Barack Obama? Who’s He?

One of the main story lines of this year’s elections has been Democratic Senate candidates fleeing from President Obama, even as he insists that his policies are on the ballot and they are all his staunch supporters. The spectacle has had plenty of entertainment value, but its significance shouldn’t be overlooked. While they don’t want to admit it publicly or even to pollsters, it is obvious that nearly all Democrats realize that the Obama administration has been a failure. Some have compared them to rats leaving a sinking ship, but Michael Ramirez sums up the phenomenon beautifully; click to enlarge:

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In years to come, we can expect service in the Obama administration to be scrubbed from lots of Democrats’ resumes.

Sen. Mark Udull Strikes Again

It’s becoming increasingly clear that Colorado Senator Mark Udall—or Senator “Mark Uterus” as he has been cleverly but accurately dubbed by local media—deserves to lose to Cory Gardner on grounds of his obvious sheer stupidity.  Watch him mangle—but perhaps tell the effectual truth of liberal dogma today?*—the famous axiom of Martin Luther King Jr in this 25-second train wreck:

Here’s the transcript (hat tip: RealClearPolitics):

“I’m so proud of our country,” Sen. Mark Udall (D-CO) said as he introduced First Lady Michelle Obama at a campaign event on Thursday. “We showed that Dr. Martin Luther King [Jr.] had it right. Which is that in America, at our best, we judge people by the content of their color.”

Udall quickly corrected himself.

“The content of their character, not the character of their skin,” he said.

“I got it right. I got it both ways!” 

“We judge people by the content of their character, not the color of their skin.”

*This looks like one of those Michael Kinsley gaffes, where someone speaks the truth: today Democrats do judge primarily by the color of skin.

Will Immigration Swing New Hampshire to the GOP?

In New Hampshire, Scott Brown has pulled into a statistical dead heat with incumbent Democrat Jeanne Shaheen. Brown is not a staunch conservative on every issue; if he were, he would not be competitive in purple New Hampshire. But one issue on which Brown is strong is immigration. That, plus the fact that by all accounts he has crushed Shaheen in their debates, has propelled him into a strong position. If Brown wins in New Hampshire, the GOP will have an insurance seat in the battle for control of the Senate, even if something goes haywire in Kansas or Kentucky. So both parties are pouring resources into the Granite State.

Conservative bellwether Jeff Sessions is backing Brown strongly:

Open borders billionaire Mark Zuckerberg is spending one million dollars to defeat Scott Brown. He knows that a Scott Brown victory is a massive defeat for Obama’s extreme immigration policies. Scott Brown’s opponent in this race, on the other hand, is a reliable vote for Obama’s immigration policies and his desire to bring in millions of new low-wage workers to compete for your jobs and wages.

The President’s immigration policies will reduce your pay, increase your tax bill, and squeeze millions of Americans out of the middle class.

We need to help struggling Americans find good jobs and rising pay – not import more low-wage workers to replace them.

Your donation to the Brown Campaign can help level the playing field.

This election is the epicenter of the fight to stop Obama’s immigration agenda. This is where we draw the line. This is where we make our stand.

Scott Brown has pledged to fight for American workers and American jobs. He has pledged to serve the working people of New Hampshire. He has pledged to protect our border so we can keep out threats- whether they be deadly terrorists or deadly viruses. …

President Obama announced his plans to nullify America’s immigration laws and issue a sweeping executive amnesty after the election. This action would give work permits, photo ID’s and Social Security numbers to millions of illegal immigrants – taking precious jobs directly from struggling Americans.

But you have the power to fight back. You have the power to send a bolt of lightning that will send shockwaves through Washington DC. You have the power to tell Obama and his open borders extremists: NO.

At this moment in history – at this grave hour – the single most effective thing you can do to stop Obama’s executive amnesty is to help elect Scott Brown.

Some people on the right say Scott Brown isn’t conservative enough. I say: if he’s conservative enough for Jeff Sessions, he’s conservative enough for me. Please go here to donate to Scott Brown’s campaign, or here to contribute to the New Hampshire GOP Victory Fund.

