Calvin Woodward and Robert Burns do an AP Fact Check, catching Obama in a whopper when blaming deficits on the Iraq war.

OBAMA:“Unfortunately, over the last decade, we have not done what is necessary to shore up the foundation of our own prosperity. We have spent over a trillion dollars at war, often financed by borrowing from overseas. This, in turn, has shortchanged investments in our own people, and contributed to record deficits.”

THE FACTS: This is partly true. For sure, the costly Iraq and Afghanistan wars have contributed to the nation’s budget deficit — but not by as much as Obama suggests. The current annual deficit is now an estimated $1.5 trillion. But as recently as 2007, the budget deficit was just $161.5 billion. And that was years after war expenses were in place for both the Afghanistan and Iraq conflicts.

Most of the current deficit is due to the longest recession since the 1930s. It has seriously depressed tax revenues while increasing costs to the government — including social safety-net programs such as unemployment insurance and spending by both the outgoing Bush and incoming Obama administrations on stimulus programs and on bailouts of banks and automakers.

The AP doesn’t question Obama’s notion of “investing in our own people” –lib-speak for tax (take money from those who earned it) and spend (on someone Obama, et al, feel is more deserving.)

Obama last night:

But this milestone should serve as a reminder to all Americans that the future is ours to shape if we move forward with confidence and commitment.  It should also serve as a message to the world that the United States of America intends to sustain and strengthen our leadership in this young century.

This is the very opposite of what the Democrats preached during Bush’s term.

Only Sen. Joe Lieberman stood strong, and for that the Democrats purged him.

From this desk, seven and a half years ago, President Bush announced the beginning of military operations in Iraq. Much has changed since that night. A war to disarm a state became a fight against an insurgency. Terrorism and sectarian warfare threatened to tear Iraq apart. Thousands of Americans gave their lives; tens of thousands have been wounded. Our relations abroad were strained. Our unity at home was tested.

Our unity was tested because Democrats decided there was no political upside to backing Bush’s policy, despite having voted for the liberation of Iraq.

To explain away the change, they cynically concocted a Big Lie, with full support of the mainstream media: the notion that Bush tricked them.

Thus we endured years of ugly politics brought to us by Michael Moore,  Joe Wilson/ Valerie Plame, assorted Hollywood nitwits, Jimmy Carter, John Kerry, Cindy Sheehan, and Barack Obama himself.

Yeah, our unity was tested.

Peter Robinson:

Incoherent: The president argued that the war had represented a worthwhile cause, asserting that “We have persevered…because of a belief…that out of the ashes of war, a new beginning could be born in this cradle of civilization.” Moments later, however, the president insisted that the war had instead been mistaken: “We have spent a trillion dollars at war…This, in turn, has short-changed investments in our own people, and contributed to record deficits.” The president wants to have it both ways, associating himself with the victory we achieved in Iraq while distancing himself from the costs. As argument, this is incoherent. But of course it isn’t argument. It’s cheap manipulation.

Grudging: “The Americans who have served in Iraq,” the president accurately stated, “completed every mission they were given…They shifted tactics to protect the Iraqi people; trained Iraqi Security Forces; and took out terrorist leaders….Iraq has the opportunity to embrace a new destiny….” In other words, we won. Why? Because in 2007, when many, including then senators Obama and Clinton, insisted that the United States should simply withdraw from Iraq, leaving behind a nation reduced to chaos, George W. Bush instead insisted on a new strategy, the surge. Let me repeat that. We won because President Bush insisted on the surge.

Did President Obama extend the courtesy to his predecessor of saying as much? He most certainly did not.

“It’s well known,” President Obama said, “that [President Bush]…and I disagreed about the war from its outset. Yet no one could doubt President Bush’s support for our troops, or his love of country and commitment to our security.” Support, love, commitment. President Obama could bring himself to credit President Bush with nothing more than mere well-intentioned haplessness. How shabby. How tawdry.

Disgraceful: After having added $1 trillion to the deficit since taking office, President Obama suggested that somehow the $1 trillion the nation has spent in Iraq and Afghanistan over the last decade “short-changed investments in our own people, and contributed to record deficits.” Take just a moment to do the math—something of which our chief executive apparently believes most Americans incapable. The cost of the war against radical Islam has averaged $100 billion a year—which comes to one-eighth the size of the President’s stimulus bill, or one-thirtieth of the average federal budget over the same ten years. I have my reservations about the president’s economic advisors, but they know—he knows—that the war in Iraq has nothing to do with our economic woes. He was intentionally attempting to mislead us…

John Podhoretz

Last night, President Obama did something amazing. He delivered — dare I say it? — a rather neoconservative speech, in the sense that neoconservatism has argued for aggressive American involvement in the world both for the world’s sake and for the sake of extending American freedoms in order to enhance and preserve American security.

Perhaps Obama did not even realize it, but when he said that “as the leader of the free world, America will do more than just defeat on the battlefield those who offer hatred and destruction — we will also lead among those who are willing to work together to expand freedom and opportunity for all people,” he was echoing ideas developed in neoconservative journals over decades of argument about how the United States can best project its power for its own

sake and for the sake of the betterment of the world.

When he said that “we must use all elements of our power — including our diplomacy, our economic strength and the power of America’s example — to secure our interests and stand by our allies,” he was speaking in the voice of those neocons who argue that American geopolitical power is enhanced when we use it to bind our friends closer to us.

And when he said that “we must project a vision of the future that is based not just on our fears, but also on our hopes — a vision that recognizes the real dangers that exist around the world, but also the limitless possibility of our time,” Barack Obama was offering a more secular version of George W. Bush’s assertion that liberty is not something unique to the American constitution, but is “God’s gift to humanity.”

And it meant something too that, for the first time, he spoke heartfelt words about his predecessor. “No one could doubt President Bush’s support for our troops, or his love of country and commitment to our security,” Obama said, knowing full well that tens of millions of people did doubt it and many thousands of activists who helped him get elected argued the opposite.

