May

Barack Obama: Inaction as a Form of Governance

After a year and a half of the Obama Administration, we may safely say certain things about the Obama way of governing. At the forefront of the Obama approach to any problem is the printing of money accompanied by a laissez-faire approach to the systemic issues which underlie any major catastrophe. The Obama Administration has realized the rub of the world economy, which is that it isn’t built on anything resembling reality in either accounting or trade.

For example, one might have safely foreseen the danger involved in assembling an economic union with a dozen countries, all of whom retained their national identities and the unique prerogatives thereof, while instituting a single currency for the entire economic union. Predictably enough, those countries with strong economies began running a trade surplus with the others, who, due to their unique prerogatives in welfare and pension obligations and the lack of a distinct currency of their own were unable to adjust their currency to stabilize in the face of mounting trade deficits. This was not a surprise.

The fact that the European Union mandated a strong deficit policy meant nothing in a regulatory and financial environment where one could shuffle one’s obligations to the future with securitized devices and thereby come in at under 3% of GDP in the current year. Fiscal responsibility, like everything else in today’s world economy, was and is an illusion. Greece never met the criteria for entry into the European Union, and neither did Portugal, Italy, or Spain. But that was no matter to the likes of France and Germany, because they had captive partners who could buy up their arms and munitions. In the case of Greece, their recent bailout is contingent on their continuing purchase of such arms so that Germany and France can continue to be enriched.

Why exactly does Greece need more weapons? Why is it a good idea to encourage arms proliferation in the area of the Balkans, Greece, and Turkey? These and other questions have no logical answer, because there is no logical sense in continuing down the primrose path to a better armed Greece when Greece can’t even meet its obligation to its pensioners and creditors without a bailout.

The great accomplishment of the Obama Administration has been to gain for itself a reputation for being a socialist regime when in fact Obama has shown a deference to industry which is quite stunning. Say what you will about the government takeover of GM and Chrysler, but without that government takeover, GM and Chrysler would no longer exist. There isn’t anything in the GM and Chrysler takeover which didn’t favor shareholders, who will eventually emerge with restructured, leaner, and more competitive companies whose debt is backstopped by the United States government. Creditors did get screwed over, but unions and shareholders will ultimately come out of the morass of their own making with an intact company rather than the fossilized remains of an extinct former employer.

Healthcare reform was more of the same. Oh, the real socialists in Congress had hoped for single payer universal healthcare, but the speed with which they were shuffled aside in the debate and the near non-existent influence they had ought to have informed the larger public as to the true ideological leanings of Barack Obama. The man and his allies in Congress accomplished a bill which reads like a Christmas list for the health insurance industry. The industry will receive over thirty million new customers, whose premiums will be subsidized by the government in the event that they cannot pay. The total payoff for the health insurance industry? Over $300 billion dollars.

The death panels of the insurance industry will no longer be paid for by health insurers who retain doctors and medical professionals to review treatments and deny coverage. The cost will be shifted to the government’s vast new bureaucracy, and the liability will be non-existent, because that bureaucracy is exempted from such liability. You can’t sue them, and you can’t sue your insurer, either, because they won’t be the ones making the decision to deny your treatment, or that of your child, or your mother, or your grandmother. You have no recourse. It’s the ultimate medical liability cap: 0$. You can’t sue to force treatment, and you can’t sue to collect damages after the fact in the event that your loved one dies from the denial of treatment.

The other stated reasons to pass healthcare reform were largely cosmetic. They didn’t matter to begin with. We know beyond the shadow of a doubt that this legislation will not contain costs or lower the deficit. In point of fact, a remarkably similar scheme was attempted in New York back in the 1980s, a scheme which led to higher premiums and higher costs before it was jettisoned.

It shouldn’t really surprise anyone that this occurred. After all, Michelle Obama achieved notoriety by developing a program for the University of Chicago Medical Center which shuffled the uninsured and Medicaid patients away from the hospital to other local clinics and hospitals. As an administrator, Mrs. Obama made $317,000 a year for her efforts. The emphasis of the Urban Health Initiative was not on providing care; it was instead on shifting the liability or cost of that treatment to other area hospitals. By limiting their potential exposure to unreimbursed or lower reimbursed care, the University of Chicago Medical Center generated greater profits.

That’s the healthcare reform bill, in a neat summation: the emphasis isn’t on providing care or lowering costs, it’s instead on shifting the liability. Younger, healthier individuals won’t have the option of purchasing catastrophic policies which fit their individual needs as consumers. They’ll be obligated to purchase comprehensive insurance policies, because their money is needed to subsidize the hospitals who treat lower reimbursement patients from Medicare and Medicaid. It may be coercive, maybe even unconstitutional and deeply immoral, but it’s also highly pragmatic if you’re a health insurer or a healthcare provider seeking to lower your exposure to liability while maximizing your profits.

