Hans Bader

In the Wall Street Journal, Nobel Prize-winning economist Gary Becker and others explain how President Obama’s policies are delaying and retarding the inevitable economic recovery, keeping unemployment high even though the recession Obama inherited was similar to others in the past that gave way to rapid recoveries:

In terms of U.S. output contractions, the so-called Great Recession was not much more severe than the recessions in 1973-75 and 1981-82. Yet recovery from the latest recession has started out much more slowly. For example, real GDP expanded by 7.7% in 1983 after unemployment peaked at 10.8% in December 1982, whereas GDP grew at an unimpressive annual rate of 2.2% in the third quarter of 2009. Although the fourth quarter is likely to show better numbers–probably much better–there are no signs of an explosive take off from the recession. …

In terms of discouraging a rapid recovery, other government proposals created greater uncertainty and risk for businesses and investors. These include plans to increase greatly marginal tax rates for higher incomes. In addition, discussions at the Copenhagen conference and by the president to impose high taxes on carbon dioxide emissions must surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.

Congressional ‘reforms’ of the American health delivery system have gone through dozens of versions. The separate bills passed by the House and Senate worry small businesses, in particular. They fear their labor costs will increase because of mandates to spend much more on health insurance for their employees. The resulting reluctance of small businesses to invest, expand and hire harms households as well, because it slows the creation of new jobs and the growth of labor incomes. …

Even though some of the proposed antibusiness policies might never be implemented, they generate considerable uncertainty for businesses and households. Faced with a highly uncertain policy environment, the prudent course is to set aside or delay costly commitments that are hard to reverse. The result is reluctance by banks to increase lending–despite their huge excess reserves–reluctance by businesses to undertake new capital expenditures or expand work forces, and decisions by households to postpone major purchases.

Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.

Obama’s $800 billion stimulus package, which failed to cut unemployment, is now pressuring states to raise taxes, thanks to costly requirements it imposed on states at the behest of powerful public-employee unions.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.  The Obama Administration claims credit for creating imaginary jobs in non-existent Congressional districts.

As the Examiner notes, “If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.”

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

Unemployment is now higher in the U.S. than in Europe,  reports the Washington Post.  “The official U.S. unemployment rate, reported last Friday, now stands at 10.2 percent,” compared to “9.7 percent” in Europe.   This is the highest rate in more than 26 years, and marks a huge change from the recent past, in which unemployment was double the American rate in much of Europe, such as in France.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

It’s been a year since the president was elected, and he’s already piled up an impressive list of lies and broken promises.

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

Two EPA lawyers criticized the cap-and-trade energy bill passed by the House as a scam, noting in The Washington Post that it will be manipulated to profit politically connected corporations and reward certain kinds of pollution, while not cutting greenhouse gas emissions.  A similar scheme enacted in Europe in the name of fighting global warming enriched polluters, while not reducing emissions, which actually rose faster in most of Europe than in the U.S.

The Washington Examiner explains how the bill will lead to deforestation, and thus increase greenhouse gas emissions in the long run.

The bill, which is loaded with pork for special interests, is backed by Obama, who once admitted that under his cap-and-trade scheme, electricity and utility bills would “skyrocket” and coal-fed power plants would go “bankrupt.”  Treasury Department analysts estimated it could increase taxes on the average American household by $1,761 per year.

The bill also contains environmentally harmful provisions, such as massive ethanol subsidies, which will result in “damage to water supplies, soil health and air quality.” Ethanol subsidies have resulted in forests being destroyed in the Third World, and caused famines that have killed countless people in the world’s poorest countries.

American law has moved in a leftward direction over the last 20 years, steadily restricting use of the death penalty and criminal sentencing, and expanding lawsuits against businesses, thanks largely to the Supreme Court.

But to some left-leaning journalists who write about the Supreme Court, none of this has ever happened, and the Supreme Court, which is responsible for many of these liberal changes, remains a conservative boogeyman.