Even more stunning, perhaps, is the fact that Obama was willing to use this nation’s involvement in Iraq — which he had opposed so completely and whose extension in the form of the surge in 2007 he argued against flatly — as an example of what America can do when it puts its mind to it. “This milestone should serve as a reminder to all Americans that the future is ours to shape if we move forward with confidence and commitment,” he said.

These are astonishing words to emerge from the mouth of Barack Obama, who has spent most of his public life and his presidency arguing that it is not the place of the United States to shape the future outside our borders — that, in fact, such efforts to shape the future have harmed rather than helped this country and the world.

He went further still, issuing a quietly nationalist challenge to the world. The American victory in Iraq “should also serve as a message to the world that the United States of America intends to sustain and strengthen our leadership in this young century.”

No wonder he was so nice to George W. Bush last night. The speech sounded like Bush. Not as eloquent or as memorable, but, hey, that’s life.

Obama stopped off in the Big Easy yesterday for some political posturing. In his speech he criticized…

the “shameful breakdown in government” that followed Katrina, which he described as “a natural disaster but also a man-made catastrophe.”

The oil spill in the Gulf may be mostly out of the headlines now but Louisiana voters aren’t getting any less mad at Barack Obama about his handling of it. Only 32% give Obama good marks for his actions in the aftermath of the spill, while 61% disapprove.

Louisianans are feeling more and more that George W. Bush’s leadership on Katrina was better than Obama’s on the spill. 54% think Bush did the superior job of helping the state through a crisis to 33% who pick Obama. That 21 point margin represents a widening since PPP asked the same question in June and found Bush ahead by a 15 point margin. Bush beats Obama 87-2 on that score with Republicans and 42-30 with independents, while Obama has just a 65-24 advantage with Democrats.

Too bad our vaunted “citizen of the world” prez couldn’t muster enough humility to listen to Germany. David Brooks:

During the first half of this year, German and American political leaders engaged in an epic debate. American leaders argued that the economic crisis was so bad, governments should borrow billions to stimulate growth. German leaders argued that a little short-term stimulus was sensible, but anything more was near-sighted. What was needed was not more debt, but measures to balance budgets and restore confidence.

The debate got pointed. American economists accused German policy makers of risking a long depression. The German finance minister, Wolfgang Schäuble, countered, “Governments should not become addicted to borrowing as a quick fix to stimulate demand.”

The two countries followed different policy paths. According to Gary Becker of the University of Chicago, the Americans borrowed an amount equal to 6 percent of G.D.P. in an attempt to stimulate growth. The Germans spent about 1.5 percent of G.D.P. on their stimulus.

This divergence created a natural experiment. Who was right?

The early returns suggest the Germans were. The American stimulus package was supposed to create a “summer of recovery,” according to Obama administration officials. Job growth was supposed to be surging at up to 500,000 a month. Instead, the U.S. economy is scuffling along.

The German economy, on the other hand, is growing at a sizzling (and obviously unsustainable) 9 percent annual rate. Unemployment in Germany has come down to pre-crisis levels. (more…)

Of course, being the professionals they are, this didn’t bias their coverage. Mark Tapscott:

Senior executives, on-air personalities, producers, reporters, editors, writers and other self-identifying employees of ABC, CBS and NBC contributed more than $1 million to Democratic candidates and campaign committees in 2008, according to an analysis by The Examiner of data compiled by the Center for Responsive Politics.

The Democratic total of $1,020,816 was given by 1,160 employees of the three major broadcast television networks, with an average contribution of $880.

By contrast, only 193 of the employees contributed to Republican candidates and campaign committees, for a total of $142,863. The average Republican contribution was $744.

Disclosure of the heavily Democratic contributions by influential employees of the three major broadcast networks follows on the heels of controversy last week when it was learned that media baron Rupert Murdoch’s News Corp. contributed $1 million to the Republican Governors Association.

The News Corp. donation prompted Nathan Daschle, executive director of the Democratic Governors Association and son of former Senate Majority Leader Tom Daschle, to demand in a letter to Fox News chairman Roger Ailes that the cable news outlet include a disclaimer in its coverage of gubernatorial campaigns. Fox News is owned by News Corp.

…and getting a fight. Peggy Venable:

The state’s slogan is “Don’t mess with Texas.” But the federal Environmental Protection Agency (EPA) is doing just that, and at stake is whether the Obama administration can impose its global-warming agenda without a vote of Congress.

President Obama’s EPA is already well down the path to regulating greenhouse gases under the Clean Air Act, something the act was not designed to do. It has a problem, however, because shoehorning greenhouse gases into that 40-year-old law would force churches, schools, warehouses, commercial kitchens and other sources to obtain costly and time-consuming permits. It would grind the economy to a halt, and the likely backlash would doom the whole scheme.

The EPA, determined to move forward anyway, is attempting to rewrite the Clean Air Act administratively via a “tailoring rule,” which would reduce the number of regulated sources. The problem with that approach? It’s illegal. The EPA has no authority to rewrite the law. To pull it off, the EPA needs every state with a State Implementation Plan to rewrite all of its statutory thresholds as well.

Where are the voices wailing about the “shredding of the Constitution.”

Texas Attorney General Greg Abbott and Texas Commission on Environmental Quality Chairman Bryan W. Shaw saw the tailoring rule for what it really is: a massive power grab and centralization of authority. They are fighting back, writing to the EPA:

“In order to deter challenges to your plan for centralized control of industrial development through the issuance of permits for greenhouse gases, you have called upon each state to declare its allegiance to the Environmental Protection Agency’s recently enacted greenhouse gas regulations – regulations that are plainly contrary to U.S. laws. … To encourage acquiescence with your unsupported findings you threaten to usurp state enforcement authority and to federalize the permitting program of any state that fails to pledge their fealty to the Environmental Protection Agency. On behalf of the State of Texas, we write to inform you that Texas has neither the authority nor the intention of interpreting, ignoring or amending its laws in order to compel the permitting of greenhouse gas emissions.”

Read it all.

Publisher Mort Zuckerman, who not only voted for Obama, but wrote some of his speeches, now rues the day.