In much the same way, the explosion of TARP from a sub-$800 billion bailout fund for the financial sector to a now staggering $23.7 trillion bundle of liability for the U.S. taxpayer represents a shifting of the liability from private banks who will get out from under their bad loans (and the accountability for those loans, which might have included, and arguably should have included, bankruptcy and insolvency up to the point of liquidation) and shuffle those loans to the U.S. government and the taxpayers. Moreover, those same banks now have $23.7 billion in liquidity to play with in the investment markets. That’s how we went from 6,500 to over 11,000 in the markets in the span of roughly thirteen months.

But investment doesn’t always yield jobs, especially when you’re investing in derivatives. I’d like anyone to show me how a derivative creates jobs in the wider economy. I’ve asked a variety of individuals, and no one has been able to show me a single job created in construction, manufacturing, the service industry, or any other sector of our economy from derivatives. I’ve been able to show them an avalanche of eliminated jobs, and even a staggering amount of wealth that is no more.

Watching CNBC can be informative from time to time. Today, Larry Kudlow argued against the guaranteeing of sovereign debt and for the guaranteeing of banking debt without any obvious indicator that he understood how the guaranteeing of the latter led in many ways to the guaranteeing of the former. We’ve dealt with banking and industry bailouts for the past thirty years. The bill has come due. Welfare in its various forms results in the purchase of private goods by its recipients, so in a very real sense, we could argue that welfare is nothing more than another subsidy to industry, especially given the trend in privatizing the administration of various welfare programs, which has seen defense contractors and weapons manufacturers take up the role of administering food assistance programs.

We’ve dealt with out of control defense spending for the past forty years. Our military is administratively top heavy by any reasonable assessment. Secretary of Defense Robert Gates has acknowledged as much, and he wants to eliminate a number of officer positions as a result. However, it’s too little, too late, and it would be instructive to examine the reasons why we haven’t already cut defense spending. That’s right, we’re subsidizing the defense industry, and that industry has a lobby which has proven particularly effective at combatting any attempt to rein in military spending or address military graft and waste. I might ask why we need a McDonald’s in Gitmo or the Balkans, and why it is that at a time when one of our generals has expressed concern that our nation’s children are too damned obese to be expected to fight in combat as adults that we are feeding our current troops fast food on foreign bases?

But then again, I’m not Barack Obama, and I’m not that deferential to or solicitous of the concerns of private industry when those concerns run counter to the public interest and national security. Which brings me to the BP oil disaster in the Gulf of Mexico, an ecological and economic crisis which threatens to overturn the economies of the Gulf states by decimating their seafood and tourism industries. Not only did our government fail to have the requisite equipment available for deployment (burning booms were recommended back in the 90s, a decade and a half ago, to be exact), but they’ve deferred to BP at virtually every turn. BP is used to being handled with care, given their repeated disregard of safety regulations and environmental requirements, not to mention their apparent lack of common sense, which has led to multiple disasters on land at their refineries.

Despite being instructed to cease and desist with the use of a particular chemical dispersant, BP continues to use the dispersant and in doing so, it flouts the authority of the federal government and indicates just what a respect it holds for that government. From the inception of its response, BP has lied about the amount of oil being spewed into the Gulf of Mexico at every turn, and they have failed at every turn to contain the spill. The federal government’s response? BP will pay for it.

Yes, we know that BP will pay for it eventually. But in the meantime, an ounce of prevention is worth a pound of cure, and there is no reason why we shouldn’t be throwing everything we have at this crisis in an expedient manner which reflects the pressing nature of this crisis and its implications for the economies and environments of the Gulf states. Now is not the time for studies and commissions. We have to prevent the oil from saturating our marshes, wetlands, and beaches any more than it already has.

We have troop surges halfway around the world when things aren’t going as planned. We spend trillions to protect and secure the ground situation in Iraq and Afghanistan, while allowing an oil spill to threaten to implode our Gulf states on any number of fronts. This threat is immediate, and it requires an immediate response. If we have over $2 trillion and counting for the wars in Iraq and Afghanistan, not to mention the rebuilding of their infrastructure, and $23.7 trillion loans and guarantees to backstop Wall Street and prevent it from absorbing the culpability of its bad business decisions, we’ve got the money to pay for the effort to save the Gulf of Mexico now and we can bill BP later.

