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| 2010-08-31 09:43 |
MAKING ENTITLEMENTS PERMANENT – REMOVE THE SHAME
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On Sunday, President Obama told Brian Wilson of NBC there is no silver bullet, but passing more of his economic
policies could have a cumulative effect. I think there is a silver bullet, put away the guns. The non-stop salvos aimed at maiming the private sector
in an attempt to usurp power and influence has worked like a charm for the agenda. By the way, don't be mislead into thinking the residual problem of
chronic unemployment, meager wage growth, and swelling pessimism weren't planned side effects. The way the narrative has gone has been deliberately
set to achieve several things.
The notion of not feeling bad for living off government hand outs had to be established. Adam Smith said only a
beggar feels good living off the benevolence of others. The goal had to be to remove that feeling of guilt. The way the Administration has gone about
it has been brilliant. People don't feel so bad living off others when the reason they are in that position in the first place isn't their fault. If
it was about being lazy or just trying to get over (formerly) proud workers would hold their heads in shame and work on their own to correct
misfortune. But, if nefarious forces deliberately pushed these workers into desperate straits, then there is no shame living off those very forces.
It's kind of like feeding your family and getting revenge at the same time.
Once people have been conditioned not to have uneasy feelings about living off the
benevolence of others, the goal then is to get them adjusted to a lower quality of living. That comes with keeping them on the dole for longer and
longer periods. If they get off government assistance too fast, they may retain a certain level of self-determination. You know one of my favorite
movie scenes comes from "Cinderella Man" (a movie about a good man and a great woman), where the Russell Crowe character goes back and pays the
welfare office all the money he had reluctantly gotten. People born into a welfare situation find themselves in a position of thinking that monthly
check and food stamps are birthrights. It would have been easier prying Charlton Heston's rifle from his dead, cold hands.
It's an amazing feat
to get people to fight tooth and nail for crumbs. It all begins by getting them to have no shame in living off the benevolence of others, or even
despising the very sources of the money. The government is the conduit, but it's only because there is prosperity in pockets of the economy that we
could support 41 million people on food stamps.
In yesterday's USA Today, there was an article about the effort to turn welfare agencies into
voter registration hubs and de facto replacement for groups like ACORN. According to the piece, President Obama enjoys a 55% approval rating among
people making $20,000 or less. I bet the President's ratings are even higher among families with high school dropouts or a family with a member doing
prison time. You should know there is a growing movement to restore voting rights to convicted felons, too. It's a heck of a mix, but making illegal
immigrants citizens, giving convicted felons the right to vote, and pushing hard for people on welfare to make it to the polls makes for a giant
voting bloc. It does not, however, make for a giant country. It doesn't make for a nation of laws and self-determination. It doesn't make for a nation
that wants better lives for its citizens.
This gets me back to (real) silver bullets. Stop the war and you need no bullets. I'm completely
sure the Administration isn't going to change the game plan ahead of midterm elections, but maybe there could be a shift to the middle if there is a
huge GOP victory. The odds are against such a move. Instead, the GOP will continue to be painted as mean-spirited for not wanting people to live on
unlimited government assistance. One thing is for sure; allowing Americans to live from the cradle to the grave on welfare has been more destructive
than anything this side of slavery. In the meantime, that USA today piece says 1 in 6 Americans are now getting government aid.
Since the
Great Recession Began
* 41 million people on food stamps: +50%
* 10 million people filed for unemployment insurance: +almost 400%
*
4.4 million people on welfare: +18%
* 50 million people on Medicaid: +17%
Over the past two years, Medicaid costs have increased 36% to
$273.0 billion, jobless benefits increased to $160.0 billion from $43.0 billion, food stamps +80% to $70.0 billion, and welfare costs are up 24% to
$22.0 billion. The grand total is $525.0 billion, but the real cost of losing so many souls that become permanently dependent on
government aid is hard to calculate, but still very devastating. I'm proud to live in a country that takes care of the needy, but am ashamed the goal
is to make people comfortable enough with such help they can't find the will to go after real American dreams. The Faustian deal leaves them with
limited goals and drive in return for their vote.
Yesterday's Session
I've been touched by the benevolence of America,
and I feel the best way I can pay it back is by providing jobs for people that want to work hard even though I also donate time, money, and gifts. The
multiplier affect that comes with earning money dwarfs the longer term benefits of charity. Yesterday, the President spoke midday, and it did nothing
for the market. I don't know what's going to happen with the $30.0 billion small bank bill being touted as TARP for community banks, but we've already
been told it's not a silver bullet. The market sank on the lowest volume of the year. It's time to start pumping up the nation with a turn in policy.
For now, the country is mired in apathy and self-loathing.
Yesterday, President Obama talked about redoubling our efforts in clean energy as a
key to climbing out of the recession, but that is such a scam, and one of the key streams to redistribute wealth. I agree that we need to let the tax
cuts continue for the middle class, but of course I would also add for anyone that pays federal income taxes. (By the way, a preview for tonight's
speech on Iraq; when the President mentions the tax cuts for the middle class he didn't call them Bush tax cuts so I wonder if the surge will share in
the spotlight tonight when another premature victory lap is taken in prime time.) I don't care whose name they put on it but people that pay tons of
taxes deserve a break, too.
Moreover, small businesses that pay huge taxes simply can't afford a tax increase. If someone thinks it's good to
take money from someone that earns it and give it to special interests then how could it be wrong to let people that earn money keep as much as
possible?
Today's Session
There are a couple of key pieces of economic data out after the open, but going into the
session investors are shying away. There aren't any axes to grind, just no enthusiasm for the market.
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