How many things can one man get wrong? Hot Air

President Obama may be on vacation this week at Martha’s Vineyard, but as with all Presidents, it’s a working vacation.  That’s good, because the people who rely on fishing in the Northeast Atlantic have a message for Obama, which is that they don’t think that fewer jobs is better for their industry.  The Boston Herald highlights a little-covered aspect of the administration’s efforts to impose top-down economic policies, this time on fisheries to solve a problem that’s mainly resolved anyway:

Leaders of the recreational and commercial fishing industry are planning a boat protest against federal policies Thursday outside the harbor of Vineyard Haven on Martha’s Vineyard, where President Obama and his family are summer vacationing.

The protest is being organized after a bipartisan, bicameral coalition of federal lawmakers — including the core of the President’s Congressional base on banking and health care issues — have given up hope of working productively with Obama’s top appointee for oceans and fisheries, Jane Lubchenco, who heads the National Oceanic and Atmospheric Administration.

The White House and Lubchenco want an end to private commercial fishing and have taken steps to eliminate “freelancing,” for lack of a better term.  Instead, they want to close the fisheries into “commodities markets” where the government essentially licenses fishermen and then allocates the catch based on a predetermined distribution plan.  The “commodities markets” will kill many fishing-based jobs and essentially turn fishermen into government employees, and they’re not happy about it.

In an economy where jobs are already scarce, how does the Obama administration justify the destruction of these jobs?

In a statement to the Times soon after her confirmation by the Senate, Lubchenco’s office said her goal was to see a “significant fraction of the vessels … removed.”

With the stocks rebuilding strongly, fishermen wonder at the need to reduce the size of the work force. …

Lubchenco has argued that consolidation, which has consistently followed catch shares, produces fewer but better jobs while giving the government a stronger hand in conservation.

So the new mantra is “fewer, but better jobs”?  I’m certain that the fishermen stuck on land will appreciate the beauty of the jobs they no longer hold.

The new policy has already been put in place in New England for groundfisheries, and the command economy approach has already produced its usual results:

New England’s groundfishery, America’s oldest continuing industry which had harvested commonly owned resources, was converted to catch share principles on May 1 — with a total allocation divided and distributed to fishermen as catching rights that [can] be bought, sold or traded.

But the minute size of the total allocation and the eccentric mixes of quota from the 15 species and 20 stocks in the groundfishery have pushed many businesses into — or close to — insolvency, a development that earlier this month brought a proposal from a bipartisan coalition of U.S. senators for a $100 million buyout.

Let’s get this straight.  The new policy of this administration is to encourage the kind of commodities speculation in fisheries that we saw in mortgage-backed securities?  And doesn’t that system favor large corporations who can afford to speculate with their capital over the small businesses and independent operators who can’t afford to buy rights to fish in these “commodities markets”?   Get ready for higher prices and more unemployment.

John Stossel:

“Corporate profits are soaring. Companies are sitting on billions of dollars of cash. And still, they’ve yet to amp up hiring or make major investments.”

So writes The Washington Post about the recession’s stubborn refusal to go away. The statisticians at the National Bureau of Economic Research declared the Great Recession over — but tell that to people who can’t find jobs. Today, businesses replace equipment and inventory, but they are reluctant to hire new workers. Investment that does occur aims at replacing the use of labor by adopting advanced technology. In a growing economy, that’s a sign of progress. Freed-up workers are then available for new projects. But lately, those new projects aren’t being launched.

The two wings of the establishment offer their usual remedies. Government-oriented types want more tax-financed “stimulus” spending, claiming last year’s nearly trillion-dollar dose wasn’t enough. That’s dubious. As economist Mark Skousen writes, “(P)roduction and investment lead the economy into and out of a recession; retail demand is the most stable component of economic activity.”

Business-oriented types want tax cuts. I’m sympathetic, but cuts should be accompanied by spending cuts, or the deficit will grow even uglier. There’s no free lunch. Deficit spending must be covered by government borrowing, which takes capital that could be used for investment out of the private sector.

Why isn’t the economy recovering? After previous recessions, unemployment didn’t get stuck at close to 10 percent. If left alone, the economy can and does heal itself, as the mistakes of the previous inflationary boom are corrected.

The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama’s vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden.

In at least three big areas — health insurance, financial regulation and taxes — no one can know what will happen.

New intrusive rules for health insurance are yet to be written, and those rules will affect hiring, since most health insurance is provided by employers.

Thanks to the new 2,300 page Dodd-Frank finance regulatory act, The Wall Street Journal reports, there will be “no fewer than 243 new formal rule-makings by 11 different federal agencies.” These as-yet unknown rules will govern lending to business and other key financial activity.

The George W. Bush tax cuts might be allowed to expire. But maybe not. Social Security and Medicare are dangerously shaky. Will Congress raise the payroll tax? A “distinguished” deficit commission is meeting. What will it do? Recommend a value-added tax?

Who knows? But few employers will commit to a big investment with those clouds hanging over our heads.

“As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company’s vulnerability to government,” Michael Fleischer, president of Bogen Communications Inc., wrote in The Wall Street Journal.

Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls “regime uncertainty.”

Christopher Chantrill in American Thinker:

Conservatives’ favorite moment in the 2008 campaign was the altercation between the Anointed One and Joe the Plumber.

Back then, Joe Wurzelbacher was worried that Obama’s plan to raise taxes on the wealthy, those making more than $250,000 per year, would hurt folks like him. Wurzelbacher planned to buy a plumbing business, and he was afraid that he’d end up in the $250,000 bracket that Obama wanted to penalize. No, no, Candidate Obama replied, Joe would get all kinds of tax breaks and credits for his business.

It’s not that I want to punish your success…I think when you spread the wealth around, it’s good for everybody.

How’s that “spread the wealth” going, Mr. President, in this summer of recovery? Time for the Fed to print a trillion or two in new money?

Spreading the wealth seems like a good idea, rather like Mom spreading frosting on a cake: tasty and yummy. In reality, of course, governments don’t ever spread the wealth. They take money from some people and give it to others. It’s more like leaf-raking. You rake the leaves together, and then you hand them over to your political pals for disbursement among their supporters. It’s a bit like passing a $26-billion bill to save the jobs and cushy retirements of well-paid teachers and state government workers.

