Straw Men and The Peter Principle.

These are a few changes that have occured recently:

a) Trillion dollar deficits will replace hundred billion deficits.

b) The Oval Office will determine how Census is manipulated so it can insure redistricting occurs in ways that benefit Democrats.

c) Unions are given advantages in receiving government contracts - pay off for campaign contributions.

d) Government control of formerly 'free' markets has increased and health care will eventually be mandated.

e) Efforts will soon be made to control talk radio's free speech format in defiance of our First Amendment because Liberals have been unsuccessful in matching more popular Conservative programming.

f) Most important of all, more and more of the private sector has come under the crushing thumb of government bureacratic control, mandatd rules and salary caps because free market corporate governance went astray. In order to save their cushy jobs, corporate management have opted to become supplicants of government bail outs.

Where all this leads is anyone's guess but it would appear the weak have been put on government life suppport systems from which they will never fully withdraw. The hangover effect can be stifling.

Sour grapes, alarmist rantings? Maybe, but the consequences of these actions will unfold in ways that cannot yet be imagined. Egregious excesses of unbrdiled capitalism, government dictated largesse has brought us to the edge. Keyne's philosophy of spending during periods of economic stress is rationale but it can be extremely dangerous and distorting when it means incurring enormous deficits because no surplus (read fat) was ever acheived during the lush years. Out of control government spending weakens the body politic and the slightest viral infection associated with any economic downturn can do serious and long term damage. And so it has - Wadsworth had it right when he penned:"Getting and spending we lay waste our powers."

Our nation is moving in the direction of the European model with respect to governance and its relationship with the private sector. I find little that government undertakes works efficiently or costs less. Yet, dependency upon government is growing exponentially. Hayek was a class mate of Keynes but his thinking never gained prominence until Thatcher and Reagan proved its worth.

The stimulus bill is a clear example of raw political power totally intent on passing a Liberal agenda under the threat of economic collapse. The nation's Representatives voted without having an opportunity to understand what they were voting on and failing that were not even given time to read the document, not that many would understand its gobbledekook.

Would you want to be defended by an attorney unable to know the details of your case because the Judge did not have time to spare?

Finally, it seems Obama's (unsure?) leadership style demands he establish a straw man - 'a political pinata.' Roosevelt had 'Barton, Martin and Fish' to stick pins in and Obama seems he has a need to pick a fight with Rush and Republicans, who offer differing views, in order to deflect attention.

Certainly, Republicans discredited themselves with their own inability to curb their spending appetites when they were in control and thus, their new found return to Conservatism bears scrutiny and rings hollow.

Obama claims he seeks bi-partisanship but then proceeds to throw down gauntlets which he must know only raises the hair on the back of Conservative necks. This seems to be the case with Sen. Gregg - 'my way or the highway'. Obama, then uses rejection as a way to beat detractors, who have legitimate differances, over the head. If that is leadership it is not of the healing variety and will come back to haunt him.

In the case of Rush, I believe Obama's attack it is a calculated softening prelude to Liberal's ultimate attack on talk radio which has become a growing thorn in their side.

I am fascinated by the fact that, in less than a month, our youthful president has broken a whole host of campaign promises, has struggled to fill cabinet posts and, more recently, was challenged by the Chairman of Caterpillar for claiming his company would start hiring when in fact CAT remains in a firing mode. (See 1 below.)

Yet, the press and media have given Obama enough protective cover to repel an IED.

Again, maybe sour grapes but I have not made up anything. This is what has happened.

Has it been a clever purposeful strategy or are these the actions of someone over their head? You decide. (See 2 and 2a below.)

Economist Schiller, suggests Obama's rhetoric is more dangerous than the circumstances about which he complains. Are we witnessing the actions of a neophyte president? Does the personification of "The Peter Principle" now occupies the Oval Office? Again, you decide. (See 3 below.)

Can the view of an Australian far removed from Israel see clear enough to predict Netanyahu has reformed and can be a strong leader? (See 4 below.)

Is the 'stimulus bill' an unread Liberal monstrosity or the saviour of Capitalism's excess? Fighting fire with fire? You decide! (See 5 below.)

Obama deflected his detrators by saying "I won." Will arrogance eventually haunt and defeat him? (See 6 below.)

Dick

1)Caterpillar Workers Oppose Stimulus, Despite Obama's Visit, Implausible Promises
The House just passed the stimulus package with no Republican support, and eight "no" votes from Democrats.

