Rebane's Ruminations
March 2009
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George Rebane

FedOutlays The nation’s pace toward a socialistic state picked up speed with the release of Obama’s budget.  One of the telltales of this is that our friends on the left are going to great pains to deny the use of the s-word in the public media.  To them socialism can only be used when the state has already taken over all means production.  Describing any sign that we’re headed that way as the road to socialism is off-limits.  Then what do they call what’s happening now – why, it’s just revamping our society so that there is more equality and justice in the land by taking from the Peters to pay the Pauls with some shrinkage along the way for shipping and handling.  The nearby chart shows that the government’s share of controlling the GDP is now nearing levels not seen since WW2.  Not socialism?  But we all know that “… a rose by any other name would smell as sweet …”, or will it simply smell?

The word ‘tax’ is also getting a makeover.  It turns out, the Left is now teaching us that the carbon ‘cap and trade’ taxes being hammered into place are really not a tax at all.  By 2012 the feds plan to rip out of the economy $78.7B, by 2014 this amount will have grown to $237B, and in ten years it will be $646B.  The familiar and more gentle name for forcefully collected tributes by the government were called taxes.  Now in the Newspeak sweeping the land, these are is simply “climate revenues” that will spontaneously rise out of the economy and deposit themselves in government coffers.  And in case you haven’t turned that coin over to see the other side – these climate revenues will be collected in proportion from those hapless enterprises who don’t do what they’re told.  In effect, it is another fine that the government can levy in order to shape us into their desired image of the perfected society.  Another lever of power for them, another link in the chain for us.  (Please refer to the rose note above.)

Obama’s support came from people on both extremes of the financial spectrum.  McCain drew most of his support from people earning in the mid-range of incomes.  Now that the President’s proposed budget is out with the heavy taxes on people earning over $204K, the people on the ‘rich end’ are beginning to wonder if there is any more significance to the observation that Obama’s supporters seemed to have come from a distribution in the shape of a dumbbell.  The 27feb09 WSJ observed that –

With yesterday’s fiscal 2010 budget proposal, President Obama is attempting not merely to expand the role of the federal government but to put it in such a dominant position that its power can never be rolled back.

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5 responses to “Ruminations – 2mar2009”

  1. Russ Steele Avatar

    George,
    Here is what happened to the Dow-Jones since the Stimulus (Porkulus). Down, down, down. Details here.

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  2. Wade Avatar
    Wade

    The market has been dropping steadily since Chinese New Year. Therefore Chinese New Year caused the stock market to deteriorate. Or, in more currently fashionable terms, the markets have clearly weighed in on Chinese New Year and the verdict is strikingly clear. Chinese New Year is bad news for the economy.
    Correlation. Not…

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  3. Wade Avatar
    Wade

    George –
    If I’m reading this right (certain threshold of federal gov’t spending as percentage of GDP === Socialism) does that mean that:
    a) Socialism is what enabled us to win WWII?
    and that, because (according to Amity Shlaes anyway) WWII rather than the New Deal, ended the Depression, that:
    b) Socialism is what ended the Depression?

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  4. George Rebane Avatar

    Wade, tough to take your multiple choice test with the alternatives supplied. Given the stats and the main street measurables of the country in 1939 – the New Deal was an abject failure in ending the Depression as even testified by FDR’s own Sec Treasury before Congress, and since then corroborated by too numerous to mention academic studies by economists of many stripes. Brink Lindsey’s paper – http://www.cato.org/pubs/wtpapers/Nostalgianomics.pdf – gives a view of the complexities involved and avoided in cartooning socio-economic cause/effect relationships.
    To now argue that the country is not set on a firm course toward socialism staggers my and many other minds. Are we there yet? of course not. But every day that Congress is in session our liberties are being removed one-by-one, and wealth creation is being curtailed and punished. (BTW, history has shown this to be a bi-partisan effort.)

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  5. Mikey McD Avatar
    Mikey McD

    Wade, certainly the leader of the free world (and his socialist actions) has more correlation to the stock market than Chinese New Year. Sure, Bush left BO a crisis, but, Bush has been gone for months! The market is not reacting to Chinese New Year or Bush’s vacation plans as much as it is reacting to BO’s policy.
    The markets might care that BO is a hypocrite, it might care that he promised to raise taxes, it might care that he has enslaved ALL future American’s with an insane amount of debt, it might care that their will be hundreds of thousands of new government jobs/mouths to feed “forever”, it might be fearful when a government signs bills into law against the advice of economists AND desires of his CONSTITUENTS, it might not believe the “rosy” budget GDP growth assumptions by the BO admin…or we can go with the Chinese New Years theory.

    http://www.ftportfolios.com/Commentary/EconomicResearch/2009/3/9/rosy_scenario_hides_irresponsible_spending

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