Middle Class In Flames: All The Fed Has Done Is Help The Banks

Naked Capitalism supports Occupy Wall Street. Heh, heh. Does Jeep know?

Yves Smith of Naked Capitalism, here:

Oh, puhleeze. Robust recovery for who? The Fed not only threw staggering amounts of firepower at salvaging bank balance sheets, while showing no interest in rescuing ordinary Americans. It was also all-in on the Administration’s program to paper over the banks’ chain of title problems and their widespread servicing abuses, and didn’t bother to obtain any meaningful concessions or reforms, the most important of which would have been principal modifications, a remedy favored by investors as well as homeowners. The Fed has been all too happy to accept mission creep rather than speak up forcefully for the need for more fiscal stimulus.

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The analysis is right, but the prescriptions are left: raising the minimum wage, breaking mortgage contracts, and spending money we do not have. Oh, puhleeze. It's Naked Liberalism.

But she's great on Obama's Mussolini-style corporatism, most recently here in response to The New Republic:

I’m actually a bit miffed that Konczal treats the “corporatism” appellation as the sole property of the right wing (in the style sheet of the Vichy Left, calling them “hysterics” is redundant but necessary for the rubes), since I have a prior claim. And what is particularly rich is that Konczal apparently regards the allusion to Mussolini to be unfair . . ..

Obamacare IS corporatist. Here we have the industries that are significant contributors to why the American medical system is so overpriced – the health insurers and Big Pharma – actually playing a major role in writing the legislation. And how is it not a sop to large companies to have the government require that citizens buy your product or else pay large tax penalties? Mr. Market certainly thought so, for the price of health insurer and drug company stocks jumped the day the ACA passed. And remember, the beneficiaries of Obamacare extend beyond the insurers and pharmaceutical makers. Hospitals, who increasingly engage in oligopoly pricing (most surgeries need to be done in hospitals), also come out even stronger because new requirements imposed on doctors’ practices will make it difficult for a retiring MD who practices medicine, as opposed to servicing the rich (e.g., cosmetic surgeons) to sell their business to anyone other than a hospital.

And the label fits in the banking arena like a glove. I’ve ... called both the Bush, but far more often the Obama bank-friendly policies “Mussolini-style corporatism” since 2008, and well before what [Mike] Konczal [of The New Republic] claims is the origin of this description, Tim Carney’s book Obamanomics, published November 30, 2009.

TNR Blames And Credits JK Galbraith For Contemporary Financier Fascism

It would be nice if liberals could make up their mind.

The New Republic's Tim Noah here traces TARP, Dodd-Frank and ultimately the general state of regulatory capture (Stigler) of the government by the banks to John Kenneth Galbraith's vision in his 1967 The New Industrial State:

Galbraith (who died in 2006) argued that big U.S. corporations had become immune to competition. Any effort to break them up into smaller companies would neither succeed nor—given the complex challenges of a modern economy—be especially desirable. Better to keep them in harness through a partnership with government. “Planning,” Galbraith wrote (in a sentence you could probably get arrested for writing today), “must replace the market.”

Galbraith was writing about manufacturing giants like General Motors and U.S. Steel. These seemed indestructible at the time, but of course they would soon prove all too susceptible to competition from abroad. Still, Galbraith’s vision of the regulatory state comes pretty close to describing today’s relationship between the federal government and a different oligopoly: the Big Six megabanks. ...

When the 2008 financial crisis hit, the feds went into Galbraithian planning mode. They bailed out the banks through the Troubled Asset Relief Program (TARP), arranged mergers, and, through the Dodd-Frank bill, required big banks to prepare “living wills” showing how they would dismantle themselves in orderly fashion should the need arise. ...

Conservatives were wrong to oppose the government’s bank rescue . . ..

For conservatives who feel queasy advocating the breakup of private enterprises, MIT’s Johnson offers this consolation: Remember George Stigler. Stigler, a conservative economist who died in 1991, won the Nobel for a theory that basically said Galbraith’s partnership approach didn’t work because of “regulatory capture,” i.e., the various ways corporations tame their minders—for example, by maintaining a revolving door between industry and government. Rather than try to control powerful corporations, Stigler thought government should use antitrust law to break them up and let competition rein them in.

