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June 9, 2009 |
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Story #1: Hassett: Obama Tells US Businesses to Drop Dead
RUSH: There's a piece today by Kevin Hassett at Bloomberg. It's a commentary piece. Kevin Hassett, director of economic policy studies at AEI, the American Enterprise Institute. "Obama Tells American Businesses to Drop Dead," is the headline. Writes Mr. Hassett, "I've finally figured out the Obama economic strategy. President Barack Obama and his team have been having so much fun wielding dictatorial power while rescuing 'failed' firms, that they have developed a scheme to gain the same power over every business. The plan is to enact policies that are so anticompetitive that every firm needs a bailout," which is essentially what I've been saying for months, that Obama loves all of this chaos. He loves the failure. He loves the increased dependence on government. This is his crisis-opportunity. This is good news for him!
"Once that happens, their new pay czar Kenneth Feinberg can set the wage for everybody and Rahm Emanuel can stack the boards of all of our companies with his political cronies. I know, it sounds like an exaggeration." That's what I always get accused of, isn't it? The very man who warned that this administration would not "waste" this crisis has emerged, Rahm Emanuel, in this piece. "But look at it this way," says Kevin Hassett. "If there were a power ranking of US companies, like the ones compiled by football writers for National Football League teams, Microsoft would surely be first or second to Google. But last week, Microsoft Chief Executive Officer Steve Ballmer came to Washington to announce what Microsoft would do if Obama's multinational tax policy is enacted. 'It makes US jobs more expensive,' Ballmer said, 'We're better off taking lots of people and moving them out of the US.'
"If Microsoft, perhaps our most competitive company, has to abandon the US in order to continue to thrive, who exactly is going to stay?" Only Government Motors, First Government Bank. If they took over Starbucks we could call it Governmentbucks. "At issue is Obama's policy to end the deferral of multinational taxation. The US now has about the highest combined corporate tax rate, second only to Japan among industrialized countries. That rate is so high that US firms have an enormous disadvantage versus competitors. The average corporate tax rate for the major developed countries in the Organisation for Economic Co-Operation and Development in 2008 was about 27 percent, more than 10 percentage points lower than the US rate. US firms have nonetheless prospered because our tax code allows a business to set up a subsidiary in a low-tax country," like Ireland.
"When that subsidiary earns profits, they are taxed at the rate of that country, and don't face US tax until the money is mailed home. The economically illiterate..." This is a great line, here: "The economically illiterate partisan Democratic view is that this practice is unpatriotic and bleeds jobs from the US. The economic reality is that American companies use this approach to acquire market share overseas," to grow their businesses, which leads to more employees. "The alternative is losing the business to foreign competitors. Don't just take my word for it. A recent paper by Harvard economists Mihir Desai and C. Fritz Foley and Berkeley economist James Hines and published in the distinguished American Economic Review, gathered data on American multinationals to explore the impact of foreign investments on domestic US activity. Their conclusion was striking.
"The authors found that '10 percent greater foreign capital investment is associated with 2.2 percent greater domestic investment, and that 10 percent greater foreign employee compensation is associated with 4 percent greater domestic employee compensation. Changes in foreign and domestic sales, assets, and numbers of employees are likewise positively associated; the evidence also indicates that greater foreign investment is associated with additional domestic exports and R&D spending.'" So American companies doing business overseas is a win-win all the way around, there and here. "So when firms expand their operations abroad, taking advantage of the lower foreign tax rates, it helps their workers in the US. Higher sales abroad (surprise, surprise) are good for domestic workers. ... So the question is, why does Obama advocate a policy that so flies in the face of everything that economists have learned?"
This is my question. These people are not stupid. Anybody with a brain, even if they don't know anything about economics, can consult history to see which economic policies worked; the kind of economic structure that works, the kinds that don't. The kinds that don't and that have failed miserably are the ones being implemented by President Obama, and so Kevin Hassett here says, why? "[W]hy does Obama advocate a policy that so flies in the face of everything that economists have learned? How could Obama possibly say, as he did last month, that he wants 'to see our companies remain the most competitive in the world'? But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens?'" That's what we should be doing. "Further, how could Treasury Secretary Tim Geithner call a practice that top scholarship has shown increases wages and employment in the US 'indefensible'?"
