on the federal budget, showing changes in revenue and expenses, and providing detailed information on the deficit. This month, it also issued a separate report showing that the federal deficit for the first seven months amounted to $721 billion. The latest monthly report shows that, during the first seven months of the fiscal year, the deficit amounted to 34.25% of all federal expenditures. Thus, more than one third of all federal outlays were paid for with borrowed money. During that time period, the US spent 52.1% more than it took in.
No country can continue indefinitely with these gaps. Under current federal policies, the deficit will only increase and become an even greater proportion of gross national product.
When talking about this, I often ask people for their estimate of the size of the deficit, compared to federal expenditures. The general estimate is that it is about 20%, and they are shocked when I tell him that it is over one-third of all federal outlays. It seems to me that discussion of the deficit has a much greater impact when people understand how enormous it is, compared to federal expenditures. I believe the Republican should pound this home every time that they discuss the issue.
The Congressional Budget Office does an excellent job of issuing monthly reports on the federal budget, showing changes in revenue and expenses, and providing detailed information on the deficit. This month, it also issued a separate report showing that the federal deficit for the first seven months amounted to $721 billion. The latest monthly report shows that, during the first seven months of the fiscal year, the deficit amounted to 34.25% of all federal expenditures. Thus, more than one third of all federal outlays were paid for with borrowed money. During that time period, the US spent 52.1% more than it took in.
No country can continue indefinitely with these gaps. Under current federal policies, the deficit will only increase and become an even greater proportion of gross national product.
When talking about this, I often ask people for their estimate of the size of the deficit, compared to federal expenditures. The general estimate is that it is about 20%, and they are shocked when I tell him that it is over one-third of all federal outlays. It seems to me that discussion of the deficit has a much greater impact when people understand how enormous it is, compared to federal expenditures. I believe the Republican should pound this home every time that they discuss the issue.
The Pan Am Bomber – a Side Effect of his Treatment
The recent death of Abdel Baset al Megrahi, the convicted Lockerbie bomber, three years after his release from prison in Scotland has drawn an interesting Wall Street Journal editorial explaining why he lived so long after the initial prognosis that he only had three months to live.
According to the Journal, the doctor who made the initial estimate explained that his estimate was based upon the National Health Service medical treatment in Scotland, where certain standard chemotherapy treatments were not available because of their cost. In contrast, Mr. Megrahi undoubtedly obtained excellent treatment in Libya, where he could receive better chemotherapy.
The Journal draws the obvious conclusion that, unconstrained by government conclusions on cost-effectiveness, Mr. Megrahi lived almost 3 years longer than he would have in the Scottish, highly regulated, medical environment. The potential for similar results to occur in the United States under Obama care is obvious.
According to the Journal, the doctor who made the initial estimate explained that his estimate was based upon the National Health Service medical treatment in Scotland, where certain standard chemotherapy treatments were not available because of their cost. In contrast, Mr. Megrahi undoubtedly obtained excellent treatment in Libya, where he could receive better chemotherapy.
The Journal draws the obvious conclusion that, unconstrained by government conclusions on cost-effectiveness, Mr. Megrahi lived almost 3 years longer than he would have in the Scottish, highly regulated, medical environment. The potential for similar results to occur in the United States under Obama care is obvious.
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