Rep. Aaron Schock, whose llinois district is home to Caterpillar, spoke on the floor about the president's speech to his constituents and their telling response. Caterpillar has been a central part of Obama's stimulus pitch the past couple of days, but the pitch has been bumbled, as the rest of the stimulus message has been. Obama claimed the Caterpillar CEO told him he'd be rehiring some of his 22,000 laid-off workers as soon as the stimulus bill was passed, but Owens later flatly contradicted the President's claim.

Schock's constituents were urged by the president himself to tell Schock to vote "yes," but he was not approached by one constituent, Caterpillar employee or otherwise, asking him to support the stimulus. Democrats can pass this monstrosity because they control both houses, but they should never get away with painting criticism of it as unreasonable or purely partisan. Criticism comes from every quarter— even from laid-off workers who are subject to an onslaught of the president's patented Promises of an Implausible Nature and Grandiloquence of Economic Gloom:


I found it very interesting that after the president finished his speech and I stayed around, not one employee at that facility approached me and asked me to vote for this bill. In fact, I have received over 1,400 phone calls, e-mails, and letters from Caterpillar employees alone asking me to oppose this legislation

2) Caution: Zombie Economy Ahead
By Rich Lowry

Computer hackers managed to hijack a digital road sign in Austin, Texas, the other day and change its message to "Zombies Ahead."

It was a whimsical warning for that stretch of Texas road, but could have served as a deadly earnest statement about the U.S. economy. "Zombie banks" was the term for Japanese financial institutions propped up by government in the 1990s despite their basic insolvency after a real-estate bubble. These unprofitable banks, in a financial revenge of the living dead, cast a decade-long pall over Japan.

At the time, American officials like Pres. Barack Obama's economic guru Larry Summers urged the Japanese to give up on failed institutions. Instead, Japan pumped 12 percent of its gross domestic product into saving the banks and got a "lost decade" of economic stagnation in return. Economic analysts across the board agree that the Japanese example must not be repeated, even as our lawmakers stumble into repeating it.

Members of the House Financial Services Committee flogged eight banking chief executive officers the other day, apparently without considering that some of them were already dead men walking. The CEOs were grilled about their lending practices and bonuses, when they should have been asked, "Why does your company still exist?" The head of Citigroup, Vikram Pandit, noted he's getting paid $1 a year, which might be $1 too much given the state of his all-but-bankrupt firm.

The awful truth is that the financial system has at least another $1 trillion hole in it. Either the U.S. government has to continue to try to patch it over with massive--and perhaps ever-escalating--injections of money à lá the Japanese in the 1990s, or it has to take the painful, risky step of letting some of the big, irreparably wounded financial players go down.

Neither choice is appealing, which is why Treasury Secretary Timothy Geithner trotted out his muddle-through, we'll-get-back-to-you-on-details rescue plan. Obama shows no appetite for grasping the nettle of a problem much more difficult technically and politically than asking Congress to shovel billions of dollars at its favorite priorities in a stimulus bill. In his first prime-time press conference, Obama dodged when asked if it would take another trillion dollars to rescue the financial sector--because a simple "yes" would be just too starkly truthful.

As it stands now, the U.S. government is keeping alive banks that would otherwise go bust at the same time it is hectoring them about lending more money--in other words, Japan redux. "Many banks continued to extend credit to insolvent borrowers, gambling that these firms would recover or that the government would bail them out," writes University of Chicago economist Anil K. Kashyap of Japan in the 1990s. "The Japanese government also encouraged banks to increase their lending to small- and medium-sized firms to ease the credit crunch after 1998." The resulting misallocation of capital smothered growth.

Tokyo short-circuited the natural churning of the capitalist system that is the only way to clear out failed companies and unproductive uses of capital. If the U.S. government keeps alive Chrysler and General Motors or Citigroup and Bank of America when they are no longer viable--and have rendered themselves such through poor business choices and foolish risk-taking--it will create a zombie economy without the capacity for self-renewal.

The financial system, of course, is fragile. We have learned that the uncontrolled collapse of an institution like Lehman Brothers is dangerous. Bankrupt banks that are truly "too big to fail" need to be taken over by the government, broken up until they are small enough to fail and sold off, with government eating their toxic assets for now. This kind of semi-nationalization can clear the decks for new, healthy banks that won't be long-term wards of the government or long-term drags on growth.