Well, Geithner is a rent-a-Treasury-secretary, just like Christina Romer and Jared Bernstein are rent-an-economists. They'll sell their souls to work for Obama, to be loyal and implement his bidding. This is what I meant, folks, when I said yesterday: These people have to know this is destructive. They have to know. The question is not, "Are they stupid and ignorant and don't know it?" The question is, "Why are they going along with it? Why?" How is Obama, in this country, able to find this many people willing to implement policies that are going to destroy the private sector economy of this country? Mr. Hassett says, "I have to admit I'm at a loss." Kevin, if you're at a loss just reread your leave, reread your headline: "Obama Tells American Businesses to Drop Dead." That says it all! This is who Obama is. It is who he's always been.
This is his vision for America. Because, Kevin, what this is all about is returning the nation's wealth to its "rightful owners." Quote, unquote. He says, "Maybe it is good politics to bash American corporations, and Obama isn't really serious about making this change happen. But if the change is enacted, and domestic corporate taxes aren't reduced to offset the big tax hike, the result will be a flight from the US that rivals in scale the greatest avian arctic migrations," meaning bird migrations for those of you in Rio Linda. Avian is not water; Evian is water. So Obama's policies, if enacted, are going to result in even more unemployment -- and they know this. They know this! The chaos and the panic are the opportunity for Obama to assert even more statist control over the citizens of this country. "Obama Tells American Businesses to Drop Dead."
 Story #2: Democrat Party and Unions Kneecapping FedEx
RUSH: Washington Times today with an editorial that makes me sick. The title: "Kneecapping FedEx -- FedEx Express is learning what could be the Democrats' economic motto -- 'Never Let Success Go Unpunished.' Led by Rep. James L. Oberstar, Minnesota Democrat, the House on May 21 passed legislation that contains an almost hidden provision -- a mere 230 words -- that would hobble FedEx Express. It would do so by completely changing the labor laws under which the company operates. Unless the Senate removes the language from the underlying bill reauthorizing the Federal Aviation Administration, a mere dozen or so workers in just one city could hamstring much of the nation's overnight delivery service. We Americans take for granted that things can 'absolutely, positively ... be there overnight' -- but it took FedEx Express to make that so.
"FedEx Express is, of course, one of the great corporate success stories of modern times, having grown from a mere idea in a 1965 term paper by Yale University undergraduate Frederick W. Smith into a company essential to the workings of our modern economy. It is a little-known fact that FedEx contracts with the US Postal Service to carry almost all of its Express Mail and a large proportion of its Priority Mail." Did you know FedEx did that for the US Postal Service? They do.
"FedEx delivers huge amounts of needed supplies for American military forces, too -- and its service is just about the only way to guarantee that some lifesaving medicines reach patients overnight. Lawmakers have long recognized that certain sorts of transportation companies are the lifeblood of interstate commerce. That's why they wrote the Railway Labor Act to apply special labor-relations rules to railroads and, eventually, airline-based businesses such as FedEx Express. Since 1926, the RLA has provided successfully for means other than strikes to resolve labor disputes fairly and quickly, without favoring either side. The RLA does not, however, apply to non-rail, mostly ground-transportation companies such as the United Parcel Service. UPS instead is governed by the National Labor Relations Act (NLRA), the terms of which favor unions such as the Teamsters, which represents UPS drivers.
"Naturally, this means UPS and the Teamsters both have an interest in kneecapping FedEx Express. Together, the ground-delivery company and the union have executed what The Hill newspaper called a lobbying 'pincer movement' to transfer authority over FedEx Express from the RLA to the NLRA. ... Mr. Oberstar argues that he is merely trying to treat similar workers similarly. FedEx Express counters that it and UPS are very different companies. FedEx says it ships 85 percent of its goods by air, whereas UPS sends 85 percent of its goods by truck. UPS trying to squash FedEx Express is like Goliath sitting on David. Again using FedEx Express numbers, UPS has 425,000 employees in a business doing $49.7 billion in annual revenue, compared to FedEx Express' 143,000 employees and $22.7 billion in revenue.