What's wrong with this analysis is that banking is not a private enterprise and hasn't been since 1913. The then new partnership of banking with government in 1913 failed in less than 20 years, requiring Glass-Steagall in 1933, which was reactionary liberalism at work. And what we have just witnessed is an instant replay of that debacle, only in faster motion. The Gramm-Leach-Bliley Act of 1999 overturning Glass-Steagall took only 9 years to blow up. But unlike Glass-Steagall, the grotesque of interventions in the wake of this latest panic has done nothing to demarcate clearly the public vs. the private in banking, and consequently keeps the public, and the country, at risk while insuring advantage to those closest to the printing presses at the Treasury. Money goes to money, as they say out in the sticks.

It's not much solace that liberalism's fingerprints have been and continue to be all over the inception and development of financier fascism in the United States. There don't seem to be any conservatives smart enough to understand the advantage it presents to them, and to the country. Or maybe it's just that they've been captured, too.

TNR Notices Obama's Recovery Benefitted Only Elites

Well, what else would you expect from a national socialist? (Obama silly, not TNR).

Tim Noah, here:

"The biggest gainers in 2011 were the bottom half of the top one percent, i.e., those making between $358,000 and $545,000. They saw their incomes increase, on average, by 1.70 percent (not much to write home about, but you've got to put a weak recovery somewhere)."

Fewer than 1 million Americans earned net compensation for Social Security purposes in that range in 2011.

Tendentious Headline Alert

Campus conservatives are dying? Really? The New Republic says that?! Truly shocking. But while the book, apparently, and the review don't flatter a certain type of conservative, neither the review nor the book, evidently, says that they are "dying", illustrating that headline writers often excel at expressing a prejudice. A promising future no doubt awaits at The New York Times. 

Progressive Lefties At TNR Recognize Senate Deal Is "Crappy" For Them

So says Tim Noah, here:

"Nevertheless, this is still a crappy deal, and Democrats should still reject it--or be quietly pleased if House Republicans reject it (as they're threatening to do)."

I agree that the deal is crappy for Democrats, really crappy, but the objective of Obama is only political. What's good for the country is meaningless. He's counting on the right in the House to reject the deal, doing for Obama what he cannot do by himself. It is the extremists of both the left and the right which cannot see how Obama is playing them. If the House had any brains they'd take the tax deal, but I don't think they will, unlike how under Pelosi the House progressives swallowed hard and took the Senate healthcare plan instead of opposing it. Better than anyone they know that ObamaCare is not the end game, but the next step to the single payer idea for which they originally stood.

Politically Obama needed to look like a compromiser, and appear reasonable and "balanced", to match his rhetoric played out over a long period, which is now very familiar to everyone. Later he can use the political capital gained thereby to appear like a genuine savior when he swoops in to offer a tax cut to the poor to relieve these unfortunate souls victimized by Republican "intransigence" over spending cuts. Obama has been telegraphing this for what seems like forever. This lousy deal for Democrats gives all the appearance of compromise, but it is intended rather to go to the heart of the split between the more conservative House Republican caucus and the more liberal Senate Republican caucus.

Once those two groups are split publically over a vote on a bill which will wreck the lives of millions, Obama is in the strongest position ever to appear the benefactor of "the middle class", the group he most wants out of his way in his attempt to level American society. In order to really screw them, he's got to get their complete confidence first. To do so he'll throw them a tax cut bone, which the doofusses will be very thankful for and will repay their master for with grateful support when he goes after their real enemy, the rich. You know, the Romneys and Buffetts of the world who look like the guys who fire them from their jobs.

The problem with true believers is that they are true. It blinds them to the way power shifts, which is why they never succeed.

