Ignore the Sham Budget

The real action will have to be next year, after the mid-term elections. But even then, it’s not clear whether our political system can deal with the crisis of deficits and debt, or whether it will take our foreign creditors, on whose lending we are totally hooked, to administer the shock we need to get our financial foundation on a sound footing. I suspect the latter. They wouldn’t have to do much, just a few public pronouncements in Beijing that China’s central bank plans to invest excess reserves in a different way than it did in the past. In other words, there would not have to be withdrawals of foreign investments, just no increases to feed our ever-growing needs, to induce widespread panic in the markets and in Washington.

If I suspended my instincts about how the crisis would ultimately be resolved, and make an assumption that our political system could rise to the occasion—an assumption of historic proportions—what would Washington have to do?

When you are finished reading that link, go to this NYT article about the ‘Volcker Rule’..another must read

“I think it’s confused the issue considerably, because he’s basically fanned the fires of populism and in a lot of instances, populism doesn’t give you either good regulatory activity or strong markets.”

In Ohio, Obama vows to ‘never stop fighting’

PAPER: Obama's fortunes set to deteriorate further...
Bernanke under pressure; Faltering support for Fed chief...
Dow Suffers Worst Week SInce Last March...
Obama seen as anti-business by 77% of investors...
Europe welcomes bank plan, won't imitate it...
White House nightmare persists...

RASMUSSEN:
Obama Approval Index: -19
Strongly Approve 24%
Strongly Disapprove 43%
Total Approval 44%

After Stimulus: 49 of 50 States Have Fewer Jobs!
*6 Million Jobs Shy of Administrations' Projections...
Obama trying to boost party money, morale...
RNC Beats DNC in Money Race...
Dems lock Republicans out of committee room: 'They don't know how to behave'...
HealthCare Propaganda On Govt. Website?
House Dems Want Medicare for Everyone...
Administration plans big pay cuts at bailout firms...
Salaries of top executives by 90%...

WHITE HOUSE MASTER TO SLASH EXEC PAY

Daniel Henninger: It’s Still the Economy, Stupid – WSJ.com.

It’s been a long time since James Carville said the most famous thing he ever said: It’s the economy, stupid. That famous phrase was in fact part of a sign hung in the Clinton campaign headquarters in 1992. There was a sense among the electorate in the fall of 1992, not entirely accurate, that the economy was foundering under George H.W. Bush. Bush lost control of the public’s perception of the economy, and then he lost the presidency.

Why with unemployment heading above 10% was Barack Obama on TV last night draining a dwindling reservoir of presidential capital on health care? Redesigning the 17% of the economy that is health care appears to be the siren song of Democratic presidencies. Mr. Obama’s crew has famously said it wouldn’t make the mistakes the Clintons made on health care. How calling forth both houses of Congress in prime time to join him in betting the ranch on health care qualifies as smarter politics than the Clintons is a mystery.

Daniel Henninger discusses how President Obama should drop his health-care agenda and focus on the economy.

Even more so now than way back in 1992: It’s still the economy, stupid.

To save himself and his party from enduring another health-care debacle, Barack Obama should put his agenda on the back burner, bend his efforts to raising the economy, and rebuild his political capital by taking credit for the inevitable rebound. That just might minimize the impending loss of House seats and allow him to revisit his wish list in 2011. The alternative is promising big, accomplishing little and getting credit for nothing. This could be America’s greatest failed presidency.

The economy is Barack Obama’s 9/11. If you’re Mr. Obama, it must seem a little unfair. One year ago at the Labor Day turn toward the stretch, Mr. Obama and his team were on the cusp of one of the most thrilling wins in American presidential history. No matter that many Obama voters were looking past all the state-based initiatives in his politics; the air was filled with possibility.

This was history’s moment. Then on Sept. 15, 2008, history hit the wall. Lehman Brothers filed for bankruptcy. The next day the Fed said it would lend a stunning $85 billion to AIG. A major money-market fund broke the buck.

This wasn’t just a recession, a reality already discussed in the summer campaign. There was a sense after the nightmare week of Sept. 15 that the American economy was imploding.

Assets in 401(k) accounts were ravaged. Much of the economy appeared to have fallen into the hands of fools and knaves. Businesses that once were economic beacons—GM, Chrysler, Lehman, much of Wall Street—were breaking off and falling into the sea.

After its Inauguration, the Obama presidency should have been driving a new health-care entitlement into everlasting law on a wave of good will. Instead, it had to deal with the stumbling economy and credit system.

Whether what they did—stimulus, the auto bailout, TARP and the rest—was the right policy is beside the point for our argument. The administration seemed to think it put a big political problem behind it, clearing the way for health care. That was a false dawn.

