by Nancy Morgan
RightBias.com
March 6, 2011

In the summer of 2008 as McCain and Obama were in the midst of their campaigns to capture the presidency, a series of events dramatically changed the focus of the campaign from Iraq to the economy. From that point on, Obama took the lead and eventually won the presidency. 

Now, a full two years later, the Pentagon has issued a reporton the series of events that led to the 2008 economic crash. Bill Gertz writes in the Washington Times:

Evidence outlined in a Pentagon contractor report suggests that financial subversion carried out by unknown parties, such as terrorists or hostile nations, contributed to the 2008 economic crash by covertly using vulnerabilities in the U.S. financial system

Consider: The economic house of cards started tumbling on June 26, 2008, when Senator Chuck Schumer leaked a memo questioning the solvency of IndyMac bank. This memo precipitated a run on IndyMac which led to its failure. Federal regulators pointedly cited U.S. Sen. Charles Schumer, D-N.Y., in explaining the bank’s failure. “The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York.”

As I wrote in February of 2009, this event, coupled with the Lehman Brothers collapse in September, marked the beginning of the current economic meltdown and provided the environment that enabled Barack Obama to focus on the economy instead of his position on Iraq – and, not incidentally, resulted in his election as President.

July 12, 2008: The federal government takes control of the $32 billion IndyMac Bank. *

* Six months later, Jan 2, 2009, a seven-member group of investors agreed to buy the remnants of failed lender IndyMac for $13.9 billion. Other investors included a fund controlled by billionaire George Soros’ Fund Management. 

Sept. 6, 2008: Fannie Mae begins its downward spiral, which will end with a crash in November. This crash was avoidable, as the problems with Fannie Mae and Freddie Mac were identified in June of 2006, when 15 Republicans on the Senate Banking Committee introduced legislation to address the problem. Democrats, led by Barney Frank, killed the reform efforts.

Sept. 15, 2008: Obama and McCain are virtually tied in their race for the presidency. Out of no-where, in the space of less than 2 hours, the Federal Reserve noticed a tremendous drawdown of money market accounts in the U.S. to the tune of $550 billion. Rep. Paul Kanjorski of Pennsylvania said that if authorities had not closed the banks, $5.5 trillion would have been withdrawn from US banks, which would have caused the collapse of the US  within 24 hours.

The markets reacted to Obama’s proposal to bail-out mortgages and Senator Christopher Dodd’s talk of nationalizing banks by reaching 11-year lows.

Enter George Soros. The infamous one-worlder, billionaire George Soros adds his voice to the media doomsayers by opining that the world financial system has effectively disintegrated, adding that there is yet no prospect of near-term resolution to the crisis.* 

Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials.

Nancy Morgan is a columnist and news editor for conservative news site RightBias.com

by Rick Sincere
RickSincereThoughts
July 16, 2009

As part of the gargantuan (1,000-page-plus) health care “reform” package introduced by members of the Democratic majority in Congress, the Obama administration proposes to raise taxes through a “surtax” on Americans who earn the most money.

The Washington Post explained this “soak the rich” policy in a front-page article on July 15:

The surtax would start at 1 percent and rise to 5.4 percent on income exceeding $1 million. Combined with the expiration next year of tax cuts enacted during the Bush administration, the surtax would drive the top federal tax rate to 45 percent, the highest level since lawmakers rewrote the tax code in 1986.

The Washington Times, for its part, points out that this raises U.S. marginal tax rates to their highest levels since the 1980s:

A new surtax of 5.4 percent in the health care bill, which would apply to married couples’ income above $1 million, would bring the top federal income tax rate to 45 percent.

After consideration of state and local income taxes and the Medicare payroll tax, which applies to all wage and salary income, taxpayers in 39 states would face a top marginal income tax rate of more than 50 percent, according to a study by the Tax Foundation, a nonprofit tax research group based in the District.

“That means government would be taking more than half of every additional dollar from high-income taxpayers,” said Tax Foundation President Scott Hodge. “The lowest tax rate would be 47 percent – and that’s in the nine states that don’t tax wages.”

Businesses say the surtax would hurt the economy.

“The intention of this plan is to tax high-income households, but the real victims would be America’s small-business owners,” said Thomas Donohue, president of the U.S. Chamber of Commerce. “Placing a big tax burden on the small-business community would rob them of the resources they need to create the jobs that will lead us out of the recession.”