And finally, just for fun, here is a brief clip of Ann Coulter on Howie Carr’s radio show on Thursday, broadcasting from the Portsmouth Ship Yard and urging listeners to support Scott Brown:

The twin pillars of the Democrats’ strategy this year are to 1) bury Republicans with unprecedented amounts of money, and 2) maximize voter fraud. To try to combat voter fraud, you can sign up as a poll watcher at your local precinct. To help the GOP narrow a money gap that still stands at $40 or $50 million, you can contribute to Scott Brown’s campaign, or support one of the Power Line Picks on the right sidebar, or contribute to any good conservative candidate where you live. But this is a critical election, and one way or another, every conservative needs to be involved or the power-hungry liberals will win. It’s that simple.

I Am the Walrus—Not!

John has already done a good debunking three weeks ago about the latest climate hysterics over walruses stranding themselves on the beach instead of planting themselves on ice floes, but in case you missed it or would like another helping, our friends at the Global Warming Policy Foundation in Britain have released this three-minute video that calmly shows how the climatistas once again ran away with unfounded claims merely to get a scary headline.  (And then wonder why serious people tune them out.)  And you can download Dr. Susan Crockford’s longer paper going through the history and data of walrus behavior here.

The Week in Pictures: Groundhog Day Edition

You thought Groundhog Day was in February, right?  No: it’s been moved.  The Obama Administration woke up (if they can ever be said to wake up about anything), saw the groundhog’s shadow up in New York, and realized it means six more weeks of Ebola.  What was that about disease vectors?  (Ten days.)

The standard liberal method for fighting Ebola.

The standard liberal method for fighting Ebola.

Manning Ebola copy Ebola Cuba copy Klain copy Klain 2 copy

Ebola in Vegas copy

Obama Heckles copy Dem War on Women copy Obama at the door copy Obama Warning System copy

Obama Then copy

Halloween Redistribution copy

Halloween Night copy

Libertarian Plot copy

All Evil copy

Hogan's Heroes copy

As they say on college campuses, “No means no”:

No Means No copy

Shall we call them "transginger" cookies?

Shall we call them “transginger” cookies?

Start Running copy

Political Science shirt copy Soccer bar copy

Back to the Future copy

Tweet of the week:Hall's Tweet copy

Weinermobile copy Under the sidewalk copy No Content Sermons copy

Celebrate Diversity copy

Jayne 8 copy

And finally. . .

Hot 116 copy

Of Bidens and buttheads [Updated]

Michelle Malkin performs a case study of Robert Hunter Biden that she dubs “The chronicles of Hunter Biden.” Biden is the younger of Vice President Biden’s two sons. Hunter Biden was discharged from the Navy when he flunked a Navy drug test; he tested positive for cocaine use.

Michelle declares that Biden’s saga signifies something larger than appearances might suggest. She finds it illustrative of beltway nepotism, corporate cronyism and corruption. Her column represents an advanced course in a tawdry subject. Please don’t miss it. Nobody does it like Michelle.

I want to back up and briefly review the story for beginners. The Wall Street Journal broke the story of Biden’s discharge last week in “Biden’s son hunter discharged from Navy Reserve after failing cocaine test,” by Colleen McCain Nelson and Julian Barnes. Here is the opening of the story:

Vice President Joe Biden ’s son Hunter was discharged from the Navy Reserve this year after testing positive for cocaine, according to people familiar with the matter.

Hunter Biden, a lawyer by training who is now a managing partner at an investment company, had been commissioned as an ensign in the Navy Reserve, a part-time position. But after failing a drug test last year, his brief military career ended.

Mr. Biden, 44 years old, decided to pursue military service relatively late, beginning the direct-commission process to become a public-affairs officer in the Navy Reserve in 2012. Because of his age—43 when he was to be commissioned—he needed a waiver to join the Navy. He received a second Navy waiver because of a drug-related incident when he was a young man, according to people familiar with the matter. Military officials say such drug waivers aren’t uncommon.

Mr. Biden was commissioned as an ensign on May 7, 2013, and assigned to Navy Public Affairs Support Element East in Norfolk, Va., a reserve unit, according to the Navy. In June 2013, after reporting to his unit in Norfolk, he was given a drug test, which turned up positive for cocaine, according to people familiar with the situation. Mr. Biden was discharged in February, the Navy said.

