Obama Administration

More Failed Stimulus Proposals from Obama Administration: Increase Wasteful Education Spending

by Hans Bader on September 2, 2011

in Economy, Stimulus to Nowhere

In a vain effort to try to stimulate the economy, the Obama administration reportedly wants to dump more money into school construction, even though “K-12 facilities spending” is “up 150 percent in two decades,” including monumentally wasteful spending such as the $578 million spent on L.A.’s RFK high school. Obama also wants to dump more money into “K-12 employment” that “has been growing 10 times faster than enrollment for forty years.” In so doing, President Obama has turned a deaf ear to experts who say it makes no sense to increase education spending further. (Much federal education spending is wasted, like the $130,000 in stimulus money spent on a book that demonized white people and promoted racial stereotypes.)

Most education spending does not qualify as a “stimulus,” since it has no short-term economic payoff, and thus can’t jump-start the economy. During the Great Depression, President Roosevelt, a pioneer of “stimulus” spending, actually cut federal education spending, as historian Gordon Lloyd has noted. (See Gordon Lloyd, The Two Faces of Liberalism: How the Hoover-Roosevelt Debate Shapes the 21st Century (2006).) While Roosevelt spent lots of money on other things, and spent more than any other President before him, even the big-spending Roosevelt realized that education spending does nothing to end recessions, and does not jump-start the economy, even if it might be helpful to the economy in the long-run. The Obama administration does not have a clue about how to revive the economy. It claimed that Obama’s $800 billion stimulus package would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose very rapidly after its passage, and it destroyed thousands of jobs in America’s export sector and elsewhere while outsourcing thousands of energy jobs to foreign countries like China.

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Barney Frank Used Influence with Fannie Mae, the Failed Mortgage Giant Bailed Out by Taxpayers

by Hans Bader on May 26, 2011

in Bailout Watch, Economy, Legal, Property Rights

Former House Banking Committee Chairman Barney Frank (D-Mass.) tenaciously opposed efforts to reform Fannie Mae and Freddie Mac, the government-sponsored mortgage giants that were bailed out at a cost to taxpayers of between $148 billion and $363 billion. Now it turns out that he got his boyfriend a “handsomely rewarded gig at Fannie Mae” while Frank “was helping to inflate the housing bubble” by pushing affordable housing mandates and policies that encouraged Fannie Mae to buy up risky mortgages.

Fannie Mae and Freddie Mac engaged in massive accounting fraud and other abuses. But Fannie Mae’s collapse was not entirely due to bad policies of its own making. Pressure from liberal lawmakers like Frank to buy up risky mortgages was also a factor in triggering the mortgage crisis, judging from a story in the New York Times. For example, “a high-ranking Democrat telephoned executives and screamed at them to purchase more loans from low-income borrowers, according to a Congressional source.” The executives of government-backed mortgage giants Fannie Mae and Freddie Mac “eventually yielded to those pressures, effectively wagering that if things got too bad, the government would bail them out.”

Despite his key role in causing the financial crisis, Frank became even more influential after President Obama took office. As the New York Times noted, the massive financial overhaul later passed in response to the financial crisis is “largely the product of extensive conversations” between the Obama administration and “Representative Barney Frank of Massachusetts and Senator Christopher J. Dodd of Connecticut.” That law, known as the Dodd-Frank Act, harms the economy, and violates both the Constitution’s separation of powers, and private property and equal-protection rights.

Frank’s co-sponsor of the Dodd-Frank Act, Senator Chris Dodd, left office in disgrace after ethical lapses. As Victor Davis Hanson notes, Dodd “got a sweetheart deal on an Irish ‘cottage’ from a crooked stock-trader,” “receiving it for hundreds of thousands of dollars less than its market value,” “got two preferential discount mortgage interest deals from the now-bankrupt Countrywide,” “got a sweetheart profit deal from a condo joint-buy with crook Edward Downe, Jr.,” “intervened with the Clinton administration to get the felon Downe pardoned,” and “misrepresented the value of his Irish cottage that he obtained via the agency of the dubious Mr. Kessinger.”

