How long will it last?

How long will it last?

Obama has approval ratings around 60%, comparable to the first 90 days of George W. Bush, Bill Clinton, and Jimmy Carter. But Sean Trende is thinking of Republicans chances in 2010:

All honeymoons end, and with an economy on a shaky foundation, the ending of this honeymoon could prove to be particularly brutal for Democrats. […] As the out-party in a midterm election, with the economy unlikely to recover fully by 2010 and with many Democrats in Republican-leaning districts, Republicans are poised to perform well in 2010.

The LA Times, who in 126 years had never endorsed a Democrat for president until doing it for Obama “without hesitation“, recently seemed disappointed for the bait-and-switch approach used in the stimulus package:

He says he wants to fix the financial crisis, but he’s focusing on selling his long-standing liberal agenda on healthcare, energy and education as the way to do it, even though his proposals have absolutely nothing to do with addressing the housing and toxic-debt problems that are the direct causes of our predicament.

Truth be told, the stimulus package was mostly a creation of House Democrats. But the notion of Obama as a double-talker pushing a partisan agenda while marketing “new politics” is spreading:

Obama thinks he can ignore these blatant inconsistencies. Like many smart people, he believes he can talk his way around problems. Maybe. He’s helped by much of the media, who seem so enthralled with him that they don’t see glaring contradictions. During the campaign, Obama said he would change Washington’s petty partisanship; he also advocated a highly partisan agenda. Both claims could not be true. The media barely noticed; the same obliviousness persists. But Obama still runs a risk: that his overworked rhetoric loses its power and boomerangs on him.

Even Newsweek, who all but eulogized the new Messiah, is reporting some disappointment from the establishment:

Luckily for Obama, the public still likes and trusts him, at least judging by the latest polls. But, in ways both large and small, what’s left of the American establishment is taking his measure and, with surprising swiftness, they are finding him lacking.

Is the honeymoon ending? Hard to tell. Obama supporters still believe in him, and a common subject is now how the new President inherited all these problems from eight years of right-wing policies. For these die-hard supporters, the honeymoon will last four years. For the remaining people, a tough 2009 and a not-easier 2010 will probably mean some Republican come-back in the House, although still keeping a Democrat majority. And in 2011, when the economy finally fixes itself as it had in the past, Obama will be able to reap the glories.

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An opinion piece on WSJ called “The 2% Illusion” is quickly spreading through the blogosphere.

It argues that Obama will need tax increases on more than just “the rich” to fund new spendings and effectively cut the deficit in half as promised.

While the conclusion makes sense, the means for it were convoluted, if not misleading. The article starts with this:

On Tuesday, he left the impression that we need merely end “tax breaks for the wealthiest 2% of Americans”

The actual quote, however, was this:

In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans.

That “also” means ending tax breaks is *part* of the process, which included ending “education programs that don’t work”, “direct payments to large agribusiness that don’t need them”, and “no-bid contracts that have wasted billions in Iraq”.

Whether or not these measures are meaningless or a recipe for disaster, that’s a whole other topic. But there was never the impression that those tax breaks would be the only action needed.

The article continues with some crass arithmetical mistakes:

But let’s not stop at a 42% top rate; as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion […].

But $1.3 trillion is their total adjusted gross income, which includes $350 million already paid in taxes (IRS spreadsheet here). The actual extra revenue would be less than $1 trillion, in 2006 dollars.

And this hypothetical extra revenue, taken solely from individual income taxes, should be compared against the deficit, not the overall budget. Individual income taxes already cover 45% of federal receipts.

In fact, this hypothetical extra revenue would cover more than half of the predicted $1.7 trillion deficit for 2010, thus fulfilling the promise of halving the deficit.

Of course, it’s an impossible hypothesis and the Laffer Curve would make sure no extra revenue would be earned. Yet, it brings up the point regarding the Conservative mantra preaching lower taxes will necessarily increase revenues. If anything, economic theory predicts a lower income tax rate will bring in more revenue if tax rates are already too high. In this already-too-high scenario, we would see new investments withheld or postponed because high taxation would be a disincentive. Is this the case today?