Inaction as a form of governance is beneath contempt. It is one thing to remain quiet and detached when it is called for. Our best course of action would have been to allow the banking industry to collapse so that its sickest institutions could be purged and liquidated, and so that the entire financial sector could emerge healthier and better and wiser for the experience. It would have been better to do nothing than to pass a healthcare reform law which will add to our already staggering national debt and create an increase in the already onerous cost of healthcare for consumers.

When action is called for, our government does not answer the call. When our border security functions as an invitation to illegal crossing, and our Gulf states face the threat of economic and environmental implosion, waiting for BP to decide what to do is unconscionable. Standing by as oil washes into our wetlands and on our beaches with a cavalier attitude is absurd. Insisting that a private company will bear the cost of making a local economy whole when its market capitalization clearly indicates that it will not be able to do so is patently disingenuous at best and outright deceitful at worst.
Barack Obama has shown himself at every turn to be unconcerned with the plight of average Americans and the matters that concern them. He has offered them remedies which will only compound their problems at a later date, or he has stood by with a detached air of sickening certitude and arrogance. As unemployment climbed beyond the level which he and his administration insisted would serve as a ceiling, he offered no balm or respite. As millions of Americans continue without employment or the prospect thereof, their unemployment benefits are cut off due to partisan bickering and they have no jobs which will hire them due to their overqualification or the simple fact that for every available job, something on the order of eight applicants exist.

The debt continues to climb, the deficits continue to mount, and the bifurcation between this administration’s treatment of Wall Street and industry and that of its concern for the plight of ordinary Americans has never been starker. Short of manna from heaven or some other form of deus ex machina, what are Americans to do? They certainly can’t count on their government to deliver anything, and what is more, they can’t count on their government to have the decency to get out of the way when others try to do something.

As Louisiana waits for the Army Corps of Engineers to complete its study of the viability of sand berms as a means to stopping oil from pouring into its wetlands and estuaries during spawning season, its citizens and officials quietly simmer, knowing that over 21 miles of berm could have already been in place if only the federal government had stepped aside. As inventors and private companies express bewilderment over the failure of BP to return their calls or even express a passing interest in the potential efficacy of their products to provide a solution to the problem, our federal government obstinately refuses to do anything to provide an incentive for BP to seek alternative solutions to its current course, which by all accounts is failing to keep oil off of our shores and fisheries.

The United States of America deserves better than a government which functions as an anchor around the neck of local citizens and bureaucrats who desperately want to take their own fates in their own hands to do something, anything, besides what the federal government is doing: nothing whatsoever of substance or significance. It is time for each of us to recognize the import of what is occurring: our federal government no longer serves the interest of this republic. It’s heart and mind lie elsewhere, and it’s ears are deaf to our petition. When the law ceases to be a means of recourse whereby both parties are equal before its institutions and the government sworn to uphold the law, the people may justifiably take matters into their own hands.

And so, Louisiana, build your sand berm, and to hell with government by inaction or obstruction in the case of endless studies and commissions. The federal government may not answer to the people of Louisiana, Texas, Mississippi, Alabama, and Florida, but their state governments do. It is time for the state governments to do what the federal government will not do: represent the interests of their people above all else. It is time for the government of Arizona to realize that the federal government is refusing to enforce border security, and is obstinately refusing to even process those individuals who are picked up by the Arizona authorities for being here illegally. Governments exist to enforce the laws and defend the freedoms and liberties which make such laws necessary and even proper. The foundation of freedom is the idea that freedom enables men to choose virtue of their own volition and reap the rewards or suffer the consequences of their choices. When the law becomes an impediment to this, and the institutions of government and their authority incentivize and even condone the choice of vice while impairing or offsetting consequence, it is time to do away with the government as a pox on civilization. We shall not regress to chaos and disorder simply because our government refuses to act in a manner consistent with the very law it is sworn to uphold, and the interests of its people. We have the right and the power to take up our own interests and contend for the survival of our way of life, governments of inaction be damned.

Barack Obama will serve out his term. He was elected democratically, and our Congress lacks the fortitude or decency to impeach him for his obvious failings. Democracy does not always produce the best result, and the obvious tragedy of the election of 2008 is that no better alternative was there to be had. In 2012, it is up to us to see to it that a better alternative exists, and that a better alternative is elected. It is time for we the people to take our fate and our survival, and that of our republic, into our own hands. Governments are as inactive as we allow them to be, and they will grovel before a determined, armed, and fed up electorate. We have turned out multiple incumbents in the primaries, and come the general election, we must sound together in a stentorian chorus that our issues and grievances will no longer be ignored. Government by inaction, regardless of its heading by a photogenic and oratorically gifted president, is not a government which can pass electoral muster. Gird yourselves up with indignation and rage, and mount up for war at the ballot box in November, while realizing that this election is the first of many where we will compel our government to meet the demands of the people.