The Republican retort to “share the wealth” is “grow the economy.” The trouble with that is that nine times out of ten, it means easy money, targeted tax cuts, easy money, pet projects like green energy, easy money, and “shovel-ready” projects for politically connected government contractors.

Even the conservative favorite, across-the-board tax-rate cuts, has its problems. The Mellon tax cuts of the 1920s ignited a tremendous boom that ended in the sorrows of the Great Depression. The Kennedy tax cuts of the 1960s ignited a tremendous boom that led to the recessions and inflation of the 1970s. The Gingrich capital gains tax cut of 1997 led to the tech bubble bursting in 2000, and the Bush tax cuts of 2001-2003 led to the 2008 banking panic.

The problem with each of these tax cuts is that they were combined with easy money. Only the tax rate cut of St. Ronald in 1981-1983 led to a twenty-year boom. Could that boom have been possible without the hard money of Fed Chairman Paul Volcker to stiffen the Reagan tax cut?

Don’t look for our political leaders and their bribed apologists in the academy to figure that out any time soon.

So my recommendation for economic policy is “do nothing.” You could call it Douglass-onomics, after African-American Frederick Douglass and his memorable cry: “Do nothing with us!” The only thing that government has succeeded in doing with just about anything, from the Negro to the economy, is messing things up…

More on the mess and who made it. Instapundit:

CHART OF THE DAY: Deficits, With And Without The Iraq War. “Do you see alarming deficits or trends from 2003 through 2007 in the above chart? No. In fact, the trend through 2007 is shrinking deficits. What you see is a significant upward tick in 2008, and then an explosion in 2009. Now, what might have happened between 2007 and 2008, and then 2009? Democrats taking over both houses of Congress, and then the presidency, was what happened. Republicans wrote the budgets for the fiscal years through 2007. Congressional Democrats wrote the budgets for FY 2008 and on.”

UPDATE: The Anchoress emails: “That deficit graph is going to go viral. This piece in the NY Times from 2006 reinforces it.”

Yeah, note this excerpt:

An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the projected budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.

Well, that was back when the Bush tax cuts were kicking in. Now, in the Age Of Obama, the “unexpectedly” language is in regard to very different kinds of developments . .

Sources: CBO and U.S. Statistical Abstract.

Professor Bainbridge:

While Obama takes his sixth vacation, he’s left 23,000 others with plenty of free time:

The nation’s top drilling regulator says the deepwater drilling moratorium in the Gulf of Mexico will cost at least 23,000 jobs.

The details are part of a July 10 memo sent to Interior Secretary Ken Salazar, who issued the moratorium in June. The memo sent by Michael Bromwich specified that the six-month suspension would directly put 9,450 people out of work and indirectly affect nearly 14,000 other jobs.

The moratorium was struck down by a federal judge after oil and gas drilling interests said it wasn’t justified.

Let’s not forget that Ken Salazar ignored the findings of his scientists when issuing the moratorium, and in fact, forged their signatures on a bogus finding.

So the court tells Obama to lay off. What does he do?

The Obama administration issued a new moratorium July 13, three days after the memo.

The White House hopes the revised ban will pass muster with the courts.

Michelle Malkin:

It’s not enough that the White House is moving to lock up hundreds of millions of acres of land in the name of environmental protection. The Obama administration’s neon-green radicals are also training their sights on the deep-blue seas. The president’s grabby-handed bureaucrats have been empowered through executive order to seize unprecedented control from states and localities over “conservation, economic activity, user conflict and sustainable use of the ocean, our coasts and the Great Lakes.”

Democrats have tried and failed to pass “comprehensive” federal oceans-management legislation five years in a row. The so-called “Oceans 21” bill, sponsored by Democratic representative Sam Farr of California, went nowhere fast. Among the top reasons: bipartisan concerns about the economic impact of closing off widespread access to recreational fishing. The bill also would have handed environmentalists another punitive litigation weapon under the guise of “ecosystem management.” Instead of accepting defeat, the green lobby simply circumvented the legislative process altogether.

An example of liberal fascism. Remember, the left whining about Bush shredding the Constitution?

In late July, President Obama established a behemoth 27-member “National Ocean Council” with the stroke of a pen. Farr gloated: “We already have a Clean Air Act and a Clean Water Act. With today’s executive order, President Obama in effect creates a Clean Ocean Act.” And not a single hearing needed to be held. Not a single amendment considered. Not a single vote cast. Who gives a flying fish about transparency and the deliberative process? The oceans are dying!The panel will have the power to implement “coastal and marine spatial plans” and to ensure that all executive agencies, departments, and offices abide by their determinations. The panel has also been granted authority to establish regional advisory committees that overlap with the existing regional and local authorities that govern marine and coastal planning.

No wonder the anti-growth, anti-development, anti-jobs zealots are cheering. The National Ocean Council is co-chaired by wackadoodle science czar John Holdren (notorious for his cheerful musings about eugenics, mass sterilization, and forced abortions to protect Mother Earth, and for hyping weather catastrophes and demographic disasters in the 1970s with his population-control-freak pals Paul and Anne Ehrlich) and White House Council on Environmental Quality head Nancy Sutley (best known as the immediate boss of disgraced green-jobs czar/avowed Communist Van Jones).

…and how many more?*

A local project that President Barack Obama cited during a visit Wednesday to Columbus as an example of how the federal stimulus package has worked isn’t actually being funded with stimulus dollars.

The president spoke at the North Side home of architect Joe Weithman, and both Obama’s comments and information from the White House touted Weithman’s work on a project that the president said was being at least partially funded by the $787 billion stimulus bill passed last year.

“What we’ve been trying to do is to build infrastructure that puts people back to work but also improves the quality of life in communities like Columbus,” Obama said in his remarks. “So Joe is an architect, and he’s now working on a new police station that was funded in part with Recovery Act funds.”