In just 30 days, more done than ever.

In just 30 days, more done than ever.

A senior White House official said in a background briefing:

“President Obama has accomplished more in 30 days than any president in modern history.”

Bill Clinton, at this point in his presidency, was dealing with the “gays in the military” controversy. But Obama, he continued, “has a set of wins under his belt”.

Those “wins” refer to legislation on children’s health insurance, the “Lily Ledbetter Fair Pay Act,” and the famous stimulus bill. VP Joe Biden couldn’t remember, but the website is www.Recovery.gov. According to the Office of Management and Budget, the website is getting 3,000 hits per second.

There, you will find an interesting break-down of the stimulus package:

"Where is money going?"(from recovery.gov)

"Where is your money going?"(from recovery.gov)

If you think “$288 B” seems too inflated when classified as “tax relief”, compared to everything else that has been circulating on the media since the House approved a first version of the bill, you are not the only one. It’s all in the semantics.

According to US Budget Watch Project‘s analysis, the stimulus breakdown is slightly different:

Another point of view

Another point of view

Those $288B of tax relief can then be separated into 5 groups: $116.2 + $69.8 + $46.5 + $6.2 + $47.9.

The largest of all, $116.2, is the “Making Work Pay Credit”, a handout payable to everyone that works regardless of tax liability; if you can get it without paying taxes, it’s hardly a new tax cut.

The second largest, $69.8, is the AMT Patch, which has become an annual tradition in Congress: it passed in 2008, 2007, 2006, 2005, 2004… It would likely be approved again in 2009. If you can get it every year, it’s hardly a new tax cut.

That leaves the rest, 35% of the “tax relief”, as real new tax provisions. The tax relief part gets to be advertised as 2.8 times larger than what it really is. More than any, ever.

Jack Ohman, February 13, 2009

Jack Ohman, The Oregonian, February 13, 2009

Go ahead... Make my day...

Go ahead... Make my day...

Only seven states ban openly carrying handguns (this USA Today article forgot about Illinois). Now four of them are considering legislation to drop the ban: Texas, South Carolina, Oklahoma and Arkansas would allow people to carry handguns openly in a holster, which is legal in most states.

While Vermont and Alaska allow adults to carry concealed weapons without a permit, and Wisconsin, Illinois and D.C. don’t allow them at all, most states have strict laws governing concealed weapons. But the story is different for open-carry. Historically, concealed weapons were seen as deceiving, while open-carry was honest. People should bear arms openly, according to gun-promoting group OpenCarry.org (“A Right Unexercised is a Right Lost!”). How bizarre.

Geithner stays

Geithner stays

Tim Geithner, now Treasury secretary, failed to pay $34,000 in Social Security and Medicare taxes throughout three years. He paid the bill, apologized and characterized his incomplete payments as an innocent mistake. At that time, Obama stuck his neck out: “It is an innocent mistake. It is a mistake that’s commonly made for people who are working internationally or for international institutions. It has been corrected. He’s paid the penalties.”

Tom Daschle, tapped to lead the Department of Health and Human Services failed to pay about $140,000 in income taxes throughout three years. He filed an amended tax return, sent a check, apologized. Asked if he still stands by Daschle, Obama answered: “Absolutely“.

Daschle goes

Daschle goes

Now we know Geithner stayed, and Daschle withdrew his bid. Explaining Daschle’s withdrawal, White House press secretary Robert Gibbs said that Obama and Daschle “both recognized that you can’t set an example of responsibility but accept a different standard in who serves.” Different standard?!

To NBC’s Brian Williams, Obama said: “I’ve got to own up to my mistake. Ultimately, it’s important for this administration to send a message that there aren’t two sets of rules — you know, one for prominent people and one for ordinary folks who have to pay their taxes.”

Yet one was confirmed and the other was shamed out of an appointment…

Former future President of the United States

Former future President of the United States

At a hearing at the Senate Committee on Foreign Relations, Sen. James Risch (R-Idaho) asked Al Gore (minute 150:00 on the video):

“What does your modeling tell you about how long we’re going to be around as a species?”

Be glad for representative democracy.