Can Mitt Romney Lead the Rebirth of the American Revolution? — Charles Kadlec, Forbes.com
“The government does not create prosperity; free markets and free people do.”
Starting with that declaration, Mitt Romney last week delivered what could be the breakthrough speech of his candidacy for President of the United States. Speaking first at the University of Chicago, and then in his victory speech after winning the Illinois primary, Romney embraced “economic freedom” as the political philosophy that gives purpose to his run for the Oval Office.
The embrace of economic freedom has the potential to broaden Romney’s base among Republicans, Tea Party activists and independent voters while increasing the intensity of his supporters. As his distant second place finish in Louisiana shows, Romney’s proven competence alone is insufficient to energize the Republican base and may not be enough to win a fall match-up against President Barack Obama.
However, a clear and unapologetic advocacy of economic freedom would align the Romney campaign with the powerful political tide the Republican party rode to its landslide victory in the 2010 election, and that is fueling a rebirth of the American Revolution.
Romney used his speech to position economic freedom as the defining issue of the 2012 campaign:
“For three years, President Obama has expanded government instead of empowering the American people. He’s put us deeper in debt. He’s slowed the recovery and harmed our economy. And he has attacked the cornerstone of American prosperity: our economic freedom…
“This November, we face a defining decision. Our choice will not be one of party or personality.
“This election will be about principle. Our economic freedom will be on the ballot. And I intend to offer the American people a clear choice.” Keep reading »
Tim Geithner Covers for Corruption on Pennsylvania Avenue — Charles Kadlec, Forbes.com
Last Friday, Treasury Secretary Timothy Geithner charged in a Wall Street Journal op-ed that those who oppose the Obama Administration’s regulatory regime for the financial services industry “seem to be suffering from amnesia about how close America came to complete financial collapse under the outdated regulatory system we had before Wall Street reform.” Au contraire, Secretary Geithner, it is you who choose to ignore and misrepresent the lessons of the financial crisis by perpetuating the myth that the source of the crisis was a lack of regulation.
First, your essay glosses over the central role the federal government played in creating the crisis. In particular, the government through Fannie Mae and Freddie Mac directed $5.2 trillion (that is trillion with a “t”) of capital to increase the supply of mortgages. In addition, it passed a law that required banks to make billions of dollars in loans to individuals that were unlikely to pay off the loans, in the end with 0% down.
In 1998, Fannie Mae announced it would purchase mortgages with only 3% down. And, in 2001, it offered a program that required no down payment at all. Between 2001 and 2004, subprime mortgages grew from $160 billion to $540 billion. And between 2005 and 2007, Fannie Mae’s acquisition of mortgages with less than 10% down almost tripled. These loans are now known as “subprime” and “alt A” loans. At the time they were made, Fannie Mae and Freddie Mac encouraged their issuance by lowering their standards and buying them up from the now vilified mortgage brokers, S&Ls, banks and Wall Street investment banks.
This activity was not due to a lack of regulation or oversight as you claim. Both companies are under the direct supervision of a federal regulator and Congress. At the time these loans were being purchased by these two Government Sponsored Enterprises, their actions were defended by many in Congress who, led by Senator Chris Dodd and Congressman Barney Frank, saw such reckless lending as a successful government initiative. Keep reading »
A focus on President Barack Obama’s “Proposed Budget” and comparing all projects to 2011 actual data led to four observations.
1) The President’s budget calls for increasing federal spending by a total of $11 trillion over the next 11 years.
2) The future has arrived. Entitlements and interest expense on the debt are putting the squeeze on all other functions of government.
3) The Obama Administration’s failed economic policies are at the heart of today’s fiscal imbalance.
4) The alternative to austerity, self-defeating tax increases and cuts to Social Security and Medicare programs is a bold program for economic growth.
The key elements of such a program would be monetary reform, tax reform, regulatory reform and free trade.
More than any other single document, the Obama Budget reveals that nothing short of such a bold growth platform designed to generate substantial additional revenue by freeing the private sector to rapidly create jobs and increase incomes will be capable of restoring balance to the federal government’s financial affairs.
The only catch: more than a handful of individuals may get rich in the process.
To Restore Prosperity, We Must Increase Economic Freedom — Charles Kadlec, Forbes.com
Economic freedom in the United States is in decline. The consequences include the worst recovery since the Great Depression and a growing fear of big government among a majority of independents and, shockingly, a near majority of Democrats.
Total government spending now exceeds 40% of GDP. Federal regulations now cost the private sector an astounding $1.7 trillion per year, or 12% of total output. That means that the governing elite now control more than 50% of the income produced by the American people to spend and distribute as they and lobbyists for powerful political and economic interests see fit.
As a result the U.S. has fallen to 10th place, its lowest rank on the Index of Economic Freedom, since the inception of the Index in 1995, down from fifth place in 2007. Moreover, the scheduled 2013 increase in tax rates and regulatory burdens means the U.S. is on course to drop to new lows in the years ahead. Read more
Businesses will pay the added costs of Obamacare, but their employees will bear the burden in the form of fewer job opportunities and higher unemployment. CKE Restaurants Inc, the owner of Carl’s Jr. and Hardee’s restaurants, for example, estimates its health care bill will jump to $30 million from $12 million. That $18 million increase is about double what it spends on building new restaurants. The net result will be fewer restaurants, a shift to part time employees, more automation and fewer individuals with jobs or employer provided health insurance.