by DJ Durant | Jun 28, 2010
The news events of the last few months have certainly put the Obama Administration in a peculiar position. The Gulf crisis notwithstanding, most of these events have been created by this president and his staff.
Team Obama went the the G20 Summit in Toronto this weekend to chide the other 19 nations to continue to stimulate their economy through Keynsian economic principles. “Not so fast”, said the other countries. “We have to make choices, and right now, we choose fiscal solvency and prudence”. What a concept!
Passage of the Financial Institutions Reform package was always tenuous, at best, but the death of Senator Robert Byrd over the weekend makes passage more difficult. One less Democratic vote means that it’s more likely that Republicans can filibuster this package, and this is a good thing. Here’s why: Any bill that increases regulation, drives up costs to the consumer, and squeezes financial services companies’ margins will negatively affect the economy. The costs of increased regulation always get passed along to the consumer in some way, shape or form. Limiting profits also limit tax revenues to the US Treasury in the form of corporate taxes, as well as limiting the taxes paid on dividends. Finally, no company will hire if they have to choose between new employees and profitability. Profits first, then job growth.
Of course, this Administration believes that more government, and more regulation is better than the alternative. Which brings us back to the oil slick in the Gulf of Mexico. Government could not solve this problem. President Obama’s unwillingnes to recognize this fact, rather, to pin it on the previous Administration, has convinced me that less Washington is the answer, not more. Incidentally, government could not solve the Katrina problem either. It was private philanthropy, including church-based organizations, that had the greatest impact during the Katrina aftermath.
It would seem that if anything, this Administration, and especially the President, is deliberately trying to keep people from focusing their attention on the economy, jobs and the fact that companies continue to shed them. This is preferable to actually implementing policies that will create jobs, stimulate the economy, and generate revenues back to federal, state and local treasuries.
On Friday, the Labor Department will release the non-farm employment numbers for June. Consensus estimates suggest that the economy shed 145,000 jobs this month, and if so, that the unemployment rate will rise to 9.8% from 9.7%. Look for President Obama to do some if not all of the following:
- Create a diversion
- Blame it on the financial crisis and the previous administration
- Express a need for additional stimulus
Do not expect him to take responsibility, or offer any potential solutions other than those expressed above. This will prove to solidify Republican gains in both houses of Congress in November. The country wants solutions and for a responsible President. It will have to wait another two and a half years.
by | Jun 25, 2010
by Paul McKinley | May 28, 2010
Paul McKinley is the Iowa Senate Republican Leader
Iowans received more sobering news on the economy late last week. Unemployment ticked up to 6.9 percent with 116,800 Iowans out of work – an increase of 2,600 from the month before.
This news comes as Governor Culver is traveling the state touting his $1.7 billion dollar I-JOBS program that he promised would create 30,000 jobs and spur an economic revitalization of Iowa’s economy. But since unveiling his I-JOBS idea during the Condition of the State address in January 2009, Iowa has actually lost over 30,000 jobs while nearly $1.7 billion has been added to the state’s credit card.
Based on employment numbers from Iowa Workforce Development, the graph below illustrates the month by month unemployment numbers since Governor Culver announced his temporary work program.
Clearly, Culver’s expensive program has failed. Government cannot create jobs – it’s the private sector and small business that is the engine of job growth.
That’s why we need a new direction for Iowa – one that actually puts the focus on private sector job creation and puts Iowans back into good paying jobs in every county and community in this state.
Senate Republicans have a better plan.
Instead of empowering government bureaucrats to pick winners as is the direction taken by Governor Culver and legislative Democrats, Senate Republicans believe we must give entrepreneurs, employers and small business owners the tools they need to not only succeed today – but into the future as well.
Our detailed three point plan involves providing an immediate jolt of adrenaline to Iowa’s economy by offering aggressive tax incentives for hiring more Iowans while also cultivating good ideas and encouraging entrepreneurs to come forward to develop or expand their venture right here in Iowa.
