Backfire!

After watching this video (and pay close attention to the President's body language), you have to wonder whether the Obama administration committed political hari kari when it proposed Thursday's "Health Care Summit" at Blair House:

Paul Ryan is one of the brightest and most articulate stars in the firmament of Republican congressional officeholders. To give him 6 minutes of uninterrupted media in order to demolish the President's policy assumptions while the President himself looks on silently is a faux pas of the highest order.

By descending from the heights of Mt. Olympus to engage with pols from both parties Obama inadvertently bestowed a presumption of seriousness and credibility on the attendees. He thus gave the Republicans a prominent platform from which to showcase their opposition to Obamacare.

Worse yet (from the Dems point of view), he gave GOP members highly valuable media face-time to demonstrate to a national audience their command of the issue of health reform and the fact that they have positive ideas for real reform. The summit undermined the Dems' primary line of attack on Republicans, which is that the GOP is the party of "no" which has no health reform ideas of its own. In retrospect, the GOP leadership's decision to attend the summit--a decision excoriated by prominent conservative voices--turned out to be politically astute.

The summit was a disaster for Democrats. Someone in the Obama White House should be fired and sued for political malpractice.

Thousands of Descendants, For G-d's Sake

Some people collect jewelry, others silver and gold. But perhaps Yitta Schwartz, who recently passed away at 93, knew a thing or two about real treasure.

Politics Takes a Back Seat

I wish I could say that I have received dozens of emails during the past 2 weeks begging me to end my self-imposed "radio silence," aka bloggus interruptus. One of my faithful readers told me yesterday that the sight of me reminded him that he hasn't seen a blogpost from me in quite some time, and he went on to say he generally like what I wrote. But in general my readers' lives seem not to have been much affected by a fortnight without the Eye of the Beholder.

My experiences over the past two weeks have sort of made the day-to-day thrust and parry of the various political and ideological warriors seem sort of silly and meaningless. The first half of the period found me in Jerusalem with 18 other guys from Atlanta on a men's "bible-study mission" if you will. We didn't study the bible text directly, but instead learned a portion of what is called the "gemara," the Talmudic discussions of the Sages inscribed about 1700 years ago. It is difficult to focus on modern politics when your head is wrapped around a piece of spiritual wisdom that transcends time itself.

Not to say that we spent all of our time in a state of asceticism. There was plenty of touring, eating, drinking and other pleasurable activities. In fact we were so busy that even if I had time to post a blog I was so un-plugged from the news cycles I wouldn't have known what to write about. The little time that I spent online was for reading and sending emails.

On the last day of the weeklong trip I found out that my youngest son Josh, age 10, was taken to Children's Healthcare of Atlanta, known locally as "Scottish Rite." Josh has been suffering from gastro-intestinal issues for many months, and had been particularly unwell for a few weeks with a low-grade fever and, well, bathroom problems. He had become increasingly dehydrated and anemic and his Mom really had no choice but to take him in.

I landed in Atlanta early Tuesday morning after a fretful flight and arrived at the hospital in time to smother Josh with fatherly kisses before he was taken down for the upper and lower GI series intended to diagnose his problem. We had known for weeks that Crohn's was suspected and indeed the initial diagnosis pointed in that direction. The colonoscopy didn't confirm Crohn's, so the diagnosis for now is ulcerative colitis, which is somewhat less severe than Crohn's but treated more or less the same, at least initially.

The boy will be fine but can't come home until the meds are working properly and his bathroom habits approach normalcy. His Mom has spent every night with him in his room and will continue doing so until he is discharged. Josh's stepmom (my wife) and I spend as much time as we can with him, as do Josh's brothers and sister and other visitors.

I am fully aware that many families have suffered with a great deal more than we are facing. We know that with modern medicines and access to the greatest health care system in the world Josh will soon resume a normal life, which is not the case with most chronic diseases. At Scottish Rite, which is a terrific children's hospital, we see on a daily basis precious children who face challenges and struggles that I hope none of my children--or yours--ever have to face.

Nevertheless I experienced, if only for a short while, the feeling of helplessness and worry that a parent feels when his or her child is sick without a definitive diagnosis. I also felt the gnawing angst of a father who is 18 hours and thousands of miles from home when he discovers that his child is in a hospital bed. That is a feeling that I could happily do without for the rest if my life.

I thank G-d for the blessings of health for me and my family, a loving and devoted wife and stepmother to my children, caring friends and family members and my kids' mom, who has made Josh's hospital room her home.

I am sure I will be back to blogging about politics and the news of the day soon. But the past two weeks has put all of that in a different, less illuminating light.

Is this the New Populist Obama?

From the U.K Guardian on Monday:

President Barack Obama today will send to the US Congress a budget with a record $1.6tn (£1tn) deficit, as he boosts spending on job creation, his healthcare overhaul and defence while ending Bush-era tax cuts for wealthy Americans.

The budget deficit is the largest ever in dollars, and at 10.6% of US gross domestic product it is the largest proportionally since 1945, when the the war-time US ran a budget deficit of 21.4% of the economy.

A 1.6 trillion dollar projected deficit for FY 2011. Thats four times larger than the projected deficit in George W. Bush's last annual budget proposal.