But although federal money is being used for the project in question, there are no stimulus dollars involved, said Columbus Finance Director Paul Rakosky, a Democrat.

* Obscure, probably lame wordplay, explained by this.

Obama should know better than to mess with an Angelinos’ commute — it’s bad enough with presidential gridlock.

But the prez came to town to raise $$$ and made a lot of people hopping mad.

LAT

We have one word for you, Mr. President, the next time you want to sweep into Los Angeles late on a weekday afternoon: Helicopter. That way, you can avoid the streets the rest of us mere residents must use to get around.

President Obama’s fundraising mission in Los Angeles on Monday evening may have been a whirlwind trip for him, but it was a tedious slog for the thousands who found themselves in gridlock from the Westside to downtown.

A Brentwood resident’s two-mile jaunt took 45 minutes. An Echo Park couple who left home at 5:30 p.m. found their usual 20-minute drive west to Olympic and Rimpau boulevards took a whopping hour and 15 minutes. An attorney left his Miracle Mile-area office at 5:45 p.m. and sat unmoving in traffic for 45 minutes.

No matter their politics, Los Angeles residents found themselves united. “It was a beautiful thing,” said Brentwood resident Myles Berkowitz, commiserating with his neighbors on Montana Avenue. “Young, old, black, white — everyone was pissed off.”

Doug McIntyre in the Daily News:

I wasn’t invited to meet President Obama at Monday night’s million-dollar Democratic Party fundraiser at the Hancock Park home of big-time TV producer John Wells.

Which doesn’t mean I didn’t get to participate.

Our president promised to unite Americans. Give the man his due – on Monday he united tens of thousands of us by creating a massive, hours-long traffic jam that was felt from the Westside to the Valley and back.

Obama’s motorcade from LAX bridged the divide between left and right, rich and poor, black, white and Latino. When you mess with L.A. traffic, you mess with E Pluribus Unum. The president’s motorcade route resembled a Lakers victory parade minus the joy, cheering and burning taxis. For the record, that wasn’t the “We’re #1!” finger greeting Obama on Olympic Boulevard.

While the glitterati hobnobbed at the president’s soiree at $30,000 a head, the rest of Los Angeles could go pound sand. It’s official: our time is not nearly as precious as Steven Spielberg’s.

We have to protect the president, and sadly, this president more than most. Obama, or Bush before him, or any president shouldn’t have to take the Super Shuttle from LAX. But there’s a difference between tight security and Caesar-like imperial contempt for the peasantry. That’s what L.A. experienced on Monday.

Thousands found themselves trapped in their cars for hours while searching for an escape route – only to be lost in a closed maze of streets. So much for CO2 s killing the planet.

Many abandoned their vehicles and tried to make it home on foot only to be prevented by the LAPD from crossing the street, and this was happening miles from Hancock Park, and long after the president had safely arrived for his champagne and caviar summit with Spielberg and company. Who planned this trip for Obama, the Republicans?

Michael Barone referred to Bill Watkins in a recent column.

I photographed him last summer, never realizing what a clear, graceful writer he is. Especially for an economist.

His view of the economy is not optimistic.

…The world changed in September 2008. We call it a regime shift. It’s a move from one (good) equilibrium to another (bad) equilibrium. Statistical models that worked well in the old regime don’t work in the new regime. We hustled to adjust our models, but admitted that with limited experience in the new regime, we were less confident in our forecasts.

The problem with a regime shift is that it is similar to a change in the rules of a game. Old relationships don’t hold anymore. Football is an example: If you changed the rules to allow five downs instead of four, nobody would predict punts on fourth down.

Some economists didn’t recognize the regime shift. They went about their business using the same old models in a new world. Comments about the length of a typical recession or about how sharp declines are followed by rapid recoveries were clear signals that the speaker didn’t understand the situation.

Some economists were fooled by the stimulus. The rules of accounting cause government spending to be reflected as an increase in economic activity. Stimulus plans such as Cash for Clunkers and tax credits for home purchases moved the timing of transactions, artificially reinforcing the direct spending impacts. Similarly, bailouts and foreclosure prevention programs postponed the recognition of losses.

Many interpreted the resulting increase in last winter’s reported activity as permanent, but that could not be. We were not building anything or laying the groundwork for sustained prosperity. Instead, we were just continuing the previous decade’s consumption binge. The banks had failed, but the government had stepped in. It became the mother of all banks, borrowing from future citizens and other countries to fuel today’s consumption.

Regime shifts that lead to a bad equilibrium appear to be similar to bank runs. There need be no basis for panic, but a panic can guarantee the demise of a bank. The result of a panic on a bank ends there. The bank is failed, gone. There may or may not be a contagion effect on another bank.

A panic can also guarantee an economic decline. But our economy is different than a bank. It can’t fail, in the sense that we can’t shut it down and walk away. We’re all still here after a regime shift. We’re stuck with a mess.

We did have a mess after September 2008. All of a sudden, everyone’s wealth had declined, a lot. Businesses, consumers and governments were over-leveraged. Risk aversion had increased, perhaps to remain high for decades. Our understanding of economic risks had changed. We had discovered black swans – rare and unexpected outliers — in our system.

The problem with regime shifts is that we don’t know how to initiate or cause them. We see shifts to bad regimes, and we can see their self-fulfilling nature. Can there be some self-fulfilling process that leads to a shift to a better regime? I hoped so, and I hoped that Obama’s election would initiate such an event. Our forecasts aren’t based on hope though, and it’s just as well that we didn’t forecast that his election would generate a spontaneous recovery.

Today, enough time has passed that even the most slowly adapting forecasters are forced to confront the post-2008 data and the government’s failed economic efforts. As forecasters confront these facts, their forecasts are becoming increasingly gloomy. Now, forecasts of protracted malaise or even a double-dip recession are increasingly common. Why?

Because we borrowed to extend a consumption binge, and we compounded that error with omissions and perverse policy.