Slate’s Dahlia Lithwick, America’s most famous Supreme Court reporter, writes today that in the Supreme Court, “big business always prevails, environmentalists are always buried, female and elderly workers go unprotected, death row inmates get the needle, and criminal defendants are shown the door.”

This is breathtakingly inconsistent with reality. Over the last dozen years, the death penalty has been dramatically cut back in cases like Roper v. Simmons (2005), as the Supreme Court has invalidated the death penalty when imposed on the “retarded” (even the mildly retarded) or juveniles (even 16 to 18 year-olds), or when imposed by judges rather than juries (as state laws long provided).

The Supreme Court overturned thousands of sentences given to criminal defendants in cases like U.S. v. Booker (2005), based not on their guilt or innocence, but on the fact that judges, rather than juries, had made findings related to those sentences (the so-called Booker/Apprendi line of cases). The supposedly “right-wing” justices Roberts, Scalia, and Thomas joined in these decisions.

Environmentalists won many cases, including perhaps the most economically-significant decision ever — Massachusetts v. EPA (2003) — which potentially opened the door to EPA regulation of virtually every human activity, on the grounds that virtually all activity (from industrial production to farming to cars) emits carbon dioxide and thus allegedly causes global warming. That decision also created a special rule of standing to allow state attorneys general to bring lawsuits that would otherwise be thrown out as meritless for lack of standing.

The Supreme Court recently allowed businesses to be sued even for products the FDA deems to be safe and effective, in Wyeth v. Levine (2009).

The Supreme Court progressively expanded businesses’ liability for discrimination against female and elderly workers. It continuously expanded the definition of sexual harassment, overturning earlier limits on vicarious liability (in Faragher v. Boca Raton (1998)), allowing institutions to be sued based on the acts of non-employees (in Davis v. Monroe County (1999)), and rejecting longstanding lower-court limits on lawsuits where there is no economic or psychological harm (in Harris v. Forklift Systems (1993)). It also allowed businesses to be sued for discrimination against elderly workers even absent any showing of discriminatory intent or differential treatment (in Smith v. Jackson (2005)). All of these decisions reversed lower court rulings in favor of businesses.

In short, Dahlia Lithwick’s perception of the Supreme Court bears no relation to reality. But it is shared by most of the nation’s leading court reporters, at publications like the New York Times, the Washington Post, USA Today, and the Los Angeles Times, who promote a similar caricature of the Supreme Court.

As a result of such reporters ceaselessly peddling this perspective to their readers, it is also the perception of much of the newspaper-reading public, especially in the so-called Blue States, many of whom view the Supreme Court as “too conservative.”

For example, factually inaccurate and dishonest reporting on recent Supreme Court decisions also contributed to recent election results.

A classic example is the Supreme Court’s recent Ledbetter decision, which many reporters wrongly claimed required discrimination plaintiffs to sue within a rigid 180-day deadline — when in fact, most pay discrimination cases could legally be brought for at least 3 years after the discrimination allegedly occurred, under laws unaffected by the Supreme Court’s decision (like the Equal Pay Act), and the 180-day deadline, even when applicable, had lots of common-sense exceptions to keep employers from escaping justice (such as tolling to protect hoodwinked employees)

(Regardless of whether the death penalty is good or bad, it is very clear that it is not unconstitutional).

In his 2008 campaign, Barack Obama talked a lot about “bipartisanship,” but in office, he has governed from the far left, on both domestic and foreign policy, by meddling overseas in favor of left-wing would-be dictators, and at home in support of powerful left-wing unions, at the expense of taxpayers, airline security, the Constitution, and the rule of law.  (One possible exception to his left-wing path is his support for the obscene Wall Street bailouts, which disgusted left and right alike, although those bailouts showered billions of dollars on the liberal Wall Street firm Goldman Sachs, which was so rich that it didn’t even need the money).