Perhaps The Most Important Argument Against Consumption Taxes

Perhaps the most important argument against consumption taxes is Murray Rothbard's critique of them here, noting their time-preference prejudice:

"The major argument for replacing an income by a consumption tax is that savings would no longer be taxed. A consumption tax, its advocates assert, would tax consumption and not savings. The fact that this argument is generally advanced by free-market economists, in our day mainly by the supply-siders, strikes one immediately as rather peculiar. For individuals on the free market, after all, each decide their own allocation of income to consumption or to savings. This proportion of consumption to savings, as Austrian economics teaches us, is determined by each individual's rate of time preference, the degree by which he prefers present to future goods. For each person is continually allocating his income between consumption now, as against saving to invest in goods that will bring an income in the future. And each person decides the allocation on the basis of his time preference. To say, therefore, that only consumption should be taxed and not savings is to challenge the voluntary preferences and choices of individuals on the free market, and to say that they are saving far too little and consuming too much, and therefore that taxes on savings should be removed and all the burdens placed on present as compared to future consumption. But to do that is to challenge free-market expressions of time preference, and to advocate government coercion to forcibly alter the expression of those preferences, so as to coerce a higher saving-to-consumption ratio than desired by free individuals."

Rothbard goes on to ascribe this prejudice to "Calvinism", which may be entertaining to the libertarian who is interested in wine, women and song now and has a devil may care attitude about present frugality as a defense against want later. But this assumes there is no moral difference between savings and consumption, which there certainly is when the penniless old man turns up on your doorstep, hat in hand. The libertarian has his own time preference prejudice, were he to admit it, which life teaches us has serious consequences, more often than not.

Be that as it may, it is important to recognize that standard measurements of economic activity in the United States have for some time shown, in something like the following formulation, that "70% of GDP consists in consumer spending", and were it not for schemes like Social Security and Medicare there would be far more ringing of the bell going on at the front. This is quite a remarkable fact in a supposedly Calvinist civilization, a fact which argues for the moral superiority of savings over consumption because despite our better natures we in reality live otherwise. This suggests that we still ought to do everything we can to encourage the former and punish the latter, for the simple reason which the observation of human nature teaches. We are mixtures of good and evil, but unfortunately too often it turns out to be a bad mixture.

The ancient Greeks, among other things, notably taught us "nothing too much", by which we may infer that the preponderance of present spendthrifts demonstrates individual and social excess which ought to be remedied by tax policy encouraging the increase of savers. To right the ship would mean achieving a better balance between the two, and to Rothbard's main point, which is that under a consumption tax savings would inevitably be taxed in the long run anyway just as consumption is in the present because that is what savings becomes, we therefore ought to have no compunction about taxing savings in the end. That is what the death tax accomplishes, the final message to an excess of savings.

In the present context this recommends taxation of consumption in some form to encourage marginally less of it, better mechanisms of rewarding savings of which we have too little, and a death tax which approximates the same level as a consumption tax would operate at. This means that draconian schemes of estate confiscation by the government at death are in principle unjust because as consumption taxes we would never think of imposing similar levies on the living.

Unless, of course, we subscribe to The New Republic.

Let's Face It, Republicans Helped Create "The Takers"

It's time for a reality check. Republicans bear heavy responsibility for creating "the takers", the infamous 47% of households who pay no taxes.

The real reason Mitt Romney lost the election is because he couldn't get Reagan Democrats to turn out for him enthusiastically, people for whom dissing the whole idea behind the tax credit programs expanded by Reagan and Bush 43 to subsidize working families just like them sounded foreign coming from the mouth of a Republican candidate for president. I refer to the Earned Income Tax Credit and the Child Tax Credit.

Reagan had made the former his answer to welfare dependency, and George W. Bush further expanded it and also doubled the latter, to the point that now, as the Tax Policy Center says here:

[T]he Earned Income Tax Credit and the Child Tax Credit . . . are the major reason many low-income working families avoid the income tax. About one-third of those who don’t pay are families with kids.

This New York Times graphic, using Tax Foundation data, shows how the percentage of non-taxpaying filers had grown by over 50% since 1986 through the end of the Bush presidency, and now under Obama has really ramped up another 50% so that since the time of the 1986 tax reform twice as many filers have no federal tax liability as did twenty-five years ago. If Obama has doubled down on anything, they were Republican ideas to begin with. To paraphrase an old saw, We sold them the rope they're hanging us with. 