The stimulus’s omissions are glaring. We didn’t significantly invest in infrastructure that would improve our future growth. We failed to address the weaknesses in our education sector that fuel increasing inequality, sentence many to a life of hopelessness, and permanently constrain our economic growth. We did nothing to encourage small business’s growth; in an example of perverse policy, we are actually creating a new regulatory regime that favors large companies.

Then there were the actions that will probably restrain future economic growth. The minimum wage was raised. We had health care reform, but we didn’t address the real problem: the fact that the health care consumer pays an insignificant portion of the bill at the time of consumption. We had financial reform that failed to address the fundamental problems of too-big-to-fail, and we protected risky activities, increasing the regulatory burden and crippling the ability of small banks. We halted much of our offshore drilling.

Looking forward, there is little reason for optimism. We’re considering huge increases in our energy costs through greenhouse gas regulation. We have a massive tax increase scheduled at the end of the year.

While a double-dip recession is not the most likely outcome, we can’t reject the possibility. More likely, we face a long slow struggle to overcome ourselves and restore real prosperity. The forecasters’ consensus appears to be moving toward accepting that reality.

Lou Dolinar shows how bad science and media hype exaggerated the threat from the Gulf oil spill, and that in fact, the big disaster has been Obama’s reaction.

Here are some excerpts, but read the whole thing.

…Still, news reports implied or asserted that “enormous oil plumes” were waiting, like submerged monsters, to rise and attack unsuspecting beaches and wetlands. The New York Times summed up the media consensus on May 15: “Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide, and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.” The article quoted Samantha Joye, a marine-sciences professor at the University of Georgia, as saying that this oil was mixed with water in the consistency of “thin salad dressing.

…

But late in May, NOAA did a study that was far less alarming. It found weak concentrations of oil in the area surrounding the Deepwater Horizon site: 0.5 parts per million, maximum. The median was a little over 0.2 parts per million. As with the “giant” spill that threatened the East Coast, that’s barely above the threshold of detection. And by late July and early August, BP, the federal government, and some independent researchers were saying they couldn’t find any plumes at all. “We’re finding hydrocarbons around the well, but as we move away from the well, they move to almost background traces in the water column,” said Adm. Thad Allen, the administration’s point man on the spill. Some 75 percent of the oil released is gone — and that’s based on new estimates that put the spill rate at the high end of earlier projections.

As with the bogus doomsday model, industry experts say the giant-plume threat was greatly overstated by scientists and further blown out of proportion by the media. According to Arthur Berman, a respected petroleum expert at Labyrinth Consulting Services in Sugar Land, Texas, the theory flunks basic physics. “Oil is lighter than water and rises above it in all known situations on this planet. The idea of underwater plumes defies everything that we know about physical laws and has distressed me from the outset about these unscientific reports.”

It also ignores the Gulf’s well-known ability to break down oil. Berman points out that the Gulf has for millennia been a warm, rich ecological gumbo of natural oil seeps, oil-eating bacteria, and marine life that subsists on the bacteria. His research, he says, suggests that the spill represents at most four times as much oil as seeps into the Gulf naturally in a year — in other words, it is eminently digestible by the native ecosystem.

Washington Post

ONE OF the principal goals of Venezuelan President Hugo Chávez’s foreign policy is preventing governments or international organizations from telling the truth about him. Over the past couple of years, captured documents and other evidence have established beyond any reasonable doubt that Mr. Chávez’s regime has provided haven and material support to the FARC movement in neighboring Colombia — a group that is known for massacres of civilians, hostage taking and drug trafficking, and that has been designated as a terrorist organization by the U.S. State Department and the European Union. That places Mr. Chávez in violation of U.N. Security Council resolutions and, at least in theory, exposes him to U.S. and international sanctions.

Luckily for Mr. Chávez, the Obama administration and other Security Council members have shown little interest in recognizing what, in terms of state sponsorship of terrorism, amounts to a smoking gun. But discussion and debate about the evidence — such as Colombia’s recent presentation to a meeting of the Organization of American States — makes this ostrich act difficult to continue. So Mr. Chávez has dedicated himself to bullying and intimidating those who dare to speak publicly about what everyone in the Western Hemisphere knows to be true.

His most conspicuous recent target was former Colombian president Álvaro Uribe, who ordered the report to the OAS shortly before leaving office. Mr. Chávez’s response to the maps, photographs, videos and other documentary evidence laid out by Colombia’s ambassador was to immediately break diplomatic relations and to threaten war. When Mr. Uribe’s successor, Juan Manuel Santos, signaled that he was ready to address the FARC problem through private discussions, the Venezuelan caudillo instantly reversed himself. On Tuesday he traveled to Colombia to meet Mr. Santos and agreed to restore relations.

Mr. Chávez also focused his attention on Larry Leon Palmer, the veteran diplomat nominated by the Obama administration as its next ambassador to Venezuela. Some Republicans question whether the United States should retain ambassadorial relations with Mr. Chávez’s government, and the nominee received a searching set of “questions for the record” from the Senate Foreign Relations Committee’s senior GOP member, Richard G. Lugar (Ind.).

To his credit and that of the State Department, Mr. Palmer answered truthfully. He said that he was “keenly aware of the clear ties between members of the Venezuelan government and Colombian guerrillas.” He said that he was “concerned” that two individuals designated as international drug traffickers by the Treasury Department “are high-ranking officials of the Venezuelan government.” He reported “growing Cuban-Venezuelan cooperation in the fields of intelligence services and the military” and “morale and equipment problems” in the Venezuelan army.

Mr. Chávez once again was quick to respond. On his weekly television show on Sunday, he announced that Mr. Palmer would not be allowed to take up his post in Caracas because “he has disqualified himself by breaking all the rules of diplomacy, by prejudging us.” He said that the Obama administration would have to “look for another candidate.” The State Department responded that it was sticking with Mr. Palmer. It should. If ignoring the facts about Mr. Chávez is a requirement for sending an ambassador to Caracas, then it would be better not to have one.

Richard Fernandez:

Forgotten in the discussion about the President Obama’s falling domestic popularity is his even more precipitous decline in the esteem of the Arab world. The Christian Science Monitor reports Zogby found it had slipped from 45 percent to 20 percent in the past year, and that his “negatives” had soared from 23 to 62 percent. ” The Asia Times says Arabs asked to name a leader they admired named Obama well below the Shi’ite Mahmud Ahmadinejad.

