As we come to the end of the year, it is usually a good time to look back and see what the year brought us and hopefully, be thankful for our health, wealth, and good times. However, from an American political class perspective, the events of 2010 were not healthy, wealthy and good for most of America. The exact opposite was true, events of the year were much worse than we think they were, based on some recent news reports:
- In the lead up to the passage of the legislation that would extend the Bush tax cuts for every American for two years, the Democrats were hollering that the legislation was not a good idea to extend the tax cuts for those Americans making over $250,000 a year. It would add about $70 billion a year to the national debt and this horrified them. Never mind that while in control of Congress the past four fiscal years, they managed to add over $4 TRILLION to the national debt.
The Republicans have spent most of the year decrying how out of control Federal government spending was, using that fact as a rallying cry to have a great midterm election. Wow, both parties seemed so interested in taming the budget deficit. However, according to an article in the December 17, 2010 isse of The Week magazine, once the two parties got together to work out a compromise on the tax cuts, the resulting compromise legislation ended up increasing the national debt by $900 billion in just two years. Thus, although all Americans will continue to be taxed at their same level, each U.S. household has now been burdened by an additional future national debt burden of almost $8,000.
How come every time the political class does anything, current and future Americans get hit with more onerous debt burdens? What makes this latest travesty so frustrating is the hypocrisy of both parties who claimed to worry about curbing government spending but ended up making a bad situation even worse.
- According to an article in the December 20, 2010 issue of Business Week magazine, the United States added 937,000 jobs in 2010. This was not nearly enough to begin bringing down the almost 10% unemployment rate. Conversely, a single company in Taiwan, Foxconn, by itself created 300,000 jobs in 2010. Let's see: one foreign company creates 300,000 all by itself, our political class creates only three times that much for the entire country. Proves once again that no matter how much government money is wasted in "economic stimulus programs," it cannot compare in either volume or cost effectiveness in the job creation capability of the private sector. Pathetic. When we will they ever learn?
- One reason that entities like Foxconn can create so many jobs and the United States political class cannot, despite spending hundreds of billions of dollars, was vividly illustrated in the December 27, 2010 issue of The Week magazine. According to the article, the last economic stimulus program spent money on a new heating system for an Indiana Methodist church, bought new windows for a Wyoming Catholic church, and food for a Pennsylvania Christian organization's homeless program. Combine them with other such wasteful stimulus programs as researching insect colonies on an island off the coast of Africa and you can see why much of the stimulus spending had absolutely no chance and no leverage of creating jobs.
A real company in the real world spends money efficiently. In the political realm, money is spend inefficiently to get incumbents re-elected by fixing their places of worship or counting bugs.
- Staying with the bad financial management theme of government, prepare to be horrified by the assertions from various sources in a December 17, 2010 article, also in The Week magazine. According to a a quote from the Financial Times, a recent document dump by the Federal Reserve Board, as required under the recently passed financial markets regulation bill, revealed that the Fed had not dumped about $800 billion into the market to rescue the banks and other financial institutions from the Great Recession, as originally and widely thought.
It was much worse. The Fed had actually dumped more than four times that amount or $3.3 TRILLION. These TRILLIONs were lent to domestic and foreign banks (I cannot understand why the U.S. taxpayer would bailout a foreign bank!), hedge funds, and even Harley Davidson. All of these TRILLIONs were disbursed without congressional oversight or approval.
According to the article, the Fed took massive risks with current and future Americans' wealth and financial health by taking on not good loans with solid collateral but "toxic assets." The article goes on to pint out that the Chairman of the Fed, Ben Bernanke, pushed to bailout AIG, the most toxic of all the bailed out companies even though his staff concluded that any AIG bailout was unnecessary.
The article quotes the CEO of JP Morgan, Jamie Dimon, when he told his shareholders "that the bank hadn't actually needed the Fed's help - but the program (loans from the Fed) did save us money." This verifies the assertion made many times in this blog that many of the financial institutions did not really need the Fed's help to survive. They could have made the hard business choices needed to get themselves out of the problems they created (issued more stock, sold off assets, cut salaries and expenses, etc.) but were more than happy to have an out of control and foolish Fed give them a lending hand, courtesy of the American taxpayer.
Thus, the American taxpayer was actually not on the hook for the original $800 billion dollars of bailout (almost $7,000 per U.S. household.) It was much worse with each household responsible for closer to $30,000 per household ($3.3 TRILLION) due to the Fed and Bernanke being out of control and accountable to no government oversight or institution.
- Another article in the December 17. 2010 issue of The Week magazine reported that American students finished 17th in reading test scores, 23rd in science test scores, and 31st math test scores in an international survey conducted by the Organization for Economic Cooperation and Development. These scores were ranked relative to the 60 countries included in the survey. A recent Associated Press article revealed that almost 25% of those wishing to enlist in the U.S. Armed Forces cannot complete basic reading and math tests.
Thus, as we are closing the second year of the Obama Presidency, we see that we are seemingly further and further away from properly educating our kids to compete in the world. Combine these results and findings with a recent quote by Robert Reich in Salon.com (as reported in the December 27, 2010 issue of The Week magazine) where he stated unemployment rate of those Americans without a college education is more than 20 percent (double the national average) and you can see what an education hole the political class has dug for the country.
This continuing public education failure by our political class, regardless of who controls Congress and who controls the White House, is drastically undermining the future economic strength of the country along with the ability of our armed forces to defend us. Shameful.
- Not only has the failure of public education in this country not been addressed in 2010:
- We still do not have a national, comprehensive, and rational energy policy.
- We still do not have a national, comprehensive, and rationale immigration policy.
- We still do not have a rational, comprehensive, and rationale health care reform policy with Obama Care coming apart at its financial underpinnings and in courts throughout the country.
- We still do not have a national, comprehensive, and rationale drug addiction policy. The current policy, the lost "War On Drugs" has not worked for the past forty years, has wasted untold billions of dollars, has not materially reduced drug usage, and has allowed a near lawless, violent narco state to evolve just south of our borders.
- Although we do not have many policies listed above, as we look back to 2010, we still have the following in this country, courtesy of the political class:
- We still have the prison at Guantanamo despite Obama campaign promises to close it.
- We still have the Patriot Act, one of the most freedom inhibiting laws of all time.
- We still have an ineffective SEC who has not prosecuted anyone of consequence despite the largest financial meltdown of our generation. Was everyone involved in the financial markets during the meltdown completely honest and law abiding?
- We still have an effective Congress and political class which continues to work on useless legislation such as the recently passed law to regulate the sound of television commercials.
- We still have a perverted election process that allows incumbent politicians to almost ensure their perpetual re-election via controlling earmark allocations, gerrymandering Congressional districts, accepting money from money well endowed organizations (PACs, corporations, unions, etc.), and moving money around the country to benefit of the political parties but to the detriment of local voters.
We should be looking forward to 2011, that it cannot be any worse than 2010. However, every time we say something like that, the political class proves us wrong and makes things worse. Instead, let's hope and work towards replacing those in office with a better and smarter class of people with higher standards of integrity and performance, both in 2011 and beyond. We cannot afford a lot more years like 2010.