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Erin Go Bragh – Ireland Inspires Europe with Budget Cuts as NYT Plugs Obama, Decrys "Austerity"

By Kevin Mooney

Ireland's "Celtic Tiger" economy, the envy of Europe throughout the 1990s and the first decade of the 21st Century, has slowed dramatically and The New York Times recommends stimulus spending to grease the engines. The Irish Prime Minister is quoted offering a sober, straightforward assessment of the economic climate that sharply contrasts with Keynesian thinking that maintains favor in the liberal media.

"The facts are that there is no easy way to cut deficits," Prime Minister Brian Cowen is quoted as saying. "Those who claim there's an easier way or a soft operation – that's not the real world." But where the prime minister sees a need for budget cutting, The Times sees an opportunity for greater government intervention and higher levels of spending. The other European nations to their great credit are lining up behind Ireland and in opposition against so-called "stimulus" strategies.

"Other European nations, including Britain and Germany are following Ireland's lead, arguing that the only way to restore growth is to convince investors and their own people that government borrowing will shrink," the report says. "The Group of 20 leaders set that in writing this weekend, vowing to make deficit reduction the top priority despite warnings from President Obama that too much austerity could choke a global recovery and warnings from a few economists about the possibility of much sharper 1930s style downturn."

The European rebuke of Obama is of particular importance. While U.S. Administration falls back on Keynesian polices with a checkered historical past, the European Union appears more inclined to revive its private sector. The Times makes every effort to discourage any movements away from further government intervention.

The headline that runs on the jump page is particularly instructive.

"As Europe Looks to Cut Deficits, Ireland Shows the Cost of Austerity."

Not too subtle.

Europe should eschew government budget cuts so as avoid the economic pain that follows from belt tightening – that's the central message in this front page piece. Here The Times joins forces with the Obama Administration to cajole and pressure Europe into Keynesian practices that are a proven failure.

As Bill Wilson, president of Americans for Limited Government (ALG) has observed, Obama has positioned himself on the outside of rationale thought and mainstream economic thinking.

"Unfortunately, Obama is apparently the only leader on Earth who doesn't think there is an overspending problem with government," Wilson said. "Despite a $13 trillion national debt at home, he urged world leaders to ratchet up the deficit-spending — only to find that the world has gone chilly on the idea of "stimulus" in the wake of the debt crisis."

Instead of offering readers tangible facts to substantiate its stance in favor of big government, The Times falls back on anecdotes.

"In the impoverished Ballymun neighborhood, developers began razing slums to make way for new low-income housing," the report says. "Halfway through the project, the financing dried up, leaving some residents to languish in graffiti-covered concrete skeletons. `Welcome to Hell,' read one of the tamest messages."

To be sure, Ireland has cycled back into tough economic times that are not unfamiliar in its long history. But it is well positioned to lead Europe away from Obama and back in the direction of restrained government. Fortunately, Ireland has a receptive audience as ALG's Wilson has noted.

"While the rest of the world is taking on the grave and growing problem of unsustainable sovereign debt, Obama calls for more spending," he said. "He has asked Congress for another $47 billion to balance state budgets this year, including $23 billion to bail out unsustainable public school spending."

Deficit spending is going out of style much to the chagrin of the liberal news media.


ALG Condemns House for Approving "Government Takeover of Financial Sector" Conference Bill 

"Members who voted for the Dodd-Frank financial takeover have signed off on an unlimited bailout-takeover authority, unconstrained bank taxes, financial  privacy violations, and have ignored the root, government causes of the financial crisis.  They must be held accountable."—ALG President Bill Wilson.

July 1st, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today condemned the House of Representatives for approving Dodd-Frank conference legislation "that will institutionalize government bailouts and takeovers for all time."

"House members have voted to not address the real causes of the financial crisis that government was responsible for," Wilson said.  "Instead, they have created a new, radical regime to seize disfavored financial firms, bail out favored ones, monitor finances, and levy unlimited taxes on the American people, all without any vote in Congress or the opportunity to object in court," Wilson said.

Wilson warned that "bailouts and takeovers under the so-called 'orderly liquidation fund' will never end, and the American people have 237 members of the House to thank."

The final vote in House was 237 to 192

The "orderly liquidation fund" would be financed by "risk-based" assessments levied by the Federal Deposit Insurance Corporation (FDIC) on institutions totaling $50 billion or more in assets, proceeds from securities issued by the FDIC of seized firms, interest and other earnings from investments owned by the fund, and "repayments to the Corporation by covered financial companies."