In addition, our plan includes putting together an extensive volunteer commission of business leaders and entrepreneurs from around that state that will be tasked with identifying the onerous barriers and regulations that are holding back growth, development, expansion and job creation in Iowa. The Legislature and governor will need to act on these citizen suggestions.
When Governor Culver took office and legislative Democrats took over both chambers of the Legislature in January of 2007, Iowa’s unemployment was at 3.6 percent. Today it is on the verge of 7 percent.
Last year, Iowa lost 222 factories and two-thirds of Iowa’s counties lost population because of a lack of jobs. Today we remain 49th in the nation in friendliness to job creators according to US News & World Report and 41st according to the very reputable Small Business Survival Index.
We have now seen four years of sky high property taxes, irresponsible spending and generational debt. Year after year, Democrats have discussed and in some instances passed damaging anti-jobs legislation like gutting Iowa’s Right to Work status, decimating our worker’s compensation system, fundamentally altering our collective bargaining methods and implementing a property tax increasing prevailing wage.
We can and must do better. The status quo in Iowa cannot continue.
Senate Republicans know we can experience a 99 county resurgence. Iowa is filled with promise because we have wonderful people in welcoming communities who have a burning passion to build a better Iowa for their families, friends and neighbors.
We must begin to change direction, reignite the entrepreneurial spirit of the private sector and welcome the new economy of tomorrow. Let us again put our faith in the people to move Iowa forward instead of allowing government to hold us back.
As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at [email protected]
Paul McKinley
Senate Republican Leader
www.mckinleyforiowa.com
www.facebook.com/paulmckinley
www.twitter.com/mckinleyforiowa
by Art Smith | May 13, 2010
[Update: some of the text of the proposed rule change included struck out content – It’s corrected now. – Ed.]
Matt Strawn met with bloggers today to provide a report on the meetings he has attended at the RNC recently. One of the items he brought back was the recommendation from the Temporary Delegate Selection Committee (TDSC), tasked with looking at how to modify the rules around Primaries and Caucuses in the 2012 Presidential Nominating process.
The proposal by the committee, which will be taken up at the Summer RNC meeting in August, establishes a starting point on March 6, 2012 for primaries and caucuses. Iowa is one of 4 states exempted from the date, so we will be able to hold the Republican Iowa Caucuses earlier in the year. Matt indicated that he expected an early February date for the caucus.
Along with Iowa, the states of New Hampshire, South Carolina and Nevada will also be exempted.
The new rules recommendation also constrains states that hold their primaries and caucuses prior to April 1 to provide proportional representation to the Republican National Convention in 2012. This is being doing to prevent a large state from holding their primary early in March and taking away the perceived impact of the exempted states. According to Matt, this rule does not apply to Iowa, although that is not clear in the wording. One way to read it, I think, is that it address the meeting to select delegates, which actually occurs at the Republican State Convention here in Iowa. It will be interesting to watch this question.
The recommendation can be amended and then voted up or down. If it is rejected, I’m not sure what happens next. Likely a new committee is formed.
Matt commended Former RPI Chairman Brian Kennedy, who served on the temporary committee, for working hard at ensuring that Iowa maintained their exemption.
Matt also mentioned that he testified before the committee in 2009.
Below is the relevant proposal:
Proposed Rule No. 15(b) Amendment with Adopted Ryder Language
(Current language adopted by the TDSC)
(b) Timing.