When respondents were asked to name the world leader they admired most, Obama’s standing was less than 1%. Turkish President Recep Tayyip Erdogan was cited most often (20%), followed by last year’s top pick, Venezuelan President Hugo Chavez (13%), and Iranian President Mahmud Ahmadinejad (12%).

The hope that appeasement would be rewarded by respect has earned the President a kick in the nose. Perceived strength generates its own legitimacy in rough places; Arabs who have traditionally feared Persia now believe it has a right to build nuclear weapons. They have watched Iran push the President’s flaccid arm down to the table and drawn their own conclusions. The policy of apologizing for America has not won friends or influenced people; it has not even delegitimized Iranian expansionism. It has produced the contrary result.

Last month, Paul McCartney, excuse me, Sir Paul McCartney made a crack about Bush not being a reader.

Obama gets passed off as an intellectual. But guess what?

Karl Rove once claimed that President George W. Bush read 95 books in a year as part of a bet.

Apparently, President Obama is not as well read.

Reporter Michael Powell to the Columbia Journalism Review: “I got talking to him about what he reads and was telling me about these different policy tomes. And I said, ‘Well, yeah, but come on. I’m out here on the campaign trail with you, you’re up even earlier than I am, and I’ve been carrying around this Philip Roth book with me for two months and I’m yet to even crack it.’ He actually laughed at that point, and said, ‘Yeah, you have very little chance to really read. I basically floss my teeth and watch Sports Center.’”

Michael Barone:

“The pace of economic recovery is likely to be more modest in the near term than had been anticipated.” Those were the carefully chosen words of the Federal Reserve Board after its meeting Tuesday. Translation into English: We wuz wrong.

So were a lot of people, including departing White House economics adviser Christina Romer, who wrote that the Obama Democrats’ February 2009 stimulus package would hold unemployment below 8 percent.

It wasn’t just administration spokesmen who expected a solid recovery. California economist Bill Watkins in newgeography.com recalls a conference last fall in which all the other economists presented rosy scenarios and only he forecast extended malaise. He was relieved that his colleagues didn’t pelt him with tomatoes.

It’s easy for Republicans to make partisan hay of all this. They can point out, as Bush administration economist Larry Lindsey does in the Weekly Standard, that the congressional Democrats’ stimulus package was not the timely, targeted and temporary measure recommended by national economic director Larry Summers.

They can add that the threat of pending regulations interpreting the health care and financial regulation bills and of pending tax increases as the Bush cuts expire have created a climate of uncertainty in which consumers don’t consume, banks don’t lend and businesses don’t create jobs.

All true. But in this summer of unrecovery, it’s still important to understand how so many smart people got so much so wrong.

One answer comes from economist Arnold Kling writing for american.com. Kling argues that the collapse of the housing market and the financial crisis disrupted what had been “a sustainable pattern of specialization and trade” and that we need to let the market economy develop a new one.

Instead, the policies of the Obama Democrats have been aimed at propping up the old order — holding up housing prices and the mortgage market, keeping the Detroit auto companies in place, maintaining the lush standard of living of public employee union members (the purpose of the $26 billion the House was summoned back to Washington to approve Tuesday).

Maintaining unsustainable patterns of production, Kling writes, prevents the trial-and-error process of private investment that creates new jobs and patterns of production that will be sustainable.

Howard Anglin at the Daily Caller:

…the notion of states seeking a handout from the federal government is a constitutional perversion.  We are not dealing here with private corporations or citizens, but sovereign states with the authority to raise revenue (through taxing and borrowing) and the power – nay, duty – to control the way that revenue is spent.  If a state faces a budget shortfall, it is a self-inflicted problem and its government has no right to shake down the citizens of neighboring states to redress its improvidence.

Imagine that your neighbor leased a Ferrari, wore bespoke Milanese suits and used 25 Year Old Macallan as mouthwash.  Then one day, after losing his job, he strolls over to your house and asks you to pay half his credit card bill.  You would be forgiven for shutting the door in his face (frankly, you’d be forgiven much worse).  Now imagine he comes round with the local constabulary and they demand that you pay his tab.

That’s the state bailout if you are a citizen of Montana, North Dakota or one of the other states that bothered to keep clean fiscal house.

Worse, the bailout actually singles out one state for punishment precisely because that state took sensible steps to protect its budget.  In 2009, Texas committed an unpardonable affront to the ghost of Keynes by using its share of the federal education bailout to create a rainy-day fund against future financial crises instead of increasing spending.

In response, Congress has included a provision in the new bailout that requires the governor of Texas to provide “assurance” that Texas will not reduce spending on education in the next three years.  As the education budget is set by the Texas legislature and not the Statehouse, this is a promise the governor is constitutionally prohibited from making.  As a result, Texas may be forced to forgo its $800 million share of the bailout.

Meanwhile, as even the Washington Post has noticed, the bailout provides the rest of the states with additional education funds whether they need it or not.  Maryland, for example, which has no plans to lay off teachers for the coming school year, receives a $179 million windfall to spend on hiring more teachers or raising existing teacher salaries.  In other words, Texas is punished for past prudence, while Maryland is bribed to increase public spending.  Is it any wonder we are in an economic crisis?

From a New York Times story about Michelle Obama’s Spanish holiday.

…The first lady is paying for her own room, food and transportation, and the friends she brought will pay for theirs as well. But the government picks up security costs, and the image of the president’s wife enjoying a fancy vacation at a luxury resort abroad while Americans lose their jobs back home struck some as ill-timed. European papers are having a field day tracking her entourage, a New York Daily News columnist called her “a modern-day Marie Antoinette” and the blogosphere has been buzzing.

The White House said it would not comment. “The first lady is on a private trip,” Robert Gibbs, the White House press secretary, said this week. “She is a private citizen and is the mother of a daughter on a private trip. And I think I’d leave it at that.”