Mr. Biden said in a statement that it was “the honor of my life to serve in the U.S. Navy, and I deeply regret and am embarrassed that my actions led to my administrative discharge. I respect the Navy’s decision. With the love and support of my family, I’m moving forward.”

The vice president’s office declined to comment….

The story doesn’t explore all the irregularities implicit in it. The discharge, for example, occurred this past February, eight months ago. How was the news suppressed for so long, until “people familiar with the matter” (in the words of the Journal’s reporters) let the coke out of the bag, so to speak? The suppression of the news represents a story by itself.

Then we have Biden’s lack of qualification for the treatment he received all along the way. The Naval Reserve must not feel too good about itself, or about the uncomfortable position in which it was put by the son of the Vice President. The authorities up the chain of the Naval Reserve are “familiar with the matter” and know how to reach out and touch someone at the Journal.

How unqualified was Hunter Biden? He was too old to join the Naval Reserve at age 43. He sought an officer’s commission for which he didn’t qualify. He received waivers to fill a part-time position in public affairs for which he wasn’t needed. After navigating these shoals, Biden was discharged within a month because he flunked a drug test.

Taking a look at the proceedings, the editors of the Delaware News Journal finds “an element soft corruption” on the part of the authorities in Biden’s treatment. It’s a bit of an understatement from a friendly source, but at least it is unillusioned.

The Weekly Standard’s Philip Terzian explores the anomalies and their historical resonance:

Biden was also granted two waivers by the Navy, one for advanced age and another for a previous, unspecified “drug-related” incident. A waiver for age is not the worst thing in the world (Biden was eight years over the maximum for the Navy’s program) and there are innumerable stories of men eager for combat who couldn’t pass an eye test, or were too old to enlist, but somehow contrived to get into uniform. Hunter Biden, however, was evidently not headed into harm’s way; and in any case, on September 11, 2001, he was 31 years old, a more appropriate age to sign up to fight. It is difficult to avoid the conclusion that he sought and obtained a naval commission for political purposes — public office in his native Delaware? — and that his status as a son of Vice President Joe Biden did him no harm.

The irony, of course, is that minor political scandals have erupted in the past over such questions. In 2000, the circumstances of George W. Bush’s service as a pilot in the Texas Air National Guard became a campaign issue. So did the promotion, in 1940, of President Franklin Roosevelt’s son Elliott to captain in the Army Air Corps. Abraham Lincoln’s eldest son Robert was criticized for his non-combatant status as a staff officer during the Civil War.

A more instructive parallel, however, might be to Sen. Joseph McCarthy, of all people. When one of McCarthy’s Senate aides, G. David Schine, was drafted into the Army and sent to basic training at Ft. Monmouth, N.J., Roy Cohn, another McCarthy aide and reputedly Schine’s lover, intervened persistently to obtain an officer’s commission for Schine. When the Army protested about repeated threats and interference from the senator’s office, McCarthy charged that the Army was attempting to retaliate against his investigations into communist subversion in the armed forces. The televised hearings that were held during April-June 1954 to investigate the matter — the famous Army-McCarthy hearings — not only revealed that McCarthy and his staff had repeatedly wielded their influence on behalf of Schine, but had done so despite Schine’s complete lack of qualifications for an officer’s commission.

The differences between Joseph McCarthy and Joseph Biden are self-evident, of course. But just as the effort to make G. David Schine an Army officer taught the country something about Senator McCarthy, so the brief, inglorious naval career of Hunter Biden tells us something about Vice President Biden — and the culture of entitlement in political Washington that has tarnished the Navy.

One wonders what might have been made of this story in a Republican administration. I can’t even imagine. What is the over/under on the number of days which the particulars of Terzian’s column would have been given page-one treatment by the New York Times? Answer, I think: 35, or until the Department of Justice appointed a special counsel to investigate the matter.

Beyond media double standards, the superficially tawdry saga of Hunter Biden raises the profound question intimated by Terzian in his conclusion: Is there an institution under its jurisdiction that the Obama administration hasn’t degraded?