During the stimulus debate, Obama often cited Japan's cautionary example. But Japan tried a big stimulus, too, even as it left in place its zombie banks. Will Obama heed his own admonitions?

2a) Obama's pyrrhic victory on the stimulus package
By Phil Levy

As the fiscal stimulus saga draws to a close, we can ask what this opening salvo of the Obama presidency means economically, politically, and internationally.

The economic range of reactions to the stimulus can be oversimplified into three camps. The first camp could be called the Scientific Keynesians, with Paul Krugman at their forefront. This group typically looks at what the economy is capable of producing, subtracts what it is likely to produce in this slump, and identifies the difference as a gap to be filled. They have confidence that it's possible to bring spending online in a timely fashion and fine-tune the amounts so as to produce the requisite growth and jobs. They tend to view the $789 billion package as woefully inadequate (it doesn't fill the gap) and have been highly critical.

A second group could be called the Cost-Benefit Covey. For them, federal spending is neither good nor bad, per se. It depends what it costs and what it will do. In a time of low interest rates and idle workers, there may be projects that are worthwhile that would not pass the test when the economy is humming. But the number of such projects is limited. As Larry Summers put it, this group is looking for spending that will be "timely, targeted, and temporary." Even if there were a $1.2 trillion output gap, that does not mean so much can be spent wisely in the time the gap remains open. Members of this loosely-defined group have criticized the stimulus plan as excessive and wasteful. They are not prone to embrace John Maynard Keynes' idea that we might just as well employ people to dig holes and fill them again. Members worry about racking up enormous debts and the high taxes or inflation those debts may bring.

A third group could be called the Animal Spiritualists. The same Lord Keynes used the term "animal spirits" to describe public confidence in the economy. Such confidence certainly seems to be at a low ebb at the moment. The question is how to restore it. In this light, perceptions are all-important. If the package is seen as being significant, it will create hope, people will buy again, and the economy will revive. There's not much precision to this approach; it's mostly psychology. While the Animal Spiritualists may be happiest with the fiscal stimulus package, they would seem vulnerable to the Scientific Keynesians and the Cost-Benefit Covey. If the public believes the critiques from either direction that the stimulus plan won't work, then those critiques will be proven correct.

My own sympathies lie closest to the Cost-Benefit Covey. I have little faith that the fiscal stimulus plan will revive the economy. There is an output gap, of course, but there are also some big structural problems -- like a collapsed financial sector and a housing sector in a downward spiral. Fixing those will be a prerequisite for recovery and may require all the resources we can muster.

Politically, President Obama seems to have dashed many of his major thematic campaign promises in his very first foray into large-scale policy-making. The crafting and selling of the stimulus package have been neither transparent, innovative, calm, nor bipartisan. Much of the package was crafted behind closed doors. The rush to push money out quickly left no time to develop creative new approaches. The president's dire warnings of doom did little to soothe fears, particularly in those who had doubts about the stimulus package's efficacy. And hopes for bipartisanship may have been the biggest victim of the endeavor. While President Obama was willing to exchange pleasantries with Republicans, those Republicans were largely excluded from the crafting of the bill and voted overwhelmingly against it.

Of course, a natural response by the Obama administration is that the Republicans were just engaging in rank partisanship. There are certainly Republicans motivated solely by politics, but this is why Sen. Judd Gregg's withdrawal as Commerce nominee is so devastating. Even President Obama's hand-picked reasonable Republican found the process unpalatable.

On the international front, the bill portends trouble. The original excesses of the Buy American clauses were trimmed back, but President Obama missed a golden opportunity. Had he embraced Sen. John McCain's amendment to remove the clause, he would have demonstrated bipartisanship, assured the world that America was not embracing protectionism, and still retained existing legal authority to direct some contracts toward domestic producers. Instead, Sen. McCain's amendment was defeated. The remaining clause sends a bad signal, allows protection, invites retaliation and risks provoking numerous trade disputes.

If worried allies wish to call up and seek reassurance, they likely won't find the right person on the other line, as key international economic positions remain unfilled: Ron Kirk, the nominee for United States Trade Representative, has not yet had hearings scheduled, and there is a new vacancy at Commerce. The Treasury, meanwhile, may be otherwise occupied.

President Obama got the stimulus plan that he wanted, but at potentially a very high cost.