President Obama would be wise to look to history to see what happened the last time a president made a surtax the centerpiece of his economic program. (Some might object that this is a “health care” program. That’s true, up to a point. The fact that the bill has been referred to the Finance Committee in the House suggests that this is really a revenue bill.)

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In Yanek Mieczkowski’s 2005 book, Gerald Ford and the Challenges of the 1970s, the Dowling College historian relates what happened when Ford proposed a 5 percent surtax on all incomes above $15,000 (more than it sounds like; remember, these were 1974 dollars) in his first major economic legislative package:

As what he termed “the acid test of our joint determination to whip inflation in America,” Ford pronounced the cornerstone of his new economic program, a one-year, 5 percent surcharge on corporate and personal incomes. The surtax was directed at individuals with yearly earnings of $15,000 or more for married taxpayers and $7,500 for the unmarried. (Taxpayers would have to figure out what they normally owed the government, then add the 5 percent surtax to it.) The advantages of the surtax were that it would be mildly progressive, since the rich would pay more, and temporary, lasting only the calendar year 1975. Nor was it onerous. For example, a single person earning $15,000 would pay a federal income tax of $2,549; the surcharge would add $78. (p. 121)

Despite its modest appearance, Ford’s proposal was met with strong opposition, especially from the Democrats who held a majority in Congress (a majority that would grow substantially after the midterm elections a few weeks after his proposal was announced). Republicans were not too fond of it, either.

Ford took a political risk by proposing a surtax less than a month before congressional elections. Unveiling a tax increase at such a time was like unleashing a skunk at a picnic; representatives and senators ran in the opposite direction, refusing to embrace or even come close to it. Officeholders facing difficult reelection battles, such as GOP senators Bob Dole of Kansas and Marlow Cook of Kentucky, deserted their president rather than support the proposal….

The program itself was a political bomb. The jumble of proposals gave the whole thing an eclectic feel, and the centerpiece — a tax increase — fell flat. One poll showed that Americans opposed the surtax, 58 to 34 percent. Members of Congress resisted it. Just two days after the speech, William Baroody warned Ford that it was “in serious trouble on the Hill and very unpopular politically” and that Congress was in no mood to reduce spending. Two weeks before the election [William] Seidman publicly acknowledged that the surtax faced an uphill struggle on Capitol Hill and called its prospects “uncertain.” The overwhelming Republican repudiation in the ensuing elections turned “uncertain” to “doomed.” Ford’s policy making was off to a rocky start. (p. 124; footnotes omitted)

In one of the more significant parenthetical partial paragraphs of any work of recent history, however, Mieczkowski writes:

(One economist’s skepticism about the surtax generated what later became a mainstay of Ronald Reagan’s “supply-side” economics. Arthur Laffer doubted that the 5 percent surtax would generate much revenue, and while dining at a restaurant with Ford administration members Don Rumsfeld and Dick Cheney, he drew a graph on a napkin to illustrate his belief that tax cuts — rather than increases — would raise more revenue because of increased business activity. His illustration became known as the “Laffer Curve.”) (p. 122)

Apparently other economists caught on, even if they hadn’t seen the napkin. Yanek Mieczkowski writes on page 130:

By November, many economists, realizing that Ford had miscalculated, urged him to drop the surtax proposal and switch his focus to fighting the recession. The president stuck by the surtax and still urged budget cuts.

In the end, the surtax proposal crashed and burned. Mieczkowski notes on page 131:

A political science axiom says that “the president proposes, Congress disposes.” Congress certainly disposed of Ford’s surtax, and quickly. Although he developed a fiscally balanced program incorporating many recommendations from the economic summit conferences, it was also like a multipronged barb that Congress could not swallow. And it soon became incongruous. The deteriorating economy, coupled with the inherent unpopularity of a tax increase, doomed Ford’s first major economic initiative. But that failure was fortunate; as events played out, a surtax would have aggravated the downturn. (emphasis added)

History teaches us, and not just in this example from the mid-1970s, that raising taxes during a recession is a bad idea.