Obama Administration Undermines Free Speech and Due Process in Crusade Against Harassment and Bullying

by Hans Bader on March 22, 2011

in Legal, Nanny State, Personal Liberty

The Obama administration’s recent push against “bullying” resulted in a letter to school officials that undermines both free speech and due process. On October 26, a political appointee in the Education Department sent a “Dear Colleague” letter to the nation’s school boards claiming that many forms of homophobia and bullying violate federal laws against sexual harassment and discrimination. But those laws only ban discrimination based on sex or race — not bullying in general. The letter from the Assistant Secretary of Civil Rights Russlynn Ali defined “harassment” so broadly as to reach both speech protected by the First Amendment, and conduct the Supreme Court says does not legally qualify as harassment.

The letter left the incorrect impression with some reporters that federal statutes already ban bullying and sexual-orientation-based harassment. For example, Keen News Service reported that the Education Department “issued guidance to all school officials in October 2010, reminding them that federal law requires schools to take action against bullying,” including “sexual harassment of LGBT students.” The letter was part of the Obamas’ PR campaign against bullying, that featured a “a high-visibility conference on bullying prevention March 10, with the President and first lady” and the introduction by Obama backers of “several LGBT-inclusive bills designed to address bullying of students.”

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The Obama Administration’s “Open Government” Empty Rhetoric

by Hans Bader on March 20, 2011

in Bailout Watch, Economy, Legal

Liberal “open government” advocates are giving the president a medal for supposedly promoting “government transparency.”  He shares their liberal ideology, but not their alleged commitment to transparency. In reality, President Obama is so hostile to open government that “the Obama administration censored 194 pages of internal e-mails about its Open Government Directive,” according to the Associated Press. For example, “it blacked-out one e-mail discussing how to respond to AP’s request for information about the transparency directive.”

Moreover, “the Obama administration has developed a reputation for ruthlessly prosecuting whistleblowers for leaks to the press.” It recently demoted a whistleblower who revealed to Congress how the Department of Homeland Security was violating the Freedom of Information Act (FOIA).

The administration discriminates in responding to requests for documents under FOIA. It illegally forces its critics to wait years for the documents to which they are entitled — well beyond the 20-day legal deadline for responding — or refuses to even respond to their requests for documents. Meanwhile, it gives many of its supporters the documents they seek in just a few days.  These are just a few of the ways that Obama has broken his promise to have the most transparent administration in history.

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Obama’s State of the Union: A Blueprint for Crony Capitalism and Costly Educational Failures

by Hans Bader on January 26, 2011

in Economy, Employment, Energy, Environment, Politics as Usual, Stimulus to Nowhere

In his State of the Union address, President Obama called for even more spending on his cronies — what he euphemistically referred to as “investments” in “clean energy technology.” Such spending benefits companies that donate millions to liberal politicians, like GE,  which recently spent  $65.7 million on lobbying to extract special favors from the government.

As the Washington Post notes, GE received massive taxpayer bailouts on special, preferential terms not available to other companies:

General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks. At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government. The company did not initially qualify for the program.  .  .But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

GE’s CEO, Jeffrey Immelt, is the “Chairman of the President’s Council on Jobs and Competitiveness.”

The “clean energy” spending Obama wants includes “initiatives aimed at building the renewable-energy sector — which received billions of dollars in stimulus funding.”

This is a bad sign for American workers, because such green jobs programs have wiped out thousands of American jobs in the past.  The $800 billion stimulus package used “green-jobs” subsidies to send American jobs overseas.  79 percent of those subsidies went to foreign firms, such as an Australian firm that imported Japanese wind turbines, effectively outsourcing American jobs.  (The stimulus package also wiped out jobs in America’s export sector.)  Moreover, some “green jobs” funding actually damages the environment, like ethanol subsidies:  ethanol mandates actually harm the environment, yet the Obama administration apparently considers them to be a “green jobs” program.