3) Obama's Rhetoric Is the Real 'Catastrophe': In 1932, automobile production shriveled by 90%.
By BRADLEY R. SCHILLER

President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.


In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don't come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate. Consider the job losses that Mr. Obama always cites. In the last year, the U.S. economy shed 3.4 million jobs. That's a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost -- fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.

Job losses in the Great Depression were of an entirely different magnitude. In 1930, the economy shed 4.8% of the labor force. In 1931, 6.5%. And then in 1932, another 7.1%. Jobs were being lost at double or triple the rate of 2008-09 or 1981-82.

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This was reflected in unemployment rates. The latest survey pegs U.S. unemployment at 7.6%. That's more than three percentage points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%). You simply can't equate 7.6% unemployment with the Great Depression.

Other economic statistics also dispel any analogy between today's economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That's comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%.

Auto production last year declined by roughly 25%. That looks good compared to 1932, when production shriveled by 90%. The failure of a couple of dozen banks in 2008 just doesn't compare to over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings & Loan) failures in 1987-88. Stockholders can take some solace from the fact that the recent stock market debacle doesn't come close to the 90% devaluation of the early 1930s.

Mr. Obama's analogies to the Great Depression are not only historically inaccurate, they're also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren't likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a "recovery" package that delivers a lot less than it promises. A more cool-headed assessment of the economy's woes might produce better policies.

4) Matured Netanyahu is Ready to Rule
By Greg Sheridan

Will it be Likud's Benjamin Netanyahu or Kadima's Tzipi Livni? Barack Obama, and the international consensus of liberal opinion, would certainly prefer Livni, as she is committed to the "peace process", while Netanyahu has never favoured a Palestinian state.

But there is almost certainly less than meets the eye to these differences. Livni has been in government these past years. All Israeli governments engage in the peace process. Israeli Oppositions, on the other hand, get back in by exploiting the failures and disappointments of the peace process.

The odds are strengthening on a Netanyahu prime ministership. He won fewer seats than Livni but more fellow-travelling right-wingers were elected than Centre-Left people, and Netanyahu should be able to form a more stable government than Livni.

Whether it's a narrow coalition, excluding Livni and also Ehud Barak's Labour Party, and therefore with a slight majority, or a broad coalition, including Livni and Barak, will make a big difference to its longevity.

What will Netanyahu be like as PM?


I first met Netanyahu in the mid-1980s when he was Israel's ambassador to the UN. He was already a media super star because of his eloquence, especially on American TV, and his sharp, quick style.

My single strongest memory from that meeting was his opposition to the establishment of a Palestinian state. But what future do you envisage eventually for the Palestinians?, I kept asking in different ways. He wouldn't answer directly but a common Israeli position then was that one day, far into the future, most of the West Bank would revert to Jordanian rule, and most of Gaza to Egypt, the status those territories enjoyed before 1967.

I was not sure that this was Netanyahu's position, however, as he was determined not to state one clearly.

There's no doubt he's as charming and smart as anyone in international politics, with a high-gloss American education in economics. He is a man of diverse parts. He has been married three times and there is a whiff of the playboy or sybarite about him, although he served five years in one of Israel's elite military units. He can also stroll down the shelves of the greatest libraries of Judaica in the world and tell you something about almost every book there.

In 2003 I had a long discussion with Netanyahu in his Jerusalem office, at a time when he was Israel's foreign minister.

His chief thought about the West Bank then was that Yasser Arafat's rule had to come to an end if there was to be any progress between Israel and the Palestinians.

"We have to put an end to 'Arafatistan' next door," he told me. How would you do that, I asked. Again, there was no direct reply.

Yet, and here is the terribly important thing, when Netanyahu was prime minister he felt himself bound by the Oslo Accords, engaged in negotiations with Arafat, withdrew from much of Hebron, and tried hard to negotiate a peace deal with Syria.

Although he has never espoused a Palestinian state, as Livni does, he has made it clear that he is willing to accept one if it means an end to Palestinian terrorism against Israel and an end of Palestinian territorial claims. His position, therefore, is not the polar opposite of Livni's. Rather, she emphasises the positive goal in an attempt to encourage Palestinian opinion; Netanyahu emphasises Israel's willingness to put up with a hard, difficult security situation indefinitely rather than make concessions that do not end terrorism.

The difference is almost this simple: Livni says stop terrorism and you get a state, Netanyahu says stop terrorism or you don't get a state.

