The International House of Bacon

This is rich:

WASHINGTON (AP) — Democrat Barack Obama says he would delay rescinding President Bush’s tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.

I mean, this is funny, right? That he wants to increase taxes, but he recognizes that the hikes would hurt the economy, so he’ll wait? Wait until what? This also assumes Obama can recognize a recession. Perhaps he’ll see it as one for the next few years and abandon his tax plan.

Like the Bush tax cuts or not, they appear to have done the trick economically. Mythology aside, the economy responded very positively to the tax cuts, especially the capital gains cut of 2003/2004, and (if you’re into that sort of thing) made the tax code more “progressive”. Why anyone would want to reverse those anyway, I have no idea, but Obama even seems to recognize, at least in some way, how untenable his plan really is.

If there’s one downside to Palinpalooza, it’s the complete lack of critical examination of the quickly-forgotten DNC speech by Barack Obama. One of the better fact checks I’ve seen on it, interestingly, comes from the AP. I’ve understood Obama to be factually challenged for a while now anyway, but it’s good to see the media stepping up for once along the way. I’d like to highlight a couple of these, plus some of my own:

”Why else would he define middle-class as someone making under $5 million a year?”’

A flaw in the political process the last few years is the apparent inability for the left to understand the difference between policy and satire. Now, I know that conservatives generally aren’t funny, but guess what - when Bush says “a dictatorship would be easier,” it’s a laugh line. When McCain jokes about a random number and then actually explains his position directly after, the joke ain’t the policy. I expect the drones at Daily Kos or TPM to run with a joke line as policy, but not a Presidential candidate. Hell, this goes as far back as “the bombing begins in 15 minutes” line from Reagan - if you’re to the point where you can run for President on a major party ticket, those concepts are appropriately grasped. That Obama feels the need to highlight that in a national speech shows either a gross misunderstanding of McCain’s policy or a severe lack of understanding of basic humor. Neither of which are a good thing.

”And when one of his chief advisers — the man who wrote his economic plan — was talking about the anxiety Americans are feeling, he said that we were just suffering from a ‘mental recession,’ and that we’ve become, and I quote, ‘a nation of whiners.”’

On Thursday morning, the second quarter GDP numbers were revised, with export sales leading the charge (rich irony given Obama’s trade leanings). Obama not only should have known the economic situation that day, but willingly chose not to adjust his speech. Combine that with the point that the media does, in fact, shape economic perception, and it seems like Obama’s more than just reaching here.

‘How else could he offer … a plan that would privatize Social Security and gamble your retirement?”

Only to a Democratic Presidential candidate does a government-run financial account become “private.” To cut Obama a little slack here, this is a myth that’s been perpetuated for more than three years now, but Obama missed a golden opportunity for accuracy.

“John McCain likes to say that he’ll follow bin Laden to the Gates of Hell - but he won’t even go to the cave where he lives.”

Here’s one more thing I don’t get - does Obama really believe this? Does Obama really think that, if there was credible, useful information that bin Laden was, say, in a cave outside of Kandahar, that he wouldn’t make it a point to go after them? Furthermore, Obama and McCain hold the same position in American government - does Obama know where bin Laden is? If so, is he sharing? The answer, of course, is no, but that’s where Obama is failing here. That he even thinks it’s okay to imply this, let alone outright state it, shouldn’t sit well with anyone.

Crazy Russian spamming aside, the situation in Georgia is really disheartening. Part of me wonders if we really should have seen this coming with Putin (where was our intelligence again?), but it’s happening and it’s apparently nasty and bad. That’s the tough part.

Now, Georgia is one of our better allies in Eastern Europe. They’re trying to get into NATO, etc. Meanwhile, Russia’s been nothing but crazy aggressive and unpredictable. So which Presidential candidate sounds like they have a better grasp on the situation. Here’s candidate A:

Russia should immediately and unconditionally cease its military operations and withdraw all forces from sovereign Georgian territory. What is most critical now is to avoid further confrontation between Russian and Georgian military forces. The consequences for Euro-Atlantic stability and security are grave.

The government of Georgia has called for a cease-fire and for a resumption of direct talks on South Ossetia with international mediators. The U.S. should immediately convene an emergency session of the United Nations Security Council to call on Russia to reverse course. The U.S. should immediately work with the EU and the OSCE to put diplomatic pressure on Russia to reverse this perilous course it has chosen. We should immediately call a meeting of the North Atlantic Council to assess Georgia’s security and review measures NATO can take to contribute to stabilizing this very dangerous situation. Finally, the international community needs to establish a truly independent and neutral peacekeeping force in South Ossetia.