Echoing earlier reports that he would advocate “new government spending” on education, Obama attacked the idea of scaling back massive increases in education spending. He called cutting education spending “like lightening an overloaded airplane by removing its engine.” Lost in his hyperbole was the fact that America already spends much more per capita on education than most other wealthy industrialized countries, with worse results.  As spending has exploded, college students are spending much less time studying and reading than they used to.

Dumping more money on the educational system is unlikely to spur economic growth, since so many college students learn little in college, are not interested in learning, and only go to college in order to get paper credentials rather than an education. Obama wants all Americans to attend at least one year of college, saying in his address that “higher education must be within reach of every American.”

Those paper credentials are increasingly useless to many who obtain them.  Most people who went to college because of rising college-attendance rates in recent years wound up in unskilled jobs (including 5,057 janitors who have Ph.D’s or other advanced degrees), while tuition skyrockets. (100 colleges charge at least $50,000 a year, compared to five in 2008-09.)  Bush increased federal education spending 58 percent faster than inflation, while Obama seeks to double it.

Colleges are so awash in money that many elite colleges are using it to rapidly expand educational bureaucracies.  For example, Wake Forest University increased spending on administrators by 600 percent.

Unlike other countries, which focus on educating engineers and other economically-productive occupations, America focuses on superficial, ideologically-fashionable liberal-arts majors.  The Obama administration seems more concerned about the gender ratios in college science departments than the small number of Americans who go into science, and is now contemplating caps on the number of male science students under Title IX to promote what it perceives as gender equity.  Such caps would be based on the Obama administration’s faulty interpretation of Title IX.

The College Diploma Fraud and Its Consequences

by Hans Bader on December 30, 2010 · 1 comment

in Economy, Employment

Retired professor Robert Weissberg has a fascinating article at The American Thinker called “The College Diploma Fraud.”  It describes how worthless many college degrees have become in an age of “credential-mania” (President Obama wants to double education spending to increase the number of college graduates by an additional 5 million, although there is already such a surplus of college graduates that many of them now have low-paying, unskilled jobs.)

It also chronicles how college administrators pressure professors not to fail even students who cheat or are grossly incompetent, in order to artificially inflate attendance and graduation rates: they absolve even “blatant cheating,” allow “failing grades to be expunged” even “after a final exam,” and create “special, unadvertised minority-only courses” that give failing students “As and Bs to eradicate Ds and Fs elsewhere.”

Michael Snyder has an article called “16 Shocking Facts About Student Debt and the Great College Education Scam.” As he notes, the Obama administration “has encouraged students to load up on college loans,” even though students can end up with crippling debt and a lousy job, and even though “our economy is facing the biggest student loan debt bubble in the history of the world.”

At Huffington Post, an article discusses the subject of suicide and student loan debt, and a student loan debtor who confesses, “I think about jumping out the 27th floor window of my office building” because of huge law-school debts that never led to a decent job, much less a job as a lawyer. This is not an anomaly: Kelli Space graduated with $200,000 in student loans for a sociology degree and a low-paying job.

A chart from the international agency OECD shows that education spending is higher per pupil in the U.S. than any other country in the world except for one, at the K-12 level. Lou Minatti notes an irony about blind support for exploding education spending:

We spend more money on education than any other country on the planet. Curiously, the same people who say that education spending is sacrosanct and cuts are bad also complain about the high cost of medical care and say that they’re spending a lot less money in places like France, with better results. So why are cuts in education spending bad, but cuts in medical spending good? Someone clear this up for me.

There is actually a strong argument for trimming America’s bloated education spending, as a recent commentary in the The Chronicle of Higher Education notes.

The college debt bubble dwarfs the recent housing bubble in terms of its price-to-earning ratio growth.  One hundred colleges now charge $50,000 or more a year, compared to just 5 in 2008-09. College tuition has surged along with federal financial-aid spending, which effectively rewards colleges for increasing tuition.