What once seemed like benign Reagan era social props have grown into major federal welfare transfer payment programs for the lower and middle classes in America, which is why liberals like Tim Noah here deliberately don't focus on them in analyzing the takers, "the 47%". To do so mutes their point that these people still pay the regressive payroll tax, which the EITC offsets. But practiced long enough, these lower wage workers getting EITC payments every year until retirement will collect Social Security without having really contributed to it themselves, transforming it, for them, from a contribution based pension into pure welfare.

Democrats are more than happy to have Republicans do this dirty work for them in expanding the federal welfare state instead of just acting as they do in more somnolent times as mere tax collectors for it. During the next five years, these direct subsidies to families are projected to cost the Treasury over $90 billion each year. In 2011 alone there were over 26 million EITC claims costing the taxpayers nearly $59 billion. 

This issue goes to the heart of Mitt Romney's problem with the Republican Party: He had the temerity to point out the dependency practiced by too many Republicans. Unfortunately for Mitt Romney and the country, he had no constituency for this message, or at least not enough of one to get him over the top.

More than ever I suspect that this way of thinking is what was behind Mitt Romney's interest in "rectitude" in "equalizing" taxes when he was governor of Massachusetts, but also accounts for his statements distancing himself from the Reagan record in the 1990s when he ran against Sen. Ted Kennedy, just when Rep. Newt Gingrich was about to unleash The Contract With America. Reagan might have been an anti-communist conservative, but a fiscal conservative he was not, at least not in practice. That's what was really important to Romney at the time and obviously still animates him. But not his party which has made zero progress toward fiscal conservatism and has gone the other way.

Say what you will about Romney's social liberalism, it was his fiscal conservatism which alienated him not just from Democrats, but also from anyone receiving a big tax refund every spring.

A famous Democrat once said, "I didn't leave the Democrat Party, the Democrat Party left me." But a fiscal conservative can't say the same of the Republican Party . . . in living memory it's never been there.

(graphic here)

Bailout Takers To Give Obama The Margin Of Victory In Ohio

Is Romney wrong to write-off voters who depend on direct government assistance?

Alec MacGillis for TNR, here:

When I was in Toledo last week, I asked Lucas County Treasurer Wade Kapszukiewicz, a Democrat, what he made of Obama’s strong position, and he didn’t hesitate. “It’s the bailout," he said. "It’s not just the Jeep plant in Toledo and that they build the Chevy Cruze in Youngstown. But more than that -- we have 88 counties, and in 82 of them there are supplier plants to the larger ones. When you start talking about 82 of 88 counties that have some sort of direct, literal, positive impact from this rescue, I think that on the margins has the ability to tweak the numbers.”

The moral hazard of bailouts doesn't affect just the outcome for a business, but also the outcome for the politician responsible for it.

Gov. Romney should have considered that the contributions of bankers who were helped through TARP bailouts which he supported may be outnumbered by the votes of workers whose jobs the auto-bailouts he opposed preserved. 

The New Republic Can't Spell The Name Of The Mayor Of LA

The New Republic has trouble spelling the name of the mayor of Los Angeles, Antonio Ramón Villaraigosa:

What, then, could be the path to a Republican resurgence? The first thing would be to break the Democratic hold on the minority vote by winning back a reasonable share of the Hispanic vote—say, 40 percent or more, which Republicans once got. Success in this case depends on advancing policies on immigration that win favor among Hispanics, but it also may hinge on Republicans take the side of Hispanics in a battle over scare public resources with blacks. One could see this kind of black-Hispanic division surfacing in 2005 Los Angeles mayoral election pitting James Hahn, who enjoyed black support, against Antonio Villagarosa.

Well . . . who wouldn't?

The Left's True Objective Is Higher Taxes On Middle Class: Citizen Cohn Admits It

Say whatever you want about Romney's tax numbers not adding up, the objective of the left in America is to raise taxes on the middle class, precisely because government spending as projected going forward cannot be paid for without it.