JOHN adds: Speaking of media double standards, I was curious about whether America’s lapdog news media are more interested in Hunter Biden–the 44-year-old son of the current vice-president, involved in a drug/corruption scandal–or Bristol Palin, the 24-year-old daughter of Sarah Palin, who never was vice-president but ran for the office six years ago, who was assaulted at a party in Alaska. Here are the results for news headlines, per Google Trends:

Screen Shot 2014-10-25 at 10.37.49 AM

Sure enough: Bristol Palin being assaulted at a party was more newsworthy than drug use and corruption involving Joe Biden’s son Hunter. In America’s media, “news” pretty much equals “what advances the Democratic Party’s narratives.”

In defense of QE

A long-time reader and professional investor responded both to the critical if tentative substance as well as the spirit of inquiry in which I posted “The Age of QE” yesterday. Our reader’s company is devoted to private equity investment and he has asked me to withhold his name for professional reasons; I thought readers interested in the subject would appreciate his response. He writes:

I want to offer some perspective on QE. As an investor and professional participant in the markets and a conservative, I thought I would try to offer something of a defense of the Fed and its decision to pursue what has been called QE, printing or what I remember being called open market purchases in my macroeconomic classes. The opposing case is typically what I think of as a populist case that doesn’t really reflect an understanding of some important topics which inhere to a functioning capitalist economy and, very importantly, our fractional reserve banking system and the need for liquid (i.e. functioning) markets with a bid and offer.

Let’s first consider a world without the Fed and without QE. In effect this is what we experienced, briefly, when Lehman went bankrupt, when Washington Mutual was seized by the FDIC (and lots of other banks essentially became insolvent). If you think about it, when that happens – markets freeze and liquidity evaporates — savers lose all of their savings. Depositors at a bank are savers. Buyers of money market mutual funds are savers. When Lehman went bankrupt, their related money market mutual funds “broke the buck” – they were worth less than par.

The only thing that prevented this phenomenon from spreading was the willingness of the Fed and the Treasury to replace the banks as providers of liquidity and backstop deposits and so forth.

During the Depression, the Fed did nothing like QE and the Treasury wanted to force liquidation of excess assets and inventories and debts. The result is economic cataclysm, especially in a leveraged economy with a fractional reserve banking system. Banks cannot liquidate and satisfy their depositors need for cash. Deposits are borrowings for the bank. They in turn lend out the money they have on deposit to generate a return, and this pays savers a return. But when an economy goes into recession, this system malfunctions because the credit that originally justified the loan can no longer support it. This is the natural course of the business cycle. But the banking system on the way down is equivalent to the problem of a fire in a crowded theater. Everybody cannot get out at once. Not even close. It’s a fire in a vault really. Those lines of depositors waiting to take their money out cannot be satisfied.

It is easy to castigate the Fed and the Treasury for “bailing out” lenders and management teams, but the truth is more complicated. They were backstopping a system which holds the savings for the vast majority of Americans. As for the continuance of QE, I would revert to the Depression data and again observe that the Fed allowed the money supply to collapse by 1/3. This was devastating to the economy. Allowing monetary contraction through forced liquidation (which is the policy antidote to QE) would be beyond cataclysmic – it would make the Depression or today’s Greece a walk in the park. Unemployment would be 30%, people’s savings would be wiped out all at once – and the beneficiaries would be a tiny fraction of wealthy who would be able to buy assets for pennies from desperate sellers.

The primary criticism viz QE is that we are destroying the dollar and sowing the seeds of inflation. Maybe. But we are currently not inflating. At all. Commodity prices are falling or have fallen dramatically – gold, oil, you name it. The dollar has strengthened viz its alternative currencies, including gold and silver. There may be particular areas of price rises, but that means it’s not a uniform monetary phenomenon. Measured inflation is tame. One of the “inputs” which drives inflation is something called monetary velocity, or the speed with which people spend their money on items. As it did in the depression, it has collapsed. During the depression, it was this particular input which was responsible for the collapse in the money supply. You can think of QE as effectively offsetting the decline in velocity.