The Wall Street Journal criticizes Obama for seeking to force Honduras to accept the return of its ex-president and would-be dictator, Manuel Zelaya, a demand backed by left-wing Latin American dictators. “Mr. Zelaya was deposed and deported this summer after he agitated street protests to support a rewrite of the Honduran constitution so he could serve a second term. The constitution strictly prohibits a change in the term-limits provision. On multiple occasions he was warned to desist, and on June 28 the Supreme Court ordered his arrest. Every major Honduran institution supported the move, even members in Congress of his own political party, the Catholic Church and the country’s human rights ombudsman. To avoid violence the Honduran military escorted Mr. Zelaya out of the country. In other words, his removal from office was legal and constitutional, though his ejection from the country gave the false appearance of an old-fashioned Latin American coup. The U.S. has since come down solidly on the side of—Mr. Zelaya.”

The Weekly Standard criticizes Obama for blocking travel to the U.S. by Hondurans, even while inviting to the White House, and giving a visa to, an official of Burma’s genocidal government, which has used mass rape and massacres against ethnic minority groups, and used torture and murder against Buddhist monks protesting oppression. The Obama Administration earlier imposed travel sanctions on the people of Honduras to punish them for their Supreme Court’s ruling refusing to allow the return of Honduras’s ex-president dictator to office.  Michael Barone, the dean of American political commentators, chides Obama for undemocratically “opposing the elected Congress, courts and civil society of Honduras.”

The Washington Times calls it “the worst foreign policy ever.” It notes that Obama has bullied “Honduras, which is desperately trying to stave off a socialist takeover by an anti-American autocrat whom the State Department has concluded is worthy of full U.S. support. This has delighted Cuban dictators Raul and Fidel Castro and Venezuelan strongman Hugo Chavez, who are very willing to let the United States carry their water. Venezuela, meanwhile, has signed a major arms deal with Russia, continues to build the anti-Gringo “Bolivarian” bloc, bullies U.S. ally Colombia and plans to launch its own nuclear program.” (Obama’s actions have also emboldened Nicaragua’s corrupt, bullying President Daniel Ortega to behave dictatorially).

The Washington Times reports that “President Obama’s diversity czar at the Federal Communications Commission” has praised Venezuelan dictator Hugo Chavez and his crackdown on independent media, in remarks in which he “described Hugo Chavez’s rise to power in Venezuela as ‘an incredible revolution.’” (Chavez recently closed 240 radio stations in Venezuela, and his regime has shot unarmed demonstrators).  Other Obama appointees have Marxist roots or sympathies.   Obama’s green jobs czar was the race-baiter Van Jones, “a self-avowed communist” who remained in office for months, desite controversy, until revelations that he was a Truther who believed that George Bush may have been behind the 9/11 attacks. Obama’s nominee to be Assistant Secretary of State, Arturo Valenzuela, has a reputation as a loud defender of Venezuelan dictator Chavez’s terrible record on freedom of the press.

The Times also criticizes Obama’s congressional allies for moving to unionize airline security screeners and authorize collective bargaining at the TSA, making it more difficult for lazy or careless employees to be fired for incompetence.  The unions have “urged TSA Acting Administrator Gale D. Rossides to suspend use of the agency’s skills test for screeners. Failure rates this year reached more than 50 percent and were as high as 80 percent at some airports. The skills test shows that large numbers of airport screeners are failing at jobs that are intrinsic to keeping our airports and commercial airplanes secure, and the union’s response is to get rid of the test. The government employees union is also pushing to have failed screeners’ records cleared because pay and bonuses are tied to performance and unsatisfactory employee records prevent those who were fired for poor performance from being reinstated. So much for worker accountability.”

Obama also wants to introduce union-backed collective bargaining at the TSA. (A study found that the TSA is more than twice as likely to fail to detect a bomb as the private security firms it replaced. And TSA’s failure rate is three or four times as high as the few remaining private firms still allowed to handle airline security.)