Similarly, Netanyahu's position on Jewish settlements in the West Bank is really not so controversial. He says settlements can expand within their existing boundaries but not take any new Palestinian land. It is a common position among all Israeli politicians that some Jewish settlements -- the close Jewish suburbs of Jerusalem, for example -- will be retained by Israel in any final settlement (in exchange for other land given up from Israel proper). Therefore if these settlements expand, upwards as it were, more people within the same area, it doesn't affect peace prospects. The government of which Livni was a minister allowed this.

Bill Clinton's former Middle East envoy Dennis Ross has produced an exhaustive record of his work, The Missing Peace. He provides a fascinating account of Netanyahu and describes what he regards as Netanyahu's self-confidence, which he regards as sometimes straying into hubris. Perhaps chutzpah is the better word.

But two passages on Netanyahu are particularly instructive. Ross writes: "When apprised of the problems he would be creating, Bibi almost always looked for practical ways to overcome them."

Elsewhere, Ross also writes: "Bibi rarely seemed to know how to act on his ideas: how to present them, to whom, and even when to do so. Translating an idea into action seemed beyond his grasp. It was not a lack of intelligence; few are more intelligent than Bibi Netanyahu. It was an impulsive lack of judgment, and a lack of feel for the Arabs generally. But there was something more: often he would come up with ideas simply to get himself out of a jam."

This was a tough judgment by Ross, but it probably had some validity. However, I believe Netanyahu has grown immeasurably since his first time as prime minister. As finance minister earlier this decade, he profoundly re-shaped Israel's economy.

Isi Leibler, the former Australian businessman who is now an important Israeli commentator and knows Netanyahu well, believes he is a much more sober, balanced, judicious, formidable and disciplined politician than he was in 1996 when he became Israel's youngest PM. Netanyahu believes Iran is Israel's biggest threat. He will not be a prime minister to be taken lightly, in Tehran or anywhere else.

5) 1,073 Pages: A stimulus bill that's anything but transparent.

In his closing remarks on the stimulus bill yesterday, House Appropriations Chairman David Obey called it "the largest change in domestic policy since the 1930s." We'd say more like the 1960s, which is bad enough, but his point about the bill's magnitude is right. The 1,073-page monstrosity includes the biggest spending increase since World War II, but more important is the fine print expanding the role of the federal government across the breadth of American business, health care, energy and welfare policy.

Given those stakes, you might think Congress would get more than a few hours to debate it. But, no, yesterday's roll call votes came less than 24 hours after House-Senate conferees had agreed to their deal. Democrats rushed the bill to the floor before Members could even read it, much less have time to broadcast the details so the public could offer its verdict.

So much for Democratic promises of a new era of transparency. Only this Tuesday the House unanimously approved a resolution promising 48-hour public notice before holding a roll call. Even better, the bill could have been posted on the Internet, as candidate Barack Obama suggested during the campaign. Let voters see what they're getting for all this money. Not a chance.

This high-handed endgame follows the pattern of this bill from the start, with Republicans all but ignored until Democrats let three GOP Senators nibble around the edges to prevent a filibuster. With their huge majorities, Mr. Obey and Democrats got their epic victory. But far from a new, transparent way of governing, this bill represents the kind of old-fashioned partisan politics that Tom DeLay would have admired.

6)Barack Obama’s Gift To Conservatives: The Only Thing That Will Be Stimulated Is Conservative Opposition
By Dan McLaughlin


President Obama, like many presidents before him, would like to have it both ways: get broad bipartisan support for his domestic agenda without compromising it. Of course, in the real world, politics doesn’t work that way - you can charm, cajole, browbeat, bribe and blackmail your way to a handful of votes here and there, but unless (like Reagan) you have a substantial faction of the opposition party that is philosophically closer to you than to your critics, or unless (like FDR and LBJ) you have so many votes you don’t need the opposition, you’re going to have to give something to get bipartisan support.

And thus far, especially on the colossal pork barrel masquerading as a “stimulus” bill, Obama has made his decision, or perhaps just allowed Congressional liberals to make it for him: it’s the Democrats’ way or the highway:

As the president, he had told Kyl after the Arizonan raised objections to the notion of a tax credit for people who don’t pay income taxes, Obama told Cantor this morning that “on some of these issues we’re just going to have ideological differences.”

The president added, “I won. So I think on that one, I trump you.”

