December 14, 2012

 

NEWSMAX
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

BREITBART
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

Return to Federalism - Conservatives need to stop playing a game rigged against them.
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

December 8, 2012

TOWNHALL
A Populist Message
by Carol Platt Liebau
December 7, 2012

John Podhoretz notes that Republicans have morphed into the "eat-your-vegetables-and-shut-up" party. There isn't much of a populist message out there from the GOP, which has been maneuvered into seeming like the party that's ready to raise taxes on everyone to prevent them from going up on the "evil rich."

On Monday night, I noted some populist points the Republicans should be making. But there's also one that bears emphasizing: Contrary to their posturing, the Democrats aren't really the party of the "common man." They're the party of government -- the force that bosses the "common man" around.

While the private sector struggles with continued high unemployment and undermployment, for government workers, the unemployment rate is just 4.3%.

State government employees outearn their private sector counterparts by 6%. (Do you like what you're getting at the DMV?)

Government workers work one month less per year and three hours less per week than their private sector counterparts.

In 2010, USA Today found that federal employees' average compensation has risen more than double what private sector workers earn.

Your tax dollars at work, friends.

President Obama's policies aren't really about helping normal, working people get a leg up.  They're about advantaging government -- and government workers -- over those who do work or seek work in the private sector.  And there's a big problem with that: The public sector doesn't produce wealth, it consumes it.  The bigger the President grows government, the more he's going to have to raise taxes on everyone to support his preferred, government "elite" (as even Howard Dean noted).

No, it's not popular for Republicans to defend high earners from tax increases (they may have to give in, though there would be significant silver linings, as Kim Strassel points out).  But they should make it clear that the President's class warfare talk is just a smoke screen for policies that do favor an elite -- it's just the government-based elite, rather than the private sector elite.

Read more: http://goo.gl/B22kv

REAL CLEAR POLITICS
Jim DeMint's Triumph
by Ben Domenech
December 7, 2012

When Jim DeMint drops the mic, he drops the mic right. Sitting in the South Carolina Senator’s office yesterday at 11 AM as he spoke at the Heritage Foundation five blocks away, aides scrambling to answer congratulatory phone calls, it struck me that it is impossible to consider this move as anything but a triumph, a vindication of DeMint’s approach to politics over the past five years.

DeMint’s approach was simple: treat the Senate as one would if you ditched the false collegiality – "where men can smile, and murder whiles they smile" – to one where you recognize that floor speeches change nothing, that process arguments are pointless, and that there can be no true grand bargains on legislation in the age of total distrust.

DeMint set out to change the Senate, and he succeeded by recognizing that the Senate no longer matters or functions in the way it once did. The success of his quest with Tom Coburn to end earmarking is a classic example of his approach: few things were viewed as more sacred to the antediluvian denizens of Capitol Hill prior to DeMint’s crusade, which tapped into conservative populist tendencies far from Washington to change Washington.

There was a view about how Senators should behave, how they should look, how they should act – and in all ways, DeMint rejected it. It was the preface for all he would do in the wake of the Bush years to redefine his party and the conservative movement.

DeMint departs from a Senate caucus now full of his ideological acolytes, ready to step out from under his shadow. It is no exaggeration to say that Marco Rubio, Mike Lee, Rand Paul, Ted Cruz, and many more faces of the party today would not be Senators at all without DeMint’s approach (imagine for a moment how different the Senate Republican caucus would look with Crist, Bennett, Bunning, and Dewhurst – oh, that’s sad). He departs even as he was positioned to take what most of the old guard in the Senate would view as a plum committee position, one where they could hand out favors and glad-hand to their hearts content, to fill a wall with crystal knickknacks and irrelevant legislative accomplishments (also known as the Kay Bailey Hutchison approach).

Instead, DeMint is recognizing that nothing of significance will likely happen in forming policy over the next four years. Rather than be the scapegrace of the Senate, he will aim to transform Heritage into the 800 pound gorilla it can be in Washington.

Many in the media blame DeMint for increasing the increasingly less collegial attitude in the Senate – but he was just ahead of the curve. In the new post-politeness reality, it is in fact more influential to have the resources and weapons of the Heritage Foundation at your fingertips than to be one of a hundred Senators. Let the other Senators play pretend – he’ll be where the action is.

As for Heritage, this move says a great deal, and a great deal of good, about who won the internal battle for the future of the most influential think-tank on the right. Heritage could have gone in another direction - toward the increasingly ineffective and irrelevant old ways of writing white papers no one reads, criticizing a conservative view just to get in the papers, or regurgitating what the Republican Party nominee thinks about something, except with more numbers and charts. Think of it as an analogue for picking between the old Mainline church and DeMint’s PCA church: faced with a decision between existing as an event planner for bored journalists or redoubling their efforts to alter the course of the nation's policy and politics, Heritage chose wisely.

Read more: http://goo.gl/LdxzV

AMERICAN THINKER
Fiscal Cliff: Negotiation Failure could be the Best Option
by Howard Richman, Raymond Richman, and Jesse Richman
December 8, 2012

It should come as no surprise that the "fiscal cliff" negotiations are taking place under utterly bogus premises. Instead of significantly cutting $502 billion from the $1,327 billion per year 2012 budget deficit as would take place automatically if the negotiations fail, both parties in the fiscal cliff negotiations are planning to keep the budget deficits at well over $1 trillion per year. The U.S. debt-to-GDP ratio would continue to explode.

According to the Washington Post, the Republican proposal made on December 3 would only seek $220 billion per year in deficit reduction ($2.2 trillion over 10 years):

• $80 billion revenue through tax reform achieved by closing loopholes and capping deductions.
• $60 billion in health spending cuts.
• $30 billion in other mandatory spending cuts.
• $20 billion gained by changing the way the government calculates cost-of-living adjustments for entitlements.
• $30 billion in further discretionary spending cuts.
• According to Politico's November 29 prediction of the eventual compromise, the deal will only produce $260 billion in deficit cuts (2.6 trillion over 10 years):
• $120 billion from tax increases.
• $120 billion from discretionary spending cuts.
• $40 billion from entitlement cuts.

Neither party is willing to risk naming programs that should be defunded. They fear offending one interest group or another. That leaves the automatic across-the-board cuts of the Budget Control Act of 2011, which would take place if the negotiations fail, as about the only way to cut spending. These would cut government expenditures to the same level as four years ago. This is the least we should do.

President Obama has sold his voters on the idea that he can raise enough money to pay for the government's expanding health care, social security, food stamp, and other spending programs simply by taxing the rich. But there has never been enough money available from that source. The most equitable solution would be to restore income and payroll taxes to their level of ten years ago as would automatically take place if the negotiations fail. Then almost all voters would learn the costs, first hand, of increased government spending.

President Obama wants to keep the budget deficits high because he takes the Keynesian view that increased budget deficits stimulate the economy. But this view has been proven erroneous by the Roosevelt depression of 1933 to 1939, by the Japanese depression of the 1990s, and by the failures of the Bush stimulus plan of February 2008 and the Obama Recovery Act of February 2009.


Read more: http://goo.gl/gRvX4