How delicious is irony, how fickle fate?
Just a little more than two years ago, liberals were ecstatic about Barack Obama’s election and Democrats’ control of Congress. Liberal pundits were all atwitter about the brand new Democratic Era that voters had ushered in. America would finally become what America should have been years ago: a European-style social democracy.
Boy, did Democrats misread their mandate! With very little hindsight needed, it’s apparent to all but ideologically-blinkered liberals that the Democrats’ gross overreach isn’t what voters wanted or expected. Voters wanted a redo of the Clinton years. Instead, in the person of Barack Obama, voters got an amalgam of FDR and LBJ with a dash of Neville Chamberlin thrown in.
But here’s the real kicker. Two years of Obama-Reid-Pelosi overreach and excesses may have been the table-setter for the real revolution now unfolding. Voters and taxpayers first needed to see the irresponsibility and recklessness of unalloyed liberalism to appreciate that conservative government is far superior. Thank you, Barack Obama, Nancy Pelosi, and Harry Reid.
Of course, the real revolution began last year with the 2010 midterm elections. Yes, the GOP made the largest gains in U.S. House seats since 1948. But the underappreciated story is that the GOP racked up huge gains in state legislative contests, and further down ballot, Republicans swept plenty of local offices. State legislatures control congressional redistricting. Republicans now dominate enough key statehouses to lock-in GOP congressional electoral advantages for a decade.
Had voters limited their ballots to throwing out the rascals in Congress, a fair argument could be made that 2010 was just a protest vote — an attempt by voters to shake up the Democrats. But when voters drill down to change party control of legislatures, city halls, and county commissions, you can bet that they’re thoroughly repudiating the party in power. The 2010 repudiation of Democrats was a clear expression of what voters did and didn’t want from government.
Move now to the present time. Republicans are on the march in Congress. Late last week, House Republicans passed a budget bill containing $61 billion in cuts. It’s not the $100 billion that conservatives aimed for, but it’s substantial and can be considered a down payment. The House Republican proposal now goes to the Senate. The budget process wrangling is just in its first phase. Moving forward, the GOP will have multiple opportunities to push more cuts.
Read more here.
Swift and severe changes are coming to Detroit Public Schools.
State education officials have ordered Robert Bobb to immediately implement a financial restructuring plan that balances the district’s books by closing half of its schools, swelling high school class sizes to 60 students and consolidating operations.
This week, Bobb, the district’s emergency financial manager, said he is meeting with Detroit city officials and will set up a meeting with Wayne County Regional Educational Service Agency to discuss consolidation opportunities in areas such as finance, public safety, transportation and other areas.
Bobb also is preparing a list of recommended school closures and Friday said layoff discussions are under way and would be announced closer to April, when notices would be issued. “We are moving forward with the plan,” he said “Right now my focus is on my transition plan and the DEP (deficit elimination plan).”
Bobb’s last day with DPS is June 30. After that, the state plans to install another financial manager who must continue to implement Bobb’s plan, according to a Feb. 8 letter from Mike Flanagan, the state superintendent of public instruction.
In the letter, Flanagan said the Michigan Department of Education gave preliminary approval to Bobb’s plan to bring the 74,000-student district out of its financial emergency. As a condition of approval, Flanagan said Bobb cannot declare the district in bankruptcy during the remainder of his contract.
Bobb, appointed emergency financial manager in March 2009, filed his deficit elimination plan with the state in January, saying it would wipe out the district’s $327 million deficit by 2014. On Feb. 9, he told state lawmakers the plan is the only way DPS “can cut its way out” of its legacy deficit.
At the same time, Bobb said he doesn’t believe the proposal is viable because it would drive more students away, exacerbating the district’s financial emergency. But on Friday, Bobb confirmed he is working to implement the plan that will shrink the district to 72 schools for a projected 58,570 students in 2014.
“I believe the district can work its way out of these challenges,” Bobb said. “It will take some time. I am firm believer we have to continue to make the deep cuts, and they are going to be painful. In the long run, the district will be stronger. There can be no retreat.”
Bobb said he continues to work on an alternative plan — one similar to a General Motors-style restructuring — but has yet to release details or announce a sponsor for such a bill.