According to a Congressional Budget Office (CBO) analysis of a similar bank tax proposal by the Obama Administration, "the ultimate cost of a tax or fee is not necessarily borne by the entity that writes the check to the government. The cost of the proposed fee would ultimately be borne to varying degrees by an institution's customers, employees, and investors, but the precise incidence among those groups is uncertain."

Wilson noted that the bill still includes a controversial Office of Financial Research that empowers the office, according to the legislation, to "collect, validate, and maintain all data necessary" to maintain financial stability "obtained from member agencies, commercial data providers, publicly available data sources, and financial entities."

"Members voted to create the Office of Financial Research, which will have the ability to know about every transaction in the country it deems it necessary for the sake of financial stability.  That's the power to monitor everyone's finances, if it wants," Wilson said.

According to the bill, the OFR would "require the submission of periodic and other reports from any financial company for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States."

The legislation also outlines that the Director of the OFR would be given subpoena power to require "the production of the data requested … upon a written finding by the Director that such data is required" to maintain financial stability.

Wilson also condemned the Dodd-Frank conference bill for what he said was "its inherent failure to address the root, government causes of the crisis.  For example, the bill does not audit the Federal Reserve, whose easy money, low interest lending policies fueled the housing bubble," citing research by Stanford economic professor John Taylor stating that "the Fed's target for the federal-funds interest rate was well below what the Taylor rule would call for in 2002-2005. By this measure the interest rate was too low for too long, reducing borrowing costs and accelerating the housing boom."

Wilson also cited research by former chief credit officer of Fannie Mae, Ed Pinto, demonstrating that Fannie Mae and Freddie Mac weakened mortgage underwriting standards and mislabeled high-risk mortgage-backed securities, defrauding investors; that the Federal Housing Administration (FHA) lowered down payments on mortgages; and that the Department of Housing and Urban Development's (HUD) Community Reinvestment Act regulations and "affordable housing goals" reduced lending standards and forced banks to give loans to lower-income Americans that could not be repaid.  "None of these root causes are addressed, either," Wilson said.

"The Dodd-Frank bill even prohibits the liquidation of Fannie Mae and Freddie Mac under the 'orderly liquidation' authority, a provision that was only added in conference," Wilson noted.

Wilson concluded, "Members who voted for the Dodd-Frank financial takeover have signed off on an unlimited bailout-takeover authority, unconstrained bank taxes, financial privacy violations, and have ignored the root, government causes of the financial crisis.  They must be held accountable."


"'Down a Rabbit Hole:' The Threat Posed by the Dodd Bill to the Private Sector," Updated June 28th, 2010, Americans for Limited Government.

"Big Brother is Watching You: The Threat Posed by the Dodd Bill to Privacy," Updated June 28th, 2010.

Letter to the U.S. Senate, ALG President Bill Wilson, April 26th, 2010.



NRN - The Daily Wrap-Up 7/1/10

July 1, 2010
4:20 PM Eastern


Good Thursday Afternoon -

White House staff meet with lobbyists at a nearby Caribou coffee. The latest ALG video takes a look at a recent report from the NYT about White House staff meeting with lobbyists at an off-site location. By doing this, the lobbyists do not appear on the official White House visitor log, which is released to the public. So much for the most transparent Administration in history…

An open letter to Democrats. From ALG President Bill Wilson, "In the post-World War II era, the so-called Cold War consensus, a bipartisan approach to U.S. foreign policy against the spread of communism, was best embodied by the late Republican Senator Arthur Vandenberg's famous quote, "Politics stops at the water's edge," and also the career of Democrat Senator Henry "Scoop" Jackson, whose support for U.S. armed forces in harm's way was unswerving."

The economy is stalled and the Federal government is not helping. From NRD Contributor Rick Manning, "13,000 private sector jobs created in June. That's what payroll giant ADP reported yesterday in their monthly report. Only 41,000 private sector jobs created in May according to the government's own economists with near post-WWII record unemployment at 9.7 percent. 15 million people unemployed nationwide with 46 percent of them classified as "long-term unemployed," meaning they hadn't worked for 27 months or more. The same number of people considered to be "long-term unemployed" as in April."

Video: Debunking Obama's Keynesian spending binge. In the latest video from Dan Mitchell, he debunks the Keynesian spending binge that the Obama administration and Congress have been on. This is a must watch.