(1) “No primary, caucus, or convention to election, select, allocate, or bind delegates to the national convention shall occur prior to the first Tuesday in March in the year in which a national convention is held. Except New Hampshire, South Carolina, Iowa and Nevada may begin their processes at any time on or after February 1 in the year in which a national convention is held.â€
(2) “Any presidential primary, caucus, convention, or other meeting held for the purpose of selecting delegates to the national convention which occurs prior to the first day of April in the year in which the national convention is held, shall provide for the allocation of the delegates selected on a proportional basis.â€
![Levin v. Goldman: Big Solution For a Big Problem?]()
by Brian Nygaard | Apr 27, 2010
When Senator Levin says “Goldman made a lot of money by betting against the mortgage market†what do we think he might have meant? Knowing some of the political philosophy of the esteemed senator from Michigan, it is obvious that his inference was that Goldman was acting in a fashion that was either illegal or immoral. How could any American institution bet against motherhood, apple pie or the American dream of universal home ownership? And certainly the notion of â€making a lot of money†is of dubious quality on its face. The Senator is literally screaming “These people are the enemy of the state, and they need to be leashed, or chained, or imprisoned, or tortured…all for the good of the system of the people.â€
It is always amusing when a single statement contains such a large number of fallacies. Let us count the ways.
First, Goldman was acting in their role as an investment broker. Everything they do is essentially either a bet for or against something…or the facilitating of someone else doing the same thing. More technically, they are simply acting as brokers, and not as agents. Agents represent a buyer or seller. Brokers facilitate the transaction. This is the “market mechanism†and it is what guides the whole system of the effective allocation of resources. It is fundamental to our material progress. As significantly, if people would have actually listened to Goldman, the whole mortgage disaster might have been avoided. Starting in 2004 Goldman was very publicly saying that the US housing market was overpriced and that we were headed for real trouble. Unfortunately, too few actually listened to them, including Senator Levin. In the case of the SEC-driven synthetic CDO case, Goldman was actually not making a bet against the mortgage market…an investor was. But even if they were, it was completely their right to do so.
“But the disclosure wasn’t adequate…†Please. If you hear anyone say this just say “stop,†and remember that these things were bought (not sold) by some of the most sophisticated investors the world has ever seen. These buyers were high-powered investors looking for levels of interest unavailable in our low-interest world, and they got torched. Anyone who uses the word “disclosure†in this argument is either very poorly educated, or more likely concealing a very ugly hidden agenda. Funny, have you heard anything from the actual investors who lost all the money? Most of the money that was lost in the mortgage meltdown was not even held by the banks. Unlike the power-mongering Senator Levin however, they all know and accept the penalty for the sin of their ill-fated and over-reaching greed.
Secondly, and contrary to Mr. Levin’s fear of profit, the world has proven over and over again that without the opportunity for “profit†the world tends towards universal impoverishment. We should very quickly notice that profit is not a word to be used exclusively with respect to corporations; it is a universally human word. All of us require “profits†as a source of motivation. Mr. Levin demonizes corporate profits, but fails to recognize the evil of “government profits,†which are the desired fruits of his labors. In the case of government, the profits take the form of the shifting of funds from individuals and corporations into the pockets of government. Profits, thus defined, always flow out of a system where productivity is advancing. It has to. The only question is who gets them. Mr. Levin has decided that they should flow to him and his kind, as opposed to those with the brains and drive to actually create something of real value. Profit is virtuous. The conscription of profits by the government is the true evil. This is particularly evident in the case where the “disclosure†of the intentions of the government (think Mr. Levin) is what is so entirely deceptive and completely lacking.
Lastly, Mr. Levin effectively is saying “And what we need is a really, really, really big solution to this really, really, really big problem.†What we have in the case of the mortgage crisis is actually a really limited problem with a very large set of consequences. The failure that we experienced was a classic simultaneous failure of the banking and insurance systems resulting from too little capital required to support the levels of risks being taken. This is hardly a new problem. The current financial services bill, like the health care bill, is just an opportunistic ruse that only tangentially relates to the real problems that we face. All we need to fix the problems with mortgage-backed securities and their “derivatives†are a set of rules around the capital needed to support both their issuance and their holding. End of story. Mr. Levin actually knows this. And that is the real problem…and a crying shame.
Sophisticated systems like ours create “sophisticated solutions†to create take-overs by the government that are accepted by “We the people.†The financial services bill is sophisticated only its complexity, and has nothing to do with the problems we really face. And herein we see the real evil. Goldman is not our problem. Levin is.