“Whatever comes out of the transition plan and whatever my new thinking is will be a part of that,” he said.
The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.
But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won’t completely change that for several years.
As President Obama and Republicans squabble over whose programs to cut and which taxes to raise, slow growth and a rising tide of interest payments – largely beyond their control – are making the job of fixing the budget much harder than in the past. Statehouses and governors face similar challenges.
After World War II, the federal debt – including debt purchased by the Social Security Trust Fund – hit nearly 122 percent of gross domestic product. State and municipal debt back then was minimal. By the time Dwight Eisenhower was elected president six years later, the federal government’s debt had dipped to about three-fourths of GDP.
The key factor in the rapid drop in government debt, said Harvard University economist Kenneth Rogoff, was fast economic growth. Spurred by a young labor force, world-leading manufacturers, high personal savings rates, a pent-up demand for consumer goods after years of war and the Depression, and a bout of inflation, the economy grew 57 percent in six years. Thanks to sharp postwar cuts in defense outlays, federal government spending also tumbled for a couple of years.
But today the U.S. economy is in a polar opposite condition. The labor force is aging, U.S. manufacturing often lags behind Asian and European rivals, households are in hock up to their eyeballs, and consumer appetite for goods is tepid. In addition, inflation is tame and government spending locked into entitlement programs and debt service that will be hard or impossible to alter.
Read more here.
Mounting concerns over Libya’s violent crisis weighed on stocks Tuesday and sent oil prices surging, while the earthquake in the New Zealand city of Christchurch pushed the country’s currency sharply lower.
With deep rifts opening up in Moammar Gadhafi’s regime, air force pilots defecting and a bloody crackdown in the capital of Tripoli, investors are fretting over how the crisis will end and what the impact on the North African country’s oil production will be.
Libya is the world’s 18th largest oil producer, pumping out around 1.8 million barrels a day, or a little under 2 percent of global daily output. The OPEC country also sits atop the biggest oil reserves in the whole of Africa.
With so much uncertainty surrounding a large chunk of the world’s daily oil production, market prices surged. Benchmark crude for March delivery was up $6.35 a barrel, or 7.4 percent, at $92.55 a barrel in electronic trading on the New York Mercantile Exchange.
“The Middle East will remain the market’s focus today with moves in the oil price probably the best single indicator of the market’s assessment of the wider implications of events there,” said Adrian Foster, an analyst at Rabobank International.
Rising crude prices are a particular worry for investors as they reinforce fears of inflation and raw materials costs. They also stoke worries of a big drop in global demand levels, as experienced in previous oil price shocks in 1973-4, 1979 and 2008.
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If House Republicans have their way, the Obama administration’s “czars” will no longer be able to dictate pay at bailed-out mega-firms or negotiate new emissions standards for U.S. vehicles. An amendment attached to the 2011 spending package, which passed the House last week, would strip funding for a select list of the so-called czars.
Rep. Steve Scalise, R-La., the author of the proposal, hailed the vote as a step toward ending the administration’s “shadow government.”
“Hardworking American families should not be forced to pay millions of dollars to fund these czars, who are implementing radical policies under the cloak of darkness,” Scalise said in a written statement.
Though the Obama administration is not the first to appoint high-level officials without Senate approval, they’ve become a popular target for Republicans since President Obama took office.
The Scalise amendment was a refined version of a catch-all anti-czar bill he introduced earlier in the session. That bill called for effectively shutting down any Executive Office task force or office led by an official who had not received Senate confirmation. At the time, Scalise estimated that 39 officials would fall under that description.
The latest amendment, which would still have to survive a vote in the Democratic-controlled Senate, narrowed that list down to nine positions. Several of them have been responsible for shepherding high-profile policy changes that Republicans opposed practically in lockstep.
Here’s the kind of “czar” activities that Republicans would stop if their amendment becomes law:
— No more administration agreements on greenhouse-gas emissions. On the list for funding elimination is the assistant to the president for energy and climate change, known colloquially as the “climate czar.” That official, Carol Browner, is expected to leave the position, following a tenure during which she helped strike a deal to increase fuel economy standards and require greenhouse-gas emissions standards for automakers.
“Let her leave, and take the funding, too,” Scalise said on the House floor last week.
Read more here.