The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.  Political cronyism is also playing a role in the gutting of Amtrak’s Office of Security Strategy and Special Operations (OSSSO).  Ultimately, OSSSO’s “highly-specialized officers” will likely be replaced by unionized employees with ”alarmingly low pass rates” in “basic” classes.

Earlier, the Obama administration ripped off taxpayers and retirees in the General Motors and Chrysler bailouts, in order to enrich the left-wing United Auto Workers union, in unnecessary bailouts that have cost at least $70 billion, drawing criticism even from the liberal Washington Post.  Many commentators argued that the auto bailouts were illegal, such as the Heritage Foundation and Clinton administration Labor Secretary Robert Reich.

In the Washington Post, George Will criticizes Obama for caving in to demands by left-wing unions for protectionist policies like tire tariffs that will harm consumers without saving jobs.   The stimulus package passed earlier this year contained protectionist provisions that backfired, destroying thousands of U.S. jobs by triggering massive retaliation against our export industry while doing little to reduce imports.

The Obama administration has now ordered a private provider of Medicare Advantage services to remain silent about how the Obama health-care plan would destroy the Medicare Advantage programs relied on by millions of seniors.  Eugene Volokh, a leading expert on First Amendment law, says that this violates the First Amendment.

Obama’s congressional allies have decided to conceal the exact language of their health-care bill until after it is voted on in committee, preventing the public from learning about controversial provisions buried in it.  (Earlier versions of ObamaCare have contained lots of provisions that do nothing to enhance health care, like racial preferences that were criticized as unconstitutional by the U.S. Commission on Civil Rights).

Obama’s Energy Secretary likens the American people to unruly “teenage kids” who don’t know what’s good for them, and need to be told what to do.  (The cap-and-trade bill he backs to fight global warming would be devastating for the economy and do nothing to protect the environment).

Obama’s health care plan would raise taxes, break promises, harm people with insurance, explode the budget deficit, destroy many inexpensive health-care plans, and take away important freedoms.

Tennessee Governor Phil Bredesen (D) is criticizing Obama’s health-care plan as “the mother of all unfunded mandates,” saying it will force states to spend so much that they will have to either massively raise taxes or run large budget deficits that violate state constitutions. Earlier, Martin Feldstein, one of Obama’s economic advisors said his health-care plan would explode the federal budget deficit and lead to “crippling deficits,” as well as “higher taxes, debt payments, and interest rates” that would cut America’s standard of living.

The middle class is facing big tax increases thanks to Obama and Congressional Democrats. Even the trimmed-down version of Obama’s health-care plan recently announced by a ranking Senate Democrat contains lots of tax increases for the middle class (see below). And the costly cap-and-trade energy legislation passed by the House and supported by Obama would lead to big tax increases, Administration officials privately have conceded, even though they publicly claim otherwise. “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI. It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase. It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs,” as jobs migrate overseas to countries which have fewer environmental protections than the U.S. does.

Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s excise tax increases were in 1932, aggravating the Great Depression. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.

Americans for Tax Reform summarizes the tax increases in the trimmed-down version of ObamaCare revealed by its principal drafter, Senator Max Baucus (D-Montana). Here are just a few of those tax increases: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

Financing expanded health-care coverage requires a growing economy. But the President is undermining the economy through trade policies that destroy jobs and drive up costs for consumers in order to satisfy the demands of left-wing unions — while sharply contradicting his own “free trade” rhetoric. That includes what the Washington Post calls a “regressive tax” on tires, a “tax on tires” demanded by union leaders.

Obama’s welfare-filled stimulus package, which the Congressional Budget Office says will shrink the economy “in the long run,” destroyed tens of thousands of jobs in America’s export sector. It contained poorly-written “buy American” provisions that were too weak to cut imports much, but explicit enough to trigger broad retaliation from countries that buy much of our exports, like Canada and Mexico, cutting our exports and increasing our trade deficit.