Here’s B:

I strongly condemn the outbreak of violence in Georgia, and urge an immediate end to armed conflict. Now is the time for Georgia and Russia to show restraint, and to avoid an escalation to full scale war. Georgia’s territorial integrity must be respected. All sides should enter into direct talks on behalf of stability in Georgia, and the United States, the United Nations Security Council, and the international community should fully support a peaceful resolution to this crisis.

For once, I’m not being entirely fair - McCain made statement, Obama made one, then another more strongly-worded one.

You’d think Obama would take advantage of what’s a clear situation to show a little oomph in the one area he’s at a distinct disadvantage. Instead, not only does Obama drop a few pithy lines about getting along, but looks completely uninformed as to the ongoing situation. What’s worse? Obama chairs a subcommittee that deals with NATO issues - you’d think he might have a little more information to use here. Maybe.

Naturally, the conservative blogosphere is up in arms over this speech:

The issue here isn’t necessarily what he said - after all, if someone was to ask me “Is America is what it could be, what it once was,” my answer would absolutely be “no, not at all.” But I know why I feel that way - I think we’ve moved way too far away from the form of government we intended, the type of society we aimed to be, and the type of society I think we naturally want to be.

Why, exactly, does Obama feel this way? Whether we like the direction we’ve been heading as a whole, there’s no denying that there’s more overall government protection of the individual than in any point in history, there’s more spending and assistance for less fortunate individuals than ever before, we’re the only current superpower in the world, and we have more equality enshrined in the law for women, minorities, and alternative lifestyles than any other era could realistically say. This is America today - 2008.

Now, if Obama’s saying that we’re not what we “could be,” that’s all well and good - on one hand, we could be a Constitutional government for once. On the other, and the hand he’s probably referring to, we could theoretically do a lot more than we are. But what it once was? Really? So if he’s saying we need to achieve what we “could be ” and “once was,” what era is he referring to, exactly?

When I note that I don’t think Barack Obama has a firm grasp on reality, it’s statements like this that drive it home for me. Yeah, there’s a lot of room for improvement here, and I don’t think anyone reading this disagrees - but, truly, when was it ever better?

I’m trying, at least with the daily reason posts, to stay away from simple ideological differences in favor of more objective situations where we can look at the situations and make some sort of clear distinctions.

This, unfortunately, probably isn’t one of those times.

One of the most unheralded points of Obama’s platform at this point is his push for a living wage. From here:

As president, Obama would further raise the minimum wage, index it to inflation and increase the Earned Income Tax Credit to make sure that full-time workers can earn a living wage that allows them to raise their families and pay for basic needs such as food, transportation, and housing — things so many people take for granted.

Putting aside any disagreements I have with the minimum wage for a moment (and I have many), does anyone in the mainstream think this is a good idea? Speaking only from my experience, there is no clear idea of what a “living wage” is, given regional differences - 75 miles north and our cost of living is noticeably different. A guy in Nebraska making $12/hour is in a radically different place than the guy in New York City financially. A one-size-fits-all wage policy like this, which would undoubtedly be a significant burden on the very businesses supplying otherwise good wages for many of the areas in questions, can only spell trouble.

I know - the statistics suggest that a minimum wage hike like the one we recently saw probably doesn’t affect employment in a significant way. We’re also not talking about $3+ increases. We’re also talking about a rising unemployment rate NOW. Like the windfall profit tax proposal, I don’t know why Obama thinks fighting the costs to the lower and middle classes is best done by increasing those very costs. It just doesn’t make sense to me.

A quickie today for reasons you might see later.

Related to yesterday: essentially, one of Obama’s more recent proposals is not only to run with a windfall profit tax on the oil companies, but to provide another rebate with those windfall profit taxes. Windfall profit taxes are a bad idea anyway, but especially in the context of the oil companies, the question has to be asked - what windfall profits?

I’ve seen this image plastered everywhere, and the numbers are buried in this CNN piece on Exxon profits, to use an example oil company. “But Jeff,” you cry - “Look how much money they made! That’s obscene!” Business doesn’t generally work in real dollar values, and a 7.6% profit margin is not anything to write home about, especially when you factor in how much they have to spend on exploration, land leases, etc. The Apple iPhone, as an extreme counterexample, has a 50%+ profit margin, and Apple does quite well for itself as a company margin-wise. you’ll also note in the Political Punch piece above, Obama can’t even define “windfall profit.” Telling, perhaps?