Barack Obama and congressional Democrats have not absorbed this lesson of history and economics. Should they succeed in raising taxes to finance their ambitious program to socialize medicine, they — or, rather, we — will live to regret it.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rick Sincere is the editor of RickSincereThoughts

Article has been published with permission

by Scott Spiegel
ScottSpiegel.com
January 9. 2009

When conservatives correctly pointed out that one disastrous terrorist attack and another catastrophic but thwarted attack both happened during President Obama’s first term in office, because his agencies overlooked the perpetrators’ jihadist intentions or failed to act on relevant intelligence, liberals responded with an argument that was discredited nearly a decade ago: “But 9/11 happened on George Bush’s watch!”

Obama supporters mocked Rudy Giuliani’s recent claim to George Stephanopolous “We had no domestic attacks under Bush,” stubbornly avoiding Giuliani’s obvious implication that he was speaking post-9/11.  Until last week, Democrats loved to excoriate Giuliani for making endless references to the terrorist attack that occurred while he was mayor of New York; now they claim he forgets it happened.  Which is it?

Conservatives’ point is that Obama has forgotten the lessons of 9/11, which Bush did not have available to him until, surprisingly—9/11.  The Ft. Hood and Flight 253 attacks happened in the first year of Obama’s administration, and 9/11 happened in the first year of Bush’s administration, but Obama had the example of 9/11 to learn from, and Bush did not.  (Even if you count the thwarted attack by the shoe bomber in December 2001, that bomber tried to strike just months after 9/11, when fully revamped security procedures were not running as smoothly as they are now; also, the bomber used the novel, unprecedented technique of wearing the bomb on his person so that it would not be detected by luggage screeners.)

Obama not only had the example of 9/11, he had seven years in which to witness and debate and vote on the implementation of the policies his predecessor devised that kept the country safe in the years after 9/11.  Obama denounced and campaigned against these tactics every chance he got.  He hasn’t revoked all of the Bush policies—upon assuming the Presidency, he must have received access to hair-raising intelligence that made him realize the suicidal folly of reversing Bush on everything—but he has slackened up enough, rhetorically and policy-wise, that our security standards have slipped and our enemies have become emboldened.

It is not enough to say that Obama has forgotten the lessons of 9/11.  He has actively rejected them.  He has argued that doing the opposite of what Bush did will keep us safer.  We are seeing how well the Obama Doctrine is working out in his first 11 months in office.

Another error in the “Bush-was-bad-so-Obama’s-off-the-hook” argument is that Bush did not do anything to actively facilitate the occurrence of 9/11.  In contrast, the Ft. Hood shootings were aided by the politically correct refusal of the U.S. Army—under Commander-in-Chief Obama—to recognize murderous jihadist sentiments expressed by Major Nidal Hasan openly and repeatedly while in medical school and residency, and the promotion Hasan received despite his poor performance reviews.  The Flight 253 near-attack was made possible by the Obama administration’s failure to act on numerous warnings available to it, such as Umar Farouk Abdulmutallab’s father having called the U.S. Embassy to report him, Abdulmutallab’s not having a passport or luggage, and his having bought a one-way ticket with cash.

But there’s an even more damning flaw to the contention that Bush should have been able to prevent 9/11, and is therefore as bad as or worse than Obama on national security.  Namely: just what would Bush opponents have preferred that he do in his first eight months in office to prevent terrorist acts, when they now scream bloody murder at the slightest suggestion of profiling at airports, accuse Bush of being Big Brother for trying to monitor terrorist communications, and express their clear disapproval of any war Bush started abroad to target Al-Qaeda?  Are liberals implying that they would have been fine with Bush doing all of these things in a pre-9/11 world?  They’re not even fine with The One doing these things in a post-9/11 world.

The left have been digging up examples of localized attacks carried out by truly isolated (not Abdulmutallab-style “isolated”) loonies—such as Bruce Ivins’ anthrax-laced letters to news broadcasters in September 2001, Hesham Hadayet’s shooting of two Israelis at LAX in July 2002, the Beltway sniper attacks in October 2002—as proof that Bush didn’t keep us safe.  Ignore for the moment that when each of these incidents happened, the same people criticized Bush for using these events to “hype” the threat of terrorism to justify extra security measures.  Instead ask: what level of government intervention into our lives would have been necessary to prevent every one of these attacks?  And how likely is it that liberals would have supported Bush’s carrying out such interventions at the time?

Scott Spiegel writes for the ScottSpiegel.com blog
Article published with the author’s permission.

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