"With UPS so much bigger than FedEx Express, it doesn't make sense to argue that 'Big Brown' somehow suffers a competitive disadvantage. Indeed, the latest earnings estimate for UPS shows growth from $2.37 to $2.90 per share, while FedEx Corp. has shown a decline from $1.26 to $0.31." Makes me sick, another one of these great US start-up companies about to be ruined by -- what else? -- the Democrat Party and unions. I remember the first time I went to Seattle. This is just a nothing little story, a nothing little story. The first time I went to Seattle was for a radio industry convention, and it was time to leave, and I got to the airport in Seattle. I guess it was about ten o'clock at night. As soon as I got out of the car I saw a FedEx DC-10 taking off, and I thought I was watching the American flag.
I really did. I got a little goose bump. I was proud. "There's a FedEx plane!" Because I knew the story of Fred Smith starting his company. Nothing against UPS, by the way. I use them, too. This is nothing against UPS. I'm not saying that they're bad. This editorial is exactly right: here is a successful business that does want to use unions. In fact, Fred Smith said if card check happens, it'll put him out of business. So here's the Democrat Party targeting another successful business for destruction, using union allies, all for the purpose of benefiting unions. Twelve people in every FedEx city could shut 'em down, and make sure that their promise of overnight delivery doesn't happen -- and then what happens to their business? Then it all goes to UPS or they shut down or what have you. And all of this is happening with nobody stopping them. And President Barack Obama leading and guiding the path on the destruction of the US private sector economy.
Story #3: European Vote was a Reaction to Fear of Obama
RUSH: A bunch of people are trying to analyze the European election results and what they mean, and the American Thinker, Bruce Walker, has a piece here today: "The Collapsing Global Left." And he asks, "Was this a victory for conservatives?" He says, "It was in this sense: It was a crushing defeat of the Left. Other elections in May brought more gloomy news for the Left and enemies of the West. India held elections in mid-May. Polls showed that the Left might well win control of the Indian Government. Instead, the ruling Congress Party won a sweeping victory, which is very good news for the United States." The global left is collapsing. But I have a little bit different theory about this. There's some people asking, "What does this mean for us, Rush? Does this mean that conservatism is coming back in the United States?" I think conservatism in the US never went anywhere. It's the Republican Party that's somehow wandered off the reservation.
At National Review Online on The Corner, Veronique de Rugy: "In European Parliamentary Elections, Capitalism Triumphs in Europe." I agree with some other people on this. I think, folks, the correct explanation of what's happening in Europe is that those countries are scared to death of what they see happening here. Now, you may think that this analysis grants the average European citizen as being too sophisticated, but I don't think so in this case. See, I really believe that Europeans, citizens -- forget the smug elitist leaders over there, although you'd maybe throw them in this group of people as well -- but they could afford to live in that cesspool of socialism that they created, with 14% unemployment in France. They can afford to do all this as long as they could be sure the United States was there to defend them, to protect them, Bosnia-Kosovo, Iraq, whatever. As long as we were there, as long as our economy was driving the world economy -- this is the key -- as long as we were driving the world economy, then all of these people around the world had the luxury and the freedom to indulge their namby-pamby socialism, high employment, government taking care of everybody, let us carry the burden.
Now they look at what happens in the United States under a socialist leader, and they are panicked because they know that if Obama succeeds in destroying the US private sector economy, that they're finished as well. These people do not want China leading the world economy. The Australians don't want it; the Europeans do not want it; the Japanese do not want it. So we created a cushion for them to go ahead and live their lazy lives. They didn't have to spend money on their own defense. They could invest in all these people causes and social programs. Now they look at us, now they look at rising unemployment in the United States -- it's on the news every day -- they see the destruction of American capitalism, they see that our economy is tanking, and they see the gravy train is over. Selfishness is what's causing them to see what's happening here and that's why they're moving to the right. I mean, there are other factors, too. I'm sure, like in France and Germany, there are a lot of people just fed up with the ongoing failures of open borders, massive government spending, lowering incomes, wages, lifestyles, and all of that. But they could always indulge that as long as we were there to save 'em, protect 'em, and lead the world. But if we're not going to do that, then, well, it's pedal to the metal time.