So Jonathan Cohn, here:

To reiterate something I've said before, I happen to support higher taxes for the middle class, at least over the long term, assuming they are part of a balanced deficit reduction approach that preserves Medicare, Social Security, and other critical programs. In an ideal world, Obama would make a case for precisely that sort of agenda, because without those higher taxes (above and beyond taxing the rich, as Obama has proposed) government won't have enough money to fund future spending obligations. But it's hard to fault Obama for not presenting the full facts about fiscal tradeoffs when the other side has shown repeatedly that it doesn't care about facts at all.

Conservatives need to make the point that government spending even at Rep. Paul Ryan levels is unaffordable without tax hikes on the middle class.

All the talk in the Republican Party about broadening the tax base is really about eliminating tax loss expenditures in order to raise revenues. In other words, taking away the deductibility of mortgage interest expenses, state and local income tax expenses, and the like. If it walks like a tax increase and talks like a tax increase, it's a tax increase, whether it's brought to you by the Gang of Six, the Gang of Twelve, or Mitt Romney.

The Stupid Party is about to vote for this again and the left knows it, which is why they are so happy. People like Jonathan Cohn know a Romney presidency will help achieve their goal, so it really doesn't matter if Obama loses. Unless conservatives take over the Republican National Convention and give the nomination to someone who will actually protect the middle class, taxes on the 66 percent of America which earns less than $100K per year are going up, up, up.

Conservatives need to remember what happened last time we fell for this gimmickry. Ronald Reagan agreed to eliminate deductibility of consumer interest in the 1986 tax reform in exchange for lower rates. We lost that deductibility and got the lower rates, but when Democrat Bill Clinton raised taxes in 1993, we didn't get back the deductibility. The same thing will happen again. We'll sacrifice deductibility of something else in exchange for lower tax rates, which liberals later will succeed in raising the next time they have power, putting the middle class even farther behind than it is now.

We didn't get back the deductibility lost in 1986 under George Bush in 2001, and we won't in future if we answer the siren call of broadening the tax base again.

What A Shock: The New Republic Defends Crony Capitalism

Michael Kazin for The New Republic here argues that crony capitalism isn't really that big a deal because it is pretty much as old as the old Republic itself, except he skips the founders and begins in the nineteenth century.

It doesn't occur to him that perhaps crony capitalism suggested itself to so many Americans because they drank from the well of monarchy for so long. No thoughtful person who respects the founders imagines they were inoculated from the failings attendant upon all natures mixed with good and evil. The left delights in pointing this out, whereas the true right mentions it as a cautionary tale.

We are monarchy's lesser children because of people like John Locke, who was at pains to remind us that "is" does not always mean "ought", else we should, for example, beget and raise children to sell them into slavery because it was done, sometime, somewhere, in the past. Reason is necessary. Respecting ancient practice is not the essential meaning of conservatism, try as the left does to reduce it always to such a formulation. They are the terrible simplifiers still.

The greater children of monarchy are the strong men of Europe who drank deeply from the well of Marx after centuries of experience with kings and queens. Hitler, Stalin and Mussolini were thus hyperbolic, aberrant, monarchists, and insofar as leftists like Wilson and FDR reinfected America with their example was to no good purpose, no matter how much The New Republicans say so to the contrary.

Gingrich Increases Delegates Over 200 Percent With Super Tuesday Wins

Here's the delegate snapshot from The Wall Street Journal, showing the new totals for each candidate after Super Tuesday.

Romney's lead is making all the headlines, but Gingrich's surge yesterday was the most significant. But can Gingrich keep it going?

Gingrich went from a total of 33 to 105, a gain of 218 percent.

Romney went from a total of 203 to 415, a gain of 104 percent.

Santorum went from a total of 92 to 176, a gain of 91 percent.

Paul went from a total of 25 to 47, a gain of 88 percent.

Gingrich is as vulnerable as Romney on the individual mandate. Newt has believed in it at least since 2006, and famously agreed with Romney in a Republican presidential debate in Las Vegas last October that they both got the idea from the so-called conservative Heritage Foundation (source of following transcript):

MR. ROMNEY: Actually, Newt, we got the idea of an individual mandate from you.


MR. GINGRICH: That's not true. You got it from the Heritage Foundation.


MR. ROMNEY: Well, it was something - yeah, we got it from you and the - you - got it from the Heritage Foundation and from you.