Monetary authorities always dance on the head of a pin in this way, trying to balance all of these inputs and avoid catastrophe. It’s a difficult task.

The truth is, the deflationary forces in the global economy are extraordinary. Technology, innovation, credit, freer movement of capital and labor – all of these forces have combined to create massive excess capacity in most of the world. This is fundamentally deflationary. Those who long for deflation are being a bit glib (which we would get without monetary intervention, believe me). William Jennings Bryan railed about being nailed to a cross of gold. That’s deflation that arises from the gold standard – truly hard money). He was a populist. In today’s world, modest deflation would – as it always does – redound to the benefit of lenders (unless it also consumed them to in a deflationary spiral , as it likely would in the end). Rapid inflation is to the benefit of borrowers at the expense of lenders. There is a reason why all of these quasi populist, socialist third world countries inflate and destroy their currencies rather than deflate. Stable, predictable and modest inflation is probably best for us all, dancing on the head of the pin.

All in all, while he gets tremendous criticism (as did Volker, Greenspan and now does Yellen), Bernanke probably deserves a great deal of credit and a big thank you from all of us, wealthy, middle and lower classes. Middle classes have been more significantly damaged by tax policy and Obamacare than anything else (i.e. fiscal transfers away from them). But the Fed really has preserved the stability of the banking and monetary system from which we all derive extraordinary benefit.

So how do we get out of this difficult, zombie economy we are in? True, real economic growth that derives from our natural competitive advantages – technological applications which yield productive and rapid growth in output (energy is the most important example) and fuel domestic industrial development and job growth. Cheap energy is our long term way out. And we need to buy time with measures like QE and some fiscal relaxation through middle class tax relief.

I wrote back that I really hadn’t thought about inflation so much as “accommodative” policy accommodating absurd federal spending. Our friend responded:

I read your post as being a bit open. You suggested that nobody has really talked about it and you were searching for a populist case against QE, but you identified one in the Post article.

I tend to think the populist case is that it is a boondoggle for the 1% while the 99% have their savings get eroded. My observation is that QE and bank recapitalizations which deter deflation and support modest inflation benefit borrowers and depositors, which is a majority. The beneficiaries of modest deflation would be lenders at the expense of borrowers. And in the case of spiraling/spiking deflation (which is a likely case versus modest deflation) everybody would lose except only hard asset and cash holders with no debt (the VERY wealthy). No analysis on this topic is perfect, but the empirical evidence from the 1930s suggests that rampant deflation and monetary shrinkage is much more damaging to the populist than QE and maintenance of the banking system.

I think the linkage of monetary accommodation to aggressive fiscal spending doesn’t really work in this case. It is true that we engaged in massive fiscal expansion and unprecedented deficit spending in 2009 and 2010. On the other hand we have been reducing the fiscal deficit substantially since then and this is actually contractionary. Reducing the deficit from 10% of GDP to 4% of GDP is still very contractionary and a very big drag on growth. One can argue about the components of that contraction as a policy matter being poor choices (tax increases to pay for bad social spending, to your point). But I wouldn’t link the Fed’s expansionary policy to our fiscal policies and choices.

Those choices are really the product of a badly flawed and broken budget process “managed” by a Democratic Senate led by Harry Reid and abetted by President Obama. The Fed doesn’t have much to do with it.

UPDATE: Our reader recommends Niall Ferguson’s column about monetary policy in the Wall Street Journal today. It is behind the Journal’s subscription paywall but accessible here via Google.

STEVE adds: This is a good analysis of the case in favor of QE, and I find it compelling.  One factor that ought to be mentioned as to why the enormous monetary growth hasn’t led to inflation, in addition to the factors mentioned above, is the collapse in “velocity,” i.e., the speed with which money turns over in the economy basically.  This factor—”V” in the famous basic equation of monetarism that Friedman made famous, “MV=PQ”—fell sharply during the recession of 2008-2010, and has kept falling since then.  You can see the chart from the Federal Reserve below.  I believe this is unprecedented in the history of Post-WWII recessions, but I haven’t gone back and looked.  There are some reasons to think a new, lower level of velocity might endure, but if it doesn’t?

Velocity