I saw a picture the other day of a lone naval ship, a destroyer, I don't know what it was, a big, big Navy ship, in the Atlantic Ocean. The caption to the picture was that this ship was trying to find the black boxes from Air France flight 447, that Airbus 330 that plunged into the ocean, we're trying to find out why. And it hit me again. Here you have Air France, you have the nation of Brazil, you have a number of South American countries, Venezuela is right there, you've got France, you've got the European Union, and who the hell has the capability, the wherewithal, the ability to scour over 600 square miles of ocean that might be 12,000 feet deep to find the black boxes? Us, the United States of America, a lone naval ship. I'm not saying that there isn't cooperation or help, don't misunderstand, but who do they call? Tsunami, who do they call? Earthquake, who do they call? Huge hurricane or cyclone, who do they call? Any natural disaster around the world, who gets the call? They don't call the UN. They call the United States. They still do. If they see that that phone call, even if answered, is not going to result in anything, then they panic. And that, as much as anything else, is why I think there's a move to the right, in addition to the general fatigue, it's a cyclical thing, but the general fatigue with liberalism, socialism, 'cause it doesn't work.
It's nice to indulge it for a while, makes everybody feel good, as long as there's somebody else, some uncle, some grandfather, some sugar daddy that's going to make everything right when you screw up your own country, your own life, but if we're not in a position to do that anymore, then it's, as they used to say when I was growing up, come to Jesus time, face reality. There are many factors. The question is not, will it translate to us? The question is, how in hell can the socialist left around the world see the error of its ways and start moving the other direction while we are moving in their former direction? What has changed in our population that has turned enough of our citizens apparently -- apparently, I say, enough of our citizens into people who enjoy sloth? Just sitting around, let somebody else handle all the hard work. It's government's job to make sure McDonald's has McNuggets. It's government's job to make sure that when you go in and order whatever it is, that McDonald's has it. It's government's job to make sure that you have a job and if you don't have a job, you got benefits; government's job to make sure you got a mortgage; government's job to make sure you got a house.
We're moving in the other direction. Hopefully we will be able to arrest our leftward tilt much sooner and with far less pain than Europe, which has been going leftist for years, decades, because we were there to prop 'em up. If we go away as the United States has always been, there's not going to be anybody to prop us up. Nobody in the world can. Nobody in the world's close to being able to prop us up, which is why we cannot afford the destruction of the US private sector economy that is being waged by Barack Obama and his administration and Harry Reid and Nancy Pelosi in the US House of Representatives and the Senate.
Story #4: AP: President Obama Scrambles to Calm Americans
RUSH: Another amazing story today from government-run AP. Yesterday they ran a story highly critical of Obama policies and how they're having the exact opposite effect of their promises. Today is this entry from AP: "President Barack Obama assured the nation his recovery plan was on track Monday, scrambling to calm Americans unnerved by unemployment rates still persistently rising nearly four months after he signed the biggest economic stimulus in history," that was supposed to reverse it. "Obama admitted his own dissatisfaction with the progress but said his administration would ramp up stimulus spending in the coming months. The White House acknowledged it has spent only $44 billion, or 5 percent, of the $787 billion stimulus," because most of it is for 2010 and 2012 and Obama's reelection. But I added that. That's not in any AP story. Obama said, "'Now we're in a position to really accelerate.' He also repeated an earlier promise to create or save 600,000 jobs by the end of the summer."
Speaking of that, I think I single-handedly have saved MSNBC and all the jobs there. If it weren't for me, they would have nobody to talk about and no ratings. So those jobs I've saved as well and nobody can say I didn't. "Neither the acceleration nor the jobs goal are new. Both represent a White House repackaging of promises and projects to blunt criticism that the effects haven't been worth the historic price tag." Do you understand, AP wrote this? "Neither the acceleration nor the jobs goal are new. Both represent a White House repackaging of promises and projects to blunt criticism." So all of this, AP's putting the light of truth on it. They're just trying to stop the criticism here. All of the policies haven't worked. "The job estimate is so murky, it can never be verified." AP writes that. Something is going on. This is tsunami-like.
AP has been loyal and state-run, government-run, and two days in a row they have run stories that contravene the propaganda the Obama people are putting out. I don't know what to make of it. I'm not investing too much in it. Don't misunderstand. It's so unusual. I'm sorry. I just can't help but notice. Stop and think of that. Do you realize how unusual it is for a mainstream media outlet to criticize this president and this administration, when the avowed purpose of mainstream media for my entire life has been "we're gonna hold people in power accountable, we're gonna snuff out their corruption and we're going to make sure they don't get away it." With Obama, it's been the exact opposite. It's a stark contrast when you have AP running stories I or any of you could have written.
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