Bernanke: Fiscal Cliff Already Hurting Economy
by the Associated Press
December 13. 2012
The U.S. economy is already being hurt by the "fiscal cliff" standoff in Washington, Federal Reserve Chairman Ben Bernanke said Wednesday. But Bernanke said the Fed believes the crisis will be resolved without significant long-term damage.
The steep tax increases and spending cuts can be avoided with a successful budget deal, Bernanke said during a news conference after the Fed's final meeting of the year. The Fed's latest forecasts for stronger economic growth next year and slightly lower unemployment assume that happens.
Still, Bernanke said the uncertainty surrounding the resolution is already affecting consumer and business confidence. And it has led businesses to cut back on investment.
"Clearly the fiscal cliff is having effects on the economy," Bernanke said.
Bernanke said the most helpful thing that Congress and the Obama administration can do is resolve the issue quickly.
"I'm hoping that Congress will do the right thing on the fiscal cliff," Bernanke said. "There is a problem with kicking the can down the road."
Bernanke repeated his belief that if the scheduled tax hikes and spending cuts do take effect in January, they will have a significantly adverse effect on the economy, regardless of what the Fed might do.
"We cannot offset the full impact of the fiscal cliff. It's just too big," Bernanke said.
Still, the Fed took more steps Wednesday to try and help boost economic growth and lower unemployment.
After the meeting, the Fed said it would keep its key short-term interest rate near zero as long as unemployment remains above 6.5 percent and inflation stays tame. It was the first time the Fed had linked future rate increases to specific economic markers.
And in an effort to drive unemployment lower, the Fed said it will spend a total of $85 billion a month to sustain an aggressive drive to keep long-term interest rates low.
Keeping rates low encourages more borrowing and spending, which drives economic growth.
At the news conference, Bernanke said changes in the purchases will be determined by how the economy performs.
He said the Fed expects to keep purchasing bonds to support economic growth "until we see substantial improvement in the labor market."
But if the committee determines that the risks of increasing the Fed's balance sheet begin to outweigh the benefits, the purchase program will be modified, he said.
Read more: http://goo.gl/UhGdb
Exclusive-DeMint: Heritage to Audit Campaign, Republicans 'Amateurish'
by Mike Flynn
December 13, 2012
This afternoon, Breitbart News sat down with Sen. Jim DeMint, in advance of his exit from the Senate to take the reigns at the Heritage Foundation. Our conversation primarily focused on the future of the conservative movement and the immediate talks surrounding the "fiscal cliff." But, one particular exchange was unexpected. Breitbart News asked Sen. DeMint about the newly announced 5-member panel to examine or "audit" the recent campaign and the Republican Party's outreach and messaging. His answer was a surprise:
I'll see what they do, but we're going to do that [auditing the campaign] at Heritage and we're not just going to do an analysis of other pols. We're going to go out and do our own research. I know you can't just ask people what they think, unless you give them cues. Like, what do you think of the word conservative. You can ask them if they call themselves conservative or not. 40% call themselves conservative, but you don't know what the other 60% think about it. They may not like the word, but they may be conservatives.
I just see, looking at the political handling from the Republican side is so amateurish compared to even what I was doing in marketing fifteen years ago, before I came to Congress. And the ability is there to be so much more sophisticated in targeting markets, segmenting and communicating with them individually.
The Republican Party used to be very good at targeting voters. We asked the Senator what he thinks happened to the party's ability to do this well:
Well, I think we tend to put political people into positions where we should have CEOs who know how to run things. When you're running a big organization its not the time for red meat for the grass roots. Its the time to make good people around you with good data. And, there are some groups out there beginning to do that...the expertise is out there.
Yes, it is out there. The work that the Republican Party used to do well is now being done by outside conservative groups like Americans for Prosperity, American Majority and Heritage Action. With just a fraction of the budget the Party commands, groups like these are building an energized infrastructure of grass roots activists.