The results thus far have been predictable:


-The House version of the stumulus bill passed with zero Republican votes and got the barest minimum number of Republican supporters (three Senators) to avoid a filibuster in the Senate. Yet even the pitiful concessions made have Nancy Pelosi vowing to force filibusters of any legislation that gets passed on party-line votes in the House rather than make compromises acceptable even to the most liberal Senate Republicans. The compromise bill has just passed the House, again with no GOP support.

-Even fetishists of bipartisan legislation, like John McCain, have blasted the resulting bill as anything but bipartisan.

-Obama’s own choice for Commerce Secretary, Republican Senator Judd Gregg, ended up withdrawing his nomination due in part to the Administration’s unwillingness to accept that he couldn’t support the bill in its current form (and in part because of Obama’s plan to remove control of the Census Bureau from his department and hand it over to political operatives in the White House in light of Gregg’s opposition during the last census to unconstitutional partisan efforts to skew the count to favor Democrats).

-Even Democrats who are still trying to spin this in Obama’s favor are noticing:

[Oklahoma Democratic Congressman Dan] Boren said Obama “missed an opportunity” for the stimulus bill to be bipartisan.

“It was a good thing for the president to meet with Republicans. The previous administration never met with Democratic members of Congress.

“The problem is that it became a Democrat bill and not an American bill,” Boren continued, “because he didn’t use any of the Republican ideas.”

Now, let’s make one thing very clear here. Obama is proceeding on the view that the guy who wins the election gets to enact the policies he wants. Having won a decisive, if not overwhelming, majority of the popular vote and having a large Congressional majority at his back, he certainly has every right to do that. Democrats spent much of the 2001-2006 period moaning about how President Bush and Karl Rove pursued, at home and abroad, a 50-plus-one strategy of making only the minimum necessary concessions to get only as much bipartisan support as they needed to get things passed, and about how Tom DeLay & company ran the House with the goal of maximizing what they could get for the conservative agenda, regardless of the wishes of the minority. Republicans shouldn’t whine about these things they way the other side did; they are the prerogative of an elected majority, and they promote accountability, so as to put the American people, in 2010 and 2012, in a position to judge the Democrats’ handiwork. As Obama himself put it:

I’m not going to make any excuses…If stuff hasn’t worked, if people don’t feel like I’ve led the country in the right direction then you’ll have a new president.

But we can certainly point out what Obama and the Democrats are doing, as well as how it makes a complete fraud of Obama’s claim that he ever intended to be a “post-partisan” president in any real sense, and complete hypocrites of the very people who whined the loudest when Bush took the same approach. What they are doing is giving a golden gift to conservatives who were feeling demoralized just a few short months ago.

A. The Pure Partisan Politics

As a matter of politics, conservatives, having only a small Republican minority to work with and a moderate-to-liberal faction still remaining within that minority, faced the dire threat that Obama would coopt enough Republican support for his initiatives to make it impossible to get out a distinct opposing message and hold him accountable if he fails. Experienced leaders know what Obama doesn’t:

If Republicans support the Democrats’ economic agenda and the economy gets better, Democrats will get all the credit.

If Republicans oppose the Democrats’ economic agenda and the economy gets better, Democrats will get all the credit.

If Republicans support the Democrats’ economic agenda and the economy does not get better, the two parties will share the blame.

If Republicans oppose the Democrats’ economic agenda and the economy does not get better, Democrats alone will get the blame.

In other words, as a strictly political matter, the only major risk for the Democrats, and the only possible upside for Republicans, is if Republicans can distinguish themselves from what the Democrats are doing. And by taking the “I won” approach, Obama is allowing, even compelling, moderate Republicans to do just that. The result is an opposition that is energized and sees a path to recovery, rather than one that is divided, demoralized and outmaneuvered.

B. The Politics of the Policy

Second, when you look more closely at the policy involved and how it plays politically, the Democrats in general and Obama in particular are doing two unwise things at once: they are ceding critical high ground to Republicans while concentrating their own forces on the site of their own worst prior defeats. Let’s consider what the Democrats are giving up:

(1) The Deficit

Democrats have made a lot of hay the last 8 years complaining about budget deficits, an argument they generally use as cover for tax hikes. Now, they are proposing to spend three quarters of a trillion dollars in pure deficit spending. Not a month into Obama’s term, Democrats are forfeiting that issue entirely. Sure, a year from now they will use the deficits they doubled as an argument for tax hikes, but who will listen?