I earlier discussed the uselessness of elite law school educations (based on my experiences at Harvard).  (I once worked at the Education Department.)

Image credit: Honeywell-Nobel Initiative’s flickr photostream.

Potato Diet Improves Man’s Health; Obama Administration Bans Potatoes from WIC Program

by Hans Bader on December 27, 2010 · 1 comment

in Health and Illness, Nanny State, Personal Liberty

Chris Voigt lost 21 pounds and improved his health by living on a potato-only diet for 60 days.  Potatoes are more nutritious than other starchy foods like rice and bread, and “are a good source of vitamins.”  They have a lot of vitamin C (much more than a banana or an apple), and potassium levels slightly higher than potassium-rich bananas).

But the Obama administration, which does not understand nutrition, has banned white potatoes from the WIC program (for school lunches and poor mothers), based on the false belief that potatoes are unhealthy.  (Yet critics of the Obama administration’s food nannyism get lectures from liberal journalists.)

Potatoes are critically important in providing the poor with cheap, nutritious food.  As Voigt notes,”In 2008, the United Nations declared it to be the ‘Year of the Potato’. This was done to bring attention to the fact that the potato is one of the most efficient crops for developing nations to grow, as a way of delivering a high level of nutrition to growing populations, with fewer needed resources than other traditional crops. In the summer of 2010, China approved new government policies that positioned the potato as the key crop to feed its growing population.”

After they were brought from America to Europe, potatoes “rescued the Western World” from recurrent famines, and made the Industrial Revolution possible.  They did this by radically increasing the amount of food that hungry peasants could grow per acre, and by enabling farmers to provide the agricultural surplus that would feed burgeoning industrial populations.

In addition to trying to take away poor people’s potatoes, the Obama administration has pushed ethanol subsidies that turn food into fuel and contribute to a “global food crisis” by spawning famines overseas.  The Obama administration is also using federal funds to subsidize the opening of an International House of Pancakes in Washington, D.C., and the development of high-calorie foods that benefit politically connected agribusinesses.

Time for Big Cuts in Education Spending?

by Hans Bader on December 26, 2010 · 10 comments

in Deregulate to Stimulate, Economy, Employment

America spends far more on education than countries like Germany, Japan, Australia, Ireland, and Italy, both as a percentage of its economy, and in absolute terms. Yet despite this lavish government support for education, college tuition in the U.S. is skyrocketing, reaching levels of $50,000 or more a year at some colleges, and colleges are effectively rewarded for increasing tuition by mushrooming federal financial-aid spending.  Americans can’t read or do math as well as the Japanese, even though America spends way more (half again more) on education than Japan does, as a percentage of income, according to the CIA World Fact Book.

In light of this, it is easy to see why some education experts like Neal McCluskey are floating the idea of “draconian education cuts“ to shake up a rotten educational establishment.

Professor Glenn Harlan Reynolds at Instapundit notes that “some spending on educational institutions” may actually have a “negative” effect on education.  People endure useless college courses to get paper credentials, but they get their actual education elsewhere, through internships and work.  One of Professor Reynolds’  readers suggests that competition from “independent scholars” via the “internet” and elsewhere may improve education by providing competition with established universities that offer “little real education.”

Unfortunately, the colleges are well aware of this threat, and rather than improve themselves in response to competition, they are urging the government to crack down on one form of competition, for-profit colleges.  The Obama administration is now doing just that, waging a war on for-profit colleges, by subjecting them, but not traditional “non-profit” colleges, to so-called “gainful employment” rules that many non-profit liberal-arts colleges would flunk.  To try to rationalize this discrimination, the administration trumpeted a GAO report that has now been thoroughly discredited.

College tuition is often a rip-off, since most people who went to college because of rising college-attendance in recent years wound up in unskilled jobs (including janitors with Ph.D’s), and tuition is skyrocketing faster than housing costs did during the real estate bubble. (100 colleges charge at least $50,000 a year, compared to five in 2008-09.)