Talking to DeMint, its clear he wants to aggressively build out this infrastructure, building an almost alternative structure to the GOP. If he succeeds, the question of whether or not the RNC can re-energize itself may be irrelevant.
Read more: http://goo.gl/GSFUP
THE NATIONAL REVIEW
by Jonah Goldberg
December 14, 2012
To understand why Republicans have a “branding problem,” you first need to understand how the system is rigged against conservatives.
Such is the schizophrenic dysfunction of our politics: We constantly demand “conviction” politicians who will “do what’s right” and then condemn them, often in the same breath, for being unwilling to put aside their conviction and their sense of what’s right.
But such condemnation does not fall equally on conservatives and progressives alike. For the progressive’s principle is, at its core, more. Do more. Spend more. Spend more doing more. Any compromise of progressive principle in this regard is seen as “pragmatic.” Hence, the progressive’s heart is always in the right place.
The conservative, however, who says the federal government is not the right tool to fix the problem at hand, or that it is not Washington’s job to fix said problem, or that such a problem is itself not fixable and taking money from taxpayers to try is despotic folly: This conservative’s heart is never in the right place.
In other words, the progressive wins entirely on the principled question of direction. The conservative (or libertarian) loses entirely on principle but gets concessions on how fast we’ll go in the wrong direction. The progressive says, “Let’s move to Mars.” The conservative says, “Earth is fine.” They compromise by moving to the moon. And, before the first lunar dawn, the progressives start agitating about how Mars would be so much better.
When the classical-liberal philosopher Friedrich Hayek famously said that he couldn’t call himself a conservative because “It has . . . invariably been the fate of conservatism to be dragged along a path not of its own choosing,” he had this dynamic in mind, and you can see it on full display as progressives respond to the unfolding disaster of Obamacare by arguing for a single-payer system.
This gets to the heart of why the Republican “brand” is in such terrible shape. Over the 20th century, progressives erected a system and culture where the government in Washington is the agency of first and last resort for all of our problems. When government is expected to say yes to everything, electing the Party of No makes as much sense as hiring a priest to run a brothel.
So what is the answer? Many conservatives argue that what the GOP needs to do is start saying “yes” to things. This was the idea behind George W. Bush’s compassionate conservatism. Americans want an activist government, so conservatives should find things they can be activist about, too. If the government is going to meddle, it might as well meddle in conservative ways.
While individual policies may be advisable, as a general proposition I think this is the wrong way to go. Not only does this do violence to the constitutional order conservatives are supposed to conserve, it forever puts the Right in a bidding war with the Left about what government can and should do. Conservatives will lose that fight — and possibly their souls in the process.
What’s the alternative? Well, if the game is rigged against you, continuing to play the game is the very definition of idiocy. You have to change the rules.
My own view is that conservatives should recommit themselves to federalism and states’ rights. The party of Lincoln should protect core civil rights, but beyond that, states and localities should be given as much freedom as they can handle. If California wants to become Sweden with better weather, let it. If Texas wants to become Singapore on the Rio Grande, great, go for it. And the same principle goes for cities and towns within those states.
Of course, conservatives already say they believe in federalism, but they rarely demonstrate it save when convenient. Which brings me back to the question of fidelity to principle. In principle, Republicans should look at the monumental clutter in Washington like a boat with too much ballast to stay afloat: When in doubt, throw it overboard.
In practice, Republicans should be more strategic and discriminating. That means taking positions that are right on policy, but also, when possible, highlighting issues that run counter to the (unfair) caricature of Republicans as prudish moneybags. Personally, I’d start with federal marijuana laws. The tide has turned on pot, and states are going to keep legalizing it. Why should Washington stand in their way? The beauty of federalism is that you don’t have to condone legalization in one state or prohibition in another. It’s just not Washington’s fight.
This can’t happen overnight, but the system didn’t get rigged overnight either.
Read more: http://goo.gl/qI4qf