CQ Politics: Illinois doesn't know how many Senate elections it will hold this fall. "A little-noticed court ruling two weeks ago found that appointee Roland W. Burris was supposed to serve only until an election was held to fill the unexpired portion of President Barack Obama's seat in the Senate. That means giving Illinois an elected senator this year."

The Blago trial daily update.

Forbes: Fictitious financial reform. "Later this week, President Obama will sign an overhaul of the financial industry, the biggest change required by law since the Great Depression. For all the legal change it brings, it won't prevent the next crisis–but it also won't do much harm."

Kagan's nanny state. "Suppose that the federal government, in its infinite wisdom, decided that it would deal with the obesity crisis and improve the health and welfare of the American people — by mandating that every American eat three helpings of vegetables and three helpings of fruit every day. Anyone caught failing to eat the required food would be subject to a fine or tax. Would such a law be constitutional"

Stossel: Entrepreneurship helps make America great. "For all its problems, America is a great place. And one thing that makes America great is its prosperity. Yes, some people have suffered during the recession—but compared to all the other countries in the history of the world, America is rich. Why?"


NRN - Must Reads for July 1, 2010

Americans for Limited Government President Bill Wilson's quote of the day urging Scott Brown to not support the Financial Takeover Bill: "Senator Brown withheld support for the Dodd-Frank financial takeover conference because of the $19 billion bank tax. Well, what about the unlimited bank tax that's still in the bill? In between eating hot dogs, Senator Brown should really check out pages 356 through 364 of the bill, where the real bank tax is. He should be familiar with it. The bank tax was in the bill the last time he voted for it, too. "



NRN - The Daily Wrap-Up June 30th 

June 30, 2010
4:00 PM Eastern


Good Wednesday Afternoon -

Robert Chatigny: The wrong choice for the Second Circuit Court of AppealsRobert Chatigny has been nominated to serve on the Second Circuit Court of Appeals. For those unfamiliar with him need to be quick. He has already breezed through the Senate Judiciary Committee and faces a confirmation vote in front of the Senate at a time to be determined. The Senate can approve him at any time, so calls are needed to your Senator now (202.224.3121). Also check out: Harry Reid under fire over Chatigny.

Can Kagan get Borked? As the U.S. Senate continues hearings on the nomination of Elena Kagan to the U.S. Supreme Court this week, it is worth recalling how well-credentialed Judge Robert Bork was for the position that he was ultimately denied.

Kagan: That was them, this is me – The contrast between Elena Kagan's current stance regarding which questions a judicial nominee can safely answer and the views she expressed on the subject in a 1995 book review, highlighted on Monday by Radley Balko, has been widely noted in print and TV coverage.But the review (PDF), a 25-page essay published by The University of Chicago Law Review, is well worth reading in full, because it provides a cogent, thoughtful, and eloquent critique of the "vapid and hollow charade" in which Kagan is currently participating.

Kagan on ACOG memo: Did I do that? From Ed Morrisey: "If  the intent of Elena Kagan's testimony in the Senate Judiciary Committee is to build confidence in her competence, her answer to Orrin Hatch about a controversial memo has to be a huge step in the wrong direction."

Earth to Obama: "Stop the Spending!" From ALG President Bill Wilson, "CNBC commentator Rick Santelli has a very simple solution to the nation's fiscal and economic woes for Barack Obama and Congress: "Stop spending!" Speaking on Squawk Box on Monday, Santelli noted the cool reception that Obama received this past weekend at the G20 summit in Toronto that sought to address the sovereign debt crisis."

Reason: Spend, baby, spend – Not long ago, President Barack Obama ordered the creation of a commission that would report back to him with policy recommendations on cutting the federal deficit. And as great leaders throughout history have proved, the most effective way to tend to any intergenerational crisis is to create a bipartisan commission to study it—but only after midterm elections.

ObamaCare is bad for business – ObamaCare will cost our nation more than $1 trillion. However, as Obama's health care plan begins to unfold, it is clear it is going to cost our nation more than just red ink…

Daily Caller: Michael Mann says hockey stick should not have become climate change icon.

Politico: Oil spill visits get partisan – Rep. Steve Scalise (R-La.) wanted to fly 10 lawmakers down to the Gulf of Mexico to see the damage caused by BP's gigantic oil spill first hand. House Democrats said no.

Why isn't the largest oil skimmer in the world working in the Gulf???