MR. GINGRICH: No, but - well, you - well, you - (inaudible) -


MR. ROMNEY: But let me - but let me just -


MR. GINGRICH: Wait a second. What you just said is not true.


MR. ROMNEY: Well, I thought -


MR. GINGRICH: You did not get that from me.


MR. ROMNEY: I think you -


MR. GINGRICH: You got it from the Heritage Foundation.


MR. ROMNEY: And - and you've never - never supported -


MR. GINGRICH: I was - I agree with them, but I'm just saying what you've said to this audience just now plain wasn't true. That's not where you got it from.


MR. ROMNEY: OK. Let me ask - have you - have you supported in the past an individual mandate?


MR. GINGRICH: I absolutely did, with the Heritage Foundation, against "Hillarycare."


MR. ROMNEY: You did support an individual mandate?


MR. GINGRICH: Yes, sir.


MR. ROMNEY: Oh, OK. That's what I'm saying. We got the idea from you and the Heritage Foundation.


MR. GINGRICH: OK. Little broader. (Laughter.)


MR. ROMNEY: OK.

In 2009 Romney specifically argued for the individual mandate in this USA Today op-ed as an acceptable alternative to the public option as embodied in Nancy Pelosi's version of ObamaCare which passed in the US House. Since then Romney has flipped on this issue, claiming repeatedly that he has been against imposing a RomneyCare-like plan on the whole country.

The Senate version of ObamaCare, which eventually became the law but is now going to be challenged before the Supreme Court, represents what Romney hoped for: government compulsion in healthcare insurance which kept government out of the insurance business itself (public option) while preserving the system of private, free-enterprise, health insurance more or less as it exists.

Historically, Republicans have been against a government-sponsored health insurance enterprise because of the perception that government has an unfair advantage against which private business cannot hope to compete and succeed. A case in point today would be Fannie and Freddie, the failed government mortgage giants without whom, alas, few people today can hope to get a mortgage. If you want a vision of failed government healthcare in about ten years, consider the miserable failed condition of those GSEs today.

This is Santorum's opportunity, but many of us wonder whether he's got the right stuff to ride this issue to the presidency. And it might become a moot point after the Supremes rule on ObamaCare by this summer.

Gingrich for his part has tried to change the subject to jobs and growth viewed through the lens of energy independence. It is a good strategy, but it leaves many voters who are worried about the growth and intrusion of the State with a nagging question unanswered: how is Newt really different from Romney philosophically if he's been willing to flirt with mandates?

One's a Creep, the Other a Monster

Tim Noah of The New Republic (who admits Edward Kennedy was "criminally irresponsible" in 1969) helps you decide which is the creep, and which the monster, here.

Progressivism can only be said to be making progress, however, when people such as these are flailed while they are alive and still in power.

The New Republic's Tim Noah Is A Crapy Spellur, For The Sure

Seen here:

New Republic Article by Timothy Noah on Rick Santorum's Healthcare Mandate Views is False

The evidence cited in Timothy Noah's article for The New Republic most certainly does NOT prove that Rick Santorum once favored a healthcare mandate. Noah lazily reads today's debate about compulsory coverage back into a 1994 debate that was about private vs. employer-provided coverage.

In one article here from 1994, the emphasis is clearly on drawing a contrast between privately purchased coverage by individuals vs. the common practice of employer purchased coverage for employees. A mandate to purchase coverage is not in view:

"Santorum and Watkins would require individuals to buy health insurance rather than forcing employers to pay for employee benefits. ... Santorum introduced the idea of a medical savings account, called Medisave, which has become part of the Gramm bill. Under it, workers would buy major medical insurance and could make tax-free contributions to a Medisave account, from which they would pay for preventive services."

It is insane to press this language to prove Santorum supported government compulsion to purchase insurance in a 1994 race against an incumbent Democrat who was running away from Hillarycare at the time.

The same is true of this story:

"Wofford supports a modified version of President Clinton's call for health coverage for all Americans, funded largely by requiring employers to pay most of the premiums, as many do today.