Not to worry. The same folks who told us last year that the way to avoid national bankruptcy is to spend more money tell us now that the way to save money is...to spend more money:

"We must do what families across the country are doing," Obama said at the White House today, "save where we can so we can spend where we need."

The proposed budget assumes increases in revenues from cap-and-trade legislation--which will never pass the Senate--and from elimination of the Bush tax cuts--which may never pass either the House or Senate. It also assumes that Congress will pass Obama's punitive banking tax, which is not at all certain.

The budget also assumes federal tax revenues and interest payments on the national debt will reflect current economic conditions, which are pretty shaky already. If the economy enters into an inflationary recession or depression--not outside the realm of possibility--expect federal tax revenues to plummet and interest on the national debt to rise significantly. The budget proposal is a train wreck under the most optimistic assumptions and a national disaster under the more plausible ones.

The president's proposed budget document--like those of all presidents- -was dead on arrival in Congress almost from the day it was announced. Democrats are already balking at its fiscal irresponsibility (see below). But as an indication of an administration's political and fiscal priorities budgets are a window into the civic morality of our leaders. This deceptive and cynical budget proposal tells us much about this president, and none of it is good.

Obama’s budget assumptions, which by law must project out 10 years, would result in almost $50 trillion in new outlays and combined additional deficits of $9 trillion. By 2020 the national debt would total over $20 trillion, exceeding 1o0% of projected GDP in that year. Experts acknowledge that once cumulative fiscal deficits total 75% or more of national GDP, nations have almost no recourse but to declare national bankruptcy.

Pundits and economists of both the left and right acknowledge that our cumulative deficits are a looming national catastrophe. Last year, The Washington Post’s Robert Samuelson--no conservative --warned that Obama’s spending plans (he was discussing Obama’s 2010 budget proposal) augured a future fiscal crisis. Samuelson wrote: “The Obama budgets flirt with deferred distress, though we can't know what form it might take or when it might occur. Present gain comes with the risk of future pain. As the present economic crisis shows, imprudent policies ultimately backfire, even if the reversal's timing and nature are unpredictable.”

That was then. Things have only gotten worse, given that last year’s budget--the one Samuelson was analyzing--projected a 10-year deficit of $7 trillion and this year’s projects a 10-year deficit of $9 trillion. Thats a 30% increase in projected deficits year over year.

Gerald Seib of the Wall Street Journal--a moderate to liberal commentator--concedes that the budget deficit has “graduated from a nuisance to a headache to a pressing national concern.” He goes so far as to deem it a national security threat, in that half our accumulated debt is owned by foreigners, many of whom aren’t interested in our welfare. Dangers abound--from China and foreign central banks who “could put pressure on the U.S. in a way that no military could” to a run on the dollar by foreign investors who suddenly lose confidence in the currency.

The New York Times--which by the way applauded Obama’s budget proposal--sort of concedes that fiscal deficits are a problem. But one that can wait, apparently. The Times admonishes Congress to not “waste any more time posturing about the deficit rather than doing what is needed to get Americans back to work.”

Many in Congress aren't listening to The Times, it would seem. Even Democrats--fresh from the wake up call of Massachusetts-- are spooked by Obama’s budget nightmare. When Peter Orszag, Obama’s budget director, testified at Capitol Hill yesterday, lawmakers of both parties took him to task over the administration’s joke of a deficit reduction plan. Senator Kent Conrad--a Democrat from North Dakota and Chair of the Senate Budget Committee--went so far as to declare that "the president's 10-year-outlook is not a path we can take.”

Obama's budget--probably willfully--sets the stage for a massive tax increase even beyond the repeal of the Bush tax cuts. But crushing new taxes will only reduce the pool of income producers who can be taxed to finance even the interest on the debt, much less to payoff the debt itself. That leaves only two options: Reduce spending to match revenues, which isn’t going to happen; or borrow the difference between outlays and income from domestic and foreign lenders.

The problem is that half of our debt--about $6 trillion-- is owned by foreign lenders. At some point they will conclude that the U.S. has no intention of putting its fiscal house in order. At some point thereafter they will avoid U.S. Treasuries and agency issues like the plague.

Enter then the third option, which is no option at all, but a fiscal imperative: run the printing presses. When the creditors balk at lending the Federal Reserve must raise short-term interest rates to attract them. But if they lose confidence in the dollar, even interest-rate premiums won't help. The Fed must then “monetize” the debt; that is, buy the bonds that no one else will.

In essence, the Fed will have no choice but to inflate the dollar by increasing its supply, thus lowering its value. This is tantamount to stealing wealth from the American people and a stealth default on our obligations to foreigners. This is the kind of scenario that results in trade wars--and shooting wars.

Barack Obama and most Democrats in Congress may be long gone by the time all this plays itself out, but that doesn't fully explain their willingness to subject this and future generations to the prospect of becoming the world's economic pariah. While both parties have contributed to our fiscal straits, the fact is that our fiscal nightmare accelerated once Democrats re-took control of the country's purse strings in 2007. Now they seem hell-bent on crushing any prospect for reversing course, preferring instead to pass an unpopular and divisive agenda.

There is something tragically, pathologically wrong with political leaders who would sacrifice the prosperity and economic well-being of its citizens for political and ideological ends. We can only speculate as to what it is that drives such men and women to put its citizens at risk. At times like this, political wisdom is not sufficient to address what increasingly looks like a psychiatric problem.