Oh, please.

Megan McArdle:

If you want to know why us libertarian types are skeptical of the government’s ability to prevent housing market bubbles, well, I give you Exhibit 9,824:  the government’s new $1000 down housing program.

No, really.  The government has apparently decided, in its infinite wisdom, that what the American economy really needs is more homebuyers with no equity.

Now, qualified homebuyers in the three states pioneering Affordable Advantage do not need to put down the 3.5 percent minimum down payment required by the Federal Housing Agency, or much of a down payment at all. They can get 100 percent financing — a loan as big as the purchase price of the house — for a 30-year, fixed-rate mortgage — a vanilla mortgage. The deal includes a program to help homebuyers if they become unemployed, lowered fees and there is no requirement that the homebuyer purchase mortgage insurance.

Wisconsin started the program first, in March, offering 100 percent loan-to-value mortgages for borrowers with a minimum credit score of 680. “It’s a good credit score,” explains Kate Venne, the spokesperson for the Wisconsin HFA. “In addition, we want to see what other lines of credit people have, and their performance. We look at their work history. We call their employers.” Thus far, Wisconsin’s HFA has offered $52 million in mortgages to 450 buyers.

Now, commentators left and right can agree that this is not a good idea.  No matter how stable said low-income homeowners are, they shouldn’t be buying houses with no equity, because if they suddenly have to sell said houses, they’re going to have trouble coming up with 6% to pay the broker, closing costs, etc.

So why is the government doing this, even though I can think of no policy analyst who doesn’t actually work for the National Association of Realtors who would say that this is a good idea?  Because politicians want to help poor people with capital formation, and homeownership is the way that the American middle class has traditionally gone about capital formation.

It’s true that this particular program is small–I don’t think the economy is going to be brought to its knees by several hundred houses.  The important thing, however, is that this is how the government thinks about housing.  The private bankers have at least reacted to their little scare by getting somewhat more conservative about the loans they offer–probably not conservative enough, but still, more conservative.  The FHA, on the other hand, is still out there offering 3.5% mortgages to anyone who can meet some fairly basic guidelines; those mortgages now account for almost 20% of all home purchases.  Yet so far, the FHA has cracked down in only one area:  it now requires a 10% downpayment from buyers with very bad credit.  On the other hand, it’s also expanded into pricier homes, so I’m not sure you can say the loan criteria have tightened overall.

Donald Boudreaux at Cafe Hayek:

Promising a “renaissance in American manufacturing,” the Obama administration proposes “raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas” (“New Democratic strategy for creating jobs focuses on a boost in manufacturing,” August 4).

Never mind that until the current downturn U.S. manufacturing output was at an all-time high and still growing.  Even now it remains the largest in the world.  The lie of U.S. manufacturing decline – repeated ad nauseam – conveniently paves the path for greater government control over the economy.

Instead focus on the plan to tax business actions that “ship jobs overseas” – that is, the plan to tax actions that economize on labor costs.  Will Democrats seek also to tax, say, shipping containers?  Over the past half-century, these humble boxes have put millions of high-paid longshoremen out of work.  Perhaps the Democrats will tax also high-grade rubber tires: by enabling cars and trucks to travel farther on single sets of tires, the number of jobs in tire-manufacturing plants is reduced.  Or maybe TeamObama will slap a punitive tax on electrical generators, for ready access to inexpensive electricity continues to encourage businesses to lower their costs by replacing human labor with machines.

The possibilities to spark the kind of economic “renaissance” envisioned by Mr. Obama and friends are endless.

IBD:

The Internet is a large-scale version of the “Committees of Correspondence” that led to the first American Revolution — and with Washington’s failings now so obvious and awful, it may lead to another.

People are asking, “Is the government doing us more harm than good? Should we change what it does and the way it does it?”

Pruning the power of government begins with the imperial presidency.

Too many overreaching laws give the president too much discretion to make too many open-ended rules controlling too many aspects of our lives. There’s no end to the harm an out-of-control president can do.

Bill Clinton lowered the culture, moral tone and strength of the nation — and left America vulnerable to attack. When it came, George W. Bush stood up for America, albeit sometimes clumsily.

Barack Obama, however, has pulled off the ultimate switcheroo: He’s diminishing America from within — so far, successfully.

He may soon bankrupt us and replace our big merit-based capitalist economy with a small government-directed one of his own design.

He is undermining our constitutional traditions: The rule of law and our Anglo-Saxon concepts of private property hang in the balance. Obama may be the most “consequential” president ever.

The Wall Street Journal’s steadfast Dorothy Rabinowitz wrote that Barack Obama is “an alien in the White House.”

His bullying and offenses against the economy and job creation are so outrageous that CEOs in the Business Roundtable finally mustered the courage to call him “anti-business.” Veteran Democrat Sen. Max Baucus blurted out that Obama is engineering the biggest government-forced “redistribution of income” in history.

Fear and uncertainty stalk the land. Fed Chairman Ben Bernanke says America’s financial future is “unusually uncertain.” (more…)

Taxprof:

Treasury Secretary Timothy Geithner made a false claim about the size of government spending being proposed by the Obama administration.

On NBC’s “Meet the Press” July 25, he said the president is proposing spending “as a share of our economy” that is “lower” than it was during the Bush administration and “comparable” to what it was under Ronald Reagan. Neither claim is true.

The administration’s own estimates project spending next year that is higher as a percentage of the economy than in any year since the end of World War II. The average projected by Obama’s budget officials is significantly higher than the average under Reagan or Bush (father or son).

Here’s what Geithner said:

Geithner: [The president has] proposed to freeze discretionary spending, to keep the overall size of the government at a very modest level as a share of our economy. If you look again at what the president’s proposing, he keeps the overall size of government at a very modest level comparable to–lower than what was in the Bush administration, comparable to what President Reagan presided over. That’s very important.

That’s not true, as a glance at this chart shows. It reflects official historical spending figures as a share of the nation’s economic output, as measured by gross domestic product (or GDP), plus the very latest estimates of current and future spending produced by Obama’s own Office of Management and Budget.