The most recent Wall Street Journal/NBC poll has 87% of the public somewhat or very dissatisfied with the economy. The unemployment rate is likely to go above 10% for all 2010. Whatever GDP growth may occur, there is no evidence of new-job creation. Gold’s price has risen above $1,000, suggesting inflation is swimming below the economy’s flat surface. China is stockpiling gold and worrying out loud about the weak dollar. A U.N. panel said this week the world should abandon the dollar as the world’s anchor currency.

Just now, Barack Obama’s mad obsession with arcane health-insurance puzzles looks beside the point.

I don’t think anyone fully understands yet how much damage was done to the U.S. economy and financial system by the events of September 2008. Whatever one’s belief in the $800 billion Obama-Pelosi-Summers-Romer Keynesian multiplier, it’s reasonable to believe more than rote public spending is needed to restore the American job-creation machine. The public rightly worries that a damaged economy is vulnerable to more blows.

The White House may think it and Democratic incumbents can simply pocket the credit for whatever fly-wheel growth shows up the next six months. It’s more likely the public will mark down a president who appears passive to its most pressing concern. A presidency seen leading a genuine agenda for renewed growth—offering at least some oxygen to the private economy—would be more likely to earn the broad support it simply does not have now for the agenda of its dreams.

Fat chance it will do that. We opened with the still-good advice of James Carville. We close with an even higher authority to explain last night’s odd spectacle before Congress. It’s Elwood, political director for the Blues Brothers: “We’re on a mission from God.”

Hot Air » Blog Archive » Quote of the day.

“He is trying to fix the financial markets but does not have an assistant treasury secretary for financial markets. He is spending more money on transportation than anyone since Dwight D. Eisenhower but does not have his own inspector general watching how the dollars are used. He is fighting two wars but does not have an Army secretary.

He sent Secretary of State Hillary Rodham Clinton to Africa to talk about international development but does not have anyone running the Agency for International Development. He has invited major powers to a summit on nuclear nonproliferation but does not have an assistant secretary of state for nonproliferation. He has vowed to improve government efficiency but does not have the chief performance officer he promised.

‘If you’re running G.M. without half your senior executives in place, are you worried? I’d say your stockholders would be going nuts,’ said Terry Sullivan, a professor at the University of North Carolina and executive director of the White House Transition Project, which tracks appointments.”

Hot Air » Blog Archive » Joltin’ Joe whiffs on his own curveball.

After watching their stimulus package fail to stimulate and an increasing number of Americans wondering whether President Barack Obama has the first clue on economics, Vice President Joe Biden steps back into the fray to rescue his partner.  In a New York Times op-ed, Biden argues that voters have misunderstood Porkulus.  It wasn’t intended to deliver a big “jolt” to the economy, Biden says — apparently forgetting what he himself said last month….

…Biden says that the administration’s progress has been right on target.  Yet Biden just three weeks ago today told ABC News that the White House had misread the economy…

….As for the “jolt,” Jonathan Adler at The Corner and Mark Silva at Swamp Politics note that just a couple of weeks before that, Biden was Joltin’ Joe when it came to the stimulus…

…All of the above links come from the White House web site.  Maybe Biden would like to do a little research at the office before attempting to build the next ridiculous cover story for the failure of Obamanomics.

Michelle Malkin » Video: ACORN affilates go nuts on Tea Party activists.

Hot Air » Blog Archive » Durbin cashed out on inside information: Sun-Times.

As U.S. stock markets plummeted last September, the Senate’s No. 2 Democrat, Dick Durbin, sold more than $115,000 worth of stocks and mutual-fund shares and used much of the money to invest in Warren Buffett’s Berkshire Hathaway Inc.

The Illinois senator’s 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway’s Class B stock, the disclosure shows.

Altogether, Durbin sold investments worth $116,000 in September. By Oct. 2, he had invested $98,046 in Omaha, Neb.-based Berkshire Hathaway, the form shows.

The Standard & Poor’s 500 index plunged 4.7 percent last Sept. 15 after the bankruptcy of Lehman Brothers Holdings Inc. and Bank of America Corp.’s government-engineered takeover of Merrill Lynch & Co. By the end of October, the index had fallen 22.6 percent.

Obama Seeks Tax on Wealthy to Fund Health Overhaul...

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Big government spending programs -- having opposite desired effect...

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Confusion...

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Obamacare plan finally released; Update: Goodbye, 4th Amendment

House Democrats seek $94.2 billion in emergency funds | Reuters.

Democrats in the U.S. House of Representatives will seek passage in coming weeks of $94.2 billion in emergency money for the wars in Iraq and Afghanistan and other programs, including $2 billion more to prepare for an influenza pandemic.

House Appropriations Committee Chairman David Obey, outlining the legislation for reporters, also said the legislation would include $2.2 billion to fund some C-17 airplanes for the Pentagon. But it will not address future purchases of a refueling tanker airplane sought by the Air Force.

Obey said $80 million to close the U.S. prison in Guantanamo, Cuba, would not be included in the bill because no details were provided by the administration on how that move would be carried out.