If Obama’s really concerned with helping working folk deal with the gas price increases as he claims, you’d think he’d take a more intelligent route. Maybe, for instance, not pushing for more taxes on a set of companies that is already extremely highly taxed and who already passes those costs onto us when we fill our tanks. I’d say that maybe it’s time to start rethinking these massive costs on the price of gas entirely, but…

Take a look at recent polling on national priorities, and near the top of the list is gas and oil prices. Energy. Even with gas prices finally starting to drop, the end result is still going to be significantly higher prices on gas in the short term, increased demand for oil in the mid-to-long term, and that doesn’t even begin to scratch the surface regarding electricity needs and the desires, misguided or not, to move toward clean energy sources.

First and foremost, in the context of the election, there are a number of truisms that need to be realized. Regardless of who is elected in November…

* …everyone - even the richest oil company - wants a viable alternative fuel sources that runs cleaner and more efficiently (both energy-wise and financially) than what we use now.
* …we will see a viable alternative fuel source for our vehicles within the next couple decades.
* …demand for oil, especially in Asia, will continue to grow.
* …even if a viable alternative fuel source was released tomorrow, it would take at least 10 years to implement in a meaningful way, and even longer to get any sort of widespread acceptance.
* …most importantly, even with all the alternatives and all the changeovers, we’ll still need oil.

The debate on energy right now seems to completely ignore the first four issues. Barack Obama’s energy policy slate recognizes, at least, that these sorts of things take time (as evidenced by his fast track-style push for alternatives), but without recognizing the reality of implementation or the role the market has to play in the matter. He has plenty of ideas for trying to keep prices down - few of which are viable - but appears to have none that address the demand realities of the worldwide oil market or the time it takes to get a proven technology into the hands of the people who want to use it.

There are many troubling aspects to Obama’s position on energy, the most glaring is this detachment from reality. Obama’s concession that drilling has to be part of the plan this past week is a welcome nod to the world as we know it, but the rest of his plan on energy still misses the point: $150b on “clean energy” infrastructure? A continued focus on the failure that is biofuels such as ethanol (and, by the way, did you hear about the havoc ethanol is causing smaller engines)? And his speech yesterday is even more troubling, with the windfall profit nonsense. It’s not a position that lends itself to serious energy policy.

I think the worst part is the types of energy Obama prefers - while clean-burning coal is noted, the obsession with ethanol is almost overshadowed by his desire to see more solar, wind, and geothermal energy sources. Again - a great thought in theory, but solar is still too expensive to have any wide use (and that’s without discussing climate issues and location - the same reason hydrogen fuel cells are useless), geothermal may not even be viable with a number of questions surrounding it such as long-term viability, and wind power can’t quite measure up to the hype. Perhaps even worse, while Obama touts numerous government initiatives to do this, we have folks like T. Boone Pickens providing offering market-based choices for some of the same ideas, and likely for a fraction of the cost. And don’t even get me started on Obama “not being a nuclear energy proponent” and not making that a major part of his mix.

Obama’s proposal to tap the strategic oil reserve (and even his somewhat ridiculous tire pressure argument, in a way) to help with oil prices indicates that we can at least assume that he understands the basic premise that more oil = lower prices. Of course, his lack of economic understanding in regards to things like windfall taxes almost completely offsets that. This results in a clear area where, if energy is your issue du jour, an imperfect candidate like John McCain provides a viable, realistic alternative. No, he’s not in favor of opening ANWR, and yes, he’s also a proponent of cap-and-trade, but he’s spot-on regarding the need to drill for the energy available to us as a nation. More importantly, longer-term (see? - viable long term thought!) involves nuclear energy and plenty of it, as well as letting the market do its job. Does anyone think McCain doesn’t understand that today’s oil companies are tomorrow’s alternative distributors? Does anyone think Obama really realizes that? Even those who prefer an activist government in regards to energy spending can find things to like in McCain’s plan - market incentives, billions for already-viable clean technologies, and the push for “green” technologies.

Personally, I think the answer is much easier - open drilling now, and recognize the need for alternative sources for transportation and electricity, and support policies - from taxes to trade - that will accellerate those issues in a market-based way. Both candidates see it as a more complex issue, but Barack Obama’s not the one who’s coming at it from a realistic angle. In an era when we’re going to require energy leadership, the guy who hangs his hat on the unproven commodities isn’t the one you want running the show.