(2) Spending

The GOP was already in the process of a grassroots-driven movement towards fiscal discipline and away from bailouts and “compassionate conservatism.” Just when this internal dynamic is gaining steam, the massive price tag and Christmas list of liberal pet projects and pork cobbled together by the Democrats has surrendered entirely any pretense that the Democrats were going to compete with Republicans on this issue. You may recall, from the nationally televised debates, Obama’s own, unambiguous, read-my-lips promise on spending (which he repeated several times):

[W]hat I’ve proposed, you’ll hear Sen. McCain say, well, he’s proposing a whole bunch of new spending, but actually I’m cutting more than I’m spending so that it will be a net spending cut.

Now, lots of people have gotten elected by promising to reduce the deficit - FDR and Reagan being two successful and popular presidents who ran on such promises and got away with doing nothing of the sort - but the deficit is a goal, with three inputs (tax policy, spending policy, and economic performance), and the public tends to discount such promises accordingly. But spending policy alone is a choice. And we all know there will be no $800 billion spending cut bill to offset the ’stimulus.’ As Obama himself put it:

You get the argument, well, ‘this is not a stimulus bill, it’s a spending bill. What do you think a stimulus is? That’s the whole point…. No seriously, that’s the point.

Not only spending, in fact, but substantial pork-barrel spending; the vast sums directed to pet causes of powerful Democrats and liberal interest groups having nothing to do with stimulating the economy have laid bare the fraudulence of Obama’s claim to be against government by earmark and favor. Big Government is back, baby, and it’s so hungry.

(3) Results

Finally, having staked themselves to big government spending and record deficits, Obama and the Democrats appear to be gambling on one thing: results. They are, as I noted, in a position to benefit if the economy improves on their watch. Indeed, Obama got elected in large part by raising expectations that the economy would get better under him, expectations he seems already to recognize he can’t meet. The problem is twofold.

Number one, of course, given the natural operation of the business cycle and the size of the losses in the housing crisis that have to work their way through the system, it will be months at least before things get better. And number two, they run the risk of betting on a strategy that is likely to make things even worse than recessions usually are.

Remember: we haven’t had liberal management of the economy in so long - three decades - that people have forgotten what it looked like in the 1933-52 and 1965-80 periods. Bill Clinton came to office with a mixed bag of policy initiatives: liberal goals like marginal tax hikes, nationalizing health care and an energy (BTU) tax, and more conservative promises like free trade agreements and welfare reform. Clinton got his tax hikes and a few additional regulatory statutes passed (we’ll leave aside for now the ticking time bomb of his housing credit policy), but his health care plan and BTU tax died even in a Democrat-controlled Congress while the free trade agreements (NAFTA and GATT) passed, and once we had a Republican Congress, they teamed up with Clinton to pass welfare reform, a capital gains tax cut, and a number of smaller conservative priorities while restraining spending and ultimately running a budget surplus. In other words, the overall record of the Clinton years was moderate and bipartisan given the deals that got made between the two sides. (Clinton also benefitted from external good fortune that bears no resemblance to the conditions of today - a period of relative world peace and huge growth in democracy and free trade worldwide).

By contrast, Obama and the Democrats have now committed themselves irrevocably to massive growth in government spending, and the odds are that they are not done there, as we are likely to see the ghosts of economic liberalism past and of Eurosocialism present come knocking: more marginal tax hikes, a government takeover of health care, protectionism, massive new regulations, measures to tip the labor-management balance towards unions, restrictions on energy production, you name it. No serious adult can believe that any of this will help the economy; Obama, by always talking about “saving” rather than creating jobs, seems to imply that he, too, recognizes that he can’t promise any improvements. Indeed, liberal economic policy has never been about enabling growth so much as assuming it will happen and fighting over how to divide the spoils. Republicans and conservatives can feel secure in their opposition to these economic policies because we know they don’t work.

So there you have it: Obama and the Democrats, by ramming the ’stimulus’ bill through on a party-line basis and bulldozing Republican opposition, have taken ownership of old-time Big Government liberalism; they have surrendered to Republicans the very issues that divided the GOP and attracted moderate swing voters to the Democratic banner; they have energized and galvanized their opponents; they have discarded the pretense of bipartisanship; and they have, in the end, lashed themselves to the mast of policies that are proven not to work. The only thing the stimulus bill will stimulate is conservatism.