"For several years, Santorum has promoted a Republican alternative. It would require workers to buy their own health insurance and allow monthly tax-free contributions into "Medisave" accounts to pay for routine medical services."

The context of the debate as presented is entirely within the world of work and employer provided health plans. The issue of compulsory coverage, and of coverage for individuals NOT employed, is wholly unaddressed.

But if Noah had actually bothered to read this article which he also cites (conveniently with a broken link), it should have been crystal clear to him that Santorum was operating in a healthcare environment which "offered," not "compelled," and that Santorum explicitly declined to offer the marginally employed person coverage of the type he was advocating at the time. Santorum's idea of healthcare restructuring was not universal, not compulsory, and wholly confined to the world of work:

U.S. Rep. Rick Santorum, R-Pittsburgh area, and Joe Watkins, a Philadelphia businessman who worked in the Bush White House, are seeking the Republican Senate nomination, creating the only true Senate primary race. ...

Santorum and Watkins both oppose having businesses provide health care for their employees. Instead, they would require individuals to purchase insurance. ...

They also oppose government-run health care and disagree with controls on doctor or hospital fees. They would cap malpractice awards. ...

The candidates split on offering health care for "marginally employed" people, with Watkins supporting it. Both oppose federally funded abortions.

Heritage Foundation Director Responsible for Healthcare Mandate Idea in 1989

It's one of three dirty little secrets about the Republicans that they are intellectually responsible for the healthcare mandate idea which we have so vehemently opposed but which now stares us in the face in ObamaCare. If ObamaCare were in fact a Bolshevik plot, that must mean the commies own also the Republican Party, not just the Democrat.

A Heritage Foundation director named Stuart Butler presented a paper in 1989 which contains the idea of the healthcare mandate, backed up by some of the absurd reasoning many of us had been attacking in the debate over the Senate healthcare bill, for example, the analogy between car insurance and health insurance.

The link to the full paper is here.

And here's an excerpt on the mandate:

This paragraph sounds like a Newt Gingrich talking point.

Boobs like Rush Limbaugh and Sean Hannity incessantly promote the Heritage Foundation to their audiences, while claiming the mantle of conservatism. But as we all come to learn sooner or later, saying doesn't make it so.

Government compulsion continues to be the nexus of political conflict in America. Unfortunately for us, the Republican establishment is for it as much as our enemies on the left.

For more, regrettably, see here:

It wouldn't have been at all odd for any of these Republicans to support the individual mandate in the past, because it was a Republican idea, hatched by Stuart Butler and some others at the Heritage Foundation. (Documentation here.) Heritage has desperately tried to disavow it, but to no avail. Even James Taranto of the Wall Street Journal, apparently present at the creation, concedes the point. You sometimes hear conservatives defend their past support for the individual mandate by saying that something was needed to head off more ambitious health insurance schemes like Hillarycare, but that's another way of saying that whenever a conservative proposes any solution to the health care crisis he or she does so in bad faith. Vote Republican if you like, but don't kid yourself that a Republican president would replace Obamacare with anything at all. Not even Romney would. You might even say especially Romney, since the issue has brought him nothing but grief since the 2012 cycle began.

James Pethokoukis Trots Out His August 2010 Surprise as a January 2012 Surprise

Involving a supposed mass refinancing of GSE-backed mortgages.

Rush Limbaugh fell for it on his show today, but it's a recycled attempt at a story to which there was nothing when it first appeared a year and a half ago, and there's nothing to it now unless . . . Obama makes another very quick recess appointment, and a bunch of lenders agree to take huge hits.

Fat chance, I say.

Aside from the political toxicity of the former (even The New Republic thinks Obama's recent appointment was unconstitutional), I can't imagine how lenders are just going to agree to eat half of the losses associated with rewriting mortgages at today's lower interest rates, especially with the stiffer Basel III bank capital rules now taking effect: "[T]he plan would have an immediate fixed cost to the government of . . . $242 billion with half that cost split equally between the government and lenders." 

Linda Lowell at housingwire.com, among others, knew the story was malarkey way back when here.

For Pethokoukis' August 2010 version, see here. For the January 2012 version, now see here.