In recent years, spending on college administrators has risen massively. One study found an average increase of 61 percent, in inflation-adjusted terms, between 1993 and 2007; one leading university increased spending on administrators by 600 percent. Bush increased federal education spending 58 percent faster than inflation, while Obama seeks to double it. Spending has exploded at the K-12 level: per-pupil spending in the U.S. is among the highest in the world, and “inflation-adjusted K-12 spending tripled over the last 40 years.”

Image credit: Honeywell-Nobel Initiative’s flickr photostream.

Civil Rights Commission: Administration Lied About Who Dropped Voter Intimidation Case

by Hans Bader on October 29, 2010 · 1 comment

in Legal, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

The U.S. Commission on Civil Rights has found that political appointees, not career Justice Department lawyers, made the decision to drop a voter intimidation case against two black panthers after the Justice Department had already won a lawsuit against them by default.  That contradicts claims made by the Obama administration and its civil-rights chief, Tom Perez.

Earlier, a career Justice Department lawyer, Chris Coates, testified that under the Obama administration, the Justice Department has a policy of systematically ignoring voter intimidation and voting-rights violations when the perpetrator is a minority.

The case arose out of intimidating behavior by members of the bigoted New Black Panther Party outside a Philadelphia polling place.

The testimony by Coates, a former ACLU lawyer hired by the Justice Department under the Clinton administration, “supported earlier accusations made by J. Christian Adams,” a former Justice Department lawyer:

Adams had told the commission that DOJ officials “over and over and over” showed “hostility” to prosecution of voter-intimidation cases involving “black defendants and white victims.”

Adams testified that Associate Attorney General Thomas J. Perrelli, a political appointee, himself overruled a unanimous recommendation for continued prosecution by Adams and his associates of voter intimidation of white voters by members of The New Black Panthers at a Philadelphia polling place in 2008.

Adams had also testified that Julie Fernandes, a deputy assistant general in the Civil Rights Division in charge of voting matters, told Voting Section leadership that the Obama administration would not file election-related cases against minority defendants — no matter what the alleged violation of the law.

Coates verified Adams’ testimony about Fernandes, and also said he had been “specifically instructed” by Loretta King, acting assistant attorney general for civil rights, “not to ask any other applicants whether they would be willing to, in effect, race-neutrally enforce the VRA (Voting Rights Act).”

The Washington Post recently ran an interesting story about “deep divisions” and internal infighting at the Justice Department about whether to enforce the civil-rights laws “without regard to race,” even in cases where the perpetrator may be a member of a minority group — like the Ike Brown case in Mississippi, where a black political boss violated the voting rights of many whites as well as a few blacks. (Lawyers who worked on that case during the Bush Administration ended up being harassed by left-wing colleagues who did not believe that the civil-rights laws should be enforced when the perpetrator is a minority.  A relative of one of those lawyers who worked in the Justice Department was also harassed.)

The Supreme Court has ruled that voting rights protect people of all races, not just members of historically disadvantaged groups.

New Jobless Claims Rise to 462,000

by Hans Bader on October 14, 2010

in Economy, Employment, Politics as Usual, Stimulus to Nowhere

New applications for unemployment benefits rose last week to 462,000, and unemployment is at 9.6 percent.

Employers are reluctant to hire because of the increased threat of being sued under the Obama administration, and massive potential future tax and regulatory burdens due to its policies. In September, 95,000 jobs disappeared due in part to Obama administration policies.

The Obama administration claimed if we passed the stimulus package, unemployment wouldn’t go above 8 percent. But the stimulus ended up destroying jobs in certain sectors, while costing more than its projected $787 billion price tag. It also expanded welfare and repealed key provisions of the 1996 welfare reform law.

Recent EPA rules aimed at global warming will wipe out at least 800,000 jobs, with many additional job-killing regulations expected soon. Employers are fearful about those rules and the enormous cost of proposed cap-and-trade global warming legislation (which would impose huge burdens on many industries, cutting their output and thus causing major losses of steel, paper, aluminum, chemical, and cement manufacturing jobs).

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