President Obama is Headed for an Exclusive Form of Small Group Therapy, or a Psychotic Episode

As noted here in The New Republic by a psychoanalyst, who never once suggests Obama's cool demeanor, detachment from emotion, and passivity are also characteristic of psychosis and might have been compounded by his drug use:

As sensitive he is to group dynamics, as the President of the United States, he is now the sole member of an exclusive group of one.  And he's going to need to push through his fears in order to avoid joining the only other group available to him—that of the ex-presidents.

National Review's Exhausted Conservatism Incubates More Liberal Monetarism

As with Ramesh Ponnuru's call here at The New Republic (!) for more monetary loosening and fiscal tightening, a policy neither Democrats nor Republicans embrace.

He must be reading Ambrose Evans-Pritchard at the UK Telegraph since the financial crisis, who keeps calling for same.

He has no understanding of, and pays no attention to, the source of the explosion in debt in The Great Moderation, however, which was a civilizational commitment to misallocation of capital to housing. To finance it, money creation had to pass from the control of central banks to so-called private bankers.

It is they who have brought us to this pass with massive amounts of leverage, with Democrat and Republican accommodation all the way, in exchange for power, money and influence.

National Review is incapable of teaching such things because it's part of the problem, not part of the solution. No wonder Ramesh wanders.

Herman Cain's So-Called Abortion Flip Was Nothing of the Kind: He Clearly Endorsed Private Choice For Adoption, Not Abortion.

What it was was a poor attempt to entrap the still too trusting Herman Cain to make it appear that his position on abortion is incoherent.

The transcript of the controversial interchange shows Herman immediately grasped Piers Morgan's attempt to bait and switch when Herman TWICE interjects the comment "you're mixing two things," namely "bringing up the baby as her own" and "abortion."

The media and the left, like Ed Kilgore of The New Republic here, are hoping that if they repeat their lie enough that we'll all believe it.

Piers Morgan starts talking about abortion, and suddenly introduces a hypothetical about raising a child who was conceived in a rape "as her own":

MORGAN: Abortion. What's your view of abortion?

CAIN: I believe that life begins at conception. And abortion under no circumstances. And here's why --

MORGAN: No circumstances?"

CAIN: No circumstances.

MORGAN: Because many of your fellow candidates -- some of them qualify that.

CAIN: They qualify but --

MORGAN: Rape and incest.

CAIN: Rape and incest.

MORGAN: Are you honestly saying -- again, it's a tricky question, I know.

CAIN: Ask the tricky question.

MORGAN: But you've had children, grandchildren. If one of your female children, grand children was raped, you would honestly want her to bring up that baby as her own?

CAIN: You're mixing two things here, Piers?

MORGAN: Why?

CAIN: You're mixing --

MORGAN: That's what it comes down to.

CAIN: No, it comes down to it's not the government's role or anybody else's role to make that decision. Secondly, if you look at the statistical incidents, you're not talking about that big a number. So what I'm saying is it ultimately gets down to a choice that that family or that mother has to make.

Not me as president, not some politician, not a bureaucrat. It gets down to that family. And whatever they decide, they decide. I shouldn't have to tell them what decision to make for such a sensitive issue.

MORGAN: By expressing the view that you expressed, you are effectively -- you might be president. You can't hide behind now the mask, if you don't mind me saying, of being the pizza guy. You might be the president of United States of America. So your views on these things become exponentially massively more important. They become a directive to the nation.

CAIN: No they don't. I can have an opinion on an issue without it being a directive on the nation. The government shouldn't be trying to tell people everything to do, especially when it comes to social decisions that they need to make.

MORGAN: That's a very interesting departure --

CAIN: Yes.

MORGAN: -- from the normal politics.

CAIN: Exactly.

There is absolutely nothing controversial here about Herman Cain saying a president has no business telling people to raise such a child as their own.

And Rick Santorum should be ashamed of himself for piling on.

Incidentally, Herman is correct about the relative rarity of the adoption question: statistics show just under 250,000 total children per year waiting to be adopted and adopted, in about equal numbers.

That's because our advanced civilization murders about 1,210,000 unborn children every year.